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EXHIBIT 19
FORM OF
TRUST AGREEMENT
THIS TRUST AGREEMENT is made and entered into as of the _____ day of
___________________, 19___, by and between PURITAN-BENNETT CORPORATION, a
Delaware corporation, as grantor (the "Grantor"), and WACHOVIA BANK OF NORTH
CAROLINA, N.A., as trustee (the "Trustee");
W I T N E S S E T H:
WHEREAS, Grantor maintains for the benefit of a select group of
management or highly compensated employees or former employees listed on
Exhibit A and their beneficiaries (together referred to as the "Members" or
individually as a "Member") a plan of deferred compensation (the
"Puritan-Bennett Corporation Supplemental Retirement Benefit Plan" or simply
the "Plan"), consisting of individual deferred compensation agreements with the
Members and a Plan document adopted by the Grantor, copies of which are
attached hereto as Exhibit B, which Exhibits A and B may be supplemented by the
Grantor with additional names and arrangements from time to time; and
WHEREAS, the Plan was amended by a First Amendment effective on or
about September 1, 1993, and by a Second Amendment effective January 1, 1994;
and
WHEREAS, the payments under the Plan and Member Agreements are not
funded or otherwise secured, and Grantor desires to provide to Members greater
assurance of the future receipt of those payments pursuant to the Plan and
Member Agreements; and
WHEREAS, to provide greater assurance to Members that they will
receive the payments pursuant to the Plan and Member Agreements, the Grantor
desires to enter into an irrevocable grantor trust within the meaning of Code
Section 671, by depositing with the Trustee sufficient cash and other assets of
Grantor to assist it in meeting its future obligations to Members (the
"Trust"); and
WHEREAS, Grantor desires to appoint the Trustee as trustee of the
Trust; and
WHEREAS, the Grantor has approved the Trust established hereby;
NOW, THEREFORE, Grantor hereby establishes the Trust, effective as of
the date first set forth above, as follows:
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ARTICLE I
DEFINITIONS
1.1 Change in Control. A "Change in Control" shall be deemed to
have occurred at any of the following times:
(i) Upon the acquisition (other than from the
Corporation) by any person, entity or
"group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Exchange Act")
(excluding, for this purpose, the
Corporation or its affiliates, or any
employee benefit plan of the Corporation or
its affiliates which acquires beneficial
ownership of voting securities of the
Corporation) of beneficial ownership
(within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50%
or more of either the then outstanding
shares of common stock of the Corporation
or the Combined Voting Power of the
Corporation's then outstanding voting
securities. "Combined Voting Power" means
the combined voting power of the
Corporation's then outstanding voting
securities generally entitled to vote in
the election of directors.
(ii) At the time individuals who, as of the date
hereof, constitute the Board (as of the
date hereof, the "Incumbent Board") cease
for any reason to constitute at least a
majority of the Board, provided that any
person becoming a director subsequent to
the date hereof whose election, or
nomination for election by the
Corporation's shareholders, was approved by
a vote of at least a majority of the
directors then comprising the Incumbent
Board (other than an election or nomination
of an individual whose initial assumption
of office is in connection with an actual
or threatened election contest relating to
the election of the directors of the
Corporation, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under
the Exchange Act) shall be, for purposes of
this subsection 1.3.2, considered as though
such person were a member of the Incumbent
Board; or
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(iii) Upon the approval by the shareholders of
the Corporation of a reorganization,
merger, consolidation (in each case, with
respect to which persons who were the
shareholders of the Corporation immediately
prior to such reorganization, merger or
consolidation do not, immediately
thereafter, own more than 50% of the
Combined Voting Power of the reorganized,
merged or consolidated company's then
outstanding voting securities) or a
liquidation or dissolution of the
Corporation or of the sale of all or
substantially all of the assets of the
Corporation; or
(iv) The occurrence of any other event which the
Incumbent Board in its sole discretion
determines constitutes a Change in Control.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.3 "Insolvent" or "Insolvency" means that Grantor (a)
voluntarily files a petition for bankruptcy under federal bankruptcy law, or an
involuntary bankruptcy petition is filed against the Grantor under federal
bankruptcy law, which involuntary petition is not dismissed within 60 days of
the filing, (b) the Grantor makes a general assignment for the benefit of
creditors, or (c) the Grantor seeks or consents to the appointment of a
trustee, receiver, liquidator or similar person.
1.4 "Plan" means the Puritan-Bennett Corporation Supplemental
Retirement Benefit Plan.
