Exhibit 10.87
SECURITY PACIFIC NATIONAL BANK
TRUST AGREEMENT FOR THE
CHARLES SCHWAB PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
<PAGE>
SECURITY PACIFIC NATIONAL BANK
TRUST AGREEMENT FOR THE
CHARLES SCHWAB PROFIT SHARING
AND EMPLOYEE STOCK OWNERSHIP PLAN
INDEX
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Page
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ARTICLE I ACCEPTANCE OF TRUST............................... 1
1.01 Acceptance of the Trust....................... 1
ARTICLE II DEFINITIONS....................................... 1
2.01 Plan Definitions.............................. 1
2.02 Special Definitions........................... 1
ARTICLE III CONTRIBUTIONS..................................... 1
3.01 Contributions................................. 1
3.02 Fund Assets................................... 2
ARTICLE IV PAYMENTS FROM TRUST FUND.......................... 2
4.01 Payments by the Trustee....................... 2
4.02 Plan Administrator's Directions............... 2
4.03 The Trustee's Reliance on Directions.......... 3
4.04 Disputed Payments............................. 3
4.05 Trust Expenses................................ 3
4.06 Taxes......................................... 3
4.07 Expenses of Administration.................... 3
4.08 Restrictions on Alienation.................... 3
4.09 Payment on Court Order........................ 4
ARTICLE V INVESTMENTS....................................... 4
5.01 Management by the Trustee..................... 4
5.02 Investment Manager............................ 4
5.03 Participant Directed Accounts................. 5
5.04 Securities Voting Rights...................... 5
5.05 Employer Securities........................... 6
ARTICLE VI FIDUCIARY RESPONSIBILITIES AND INDEMNITIES........ 7
6.01 Relationship of Fiduciaries................... 7
6.02 Benefits of Participants...................... 8
6.03 Duty of Care.................................. 8
6.04 Indicia of Ownership.......................... 8
6.05 The Trustee's Reliance........................ 8
6.06 Indemnities................................... 8
6.07 Responsibility with Respect to Securities Laws 9
ARTICLE VII POWERS OF THE TRUSTEE............................. 9
7.01 Investment Powers............................. 9
7.02 Securities Depositories....................... 11
7.03 Investment in Common Trust Funds.............. 11
ARTICLE VIII ACCOUNTS OF THE TRUSTEE........................... 11
8.01 Records...................................... 11
8.02 Reports...................................... 11
8.03 Valuation.................................... 12
ARTICLE IX RESIGNATION AND REMOVAL OF THE TRUSTEE............ 12
9.01 Resignation.................................. 12
9.02 Removal...................................... 12
9.03 Appointment of a Successor................... 12
9.04 Settlement of Account........................ 13
9.05 Indemnity for Expenses and Compensation...... 13
ARTICLE X AMENDMENT AND TERMINATION......................... 13
10.01 Amendment.................................... 13
10.02 Termination.................................. 13
10.03 Failure to Maintain Qualification............ 14
ARTICLE XI MISCELLANEOUS..................................... 14
11.01 Participation by Affiliated Companies........ 14
11.02 Multiple Plans............................... 14
11.03 Exclusive Benefit Rule....................... 14
11.04 Refunds to Employer.......................... 14
11.05 Construction................................. 15
11.06 Execution and Counterparts................... 15
11.07 Successors and Assigns....................... 15
11.08 Gender....................................... 16
<PAGE>
SECURITY PACIFIC NATIONAL BANK
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TRUST AGREEMENT FOR THE
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CHARLES SCHWAB PROFIT SHARING
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AND EMPLOYEE STOCK OWNERSHIP PLAN
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ARTICLE I
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ACCEPTANCE OF TRUST
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1.01 Acceptance of the Trust. The Trustee agrees to hold and
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administer the assets of the Plan that are delivered to it pursuant to the
instructions of the Employer, together with additional contributions that are
delivered to the Trustee under the terms of the Plan.
ARTICLE II
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DEFINITIONS
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2.01 Plan Definitions. Words defined in the Plan shall have the
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same definition in this Trust Agreement except when such definition would be
inconsistent with the definitions in the Trust Agreement or would be contrary to
Trust Agreement terms.
