Exhibit 10.20.1
TRUST UNDER
ALLIANT TECHSYSTEMS INC.
INCOME SECURITY PLAN
THIS AGREEMENT, made this fourth day of May, 1998, by and between ALLIANT
TECHSYSTEMS INC., a Delaware corporation ("Company") and U.S. BANK NATIONAL
ASSOCIATION ("Trustee").
WITNESSETH:
WHEREAS, Company has adopted the Alliant Techsystems Inc. Income Security Plan
("Plan"); and
WHEREAS, Company has incurred or expects to incur liability under the terms of
such Plan with respect to the individuals participating in such Plan ("Plan
participants" or "participants"); and
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust") and to
contribute to the Trust assets that shall be held therein, until paid to Plan
participants and their beneficiaries in such manner and at such times as
specified in the Plan; and
WHEREAS, it is the intention of Company to make contributions to the Trust to
provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan.
NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust
(a) Company shall from time to time make deposits in cash or cash
equivalents with Trustee in trust, which shall become the
principal of the Trust to be held, administered and disposed
of by Trustee as provided in this Trust Agreement. The Trust
shall be established and maintained as a revocable "grantor
trust" within the meaning of Section 671 and following of the
Internal Revenue Code of 1986, as amended.
(b) The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of Company and shall
be used exclusively for the uses and purposes of Plan
participants and beneficiaries.
(c) Company, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or cash equivalents
in trust with Trustee to augment the principal to be held,
administered 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 such additional
deposits.
Section 2. Payments to Plan Participants and Their Beneficiaries and Tax
Determinations
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of
each Plan participant (and his or her beneficiaries), that (i)
provides a formula or other instructions acceptable to Trustee
for determining the amounts so payable, (ii) the form in which
such amount is to be paid (as provided for or available under
the Plan), and (iii) the time of commencement for payment of
such amounts. Company may revise any such Payment Schedule to
reflect adjustments to payments required or permitted under
the terms of the Plan. Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such
Payment Schedule or revised Payment Schedule. The Trustee
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 benefits pursuant to
the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by Company. In addition,
to the extent that Company contributions to the Trust result
in the imposition of federal, state or local taxes to be paid
by a participant, Trustee shall determine such tax amounts for
each participant and inform Company of such determination. It
is Company's intention, pursuant to the terms of the Plan,
that no amount shall be vested with respect to a participant
until there has been a Change of Control as defined herein,
and the participant has sustained a Qualifying Termination, as
defined in the Plan.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined
by Company or such party as it shall designate under the Plan,
and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.
Section 3. Trustee Investment Authority
(a) Trustee shall have the power and authority provided under
Chapter 501B of the Minnesota Statutes, as amended, or its
successor provisions, to invest and reinvest, without
distinction between principal and income, the assets of the
Trust. In no event, however, may Trustee invest in securities
(including stock or rights to acquire stock) or obligations
issued by Company, other than a DE MINIMIS amount held in
common investment vehicles (including mutual funds for which
Trustee or any affiliate of Trustee serves as investment
advisor, custodian or other service provider) in which Trustee
invests. All rights associated with assets of the Trust shall
be exercised by Trustee or the other person designated by
Trustee, and shall in no event be exercisable by or rest with
Plan participants.
