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As filed with the Securities and Exchange Commission on June 27, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST USA, INC.
(Exact Name of Registrant as specified in its charter)
DELAWARE 75-2634185
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1601 ELM STREET
SUITE 4700
DALLAS, TEXAS 75201
(Address of Principal Executive Offices, Including Zip Code)
FIRST USA DEFERRED COMPENSATION PLAN
(Full Title of the Plan)
JACK M. ANTONINI
VICE CHAIRMAN, FINANCE AND PLANNING
FIRST USA, INC.
1601 ELM STREET, SUITE 4700
DALLAS, TEXAS 75201
(214) 849-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
PHILIP E. TAKEN, ESQ. MICHAEL P. FINCH, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL VINSON & ELKINS L.L.P.
FIRST USA, INC. 2300 FIRST CITY TOWER
1601 ELM STREET, SUITE 4700 1001 FANNIN STREET
DALLAS, TEXAS 75201 HOUSTON, TEXAS 77002
(214) 849-2000 (713) 758-2128
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
REGISTERED(1) REGISTERED(2) PRICE PER SHARE OFFERING PRICE(2) FEE
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Deferred Compensation
Obligations...................
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Common Stock, par value $.01
per share (the "Common Stock").
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Total $4,000,000 100% $4,000,000 $1,380
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(1) The Deferred Compensation Obligations are unsecured obligations of First
USA, Inc. to pay deferred compensation in the future in accordance with the
terms of the First USA Deferred Compensation Plan for a select group of
eligible employees.
(2) The amount to be registered is estimated solely for purposes of calculating
the registration fee and includes such indeterminate number of shares of
the Registrant's Common Stock as may be issued at indeterminate prices from
time to time as one of the various investment options for participants in
the First USA Deferred Compensation Plan.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission (the
"Commission") by First USA, Inc., a Delaware corporation (the "Registrant"), are
incorporated by reference in this registration statement:
(a) Annual Report on Form 10-K of the Registrant for the fiscal year ended
June 30, 1995 (File No. 1-11030).
(b) The description of the Common Stock, par value $.01 per share, of the
Registrant, contained in the Registrant's Registration Statement on Form S-
1, No. 33-45110, as filed with the Commission on January 16, 1992,
including any amendment or report filed for the purpose of updating such
description.
(c) Quarterly Reports on Form 10-Q of the Registrant for the fiscal quarters
ended September 30, 1995, December 31, 1995 and March 31, 1996.
(d) Current Reports on Form 8-K of the Registrant dated July 6, 1995, September
14, 1995, December 7, 1995, March 6, 1996 and May 2, 1996.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c) 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Deferred Compensation Obligations registered hereunder (the "Obligations")
are unsecured obligations of the Registrant and its subsidiaries to pay deferred
compensation in the future in accordance with the terms of the First USA
Deferred Compensation Plan (the "Plan") and the First USA Deferred Compensation
Plan Trust Agreement, dated as of June 27, 1996, between First USA, Inc. and
Wachovia Bank of North Carolina, N.A., as Trustee (the "Trust Agreement"), which
are filed as Exhibits 4.6 and 4.7 to this Registration Statement. Such Exhibits
set forth a description of the Obligations and are incorporated herein by
reference in their entirety in response to this Item 4., pursuant to Rule
411(b)(3) under the Securities Act of 1933.
No participant under the Plan shall have any preferred claim to, or any
beneficial ownership interest in, any assets which are subject to the Trust
established by the Trust Agreement (the "Trust"). All such assets are subject
to the claims of the creditors of the participant's employer until they are paid
out of the Trust to the participant in accordance with the terms of the Plan.
The Plan provides that payment of all Obligations of the Registrant's
subsidiaries under the Plan is guaranteed by the Registrant, and that any such
payment by the Registrant shall be made directly and not through the Trust.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Corporation Law"), each director and officer of the
Registrant may be indemnified by the Registrant against expenses (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he is involved by
reason of the fact that he is or was a director of officer of the Registrant if
he acted in good faith and in a manner that he reasonably believed to be in or
not opposed to the best interests of the Registrant, and, with respect to any
criminal action or proceeding, if he had no reasonable cause to believe that his
conduct was unlawful. If the legal proceeding, however, is by or in the right
of the Registrant, the director or officer may not be indemnified in respect of
any claim, issue or matter as to which he shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the Registrant
unless a court determines otherwise.
In addition, the Registrant has directors' and officers' liability coverage
pursuant to an insurance policy maintained by the Registrant.
The Registrant's Restated Certificate of Incorporation provides that no
director of the Registrant shall be liable to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Registrant
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) in respect
of certain unlawful dividend payments or stock redemptions or repurchases or
(iv) for any transaction from which the director derived an improper personal
benefit. The effect of these provisions will be to eliminate the rights of the
Registrant and its stockholders (through stockholders' derivative suits on
behalf of the Registrant) to recover monetary damages against a director for
breach of fiduciary duty as a director (including breaches resulting from
grossly negligent behavior), except in the situation described above. The
provisions will not limit the liability of directors under federal securities
laws.
The foregoing statements are subject to the detailed provisions of the
Delaware Corporation Law, the Registrant's Certificate of Incorporation, as
amended, and the Registrant's By-Laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1.1 to the Registrant's Annual Report on Form 10-K
for the Registrant's fiscal year ended June 30, 1995).
4.2 Certificate of Correction of the Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3.1.1 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1993).
4.3 Certificate of Amendment to the Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit 3.1.2 to the
Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1993).
4.4 Certificate of the Powers, Designations, Preferences and Rights of the
6-1/4% PRIDES, Mandatory Convertible Preferred Stock (incorporated by
reference to Exhibit 4.1.2 to the Registrant's Registration Statement on
Form S-3 (No. 33-74288).
4.5 By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to
the Registrant's Form S-1 Registration Statement No. 33-45110).
*4.6 First USA Deferred Compensation Plan.
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*4.7 First USA Deferred Compensation Plan Trust Agreement, dated as of June 27,
1996, between First USA, Inc. and Wachovia Bank of North Carolina, N.A.,
as Trustee.
*5.1 Opinion of Philip E. Taken, Esq. regarding the legality of the Common
Stock and the Deferred Compensation Obligations being registered.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Philip E. Taken, Esq. (included in Exhibit 5.1).
24 Powers of Attorney (included on the signature page hereof).
______________________
* Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
this registration statement or any material change to such information in this
registration statement.
(2) that, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 27th day of June,
1996.
FIRST USA, INC.
(Registrant)
By /s/ JOHN C. TOLLESON
--------------------------------------
John C. Tolleson
Chairman of the Board and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on June 27, 1996.
POWER OF ATTORNEY
We, the undersigned directors and officers of First USA, Inc. and each of
us, do hereby constitute and appoint Philip E. Taken, our true and lawful
attorney and agent, with power of substitution, to do any and all acts and
things in our name and behalf in our capacities as directors and officers and to
execute any and all instruments for us and in our names in the capacities
indicated above, which said attorney and agent may deem necessary or advisable
to enable said corporation to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with this Registration Statement, including
specifically, but without limitation, power and authority to sign for us or any
of us in our names in the capacities indicated below, and any and all amendments
(including post-effective amendments) hereto and we do hereby ratify and confirm
all that the said attorney and agent, or his substitute or substitutes shall do
or cause to be done by virtue hereof.
SIGNATURE TITLE
/s/ JOHN C. TOLLESON Chairman of the Board, Chief Executive
John C. Tolleson Officer and Director (Principal Executive
Officer)
/s/ RICHARD W. VAGUE President and Director
Richard W. Vague
/s/ JACK M. ANTONINI Vice Chairman, Finance and Planning
Jack M. Antonini (Principal Financial Officer)
/s/ STEVEN L. McDONALD Senior Vice President (Principal Accounting
Steven L. McDonald Officer)
/s/ GERALD S. ARMSTRONG Director
Gerald S. Armstrong
/s/ GENE H. BISHOP Director
Gene H. Bishop
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/s/ CHARLES T. RUSSELL Director
Charles T. Russell
/s/ RUPINDER S. SIDHU Director
Rupinder S. Sidhu
/s/ ROGER T. STAUBACH Director
Roger T. Staubach
/s/ CARL H. WESTCOTT Director
Carl H. Westcott
II-5
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EXHIBIT 4.6
FIRST USA
DEFERRED COMPENSATION PLAN
Effective Date: June 1, 1996
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TABLE OF CONTENTS
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ARTICLE PAGE
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I. DEFINITIONS AND CONSTRUCTION 1
1.1 DEFINITIONS 1
(1) ACCOUNT 1
(2) AFFILIATE 1
(3) BOARD 1
(4) CODE 1
(5) COMPANY 1
(6) DEFERRALS 1
(7) DIRECTOR 1
(8) DISABILITY 2
(9) EFFECTIVE DATE 2
(10) ELIGIBLE INDIVIDUAL 2
(11) ENTRY DATE 2
(12) FUNDS 2
(13) INSIDER 2
(14) MEMBER 2
(15) PARENT BOARD 2
(16) PARENT COMMITTEE 2
(17) PAY 2
(18) PAYMENTECH BOARD 3
(19) PAYMENTECH COMMITTEE 3
(20) PLAN 3
(21) PLAN ADMINISTRATOR 3
(22) PLAN YEAR 3
(23) RETIREMENT 3
(24) STOCK FUNDS 3
(25) TRUST 3
(26) TRUST AGREEMENT 3
(27) TRUST FUND 4
(28) TRUSTEE 4
(29) UNFORESEEABLE FINANCIAL EMERGENCY 4
(30) VALUATION DATES 4
1.2 NUMBER AND GENDER 4
1.3 HEADINGS 4
II. PARTICIPATION
2.1 ELIGIBILITY 4
2.2 PARTICIPATION 4
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(i)
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III. ACCOUNT CREDITS AND ALLOCATIONS 5
3.1 DEFERRALS 5
3.2 ALLOCATION OF NET INCOME OR NET LOSS EQUIVALENTS 7
IV. DEEMED INVESTMENT OF FUNDS 8
V. VESTING 9
VI. WITHDRAWALS 9
6.1 IN GENERAL 9
6.2 UNFORESEEABLE FINANCIAL EMERGENCY 9
6.3 ELECTIVE WITHDRAWAL 10
VII. DISTRIBUTIONS 10
7.1 AMOUNT OF BENEFIT 10
7.2 TIME OF PAYMENT 10
7.3 ALTERNATIVE FORMS OF BENEFIT PAYMENTS 11
7.4 DESIGNATION OF BENEFICIARIES 11
7.5 CHANGE IN PAY-OUT OF CERTAIN BENEFITS 12
7.6 ACCELERATED PAY-OUT DUE TO EMERGENCY 12
7.7 DEFERRED PAY-OUT DUE TO LOSS OF TAX DEDUCTION 13
7.8 PAYMENT OF BENEFITS 13
7.9 UNCLAIMED BENEFITS 13
7.10 SET-OFF UPON DISCHARGE FOR CAUSE 13
VIII. ADMINISTRATION OF THE PLAN 14
8.1 APPOINTMENT OF PLAN ADMINISTRATOR 14
8.2 RESIGNATION AND REMOVAL 14
8.3 RECORDS AND PROCEDURES 14
8.4 SELF-INTEREST OF PLAN ADMINISTRATOR 14
8.5 COMPENSATION AND BONDING 14
8.6 PLAN ADMINISTRATOR POWERS AND DUTIES 14
8.7 COMPANY TO SUPPLY INFORMATION 15
8.8 CLAIMS REVIEW 15
8.9 INDEMNITY 16
IX. ADMINISTRATION OF FUNDS 16
9.1 PAYMENT OF EXPENSES 16
9.2 TRUST FUND PROPERTY 17
X. NATURE OF THE PLAN 17
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(ii)
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XI. ADOPTING ENTITIES 18
XII. MISCELLANEOUS 18
12.1 NOT CONTRACT OF EMPLOYMENT 18
12.2 ALIENATION OF INTEREST FORBIDDEN 18
12.3 WITHHOLDING 18
12.4 GUARANTY 19
12.5 AMENDMENT AND TERMINATION 19
12.6 SEVERABILITY 19
12.7 GOVERNING LAWS 19
</TABLE>
(iii)
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FIRST USA
DEFERRED COMPENSATION PLAN
W I T N E S S E T H :
WHEREAS, FIRST USA, INC. and other adopting entities desire to adopt the
FIRST USA DEFERRED COMPENSATION PLAN (the "PLAN") for the benefit of certain
eligible individuals; and
NOW THEREFORE, the Plan is hereby adopted as follows, effective as of June
1, 1996:
I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT: An individual account for each Member to which is credited the
Deferrals made on his behalf pursuant to Section 3.1 and which is credited or
debited for such account's allocation of net income (or net loss) equivalents as
provided in Section 3.2.
