Exhibit 10.12.1
TRUST AGREEMENT
BETWEEN
CONNECTICUT WATER COMPANY
AND
RIGGS BANK N.A.
TRUSTEE
This Trust Agreement, hereinafter referred to as the `Agreement', is
made as of the date appearing at the end hereof but effective for all purposes
as of June 1, 2002, between Connecticut Water Company hereinafter referred to as
the "Employer", and Riggs Bank NA., a national banking association organized and
existing under the laws of the United States and having its principal office and
place of business in Washington, D.C., hereinafter referred to as the "Trustee'.
WITNESSETH
WHEREAS, the Employer has adopted Savings Plan of Connecticut Water
Company, hereinafter collectively referred to as the "Plan', for the benefit of
eligible employees and alternate payees and beneficiaries of deceased eligible
employees, hereinafter referred to as "Participants"; and
WHEREAS, the Plan provides that the assets thereof be held, IN TRUST,
by a trustee, subject to the provisions of a trust agreement to be entered into
between the Employer and a trustee or trustees;
WHEREAS, the Employer and its designated agent have entered into a
DCXchange Brokerage Agreement with PFPC Distributors, Inc., providing for daily
trading of certain assets of a trust to be established under the Plan;
WHEREAS, the Employer wishes to appoint the Trustee to hold and
administer the Plan assets subject to the DCXchange Brokerage Agreement and
other assets as agreed upon, as a directed trustee pursuant to the terms of this
Trust Agreement, and the Trustee is willing to serve in such capacity;
NOW THEREFORE, the Employer and the Trustee agree as follows:
1. Fund.
The Employer hereby appoints the Trustee to serve as Trustee for the
assets of the Plan subject to the DCXchange Brokerage Agreement and other assets
as agreed to by the Trustee, and establishes with the Trustee a trust account or
accounts consisting of such sums of money and such other property acceptable to
the Trustee as shall from time to time be paid or delivered to the Trustee
pursuant to this Agreement. All such money and property, all investments made
therewith and proceeds thereof and all earnings and profits thereon, less any
payments or distributions made by the Trustee pursuant to the terms of this
Agreement, are referred to herein as the "Fund".
2. Contributions and Distributions.
(a) The Employer shall make contributions to the Fund pursuant to
the terms of the Plan in such manner as agreed to by the Trustee. The Trustee
shall have no duty to determine or to enforce payment of any contribution due
under the Plan or any responsibility for the adequacy of the funding policy
adopted by the Employer to meet and discharge liabilities under the Plan.
(b) The Trustee shall make such payments and distributions as
directed in writing by the Employer. Such written direction of the Employer
shall be deemed a certification that such payments and distributions comply with
the terms of the Plan and the Employee Retirement Income Security Act of 1974 as
now in effect or as it may hereafter be amended (hereinafter referred to as
"ERISA"), and (except as provided in Section 20 of this Agreement), the Trustee
shall have no duty to verify that such payments and distributions comply with
the provisions of the Plan and applicable law.
3. Investments.
(a) The Employer by written direction to the Trustee shall
designate the investment options to be offered to the Participants and an agent
(the "Agent"), who shall be authorized to determine the allocation of available
moneys for investment among such investment options and initiate transactions
for such investment. The Trustee shall have no duty to question any action or
direction of the Employer or its Agent or any failure to give directions, or to
review the securities which are held pursuant to the Employer's directions, or
to make any suggestions to the Employer on the investment and reinvestment of,
or disposing of, such assets. The Trustee shall not have any liability or
responsibility for any loss to or depreciation of such assets because of the
purchase, retention or sale of assets in accordance with the Employer's
direction.
(b) If authorized by the Employer, the Trustee may invest
available cash balances with itself so that the cash balances may be credited
with interest paid in accordance with the Trustee's usual procedures. However,
nothing herein shall confer any authority or obligation upon the Trustee to
invest or reinvest such cash balances under an Employer's control until the
Trustee receives directions acceptable to the Trustee from the Employer.
(c) The transactions directed by the Employer shall be made upon
such terms and conditions and from or through such principals and agents,
including the Agent, as the Employer shall direct, provided that no transaction
shall be executed through the facilities of the Trustee without its consent.