2.02 Special Definitions. The following definitions are in
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addition to those in the Plan.
(a) ERISA. The Employee Retirement Income Security Act of
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1974, as it may be amended from time to time.
(b) Investment Manager. A person, other than the Trustee,
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appointed by the Employer or Plan Administrator to manager the investment
of the Plan assets, who meets the requirements of Section 3(38) of ERISA.
(c) Code. The Internal Revenue Code of 1986, as it may be
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amended from time to time.
ARTICLE III
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CONTRIBUTIONS
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3.01 Contributions. The Trustee shall receive contributions from
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the Employer or Plan Administrator in cash or other property acceptable to the
Trustee. The Trustee shall have no duty to collect or enforce payment to it of
any contributions, or to require any contributions to be made, and shall have no
duty to compute any amount to be paid to it nor to determine whether amounts
paid comply with the Plan.
3.02 Fund Assets. The trust fund assets consist of all money and
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property received as contributions, together with any income on or increment in
such assets. The Trustee shall hold the fund assets without distinction between
principal and income.
ARTICLE IV
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PAYMENTS FROM TRUST FUND
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4.01 Payments by the Trustee. Payments of money or property from
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the trust fund shall be made by the Trustee for any purpose authorized under the
Plan upon written direction from the Plan Administrator. The Trustee shall have
no duty to inquire whether directions by the Plan Administrator conform to the
Plan provisions.
If the Plan Administrator directs that any payment or payments be made or
continued contingent upon future events, it shall be the responsibility of the
Plan Administrator to notify the Trustee in writing that the event has occurred
and any payments made by the Trustee prior to the date of such notification
shall, as to the Trustee, be proper payments.
Payments by the Trustee shall be delivered or mailed to addresses supplied
by the Plan Administrator and the Trustee's obligation to make such payments
shall be satisfied upon such delivery or mailing. The Trustee shall have no
obligation to determine the identity of persons entitled to benefits or their
mailing addresses.
4.02 Plan Administrator's Directions. Directions by the Plan
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Administrator to the Trustee shall be in writing and signed by the Plan
Administrator or persons authorized by the Plan Administrator.
The Plan Administrator shall be identified to the Trustee by a copy of the
resolution of the Board of Directors of the Employer appointing such Plan
Administrator. Persons authorized to give directions to the Trustee on behalf of
the Plan Administrator shall be identified to the Trustee by written notice from
the Board of Directors or the Plan Administrator and such notice shall contain
specimens of the authorized signatures. The Trustee shall be entitled to rely
upon such written notice as evidence of the identity and authority of the
persons appointed until a written cancellation of the appointment, or the
written appointment of a successor, is received by the Trustee.
4.03 The Trustee's Reliance on Directions. The Trustee may rely
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upon directions from the Plan Administrator in making payments from the trust
fund. The Trustee shall have no liability for payments made, or for failure to
make payments, or for discontinuing payments, on direction of the Plan
Administrator. The Trustee shall have no liability for failure to make payments
in the absence of proper written directions.
The Trustee shall have no responsibility to determine whether trust assets
are sufficient to meet the liabilities under the Plan, and shall not be liable
for payments or Plan liabilities in excess of trust assets.
4.04 Disputed Payments. If a dispute arises over the propriety of
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any payment from the trust fund, the Trustee may withhold payment until the
dispute has been resolved by a court of competent jurisdiction or settled by the
parties to the dispute. The Trustees may consult its legal counsel or legal
counsel of the Employer and shall be protected to the extent permitted by law in
acting upon advice of counsel.
4.05 Trust Expenses. The Trustee shall be entitled to reasonable
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compensation for its services as from time to time agreed upon in writing
between the Trustee and Charles Schwab & Co., Inc. If the Trustee and Charles
Schwab & Co., Inc. fail to agree upon a compensation, the Trustee shall be
entitled to compensation at a rate equal to the rate charged for similar
services rendered by it during the preceding fiscal year. The Trustee shall be
entitled to reimbursement for actual expenses incurred by it in the performance
of its duties as the Trustee, including reasonable fees for legal counsel.
