EXHIBIT 10.13
MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT FOR
THE BENEFIT OF _________________________
This Management Incentive Trust Agreement is made effective the 8th day
of May, 1998, by and among MBCI Operating, L.P., a Texas Limited Partnership and
Metal Coaters Operating, L.P., a Texas Limited Partnership (hereinafter referred
to as "MBCI"), and NationsBank of Texas, N.A. (hereinafter referred to as
"Trustee").
WITNESSETH
WHEREAS, MBCI has adopted a Management Incentive Scheme (hereinafter
referred to as the "Plan"), an executed copy of which is attached hereto as
Exhibit "A" and hereby incorporated by reference, in which certain employees
have been allowed to participate; and
WHEREAS, MBCI has designated _________________________, as a
Participant under the Plan; and
WHEREAS, MBCI has incurred or expects to incur liability under the
terms of such Plan; and
WHEREAS, MBCI desires to establish an irrevocable grantor trust
(hereinafter referred to as the "Trust"), and shall transfer to such Trust
certain assets which shall be held therein for the purposes and under the
direction and constraints contained in this document, until such time as they
may be distributed under the Plan; and
WHEREAS, it is the intention of MBCI to transfer and contribute assets
to the Trust under the Plan, for the Trustee to act as a repository for and to
safeguard such assets, and, the Trustee is willing to act as Trustee under the
terms of this document and hold such assets for the purposes herein contained;
and
WHEREAS, MBCI shall appoint one or more of its employees to act as the
Trust and Plan Recordkeeper (hereafter referred to as the "Recordkeeper") to
perform such accounting and administrative services as are required by this
Trust and the Plan, and further is willing to provide said services under the
direction and requirements of this Trust or the Plan;
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties do hereby establish this Trust, agree to be bound
by and operate under the terms of this Trust Agreement, and further agree that
the assets of the Trust shall be held, administered, accounted for and
distributed under the terms and conditions enumerated herein, as follows:
MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
SECTION 1. ESTABLISHMENT OF TRUST
A. MBCI hereby agrees to deposit with Trustee in trust the sum of
exactly _________________________ ($_______________), in cash, in kind, or in
other forms to be administered and together with all income and accumulations to
be disposed of as provided in this Trust Agreement, which shall become the
principal and disposed of by Trustee as provided in this Trust Agreement.
Neither Trustee nor any Plan Participant or beneficiary shall have any right to
compel any additional deposits.
B. The Trust hereby established is irrevocable by MBCI subject to the
terms and conditions of the Plan.
C. The Trust is intended to be a grantor trust, of which MBCI 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.
D. The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of MBCI and shall be used exclusively for
the uses and purposes of Plan Participants and general creditors as herein set
forth. Plan 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 Plan(s) and this Trust Agreement shall be mere unsecured
contractual rights of Plan Participants and their beneficiaries against MBCI.
Any assets held by the Trust will be subject to the claims of MBCI's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3A herein.
SECTION 2. PAYMENTS FOR THE BENEFIT OF PLAN
PARTICIPANTS AND THEIR BENEFICIARIES.
A. Annual Earnings. The Trustee shall retain, for the benefit of each
Plan Participant, all of the annual earnings of the Trust.
1. All retained, undistributed earnings shall be accumulated
with and become a part of the undistributed corpus of the Trust.
B. Vested Portion. During the term of this Trust and the Plan, MBCI may
deliver to the Trustee a schedule directing the Trustee to distribute all of the
corpus and earnings of the Trust to MBCI for the benefit of the Participant.
Upon receipt of such instruction, the Trustee shall distribute the amount
indicated by MBCI to MBCI for the benefit of the Participant. MBCI shall pay to
_________________________ all distributions of earnings in excess of the amount
required to be withheld and paid to taxing authorities. MBCI shall make
provision for the reporting and withholding of any federal, state or local taxes
that may be required to be withheld with respect to the payment of the vested
portion and shall pay amounts withheld to the appropriate taxing authorities.
MBCI shall, upon request from the Trustee, provide verification that such
amounts have been reported, withheld and paid by MBCI or the Participant.
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
C. The entitlement of a Plan Participant or his or her beneficiaries to
benefits under the Plan(s) shall be determined by MBCI or such party as it shall
designate under the Plan(s), and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan(s).
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN MBCI IS INSOLVENT.
A. Trustee shall cease payment for the benefit of Plan Participant and
his beneficiaries if MBCI is Insolvent. MBCI shall be considered "Insolvent" for
purposes of this Trust Agreement if (1) MBCI is unable to pay its debts as they
become due, or (2) MBCI 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 MBCI
under federal and state law as set forth below:
1. The Chief Executive Officer of MBCI shall have the duty to
inform Trustee in writing of Company's Insolvency. If a person claiming to be a
creditor of MBCI alleges in writing to Trustee that MBCI has become Insolvent,
Trustee shall determine whether MBCI is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to Plan
Participants or their beneficiaries.
2. Unless Trustee has actual knowledge of MBCI's Insolvency,
or has received notice from MBCI or a person claiming to be a creditor alleging
that MBCI is Insolvent, Trustee shall have no duty to inquire whether MBCI is
Insolvent. Trustee may in all events rely on such evidence concerning MBCI's
solvency as may be furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning MBCI's solvency.