(d) The Trustee shall execute any instruments necessary or
appropriate to enable the Trustee to carry out its powers hereunder. The
Employer shall give all directions to the Trustee in writing, signed by its
authorized officer, the Agent or any other such person or persons designated in
writing by the Employer, provided that the Trustee may accept oral directions
for purchases or sales from such designated person or persons subject to
confirmation in writing. The Trustee is to authorized to act and rely upon any
document delivered to it by facsimile transmission as if such documents were
originals, provided that the Trustee may request that the original document be
subsequently delivered to it by mail.
(e) The Trustee shall not be liable for and the Employer will
indemnify and hold harmless the Trustee (and any employee of the Trustee) of and
from all liability or expense (including reasonable counsel fees) because of (1)
any investment action taken or omitted by the Trustee in good faith in
accordance with any direction of the Employer or any investment inaction in the
absence of directions from the Employer, or (2) any investment action taken in
good faith by the Trustee pursuant to an order to purchase or sell securities
placed by the Employer directly to a broker or dealer.
(f) The Trustee shall not be liable for any losses to the Fund
resulting from the disposition of any investment received from the Employer.
Until receipt of any written notice of the Employer pertaining to employer
investments, the Trustee shall be fully protected in relying upon the latest
prior written notice of the Employer received by it.
4. Insurance Policies and Contracts. Unless the Plan is part of a
profit sharing and/or 401(k) plan which does not provide for annuities as an
optional form of benefit payment, the Employer may direct the Trustee to enter
into a contract or contracts or an agreement or agreements with one or more
legal reserve life insurance companies for the purchase of retirement income and
retirement annuity contracts (or policies), five-year renewable term life
insurance, one year renewable term life insurance or other form of life
insurance or other benefits, on an individual or group basis, in such manner and
in such form as the Employer may deem appropriate. Such retirement annuities and
other benefits may be purchased under one or more deposit administration type
group annuity contracts. In giving instructions concerning policies and
insurance contracts, the Employer shall give the Trustee written instructions
acceptable to the Trustee which shall include the name of the Participant, the
type of policy to be purchased, the amount of the premium or funds to be
forwarded, and the name of the insurance company. The Trustee shall not be
obligated to take any action on any policy or contract except upon Employer
written instructions acceptable to the Trustee and shall not be liable for its
acts in following the Employer's directions. The Employer shall give
instructions when requested to do so by the Trustee for any action the Trustee
must take as the contract holder or owner of a policy or insurance contract. If
the insurer denies liability under its policies or contracts, the Trustee shall
be under no obligation to bring an action unless the Employer so instructs and
has indemnified the Trustee to its satisfaction for all anticipated costs,
expenses and attorneys' fees. The Trustee is not a guarantor of any amounts due
or payable to a participant or beneficiary under any insurance contract.
Notwithstanding anything herein to the contrary, if the Plan is part of a profit
sharing and/or 401(k) plan which does not provide for annuities as an optional
form of benefit payment, the provisions of this paragraph shall neither apply
nor be enforceable.
5. Insurance Investment Contracts. The Employer or its agent may
direct the Trustee to invest all or a portion of the Fund in contracts issued by
insurance companies, including but not limited to contracts under which the
insurance company holds Fund assets in a separate account or commingled separate
account managed by the insurance company. Notwithstanding any provisions of such
contract, the Trustee's responsibilities shall be limited solely to receiving
and forwarding monies
and other properties to and from the insurance company as the Employer directs.
The Employer shall assume all other duties, responsibilities, rights, or
obligations under the contract not expressly assumed by the insurance company
for the management, control, or administration of such assets. The Trustee may
rely upon statements made by any insurance company as they affect the Trustee's
duties hereunder. The Trustee shall not be liable or responsible for the acts or
omissions of any insurance company for the portion of the Fund over which the
insurance company has control.