4.06 Taxes. If the trust fund becomes liable for the payment of
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any taxes, charges or assessments by federal, state or local units, the Trustee
may pay such taxes, charges, or assessments out of the trust fund and deduct
those amounts from payments due to the person whose interest in the trust fund
was the cause of the tax, charge, or assessment; provided, however, that the
Trustee shall give ten days notice by mail to the Plan Administrator of its
intention to make such payment.
4.07 Expenses of Administration. Expenses incurred by the
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Employer or Plan Administrator, Investment Managers, or other persons designated
to act on behalf of the Employer or Plan Administrator, shall be the obligation
of the Employer. However, such expenses may be paid from the Trust and upon the
written request of the Employer.
4.08 Restrictions on Alienation. The interest of any Participant
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or Beneficiary in the trust fund shall not be subject to the claims of their
creditors and may not be assigned, transferred, alienated, or encumbered. Any
attempt at alienation shall be void, and the Trustee shall disregard any
attempted alienation. The trust assets shall not be liable for or subject to
debts or torts of any Participant or Beneficiary, and benefits shall not be
considered an asset of a Participant in bankruptcy. This does not preclude the
Trustee from complying with a qualified domestic relations order, as that term
is defined in the Code.
4.09 Payment on Court Order. To the extent permitted under ERISA
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and the Code, the Trustee is authorized to make any payments directed by court
order in any action in which the Trustee has been named as a party. The Trustees
is not obligated to defend actions in which the Trustee is named by shall notify
the employer or Plan Administrator or any such action and may tender defense of
the action to the Employer, Plan Administrator, or Participant or Beneficiary
whose interest is affected. The Trustee may in its discretion defend any action
in which the Trustee is named, and any expenses incurred by the Trustee shall be
a charge upon the Trust Fund unless paid by the Employer; provided, however,
that in the event of a decision by a court of competent jurisdiction that the
Trustee has breached its duty under the terms of this Agreement or ERISA, the
Trustee shall make reimbursement of such expenses, in whole or in part, pursuant
to the decision of the court.
ARTICLE V
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INVESTMENTS
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5.01 Management by the Trustee. The Trustee shall manage the
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investment of the trust fund unless the Plan Administrator has given the Trustee
written notice of the appointment of an Investment Manager or other person
designated to direct Investment of all or a portion of the trust fund.
5.02 Investment Manager. Subject to Section 5.05, the Plan
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Administrator may appoint one or more Investment Managers to direct the Trustee
in the investment of all or a specified portion of the assets of the trust fund.
The Plan Administrator may also remove any Investment Manager. The Plan
Administrator shall promptly notify the Trustee in writing of the appointment or
removal of any Investment Manager.
If there is more than one Investment Manager under appointment at any one
time, the Trustee shall, upon instructions from the Plan Administrator,
establish separate funds for control by each Investment Manager. The funds shall
consist of those trust assets or that portion of the trust fund designated by
the Plan Administrator.
Investment instructions from Investment Mangers to the Trustee shall be
made in writing unless the Trustee consents to receive oral instructions from an
Investment Manager. An Investment Manager may issue orders for the purchase or
sale of securities directly to a broker dealer provided the Investment Manger
immediately notifies the Trustee in writing of the issuance of such order and
requires the broker dealer to confirm execution of the order to the Trustee.
The Trustee shall have no liability for the acts or omissions of any
Investment Manager or be under any obligation to invest or otherwise manage any
assets of the trust fund which are subject to control of an Investment Manager.
If any foreign securities are purchased by the Investment Manager, it shall be
the responsibility of the Investment Manager to advise the Trustee in writing of
any laws or regulations, either foreign or domestic, which apply to such foreign
securities or to the receipt of dividends or interest on such securities.