(2) AFFILIATE: Each corporation or unincorporated entity, directly or
indirectly, through one or more intermediaries, controlling, controlled by, or
under common control with First USA, Inc. For this purpose, control shall be
determined by a more than 50% ownership standard.
(3) BOARD: The Board of Directors of First USA, Inc.
(4) CODE: The Internal Revenue Code of 1986, as amended.
(5) COMPANY: First USA, Inc. and any other adopting entity which adopts the
Plan pursuant to the provisions of Article XI.
(6) DEFERRALS: Deferrals made by the Company on a Member's behalf pursuant to
Section 3.1.
(7) DIRECTOR: Any member of the Board of Directors of First USA, Inc., First
USA Paymentech, Inc. and/or their Affiliates.
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(8) DISABILITY: The total and permanent disability of a Member, as determined
in the sole discretion of the Plan Administrator, based on a written medical
opinion (unless waived by the Plan Administrator as unnecessary), that such
Member is permanently incapable of performing his job for physical or mental
reasons.
(9) EFFECTIVE DATE: June 1, 1996.
(10) ELIGIBLE INDIVIDUAL: Any individual (i) who is employed by the Company
as an officer or with an equivalent title and who earned cash compensation of at
least $125,000 during the fiscal year of the Company immediately preceding the
Plan Year selected as a Member, or (ii) who is a Director. For all purposes
herein, the "service" of an individual as a Director shall be deemed to be
equivalent to "employment" with the Company.
(11) ENTRY DATE: The first day of each Plan Year and, with respect to an
Eligible Individual who becomes a Member on other than the first day of a Plan
Year, the date such Eligible Individual becomes a Member in such Plan Year.
(12) FUNDS: The investment funds designated from time to time for the deemed
investment of Accounts pursuant to Article IV.
(13) INSIDER: An officer or director of First USA, Inc. or First USA
Paymentech, Inc. subject to Section 16(b) of the Securities Exchange Act of
1934.
(14) MEMBER: Each Eligible Individual who has met the eligibility
requirements for participation in the Plan and who has become a Member pursuant
to Article II.
(15) PARENT BOARD: The Board of Directors of First USA, Inc.
(16) PARENT COMMITTEE: A committee of the Parent Board that is composed
solely of two or more directors, none of whom (i) is an officer of First USA,
Inc. or a parent or subsidiary (including First USA Paymentech, Inc.) thereof or
is otherwise employed by First USA, Inc. or a parent or subsidiary (including
First USA Paymentech, Inc.) thereof; (ii) receives compensation, either directly
or indirectly, from First USA, Inc. or a parent or subsidiary (including First
Paymentech, Inc.) thereof for services rendered as a consultant or in any
capacity other than as a director, except for an amount that does not exceed the
dollar amount for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K; (iii) possesses an interest in any other transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation S-K; or (iv)
is engaged in a business relationship for which disclosure would be required
pursuant to item 404(b) of Regulation S-K.
(17) PAY: The total of all amounts paid by the Company to or for the benefit
of a Member for services rendered or labor performed, which are required to be
reported on such Member's federal income tax withholding statement(s) (Form W-2,
1099, or their subsequent
2
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equivalents), excluding taxable income resulting from the exercise of
nonqualified stock options, the imputed value of group term life insurance,
relocation reimbursements and from non-cash executive perquisites, deductions
for supplemental life and medical coverages or other similar payroll deductions,
plus any amounts such Member could have received in cash in lieu of Deferrals
pursuant to Section 3.1.
(18) PAYMENTECH BOARD: The Board of Directors of First USA Paymentech, Inc.
(19) PAYMENTECH COMMITTEE: A committee of the Paymentech Board that is
composed solely of two or more directors, none of whom (i) is an officer of
First USA Paymentech, Inc. or a parent (including First USA, Inc.) or subsidiary
thereof or is otherwise employed by First USA Paymentech, Inc. or a parent
(including First USA, Inc.) or subsidiary thereof; (ii) receives compensation,
either directly or indirectly, from First USA Paymentech, Inc. or a parent
(including First USA, Inc.) or subsidiary thereof for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of Regulation S-K; (iii) possesses an interest in any
other transaction for which disclosure would be required pursuant to Item 404(a)
of Regulation S-K; or (iv) is engaged in a business relationship for which
disclosure would be required pursuant to item 404(b) of Regulation S-K.
(20) PLAN: The First USA Deferred Compensation Plan, as amended from time to
time.
(21) PLAN ADMINISTRATOR: The Plan administrator appointed by the Board
pursuant to Section 8.1.
(22) PLAN YEAR: The short period commencing on the Effective Date and ending
on June 30, 1996, and thereafter the twelve-consecutive month period commencing
July 1 of each year.
(23) RETIREMENT: As to a Member who is not a Director, termination of
employment with the Company and its Affiliates after attainment of age sixty or
attainment of age fifty-five with five years of aggregate employment from and
after the Effective Date. As to a Member who is a Director, termination of
employment with the Company following the date which is at least five years
after the first day of the Plan Year in which he commenced participation in the
Plan.
(24) STOCK FUNDS: The First USA, Inc. Common Stock Fund and the First USA
Paymentech, Inc. Common Stock Fund.
(25) TRUST: The trust, if any, established under the Trust Agreement.
(26) TRUST AGREEMENT: The agreement, if any, entered into between the Company
and the Trustee pursuant to Article X.
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(27) TRUST FUND: The funds and properties, if any, held pursuant to the
provisions of the Trust Agreement, together with all income, profits and
increments thereto.
(28) TRUSTEE: The trustee appointed by the Board who is qualified and acting
under the Trust Agreement at any time.
(29) UNFORESEEABLE FINANCIAL EMERGENCY: An unexpected need of a Member for
cash that (i) arises from an illness, casualty loss, sudden financial reversal,
or such other unforeseeable occurrence that is caused by an event beyond the
control of such Member, (ii) would result in severe financial hardship to such
Member if his Deferral election was not cancelled pursuant to Section 3.1(h)
and/or if a withdrawal or benefit payment pursuant to Article VI or Section 7.6
was not permitted, and (iii) is not reasonably satisfiable from other resources
of such Member. Cash needs arising from foreseeable events, such as the
purchase of a house or education expenses for children, shall not be considered
to be the result of an Unforeseeable Financial Emergency.
(30) VALUATION DATES: Each Entry Date and any other interim Valuation Date
designated by the Plan Administrator on a nondiscriminatory basis.
Notwithstanding the foregoing, an interim Valuation Date shall be designated as
the date next preceding the date a withdrawal or payment of a Member's benefit
is to be made or to commence pursuant to Article VI or Article VII.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
II.
PARTICIPATION
2.1 ELIGIBILITY. Any Eligible Individual shall be eligible to become a
Member of the Plan for any Plan Year by electing to make Deferrals pursuant to
Section 3.1. Notwithstanding the foregoing, for the Plan Years commencing with
the Effective Date and with July 1, 1996, Eligible Individuals shall only be
eligible to become Members of the Plan if so designated for eligibility by the
Plan Administrator and effective as of the date so designated.
2.2 PARTICIPATION.
(a) Prior to each Entry Date, the Plan Administrator shall notify
those Eligible Individuals who are determined by the Plan Administrator to be
eligible to initially become Members
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pursuant to Section 2.1 as of such Entry Date. Any such Eligible Individual may
become a Member for the Plan Year beginning on such Entry Date by effecting,
prior to such Entry Date and within the time period prescribed by the Plan
Administrator, the Deferral election prescribed by the Plan Administrator.
Notwithstanding any provision herein to the contrary, an Eligible Individual who
first becomes an Eligible Individual on other than the first day of a Plan Year
may become a Member on the first day of the calendar month coinciding with or
next following the date he first becomes an Eligible Individual for the
remainder of such Plan Year with respect to Deferrals pursuant to Section 3.1 by
effecting, prior to or within 30 days after the date he first becomes an
Eligible Individual and within the time period prescribed by the Plan
Administrator, the Deferral election prescribed by the Plan Administrator.
(b) Notwithstanding any provision herein to the contrary, if an
Eligible Individual who is an officer or who has an equivalent title becomes a
Member of the Plan and ceases to earn cash compensation of at least $125,000
during the fiscal year of the Company immediately preceding any Plan Year, such
Eligible Individual shall not be entitled to make Deferrals hereunder for such
Plan Year. Any such Eligible Individual may again become entitled to make
Deferrals hereunder for any subsequent Plan Year which is immediately preceded
by a fiscal year of the Company in which such Eligible Individual earns cash
compensation of at least $125,000.
(c) Notwithstanding any provision herein to the contrary, an Eligible
Individual who has become a Member of the Plan shall cease to be entitled to
make Deferrals hereunder effective as of any date designated by the Plan
Administrator. Any such Plan Administrator action shall be communicated to the
affected individual prior to the effective date of such action. Any such
Eligible Individual may again become entitled to make Deferrals hereunder for
any subsequent Plan Year selected by the Plan Administrator in its sole
discretion.
III.
ACCOUNT CREDITS AND ALLOCATIONS
3.1 DEFERRALS.
(a) A Member may:
(1) Elect to defer from his Pay a fixed amount or an integral
percentage of from 1% to 100% of his base annual salary (or of his fees in the
case of a Director) for a Plan Year; and/or
(2) Elect to defer from his Pay a fixed amount or an integral
percentage of from 1% to 100% of his annual incentive bonus (or of his retainers
in the case of a Director) for a Plan Year.
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Notwithstanding the foregoing, no Member may elect to defer less than $5,000 of
his Pay for any Plan Year (with such amounts prorated for any Plan Year of less
than twelve months with respect to any Member). Further, with respect to an
Eligible Individual who first becomes a Member on other than the first day of a
Plan Year, any such Deferrals pursuant to Section 3.1(a)(1) shall apply only for
the portion of such Plan Year commencing with the date he first becomes a Member
and ending on the last day of such Plan Year.
