Exhibit 10.6(a)
FMC CORPORATION SALARIED EMPLOYEES'
EQUIVALENT RETIREMENT PLAN
GRANTOR TRUST AGREEMENT
This Grantor Trust Agreement (the "Trust Agreement") is made this 31/st/ day of
July 2001 by and between FMC CORPORATION ("the Company") and WACHOVIA BANK, N.A.
("the Trustee").
Recitals
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(a) WHEREAS, the Company has adopted the FMC Corporation Salaried
Employees' Equivalent Retirement Plan (the "Arrangement");
(b) WHEREAS, the Company has incurred or expects to incur liability under
the terms of such Arrangement with respect to the individuals
participating in such Arrangement (the "Participants and Beneficiaries");
(c) WHEREAS, the Company has previously established a grantor trust effective
April 14, 1999 (the "Prior Trust") for such Arrangement and wishes by
this Trust (the "Trust") to amend and restate such Prior Trust and shall
contribute to the Trust assets that shall be held therein, subject to the
claims of the Company's creditors in the event of the Company's
Insolvency, and subject to the claims of a Subsidiary's creditors in the
event of the Subsidiary's Insolvency to the extent the Trust assets were
contributed on behalf of such Subsidiary's employees, until paid to
Participants and their Beneficiaries in such manner and at such times as
specified in the Arrangement and in this Trust Agreement;
(d) WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Arrangement as unfunded plans maintained for the purpose of providing
executive benefits for a select group of management or highly compensated
employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974; and
(e) WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds (the "Fund") to assist
it in satisfying its liabilities under the Arrangement.
NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
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Section 1. Establishment of The Trust
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(a) The Trust is intended to be a Grantor Trust, of which the Company is
the Grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended,
and shall be construed accordingly.
(b) The Company shall be considered a Grantor for the purposes of the
Trust.
(c) The Trust hereby established is revocable by the Company; it shall
become irrevocable upon a Potential Change in Control or Change in
Control, as defined herein (except as may otherwise be provided by this
Trust Agreement); provided however, in the event that no Change in
Control occurs within one year of a Potential Change in Control, this
Trust shall again become revocable until a Potential Change in Control
or Change in Control should occur.
(d) The Company hereby deposits with the Trustee in the Trust one-thousand
dollars and zero cents ($1,000.00) which shall become the principal of
the Trust to be held, administered and disposed of by the Trustee as
provided in this Trust Agreement.
(e) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of Participants and general
creditors as herein set forth. Participants and their Beneficiaries
shall have no preferred claim on, or any beneficial ownership interest
in, any assets of the Trust. Any rights created under the Arrangement
and this Trust Agreement shall be unsecured contractual rights of
Participants and their Beneficiaries against the Company. Any assets
held by the Trust will be subject to the claims of the general
creditors of the Company under federal and state law in the event the
Company is Insolvent, and subject to a Subsidiary's creditors in the
event of the Subsidiary's Insolvency to the extent the Trust assets
were contributed to the Trust on behalf of the Subsidiary's employees.
(f) The Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property acceptable
to the Trustee in the Trust to augment the principal to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement. Prior to a Change in Control, neither the Trustee nor any
Participant or Beneficiary shall have any right to compel additional
deposits.
(g) As soon as practicable after the Company has knowledge that a Change in
Control is imminent, but no later than the last business day
immediately preceding the date of the Change in Control, the Company
shall make a contribution to the Trust in an amount equal to the
Required Funding Amount as defined by this Trust less any assets held
by the Trust. At least each six months after the occurrence of a Change
in Control, the Company shall make a contribution in the amount, if
any, by which the Required Funding Amount exceeds the value of assets
held by the Trust.
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Section 2. Payments to Participants and Their Beneficiaries
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(a) Prior to a Change in Control, the Trustee shall make distributions
from the Trust to Participants and Beneficiaries at the direction of
the Company. Prior to a Change in Control, the entitlement of a
Participant or his or her Beneficiaries to benefits under the
Arrangement shall be determined as provided by the Arrangement, and any
claim for such benefits shall be considered and reviewed under the
procedures set out in the Arrangement.
(b) The Company may make payment of benefits directly to Participants or
their Beneficiaries as they become due under the terms of the
Arrangement. The Company shall notify the Trustee of its decision to
make payment of benefits directly prior to the time amounts are payable
to Participants or their Beneficiaries. In addition, if the principal
of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Arrangement,
the Company shall make the balance of each such payment as it falls due
in accordance with the Arrangement. The Trustee shall notify the
Company where principal and earnings are not sufficient. Nothing in
this Agreement shall relieve the Company of its liabilities to pay
benefits due under the Arrangement except to the extent such
liabilities are met by application of assets of the Trust.