5.03 Participant Directed Accounts. In plans providing for
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Participant directed accounts, the Trustee may, upon written instructions from
the Plan Administrator with the Trustee's consent, segregate assets representing
the value of an individual Participant's account under the Plan and allow the
Participant to manage the investment of those assets attributable to his
account. The Trustee shall have no obligation to invest or otherwise manage
assets earmarked for an individual Participant's account until written notice is
received from the Plan Administrator terminating the Participant directed
account. The Participant shall have full investment responsibility for the
assets aggregated for his account and the Trustee shall have no duty to oversee
the Participant's investment except that the Trustee shall not accept a
Participant's direction to invest in "collectibles" [within the meaning of
Section 408(m)(2) of the Code] including, but not limited to, tangible personal
property such as a work of art, rug, antique, metal, gem, stamp, coin, alcoholic
beverage or any other such property specified by the Internal Revenue Service.
Neither the Trustee nor any other fiduciary shall be liable for any loss which
results from a Participant's or his Beneficiary's exercise of control over the
assets segregated to his individual account.
5.04 Securities Voting Rights. Except as provided in Section 5.05
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regarding Employer Securities, voting or other rights in securities held in the
Trust shall be exercised by the Trustee, unless an Investment Manager has been
appointed or the Plan Administrator has reserved to itself the authority, or
subsequently elects to assume the authority, to exercise voting and other rights
in such securities. Where an Investment Manger has been authorized to acquire
and dispose of all or a portion of the assets of the Trust, the Investment
Manger shall be responsible and liable for voting or exercising other rights in
the securities subject to its management and control.
5.05 Employer Securities.
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(a) Employer Securities are required to be purchased pursuant to
the Plan (i) to be the primary investment under the employee stock
ownership plan part of the Plan and (ii) to accommodate investment
directions given by Participants with respect to the investment of their
Accounts under the profit sharing plan part of the Plan (including salary
deferrals and Employer matching contributions credited to such Accounts).
Investment in such Employer Securities shall be made from time to time by
a direct issue of such Employer Securities from the Employer (in the
event of Employer Securities used to fund the employee stock ownership
plan only) or by purchase through securities dealers or by private
purchase. However, no private purchase of such Employer Securities shall be
made at a total cost greater than the total cost (including brokers' fees
and other expenses of purchase) of purchasing such shares at the then
prevailing price of such shares on the open market, such prevailing
price to be determined by the Trustee as nearly as practicable.
(b) Employer Securities purchased as an investment of the
employee stock ownership plan shall be purchased pursuant to
directions to the Plan Administrator with regard to such purchase. Employer
Securities purchased as an investment of the profit sharing plan shall be
purchased at such prices, in such amounts, in such manner, at such times
and through such broker-dealer as the Trustee may determine in its absolute
and uncontrolled discretion.
(c) Cash dividends received on any Employer Securities held as
part of the profit sharing plan shall be invested as soon as possible
in additional shares of Employer Securities. Cash dividends received on any
Employer Securities held as an investment of the employee stock ownership
plan shall be invested as directed by the Plan Administrator.
(d) The Trustee shall invest funds awaiting investment in Employer
Securities in the manner authorized by Section 7.01(e).
(e) All Employer Securities purchased by the Truste shall be
registered in the name of the Trustee or its nominee and legal title
to such Employer Securities shall remain in the Trustee until the
Participant shall become entitled to distribution thereof pursuant to the
Plan.
(f) Voting or proxy or other rights with respect to Employer
Securities shall be disposed of as provide in this Section. With
respect to Employer Securities that are allocated to Participants'
Accounts, each Participant shall be entitled to direct the Trustee as to
the manner in which such Employer Securities then allocated to his Account
shall be voted. Such directions may be achieved through the use of proxy or
similar statements delivered to the Participants with respect to the
Employer Securities allocated to their Accounts. The Plan Administrator
shall provide any information requested by the Trustee that is necessary or
convenient in connection with obtaining and preserving the confidentiality
of the Participants' directions. Any allocated Employer Securities with
respect to which Participants are entitled to issue directions pursuant to
the foregoing and for which such directions are not received by the Trustee
shall not be voted by the Trustee unless the Trustee is required to
exercise its discretion in voting such Employer Securities pursuant to
ERISA. All unallocated Employer Securities shall be voted by the Trustee at
the direction of the Plan Administrator; provided, however, that subject to
the requirements of ERISA, the Plan Administrator shall direct the Trustee
to vote such unallocated Employer Securities in the same proportion as the
share of Employer Securities for which Participant voting instructions have
been received as provided in the agreement between the Employer and the New
York Stock Exchange.