1.5 "Trust" or "Trust Fund" means all property transferred to
the Trustee, in trust, by Grantor and thereafter held by the Trustee under the
Trust established pursuant to this Trust Agreement, including the investments
and reinvestments thereof and the income therefrom.
ARTICLE II
INCORPORATION OF PLAN AND MEMBER AGREEMENTS
2.1 Incorporation of Plan and Member Agreements by Reference.
The Plan and Member Agreements are incorporated herein by reference.
2.2 Trust Agreement Given Precedence Over Plan and Member
Agreements. In the event of a conflict between the terms and provisions of
this Trust Agreement and those of the Plan or a
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Member Agreement, the terms and provisions of this Trust Agreement shall be
given precedence in the administration and determination of the benefits
payable from the Trust. However, nothing contained in this Trust Agreement is
intended to diminish the amount of benefits required to be paid for the benefit
of any Member under the terms of the Plan or any Member Agreement. To the
extent possible, the terms and provisions of the Plan and each Member Agreement
and those of this Trust Agreement shall be interpreted as mutually consistent.
ARTICLE III
CLAIMS OF GENERAL CREDITORS
3.1 Trust Fund Considered as General Assets. The assets
constituting the Trust Fund shall be treated as general assets of Grantor and
shall remain subject to claims of the general creditors of Grantor under
applicable state and federal law. Nothing in the Trust Agreement shall affect
the rights of any Member as a general creditor of Grantor. No Member shall
have a preferred claim on or any beneficial ownership in the Trust Fund.
3.2 Insolvency of Grantor. In the event of Grantor's
Insolvency, Grantor's Chief Executive Officer and Grantor's Chief Financial
Officer shall inform the Trustee within a reasonable time of such Insolvency.
At any time the Trustee receives actual notice from Grantor that Grantor is
Insolvent, determines that the Grantor is Insolvent or has actual knowledge of
Grantor's Insolvency, the Trustee shall suspend all further payments to Members
and shall hold any undistributed assets of the Trust Fund for the benefit of
the general creditors of Grantor as a court of competent jurisdiction may
direct. In the event of such Insolvency, the Trustee shall have the right to
pay the assets of the Trust into such court in an interpleader proceeding for
the purpose of such court directing the proper disposition of such assets. The
Trustee and all other parties shall be bound by such direction, and payment of
the Trust assets by the Trustee to the court or pursuant to such court
direction shall discharge the Trustee from liability with respect to such
payment under the Trust. If a creditor of Grantor or any third party submits a
written allegation of Grantor's Insolvency to the Trustee, the Trustee shall
determine, within 30 days after receipt of the allegation, whether Grantor is
Insolvent. Pending such determination of Insolvency by the Trustee, the
Trustee shall suspend payments to Members. The Trustee shall resume holding
the Trust assets for the benefit of Members and resume making any payments
under the Plan and Member Agreements to Members only after the Trustee has
determined that Grantor is not Insolvent. Unless the Trustee has actual notice
of Grantor's Insolvency or has received a written allegation of same, the
Trustee shall have no duty to inquire whether Grantor is Insolvent. The
Trustee may
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rely on evidence of solvency provided by Grantor, and the Trustee shall not be
liable to any person for any good faith actions it takes on account of any such
determination.
ARTICLE IV
CONTRIBUTIONS
4.1 Contributions. Any and all contributions to the Trust shall
be at the sole discretion of the Grantor.
4.2 Duties of Trustee. The Trustee shall be responsible for
assets actually received by it as Trustee, and shall have no duty or authority
to compute amounts to be contributed or to review the computation of amounts to
be contributed.
ARTICLE V
ACCOUNTING AND PAYMENTS
5.1 Prior to Change in Control. Prior to the occurrence of a
Change in Control, the following shall apply:
(a) Accrued Benefits. No less frequently than annually,
Grantor shall furnish a written statement setting forth each Member's
benefit as of a specific date or instructions, acceptable to the
Trustee, utilizing readily determinable and objective information for
determining such benefit. The Trustee shall have no duty to
independently calculate or verify information provided by the Grantor
in accordance with the foregoing.
(b) Payments from Trust Fund. At all times during which
the Grantor is not Insolvent, and prior to a Change in Control, the
Trustee shall make payments to each Member of his or her benefits in
accordance with the instructions or directions of the Grantor as to
the form, time and amount of such benefit payments. Notwithstanding
the foregoing, Grantor may direct the Trustee to pay any amount from
the Trust Fund to the Grantor at any time during which the Grantor is
not Insolvent and prior to a Change in Control.