(c) After a Potential Change in Control and before a Change in Control, the
Company shall deliver to the Trustee a schedule of benefits due under
the Arrangement. After a Change in Control, the Company shall continue
to make the determination of benefits due to Participants or their
Beneficiaries and shall provide the Trustee with an updated schedule of
benefits due; provided however, a Participant or their Beneficiaries
may make application to the Trustee for an independent decision as to
the amount or form of their benefits due under the Arrangement. The
Trustee shall notify the Company of any such appeal and the Company
shall be permitted to provide the Trustee with any information the
Company wishes the Trustee to consider in making a determination
pursuant to this Section. In making any determination required or
permitted to be made by the Trustee under this Section, the Trustee
shall, in each such case, reach its own independent determination, in
its absolute and sole discretion, as to the Participant's or
Beneficiary's entitlement to a payment hereunder. In making its
determination, the Trustee may consult with and make such inquiries of
such persons, including the Participant or Beneficiary, the Company,
legal counsel, actuaries or other persons, as the Trustee may
reasonably deem necessary. Any reasonable costs incurred by the Trustee
in arriving at its determination shall be reimbursed by the Company
and, to the extent not paid by the Company within a reasonable time,
shall be charged to the Trust. The Company waives any right to contest
any amount paid over by the Trustee hereunder pursuant to a good faith
determination made by the Trustee notwithstanding any claim by or on
behalf of the Company (absent a manifest abuse of discretion by the
Trustee) that such payments should not be made.
(d) In the event any Participant or his or her Beneficiary is determined to
be subject to federal income tax on any amount to the credit of his or
her account under any Arrangement prior to the time of payment
hereunder, whether or not due to the establishment of or contributions
to this Trust, a portion of such taxable amount equal to
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the federal, state and local taxes (excluding any interest or
penalties) owed on such taxable amount, shall be distributed by the
Trustee as soon thereafter as practicable to such Participant or
Beneficiary. For these purposes, a Participant or Beneficiary shall be
deemed to pay state and local taxes at the highest marginal rate of
taxation in the state in which the Participant resides or is employed
(or both) where a tax is imposed and federal income taxes at the
highest marginal rate of taxation, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. Any distributions from the Fund to a Participant
or Beneficiary under this Section 2(d) shall be applied to reduce the
Company liabilities to such Participant and/or Beneficiary under the
applicable Arrangement with such reductions to be made on a pro-rata
basis over the term of benefit payments under the Arrangement
(e) The Trustee agrees that it will not itself institute any action at
law or at equity, whether in the nature of an accounting, interpleading
action, request for a declaratory judgment or otherwise, requesting a
court or administrative or quasi-judicial body to make the
determination required to be made by the Trustee under this Section 2
in the place and stead of the Trustee. The Trustee may (and, if
necessary or appropriate, shall) institute an action to collect a
contribution due the Trust following a Change in Control or in the
event that the Trust should ever experience a short-fall in the amount
of assets necessary to make payments pursuant to the terms of the
Arrangement.
Section 3. Trustee Responsibility Regarding Payments
To The Trust Beneficiary When The Company Is Insolvent
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(a) The Trustee shall cease payment of benefits to Participants and
their Beneficiaries if the Company is Insolvent or a Subsidiary is
Insolvent to the extent the Trust assets were contributed on behalf of
the Subsidiary's employees. The Company and/or a Subsidiary shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) the
Company and/or a Subsidiary is unable to pay its debts as they become
due, or (ii) the Company and/or a Subsidiary is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, the principal
and income of the Trust shall be subject to claims of general creditors
of the Company and/or a Subsidiary under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of the
Company, or in the case of a Subsidiary, the President of the
Subsidiary shall have the duty to inform the Trustee in writing
that the Company and/or a Subsidiary is Insolvent. If a person
claiming to be a creditor of the Company and/or a Subsidiary
alleges in writing to the Trustee that the Company and/or a
Subsidiary has become Insolvent, the Trustee shall determine
whether the Company and/or a Subsidiary is Insolvent and, pending
such determination, the Trustee shall discontinue payment of
benefits to Participants or their Beneficiaries.
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(2) Unless the Trustee has actual knowledge that the Company and/ or
a Subsidiary is Insolvent, or has received notice from the
Company and/or a Subsidiary or a person claiming to be a creditor
alleging that the Company's and/or a Subsidiary is Insolvent, the
Trustee shall have no duty to inquire whether the Company and/or
a Subsidiary is Insolvent. The Trustee may in all events rely on
such evidence concerning the Company's and/or a Subsidiary's
solvency as may be furnished to the Trustee and that provides the
Trustee with a reasonable basis for making a determination
concerning the Company's and/or a Subsidiary's solvency.
(3) If at any time the Trustee has determined that the Company and/or
a Subsidiary is Insolvent, the Trustee shall discontinue payments
to Participants or their Beneficiaries and shall hold the assets
of the Trust for the benefit of the Company's general creditors
and shall hold the assets of the Trust to the extent contributed
on behalf of the employees of a Subsidiary for the benefit of the
Subsidiary's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants or their
Beneficiaries to pursue their rights as general creditors of the
Company and/or a Subsidiary with respect to benefits due under
the Arrangement or otherwise.