(b) Assets of the Trust may be invested and reinvested by Trustee
in any real or personal property as an ordinary prudent
investor of intelligence and integrity would purchase in an
exercise of reasonable care, judgment and diligence,
including, but merely by way of illustration:
(1) bonds, mortgages, notes, debentures, equipment trust
certificates, interest in investment trusts, shares
of stock, whether common or preferred, shares of
regulated investment companies (i.e., mutual funds,
including mutual funds for which Trustee or any
affiliate of Trustee serves as investment advisor,
custodian or other service provider as disclosed in
the current mutual fund prospectus to be provided to
Company), leasehold interest, real estate, money
market securities, such insurance company group
annuity or other insurance contracts as Company may
specify, and any other property which it may deem
suitable;
(2) commingling funds of the Trust with those of other
funds with respect to which Trustee is acting in a
fiduciary capacity and to retaining any such
investment coming into its possession as Trustee:
(3) commingling funds of the Trust with any common trust
funds maintained by Trustee or any affiliate thereof;
(4) depositing any portion of the trust fund in bank
accounts, certificates of deposit, time deposit open
accounts and other similar investments which bear a
reasonable rate of interest, in the banking
department of any bank or trust company, including
the banking department of Trustee or of any affiliate
thereof;
(5) retaining in cash or other investments which are
unproductive of income so much of the Trust fund as
it may deem advisable (e.g., Trust assets pending
investment or disbursement) which may include
retention of trust assets in noninterest-bearing
accounts in the banking department of Trustee or any
affiliate thereof;
(6) retaining the entire or a substantial part of the
principal in any shares or other interest in assets
used to initially fund the Trust or to sell all or
any part of the interest. Trustee is authorized to
retain this interest without liability for failure to
sell the interest even though the retention may
result in lack of diversification or the interest is
not the character or quality of investment permitted
by law for Trustee.
Section 4 Disposition of Income
During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.
Section 5 Accounting by Trustee
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 writing between Company and
Trustee. Within 60 days following the close of each calendar
year and within 45 days after the removal or resignation of
Trustee, Trustee shall deliver to 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.
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 Company
which is contemplated by, and in conformity with, the
terms of the Plan or this Trust and is given in
writing by Company. In the event of a dispute between
Company 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 the Trust, Company agrees
to indemnity Trustee against Trustee's costs,
expenses and liabilities (including, without
limitation, attorney's fees and expenses) relating
thereto and to be primarily liable for such payments.
If Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee
may obtain payment form the Trust.
(c) Trustee may consult with legal counsel (who may also
be counsel for Company generally) with respect to any
of its duties or obligations hereunder.
(d) Trustee may 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.
Section 7. Compensation and Expenses of Trustee
Company shall pay all administrative expenses and Trustee's
fees and expenses. If not so paid, the fees and expenses shall
be paid from the Trust.
Section 8. Resignation and Removal of Trustee
(a) Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after
receipt of such notice unless Company and Trustee
agree otherwise.
(b) Trustee may be removed by Company on 30-days notice
or upon shorter notice accepted by Trustee.
(c) If Trustee resigns or is removed following a Change
of Control, as defined herein, Company shall apply to
a court of competent jurisdiction for the appointment
of a successor Trustee or for instructions.
(d) Upon resignation or removal of Trustee and
appointment of a successor Trustee, all assets shall
subsequently be transferred to a successor Trustee.
The transfer shall be completed within 45 days after
receipt of notice of resignation, removal or
transfer, unless Company extends the time limit.
(e) 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 under
paragraph (a) or (b) of this section. 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
Section 8(a) or (b) hereof, Company may appoint any
third party, such as a bank trust department or other
party that may be granted corporate trustee powers
under state law, as a successor to replace 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
Company or the successor Trustee to evidence the
transfer.
(b) If Trustee resigns or is removed pursuant to the
provisions of Section 8(c) hereof and if, pursuant to
court direction, the Trustee is granted discretion to
select a successor Trustee, Trustee may appoint any
third party such as a bank
trust department or other party that may be granted
corporate trustee powers under state or Federal law.
The appointment of a successor Trustee shall be
effective when accepted in writing by the new
Trustee. The new Trustee shall have all the rights
and powers of the former Trustee, including ownership
rights in Trust assets. The former Trustee shall
execute any instrument necessary or reasonably
requested by the successor Trustee to evidence the
transfer.
Section 10. Amendment or Termination
(a) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company.
Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Plan.
(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. Upon termination of the Trust, any assets
remaining in the Trust shall be returned to the
Company.
(c) Upon written approval of at least 80% of the
participants (or beneficiaries in the case of
participants who have died) entitled or potentially
entitled to benefits pursuant to the terms of the
Plan, Company may terminate this Trust prior to the
time all benefit payments under the Plan have been
made. All assets in the Trust at termination shall be
returned to Company.
(d) Notwithstanding any other provision of the Plan or
the Trust, the Company shall be entitled to withdraw
from the Trust and have returned to it any amount in
excess of 120% of the amount that is the maximum
liability for the payment of benefits under the Plan
(as determined annually), provided that the amount
remaining in the Trust shall never be reduced to an
amount less than 25% of the amount of the Company
contribution for the first year of the Trust, and 50%
of the contribution in any subsequent year.
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
Minnesota.
(d) For purposes of this Trust, a "Change of Control"
shall mean
(1) the acquisition by any "person" or group of
persons (a "Person"), as such terms are used
in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended
and the regulations thereunder (the
"Exchange Act") (other than the Company or a
Subsidiary or any Company employee benefit
plan (including its trustee)) of "beneficial
ownership" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly,
of securities of the Company representing,
directly or indirectly, more than fifty
percent (50%) of the total number of shares
of the Company's then outstanding Voting
Securities;
(2) consummation of a reorganization, merger or
consolidation of the Company, or the sale or
other disposition of all or substantially
all of the Company's assets (a "Business
Combination"), in each case, unless,
following such Business Combination, the
individuals and entities who were the
beneficial owners of the total number of
shares of the Company's outstanding Voting
Securities immediately prior to both (x)
such Business Combination, and (y) any
Change Event occurring within twelve (12)
months prior to such Business Combination,
beneficially own, directly or indirectly,
more than fifty percent (50%) of the total
number of shares of the outstanding Voting
Securities of the resulting corporation, or
the acquiring corporation, as the case may
be, immediately following such Business
Combination (including, without limitation,
the outstanding Voting Securities of any
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 Business Combination, of the
total number of shares of the Company's
outstanding Voting Securities; or
(3) any other circumstances (whether or not
following a "Change Event") which the Board
determines to be a Change of Control for
purposes of this Trust after giving due
consideration to the nature of the
circumstances then represented and the
purposes of this Trust. Any determination
made under this Subsection (d)(3) shall be
irrevocable except by vote of a majority of
the members of the Board who voted in favor
of making such determination.
For purposes of this Subsection (d), a
"Change of Control" shall not result from
any transaction precipitated by the
Company's Insolvency, appointment of a
conservator, or determination by a
regulatory agency that the Company is
insolvent.
(e) "Change Event" shall mean:
(1) the acquisition after the effective date of
this Trust, by any Person (other than the
Company or a Subsidiary, or any Company
employee benefit plan (including its
trustee)) of "beneficial ownership" (as
defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities
of the Company directly or indirectly
representing fifteen percent (15%) or more
of the total number of shares of the
Company's then outstanding Voting Securities
(excluding the sale or issuance of such
securities directly by the Company, or where
the acquisition of such securities is made
by such Person from five (5) or fewer
shareholders in a transaction or
transactions approved in advance by the
Board);
(2) the public announcement by any Person of an
intention to acquire the Company through a
tender offer, exchange offer, or other
unsolicited proposal; or
(3) the individual who, as of the effective date
of this Trust Agreement, are members of the
Board (the "Incumbent Board"), cease for any
reason to constitute at least a majority of
the Board; provided, however, that if the
nomination for election of any new director
was approved by a vote of a majority of the
Incumbent Board, such new director shall,
for the purposes of this definition, be
considered a member of the Incumbent Board.
(f) "Voting Securities" shall mean any share of the
capital stock or other securities of the Company that
are generally entitled to vote in elections for
directors.
Section 12. Effective Date
The effective date of this Trust Agreement shall be March 2,
1998.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this 4th day
of May 1998.
COMPANY: TRUSTEE:
ALLIANT TECHSYSTEMS INC. U. S. BANK NATIONAL ASSOCIATION
By: /S/ Richard Schwartz By: /S/ M. R. Braun
-------------------------------- ---------------------------
Its: Chairman of the Board Its: Vice President
President, and CEO