(c) Investment and Management of Trust Fund. The
Grantor shall have the power to direct the Trustee concerning any
aspect of investment and management of Trust assets and the power to
direct the Trustee to dispose of Trust assets or to borrow from the
Grantor or other sources such amounts determined appropriate by the
Grantor and to
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pledge, assign and/or encumber such Trust assets directed by the
Grantor as security for such debt.
5.2 Following Change in Control. Upon and following the
occurrence of a Change in Control, the following shall apply:
(a) Insurance Policies. As provided in Section 7.3, the
Trustee shall surrender any life insurance policies held by it as a
part of the Trust Fund for the cash value thereof.
(b) Member Accounting. The Trustee shall determine each
Member's benefit payable pursuant to the terms of the Plan. Grantor
shall provide Trustee with any and all information appropriate and
necessary to perform such determination, including copies of records
of the trustee and recordkeeper of the Qualified Plan.
(c) Payments from Trust Fund. At all times during which
the Grantor is not Insolvent, the Trustee shall, to the extent the
assets of the Trust Fund are adequate therefor, make payments to
Members pursuant to the terms of the Plan and Member Agreements and
pursuant to each Member's election regarding the time, manner and form
of payment. No payment shall be made to Grantor from the Trust Fund
until all Members (and beneficiaries) have received all benefits to
which they are entitled under the Plan and Member Agreements, at which
time any remaining assets of the Trust Fund, after provision for
reasonable expenses, shall be paid to the Grantor and the Trust shall
terminate.
(d) Investment and Management of Trust Fund. The
Grantor shall have no power to direct the Trustee with respect to any
matter, except to inform the Trustee of the location of a Member
pursuant to Section 7.5(c). To the extent the Trustee does not, or
may not under the terms hereof, receive direction from the Grantor,
the Trustee shall have sole discretion and responsibility for the
investment and management of Trust assets in accordance with the terms
of this Trust Agreement and the Plan and Member Agreements.
5.3 Method and Effect of Payment. Each Member may give the
Trustee reasonable instructions in writing, prior to the date a payment is to
be made to the Member, as to the method by which the Member will receive
payments, which may be by check delivered to the Member or electronic funds
transfer or any other reasonable means. The Trustee shall make payment
according to the method specified in the Member's reasonable instructions, or
if no instructions are given, by check mailed to the Member by regular U.S.
mail. To the extent benefits are paid to a Member from the Trust Fund, such
payments shall be deemed to have
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satisfied Grantor's obligation under the Plan and applicable Member Agreements.
Notwithstanding anything to the contrary contained herein, if Grantor makes any
payment to any person other than the Trustee in respect of its obligations
under a Plan and Member Agreement, or if the Trustee makes any payment for the
benefit of a Member, any such payment shall be deemed to have satisfied, to the
extent of such payment, Grantor's obligations under the applicable Member
Agreement, in order of the maturity of such obligations, and any future
benefits payable under the Plan and any such Member Agreement to the Member
shall be reduced accordingly. In any event, the Trustee shall be liable for
payment of benefits to any Member only to the extent of the lesser of-- (i) the
amount due to the Member pursuant to the terms of the Plan and Member
Agreements, or (ii) the assets in the Trust Fund from time to time.
5.4 Payment of Taxes. If a court of competent jurisdiction
decides by final judgment, or as a result of settlement and compromise between
a Member and the Internal Revenue Service, which settlement and compromise is
approved by Grantor (or the Trustee following a Change in Control), or the Code
is amended in such a manner that a tax is payable by the Member in respect of
any right, title or interest in any assets of the Trust Fund prior to the date
such assets are actually used to pay amounts to such Member pursuant to this
Trust Agreement; then, upon the occurrence of such an event, the Trustee shall
pay the present value of such Member's benefit as of the date of such event to
him or her in full satisfaction of all amounts or benefits to which the Member
is entitled from the Trust Fund.
ARTICLE VI
THE TRUST FUND
6.1 Accumulation Trust. The Trust shall be an accumulation
trust, and principal and all currently earned income shall be accumulated
during the term of the Trust. The Trustee shall hold, preserve, manage,
administer, invest and reinvest the assets of the Trust, collect the income
therefrom and, after deducting all charges and expenses properly payable
therefrom, hold and distribute the then principal of the Trust and the income
therefrom in accordance with the provisions of this Trust Agreement.
6.2 Exclusive Benefit of Members. Except as otherwise provided
herein, at no time prior to the satisfaction of all liabilities with respect to
each Member under the Plan and any Member Agreement shall any portion of the
Trust Fund be used for or diverted to purposes other than the exclusive benefit
of Members (including the defraying of reasonable expenses of
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administration of the Trust) unless and until Grantor is determined to be
Insolvent.