3. If at any time Trustee has determined that MBCI is
Insolvent, Trustee shall discontinue payments for the benefit of Plan
Participant or his beneficiaries and shall hold the assets of the Trust for the
benefit of MBCI's general creditors. Nothing in this Trust Agreement shall in
any way diminish any rights of Plan Participant or his beneficiaries to pursue
their rights as general creditors of MBCI with respect to benefits due under the
Plan(s) or otherwise.
4. Trustee shall resume the payment of benefits for the
benefit of Plan Participant or his beneficiaries in accordance with Section 2 of
this Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
C. Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3B hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due for the
benefit of Plan Participant or his beneficiaries under the terms of the Plan(s)
for the period of such discontinuance, less the aggregate amount of any payments
made
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
to Plan Participant or his beneficiaries by MBCI in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. INVESTMENT AUTHORITY
A. In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by MBCI or any entity owning all
or part of MBCI; provided, however, that the Trustee may invest in the 9 1/4%
senior subordinated notes due 2009 issued by NCI Building Systems, Inc, a
Delaware corporation and ultimate parent company of the Company. All rights
associated with assets of the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercisable or rest with MBCI or
the Plan Participant.
B. Subject to the exception in Paragraph A above, investments of the
Trust funds, including principal and earned and undistributed income, shall be
made by the Trustee in accordance with the instructions delivered to the
Trustee, in writing, by an officer designated, in writing, by the board of
directors of NCI Operating Corp., a Nevada corporation, which is the general
partner of MBCI.
SECTION 5. ACCOUNTING BY TRUSTEE
Trustee shall keep accurate and detailed records of all earnings,
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
MBCI and Trustee. Within thirty (30) days following the close of each calendar
quarter and within thirty (30) days after the removal or resignation of Trustee,
Trustee shall deliver to MBCI 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 earnings,
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.
SECTION 6. RESPONSIBILITY OF TRUSTEE
A. 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 Trustee shall incur
no liability to any person for any action taken pursuant to a direction, request
or approval given by MBCI which is contemplated by, and in conformity with, the
terms of the Plan(s) or this Trust and is given in writing by MBCI. The Trustee
shall not be liable to the Trust or to any person having a beneficial interest
in the Trust for any losses or decline in value which may be incurred in any
investment of the Trust, so long as the Trustee acts, without negligence, in
good faith and in accordance with the terms of this
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
Trust Agreement. In the event of a dispute between MBCI and a party, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
B. If Trustee undertakes or defends any litigation arising in
connection with this Trust, MBCI agrees to indemnify Trustee against Trustee's
costs, expenses and liabilities (including, without limitation, attorneys' fees
and expenses) relating thereto and to be primarily liable for such payments.
However, MBCI's obligations to indemnify Trustee for its costs, expenses and
liabilities (including, without limitation, attorneys' fees and expenses) shall
be expressly conditioned upon a timely, written notification of a claim
submitted by Trustee to MBCI with the express understanding and agreement that
upon receipt from MBCI of its written statement of intention to accept the claim
for indemnification, MBCI shall have the sole right to retain counsel to
prosecute or defend the claim and shall, thereafter, have no obligation to the
Trustee, for its costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) incurred by Trustee. Additionally, MBCI's
obligations to indemnify Trustee are conditioned upon Trustee's full cooperation
in the defense of any claim tendered for indemnification.
C. Trustee may, at its expense, consult with legal counsel (who may
also be counsel for MBCI generally) with respect to any of its duties or
obligations hereunder.
D. Trustee may, at its expense, hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.
E. Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
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 such policy.
F. Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, 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 201.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 7. COMPENSATION AND EXPENSES OF TRUSTEE
A. Trustee shall be entitled to a reasonable and customary fee for
serving as Trustee.
B. Any and all expenses, costs or fees, incurred by the Trustee in the
administration of this Trust or in its capacity as Trustee hereunder, shall be
borne wholly by the Trustee without charge to or reimbursement from MBCI, the
Trust or any person having a beneficial interest in
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
the Trust or its assets. The fee payable to the Trustee, which may upon
agreement of MBCI and the Trustee be from time-to-time adjusted, shall be the
only sums due and payable to the Trustee.
SECTION 8. RESIGNATION AND REMOVAL OF TRUSTEE
A. Trustee may resign at any time by written notice to MBCI, which
shall be effective thirty (30) days after receipt of such notice unless MBCI and
Trustee agree otherwise.
B. Trustee may be removed by MBCI on thirty (30) days notice or upon
shorter notice accepted by Trustee.
C. Upon an event of Termination of the Plan or an event of Good Reason,
both of which are defined in the Plan, Trustee may not be removed by MBCI for
two (2) years.
D. If Trustee resigns or is removed in accordance with the terms of
this Trust Agreement, MBCI shall appoint a successor Trustee.
E. Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days after receipt
of notice of resignation, removal or transfer and the appointment of a successor
Trustee, unless MBCI extends the time limit.