(4) The Trustee shall resume the payment of benefits to Participants
or their Beneficiaries in accordance with Section 2 of this Trust
Agreement only after the Trustee has determined that the Company
and/or a Subsidiary is not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof
and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments
due to Participants or their Beneficiaries under the terms of the
Arrangement for the period of such discontinuance, less the aggregate
amount of any payments made to Participants or their Beneficiaries by
the Company and/or a Subsidiary in lieu of the payments provided for
hereunder during any such period of discontinuance.
(d) The Insolvency of a Subsidiary shall not, in and of itself, cause the
Company or any other Subsidiary participating in this Trust to be
Insolvent. However, any assets attributable to such Insolvent
Subsidiary held by this Trust shall be held for the benefit of the
Insolvent Subsdiary's general creditors.
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Section 4. Payments When a Short-Fall of The Trust Assets Occurs
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(a) If there are not sufficient assets for the payment of current and
expected future benefits pursuant to Section 2 or Section 3(c) hereof
and the Company does not otherwise make such payments within a
reasonable time after demand from the Trustee, the Trustee shall
allocate the Trust assets among the Participants or their Beneficiaries
in a pro rata manner with respect to the total present value of
benefits expected for each Participant or Beneficiary.
(b) Upon receipt of a contribution from the Company necessary to make up
for a shortfall in the payments due, the Trustee shall resume payments
to all the Participants and Beneficiaries under the Arrangement. In
addition to the normally scheduled payments due under the Arrangement,
the Trustee shall make a payment to the Participants and Beneficiaries,
as soon as is practicable following the Company's contribution equal to
the amount by which any payment was reduced during the period for which
the Trustee made payments under Section 4(a). Following a Change in
Control, the Trustee shall have the right and duty to compel a
contribution to the Trust from the Company to make-up for any
shortfall.
Section 5. Payments to the Company
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Except as provided in Section 3 hereof, after the Trust has become irrevocable,
the Company shall have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Participants and their Beneficiaries pursuant to the
terms of the Arrangement. Following payment of all benefits due under the
Arrangement and any remaining fees and expenses, the Trustee shall return any
amounts remaining in the Trust to the Company.
Section 6. Investment Authority
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(a) The Trustee shall not be liable in discharging its duties hereunder,
including without limitation its duty to invest and reinvest the Fund,
if it acts for the exclusive benefit of the Participants and their
Beneficiaries, in good faith and as a prudent person would act in
accomplishing a similar task and in accordance with the terms of this
Trust Agreement and any applicable federal or state laws, rules or
regulations.
(b) Subject to investment guidelines agreed to in writing from time to time
by the Company and the Trustee prior to a Change in Control and Section
6(c), the Trustee shall have the power in investing and reinvesting the
Fund in its sole discretion:
(1) To invest and reinvest in any readily marketable common and
preferred stocks, bonds, notes, debentures (including convertible
stocks and securities but not including any stock or security of
the Trustee other than a de minimus amount held in a mutual fund),
certificates of deposit or demand or time deposits (including any
such deposits with the Trustee) and shares of investment companies
and mutual funds, without being limited to the classes or property
in which the Trustees are authorized to invest by any law or any
rule of court of any
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state and without regard to the proportion any such property
may bear to the entire amount of the Fund;
(2) To invest and reinvest all or any portion of the Fund
collectively through the medium of any proprietary mutual fund
that may be established and maintained by the Trustee;
(3) To commingle for investment purposes all or any portion of
the Fund with assets of any other similar trust or trusts
established by the Company with the Trustee for the purpose of
safeguarding deferred compensation or retirement income or
benefits of its employees and/or directors;
(4) To retain any property at any time received by the Trustee;
(5) To sell or exchange any property held by it at public or
private sale, for cash or on credit, to grant and exercise
options for the purchase or exchange thereof, to exercise all
conversion or subscription rights pertaining to any such
property and to enter into any covenant or agreement to
purchase any property in the future;
(6) To participate in any plan of reorganization, consolidation,
merger, combination, liquidation or other similar plan
relating to property held by it and to consent to or oppose
any such plan or any action thereunder or any contract, lease,
mortgage, purchase, sale or other action by any person;
(7) To deposit any property held by it with any protective,
reorganization or similar committee, to delegate discretionary
power thereto, and to pay part of the expenses and
compensation thereof any assessments levied with respect to
any such property to be deposited;
(8) To extend the time of payment of any obligation held by it;
(9) To hold uninvested any moneys received by it, without
liability for interest thereon, but only in anticipation of
payments due for investments, reinvestments, expenses or
disbursements;
(10) To exercise all voting or other rights with respect to any
property held by it and to grant proxies, discretionary or
otherwise;
(11) For the purposes of the Trust, to borrow money from others, to
issue its promissory note or notes therefor, and to secure the
repayment thereof by pledging any property held by it;
(12) Upon prior notice, to employ suitable contractors and counsel,
who may be counsel to the Company or to the Trustee, and to
pay their reasonable expenses and compensation from the Fund
to the extent not paid by the Company;
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(13) To register investments in its own name or in the name of a
nominee; to hold any investment in bearer form; and to combine
certificates representing securities with certificates of the