6.3 Investment. The assets of the Trust shall be held and
administered as a single trust. Except to the extent of instructions from the
Grantor, as herein provided, the Trust Fund shall be under the investment
management of the Trustee.
6.4 Legal Ownership. The Trustee shall be vested with legal
ownership of the assets comprising the Trust Fund. Except as otherwise
provided under the terms and provisions of the Plan and Member Agreement, no
Member shall have claim to or interest in a specific asset of the Trust Fund as
a result of any manner of accounting for a Member's interest in or benefits
under the Plan or Member Agreement.
6.5 Grantor Trust Intended. It is intended that the Trust be
taxed as a grantor trust under the provisions of Section 671 and Section
677(a)(2) of the Code and that Grantor, as grantor, be treated as "owner"
within the meaning of those provisions. Grantor shall file its federal income
tax returns in a manner consistent with these provisions of the Code.
ARTICLE VII
THE TRUSTEE
7.1 Trustee as Fiduciary. The Trustee shall be a fiduciary with
respect to the Trust and, except as otherwise provided herein, shall have the
exclusive responsibility for and all the powers necessary to receive, hold,
preserve, manage, invest and reinvest the Trust Fund as provided generally in
this Trust Agreement and to pay all costs and expenses incident thereto. The
Trustee shall not be responsible for the adequacy of the Trust Fund to meet and
discharge any liabilities of the Plan and Member Agreements. The following
entity shall have power to construe the terms of this Trust Agreement, the Plan
and the Member Agreements and to determine all questions that arise under those
documents, including entitlement to and the amount of benefits: (i) prior to
the occurrence of a Change in Control, the Grantor; (ii) upon and following the
occurrence of a Change in Control, the Trustee.
7.2 Additional Powers Relating to Investments. Subject to the
Grantor's direction prior to a Change in Control, the Trustee shall have the
following powers relating to the receipt, preservation, management, investment,
and reinvestment of both principal and income of the Trust, in addition to all
of the powers, rights, options and privileges now or hereafter provided for,
vested in, or granted to the Trustee under applicable law, except such as
conflict with the terms of this Trust Agreement or
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applicable law, and as far as possible, no subsequent legislation or regulation
shall be in limitation of the rights, powers or privileges granted the Trustee
hereunder or under applicable law at the time of the execution hereof:
(a) To purchase or subscribe for and to hold as a part
of the Trust Fund any securities or property of any kind or nature
whatsoever (other than securities issued by Grantor), whether real,
personal, or mixed, whether tangible or intangible, whether or not
productive of income, any rights or interests in property, or any
evidence or indicia of property, including, without limitation, life
insurance policies and shares of mutual funds, beneficial interests,
leaseholds, bonds, mortgages, leases, notes (including, but not
limited to, secured or unsecured notes of any kind), obligations,
savings accounts, certificates of deposit or like investments with the
commercial department of any bank (including any bank acting as
Trustee or its affiliates provided they bear a reasonable rate of
interest and the bank is supervised by the United States or a state),
common, pooled, or collective trust funds which the Trustee or any
other corporation may now have or in the future may adopt for the
collective investment of funds pursuant to Section 584 of the Code,
money market funds, or other property or interests in property as long
as the purchases are made in accordance with the requirements of
applicable provisions of state and federal law, and to retain the same
in trust;
(b) To sell, exchange, convey, transfer, or otherwise
dispose of any securities or property held by it, by private contract
or at public auction, with or without advertising, and no person
dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity, expediency or
propriety of any disposition;
(c) To vote any stocks, bonds or other securities; 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 oppose, to consent to, or otherwise participate
in corporate reorganizations or other changes affecting corporate
securities, to delegate discretionary powers, and 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 as part of the Trust Fund;
(d) To hold any investment unregistered or to register
any investment held as a part of the Trust Fund in its own name or in
the name of a nominee, and to hold any investment in bearer or in
Federal Book-Entry form or through or by a central clearing
corporation maintained by
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institutions active in the national securities markets, but the books
and records of the Trustee shall at all times show that all the
investments are part of the Trust Fund;
(e) To make, execute, acknowledge and deliver any
documents of transfer and conveyance and any other instruments or
agreements that may be necessary or appropriate to carry out the
powers of the Trustee under this Trust or incidental thereto;
(f) To settle, compromise or submit to arbitration any
claims, debts or damages due or owing to or from the Trust Fund; to
commence or defend any suits or legal or administrative proceedings
arising or necessary or appropriate in connection with the Trust, the