(b) Pay for a Plan Year not so deferred by such election pursuant to
this Section shall be received by such Member in cash. A Member's election to
defer an amount of his Pay pursuant to this Section shall be made by effecting,
in the form prescribed by the Plan Administrator, a Deferral election pursuant
to which the Member authorizes the Company to reduce his Pay in the elected
amount and the Company, in consideration thereof, agrees to credit an equal
amount to such Member's Account maintained under the Plan. The reduction in a
Member's Pay pursuant to Section 3.1(a)(1) shall be effected by equal Pay
reductions each pay period during the applicable portion of the Plan Year as
determined by the Plan Administrator following the effective date of such
election. The reduction in a Member's Pay pursuant to Section 3.1(a)(2) shall be
effected by a Pay reduction at the time such annual bonus (or retainer) is paid.
Such Pay reductions shall be within the Plan Year to which the Deferral election
relates, except that Pay reductions attributable to elections pursuant to
Section 3.1(a)(2) may be made within the next following Plan Year if the bonus
(or retainer) to which the Deferral election relates is paid in such next
following Plan Year. Deferrals made by a Member shall be credited to such
Member's Account as of the date deferred.
(c) Notwithstanding the foregoing, a Deferral election of a Member
pursuant to Section 3.1(a)(1) for a Plan Year shall be automatically suspended
during such Member's unpaid leave of absence and upon termination of such
Member's employment with the Company and its Affiliates. A Deferral election of
a Member pursuant to Section 3.1(a) may, with the consent of the Plan
Administrator, be suspended for the remainder of the Plan Year in which such
Member has an unpaid leave of absence. Any such Member may again become
entitled to make Deferrals hereunder for any subsequent Plan Year following
return to full-time employment. A Deferral election of a Member pursuant to
Section 3.1(a) shall be suspended for the remainder of the Plan Year in which
such Member is on short-term Disability for ninety consecutive days. Any such
Member may again become entitled to make Deferrals hereunder for any subsequent
Plan Year following recovery from Disability.
(d) A Deferral election pursuant to Section 3.1(a) shall become
effective as of the Entry Date which is on or after the date the election is
effected by the Member. A Deferral election shall remain in force and effect
for the entire (or partial, if applicable) Plan Year to which such election
relates.
(e) A Deferral election shall indicate the applicable time and form of
payment, as provided in Sections 7.2 and 7.3, for the Pay deferred thereunder
for such Plan Year and the net income (or net loss) equivalents allocated with
respect thereto. A Member may make different time and form of payment elections
with respect to base annual salary (or fee) Deferrals and annual
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incentive bonus (or retainer) Deferrals for any Plan Year. Each Member's Account
shall be divided into subaccounts to reflect such Member's various elections
respecting time and form of payment.
(f) A Member who has made a Deferral election pursuant to Section
3.1(a) may change his election, as of the Entry Date of any subsequent Plan
Year, by effecting a new Deferral election prior to such Entry Date and within
the time period prescribed by the Plan Administrator.
(g) A Member who has made a Deferral election pursuant to Section
3.1(a) may cancel his election, as of the Entry Date of any subsequent Plan
Year, by effecting the same in the form prescribed by the Plan Administrator
prior to such Entry Date and within the time period prescribed by the Plan
Administrator. A Member who so cancels his Deferral election may again make a
new such Deferral election for a subsequent Plan Year, if he satisfies the
eligibility requirements set forth in Section 2.1, by effecting a new such
Deferral election prior to the Entry Date of such Plan Year and within the time
period prescribed by the Plan Administrator.
(h) In the event that the Plan Administrator, upon written petition of
a Member, determines in its sole discretion that such Member has suffered an
Unforeseeable Financial Emergency, the Deferral election of such Member then in
effect, if any, shall be terminated as soon as administratively practicable
after such determination. A Member whose Deferral election has been so
terminated may again make a new Deferral election for a subsequent Plan Year
that begins at least twelve months after the effective date of such termination,
if he satisfies the eligibility requirements set forth in Section 2.1, by
effecting a new Deferral election for such Plan Year and within the time period
prescribed by the Plan Administrator.
3.2 ALLOCATION OF NET INCOME OR NET LOSS EQUIVALENTS.
(a) As of each Valuation Date, the Plan Administrator shall determine
the net income (or net loss) equivalents of each Fund for the period elapsed
since the next preceding Valuation Date. The net income (or net loss)
equivalent of each Fund since the next preceding Valuation Date shall be
ascertained by the Plan Administrator based upon changes in net asset value in
such manner as it deems appropriate, which may include expenses of operating the
Fund.
(b) For purposes of allocations of net income (or net loss)
equivalents, each Member's Accounts shall be divided into subaccounts to reflect
such Member's deemed investment in a particular Fund or Funds pursuant to
Article IV. As of each Valuation Date, the net income (or net loss) equivalent
of each Fund, separately and respectively, shall be allocated among the
corresponding subaccounts of the Members who were deemed to have had such
corresponding subaccounts invested in such Funds since the next preceding
Valuation Date.
(c) So long as there is any balance in any Account, such Account shall
continue to receive allocations pursuant to this Section.
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IV.
DEEMED INVESTMENT OF FUNDS
Each Member shall designate, in accordance with the procedures established
from time to time by the Plan Administrator, the manner in which the amounts
allocated to his Account shall be deemed to be invested from among the Funds
made available from time to time for such purpose by the Plan Administrator.
Such Funds shall include the Stock Funds; provided, however, with respect to
Insiders, the Stock Funds shall not be available until August 15, 1996. Such
Member may designate one of such Funds for the deemed investment of all the
amounts allocated to his Account or he may split the deemed investment of the
amounts allocated to his Account between such Funds in 5% increments. If a
Member fails to make a proper designation, then his Account shall be deemed to
be invested in the Fund or Funds designated by the Plan Administrator from time
to time in a uniform and nondiscriminatory manner. Any such initial designation
by an Insider affecting a Stock Fund shall be approved in advance of the
effective date of such initial designation by (i) either the Parent Board or the
Parent Committee, with respect to designations affecting the First USA, Inc.
Common Stock Fund, or (ii) either the Paymentech Board or the Paymentech
Committee, with respect to designations affecting the First USA Paymentech, Inc.
Common Stock Fund.
A Member may change his deemed investment designation for future amounts to
be allocated to his Account. Any such change shall be made as of the first day
of any calendar quarter in accordance with the procedures established by the
Plan Administrator, and the frequency of such changes may be limited by the Plan
Administrator. Any such change in designation by an Insider affecting a Stock
Fund shall be approved in advance of the effective date of such change of
designation by (i) either the Parent Board or the Parent Committee, with respect
to designations affecting the First USA, Inc. Common Stock Fund, or (ii) either
the Paymentech Board or the Paymentech Committee, with respect to designations
affecting the First USA Paymentech, Inc. Common Stock Fund.
A Member may elect to convert his deemed investment designation with
respect to the amounts already allocated to his Account. Any such conversion
shall be made as of the first day of any calendar quarter in accordance with the
procedures established by the Plan Administrator, and the frequency of such
conversions may be limited by the Plan Administrator. No election of a
conversion designation by an Insider which has the effect of increasing the
total amount allocated to a Stock Fund may be made on a date which is less than
six months following (i) the date of any prior election of a conversion
designation by such Insider which had the effect of decreasing the total amount
allocated to such Stock Fund or (ii) the date of any election by such Insider
with respect to any other plan of First USA, Inc. or any subsidiary thereof
(including First USA Paymentech, Inc.) which had the effect (directly or
indirectly) of making a disposition on behalf of such Insider of the same class
of equity security as that which is the subject of such Stock Fund. No election
of a conversion designation by an Insider which has the effect of decreasing the
total amount allocated to a Stock Fund may be made on a date which is less than
six months following (i) the date of any
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prior election of a conversion designation by such Insider which had the effect
of increasing the total amount allocated to such Stock Fund or (ii) the date of
any election by such Insider with respect to any other plan of First USA, Inc.
or any subsidiary thereof (including First USA Paymentech, Inc.) which had the
effect (directly or indirectly) of making an acquisition on behalf of the
Insider of the same class of equity security as that which is the subject of
such Stock Fund.
The restrictions contained herein regarding investment designations,
changes, and/or conversions by Insiders respecting Stock Funds are intended to
comply with, and enable Insiders to rely upon, the exemption provided by Rule
16b-3 under the Securities Exchange Act of 1934. Any future amendment to Rule
16b-3 or any successor rule promulgated by the Securities and Exchange
Commission affecting the investment by Insiders in the Stock Funds shall be
incorporated by reference herein and be deemed to be an amendment to the Plan in
order that Insiders shall continue to be entitled to rely upon the exemption
provided by such rule without any interruption. Notwithstanding the foregoing,
the Plan Administrator may alter the designation, change and/or conversion
restrictions applicable to an Insider, as set forth in this Article IV, as a
result of changes in Rule 16b-3 under the Securities Exchange Act of 1934.
V.
VESTING
A Member shall be 100% vested in his Account at all times.
VI.
WITHDRAWALS
6.1 IN GENERAL. Except as provided in this Article VI and in Article VII,
Members shall not be permitted to make withdrawals from the Plan. Members shall
not, at any time, be permitted to borrow from the Plan.
6.2 UNFORESEEABLE FINANCIAL EMERGENCY. In the event that the Plan
Administrator, upon written petition of a Member, determines in its sole
discretion that such Member has suffered an Unforeseeable Financial Emergency,
such Member shall be entitled to a benefit, determined as of any Valuation Date,
in an amount not to exceed the lesser of (1) the amount determined by the Plan
Administrator as necessary to meet such Member's needs created by the
Unforeseeable Financial Emergency or (2) the then value of such Member's
Account. Such withdrawal benefit shall be paid in a single lump sum, cash
payment as soon as administratively practicable after the Plan Administrator has
made its determinations with respect to the availability and amount of such
benefit. If a Member's Account contains more than one distribution subaccount,
such withdrawal benefit shall be considered to have been distributed, first,
from the subaccount with respect to which the earliest distribution would be
made, then, from the subaccount with respect to which the next
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earliest distribution would be made, and continuing in such manner until all of
such subaccounts necessary to satisfy the withdrawal benefit have been
exhausted. Moreover, within the applicable Account or subaccount, such
withdrawal benefit shall be considered to have been distributed from Deferrals
(including net income (or net loss) and additional interest equivalents
attributable thereto) on a first-in, first-out basis.
6.3 ELECTIVE WITHDRAWAL.
(a) A Member may elect at any time, by effecting the election
procedure prescribed by the Plan Administrator, to withdraw as a benefit all,
but not less than all, of his Account as of any Valuation Date, subject to a
withdrawal penalty of 10% of such Account as of such Valuation Date. Upon any
such withdrawal, the withdrawal penalty shall be forfeited to the Company. Upon
any such withdrawal, such Member's participation in the Plan shall terminate and
no further Deferrals shall be made under the Plan on behalf of such Member.
(b) No election of a withdrawal of an amount allocated to a Stock Fund
may be made by an Insider on a date which is less than six months following (i)
the date of any prior election to convert such Insider's deemed investment
designation which had the effect of increasing the total amount allocated to
such Stock Fund or (ii) the date of any election by such Insider with respect to
any other plan of First USA, Inc. or any subsidiary thereof (including First USA
Paymentech, Inc.) which had the effect (directly or indirectly) of making an
acquisition on behalf of such Insider of the same class of equity security as
that which is the subject of such Stock Fund.
VII.
DISTRIBUTIONS
7.1 AMOUNT OF BENEFIT. A Member or, in the event of the death of the
Member, the Member's designated beneficiary, shall be entitled to a benefit
equal in value to the Member's Account as of the Valuation Date next preceding
the date the payment of such benefit is to be made or to commence pursuant to
Section 7.2 (plus any annual bonus (or retainer) Deferral not previously
allocated to such Account).