same issue held by it in other fiduciary capacities or to deposit
or to arrange for the deposit of such securities with any
depository, even though, when so deposited, such securities may
be held in the name of the nominee of such depository with other
securities deposited therewith by other persons, or to deposit or
to arrange for the deposit of any securities issued or guaranteed
by the United States government, or any agency or instrumentality
thereof, including securities evidenced by book entries rather
than by certificates, with the United States Department of the
Treasury or a Federal Reserve Bank, even though, when so
deposited, such securities may not be held separate from
securities deposited therein by other persons; provided, however,
that no securities held in the Fund shall be deposited with the
United States Department of the Treasury or a Federal Reserve
Bank or other depository in the same account as any individual
property of the Trustee, and provided, further, that the books
and records of the Trustee shall at all times show that all such
securities are part of the Trust Fund;
(14) To settle, compromise or submit to arbitration any claims, debts
or damages due or owing to or from the Trust, respectively, to
commence or defend suits or legal proceedings to protect any
interest of the Trust, and to represent the Trust in all suits or
legal proceedings in any court or before any other body or
tribunal; provided, however, that the Trustee shall not be
required to take any such action unless it shall have been
indemnified by the Company to its reasonable satisfaction against
liability or expenses it might incur therefrom;
(15) To hold and retain policies of life insurance, annuity contracts,
and other property of any kind which policies are contributed to
the Trust by the Company or any subsidiary of the Company or are
purchased by the Trustee;
(16) To hold any other class of assets which may be contributed by the
Company and that is deemed reasonable by the Trustee, unless
expressly prohibited herein:
(17) To loan any securities at any time held by it to brokers or
dealers upon such security as may be deemed advisable, and during
the terms of any such loan to permit the loaned securities to be
transferred into the name of and voted by the borrower or others;
and
(18) Generally, to do all acts, whether or not expressly authorized,
that the Trustee may deem necessary or desirable for the
protection of the Fund.
(c) Prior to a Change in Control, the Company shall have the right, subject to
this Section to direct the Trustee with respect to investments.
(1) The Company may at any time direct the Trustee to segregate all
or a portion of the Fund in a separate investment account or
accounts and may appoint one or more investment managers
including itself and to direct the investment and
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reinvestment of each such investment account or accounts. In such
event, the Company shall notify the Trustee of the appointment of
each such investment manager.
(2) Thereafter (until a Change in Control), the Trustee shall make
every sale or investment with respect to such investment account
as directed in writing by the investment manager(s). It shall be
the duty of the Trustee to act strictly in accordance with each
direction. The Trustee shall be under no duty to question any
such direction of the investment manager, to review any
securities or other property held in such investment account or
accounts acquired by it pursuant to such directions or to make
any recommendations to the investment manager(s) with respect to
such securities or other property.
(3) Notwithstanding the foregoing, the Trustee, without obtaining
prior approval or direction from an investment manager, shall
invest cash balances held by it from time to time in short term
cash equivalents including, but not limited to, through the
medium of any short term common, collective or commingled trust
fund established and maintained by the Trustee subject to the
instrument establishing such trust fund, U.S. Treasury Bills,
commercial paper (including such forms of commercial paper as may
be available through the Trustee's Trust Department),
certificates of deposit (including certificates issued by the
Trustee in its separate corporate capacity), and similar type
securities, with a maturity not to exceed one year; and,
furthermore, sell such short term investments as may be necessary
to carry out the instructions of an investment manager regarding
more permanent type investment and directed distributions.
(4) The Trustee shall neither be liable nor responsible for any loss
resulting to the Fund by reason of any sale or purchase of an
investment directed by an investment manager nor by reason of the
failure to take any action with respect to any investment which
was acquired pursuant to any such direction in the absence of
further directions of such investment manager.
(5) Notwithstanding anything in this Agreement to the contrary, the
Trustee shall be indemnified and saved harmless by the Company
from and against any and all personal liability to which the
Trustee may be subjected by carrying out any directions of an
investment manager or the Company issued pursuant hereto or for
failure to act in the absence of directions of the investment
manager or the Company including all expenses reasonably incurred
in its defense in the event the Company fails to provide such
defense; provided, however, the Trustee shall not be so
indemnified if it participates knowingly in, or knowingly
undertakes to conceal, an act or omission of an investment
manager or the Company, having actual knowledge that such act or
omission is a breach of a fiduciary duty; provided further,
however, that the Trustee shall not be deemed to have knowingly
participated in or knowingly undertaken to conceal an act or
omission of an investment manager or the Company with knowledge
that such act or omission was a breach of fiduciary duty by
merely complying with directions of
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an investment manager or the Company or for failure to act in the
absence of directions of an investment manager or the Company. The
Trustee may rely upon any order, certificate, notice, direction or
other documentary confirmation purporting to have been issued by the
investment manager or the Company which the Trustee reasonably
believes to be genuine and to have been issued by the investment
manager or the Company. The Trustee shall not be charged with
knowledge of the termination of the appointment of any investment
manager until it receives written notice thereof from the Company.