6. Investment Powers. The Trustee shall have the following powers
and authority in the administration of the Trust; provided, however, that such
powers and authority shall be exercised by the Trustee only upon the receipt of
direction from the Employer or its Agent:
(a) To invest and reinvest the Fund free from any limitations
imposed by state law on investments of trust funds and without distinction
between income and principal in any property, real or personal, including, but
not limited to the following: common and preferred stocks (including stock of
the Employer, or any associated, affiliated or subsidiary company of the
Employer, to the extent permitted by ERISA; governmental obligations; equipment
trust certificates; participation certificates; investment companies or trusts;
collateral trust notes; savings and time deposits (including any deposit bearing
a reasonable rate of interest that a bank or similar financial institution named
in this Agreement makes in itself or an affiliate); mutual funds including
open-end investment companies registered under the Investment Company Act of
1940 to which Trustee or an affiliate provides investment advisory, investment
management or other similar services for a fee; commercial paper including
participation in variable amount notes of borrowers of prime credit; leasebacks;
mortgages and other interests in realty; corporate bonds, debentures, notes, and
other evidences of indebtedness, secured or unsecured (including bonds,
debentures or notes, whether secured or unsecured, of the Employer or any
associated, affiliated or subsidiary company of the Employer, to the extent
permitted by ERISA); non-income producing securities or property; options; and
participation in any group or common trust funds held or maintained by the
Trustee for commingling assets of participating trusts and exempt from Federal
Income tax including, but not limited to, any group or common trust fund which
is qualified under the provisions of Section 401(a) of the Internal Revenue Code
of 1986 as amended or any successor provisions thereto, the instrument of trust
creating any such qualified group or common trust fund, to the extent of the
Fund's equitable share thereof, being deemed adopted hereby.
(b) To vote in person or by proxy, general or special, any
securities held in the Fund; to exercise conversion privileges, subscription
rights or other options; to participate in reorganizations or other changes in
property rights.
(c) To hold property hereunder in bearer form or to hold such
property in its own name or the name of its nominee, to combine certificates
representing investments hereunder with certificates of the same issue the
Trustee holds in other fiduciary capacities, to hold securities in definitive
form on a segregated or non-segregated basis or with a correspondent bank or
depository (including The Depository Trust Company (New York)) on a segregated
or non-segregated basis with such correspondent bank or depository empowered to
hold registrable securities in its nominee, to hold obligations of the United
States government and agencies thereof on a book entry basis at the appropriate
Federal Reserve bank; provided that the books and records of the Trustee shall
at all times show that all such property and securities are held hereunder, and
the trustee shall not hold any property or securities hereunder in the same
account as any individual property of the Trustee.
(d) To enter into contracts for or to make commitments either
alone or in company with others to purchase or sell at any future date any
property acquired for the Fund or which it may be authorized to acquire under
this Agreement.
(e) To retain, to exchange for any other property, to sell from
time to time in any manner (public or private), to convey or transfer any
property held in the Fund, and at any time, to divide, subdivide, partition,
mortgage, improve, alter, remodel, repair, and develop in any manner any
property, real or personal, to lease all or part of such property for any period
of time, without regard to the duration of the Trust, and to grant options to
buy or lease any such property, without regard to restrictions and without the
approval of any court.
(f) To delegate to a property manager or the holder or holders of
a majority interest in any real property or mortgage on real property at any
time constituting the Fund, the management and operation of any interest in such
real property or mortgage and the authority to sell such real property or
mortgage or otherwise carry out the decisions of such property manager or holder
or holders of such majority interest.
(g) To enforce by suit or otherwise, or to waive its rights on
behalf of the Fund, and to defend claims asserted against it or the Fund; to
compromise, adjust and settle any and all claims against or for the Fund.
(h) To borrow money from any source as may be necessary or
advisable to effectuate the purposes of the Fund.
(i) To organize corporations under the laws of any state hr the
purpose of acquiring or holding title to any property for the Fund.
(j) To employ and pay suitable agents and counsel, provided that
the Trustee is reimbursed for such expenses by the Employer.
(k) To do all other acts that the Employer may deem necessary or
proper to carry out any of the foregoing powers or otherwise in the best
interests of the Fund.