7.2 TIME OF PAYMENT. Payment of a Member's benefit under Section 7.1
shall be made or commence, with respect to such Member's Account, or with
respect to such Member's subaccounts established pursuant to Section 3.1(e)
separately and respectively, as soon as administratively practicable as of the
date irrevocably elected by such Member pursuant to Section 3.1(e). A Member
may, pursuant to Section 3.1(e), elect distribution with respect to his
Deferrals for any Plan Year to be made as of an Entry Date which is at least
five years following the beginning of such Plan Year or to be made or commenced
after the first day of the month following his Retirement. Notwithstanding the
foregoing, payment of a Member's benefit under Section 7.1 shall be made or
commence as soon as administratively practicable after the first day of the
month
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following the date the Member terminates his employment with the Company and its
Affiliates for any reason, including Retirement, Disability or death. For this
purpose, a Member on Disability for a period of two years shall be deemed to
have terminated his employment with the Company and its Affiliates as of the end
of such two-year period.
7.3 ALTERNATIVE FORMS OF BENEFIT PAYMENTS. A Member's benefit under
Section 7.1 payable prior to termination of employment with the Company and its
Affiliates shall be paid, with respect to such Member's Account, or with respect
to such Member's subaccounts established pursuant to Section 3.1(e) separately
and respectively, in one lump sum payment. A Member's benefit under Section 7.1
payable after termination of employment with the Company and its Affiliates
prior to a Member's Retirement shall be paid in one lump sum payment. A
Member's benefit under Section 7.1 payable after a Member's Retirement
(inclusive of termination due to Disability) shall be paid in one of the
following forms irrevocably elected by such Member pursuant to Section 3.1(e):
(1) One lump sum payment; or
(2) Monthly installment payments for a term certain of either 5 or 10 years
payable to the Member or, in the event of such Member's death prior to the end
of such term certain, to his designated beneficiary as provided in Section 7.4;
provided, that to the extent such Member designates a non-spouse beneficiary,
such beneficiary's share of the remaining installments shall be paid in one lump
sum.
With respect to any portion of a Member's Retirement benefit for which no form
of payment election is in effect, such amount shall be paid in the 10-year
monthly installment payment form; provided, however, that the Plan Administrator
may, in its sole discretion, elect to make such benefit payment in any other
available form. If a Member dies prior to the date the payment of his lump sum
benefit is made, then such lump sum benefit shall be made to the Member's
designated beneficiary as provided in Section 7.4. Plan provisions to the
contrary notwithstanding, if payments are to be made in monthly installments,
"installment valuation dates" shall be established as of each payment date. As
of each such "installment valuation date," net income (or net loss) equivalents
shall be allocated to the Member's Account. The installment payment to be made
on behalf of a Member as of each such "installment valuation date" shall be
determined by multiplying the balance of such Member's Account as of such
"installment valuation date" (after allocation of net income (or net loss)
equivalents) by a fraction, the numerator of which is one and the denominator of
which is the number of months remaining in the installment period.
7.4 DESIGNATION OF BENEFICIARIES.
(a) Each Member shall have the right to designate the beneficiary or
beneficiaries to receive payment of his benefit in the event of his death. Each
such designation shall be made by executing the beneficiary designation form
prescribed by the Plan Administrator and filing same
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with the Plan Administrator. Any such designation may be changed at any time by
execution of a new designation in accordance with this Section.
(b) If no such designation is on file with the Plan Administrator at
the time of the death of the Member or such designation is not effective for any
reason as determined by the Plan Administrator, then the designated beneficiary
or beneficiaries to receive such benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his benefit shall be paid
to such surviving spouse;
(2) If a Member leaves no surviving spouse, his benefit shall be paid
to such Member's executor or administrator, or to his heirs at law if there is
no administration of such Member's estate.
7.5 CHANGE IN PAY-OUT OF CERTAIN BENEFITS.
(a) Notwithstanding any provision in Section 7.3 to the contrary, if a
Member's Retirement benefit payments are to be paid in installments and the
aggregate amount to be paid with respect to such Member in any particular Plan
Year is less than $12,000, then the Plan Administrator shall cause the
installment payments for such Plan Year with respect to such Member to be paid
in one lump sum payment.
(b) Notwithstanding any provision in Section 7.3 to the contrary, if a
Member's Retirement benefit payments respecting any one subaccount established
pursuant to Section 3.1(e) are to be paid in installments and the aggregate
amount remaining to be paid with respect to such subaccount is less than
$50,000, then the Plan Administrator shall cause the remaining benefit payments
with respect to such subaccount to be paid in one lump sum payment.
(c) Notwithstanding any provision in Section 7.3 to the contrary, the
form of payment of a Member's Retirement Benefits with respect to a part or all
of his Account may, in the sole discretion of the Plan Administrator, be changed
from the form(s) elected by such Member pursuant to Sections 3.1(e) and 7.3 to
one or more other forms provided in Section 7.3. In making its determination as
to the form(s) of payment, the Plan Administrator may consider the age, family
status, health, financial status, or such other facts as it deems relevant
respecting the Member. The Member may, but shall not be required to, express
his preference to the Plan Administrator as to such form(s) of payment, but the
Plan Administrator shall be under no obligation to follow such preference.
7.6 ACCELERATED PAY-OUT DUE TO EMERGENCY. Notwithstanding any provision
in Sections 7.2 and 7.3 to the contrary, in the event that the Plan
Administrator, upon written petition of a Member, determines in its sole
discretion that such Member has suffered an Unforeseeable Financial Emergency,
such Member shall be entitled to an accelerated payout of his benefit pursuant
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to Section 6.2. Any remaining amounts in such Member's Account following
payment of such emergency benefit shall be payable at the time(s) and in the
form(s) otherwise provided in Sections 7.2 and 7.3.
7.7 DEFERRED PAY-OUT DUE TO LOSS OF TAX DEDUCTION. If the Company
determines in good faith that there is a reasonable likelihood that any benefits
paid to a Member pursuant to this Article VII would not be deductible by the
Company under applicable income tax provisions then in effect, then to the
extent deemed necessary by the Company to ensure that the entire amount of any
such distribution to a Member is deductible, the Company may defer payment of
all or any portion of such benefits. Any amount deferred pursuant to this
Section 7.7 shall continue to receive net income (or net loss) equivalents
pursuant to the Plan until distribution. The amounts so deferred shall be
distributed to the Member (or his beneficiary in the event of the Member's
death) at the earliest possible date, as determined by the Company in good
faith, as of which such deductibility will be ensured.
7.8 PAYMENT OF BENEFITS. To the extent the Trust Fund has sufficient
assets, the Trustee shall pay benefits to Members or their beneficiaries, except
to the extent the Company pays the benefits directly and provides adequate
evidence of such payment to the Trustee. To the extent the Trustee does not or
cannot pay benefits out of the Trust Fund, the benefits shall be paid by the
Company. Any benefit payments made to a Member or for his benefit pursuant to
any provision of the Plan shall be debited to such Member's Account. All
benefit payments shall be made in cash to the fullest extent practicable.
7.9 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of a
Member, if, after exercising reasonable diligence, the Plan Administrator is
unable to locate the Member or beneficiary to whom such benefit is payable, upon
the Plan Administrator's determination thereof, such benefit shall be forfeited
to the Company. Notwithstanding the foregoing, if subsequent to any such
forfeiture the Member or beneficiary to whom such benefit is payable makes a
valid claim for such benefit, such forfeited benefit shall be restored to the
Plan by the Company.
7.10 SET-OFF UPON DISCHARGE FOR CAUSE. Plan provisions to the contrary
notwithstanding, if a Member's employment with the Company and its Affiliates is
terminated by the Company or its Affiliates because he has engaged in misconduct
to the material detriment of the Company and its Affiliates or because he has
been convicted of a felony involving the Company or its Affiliates, the amount
of his benefit, determined pursuant to Section 7.1, shall be reduced by any
amounts due the Company and its Affiliates by such Member as a result of such
misconduct or felony, with such amounts due to be determined in the sole
discretion of the Plan Administrator. Notwithstanding the foregoing, the right
of set-off as provided in this Section 7.10 shall not affect any other rights or
set-off available to the Company or its Affiliates under common-law or under any
other agreement.
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VIII.
ADMINISTRATION OF THE PLAN
8.1 APPOINTMENT OF PLAN ADMINISTRATOR. The general administration of the
Plan shall be vested in the Plan Administrator (which may be an individual or a
committee of two or more persons) which shall be appointed by the Board.
8.2 RESIGNATION AND REMOVAL. At any time during his term of office, the
individuals comprising the Plan Administrator may resign by giving written
notice to the Board, such resignation to become effective upon the appointment
of a substitute or, if earlier, the lapse of thirty days after such notice is
given as herein provided. At any time during its term of office, and for any
reason, the individuals comprising the Plan Administrator may be removed by the
Board.
8.3 RECORDS AND PROCEDURES. The Plan Administrator shall keep appropriate
records of its proceedings and the administration of the Plan and shall make
available for examination during business hours to any Member or beneficiary
such records as pertain to that individual's interest in the Plan. The Plan
Administrator shall provide an annual statement to each Member or beneficiary of
his interest in the Plan. The Plan Administrator shall designate the person or
persons who shall be authorized to sign for the Plan Administrator and, upon
such designation, the signature of such person or persons shall bind the Plan
Administrator.
8.4 SELF-INTEREST OF PLAN ADMINISTRATOR. No individual comprising the
Plan Administrator shall have any right to vote or decide upon any matter
relating solely to himself under the Plan or to vote in any case in which his
individual right to claim any benefit under the Plan is particularly involved.
In any case in which an individual comprising the Plan Administrator is so
disqualified to act, the remaining individuals comprising the Plan Administrator
or, if none, the Board shall decide the matter in which he is disqualified.
8.5 COMPENSATION AND BONDING. The Plan Administrator shall not receive
compensation with respect to its services as Plan Administrator. To the extent
required by applicable law, or required by the Company, the Plan Administrator
shall furnish bond or security for the performance of its duties hereunder.
8.6 PLAN ADMINISTRATOR POWERS AND DUTIES. The Plan Administrator shall
supervise the administration and enforcement of the Plan according to the terms
and provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, authority
and duty:
(a) to make rules, regulations and bylaws for the administration of the
Plan which are not inconsistent with the terms and provisions hereof, provided
such rules, regulations
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and bylaws are evidenced in writing and copies thereof are delivered to the
Trustee and to the Company;
(b) to construe all terms, provisions, conditions and limitations of the
Plan;
(c) to correct any defect or supply any omission or reconcile any
inconsistency that may appear in the Plan, in such manner and to such extent as
it shall deem expedient to carry the Plan into effect for the greatest benefit
of all interested parties;
(d) to employ and compensate such accountants, attorneys, investment
advisors and other agents and employees as the Plan Administrator may deem
necessary or advisable in the proper and efficient administration of the Plan;
(e) to determine all questions relating to eligibility;
(f) to determine the amount, manner and time of payment of any benefits and
to prescribe procedures to be followed by Members and their beneficiaries in
obtaining benefits;
(g) to make a determination as to the right of any person to a benefit
under the Plan; and
(h) to receive and review reports from the Trustee as to the financial
condition of the Trust Fund, including its receipts and disbursements.
8.7 COMPANY TO SUPPLY INFORMATION. The Company shall supply full and
timely information to the Plan Administrator relating to the Pay of all Members,
their ages, their Retirement, Disability, death or other termination of
employment and such other pertinent facts as the Plan Administrator may require.