(6) The Company may direct the Trustee as to how to vote any Company
stock held by the Trust.
(d) Following a Change in Control, the Trustee shall have the sole and
absolute discretion in the management of the Trust assets and shall have
all the powers set forth under Section 6(b). In investing the Trust
assets, the Trustee shall consider.
(1) the needs of the Arrangement;
(2) the need for matching of Trust assets with the liabilities of the
Arrangement; and
(3) the duty of the Trustee to act solely in the best interest of the
Participants and their Beneficiaries.
(e) The Trustee shall have the right, in its sole discretion, to delegate
its investment responsibility to an investment manager who may be an
affiliate to the Trustee. In the event the Trustee shall exercise this
right, the Trustee shall remain, at all times responsible for the acts of
an investment manager. The Trustee shall have the right to purchase an
insurance policy or an annuity to fund the benefits of the Arrangement.
(f) The Company shall have the right at any time, and from time to time
in its sole discretion, to substitute assets of equal fair market value
for any asset held by the Trust. This right is exercisable by the Company
in a nonfiduciary capacity without the approval or consent of any person
in a fiduciary capacity; provided, however, that, following a Change in
Control, no such substitution shall be permitted unless the Trustee
determines that the fair market values of the substituted assets are
equal.
(g) Prior to a Change in Control, the Company shall have the right to
contribute to the Trust common stock of the Company ("Company Stock"). To
the extent that Company Stock is contributed to the Trust, it shall be
held by the Trustee pursuant to this Section 6(g).
(h) Execution of Purchases and Sales.
(1) Transactions. Purchases and sales of Company Stock shall be made on
the date on which the Trustee receives from the Company in good order all
information and documentation necessary to accurately effect such
purchases and sales (or, in the case of purchases, the subsequent date on
which the Trustee has received a wire transfer of the
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funds necessary to make such purchases). Purchases and sales of Company
Stock for the Stock Fund shall be made on the open market as necessary
unless the following applies:
(i) The Trustee is unable to determine the number of shares required
to be purchased or sold on such day; or
(ii) If the Trustee is unable to purchase or sell the total number of
shares required to be purchased or sold on such day as a result
of market conditions; or
(iii) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory
body form purchasing or selling any or all of the shares
required to be purchased or sold on such days.
In the event of the occurrence of the circumstances described in (i),
(ii) or (iii) above, the Trustee shall purchase or sell such shares as
soon as possible thereafter and shall determine the price of such
purchases or sales to be the average purchase or sales price of all
such shares purchased or sold, respectively. The Trustee may follow
written directions from the Company to deviate from the above purchase
and sale procedures.
(1) Use of an Affiliated Broker. The Company hereby directs the Trustee to
use Wachovia Securities, Inc. (WSI) to provide brokerage services in
connection with any purchase or sale of Company Stock subject to the
requirement that the Trustee take all reasonable steps to assure that
the Trust receives best execution on any transaction. The rovision of
brokerage services shall be subject to the following:
(i) To the extent such services are utilized, as consideration for
such brokerage services, the Company agrees that WSI shall be
entitled to remuneration under the authorization provision in
accordance with its normal fee schedule.
(ii) Any successor organization of WSI, through reorganization,
consolidation, merger or similar transactions, shall, upon
consummation of such transaction, become the successor broker in
accordance with the terms of this authorization provision.
(iii) The Trustee and WSI shall continue to rely on this authorization
provision until notified to the contrary. The Company reserves
the right to terminate this authorization upon sixty (60) days
written notice to WSI (or its successor) and the Trustee.
(2) Securities Law Reports. The Company shall be responsible for filing all
reports required under Federal or state securities laws with respect to
the
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Trust's ownership of Company Stock, including, without limitation, any
reports required under section 13 or 16 of the Securities Exchange Act
of 1934, and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Company Stock pending the
filing of any report. The Company shall be responsible for the
registration of any Plan interests required under Federal or state
securities laws. The Trustee shall provide to the Company such
information on the Trust's ownership of Company Stock as the Company
may reasonably request in order to comply with Federal or state
securities laws.
Section 7. Insurance Contracts
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(a) To the extent that the Trustee is directed by the Company prior to a Change
in Control to invest part or all of the Trust Fund in insurance contracts,
the type and amount thereof shall be specified by the Company. The Trustee
shall be under no duty to make inquiry as to the propriety of the type or
amount so specified.
(b) Each insurance contract issued shall provide that the Trustee shall be the
owner thereof with the power to exercise all rights, privileges, options
and elections granted by or permitted under such contract or under the
rules of the insurer. The exercise by the Trustee of any incidents of
ownership under any contract shall, prior to a Change in Control, be
subject to the direction of the Company. After a Change in Control, the
Trustee shall have all such rights.