administration and operation thereof or the powers or authority of the
Trustee under this Trust; and to represent the Trust in all suits and
legal and administrative proceedings in any court or before any body,
board, agency, panel, or tribunal;
(g) To keep portions of the Trust Fund in cash or cash
balances as the Trustee may deem to be in the best interest of the
Trust, it being understood that the Trustee shall not be required to
pay any interest on any cash balances;
(h) To apply for or to procure life insurance or annuity
contracts upon the life of a Member; to borrow against the values of
any life insurance or annuity contract owned by the Trustee as a
portion of the Trust Fund; and to surrender any life insurance or
annuity contract owned by the Trustee as a portion of the Trust Fund;
(i) Generally, to do all acts and to execute and deliver
all instruments as in the judgment of the Trustee may be necessary or
desirable to carry out any powers or authority of the Trustee, without
advertisement, without order of court and without having to post bond
or make any returns or report of its doings to any court; and
(j) After giving prior written notice to Grantor, to
engage the services of individuals, partnerships or corporations
(including, but not limited to, lawyers, accountants, actuaries,
brokers, banks, investment counsel, or other agents or employees) to
assist and advise with respect to the management or investment of the
Trust Fund and to delegate to them such duties, rights, and powers of
the Trustee as the Trustee deems advisable in managing the Trust Fund.
7.3 Life Insurance. Notwithstanding anything herein to the
contrary, upon the occurrence of a Change in Control, the
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Trustee shall surrender all insurance policies then held by it as part of the
Trust Fund for their cash value.
7.4 Standard of Performance. Subject to the Grantor's
directions prior to a Change in Control, the Trustee, in discharging its duties
hereunder, including but not limited to the management, investment and
reinvestment of the Trust Fund, shall do so solely in the interest of Members
using the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character; shall
diversify the investments of the Trust Fund under its management within the
described funds so as to minimize the risk of large losses unless under the
circumstances it is clearly prudent not to do so; and shall otherwise act in
accordance with the provisions of this Trust Agreement and applicable federal
or state law.
7.5 Powers Relating to Payment and Distribution. The Trustee
shall have the following powers relating to payments and distributions to be
made from the Trust Fund:
(a) To the extent the same are not paid by the Grantor,
to pay out of the Trust Fund the following: amounts due and payable on
any advance made by the Trustee or on any loan made by anyone to the
Trust Fund; all taxes of any nature levied, assessed or imposed upon
the Trust Fund; reasonable expenses of the Trustee, including fees of
accountants, actuaries and legal counsel with respect to the Trust;
and the Trustee's compensation as provided in Article IX.
(b) Except where inconsistent with applicable law which
cannot be waived, to convey, assign and deliver, upon full termination
of the Trust, the Trust Fund or the net proceeds of the Trust Fund in
cash, to each Member to the extent each such Member is entitled
thereto under the Plan and the Member Agreements (which amounts shall,
prior to a Change in Control, be determined and paid in accordance
with written instructions from Grantor) and the balance, if any, to
Grantor.
(c) To make distributions out of the Trust Fund in
accordance with the provisions of Article V hereof. If the person to
receive the distribution cannot be found, the Trustee shall hold such
payment or deposit same in a bank, including the Trustee, for the
credit of that person without liability for interest thereon. If a
check in payment of the benefit hereunder has been mailed by regular
U.S. mail to the last address of the payee furnished the Trustee by
Grantor and is returned unclaimed, the Trustee shall notify Grantor
and shall discontinue further payments to payee
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until it receives instructions from Grantor or otherwise receives
information concerning the Member's location. The Trustee shall not
be required to make any investigation to determine the whereabouts or
mailing address of any person. The Trustee may make payment of any
benefit hereunder by mailing its check for the amount thereof to the
person certified to the Trustee by Grantor as the person to whom such
payment is to be made or by personally delivering same to said person.
7.6 Proof of Trustee's Authority. All persons dealing with the
Trustee are entitled to rely upon the representations of the Trustee as to its
authority and are released from any duty to inquire into its authority for
taking or omitting any action or to verify that any money paid or other
property delivered to the Trustee is used by the Trustee for Trust purposes.
Any action of the Trustee under this Trust Agreement shall be conclusively
evidenced for all purposes by a certificate or other document signed by the
Trustee, and any such certificate or document shall be conclusive evidence of
the facts recited in it. All persons shall be fully protected when acting or
relying upon any notice, resolution, instruction, direction, order,
certificate, opinion, letter, telegram or other document believed by such
persons to be genuine, to have been signed by the Trustee, and to be the act of
the Trustee.