7. Income Collection and Payments on Instructions. The Trustee
shall collect the income from the Fund and shall make payments from the Fund in
such amounts and in such manner as the Employer may direct from time to time in
writing; but the obligation of the Trustee to make payments hereunder shall not
be for an amount in excess of the realizable value of the Fund at the time, and
such directions need not specify the application to be made of such payments.
8. Trustee's Records and Statements. The Trustee shall keep
accurate and detailed records of all transactions hereunder, and all its
accounts, books and records relating thereto shall be open at all reasonable
times to the inspection of the Employer or its agents. The Trustee shall furnish
its usual reports of cash transactions and statements of assets and such other
reports as the Employer and the Trustee mutually agree.
9. Reports and Collective Fund Valuation.
(a) Within 90 days after the close of the Plan's fiscal year or
such other period as the Employer and Trustee may agree and within 90 days after
either the resignation or the removal of the Trustee as provided herein, the
Trustee shall file with the Employer a written account setting forth all
investments, receipts, disbursements and other transactions effected by it
during such fiscal year or during the period from the close of the last fiscal
year to the date of such resignation or removal.
(b) Whenever the Fund holds units of any group or common trust
fund, and the Trustee must value the Fund, the Trustee may use the most recently
available unit value determined in accordance with the rules and regulations
pertaining to each group or common trust fund.
(c) If the Trustee shall be required to value the assets of any
portion of the Fund under the direction of the Employer, the Trustee may rely
for all purposes of this Agreement on any valuation which the Employer furnishes
to the Trustee.
10. Certifications. Instructions and Indemnification.
(a) Any action of the Employer pursuant to any of the provisions
of this Agreement shall be evidenced by a copy of a resolution of the Board of
Directors of the Employer, certified by the Secretary or an Assistant Secretary
of the Board of Directors and the Trustee shall be fully protected in relying
upon such resolutions so certified to it as actions of the Employer. If the
Employer designates a committee or administrator to perform duties with respect
to the Plan involving contact with the Trustee, the Employer shall promptly
certify to the Trustee from time to time the name or names of the members of
such committee or of the administrator together with specimen signatures, and
for all purposes hereunder the Trustee shall be entitled to rely upon such
certificates as evidence of the identity and authority of the committee or
administrator to act for the Employer. In the absence of any written
notification of change, the Trustee may assume that the committee or
administrator is the same as last reported to the Trustee. Any communication to
the Trustee by the committee or the administrator shall be in writing and shall
be signed by a majority of the committee or the administrator or by such person
as may be designated in writing by the committee or administrator to sign on its
behalf. The Trustee shall not be liable and the Employer shall indemnify and
hold harmless the Trustee of and from any liability or expense (including
Trustee reasonable counsel's fees) because of any disbursement of any part of
the Fund made by the Trustee in good faith at the direction of the Employer, the
committee or the administrator or any action taken or omitted in accordance with
directions of the Employer, the committee, or the administrator.
(b) The Employer shall indemnify and save the Trustee (and any
employee of the Trustee) harmless from and against any liability, cost or other
expense, including but not limited to the payment of reasonable attorneys' fees,
that the Trustee may incur in connection (whether direct or indirect) with this
Agreement or the Plan unless such liability, cost or other expense arises from
the Trustee's own negligence or willful misconduct. The Employer recognizes that
a burden of litigation may be imposed upon the Trustee as a result of some act
or transaction for which it has no responsibility or over which it has no
control under this Agreement. Therefore, the Employer agrees to indemnify and
hold harmless and, if requested, defend the Trustee (and any employee of the
Trustee) from any expenses (including reasonable counsel fees, liabilities,
claims, damages, actions, suits or other charges) incurred by the Trustee (or
its employees) in defending against any such litigation.