ARTICLE VI
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FIDUCIARY RESPONSIBILITIES AND INDEMNITIES
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6.01 Relationship of Fiduciaries. Each fiduciary of the Plan and
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this Trust shall be solely responsible for his own acts or omissions. The
Trustee shall have no duty to question any other fiduciary's performance of
fiduciary duties allocated to other fiduciaries by the Plan Administrator. No
fiduciary shall be responsible for breach by another fiduciary unless he
participates knowingly in, or knowingly undertakes to conceal, an act or
omission of such other fiduciary, knowing such act or omission is a breach; he
has actual knowledge of a breach by such other fiduciary and fails to make
reasonable effort under the circumstances to remedy the breach; or his failure
to perform his own specific fiduciary duties has enabled another fiduciary to
commit a breach.
6.02 Benefits of Participants. A fiduciary shall discharge his
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duties with respect to the Plan and Trust solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of providing
benefits to Participants and their Beneficiaries and defraying reasonable
expenses of the Plan.
6.03 Duty of Care. A fiduciary shall discharge his duties with the
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care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent man 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; and
in accordance with the documents and instruments governing the Plan and this
Trust. A fiduciary managing investments shall diversify investments so as to
minimize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
6.04 Indicia of Ownership. Except as authorized by regulation by
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the Secretary of the Department of Labor, the Trustee shall not maintain the
indicia of ownership of any assets of the trust fund outside the jurisdiction of
the district courts of the United States.
6.05 The Trustee's Reliance. The Trustee shall have no liability
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to any Participant, Beneficiary, or any other person for payments made, failure
to make payments, or discontinuance of payments, on direction of the Plan
Administrator; or for failure to make payments in the absence of instructions
from the Plan Administrator.
Except as provided in Section 5.05, the Trustee may request instructions
from the Plan Administrator. The Trustee shall have no duty to act or liability
for failure to act if such instructions are not forthcoming from the Plan
Administrator. If requested instructions are not received within a reasonable
time, the Trustee may, but is under no duty to, act on its direction to carry
out the provisions of the Plan and Trust.
6.06 Indemnities. The Employer shall indemnify and hold the Trustee
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and trust fund harmless against any loss or liability, including reasonable
attorney's fees, imposed upon the Trustee as a result of any acts taken in
accordance with written directions (or failure to act in the absence of such
directions) from the Plan Administrator, Investment Manger, or any other person
designated to act on their behalf, or by reason of the Trustee's good faith
execution of its duties in the administration of this trust, except in the event
of the Trustee's negligence in performing its own specific fiduciary duties as
described under this Trust Agreement and under ERISA.
If the trust ceases to be a tax-exempt trust under Section 401 and Section
501 of the Code, the Employer shall indemnify the Trustee for any federal or
state taxes which the Trustee is required to pay as a result of the distribution
made at the direction of the Plan Administrator.
6.07 Responsibility with Respect to Securities Law. It shall be the
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responsibility of the Plan Administrator, and not the Trustee, to assure
compliance with all requirements imposed under the securities laws of the United
States or any State, including, but not limited to, registration and filing
requirements. The Trustee is hereby specifically indemnified and held harmless
for any loss or liability it may incur, or for any penalties that may be imposed
as a result of the Plan Administrator's failure to comply with such
requirements.