The Company shall advise the Trustee of such of the foregoing facts as are
deemed necessary for the Trustee to carry out the Trustee's duties under the
Plan. When making a determination in connection with the Plan, the Plan
Administrator shall be entitled to rely upon the aforesaid information furnished
by the Company.
8.8 CLAIMS REVIEW. In any case in which a claim for Plan benefits of a
Member or beneficiary is denied or modified, the Plan Administrator shall
furnish written notice to the claimant within ninety days (or within 180 days if
additional information requested by the Plan Administrator necessitates an
extension of the ninety-day period), which notice shall:
(a) State the specific reason or reasons for the denial or modification;
(b) Provide specific reference to pertinent Plan provisions on which the
denial or modification is based;
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(c) Provide a description of any additional material or information
necessary for the Member, his beneficiary, or representative to perfect the
claim and an explanation of why such material or information is necessary; and
(d) Explain the Plan's claim review procedure as contained herein.
In the event a claim for Plan benefits is denied or modified, if the Member, his
beneficiary, or a representative of such Member or beneficiary desires to have
such denial or modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a written request
for review by the Plan Administrator of its initial decision. In connection with
such request, the Member, his beneficiary, or the representative of such Member
or beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
sixty days following such request for review the Plan Administrator shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period, the Plan
Administrator's decision shall be rendered as soon as possible, but not later
than 120 days after receipt of the request for review. If an extension of time
for review is required, written notice of the extension shall be furnished to
the Member, beneficiary, or the representative of such Member or beneficiary
prior to the commencement of the extension period.
8.9 INDEMNITY. To the extent permitted by applicable law, the Company
shall indemnify and save harmless the Board and any individual acting as Plan
Administrator against any and all expenses, liabilities and claims (including
legal fees incurred to defend against such liabilities and claims) arising out
of their discharge in good faith of responsibilities under or incident to the
Plan. Expenses and liabilities arising out of willful misconduct shall not be
covered under this indemnity. This indemnity shall not preclude such further
indemnities as may be available under insurance purchased by the Company or
provided by the Company under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, as such indemnities are permitted under
applicable law.
IX.
ADMINISTRATION OF FUNDS
9.1 PAYMENT OF EXPENSES. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, and expenses of the Plan Administrator, shall be paid by the Company and,
if not paid by the Company, shall be paid by the Trustee from the Trust Fund, if
any.
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9.2 TRUST FUND PROPERTY. All income, profits, recoveries, contributions,
forfeitures and any and all moneys, securities and properties of any kind at any
time received or held by the Trustee, if any, shall be held as a commingled
Trust Fund pursuant to the terms of the Trust Agreement. The Plan Administrator
shall maintain an Account in the name of each Member, but the maintenance of an
Account designated as the Account of a Member shall not mean that such Member
shall have a greater or lesser interest than that due him by operation of the
Plan and shall not be considered as segregating any funds or property from any
other funds or property contained in the commingled fund. No Member shall have
any title to any specific asset in the Trust Fund, if any.
X.
NATURE OF THE PLAN
The Company intends and desires by the adoption of the Plan to recognize
the value to the Company of the past and present services of individuals covered
by the Plan and to encourage and assure their continued service with the Company
by making more adequate provision for their future retirement security. The
Plan is intended to constitute an unfunded, unsecured plan of deferred
compensation for a select group of management or highly compensated employees of
the Company and for Directors. Plan benefits herein provided are a contractual
obligation of the Company which may be paid out of the Company's general assets
or out of the Trust Fund. Subject to the terms hereof and of the Trust
Agreement, the Company may transfer money or other property to the Trustee, and
the Trustee shall pay Plan benefits to Members and their beneficiaries out of
the Trust Fund in accordance with the terms of the Trust Agreement.
The Board, in its sole discretion, may establish the Trust and direct the
Company to enter into the Trust Agreement. In such event, the Company shall
remain the owner of all assets in the Trust Fund and the assets shall be subject
to the claims of Company creditors if the Company ever becomes insolvent. For
purposes hereof, the Company shall be considered "insolvent" if (a) the Company
is unable to pay its debts as they become due, or (b) the Company is subject to
a pending proceeding as a debtor under the United Sates Bankruptcy Code (or any
successor federal statute). The chief executive officer of the Company and its
board of directors shall have the duty to inform the Trustee in writing if the
Company becomes insolvent. Such notice given under the preceding sentence by
any party shall satisfy all of the parties' duty to give notice. When so
informed, the Trustee shall suspend payments to the Members and hold the assets
for the benefit of the Company's general creditors. If the Trustee receives a
written allegation that the Company is insolvent, the Trustee shall suspend
payments to the Members and hold the Trust Fund for the benefit of the Company's
general creditors, and shall determine within the period specified in the Trust
Agreement whether the Company is insolvent. If the Trustee determines that the
Company is not insolvent, the Trustee shall resume payments to the Members. No
Member or beneficiary shall have any preferred claim to, or any beneficial
ownership interest in, any assets of the Trust Fund.
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XI.
ADOPTING ENTITIES
It is contemplated that other corporations, associations, partnerships or
proprietorships may adopt this Plan and thereby become the Company. Any such
entity, whether or not presently existing, may become a party hereto by
appropriate action of its officers without the need for approval of its board of
directors or noncorporate counterpart or of the Board; provided, however, that
such entity must be an Affiliate. The provisions of the Plan shall apply
separately and equally to each Company and its employees in the same manner as
is expressly provided for First USA, Inc. and its employees, except that the
power to appoint or otherwise affect the Plan Administrator or the Trustee and
the power to amend or terminate the Plan or amend the Trust Agreement shall be
exercised by the Board alone. Transfer of employment among Companies and
Affiliates shall not be considered a termination of employment hereunder. Any
Company may, by appropriate action of its officers without the need for approval
of its board of directors or noncorporate counterpart or the Board, terminate
its participation in the Plan. Moreover, the Board may, in their discretion,
terminate a Company's Plan participation at any time.
XII.
MISCELLANEOUS
12.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the
Plan shall not be deemed to be a contract between the Company and any person or
to be consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to remain under contract with the
Company or to be retained in the employ of the Company or to restrict the right
of the Company to discharge any person at any time nor shall the Plan be deemed
to give the Company the right to require any person to remain under contract
with the Company or remain in the employ of the Company or to restrict any
person's right to terminate his services at any time.
12.2 ALIENATION OF INTEREST FORBIDDEN. The interest of a Member or
his beneficiary or beneficiaries hereunder may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or involuntarily, and
any attempt so to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be null and void; neither shall the benefits
hereunder be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person to whom such benefits or funds are payable,
nor shall they be an asset in bankruptcy or subject to garnishment, attachment
or other legal or equitable proceedings.
12.3 WITHHOLDING. All Deferrals and payments provided for hereunder
shall be subject to applicable withholding and other deductions as shall be
required of the Company under any applicable local, state or federal law.
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12.4 GUARANTY. Plan provisions to the contrary notwithstanding, in
the event any Affiliate that adopts the Plan pursuant to Article XI (other than
First USA Paymentech, Inc. or any of its subsidiaries) fails to make payment of
the benefits due under the Plan on behalf of its Members, whether directly or
through the Trust, First USA, Inc. shall be liable for and shall make payment of
such benefits due as a guarantor of such entity's obligations hereunder.
Moreover, in the event any subsidiary of First USA Paymentech, Inc. that adopts
the Plan pursuant to Article XI fails to make payment of the benefits due under
the Plan on behalf of its Members, whether directly or through the Trust, First
USA Paymentech, Inc. shall be liable for and shall make payment of such benefits
due as a guarantor of such entity's obligations hereunder. The guaranty
obligations provided herein shall be satisfied directly and not through the
Trust.
12.5 AMENDMENT AND TERMINATION. The Board may from time to time, in
their discretion, amend, in whole or in part, any or all of the provisions of
the Plan; provided, however, that no amendment may be made that would impair the
rights of a Member with respect to amounts already allocated to his Account.
The Board may terminate the Plan at any time. In the event that the Plan is
terminated, the balance in a Member's Account shall be paid to such Member or
his designated beneficiary in the manner specified by the Plan Administrator,
which may include one lump sum payment in full satisfaction of all of such
Member's or beneficiary's benefits hereunder.
12.6 SEVERABILITY. If any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions hereof; instead, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.
12.7 GOVERNING LAWS. ALL PROVISIONS OF THE PLAN SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
EXECUTED this 27th day of June, 1996.
FIRST USA, INC.
By: /s/ Philip E. Taken
______________________________
Senior Vice President
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EXHIBIT 4.7
FIRST USA
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I - GENERAL TRUST PROVISIONS 2
1.1 ESTABLISHMENT OF TRUST 2
1.2 SEPARATE SUB-TRUSTS 2
1.3 TRUST IRREVOCABLE 2
1.4 NON-ALIENATION 2
1.5 ACCEPTANCE BY TRUSTEE 2
ARTICLE II - GENERAL DUTIES OF THE PARTIES 3
2.1 GENERAL DUTIES OF THE COMPANY AND THE TRUSTEE 3
2.2 ADDITIONAL GENERAL DUTIES OF TRUSTEE 4
ARTICLE III - INVESTMENT, ADMINISTRATION AND DISBURSEMENT
OF TRUST FUND 4
3.1 INVESTMENT OF TRUST FUND 4
3.2 VALUATION OF TRUST FUND. 6
3.3 ADDITIONAL INVESTMENT POWERS OF TRUSTEE 6
3.4 ADMINISTRATIVE POWERS OF TRUSTEE 6
3.5 DEALINGS WITH TRUSTEE 7
3.6 DISTRIBUTIONS FROM TRUST FUND 7
ARTICLE IV - SETTLEMENT OF ACCOUNTS 10
ARTICLE V - TAXES, EXPENSES AND COMPENSATION OF TRUSTEE 10
5.1 TAXES 10
5.2 EXPENSES AND COMPENSATION 11
ARTICLE VI - FOR PROTECTION OF TRUSTEE 11
6.1 COMMUNICATIONS WITH THE COMPANY, THE PLAN ADMINISTRATOR
AND THE MEMBERS 11
6.2 ADVICE OF COUNSEL 12
6.3 FIDUCIARY RESPONSIBILITY 12
ARTICLE VII - INDEMNITY OF TRUSTEE 12
ARTICLE VIII - RESIGNATION AND REMOVAL OF TRUSTEE 13
8.1 RESIGNATION OF TRUSTEE 13
8.2 REMOVAL OF TRUSTEE 13
8.3 SUCCESSOR TRUSTEE 14
8.4 TRANSFER OF TRUST FUND TO SUCCESSOR 14
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
ARTICLE IX - DURATION AND TERMINATION OF TRUST AND AMENDMENT 14
9.1 DURATION AND TERMINATION 14
9.2 DISTRIBUTION UPON TERMINATION 15
9.3 AMENDMENT 15
ARTICLE X - CLAIMS OF COMPANY'S CREDITORS 15
10.1 INSOLVENCY OF COMPANY 15
10.2 TRUSTEE'S RESPONSIBILITIES IF COMPANY MAY BE INSOLVENT 16
10.3 TRUST RECOVERY OF PAYMENTS TO CREDITORS 16
ARTICLE XI - ADOPTING ENTITIES 17
ARTICLE XII - MISCELLANEOUS 17
12.1 LAWS OF THE STATE OF TEXAS TO GOVERN 17
12.2 TITLES AND HEADINGS NOT TO CONTROL 17
12.3 CHANGE IN CONTROL 17
12.4 SUCCESSORS AND ASSIGNS 18
12.5 CONTROLLING DOCUMENT 18
</TABLE>
<PAGE>
FIRST USA
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
THIS AGREEMENT AND DECLARATION OF TRUST, made this 27th day of June,
1996, by and between FIRST USA, INC. and WACHOVIA BANK OF NORTH CAROLINA, N.A.