(c) The Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan
to any person the proceeds of any borrowing against an insurance policy
held in the Trust Fund.
(d) No insurer shall be deemed to be a party to the Trust and an insurer's
obligations shall be measured and determined solely by the terms of
contracts and other agreements executed by the insurer.
Section 8. Disposition of Income
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(a) Prior to a Change in Control, all income received by the Trust, net of
expenses and taxes, may be returned to the Company or accumulated and
reinvested within the Trust at the direction of the Company.
(b) Following a Change in Control, all income received by the Trust, net of
expenses and taxes payable by the Trust, shall be accumulated and
reinvested within the Trust.
Section 9. Accounting by The Trustee
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The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in
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writing between the Company and the Trustee. Within thirty (30) days following
the close of each calendar year and within thirty (30) days after the removal or
resignation of the Trustee, the Trustee shall deliver to the Company a written
account of its administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such removal or
resignation setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
The Company may approve such account by an instrument in writing delivered to
the Trustee. In the absence of the Company's filing with the Trustee objections
to any such account within one hundred eighty (180) days after its receipt, the
Company shall be deemed to have so approved such account. In such case, or upon
the written approval by the Company of any such account, the Trustee shall, to
the extent permitted by law, be discharged from all liability to the Company for
its acts or failures to act described by such account. The foregoing, however,
shall not preclude the Trustee from having its accounting settled by a court of
competent jurisdiction. The Trustee shall be entitled to hold and to commingle
the assets of the Trust in one Fund for investment purposes but at the direction
of the Company prior to a Change in Control, the Trustee shall create one or
more sub-accounts.
Section 10. Responsibility of The Trustee
-----------------------------
(a) The Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
the Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the Arrangement or
this Trust and is given in writing by the Company. In the event of a
dispute between the Company and a party, the Trustee may apply to a court
of competent jurisdiction to resolve the dispute, subject, however to
Section 2(d) hereof.
(b) The Company hereby indemnifies the Trustee against losses, liabilities,
claims, costs and expenses in connection with the administration of the
Trust, unless resulting from the negligence or misconduct of Trustee. To
the extent the Company fails to make any payment on account of an indemnity
provided in this paragraph 10(b), in a reasonably timely manner, the
Trustee may obtain payment from the Trust. If the Trustee undertakes or
defends any litigation arising in connection with this Trust or to protect
a Participant's or Beneficiary's rights under the Arrangement, the Company
agrees to indemnify the Trustee against the Trustee's costs, reasonable
expenses and liabilities (including, without limitation, attorneys' fees
and expenses) relating thereto and to be primarily liable for such
payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the
Trust. The Trustee hereby indemnifies the Company against losses,
liabilities, claims, costs and expenses in connection with the
administration of the Trust which occur as a result of the Trustee's
negligence or breach of this Trust.
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(c) Prior to a Change in Control, the Trustee may consult with legal counsel
(who may also be counsel for the Company generally) with respect to any of
its duties or obligations hereunder. Following a Change in Control the
Trustee shall, upon notice to the Company, select independent legal counsel
and may consult with counsel or other persons with respect to its duties
and with respect to the rights of Participants or their Beneficiaries under
the Arrangement.
(d) The Trustee may, upon notice to the Company, hire agents, accountants,
actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or obligations
hereunder and may rely on any determinations made by such agents and
information provided to it by the Company.
(e) The Trustee shall have, without exclusion, all powers conferred on the
Trustee by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to this Trust
Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
Section 11. Compensation and Expenses of The Trustee
----------------------------------------
The Trustee's compensation shall be as agreed in writing from time to time by
the Company and the Trustee. A copy of the current fee schedule is listed in
Attachment A. The Company shall pay all administrative expenses and the
Trustee's fees and shall promptly reimburse the Trustee for any fees and
expenses of its agents. If not so paid, the fees and expenses shall be paid from
the Trust.
Section 12. Resignation and Removal of The Trustee
--------------------------------------
(a) Prior to a Change in Control, the Trustee may resign at any time by written
notice to the Company, which shall be effective thirty (30) days after
receipt of such notice unless the Company and the Trustee agree otherwise.
Following a Change in Control, the Trustee may resign only after the
appointment of a successor Trustee.
(b) The Trustee may be removed by the Company on thirty (30) days notice or
upon shorter notice accepted by the Trustee prior to a Change in Control.
Subsequent to a Change in Control, the Trustee may only be removed after
the Company's appointment of an independent third party national banking
association or other entity having the authority to exercise trust powers
with a market capitalization exceeding $5,000,000,000 to replace the
Trustee and the agreement by the successor Trustee to a trust agreement
containing the provisions of Sections 2(c) and 14(a) hereof.
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(c) If the Trustee resigns within two years after a Change in Control, as
defined herein, the Company, or if the Company fails to act within a
reasonable period of time following such resignation, the Trustee shall
apply to a court of competent jurisdiction for the appointment of a
successor Trustee which satisfies the requirements of Section 13 or for
instructions.