ARTICLE VII
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POWERS OF THE TRUSTEE
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7.01 Investment Powers. The Trustee, except as provided in Article
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V, and only to the extent it has not received directions pursuant to Article V,
is authorized and empowered in its sole discretion:
(a) To invest and reinvest trust assets, together with the income
therefrom, in common stock, preferred stock, convertible preferred
stock, bonds, debentures, convertible debentures and bonds, mortgages,
notes, time certificates of deposit, commercial paper and other evidence of
indebtedness (including those issued by the Trustee or any affiliate),
other securities, policies of life insurance, annuity contracts, options or
buy or sell securities or other assets, and property (personal, real, or
mixed, and tangible or intangible);
(b) To deposit or invest all or any part of the assets of the
trust in savings accounts or certificates of deposit or other deposits
which bear a reasonable interest rate in a bank, including the commercial
department of the Trustee, if such bank is supervised by the United States
or a State;
(c) To hold, manage, improve, repair and control all property,
real or personal, forming part of the trust assets; to sell, convey,
transfer, exchange, partition, lease for any term, even extending beyond
the duration of this trust, and otherwise dispose of the same from time to
time in such manner, for such consideration, and upon such terms and
conditions as the Trustee shall determine.
(d) To have, respecting securities, all the rights, powers and
privileges of an owner, including the power to give proxies, pay
assessment and other sums deemed by the Trustee to be necessary for the
protection of the trust fund, to vote any corporate stock either in person
or by proxy, with or without power of substitution, for any purpose; to
participate in voting trusts, pooling agreements, foreclosures,
reorganizations, consolidations, mergers and liquidations, and in
connection therewith to deposit securities with and transfer title to any
protective or other committee under such terms as the Trustee may deem
advisable; to exercise or sell stock subscriptions or conversion rights;
and, regardless of any limitation elsewhere in this instrument relative to
investment by the Trustee, to accept and retain as an investment any
securities or other property received through the exercise of any of the
foregoing powers;
(e) In the ordinary course of administration of the trust fund,
all uninvested cash balances shall be invested in short term
obligations, including obligations of the United States of America or any
agency or instrumentality thereof, trust and participation certificates,
beneficial interests in any trust and such other short term obligations as
the Trustee deems to be appropriate for such interim investment purposes,
including the Short Term Investment Fund maintained by the Trustee;
provided, however, that the Trustee may hold in cash without liability for
interest such portion of the trust fund that in its discretion shall be
reasonable under the circumstances, pending investments, or payment of
expenses, or the distribution of benefits;
(f) To take such actions as may be necessary or desirable to
protect the trust from loss, including the appointment of agents or
trustees in such other jurisdictions as may seem desirable, to transfer
property to such agents or trustees, to grant such powers as are necessary
or desirable to protect the trust or its assets, to direct such agent or
trustee, or to delegate such power to direct, and to remove such agent or
trustee;
(g) To employ such agents including custodians and counsel as may
be reasonably necessary and to pay them reasonable compensation; to
settle, compromise or abandon all claims and demands in favor of or against
the trust assets;
(h) To cause title to property of the trust to be issued, held or
registered in the individual name of the Trustee, or in the name of
its nominee(s) or agents, or in such form that title will pass by delivery;
(i) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally
under the laws of the State of California, so that the powers conferred
upon the Trustee herein shall not be in limitation of any authority
conferred by law, but shall be in addition thereto;
(j) To borrow money from any source to purchase Employer
Securities and to execute promissory notes or other obligations and to
pledge or mortgage any trust assets as security, subject to applicable
requirements of the Code and ERISA; provided, however, that any money
needed for the purchase of Employer Securities shall not be borrower from
the Trustee;
(k) To lend certificates representing stocks, bonds, or other
securities to any brokerage or other firm selected by the Trustee,
provided such loans are adequately secured; and
(l) To do all other acts necessary or desirable for the proper
administration of the Trust assets, as if the Trustee were the absolute
owner thereof.
7.02 Securities Depositories. Notwithstanding anything herein to
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the contrary, the Trustee in its discretion is authorized to use securities
depositories or custodians. Further, such securities as are held by a depository
or custodian may be registered in the name of such depository or its nominee or
in the name of such custodian or its nominee.
7.03 Investment in Common Trust Funds. Notwithstanding any
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provision herein to the contrary, the Trustee is hereby expressly authorized to
invest in any common, collective or pooled fund maintained by the Trustee or any
other bank or trust company and the Declarations of Trust establishing or
amending such funds are hereby incorporated by reference into this Agreement.