(hereinafter referred to as the "TRUSTEE").
WHEREAS, FIRST USA, INC. has established the FIRST USA DEFERRED
COMPENSATION PLAN (hereinafter referred to as the "PLAN") for the benefit of
certain individuals who are eligible for benefits under the terms of the Plan
(such individuals being referred to herein as the "MEMBERS"), which Plan
provides for the payment of certain deferred compensation benefits (the
"BENEFITS") to the Members and the beneficiaries of the respective Members who
may become entitled to any payments under the terms of the Plan in the event of
the Member's death ("BENEFICIARIES"); and
WHEREAS, other adopting entities may adopt the Plan (such other
adopting entities, if any, along with FIRST USA, INC. hereinafter referred to as
the "COMPANY," jointly and severally); and
WHEREAS, the Plan contemplates that the Company will pay the entire
cost of the Benefits from its general assets; and
WHEREAS, FIRST USA, INC. desires to establish the FIRST USA DEFERRED
COMPENSATION PLAN TRUST AGREEMENT (the "TRUST") to aid the Company in meeting
the obligations under the Plan; and
WHEREAS, the Trust is intended to be a "grantor trust" with the corpus
and income of the Trust treated as assets and income of the Company for federal
income tax purposes; and
WHEREAS, the Company intends that the assets of the Trust shall at all
times be subject to the claims of general creditors of the Company as provided
in Article X; and
WHEREAS, the Company intends that the existence of the Trust shall not
alter the characterization of the Plan as "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and shall
not be construed to provide income to any Member prior to actual payment of
Benefits under the Plan; and
WHEREAS, under the Trust, the Trustee covenants that it will hold all
property which it may receive hereunder, IN TRUST, for the uses and purposes and
upon the terms and conditions hereinafter stated;
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NOW, THEREFORE, the parties hereto adopt this Trust Agreement,
effective June 1, 1996, and agree, as follows:
ARTICLE I
GENERAL TRUST PROVISIONS
1.1 ESTABLISHMENT OF TRUST. First USA, Inc. hereby adopts the Trust
Agreement, establishing the Trust with the Trustee, consisting of such sums of
money and other property acceptable to the Trustee as from time to time shall be
paid or delivered to the Trustee by the Company. All such money and other
property, all investments and reinvestments made therewith or proceeds thereof
and all earnings and profits thereon, less all payments and charges as
authorized herein, shall constitute the "TRUST FUND." The Trust Fund shall at
all times be subject to the claims of general creditors of the Company as
provided in Article X. No Member or Beneficiary shall have any preferred claim
to, or any beneficial ownership interest in, any assets of the Trust Fund prior
to the time such assets are paid to such Member or Beneficiary as Benefits.
1.2 SEPARATE SUB-TRUSTS. Contrary provisions of the Trust
notwithstanding, except as provided in Article XI, the provisions of the Trust
shall apply separately and equally to First USA, Inc. and to each adopting
entity that has entered into this Trust Agreement pursuant to Article XI. Each
Company shall bear the cost of providing Benefits for its own Members and their
Beneficiaries, and the portion of the Trust Fund attributable to the
contributions of each Company shall be available only to provide benefits to
such Company's Members and their Beneficiaries or to satisfy claims of such
Company's Bankruptcy Creditors in the event such Company becomes Insolvent (as
such terms are defined in Section 10.1).
1.3 TRUST IRREVOCABLE. The Trust shall be irrevocable and shall be
held for the exclusive purpose of providing benefits under the Plan to Members
and their Beneficiaries and defraying expenses of the Trust in accordance with
the provisions of this Trust Agreement. Except as provided in Sections 3.6(c)
and 3.6(d) and Articles IX and X hereof, no part of the income or corpus of the
Trust Fund shall be recoverable by or for the Company.
1.4 NON-ALIENATION. No right or interest to receive benefits from
the Trust may be assigned, sold, anticipated, alienated or otherwise transferred
by any Member or Beneficiary.
1.5 ACCEPTANCE BY TRUSTEE. The Trustee accepts the Trust established
under this Trust Agreement on the terms and subject to the provisions set forth
herein, and it agrees to discharge and perform fully and faithfully all of the
duties and obligations imposed upon it under this Trust Agreement.
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<PAGE>
ARTICLE II
GENERAL DUTIES OF THE PARTIES
2.1 GENERAL DUTIES OF THE COMPANY AND THE TRUSTEE.
(a) The Company has provided or will provide the Trustee with a copy
of the Plan and shall provide the Trustee with a copy of any amendment to the
Plan promptly upon its adoption. The Plan, as of the date of execution of this
Trust Agreement, is hereby incorporated by reference into and shall form a part
of this Trust Agreement as fully as if set forth herein verbatim. Any amendment
to the Plan shall also be incorporated by reference into and form a part of this
Trust Agreement, effective as of the effective date of such amendment. Schedule
A to this Trust Agree ment sets forth the name and mailing address of each
Member entitled to receive Benefits, the Beneficiaries, if any, designated by
each Member, and each Member's aggregate balance ("ACCOUNT BALANCE") in the
accounts maintained under the Plan on his or her behalf. Such Schedule (as
amended from time to time as provided herein) is hereinafter referred to as the
"BENEFIT SCHEDULE." The Company shall be responsible for notifying the Trustee
of any changes in the information set forth on the Benefit Schedule, including,
but not limited to, the addition of new Members and a change in the mailing
address of a Member.
(b) Subject to the provisions of Section 2.1(c), the Trustee shall be
charged with keeping the Benefit Schedule accurate and current, including but
not limited to, preparing by September 30 of each year a completely updated
Benefit Schedule as of June 30 of the immediately preceding year with such
assistance from the Company and independent third parties as may be necessary in
order to permit distributions from the Trust Fund to be made in accordance with
the pro visions of Section 3.6. The Company shall keep accurate books and
records with respect to the eligibility of individuals to participate in the
Plan and the Benefits payable under the Plan, and shall provide such information
to the Trustee and any independent third party referred to in the immediately
preceding sentence and shall also provide access to such books and records at
such time or times as the Trustee shall reasonably request.
(c) If, at any time, the Company fails or refuses to give the Trustee
Member data or access to such books and records in accordance with Section
2.1(b), the Trustee shall deliver a written request to the Company to provide
access to books and records of the Company and to provide such data as required
in accordance with Section 2.1(b) for the Trustee to keep the Benefit Schedule
accurate and current. If the Company fails or refuses to comply with the
Trustee's written request pursuant to the preceding sentence prior to the
expiration of thirty days from the date of delivery thereof by the Trustee, the
Trustee shall, after ten days written notice to the Company, immediately pay to
each Member an amount equal to such Member's Account Balance as set forth on the
most recent Benefit Schedule, reduced by any taxes to be withheld pursuant to
Section 3.6. Such payment shall be made in accordance with the provisions of
Section 3.6. For this purpose, the Company shall be deemed to have complied
with the Trustee's written request if, in the Trustee's judgment, it shall have
substantially complied at the end of the thirty-day period and is endeavoring in
good faith to complete compliance without delay.
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<PAGE>
(d) The Trustee shall notify each Member and Beneficiary of a then
deceased Member in writing of any changes in the Benefit Schedule with respect
to such Member or Benefi ciary and shall notify all Members and such
Beneficiaries of any failure of the Company to provide information required in
this Section 2.1.
(e) It is intended that Benefits payable to Members shall be
determined under the provisions of the Plan and shall be calculated under the
provisions of the Plan as of the date of payment. Payment of Benefits shall be
based upon the amounts set forth on the Benefit Schedule only under the
circumstances set forth in Section 2.1(c). If the actual Benefits payable to a
Member under the provisions of the Plan exceeds the amount set forth on the
Benefit Schedule which is paid pursuant to Section 2.1(c), the Company shall be
liable for payment of the remaining portion of such Benefits.
(f) Trust provisions to the contrary notwithstanding, 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.
2.2 ADDITIONAL GENERAL DUTIES OF TRUSTEE. The Trustee shall manage,
invest and reinvest the Trust Fund as the Trustee may determine in the exercise
of its fiduciary duties hereunder, consistent with the provisions of Article
III. The Trustee shall collect the income on the Trust Fund, and make
distributions therefrom, all as hereinafter provided.
ARTICLE III
INVESTMENT, ADMINISTRATION AND DISBURSEMENT OF TRUST FUND
3.1 INVESTMENT OF TRUST FUND. The following provisions shall apply
with respect to investment of the Trust Fund:
(a) At any time prior to the occurrence of a Change in Control (as
such term is defined in Section 12.3), the Trustee shall invest and reinvest the
assets of the Trust Fund in accordance with the written directions received from
time to time by the Trustee from the administrator established pursuant to the
Plan (the "PLAN ADMINISTRATOR"). Specifically, but not by way of limitation,
the Plan Administrator may, in its discretion, direct the Trustee to follow the
deemed investment directions of each Member or Beneficiary of a deceased Member,
whether written or telephonic, with respect to a portion of the Trust Fund
assets equal in value to the Account Balance maintained under the Plan on behalf
of such individual, within parameters established by, and as agent for, the Plan
Administrator;
(b) To the extent that the Trustee is directed by the Plan
Administrator, the Trustee may invest in securities (including stock or rights
to acquire stock) or obligations issued by the Company;
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<PAGE>
(c) To the extent that the Trustee is directed by the Plan
Administrator, the Trustee may establish one or more separate investment
accounts within the Trust Fund, each separate account being hereinafter referred
to as an Investment Fund. Except as otherwise provided, the Trustee shall
transfer to each such Investment Fund such portion of the assets of the Trust
Fund as the Plan Administrator directs. The Trustee shall be under no duty to
question, and shall not incur any liability on account of following, any
direction of the Plan Administrator. The Trustee shall be under no duty to
review the investment guidelines, objectives, and restrictions established, or
the specific investment directions given by the Plan Administrator for any
Investment Fund, or to make suggestions to the Plan Administrator in connection
therewith. To the extent that directions from the Plan Administrator to the
Trustee represent deemed investment elections of the Members, the Trustee shall
have no responsibility for such investment elections and shall incur no
liability on account of investing the assets of the Trust Fund in accordance
with such directions. All interest, dividends, and other income received with
respect to, and any proceeds received from the sale or other disposition of
securities or other property held in, an Investment Fund shall be credited to
and reinvested in such Investment Fund. All expenses of the Trust Fund which
are allocable to a particular Investment Fund shall be so allocated and charged.