7.7 Employment of Legal Counsel. The Trustee may engage and
consult with legal counsel of its choice, who may be counsel for Grantor, a
Member or Trustee's own general counsel, with respect to the meaning or
construction of the Plan or Member Agreement or the Trust Agreement as regards
the Trustee's obligations or duties hereunder.
7.8 Exemption from Bond. The Trustee shall not be required to
give bond or other security for the faithful performance of its duties unless
required by a law which cannot be waived or as a result of litigation; and the
Trustee shall not be required to make any inventory, return, or report of any
kind to any court unless required by a law which cannot be waived or as a
result of litigation.
ARTICLE VIII
NOTICES AND DIRECTIONS
8.1 Effective Time of Notice. The Trustee shall not be bound by
any certificate, notice, resolution, consent, order, information or other
communication unless and until it has been received by the Trustee.
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8.2 Evidence of Authority. The Trustee may accept as evidence
of the authority of any persons acting on behalf of Grantor or its agents, a
copy of resolutions of the Grantor designating such persons and conferring such
authority, and shall be entitled to recognize them as such and act upon the
instructions, directions, consents, and requests of such persons. The Trustee
may continue to act in accordance with any such notice until the receipt by it
of notice rescinding or superseding such action or resolution.
8.3 Directions of Grantor. Instructions, directions or notices
from Grantor to the Trustee, certified by a duly authorized officer appointed
by Grantor shall be accepted as conclusive evidence of the proper issuance and
contents thereof.
8.4 Reliance Upon Direction. The Trustee, in all matters
pertaining to its management, investment and distribution of the Trust, when it
acts in good faith may rely upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
believed by the Trustee to be genuine, to have been signed by a Member or a
proper representative of Grantor, and to be the act of a Member or Grantor, as
the case may be.
8.5 Notices from Trustee. Notices or communications from the
Trustee to Grantor shall be addressed to the person as shall have been
certified to the Trustee and shall be sent to that person at the principal
office of Grantor unless the Trustee shall have been instructed in writing to
send communications to another address.
ARTICLE IX
FEES AND EXPENSES
The Trustee shall be reimbursed for expenses properly and actually
incurred in the performance of its duties under the Trust, including, but not
limited to compensation to agents and fees for professional services incurred
in administration of the Trust, and shall receive fair and reasonable
compensation for services rendered as may be agreed upon from time to time
between the Trustee and Grantor. The Trustee's compensation and the expenses
of the Trust shall be paid by Grantor, but in any case, such compensation and
expenses shall be a lien or charge on the Trust Fund until actually paid. In
the event that Grantor shall fail to pay the Trustee its compensation and
expenses within 90 days of the presentation of its invoice, the Trustee is
authorized to use the assets held by the Trustee under the Trust (including, to
the extent necessary, the surrender of life insurance contracts for their cash
surrender value) to pay its unpaid compensation and expenses.
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ARTICLE X
LIABILITY OF THE TRUSTEE
10.1 In General. The Trustee shall not be liable for any act or
omission, any losses or decline in value which may be incurred upon any
investment of the Trust Fund, or for failure of the Trust Fund to produce any
or greater earnings, interest, or profits, so long as the Trustee acts in good
faith and in accordance with the responsibilities, obligations and duties
placed on it hereunder and under applicable law.
10.2 Acts or Omissions Under Direction. The Trustee shall not
be liable for any act or omission by it that is in compliance with a direction
received from Grantor prior to a Change in Control of Grantor, nor for any act
or omission of Grantor except to the extent required by applicable law. When
the Trustee has made any payment out of the Trust Fund in accordance with the
directions of Grantor, it shall not be responsible for the correctness of the
amount of the payment to the recipient, or the method by which it is paid. The
Trustee shall also be protected in relying upon any certificate, notice,
resolution, consent, order or other communication purporting to have been so
signed on behalf of Grantor which it believes to be genuine, without any
obligation on the part of the Trustee to ascertain whether or not the
provisions of the Plan or Member Agreement are thereby being complied with.
10.3 Withholding for Taxes. The Trustee shall withhold from
distributions from the Trust Fund such amounts as the trustee considers
necessary and proper for the payment of any income taxes under present (with
respect to federal income tax, currently in accordance with Treasury Regulation
Section 31.3402(g)-l) or future laws, which the Trustee is obligated to pay or
withhold.