(d) Upon resignation or removal of the Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within ninety (90) days after
receipt of notice of resignation, removal or transfer, unless the Company
extends the time limit.
(e) If the Trustee resigns or is removed, a successor shall be appointed by the
Company, in accordance with Section 13 hereof, by the effective date of
resignation or removal under paragraph(s) (a) or (b) of this Section. If no
such appointment has been made, the Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for instructions.
All expenses of the Trustee in connection with the proceeding shall be
allowed as administrative expenses of the Trust.
Section 13. Appointment of Successor
------------------------
(a) If the Trustee resigns or is removed in accordance with Section 12 hereof,
the Company may appoint, subject to Section 12, any independent third party
national banking association or other entity having the authority to
exercise trust powers with a market capitalization exceeding $5,000,000,000
to replace the Trustee upon resignation or removal. The successor Trustee
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust. The former Trustee shall execute any
instrument necessary or reasonably requested by the Company or the
successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any prior
Trustee and may retain or dispose of existing Trust assets, subject to
Section 8 and 9 hereof. The successor Trustee shall not be responsible for
and the Company shall indemnify and defend the successor Trustee from any
claim or liability resulting from any action or inaction of any prior
Trustee or from any other past event, or any condition existing at the time
it becomes successor Trustee.
Section 14. Amendment or Termination
------------------------
(a) This Trust Agreement may be amended by a written instrument executed by the
Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Arrangement or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1
hereof. Additionally, no amendment may be made which would change Section
2(c) hereof.
(b) Following a Change in Control, the Trust shall not terminate until the date
on which Participants and their Beneficiaries have received all of the
benefits due to them under the terms and conditions of the Arrangement.
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(c) Upon written approval of all Participants or Beneficiaries entitled to
payment of benefits pursuant to the terms of the Arrangement, the Company
may terminate this Trust prior to the time that all benefit payments under
the Arrangement have been made. All assets in the Trust at termination
shall be returned to the Company.
Section 15. Definitions
-----------
For purposes of this Trust, the following terms shall be defined as set forth
below:
(a) Potential Change in Control shall mean the Company entering into any
agreement or making any announcement either of which, if consummated would
result in a Change in Control.
(b) Change in Control the happening of any of the following events:
(a) An acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); excluding,
however, the following: (A) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any entity controlled by the Company,
or (D) any acquisition pursuant to a transaction which complies with
Subsections (i), (ii) and (iii) of Subsection (C) of this Section
15(b);
(b) A change in the composition of the Board such that the individuals
who, as of the Effective Date, constitute the Board (such Board will
be hereinafter referred to as the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, for purposes of this Section 15(b), that any individual who
becomes a member of the Board subsequent to the Effective Date, whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) will be
considered as though such individual were a member of the Incumbent
Board; but, provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board will not be so considered as a member of
the Incumbent Board;
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(c) Consummation of a reorganization, merger or consolidation, sale or
other disposition of all or substantially all of the assets of the
Company, or acquisition by the Company of the assets or stock of
another entity ("Corporate Transaction"); excluding, however, such a
Corporate Transaction pursuant to which (i) all or substantially all
of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than
sixty percent (60%) of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than the
Company, any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, twenty percent (20%) or more
of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined
voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors except to the
extent that such ownership existed prior to the Corporate Transaction,
and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction; or
(d) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
The General Counsel, the Chief Executive Officer or the Chief Financial Officer
of the Company shall have the specific authority to determine whether a
Potential Change in Control or Change in Control has transpired under the
guidance of this Section 15(b) and shall be required to give the Trustee notice
of a Change in Control or a Potential Change in Control. The Trustee shall be
entitled to rely upon such notice, but if the Trustee receives notice of a
Change in Control from another source, the Trustee shall make its own
independent determination.
(c) "Company" shall mean the FMC Corporation unless otherwise specified by this
Trust.
(d) Required Funding Amount shall mean an amount equal to:
(1) the present value of all benefits using assumptions identical to those
used for the most recent evaluation for FAS 87 purposes of the
Company's 10K for the Arrangement; and
(2) anticipated trustee, administrative and advisory fees in connection
with the maintenance of the Trust or the Arrangement until the
Company's obligations under the Arrangement
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have been fully met, and any taxes expected to be due over the
remaining duration of the Trust.
(d) "Subsidiary" shall mean a subsidiary or an affiliate of the Company.
Section 16. Miscellaneous
-------------
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) The Company hereby represents and warrants that all of the Arrangement have
been established, maintained and administered in accordance with all
applicable laws, including without limitation, ERISA. The Company hereby
indemnifies and agrees to hold the Trustee harmless from all liabilities,
including attorney's fees, relating to or arising out of the establishment,
maintenance and administration by the Company of the Arrangement. To the
extent the Company does not pay any of such liabilities in a reasonably
timely manner, the Trustee may obtain payment from the Trust.