F. Notwithstanding anything to the contrary contained in 9B or 9E
above, if MBCI removes the Trustee because of Trustees failure to act in
accordance with the Terms of this Trust Agreement, the applicable notice period
and time for delivery of records and assets shall be shortened to ten (10) days.
G. If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 9 hereof, by the effective date of resignation or
removal in accordance with the terms of this Trust Agreement. If no such
appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
SECTION 9. APPOINTMENT OF SUCCESSOR.
A. If Trustee resigns [or is removed] in accordance with the terms of
this Trust Agreement, MBCI may appoint any third party, such as a bank trust
department or other party that may be granted corporate trust powers under state
law, as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by MBCI or the successor Trustee to
evidence the transfer.
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
SECTION 10. AMENDMENT OR TERMINATION
A. This Trust Agreement may be amended by a written instrument executed
by Trustee and MBCI. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan(s), provided, however, that any such
amendment or reformation shall be void to the extent that it adversely affects
the Participants in the Plan as a group; and
B. The Trust shall not terminate until the date on which Plan
Participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan(s). Upon termination of the Trust any assets remaining
in the Trust, after all distributions to Plan Participants, shall be returned to
MBCI.
C. Upon written approval of Participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan(s), MBCI may terminate
this Trust prior to the time all benefit payments under the Plan(s) have been
made. All assets in the Trust at termination shall be returned to MBCI.
SECTION 11. 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. Benefits payable to Plan 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.
C. This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
D. If this Trust Agreement conflicts, or is held or deemed to conflict,
with any of the terms of the Plan, the terms of the Plan shall control and this
Trust Agreement shall be automatically amended to the extent necessary to remove
or resolve the conflict. The Trustee acknowledges that it has received a copy of
the Plan, as currently constituted, and agrees to promptly provide the Trustee
with all amendments to the Plan as soon as possible after their adoption.
E. In the event any section of this document shall become in fact or by
operation of law illegal or ineffective, it shall become a nullity without
invalidating the remaining sections. To the extent permitted by law, no benefits
under this Trust shall be subject to assignment, attachment, garnishment, levy,
execution or other legal process. No benefit, with the exception of an obvious
error, actually paid to any beneficiary shall be subject to reclaim by either
the Trustee or MBCI.
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
F. The headings, subheadings and paragraph identifiers are provided for
convenience only and as such are not part of this Trust Agreement. This Trust
may be executed in multiple counterparts, each of which shall constitute an
original of this instrument.
G. Any notice to any party required by this instrument shall be in
writing, signed by the party giving notice, and shall be effective seven (7)
days after it is deposited, deemed given the United States Mail, postage paid,
return receipt requested, to the last known address of the party to whom the
notice need be given.
SECTION 12. EFFECTIVE DATE
The effective date of this Trust Agreement shall be May 8, 1998.
SECTION 13. DUTIES OF THE RECORDKEEPER
A. The Recordkeeper shall keep and maintain detailed records of each
Plan Participant's account. With respect to the individual account of each Plan
Participant, the Recordkeeper shall provide to MBCI and each Participant a
report on an annual basis which details the contributions, distributions,
changes in specific assets, cost and fair market value of assets, and earnings
thereon, which occurred during the calendar year. The report shall be
distributed within thirty (30) days after the end of each calendar year.
B. The Recordkeeper shall, upon notice from MBCI that benefits are due
to any Participant under the Plan, calculate the amount and notify the Trustee
in a timely manner so the Trustee may distribute the benefit due. Upon
notification to the Trustee and confirmation of payment from the Trustee, the
Recordkeeper shall charge the account of the Participant accordingly.
C. The Recordkeeper shall make its books, records and calculations open
and available for inspection by any Participant at all reasonable times and upon
reasonable notice; provided, however, that each Participant shall only be
entitled to inspect the books, records and calculations which pertain to that
Participant's individual account.
D. The Recordkeeper shall prepare filings required by the Internal
Revenue Service and any other federal, state or local government agency relating
to the Trust.
E. If MBCI utilizes the services of a third-party recordkeeper, then a
copy of the agreement with such recordkeeper shall be provided to Trustee.
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________
EXECUTED ON THIS 8TH DAY OF MAY, 1998.
METAL COATERS OPERATING, L.P. MBCI OPERATING, L.P.
BY: /s/ Kenneth W. Maddox BY: /s/ Kenneth W. Maddox
------------------------------ --------------------------------
Printed Printed
Name: Kenneth W. Maddox Name: Kenneth W. Maddox
---------------------------- ------------------------------
Title: Vice President/CFO Title: Vice President/CFO
--------------------------- -----------------------------
NATIONSBANK OF TEXAS, N.A.
BY: /s/ Dennis A. Young
--------------------------------
Printed
Name: Dennis A. Young
------------------------------
Title: Senior Vice President
-----------------------------
ACCEPTED BY:
- ---------------------------------------
, Participant
- --------------------------
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MBCI OPERATING, L.P. AND
METAL COATERS OPERATING, L.P.
MANAGEMENT INCENTIVE TRUST AGREEMENT
FOR THE BENEFIT OF _________________