ARTICLE VIII
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ACCOUNTS OF THE TRUSTEE
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8.01 Records. The Trustee shall maintain accurate records and
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accounts of all trust transactions and assets. The records and accounts shall be
available at reasonable times for inspection or audit by any person or persons
designated by the Plan Administrator.
8.02 Reports. Within ninety days following the close of each Plan
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Year, or the effective date of the removal or resignation of the Trustee, the
Trustee shall file with the Plan Administrator a written account setting forth
all transactions since the end of the period covered by the last previous
accounting. The report shall include a listing of the trust assets, showing
carrying and market values of such assets at the close of the period covered by
the account. On direction of the Plan Administrator, the Trustee shall submit to
the Plan Administrator interim valuations, reports, or other information.
The Plan Administrator may approve the accounting by written approval
delivered to the Trustee or by failure to deliver written objection to the
Trustee within sixty days after receipt of the accounting.
8.03 Valuation. Trust assets shall be valued at fair market value
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on the date of valuation, as determined by the Trustee based upon such sources
of information as it may deem reliable including, but not limited to, stock
market quotations, statistical evaluation services, newspapers of general
circulation, financial publications, advice from investment counselors or
brokerage firms, or any combination of sources. The value of unlisted or very
thinly traded company stock shall be based on an appraisal by a qualified
independent appraiser acceptable to the Trustee.
The Plan Administrator shall instruct the Trustee as to the value of assets
for which market value is not readily obtainable by the Trustee. If the Plan
Administrator fails to provide values the Trustee may take whatever action it
deems reasonable, including employment of attorneys, appraisers or other
professions, the expense of which will be an expense of the administration of
the trust.
ARTICLE IX
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RESIGNATION AND REMOVAL OF THE TRUSTEE
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9.01 Resignation. The Trustee may resign at any time upon at
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least thirty days written notice to Charles Schwab & Co., Inc.
9.02 Removal. Charles Schwab & Co., Inc. may remove the Trustee upon
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at least thirty days written notice to the Trustee.
9.03 Appointment of a Successor. Upon resignation or removal of
--------------------------
the Trustee, Charles Schwab & Co., Inc., by resolution of its Board of
Directors, shall appoint a successor trustee. Upon failure of the Board of
Directors to appoint a successor trustee by the effective date of resignation or
removal, the individual members of the Board of Directors of Charles Schwab &
Co., Inc. shall become successor trustee until another successor trustee is
appointed.
Upon appointment of the successor trusteethe Trustee shall deliver to the
successor trustee such records as may be reasonably required to enable the
successor trustee properly to administer the trust fund, and shall deliver to
the successor trustee all property of the trust after deducting such amounts as
the Trustee deems necessary to provide for expenses, compensation, and taxes.
9.04 Settlement of Account. Upon resignation or removal, the
---------------------
Trustee shall have the right to a settlement of its account which settlement
shall be made, at the Trustee's options, either by a judicial settlement in an
action instituted by the Trustee, or by an agreement of settlement between the
Trustee and the Employer.
9.05 Indemnity for Expenses and Compensation. The Trustee shall
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not be obligated to transfer assets of the trust until the Trustee is
indemnified in a manner satisfactory to it for all fees and expenses reasonably
anticipated.
9.06 Termination of Liability. Upon settlement of its account and
------------------------
transfer of the trust assets to the successor trustee, all rights and privileges
under the Plan and this Trust Agreement shall vest in the successor trustee and
thereafter liability of the Trustee shall terminate with respect to acts of the
successor trustee not related to prior acts of the Trustee subject only to the
requirement that the Trustee execute all necessary documents to transfer the
trust assets to the successor trustee.
ARTICLE X
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AMENDMENT AND TERMINATION
-------------------------
10.01 Amendment. The Trustee and Charles Schwab & Co., Inc. may
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amend any or all of the provisions of this Trust Agreement. Amendments to the
Trust Agreement shall be executed by two officers of the Trustee and a copy of
such amendments shall be mailed to Charles Schwab & Co., Inc. No amendment shall
be made which will permit any part of the trust fund to be used for, or diverted
to, purposes other than the exclusive benefit of Participants or their
Beneficiaries.
10.02 Termination. The trust is irrevocable but may be terminated
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by Charles Schwab & Co., Inc. by resolution of its Board of Directors and with
at least sixty days written notice to the Trustee. Upon termination of the
trust, the trust assets shall be distributed as directed by the Plan
Administrator; provided, however, that the Trustee shall not be required to make
any distribution prior to receipt of a determination letter from the Internal
Revenue Service that the termination does not affect the tax exempt status of
the plan and trust. In the event the plan is not required to obtain the prior
approval of the Internal Revenue Service, the Trustee may, in lieu of such
determination letter, accept an indemnification of the Trustee by the Employer
for any liability the Trustee may incur for compliance with directions to
distribute the assets of the Trust, including taxes and attorney's fees.
10.03 Failure to Maintain Qualification. If the Plan and Trust fail
---------------------------------
to qualify or the Plan loses it status as a Qualified Plan, the Trustee may,
without notice or direction, remove the trust fund assets from any common or
collective trust fund or pooled investment fund maintained by the Trustee for
investments by Qualified Plans.
ARTICLE XI
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MISCELLANEOUS
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11.01 Participation by Affiliated Companies. Any company affiliated
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with the Employer may become a party to this Trust Agreement by adopting the
Employer's Plan and this Trust Agreement.
11.02 Multiple Plans. With the consent of the Trustee, the assets of
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two or more Qualified Plans maintained by the Employer and affiliated companies
may be maintained as one trust and their assets may be commingled.
11.03 Exclusive Benefit Rule. Except as provided in Section 11.04,
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no part of the principal or income of this trust shall be used for, or diverted
to, purposes other than the exclusive benefit of Participants or their
Beneficiaries or for the reasonable expenses of administering the Plan until all
liabilities for benefits due Participants or their Beneficiaries have been
satisfied.
11.04 Refunds to Employer. Notwithstanding the foregoing Section
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11.03, if the Internal Revenue Service finds that this Plan does not initially
meet the requirements of a qualified plan whose trust is a qualified trust
exempt from federal income tax, the Trustee may within one year after the date
the initial qualification is denied and upon written directions from the
Employer, return any initial contribution made by the Employer and the trust
shall then be terminated.
The Trustee may, upon instructions from the Plan Administrator, return to
the Employer or individual Participants contributions made on mistake of fact or
in excess of the amount determined to be deductible by the Employer within one
year of the date the contribution was made, or within one year of the date the
deduction for the Employer was disallowed.
11.05 Construction. The Trust will be administered in the State of
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California, and its validity, construction and all rights hereunder shall be
governed by ERISA and, to the extent not preempted, by the laws of California.
If the provisions of this Trust Agreement and the Plan shall be inconsistent or
otherwise in conflict regarding the rights, duties or obligations of the
Trustee, the provisions of this Agreement shall control. If any provisions of
this Agreement shall be ruled invalid or unenforceable, the remaining provisions
thereof shall continue to be fully effective.
Headings or subheading are inserted for convenience of reference only and
are not to be considered in the construction of the provisions of the Trust
Agreement.
11.06 Execution and Counterparts. This Trust Agreement may be
--------------------------
executed in several counterpart, each of which shall be deemed an original and
said counterparts shall constitute but one instrument which may be sufficiently
evidenced by any one counterpart.
11.07 Successors and Assigns. This Trust Agreement shall inure to
----------------------
the benefit of any and shall be binding upon, the parties and their successor
and assigns.
11.08 Gender. As used in this Trust Agreement, the masculine gender
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shall include the feminine and neuter genders and the singular shall include the
plural and the plural the singular as the context requires.
Executed by the Employer and the Trustee on 10/25, 1990, effective as of
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11/01, 1990.
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CHARLES SCHWAB & CO., INC.
By: /s/ Charles R. Schwab
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Its: Chairman/CEO
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SECURITY PACIFIC NATIONAL BANK
By: /s/ Mary Lau
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Its: Assistant Vice President
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By:
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Its:
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