11. Expenses and Compensation. All expenses of the Trustee
relating to the acquisition, servicing, and disposition of investments
constituting part of the Fund, and all taxes of any kind whatsoever that may be
assessed under existing or future laws against the Fund or the income thereof
shall be charged to the Fund. All other expenses incurred by the Trustee in the
administration of this Agreement, including fees for legal services rendered to
the Trustee (whether or not rendered in connection with a judicial or
administrative proceeding and whether or not incurred while it is acting as
Trustee), such compensation to the Trustee as may be agreed upon from time to
time between the Trustee and the Employer, and all other proper charges and
disbursements of the Trustee, shall be paid from the Fund unless paid by the
Employer. Anything in the preceding sentences to the contrary notwithstanding,
the Employer shall reimburse the Trustee for any such expenses incurred by it if
for any reason such expenses cannot be paid out of the Fund or, if paid by the
Fund, are subsequently required to be restored to the Fund or to the Plan.
Nothing in this Section 11 shall be deemed to prevent the Fund from bearing any
management fees and expenses that may be charged on any investment made in or
through a group or common trust fund, an insurance company, an investment
company or any other medium for group investment. To the extent that the Fund is
invested in mutual funds to which Trustee or an affiliate provides investment
advisory and other services, Trustee or an affiliate may receive fees from the
mutual funds for such services.
12. Removal and Resignation.
(a) Resignation or removal of the Trustee will not terminate the
Trust. In the event of any vacancy in the position of Trustee, whether by the
resignation or removal of the Trustee, the Employer will appoint a successor
trustee and such appointment will become effective upon the acceptance of its
office by the successor trustee. If the Employer does not appoint such a
successor within 60 days after notice of resignation or removal is given, the
Trustee may apply to a court of competent jurisdiction for such appointment.
Each successor Trustee so appointed and accepting a Trusteeship hereunder will
have all the rights and powers and all of the duties and obligations of the
original trustee under the provisions hereof.
(b) The Employer may remove the Trustee at any time upon sixty
(60) days notice in writing to the Trustee unless the Trustee agrees to a
shorter period. The Trustee may resign at any time upon sixty (60) days notice
in writing to the Employer unless the Employer agrees to a shorter period. Upon
such removal or resignation of the Trustee, the Employer shall appoint a
successor trustee and, upon the successor trustee's acceptance of such
appointment, the Trustee shall assign, transfer and pay over to such successor
trustee the funds and properties under its control, or if the Employer
establishes an alternative funding medium, the Trustee shall assign, transfer
and pay over the funds and properties under its control as the Employer directs.
The Trustee is authorized, however, to reserve such amount as it may deem
advisable for payments of fees and expenses for the settlement of its account or
otherwise, and any balance of such reserve remaining after the payment of such
fees and expenses shall be paid as the Employer directs.
(c) No trustee will be liable or responsible for anything done or
omitted to be done in the administration of the Fund before it became Trustee or
after it ceases to be Trustee.
13. Amendment. The Employer and the Trustee may amend this
Agreement at any time by a written agreement between them; provided, however,
that no such amendment shall make it possible for any part of the corpus or
income of the Fund to be used for or diverted to purposes other than the
exclusive benefit of Participants.
14. Termination. The Employer reserves the right at any time to
terminate this Agreement upon sixty (60) days notice to the Trustee unless the
Trustee agrees to a shorter period. In the event of such termination of this
Agreement (or of the Plan under which it was established), the Trustee shall
continue to administer the Fund as herein provided until all of the purposes for
which it has been established have been accomplished or dispose of the Fund
after the payment or other provision for all expenses incurred in the
administration and termination of the Trust (including any compensation to which
the Trustee may be entitled), all in accordance with the written order of the
Employer or any successor thereto. Until the final distribution of such Fund,
the Trustee, and the Employer shall continue to have and exercise all of the
powers and discretions conferred upon them by this Agreement.
15. Successor Employer and Merger or Consolidation of Trustee. The
term "Employer" shall include its successors in business, and the term "Trustee"
shall apply to any trustee or trustees acting hereunder, whether signatory
hereto or subsequently designated by the Employer. Any corporation into which
the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger, reorganization, or consolidation to which
the Trustee may be a party, or any corporation to which all or substantially all
of the trust business of the Trustee may be transferred shall be the successor
of the Trustee hereunder without the execution or filing of any instrument or
the performance of any further act.