The Plan Administrator may direct the Trustee to eliminate an Investment Fund or
Funds, and the Trustee shall thereupon dispose of the assets of such Investment
Fund and reinvest the proceeds thereof in accordance with the directions of the
Company; and
(d) From and after the occurrence of a Change in Control, or if the
Plan Administrator fails to provide the Trustee with such written directions,
the Trustee shall have, with respect to the Trust Fund, power in its discretion
to invest and reinvest such assets in (i) common and preferred stocks, bonds,
notes and debentures (including convertible stocks and securities but not
including any stock, debt instruments, or other securities of the Company, the
Trustee or their affiliates) which are readily marketable and listed on a United
States national securities exchange or the NASDAQ national market, (ii)
interest-bearing deposit accounts or certificates of deposit maturing within one
year after acquisition thereof, entered into or issued by a United States
national or state bank or trust company having capital, surplus and undivided
profits, at the holding company level, of at least $75 million, (iii) direct
obligations of, and obligations fully guaranteed by, the United States of
America or any agency of the United States of America which is backed by the
full faith and credit of the United States of America (so long as such
obligations shall mature within one year after acquisition thereof), (iv) any
common, collective or commingled fund, including a fund maintained by the
Trustee, established and maintained primarily for the purpose of investing and
reinvesting in assets of the type described in (i), (ii) and (iii) above, and
(v) insurance contracts issued by one or more insurance companies. Further,
notwithstanding the provisions of the preceding sentence, after the occurrence
of a Change in Control or in the event the Plan Administrator fails to provide
the Trustee with written directions pursuant to the first sentence of this
Section, the Trustee shall have the power in its discretion to retain, maintain,
continue, sell, or take any other actions relative to any assets then held in
the Trust Fund (including, without
5
<PAGE>
limitation, to take actions in accordance with deemed investment directions
obtained directly from a Member or Beneficiary of a deceased Member with respect
to a portion of the Trust Fund assets equal in value to the Account Balance
maintained under the Plan on behalf of such individual).
3.2 VALUATION OF TRUST FUND. As soon as practicable after June 30 of
each year and as of such other dates as may be specified by the Company or the
Plan Administrator, the Trustee shall report to the Company and the Plan
Administrator the assets held in the Trust Fund as of such day and shall
determine and include in such report the fair market value as of such day of
each such asset. In determining such fair market values, the Trustee shall use
such market quotations and other information as are available to it and may in
its discretion be appropriate. The report of any such valuation shall not
constitute a representation by the Trustee that the amounts reported as fair
market values would actually be realized upon the liquidation of the Trust Fund.
The Trustee shall not be accountable to the Company or to any other person on
the basis of any such valuation, but its accountability shall be in accordance
with the provisions of Article IV hereof.
3.3 ADDITIONAL INVESTMENT POWERS OF TRUSTEE. Subject to the
provisions of Sections 3.1, 3.6 and 9.2 hereof, the Trustee shall have, with
respect to the Trust Fund, the power in its discretion:
(a) To retain any property at any time received by it;
(b) To sell, exchange, convey, transfer or dispose of, and to grant
options for the purchase or exchange with respect to, any property at any time
held by it; and
(c) To register and carry any securities or any other property in the
name of the Trustee, or in the name of the nominee of the Trustee (or to hold
any such property unregistered) without increasing or decreasing the fiduciary
liability of the Trustee, and to exercise any option, right or privilege to
convert any convertible securities, including shares or fractional shares of the
Trustee so long as the conversion privilege is offered pro rata to all
shareholders.
3.4 ADMINISTRATIVE POWERS OF TRUSTEE. The Trustee shall have the power
in its discretion:
(a) To exercise all voting rights with respect to the shares of stock
held in the Trust Fund and to grant proxies, discretionary or otherwise;
provided, however, voting rights with respect to stock issued by the Company or
its affiliates shall be exercised by the Company prior to the occurrence of a
Change in Control;
(b) To cause any shares of stock to be registered and held in the name
of one or more of its nominees, or one or more nominees of any system for the
central handling of securities, without increase or decrease of liability;
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<PAGE>
(c) To collect and receive any and all money and other property due to
the Trust Fund and to give full discharge therefor;
(d) Subject to the provisions of Section 3.6 hereof: to settle,
compromise or submit to arbitration any claims, debts or damages due or owing to
or from the Trustee; 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;
(e) To organize under the laws of any state a corporation or limited
liability company for the purpose of acquiring and holding title to any property
which it is authorized to acquire under this Trust Agreement and to exercise
with respect thereto any or all of the powers set forth in this Trust Agreement;
(f) To determine how all receipts and disbursements shall be credited,
charged or apportioned as between income and principal;
(g) To determine the amount and time of Benefit payments in accordance
with Section 3.6; and
(h) Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the protection of the
Trust Fund.
3.5 DEALINGS WITH TRUSTEE. Persons dealing with the Trustee shall be
under no obligation to see to the proper application of any money paid or
property delivered to the Trustee or to inquire into the Trustee's authority as
to any transaction.
3.6 DISTRIBUTIONS FROM TRUST FUND.
(a) Except as set forth in Section 3.6(c), Section 3.6(d), Section 9.2
and Article X hereof, distributions from the Trust Fund shall be made by the
Trustee to the Members and Beneficiaries at the times and in the amounts set
forth in the Plan and, to the maximum extent permitted by applicable law, the
Trustee shall be fully protected in so doing. Any amounts so paid shall be
reduced by the amount of any federal, state, or local income or other taxes that
may be required by law to be withheld or paid by the Trustee and the Trustee
shall pay such amounts to the appropriate governmental authorities; provided,
however, that the Company, the Plan Administrator, the Members, and the
Beneficiaries shall provide the Trustee with all of the information necessary
for the Trustee to determine the amount of such taxes required to be withheld or
paid by the Trustee and the Trustee shall be fully protected in relying upon
such information. Notwithstanding any provision of this Trust Agreement to the
contrary, the Company shall be obligated to pay the Benefits. To the extent
that the Trust Fund is not sufficient to pay any Benefit when due, the Company
shall pay such Benefit directly. In the event Benefits are due to more than one
Member or Beneficiary on the same date and the Trust Fund is not sufficient to
pay all such Benefits, the Trust Fund shall be applied pro rata among such
Members
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<PAGE>
and Beneficiaries on the basis of the Benefits due to be paid such individuals
on such date. Nothing in this Trust Agreement shall relieve the Company of its
liabilities to pay Benefits except to the extent such liabilities are met by
application of Trust Fund assets.
(b) Prior to the occurrence of a Change in Control, the Plan
Administrator shall direct the Trustee in writing as to the time and amount of
Benefits to be distributed to the Members and Beneficiaries. From and after the
occurrence of a Change in Control, a Member or Beneficiary who believes that he
or she is entitled to Benefits may apply in writing directly to the Trustee for
payment of such Benefits. Such application shall advise the Trustee of the
circumstances which entitle such Member or Beneficiary to payment of such
Benefits. The Trustee shall, in such case, reach its own independent
determination as to the Member's or Beneficiary's entitlement to Benefits, even
though the Trustee may be informed from another source (including the Company or
the Plan Administrator) that payments are not due under the Plan. If the
Trustee so desires, it may, in its sole discretion, make such additional
inquiries and/or take such additional measures as it deems necessary in order to
enable it to determine whether Benefits are due and payable, including, but not
limited to, interviewing appropriate persons, requesting affidavits, soliciting
oral or written testimony under oath, or holding a hearing or other proceeding.
After the occurrence of a Change in Control, the Trustee shall determine whether
Benefits are payable as promptly as possible.
(c) At any time and from time to time, the Plan Administrator may
direct the Trustee in writing to distribute to the Company cash held by the
Trustee as part of the Trust Fund in an amount equal to the Benefits accrued
under the Plan that have been forfeited under the terms of the Plan. As soon as
practicable after receipt of such a direction and, if such direction is received
by the Trustee after the occurrence of a Change in Control, the Trustee's
independent determination that such benefits have, in fact, been forfeited in
accordance with the terms of the Plan, the Trustee shall distribute such amount
to the Company.
(d) At any time and from time to time prior to the occurrence of a
Change in Control, the Company may apply in writing to the Trustee for a
distribution by the Trustee to the Company of assets held by the Trustee as part
of the Trust Fund ("TRUST ASSETS") in an amount (the "REFUND AMOUNT") equal to
or less than the difference, if any, between (i) the Net Fair Market Value of
the Trust Assets (as such term is hereinafter defined) as of the last day of the
month coincident with or immediately preceding the date of such application, and
(ii) the aggregate Account Balances for all Members and Beneficiaries as of such
date. Such application shall advise the Trustee of the manner in which the
Refund Amount was calculated. Upon the receipt of such an application from the
Company, the Trustee shall reach its own independent determination as to the
Company's entitlement to the Refund Amount, even though the Trustee may be
informed from another source (including a Member) that the Company is not
entitled to the Refund Amount. If the Trustee so desires, it may, in its sole
discretion, make such additional inquiries and/or take such additional measures
as it deems necessary in order to enable it to determine whether the Company is
entitled to the Refund Amount, including, but not limited to, interviewing
appropriate persons, requesting affidavits, soliciting oral or written testimony
under oath, or engaging such independent third parties as the Trustee may deem
necessary to assist in
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making such determination. The Trustee shall determine whether the Company is
entitled to all or any portion of the Refund Amount as promptly as possible. If
the Trustee determines that the Company is entitled to all or any portion of the
Refund Amount, then the Trustee shall distribute such amount to the Company in
cash or in kind as determined by the Trustee in its sole discretion. As used
herein, the term "NET FAIR MARKET VALUE OF THE TRUST ASSETS" shall mean the fair
market value of the Trust Assets, as determined by the Trustee in its sole
discretion, reduced by all liabilities of the Trust, whether or not such
liabilities are secured by any or all of the Trust Assets, other than
liabilities to Members or Beneficiaries under the Plan. In determining such fair
market value, the Trustee shall use such market quotations and other information
as are available to it and may in its discretion be appropriate; provided,
however, that the fair market value of any life insurance contract which
constitutes a portion of the Trust Assets shall be its net cash surrender value.
The determination of the Net Fair Market Value of the Trust Assets by the
Trustee shall not constitute a representation by the Trustee that the amounts re
ported as fair market values would actually be realized upon the liquidation of
the Trust Assets. The Trustee shall not be accountable to the Company or to any
other person, including the Members or Beneficiaries, on the basis of any such
valuation except as otherwise provided in this Trust Agreement.
(e) The Trustee may engage its own counsel or other experts to assist
it in making its determination under Section 3.6(a), (b), (c) or (d) hereof.
The cost of such counsel or other expert assistance, and any other costs
reasonably incurred by the Trustee in making such determination, shall be borne
by the Company. If the Company fails to pay any such costs when due, the
Trustee may use the assets of the Trust Fund to pay them as provided in Section
5.2.
(f) The Trustee shall not itself commence any legal action, whether in
the nature of an interpleader action, request for declaratory judgment or
otherwise, requesting a court to make a determination under Section 3.6(a), (b),
(c) or (d) hereof in the Trustee's stead without first using its best efforts to
make such determination.
(g) Notwithstanding any other provision of this Trust Agreement, if
any amounts held in the Trust are found in a "determination" (within the meaning
of Section 1313(a) of the Internal Revenue Code of 1986) to have been includible
in gross income of a Member or Beneficiary prior to payment of such amounts from
the Trust, the Trustee shall, as soon as practicable, pay such amounts to such
Member or Beneficiary, as applicable, (but not in excess of such Member's or
Beneficiary's Account Balance at the time of such payment). For purposes of
this Section 3.6, the Trustee shall be entitled to rely on an affidavit by a
Member or Beneficiary, as applicable, and a copy of the determination to the
effect that a determination described in the preceding sentence has occurred.