10.4 Filing Returns or Reports. The Trustee shall not be liable
for its failure or inability to file any tax return or other report which it is
unable to file because of the failure of Grantor, after written demand by the
Trustee, to furnish the information necessary for the preparation thereof.
10.5 Indemnity. Grantor hereby agrees to indemnify and hold
harmless the Trustee from and against any and all losses, claims, damages,
liabilities, costs and expenses, including but not limited to, liability for
any judgments or settlements consented to in writing by the Trustee, which
consents will not be unreasonably given, and reasonable attorneys' fees,
arising out of or in connection with its acts or omissions taken in good faith
and in accordance with the terms of the Trust Agreement and applicable law.
The Trustee shall promptly notify Grantor of any
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claim, action or proceeding for which it may seek indemnity. Such indemnity is
a continuing obligation and shall be binding on Grantor and its successors,
whether by merger or otherwise, and assigns. In addition, such indemnity shall
survive the resignation or removal of the Trustee and/or the liquidation of the
Trust.
ARTICLE XI
ACCOUNTS
11.1 Maintenance of Records. The Trustee shall keep such
records as the Trustee considers necessary for the management of the Trust.
The Trustee's books and records of the Trust Fund shall be open to inspection
by Grantor during regular business hours of the Trustee.
11.2 Written Reports. Within sixty (60) days after the close
of each Plan year, at such other times (or shorter accounting periods) as
requested in writing by Grantor, and as of the date of the removal or
resignation of the Trustee, the Trustee shall render to Grantor a written
account of its management of the Trust Fund covering the period since the
previous account and report. The written approval of such accounting and
report by Grantor or the failure of Grantor to notify the Trustee of its
disapproval of such accounting within ninety (90) days after its receipt shall
be final and binding as to the Trustee's administration of the Trust for the
period upon Grantor and all persons who have or may thereafter have an interest
in the Trust.
ARTICLE XII
RESIGNATION, REMOVAL AND SUCCESSION
12.1 Notice of Resignation. The Trustee may resign at any time
upon giving thirty (30) days' prior written notice to Grantor.
12.2 Notice of Removal. Grantor may remove the Trustee by
giving at least five (5) business days' prior written notice to the Trustee,
unless prior thereto a successor Trustee shall have been appointed and accepted
and the Trustee consents to an earlier date.
12.3 Vacancy. Any vacancy in the office of Trustee created by
the resignation or removal of the Trustee shall not terminate the Trust. Upon
removal or resignation of the Trustee, Grantor shall appoint a successor
Trustee.
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12.4 Appointment of Successor. The appointment of a successor
Trustee hereunder shall be accomplished by Grantor's delivery to the resigning
or removed Trustee, as the case may be, a written instrument appointing such
successor Trustee, and the successor Trustee's acceptance in writing of the
appointment as successor Trustee hereunder. Any successor Trustee hereunder
shall be a national banking association or trust company having at least one
billion dollars in assets. All of the provisions set forth herein with respect
to the Trustee shall relate to each successor Trustee.
12.5 Transfer of Assets. Any successor Trustee, after
acknowledging acceptance of the Trust Agreement and accepting the Trust assets
and the accounting of the retiring Trustee, shall be vested with all the
estates, titles, rights, powers, duties, and discretions granted to the
retiring Trustee. The retiring Trustee shall execute and deliver all
assignments or other instruments within a reasonable time as may be necessary
or advisable in the discretion of the successor Trustee; provided, however, the
retiring Trustee is hereby authorized to reserve such sum of money as is
reasonable for the payment of its fees and expenses in connection with the
settlement of its account or otherwise.
12.6 Consolidation or Merger of Trustee. In the event that a
corporate Trustee shall merge or be consolidated with or otherwise be acquired
by any other corporation authorized to exercise trust powers, the continuing,
resulting or acquiring corporation shall automatically become Trustee hereunder
without the necessity of designation or appointment by Grantor.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.1 Amendment. The Trust Agreement may be amended any time and
to any extent by a written instrument executed by the Trustee and Grantor,
provided, however, that no such amendment shall be effective to the extent that
it purports to make the Trust revocable. No amendment to the Trust Agreement
shall be effective to the extent that such amendment would be inconsistent with
the intents and purposes of the Trust Agreement. No amendment shall have the
effect of retroactively changing or depriving Members of rights already accrued
hereunder. Upon and following a Change in Control, no amendment may have the
effect or possible effect of reducing the amount of payments to which the
Members are or will be entitled to receive from the Trust pursuant to the terms
hereof prior to any such amendment. For instance, the definition of
"Insolvency" may not be amended in a manner that would cause an Insolvency to
occur at a time prior to the time it would occur but for such amendment, the
definition of
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"Change in Control" may not be amended in a manner that would cause a Change in
Control to not occur at a time it would occur but for such amendment, and the
Grantor's rights under Section 5.2, relating to accounting and payments
following Change in Control, may not be amended; unless, in the case of each
such amendment, it is necessary to achieve the tax results intended for this
Trust. Furthermore, upon and following a Change in Control, the provisions of
Section 12.4, relating to appointment of a successor trustee, may not be
amended.