16. Return of Contributions. Contributions are conditional on
initial qualification of the Plan under Section 401(a), of the Internal Revenue
Code of 1986, and if the Plan and Trust do not so qualify, the Trustee may
return such contribution to the Employer upon the Employer's written direction
within one year after the date of denial of qualification. Contributions are
conditioned upon deductibility under Section 404 of the Internal Revenue Code of
1986 and to the extent such deductions are disallowed, or are made by a mistake
of fact, the Trustee may return said contribution (to the extent disallowed or
to the extent made by mistake of fact) to the Employer upon the Employer's
written direction. In making returns of contributions upon the Employer's
direction, the Trustee may accept such direction as the Employer's warranty that
such payment is provided for in the Plan and complies with both the provisions
of the Plan and with the provisions of this paragraph, and the Trustee need make
no further investigation.
17. Law Governing. This agreement shall be administered, construed
and enforced according to the laws of the District of Columbia and applicable
Federal law.
18. Exclusive Benefit of Participants. Except in the case of a
Qualified Domestic Relations Order as defined in Section 414(p) of the Internal
Revenue Code of 1986, as amended, it shall be impossible at any time prior to
the satisfaction of all liabilities to the Participants for any part of the
Fund, other than such part as is required to pay taxes, administrative expenses
or refund contributions as provided elsewhere herein, to be used for, or
diverted to, purposes other than the exclusive benefit of th8 Participants.
19. Non-alienation of Benefits. Except in the case of a Qualified
Domestic Relations Order as defined in Section 414(p) of the Internal Revenue
Code of 1986, as amended, no rights or claims to any of the monies or other
assets of the Fund shall be assignable, nor shall such rights or claims be
subject to garnishment, attachment, execution or levy of any kind; and any
attempt to transfer, assign or pledge the same shall not be recognized by the
Trustee.
20. Distribution. Notwithstanding any other provisions of this
Agreement, the Trustee may condition its delivery, transfer or distribution of
any assets upon the Trustee's receiving assurances satisfactory to it that the
approval of appropriate governmental or other authorities has been secured and
that all notice and other procedures required by applicable law have been
complied with.
21. Trustee not Liable for Duties not Assigned Herein. The duties
of the Trustee to the Plan are limited to those assumed by the Trustee by the
terms of this Agreement. The Trustee shall not be deemed by virtue hereof to be
the Administrator or Sponsor of the Plan, and shall not be responsible for
filing reports, returns or disclosures with any government agency except as may
be required of the Trustee under applicable law or regulation.
22. Separability. If any provision of this Agreement is found,
held or deemed to be void, unlawful or unenforceable under any applicable
statute or other controlling law, the remainder of this Agreement shall continue
in full force and effect.
23. Dealing with the Trustee. No person dealing with the Trustee
will be obliged to see to the application of any property paid or delivered to
the Trustee or to inquire into the expediency or propriety of any transaction or
the Trustee's authority to consummate the same, except as may specifically be
required of such person under ERISA.
24. Payment by Mail. If any check in payment of a benefit
hereunder, which had been mailed by regular U.S. mail to the last address of the
payee is returned undelivered, the Trustee shall so notify the Employer and
shall discontinue further payments to such payee until it receives further
instructions from the Employer. The Trustee shall have no duty to locate
participants.
25. Signature Authority and Conformity with Plan. The person
executing this agreement on behalf of the Employer certifies thereby that he or
she is duly authorized by the Employer consistent with the terms of the Plan to
do so. The Employer, by executing this Agreement, certifies that the Plan has
been duly adopted, that the provisions hereof are consistent with the terms of
the Plan, that all conditions and limitations in the Plan which would limit the
actions of the Trustee are expressly contained herein, and that the Employer
will promptly notify the Trustee of any amendments made to the Plan.
IN WITNESS WHEREOF, the parties hereto have caused the respective duly
authorized officers to execute this Agreement in duplicate and affix their
corporate seals hereto this 29th day of May, 2002.
ATTEST: Employer
/s/ Catherine Bokus By: /s/ David C. Benoit
CFO
ATTEST: Riggs Bank N.A., Trustee
/s/ Suzanna Fouelles By: /s/ Richard H. Deuber
12
ATTEST:
ATTEST: