Exhibit 10(10)
PROMUS HOTEL CORPORATION
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SAVINGS AND RETIREMENT PLAN
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TRUST AGREEMENT
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THIS TRUST AGREEMENT made and entered into at Memphis, Tennessee, as
of May 26, 1995, by and between Promus Hotel Corporation, a corporation
duly organized and existing under the laws of the State of Delaware having
its principal place of business in Memphis, Tennessee, and Robert S. Davis,
Donald H. Dempsey, Patricia R. Ferguson, Jeffery M. Jarvis, Kelly R.
Jenkins, Frederick G. Schultz and Mark C. Wells, Memphis, Tennessee, acting
in their fiduciary capacities as co-trustees (hereinafter referred to as
the "Trustees");
RECITALS
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A. DEFINITIONS. Wherever used herein, the following terms shall
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(unless the context clearly requires otherwise) have the following
meanings:
1. "Corporation" shall mean Promus Hotel Corporation.
2. "Employer" shall mean any company which has adopted or hereafter
adopts the Plan (as hereafter defined), including, but not limited to, the
Corporation and those affiliates of the Corporation participating in the
Plan.
3. "ERISA" shall mean the Employment Retirement Income Security Act
of 1974, as amended from time to time.
4. "Fund" shall mean the trust assets held by the Trustees pursuant
to the terms of this Agreement and the Plan.
5. "Plan" shall mean the Promus Hotel Corporation Savings and
Retirement Plan as amended from time to time.
6. "Trust" shall mean the trust established by this Agreement.
B. BACKGROUND
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1. The Corporation adopted and established the Plan. The Plan will
commence on the effective date of the spin-off of the Corporation from The
Promus Companies Incorporated scheduled for June 30, 1995. Said Plan
provides for contributions by the Corporation to be held in trust, invested
and paid out by the Trustees to Participants and their Beneficiaries or
representatives for the accomplishment of the purposes of the Plan. The
Corporation desires to provide a trust pursuant to the Plan which is
intended to qualify under Sections 401 and 501 of the Internal Revenue
Code, and regulations issued thereunder, as a tax-exempt trust, and to
comply with the requirements of ERISA.
NOW, THEREFORE, in consideration of the premises and the covenants
herein contained, the Corporation and the Trustees agree as follows:
SECTION I
Trust and Fund
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1.1 The Trust created by this agreement shall hereafter be known as
the "Promus Hotel Corporation Savings and Retirement Trust" or "Trust" and
shall continue without interruption to be part of the Plan, which Plan is
intended to continue to be qualified under Section 401(a) of the Internal
Revenue Code.
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1.2 The definitions set forth in Section 2 and elsewhere in the Plan
are incorporated herein by reference, and terms not otherwise defined
herein shall have the same meanings given them in said Plan.
1.3 This Trust Agreement, as hereafter modified or amended, shall
constitute the Trust Agreement referred to in paragraph 2.51 of the Plan.
SECTION 2
Plan
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2.1 The Corporation shall deliver to the Trustees a copy of the Plan
and each amendment thereto for convenience of reference, but the rights,
powers, titles, duties, discretion and immunities of the Trustees shall be
governed solely by this Trust Agreement.
SECTION 3
Administration
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3.1 A majority of the Trustees then serving shall constitute a quorum
for the transaction of business, provided prior notice of the meeting has
been given to all Trustees then serving. All actions taken by the Trustees
shall be by vote of a majority of those present at a meeting of the
Trustees at which a quorum is present, or without a meeting by a written
instrument signed by all Trustees then serving.
3.2 The Trustees shall administer their duties under the Plan and
with respect to the Fund in accordance with the provisions of the Plan and
this Agreement, except to the extent their responsibilities have been
properly delegated
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pursuant to the provisions of the Plan and this Agreement and except to the
extent the Corporation and its delegees have been given administrative
responsibilities under the Plan. No Trustee shall participate in making or
implementing any decision of the Trustees with respect to the personal
pecuniary interest of such Trustee or the interests of such Trustee's
beneficiaries.
3.3 The Trustees shall have complete authority to determine the
existence of rights and interests in the Fund of all persons having or
claiming any rights under the Plan.
SECTION 4
Contributions
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4.1 The Trustees shall be accountable for all contributions received
by them but shall have no duty to require any contributions to be made to
them, or to determine that the amounts received comply with the Plan, or to
determine that the fund is adequate to provide the benefits payable
pursuant to the Plan. The Trustees shall be responsible for the
maintenance of records which will clearly reflect each payment received
from each employer.
SECTION 5
Payments from the Fund
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5.1 Benefit payments to Participants and Beneficiaries under the Plan
shall be made from the Fund by the Trustees in such manner, at such times
and in such amounts as shall be provided by the Plan. The Trustees shall
have no responsibility to see to the application of payments so made.
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5.2 The Trustees shall be reimbursed for any expenses incurred by
them that are reasonably necessary and incident to the administration of
the Plan and the Trust. The Trustees shall be paid such reasonable
compensation for their services as shall be agreed upon from time to time
by the Corporation and the Trustees. To the extent the Employer does not
pay such expenses and compensation, they shall be paid from the Fund. The
Employer or the Corporation may advance or temporarily pay such expenses
and compensation which the Fund will repay upon request of the Employer or
Corporation.
5.3 The Trustees are authorized, but not required, to withhold from
distribution to any payee such sums as may reasonably be necessary to cover
federal and state taxes which are, or may be, assessed with regard to the
amount distributable to such payee and for which the Trustees or the Fund
may be liable. Upon discharge or settlement of such tax liability, the
Trustees shall pay or cause to be paid any remaining balance of the sums so
withheld to such payee or to his estate. Prior to making any payment or
distribution hereunder, the Trustees may require such releases or other
documents from any lawful taxing authority, and may require such indemnity
from any payee or distributee, as the Trustees shall reasonably deem
necessary for their protection or for the protection of the Fund.
5.4 Subject to the proviso at the end of this Section 5.4, no one
other than Participants and their Beneficiaries shall have any interest in
the Fund and the following restrictions shall apply to distributions: (a)
Distributions payable from the Fund shall not be subject in any manner to
anticipation, alienation, sale,
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transfer, assignment, pledge, encumbrance, charge, garnishment, execution,
or levy of any kind, either voluntary or involuntary, including liability
for alimony or other payments for property settlement or support of a
spouse or former spouse or any other relative of the Employee prior to
actually being received by the person entitled to the benefit under the
terms of the Plan, excluding transfer by death or mental incompetency. (b)
Any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits payable
under the Plan shall be void. (c) The Fund shall not be in any manner
liable for, or subject to, the debts, contracts, liabilities, engagements
or torts of any person entitled to benefits hereunder. (d) None of the
Plan benefits or Trust assets shall be considered an asset of the Employee
in event of his divorce, insolvency or bankruptcy. PROVIDED, HOWEVER, the
restrictions of this Section 5.4 shall have no application to (1)
distributions under a qualified domestic relations order that meets the
requirements of ERISA Section 206(d) (which may be a lump sum distribution
of vested amounts irrespective of the age of the Employee or the alternate
payee), (2) circumstances in which an Employee has obtained a loan from the
plan secured by his vested account balance in which case the Employee's
vested balance shall be subject to offset and attachment by the Trust and
the Plan upon default in the loan, or (3) to the extent permitted by
applicable law, Federal tax liens or levies pursuant to Federal law.
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5.5 The fees payable by the Employer for actuarial, legal, accounting
or other necessary and proper services relating to the administration of
the Plan and Trust (including fees for the Trustees) shall be paid by the
Employer if the Employer elects to pay them. If the Employer does not
elect to pay such fees and expenses (or advances them temporarily) or if
they are not so paid, they shall be payable or reimbursed by the Trustees
out of the Fund, and until paid shall constitute a first and prior charge
and lien against the Fund. The Trustees may also on their own volition
employ, for purposes of managing or administering the Fund, accountants,
attorneys, actuaries, consultants, advisers, and any other persons, firms,
or corporations as the Trustees may designate and may pay from the Fund the
reasonable fees, expenses, and compensation of such parties. The Trustees
may also contract or make reasonable arrangements with the Corporation, an
Employer or other parties in interest for office space, or legal,
accounting or other services necessary for the establishment or operation
of the Trust, if no more than reasonable compensation is paid therefor.
SECTION 6
Management of the Fund
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6.1 The Trustees may employ an Investment Manager or Managers to
manage the Fund or any part thereof or to advise the Trustees. "Investment
Manager" shall mean a person who is registered as an investment adviser
under the Investment Advisers Act of 1940, a bank as defined in such Act,
or an insurance
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company which is qualified to manage the assets of employee benefit plans
under the laws of more than one state, or any other entity or person
permitted by applicable law to be an Investment Manager for the Fund. No
person shall be employed as Investment Manager unless he has first
acknowledged in writing that he is a fiduciary with respect to the Plan,
and unless the extent of his authority and responsibility with respect to
the management of the Fund has been identified by written agreement with
the Trustees. Such authority and responsibility may extend to the making,
acquisition, retention, sale or other disposition of Fund investments to
the same extent that the Trustees are authorized and empowered so to do
under the terms of this Agreement. If an Investment Manager is employed
pursuant to this Section, the Trustees shall not have any discretionary
authority or responsibility with respect to Fund investments to the extent
that such authority and responsibility has been given to the Investment
Manager, but rather shall act upon and pursuant to the direction of the
Investment Manager. The Trustees may change Investment Managers at any
time, as the Trustees deem appropriate, and the Trustees may choose to
manage the Fund, or any part of the Fund, without employing an Investment
Manager. The Trustees may also appoint an investment adviser.
6.2 The Trustees, whether acting pursuant to the direction or advice
of a duly appointed Investment Manager or investment adviser, or upon their
own
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discretion with respect to Fund investments not subject to such direction,
shall, except as otherwise restricted by law and the provisions hereof and
the Plan, be authorized and empowered:
(a) to invest the assets of the Trust in such securities and
properties as they may determine;
(b) to invest assets of the Trust in any corporate master notes
maintained by any of the Trustees or an Investment Manager;
(c) to keep such portion of the fund in cash or cash balances as they
deem to be in the best interest of the trust;
(d) to sell, exchange, convey, transfer or otherwise dispose of any
property held by them, by private contract or at public auction;
(e) with respect to any stock or other securities owned by them:
(1) to exercise or refrain from exercising any voting rights
associated therewith;
(2) to give general or special proxies or powers of attorney
with or without power of substitution;
(3) to exercise any conversion privileges, subscription rights
or other options and to make any payments incidental
thereto;
(4) to consent to or respond to or otherwise participate in
corporate reorganizations, recapitalizations, tender offers,
mergers or consolidations, and to delegate discretionary
powers and to pay any assessments or charges in connection
therewith;
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(5) to deposit such stock or other securities in any voting
trust or protective committee or like committee or trustee
or with the depositories designated thereby;
(f) to make, execute, acknowledge and deliver any and all documents
of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein
granted;
(g) to register any investment of the Fund in their own name or in
the name of a nominee or nominees and to hold any investment in
bearer form, provided that the books and records of the Trustees
shall at all times show that all such investments are part of the
Fund;
(h) to employ suitable agents, accountants, advisers, consultants,
and counsel, and to pay their reasonable expenses and
compensation;
(i) to borrow money from time to time for the purposes of the Trust
on such terms and conditions as may be deemed to be advisable,
and for any sum so borrowed to issue their promissory note as
Trustees and to secure the repayment thereof by pledging all or
any part of the Fund; and
(j) to exercise all of the powers of an owner with respect to any
stock or other securities or property.
The Trustees shall not be restricted with respect to the forms of property
which may be held or acquired by the Trustees, other than by the
restrictions set forth
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herein or in the Plan or by applicable law. Subject to the limitations
contained in Section 407 of ERISA and other limitations expressed herein
and in the Plan, the Trustees may invest assets of the Trust in any common
or preferred stock, securities or other obligations of the Employer.
Without limiting the generality of any other provision hereof, it is
expressly provided that the Trust assets may be invested in a pooled fund
maintained by any of the Trustees or any Investment Manager.
6.3 Cash received under any of the provisions hereof may be deposited
by the Trustees in accounts with such banking institutions as may be
selected by the Trustees, including a banking division of any Trustee,
under such provisions with respect to interest as may be permitted by law.
For the purposes of this Section 6.3, the word "accounts" shall be
construed to mean not only demand deposit accounts, but also savings
accounts and time deposit accounts without regard to whether the amount on
deposit is evidenced by a statement, passbook or certificate.
6.4 The Trustees shall comply with ERISA and with any funding policy
established in writing by the Employer, but the Trustees shall be solely
responsible for the selection and retention or disposal of the investments
to comply with such funding policy.
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SECTION 7
Powers of Trustees
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7.1 Subject only to the provisions of Section 5 and 6 of this
Agreement, the Trustees are further authorized and empowered;
(a) to hold, manage, improve, repair and control all real and
personal property at any time forming part of the Fund; to sell,
convey, transfer, exchange, partition, lease for any term, even
extending beyond the duration of this Trust, and otherwise
dispose of the same from time to time in such manner, for such
consideration and upon such terms and conditions as the Trustees
shall determine;
(b) to employ such agents, accountants, advisers, consultants, and
counsel as may be reasonably necessary in managing and protecting
the Fund and to pay them reasonable compensation; to settle,
compromise or abandon all claims, questions or demands in favor
of or against the Fund; to charge any premium on bonds purchased
above par value to the principal of the Fund and to charge fees
and expenses of investments against the principal of the Fund
without amortization, regardless of any law relating thereto;
(c) to exercise all the powers set out in Section 35-618 of the
Tennessee Code Annotated, the provisions thereof being hereby
adopted by reference specifically and as fully and in the same
manner as if they
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were set out herein verbatim, and to exercise all the further
rights, powers, options and privileges granted, provided for, or
vested in trustees generally under the laws of the State of
Tennessee as amended from time to time, it being intended that,
except as herein otherwise provided, the powers herein conferred
upon the Trustee shall not be construed as in limitation of any
authority conferred by law, but shall be construed as in addition
thereto;
(d) to vote upon any stocks, bonds or other securities, except that
the Trustees shall not vote stock to which any Participant is
entitled to direct the vote under Plan Section 6.4(d) except
pursuant to confidential written instructions from such
Participants; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options, and
to make any payments incidental thereto; to consent to or
otherwise participate in corporation reorganizations or other
changes affecting corporate securities and to delegate
discretionary powers to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers
of an owner with respect to stocks, bonds, securities or other
property held in the Trust Funds. The Trustee shall maintain the
strict confidentiality of any instructions received from
Participants pursuant to Plan Section 6.4(d); and
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(e) in addition to the powers enumerated herein, to do all other acts
which, in their judgment, are necessary or desirable for the
proper administration of the Fund.
7.2 The Trustees shall be fully protected in taking any action in
reliance upon a certified copy of a resolution of the Board of Directors of
the Employer or any other committee or body authorized to act on behalf of
the Corporation regarding the Plan which the Trustees in good faith believe
to be genuine, if this instrument provides that such action is within the
scope of the authority of such Board, committee or other body.
7.3 The Trustees may consult with legal counsel, who may be counsel
for the Employer or the Corporation, regarding any of their duties or
obligations hereunder, and shall be fully protected in acting or refraining
from acting in accordance with the advice of such counsel.
7.4 The Trustees shall incur no personal liability for any act done
or omitted to be done in good faith in the administration of the Trust
other than as may otherwise be required by law. To the maximum extent
allowed by law and to the extent otherwise not indemnified, the Corporation
shall indemnify each Trustee (and former Trustee) against any and all
claims, losses, damages, expenses, including counsel fees, incurred by any
such person on account of such person's action, or failure to act, in
connection with the Plan, including, in the case of amounts paid in
settlement, only such amounts as are paid with the Corporation's approval.
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7.5 If at any time the Fund shall consist in whole or in part of
assets located in a jurisdiction in which the Trustees are not authorized
to act, the Trustees may appoint a corporation in such jurisdiction as
ancillary trustee and may confer upon such ancillary trustee power to act
solely with reference to such assets, and such ancillary trustee shall
remit all net income from or proceeds from the sale of such assets to the
Trustees. The Trustees may pay such ancillary trustee reasonable
compensation and may absolve it from any requirement that it make
accounting to any court or furnish bond or other security.
7.6 The Trustees shall not be required to receive any order or
consent of any court as a prerequisite to taking any action hereunder, or
to file any court return or report or make accounting to any court.
7.7 Subject to applicable provisions of the Plan regarding treatment
of contributions conditioned upon initial Internal Revenue Service
qualification of the Plan, the Trustees and the Employer shall discharge
their respective duties under the Plan solely in the interest of
Participants and their Beneficiaries and for the exclusive purpose of
providing Plan benefits and defraying the reasonable expenses of
administering the Plan and Trust.
7.8 In discharging their duties, the Trustees shall:
(a) act with care, skill, prudence and diligence that a prudent man
acting in a like capacity and familiar with such matters would
use in similar circumstances in the conduct of an enterprise of
like character and with like aims;
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(b) to the extent the Trustees have the discretionary authority and
responsibility for Trust investments, diversify investments so as
to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(c) act in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent
with the provisions of ERISA.
7.9 The Trustees shall not cause the Plan to engage in any
transaction if they know or should know that such transaction constitutes,
directly or indirectly, a prohibited transaction under ERISA.
7.10 The Trustees shall not:
(a) deal with the assets of the Trust in their own interest or for
their own account;
(b) in their individual capacity or in any other capacity, act in any
transaction involving the Plan or in behalf of a party, where
there interests of the Trustees or such party are adverse to the
interest of the Plan, the Participants or Beneficiaries; or
(c) receive any consideration for their own account from any party
dealing with the Plan in connection with a transaction involving
the Plan, the Trust or the Fund; provided, however, that nothing
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in this section shall be construed to preclude the Trustees from
receiving reasonable
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compensation for services rendered or reimbursement of expenses
properly and actually incurred in the performance of their duties
under the Plan and Trust.
7.11 Except as authorized by regulations issued by the Secretary of
Labor, the Trustee shall not maintain the indicia of ownership of any
assets of the Fund outside the jurisdiction of the District Courts of the
United States.
7.12 Nothing in this Section shall be construed to preclude a
transaction which is otherwise prohibited hereunder or under ERISA, if the
Trustees, or any other interested party or parties, have first secured from
the Secretary of Labor an exemption with respect to such transaction.
7.13 The Trustees or the Corporation may purchase insurance to insure
themselves, the Fund, or other fiduciaries against liability or losses
occurring by reason of an act or omission of any fiduciary, provided that
such insurance if purchased by the Plan shall permit recourse by the
insurer against the fiduciary in the case of a breach of fiduciary duty.
SECTION 8
Accounts of the Trustees
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8.1 The Trustees shall maintain accurate and detailed records and
accounts of all transactions hereunder, which shall be available at all
reasonable times for inspection or audit by any person or persons
designated by the Employer.
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8.2 The Trustees, at the direction of the Employer, shall submit to
the auditors of the Employer and to the Enrolled Actuary for the Plan such
valuations, reports or other information as such persons may reasonably
require.
8.3 The accounting year of the Trust shall be the calendar year.
Within ninety days after the close of each accounting year and at such
other times as may be required by law, the Trustees shall file or caused to
be filed with the Employer a written accounting setting forth all
transactions effected by them subsequent to the end of the period covered
by their latest previous accounting, and listing the assets of the Fund at
the close of the period covered by such accounting.
8.4 Upon the earlier of the receipt by the Trustees of the Employer's
written approval of any such accounting or the expiration of ninety days
after delivery of any such accounting to the Employer, such accounting, as
originally stated or as theretofore adjusted pursuant to agreement between
the Employer and the Trustees, shall be deemed to be approved by the
Employer except as to matters, if any covered by written objections
theretofore delivered to the Trustees by the Employer which the Trustees
have not explained or adjusted in a manner satisfactory to the Employer.
The Trustees shall be released and discharged as to all items, matters and
things set forth in such accounting which are not covered by such written
objections as if such accounting had been settled and allowed by a decree
of a court having jurisdiction regarding such accounting and the Trustees,
the Employer and all persons having or claiming to have any interest in the
Fund.
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The Trustees, nevertheless, shall have the right to have its accounts
settled by judicial proceedings if they so elect, in which event the
Corporation and the Trustees shall be the only necessary parties to such
proceeding.
SECTION 9
Resignation, Removal and Succession of Trustees
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9.1 At any time, the Board of Directors of the Corporation or other
committee or body authorized to act for the Corporation regarding the Plan,
by duly adopted resolution, may remove any of the Trustees and appoint
additional or successor Trustees. Any such removal shall become effective
when a copy of said resolution certified by an officer of the Corporation
(and, if no other trustee is then serving, an acceptance of the trust
signed by the successor Trustee so appointed) is delivered to the Trustee
to be removed. Appointments of additional or successor Trustees shall
otherwise become effective when the newly-appointed Trustee accepts such
appointment in writing or upon the Trustee's attendance at a Trustees'
meeting.
9.2 Any Trustee may resign by delivering to the Corporation a written
resignation and such resignation shall become effective on the date of such
resignation. If the resigning Trustee is the only Trustee then serving,
such resignation shall not be effective until the Corporation appoints a
successor Trustee by resolution of its Board of Directors or its Executive
Committee and delivers to the resigning Trustee copies of said resolution
certified by any officer of the
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Corporation and an acceptance of the Trust signed by the successor Trustee
so appointed. If any Trustee terminates employment with any Employer, such
person shall be deemed to have resigned as Trustee on the effective date of
his termination unless he or she advises the other Trustees in writing that
he or she does not wish to resign.
9.3 All of the provisions set forth herein with respect to the
Trustees shall relate to each additional or successor Trustee with the same
force and effect as if such additional or successor Trustee had been named
herein as a Trustee.
9.4 If the removed or resigning Trustee is the only Trustee then
serving, he shall transfer and deliver the Fund to such successor Trustee
appointed to replace him. No successor Trustee shall be liable for the
acts or omissions of any prior Trustee or be obliged to examine the
accounts, records or acts of any prior Trustee or Trustees.
9.5 In the event that any corporate Trustee hereunder shall be
converted into, shall merge or consolidate with, or shall sell or transfer
substantially all its assets and business to another corporation, the
corporation resulting from such conversion, merger or consolidation, or the
corporation to which such sale or transfer shall be made, shall thereupon
become and be a Trustee under this Agreement with the same effect as though
originally so named.
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SECTION 10
Termination
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10.1 The Trust created by this Agreement is intended to be permanent
unless otherwise prohibited by law, and in such event, it shall last only
so long as one day short of the maximum time permitted by the statutes and
laws of the State of Tennessee. The Trust may, however, be terminated at
any time by any Employer insofar as it relates to such Employer, in
accordance with and as provided in the Plan pursuant to resolution or
decision of the Board of Directors or other governing authority of such
terminating Employer, by giving notice in writing to the Trustees, which
notice shall recite the date upon which the termination shall be effective.
After receipt of such notice the Trustees shall continue to hold, invest,
administer, liquidate, and distribute the assets of the Fund attributable
to such terminating Employer pursuant to the provisions of this Trust
Agreement. The Trust shall terminate as to an Employer only when no assets
of the Trust attributable to the terminating Employer remain in the
possession of the Trustee.
10.2 In no event shall any assets be returned to the Corporation or
any Employer except:
(a) contributions made in error by reason of a mistake in fact,
provided that any such refund is made within one year of the date
such contribution was made;
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(b) contributions made conditioned upon the contribution being
allowed as a deduction for federal income tax purposes and such
deduction is disallowed, provided the disallowed portion is
returned within one year of the date of disallowance;
(c) contributions made conditioned upon the qualification of the Plan
and such qualification is denied, provided such contribution is
returned within one year of the date of denial; or
(d) upon termination of the Plan or complete discontinuance of
contributions thereto, any unallocated Company contributions or
forfeiture being held in suspense because of the limitation of
Section 415 of the Code.
SECTION 11
Amendments
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11.1 The Corporation shall have the right at any time to amend this
Trust Agreement, in whole or in part, without the Consent of the Trustees
or any employer except that the Corporation may not:
(a) amend this Trust Agreement (with or without such consent) at any
time prior to the satisfaction of all liabilities under the Plan
with respect to Employees of the Employer and their
beneficiaries, to permit any part of the Fund to be used for, or
diverted to, purposes other than for the exclusive benefit of
Employees of the Employer or their beneficiaries; or
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(b) amend this Trust Agreement to increase the duties or liabilities
of the Trustees without their written consent.
11.2 Each amendment to this Trust Agreement shall be effective upon
delivery of a copy of such amendment to the Trustees by the Corporation.
11.3 Upon delivery to any Employer of an amendment hereto duly
authorized and adopted by the Corporation, the Trust shall be thereby
amended as to such Employer.
SECTION 12
Governing Law and Legal Actions
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12.1 The Trust and Fund shall have a situs in, and this instrument and
the Trust shall be construed, enforced and administered according to the
laws of, the State of Tennessee.
12.2 All provisions of this Trust Agreement shall be fully severable,
and if any provision hereof is held illegal or invalid for any reason, said
illegality or invalidity shall not affect the remaining provisions of this
Trust Agreement, and the Trust Agreement shall be construed and enforced as
if said illegal or invalid provision had never been inserted herein.
12.3 The Corporation shall have the authority to enforce this Trust
Agreement on behalf of any and all persons having or claiming any interest
in the Fund. In any action or proceeding affecting the Fund or the
administration thereof, or for instructions to the Trustees, the
Corporation and the Trustees shall be the
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only necessary parties, and no Employees or former Employees of the
Employer, their beneficiaries, or any other person having or claiming to
have an interest in the Fund, shall be entitled to any notice or process in
connection with such action or proceedings. Any judgment that may be
entered in such action or proceeding shall be binding on all persons having
or claiming to have any interest in the Fund.
SECTION 13
Adoption by Other Organizations
-------------------------------
13.1 Any corporation or other organization, now in existence or
hereafter formed or acquired, which is not already as of the date hereof an
Employer under this Plan and Trust and that is affiliated with the
Corporation may, with the approval of the Corporation's Chief Executive
Officer, adopt the Trust hereby created and the plan of which it is a part,
for all or any classification of persons in its employment and thereby,
from and after the specified effective date, become an "Employer" as
defined in the Plan. Such adoption shall be effectuated by and evidenced
by resolution or decision by the adopting organization and by approval of
the Corporation's Chief Executive Officer. The adoption resolution or
decision may contain such specific changes and variations in the Plan and
Trust terms and provisions as may be acceptable to the Corporation and the
Trustees. The adoption resolution or decision shall become, as to such
adopting organization and its Employees, a part of this Trust and related
Plan, as then or thereafter amended. It shall not be necessary for the
adopting organization to sign or execute the
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original or then amended Plan and Trust documents or any other instrument.
The effective date of the Plan and Trust for any such adopting organization
shall be that stated in the resolution or decision of adoption, and from
and after such effective date such adopting organization shall assume all
the obligations of an individual employer entity hereunder and under the
Plan. The administrative powers and control of the Corporation provided in
the Plan and this Trust Agreement, including the sole right of amendment
and of appointment and removal of the Trustees and their successors, shall
not be diminished by reason of the participation of any such adopting
organization in the Plan and Trust. Any participating employer may
withdraw from the Plan and Trust at any time without affecting other
Employers not so withdrawing, by complying with the withdrawal provisions
of the Plan and this Trust Agreement. The Corporation may, in its absolute
discretion, terminate an adopting Employer's participation at any time when
in its judgment such adopting employer fails or refuses to discharge its
obligations under the Plan.
13.2 The merger or consolidation with, or transfer of assets and
liabilities from or to, any other qualified plan shall be permitted only if
the Corporation approves such transaction and if the benefit each
participant, former participant, or beneficiary of the Plan and the other
plan would receive, if either the Plan or the other plan terminated
immediately after such merger, consolidation or transfer, would be at least
as great as the benefit they each would have received had the Plan or the
other plan been terminated immediately before any such transaction.
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13.3 The Corporation may require any other participating Employer to
pay its proportionate share of all expenses incurred in the administration
of the Plan and Trust.
SECTION 14
Trustee Actions During Tender Offer
-----------------------------------
14.1 In the event of any transaction involving one or more offers to
purchase Stock which is evidenced by the filing of a Statement on Schedule
14D-1 with the Securities and Exchange Commission ("SEC") or any other
similar transaction (such transaction referred to herein as a "Tender
Offer" and the date of filing with the SEC referred to herein as the
"Filing Date"), paragraphs (a) through (j) shall apply.
(a) Notwithstanding anything in the Plan to the contrary, after the
Filing Date,
(i) no option to receive cash instead of Stock under any of the
Plan's distribution provisions shall be honored unless the
Trustees otherwise direct, and the Stock portion of any
distribution shall be limited to amounts of Stock credited,
on or before the Filing Date, to the Accounts of the
Participant in question; and
(ii) no Participant election to invest additional amounts in
Investment Fund III shall be honored after the Filing Date.
The
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portion of any Account which otherwise would have been
invested in Investment Fund III shall instead be invested in
Investment Fund I.
(b) The Corporation shall promptly, and at its own expense, engage
the services of an Outside Independent Plan Administrator
("OIPA") experienced in administration of like plans. The OIPA
shall, on a standby basis, perform those functions (and only
those functions) which are set forth in paragraphs (c) and (g)
and which are necessary to preserve the strict confidentiality of
(i) the identity of Participants delivering instructions to the
Trustees and (ii) any other information which would reveal to the
Corporation or, if the Trustees are Employees of the Corporation,
the Trustees, whether or not (A) Stock representing the
proportionate share of Investment Fund III of a Participant's
Accounts (excluding Account 10) and (B) Stock allocated to a
Participant's Account 10 (collectively referred to as his
"Company Shares") has or has not ben tendered.
(c) (i) The Trustees shall seek by mail confidential written
instructions from each Participant, as to whether his
Company shares should be tendered pursuant to the Tender
Offer.
(ii) The Trustees shall distribute to each such Participant,
copies of all relevant material filed with the SEC with
respect to the Tender Offer. The Trustees shall have the
power to require that
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payment for such distributions of materials be made in
advance and in any event, the Trustees shall be entitled to
reimbursement out of the Trust Fund for its reasonable out-
of-pocket expenses for services rendered in the performance
of its responsibilities and duties described in this Section
14.1 (including any expenses not reimbursed by the filing
party).
(iii) The identify of each Participant and the number of his
Shares shall be determined from the list of
Participants delivered to the Trustees or, if an OIPA
has previously been appointed under this Section and if
the Trustees do not have such information because of
the confidentiality rules contained herein, by that
OIPA.
(iv) Any Stock in the Exempt Loan Suspense Account or any Stock
which is forfeited and unreallocated shall be tendered or
not tendered in the same proportions as Stock is tendered or
not tendered pursuant to Subsection (c)(i).
(d) Each Participant, shall be entitled to instruct the Trustee, with
respect to his Company Shares, either
(i) to tender all (but not less than all) such Company Shares,
or
(ii) not to tender any such Company Shares, and the Trustee shall
follow such instructions.
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(e) The Trustee shall make such follow-up efforts, through additional
mailings, bulletins to be posted in areas where notices to
Participants are normally posted and otherwise, as it finds to be
reasonable under the time constraints and other circumstances at
hand, to assure that materials referred to in Paragraph (c) have
been received by Participants, and obtain instructions from
Participants who have not otherwise responded to the Trustees
request for instructions. The Company shall provide full
cooperation to the Trustees in this regard.
(f) If, after the Trustee has made the follow-up effort set out in
Paragraph (e), a Participant does not respond to the Trustees
request for instructions, the nonresponding Participant shall be
deemed to have made the election set out in Paragraph (d)(ii).
(g) If some but less than all of the Participants' Company Shares are
tendered and sold or exchanged by the Trustees, the OIPA shall
thereafter perform all functions with respect to all Accounts as
constituted on or after the Filing Date. Records and
administration for all contributions after the Filing Date shall
be maintained by the Trustees unless that duty has also been
delegated to the OIPA.
(h) At such time as events (e.g., termination of the Plan or
----
placement of all Plan assets in investments other than Stock)
occur which obviate
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the need for the OIPA in order to preserve confidentiality, the
services of the OIPA shall be terminated and, to the extent
necessary to preserve confidentiality, its records relating to
the Plan destroyed.
(i) The proceeds of the sale of any Stock from Investment Fund III
sold by the Trustees pursuant to an instruction from a
Participant in accordance with Paragraph (d)(i) herein, shall be
invested in the other investment funds (other than the ESOP fund)
in the same proportions as such Participant's Accounts are
invested in such funds as of the Filing Date; provided, however,
that if such Participant's Accounts are not invested in any of
such funds as of the Filing Date, the sale proceeds shall be
invested in Investment Fund VI. The proceeds of the sale of any
Stock from Investment Fund V including unallocated Stock held in
the Exempt Loan Suspense Account shall be reinvested as the Plan
Administrator directs.
14.2 Except as provided in Section 14.1(g), the Trustees functions
under Section 14.1 are and shall be solely custodial and ministerial. The
Trustee shall have no powers or duties with respect to a Tender Offer
except as expressly set forth in Section 14.1 and specifically shall have
no power or duty
(a) to manage or to control the assets of the Plan in connection with
any Tender Offer,
(b) to evaluate any Tender Offer,
30
(c) to advise any Participant, as to the fairness or other features
of a Tender Offer,
(d) to tender or vote any Stock held under the Plan, except as
instructed by Participants, or
(e) to monitor or police the activities of the tendering entity or
the Corporation in promoting or resisting any Tender Offer;
provided, however, that if the Trustees become aware of any such
activity which reasonably appears to the Trustees to be coercive
or misleading in any material way to Participants, the Trustees
shall promptly demand that the offending party take appropriate
corrective action. The Trustees shall, in the event of refusal
or failure of such party to take such corrective action as the
Trustees reasonably find appropriate, communicate with
Participants as to the matter.
SECTION 15
Miscellaneous
-------------
15.1 No person dealing with the Trustees in the administration of the
Plan and Trust shall be required or entitled to see to the application of
any money paid or property delivered to the Trustees, or to determine
whether or not the Trustees are acting pursuant to authority granted to
them hereunder or to authorizations or directions herein required. The
certificate of the Trustees that they are acting in accordance with this
Trust Agreement shall protect any person relying thereon.
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The Trustees shall have full authority to delegate to one or more persons
the duties and responsibilities of the Trustees hereunder to the extent not
prohibited by applicable law.
15.2 The Trust is hereby designated as constituting a part of the Plan
intended to continue to qualify and to be tax exempt under applicable
sections of the Internal Revenue Code of 1986, as amended from time to
time, and to comply with ERISA. The Trustees may conclusively assume that
this Trust is so qualified, is exempt from federal income taxes and is in
compliance with ERISA.
15.3 Neither the creation of this Trust nor anything contained in this
Trust Agreement shall be construed as giving any person entitled to
benefits hereunder or any Employee of an Employer any equity or other
interest in the assets, business, or affairs of the Employer.
15.4 It shall be impossible by operation of this Trust, by natural
termination thereof, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement, or by any other means, prior
to the satisfaction of any and all liability under the Plan with respect to
the Participants and Beneficiaries, for any part of the Fund and the income
therefrom to be used for or inverted to purposes other than for the
exclusive benefit of the Participants and Beneficiaries. The term
"liability" as used in this Section includes both fixed and contingent
obligations to the Participants and Beneficiaries.
32
15.5 The Trustees shall be under no obligation to see to the
separation of the Fund between the individual Employers other than to
record separately the contributions from the respective Employers made with
respect to the Plan and the benefits paid under the Plan to the
Participants and Beneficiaries attributable to the respective Employers.
15.6 All provisions of this Agreement shall apply separately to each
of the Employers, provided however, that an individual Employer may, by
resolution of its Board of Directors, or other governing body, appoint
another Employer as its agent for all dealings with the Trustees and the
Trustees are hereby authorized to recognize such appointment.
15.7 In the event of an Employer's liquidation, bankruptcy, insolvency
or sale, or of its consolidation or merger to or with another organization,
the assets of the Fund attributable to such employer shall be treated as
follows:
(a) if the Plan is terminated insofar as such Employer is concerned,
the assets of the Fund attributable to such Employer and its
Employees shall be held or distributed as provided in Section 10
of this Agreement; or
(b) if a successor or surviving organization assumes the duties and
responsibilities of an Employer under the Plan and this Trust,
the Trust with respect to the Employees of the Employer and their
beneficiaries shall continue on behalf of the successor or
surviving organization; or
33
(c) if a successor or surviving organization establishes a separate
Plan and Trust for the continuation of the benefits of the
Employees of an Employer and their beneficiaries, then with the
consent of the Corporation the Trust assets held in behalf of
such Employees and the beneficiaries may be transferred to the
Trustees thereof. If such assets are not so transferred, they
shall be distributed to Participants and their beneficiaries
according to the provisions of the Plan.
15.8 No bond, surety or security shall be required of the Trustees
except as may be required by law or by the Corporation, in which case the
Corporation shall pay the premium therefor.
SECTION 16
Execution
---------
16.1 This Agreement may be executed in any number of counterparts,
each of which shall be considered an original, and no other counterpart
need be produced.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing instrument creating the Trust, Promus Hotel Corporation as the
Corporation, and Robert S. Davis, Donald H. Dempsey, Patricia R. Ferguson,
Jeffery M. Jarvis, Kelly R. Jenkins, Frederick G. Schultz and Mark C. Wells
as
34
Trustees, have executed or caused these presents to be duly executed by
proper officer thereunto authorized on the date and year first written
above.
PROMUS HOTEL CORPORATION
By: _________________________________
Vice President
THE TRUSTEES OF PROMUS HOTEL
CORPORATION SAVINGS AND
RETIREMENT PLAN
By: _________________________________
Robert S. Davis
By: _________________________________
Donald H. Dempsey
By: _________________________________
Patricia R. Ferguson
By: _________________________________
Jeffery M. Jarvis
By: _________________________________
Kelly R. Jenkins
By: _________________________________
Frederick G. Schultz
By: _________________________________
Mark C. Wells
35