13.2 Ultimate Termination of the Trust. Notwithstanding any
other provisions of the Trust Agreement to the contrary, the Trust shall
terminate (a) on the complete distribution of the Trust Fund of the benefits of
all Members in accordance with the terms and provisions of this Trust Agreement
and the Plan and Member Agreements, (b) upon the delivery to the Trustee of a
written instrument terminating the Trust signed by all Members and Grantor, or
(c) prior to a Change in Control, upon the delivery to the Trustee of a writing
terminating the Trust signed by all Members who are officers of Grantor holding
a position of senior vice-president or higher and at least two-thirds of all
Members (including such officers) and Grantor. Any assets remaining in the
Trust Fund after satisfaction of all liabilities pursuant to the Plan and
Member Agreements, expenses of the Trust, and any liability pursuant to Section
10.5 hereof shall be returned to Grantor.
ARTICLE XIV
MISCELLANEOUS
14.1 Spendthrift Provisions. No principal or income payable or
to become payable from the Trust will be subject to anticipation or assignment
by any Member or any person entitled to receive benefits under a Member
Agreement; to attachment by, interference with, or control by any creditor of
any Member or any person entitled to receive benefits under the Plan or Member
Agreement; or to being taken or reached by any legal or equitable process in
satisfaction of any debt or liability of any Member or any person entitled to
receive benefits under the Plan or Member Agreement prior to its actual receipt
by the Member or such person. Any attempted conveyance, transfer, assignment,
mortgage, pledge, or encumbrance of the Trust Fund, any part of it, or any
interest in it by any Member or any person entitled to receive benefits under
the Plan or Member Agreement prior to distribution will be void, whether that
conveyance, transfer, assignment, mortgage, pledge, or encumbrance is intended
to take place or become effective before or after any distribution of trust
assets or the termination of the Trust Fund. The Trustee will under no
circumstances be required to recognize any conveyance, transfer, assignment,
mortgage, pledge or encumbrance
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by any Member or any person entitled to receive benefits under the Plan or
Member Agreement, any part of it, or any interest in it, or to pay any money or
thing of value to any creditor or assignee of any Member or such person for any
cause whatsoever; provided, however, this Section 14.1 does not affect the
provisions of Article III of the Trust Agreement.
14.2 Ownership of Contracts. The Trustee shall hold, own, and
control all contracts and policies purchased by the Trust, if any, as well as
all other property belonging to the Trust, subject to the rights of Members as
specified in the Trust Agreement.
14.3 Gender of Words. Whenever the context requires such, words
of the masculine gender used herein shall include the feminine and the neuter,
and the words used in the singular shall include the plural.
14.4 Severability. Each provision of the Trust Agreement is
severable and if any provision is found to be void as against public policy it
shall not affect the validity of any other provision hereof.
14.5 Successors and Assigns. The Trust Agreement shall be
binding upon the successors and assigns of Grantor and the Trustee.
14.6 Governing Law; Parties to Legal Actions. The provisions of
the Trust shall be construed according to the laws of the State of Kansas and,
to the extent applicable, according to the laws of the United States. The
Trustee or Grantor may at any time initiate a legal action or proceeding for
the settlement of the account of the Trustee, or for the determination of any
question or for instructions. The only necessary parties to any such action or
proceeding are the Trustee, the Member concerned, if any, and Grantor; however,
any other person or persons may be included as parties defendant at the
election of the Trustee and Grantor.
IN WITNESS WHEREOF, Grantor and Trustee have caused the Trust
Agreement to be executed in multiple counterparts, each of which shall be
deemed to be an original, as of the date first above written.
GRANTOR:
PURITAN-BENNETT CORPORATION
By:
___________________________________
ATTEST:
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Title:
___________________________________
By: _________________________________
Title: ______________________________
(CORPORATE SEAL)
TRUSTEE:
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:
____________________________________
ATTEST:
Title:
____________________________________
By: _________________________________
Title: ______________________________
(SEAL)
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