(c) Benefits payable to Participants and their Beneficiaries under this Trust
Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(d) This Trust Agreement shall be governed by and construed in accordance with
the laws of North Carolina.
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IN WITNESS WHEREOF, this Trust has been executed on behalf of the parties hereto
on the day and year first above written.
FMC CORPORATION WACHOVIA BANK, N.A. as TRUSTEE
By: /s/ William H. Schumann III By: /s/ Joe O. Lorg
--------------------------- --------------------------------------
Its: Senior V.P. and Chief Financial Officer Its: Senior Vice President/ Group Executive
--------------------------------------- --------------------------------------
ATTEST: ATTEST:
By: /s/ Michael W. Murray By: /s/ John N. Smith, III
-------------------------------- --------------------------------------
Its: Vice President - Human Resources Its: Assistant Secretary
-------------------------------- --------------------------------------
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Attachment A
SCHEDULE OF FEES--FMC Corporation Salaried Employees'
Equivalent Retirement Plan
WACHOVIA EXECUTIVE SERVICES -
EXECUTIVE COMPENSATION AND OTHER
NON-QUALIFIED TRUST SERVICES
--------------------------------------------------------------------------------
Non-qualified Trust Services include rabbi, secular and
other non-qualified trusts providing benefits in
addition to those from qualified plans. Plans
specifically providing for change of control benefits
are also covered by this Schedule of Fees. Charges are
quoted on an annual basis and are payable quarterly.
STANDARD SERVICES
--------------------------------------------------------------------------------
I. DOCUMENT REVIEW A Document Review and Implementation Fee will be
AND charged to all new accounts. This fee will be quoted by
IMPLEMENTATION account, based on the use of Wachovia's proprietary
documents, consulting and legal time required, as well
as administrative requirements to establish the
account.
II. CUSTODIAL AND Ad Valorem Charges - An ad valorem fee is assessed for
FIDUCIARY CHARGES all basic services related to custody of funds and is
based on the total liability of all covered plans or
Arrangement. This fee covers up to 5 (five) funds. The
following is the schedule of charges:
MARKET VALUE RATE PER $1,000
------------ ---------------
First $ 500,000 $5.00
Next 1,500,000 2.60
Next 8,000,000 1.40
Next 40,000,000 .50
Next 50,000,000 .40
Over 100,000,000 Negotiated
A minimum ad valorem charge of $20,000 shall be
applied. Fees covered by Section III-IV and VII of this
schedule will be in addition to the minimum ad valorem
charge.
Insurance, Letter In applying the ad valorem schedule, the cash surrender
of Credit and other value of insurance, letters of credit, unfunded
Non- liabilities and other non-cash funding will normally be
discounted 75% prior to change of control. Following a
change of
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Cash Funding control, this discount will no longer be used in
computing ongoing fees, and Wachovia will
normally manage assets not invested in insurance
products.
Employer Securities In applying the ad valorem schedule, employer
securities will normally be discounted 50% prior
to change of control. Following change of
control, this discount will no longer be used in
computing ongoing fees.
Research Requests for research will be performed at a cost
of $100 per hour.
Additional Funds $500.00
Insurance Policy Storage 5.00 per policy
III. INVESTMENT For individually managed portfolios, a separate
MANAGEMENT schedule will apply. Proprietary mutual funds
will be charged in accordance with the applicable
prospectus. Any money market fund must be a
Wachovia Asset Wachovia Fund.
Management
Cash Benefit Payments
IV. BENEFIT Periodic: By check $2.50 plus postage
PAYMENTS AND By ACH $1.00 plus postage
WIRES
Non-Periodic: $25.00 plus postage
In-Kind Distributions $50.00
Payment Set-up $100.00
Stop Payments $20.00 initialization
Wires $20.00 each
V. TAX REPORTING
State Tax Withholding An annual charge of $75 per account will apply
for each state where withholdings are requested
or required.
Preparation and Filing
of Form 1041 For each 1041 required to be prepared and filed,
a fee of $150 will be charged.
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VI. CHANGE OF CONTROL FEE A one-time, $25,000 minimum fee plus expenses
will be charged for each change of control in
addition to fees for ongoing services.
VII. OTHER SERVICES Financial planning services for individuals and
group educational or communications materials
are available. Fees will be negotiated prior to
commencement.
Billable time plus out-of-pocket expenses will
be charged for consulting services or other
services not covered by this schedule.
Meetings requiring the attendance of one of
Wachovia Executive Services' Consultants are
subject to a per diem fee of $1,000 per day,
per consultant, plus travel expenses.
Participant recordkeeping and performance
measurement services shall be charged in
accordance with separate schedules.
For on-line and PC downloading support,
appropriate additional charges will be made.
The physical storage of insurance policies is
not included in the above charges.
For account terminations less than two years
from inception, a minimum, prorated ad valorem
fee for the initial two year period plus
expenses will be charged.
Additional reasonable fees will be charged for
services not covered by this schedule.
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