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ARTICLE IV
SETTLEMENT OF ACCOUNTS
The Trustee shall keep full accounts of all of its receipts and
disbursements. Its books and records with respect to the Trust Fund shall be
open to inspection by the Company, any Member or any Beneficiary of a deceased
Member or their representatives at all times during business hours of the
Trustee. Within sixty days after June 30 of each year, or any termination of
the duties of the Trustee, the Trustee shall prepare, sign and mail to the
Company and the Plan Administrator an account of its acts and transactions as
Trustee hereunder. If, within sixty days after the mailing of the account or
any amended account, the Company and the Plan Administrator have not filed with
the Trustee notice of any objection to any act or transaction of the Trustee,
the account or amended account shall become an account stated. If any objection
has been filed, and if the objecting party is satisfied that it should be
withdrawn or if the account is adjusted to the objecting party's satisfaction,
the objecting party shall in writing filed with the Trustee signify its approval
of the account and it shall become an account stated. When an account becomes
an account stated, such account shall be finally settled, and the Trustee shall
be completely discharged and released, as if such account had been settled and
allowed by a judgment or decree of a court of competent jurisdiction in an
action or proceeding in which the Trustee, the Company and the Plan
Administrator were parties. The Trustee, the Company or the Plan Administrator
shall have the right to apply at any time to a court of competent jurisdiction
for judicial settlement of any account of the Trustee not previously settled as
hereinabove provided. In any such action or proceeding it shall be necessary to
join as parties the Trustee, the Company and the Plan Administrator and any
judgment or decree entered therein shall be conclusive upon all such parties.
ARTICLE V
TAXES, EXPENSES AND COMPENSATION OF TRUSTEE
5.1 TAXES. The Company agrees that all income, deductions and
credits of the Trust Fund belong to it as owner for income tax purposes and will
be included on the Company's income tax returns. The Company shall from time to
time pay taxes (references in this Trust Agreement to the payment of taxes shall
include interest and applicable penalties) of any and all kinds whatsoever which
at any time are lawfully levied or assessed upon or become payable in respect of
the Trust Fund, the income or any property forming a part thereof, or any
security transaction pertaining thereto. To the extent that any taxes levied or
assessed upon the Trust Fund are not paid by the Company or contested by the
Company pursuant to the last sentence of this Section 5.1, the Trustee shall pay
such taxes out of the Trust Fund and the Company shall upon demand by the
Trustee deposit into the Trust Fund an amount equal to the amount paid from the
Trust Fund to satisfy such tax liability. If requested by the Company, the
Trustee shall, at Company expense, contest the validity of such taxes in any
manner deemed appropriate by the Company or its counsel, but only if it has
received an indemnity bond or other security
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satisfactory to it to pay any expenses of such contest. Alternatively, the
Company may itself contest the validity of any such taxes, but any such contest
shall not affect the Company's obligation to reimburse the Trust Fund for taxes
paid from the Trust Fund.
5.2 EXPENSES AND COMPENSATION. The Trustee shall be paid
compensation by the Company as the Company and the Trustee may from time to time
agree. The Trustee shall be reimbursed by the Company for its reasonable
expenses of management and administration of the Trust, including reasonable
compensation of counsel and any agent engaged by the Trustee to assist it in
such management and administration. In the event that the Company shall fail or
refuse to make such reimbursement upon demand, the Trustee may satisfy such
obligations out of the assets of the Trust Fund; in that event, the Company
shall immediately upon demand by the Trustee deposit into the Trust Fund a sum
equal to the amount paid by the Trust Fund for such fees and expenses.
ARTICLE VI
FOR PROTECTION OF TRUSTEE
6.1 COMMUNICATIONS WITH THE COMPANY, THE PLAN ADMINISTRATOR AND THE
MEMBERS.
(a) The Company shall certify to the Trustee the name or names of any
person or persons authorized to act for the Company and for the Plan
Administrator. Such certification shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary of the Company. Until the
Company notifies the Trustee, in a similarly signed notice, that any such person
is no longer authorized to act for the Company or for the Plan Administrator, as
applicable, the Trustee may continue to rely upon the authority of such person.
(b) The Trustee may rely upon any certificate, notice or direction of
the Company or the Plan Administrator which the Trustee reasonably believes to
have been signed by a duly authorized officer or agent of the Company or the
Plan Administrator, as applicable.
(c) Communications to the Trustee shall be sent in writing to its
principal address, Attention: Legal Department, or to such other address as the
Trustee may specify. No communication shall be binding upon the Trust Fund or
the Trustee until it is received by the Trustee and unless it is in writing and
signed by an authorized person.
(d) Communications to the Company shall be sent in writing to the
Company at 1601 Elm Street, 47th Floor, Dallas, Texas 75201, Attention:
General Counsel, or to such other address as the Company may specify in writing
to the Trustee. Communications to the Plan Administrator shall be sent in
writing to the Company's address, Attention: Deferred Compensation Plan
Administrator. Communications to a Member or Beneficiary shall be sent in
writing to the address of such person as stated on the Benefit Schedule, or to
such other address as such person may specify in writing to the Trustee. No
communication shall be binding upon
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the Company, the Plan Administrator, or a Member or Beneficiary until it is
received by such person.
6.2 ADVICE OF COUNSEL. The Trustee may consult with any legal
counsel with respect to the construction of this Trust Agreement, its duties
hereunder or any act which it proposes to take or omit, and shall not be liable
for any action taken or omitted in good faith pursuant to such advice. Expenses
of such counsel shall be deemed to be expenses of management and administration
of the Trust within the meaning of Section 5.2 hereof.
6.3 FIDUCIARY RESPONSIBILITY.
(a) The Trustee shall discharge its duties under this Trust Agreement
in effectuating the Plan in a manner consistent with the objectives of this
Trust Agreement and the Plan. The Trustee shall not be liable for any loss
sustained by the Trust Fund by reason of the purchase, retention, sale or
exchange of any investment in good faith and in accordance with the provisions
of this Trust Agreement. The Trustee shall have no responsibility or liability
for any failure of the Company to make contributions to the Trust Fund or for
any insufficiency of assets in the Trust Fund to pay Benefits when due. The
Trustee shall not be liable hereunder for any act taken or omitted to be taken
in good faith, except for its own negligence or misconduct.
(b) The Trustee's duties and obligations shall be limited to those
expressly imposed upon it by this Trust Agreement.
(c) The Company at any time may employ as agent (to perform any act,
keep any records or accounts, or make any computations required of the Company
or the Plan Administrator by this Trust Agreement or the Plan) the individual,
corporation or association serving as Trustee hereunder. Nothing done by said
individual, corporation or association as such agent shall affect its
responsibilities or liability as Trustee hereunder.
ARTICLE VII
INDEMNITY OF TRUSTEE
The Company hereby indemnifies and holds the Trustee harmless from and
against any and all losses, damages, costs, expenses or liabilities (herein,
"LIABILITIES"), including reasonable attorneys' fees and other costs of
litigation, to which the Trustee may become subject pursuant to, arising out of,
occasioned by, incurred in connection with or in any way associated with this
Trust Agreement, except for any act or omission constituting negligence or
misconduct of the Trustee. If one or more Liabilities shall arise, or if the
Company fails to indemnify the Trustee as provided herein, or both, then the
Trustee may engage counsel of the Trustee's choice, but at the Company's
expense, either to conduct the defense against such Liabilities or to conduct
such actions as may be necessary to obtain the indemnity provided for herein, or
to take both such actions. The Trustee shall notify the Company within fifteen
days after the Trustee has so engaged counsel of the name and address of such
counsel. If the Trustee shall be entitled to
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indemnification by the Company pursuant to this Article VII and the Company
shall not provide such indemnification upon demand, the Trustee may apply assets
of the Trust Fund in full satisfaction of the obligations for indemnity by the
Company, and any legal proceeding by the Trustee against the Company for such
indemnification shall be on behalf of the Trust.
ARTICLE VIII
RESIGNATION AND REMOVAL OF TRUSTEE
8.1 RESIGNATION OF TRUSTEE. The Trustee may resign upon sixty days'
prior written notice to the Board of Directors of First USA, Inc. (the "BOARD"),
the Plan Administrator, each Member and each Beneficiary of a deceased Member,
except that any such resignation shall not be effective until the Board have
appointed in writing a successor trustee, which must be a bank, trust company,
or an individual, and such successor has accepted the appointment in writing;
provided, however, that if such appointment is to become effective at any time
after the occurrence of a Change in Control, then the consent of a majority of
the Members to the appointment of such successor trustee must be obtained. For
all purposes of this Trust Agreement where the consent of a majority of the
Members is required, the determination of majority consent shall be based upon
receiving the consent of any combination of Members whose sum of Account
Balances as of the time of determination is greater than fifty percent of the
sum of Account Balances for all Members at such time, rather than upon receiving
the consent of a majority of the number of Members. For purposes of this
determination, Beneficiaries of deceased Members shall be considered Members.
The Board shall make a good faith effort, following receipt of notice of
resignation from the Trustee, to find and appoint a successor Trustee who will
adhere to the obligations imposed on such successor under the terms of this
Trust Agreement, and in particular, but without limitation, the obligation to
exercise judgment independent of the Company in the circumstances described in
Section 3.6 hereof. The appointment of a successor trustee shall also be
conditioned upon obtaining from such successor a written statement that the
successor has read the Trust Agreement and understands its obligations
thereunder. If the consent of a majority of the Members is required for the
appointment of a successor Trustee, then the Trustee shall be responsible for
securing such Member consents in a timely fashion and, unless ordered by a court
of competent jurisdiction, shall not reveal to the Board, the Plan Administrator
or any other person any information concerning such consents, except whether the
required majority has been achieved. Any notice sent to Members by the Trustee
canvassing the Members as to their consent to a successor trustee, shall include
the name and address of the proposed successor trustee. Any consent of a Member
required under this Section 8.1 shall be deemed given if no written objection is
received by the Trustee from such Member within fourteen days after request for
such consent is sent postpaid by United States registered or certified mail with
return receipt requested to such Member.
8.2 REMOVAL OF TRUSTEE. The Board may remove the Trustee upon sixty
days' prior written notice to the Trustee, the Plan Administrator, each Member
and each Beneficiary of a deceased Member, except that any such removal shall
not be effective until the close of such notice period and (a) delivery by the
Board to the Trustee of an instrument in writing appointing
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a successor trustee meeting the requirements of Section 8.1, and (b) an
acceptance of such appointment in writing executed by such successor.
Notwithstanding the provisions of the preceding sentence, if such appointment of
a successor trustee is to become effective at any time after the occurrence of a
Change in Control, then the removal of the Trustee and the appointment of a
successor trustee shall not be effective until the Trustee has received the
consent of a majority of the Members (as determined in accordance with the
provisions of Section 8.1 hereof) to such removal and such appointment. Upon the
receipt by the Trustee of a written notice of removal, the Trustee shall be
responsible for securing the Member consents (if such consents are required
pursuant to the preceding provisions of this Section 8.2) in a timely fashion
and, unless ordered by a court of competent jurisdiction, shall not reveal to
the Board, the Plan Administrator or any other person any information concerning
such consents, except whether the required majority has been achieved. Any
notice sent to Members by the Trustee canvassing the Members as to their consent
to removal of the Trustee and the appointment of a proposed successor trustee,
shall include the name and address of the proposed successor trustee. Any
consent of a Member required under this Section 8.2 shall be deemed given if no
written objection is received by the Trustee from such Member within fourteen
days after request for such consent is sent postpaid by United States registered
or certified mail with return receipt requested to such Member.
8.3 SUCCESSOR TRUSTEE. All of the provisions set forth herein with
respect to the Trustee shall relate to each successor with the same force and
effect as if such successor had been originally named as the Trustee hereunder.
8.4 TRANSFER OF TRUST FUND TO SUCCESSOR. Upon the resignation or
removal of the Trustee and appointment of a successor, the Trustee shall
transfer and deliver the Trust Fund to such successor. Following the effective
date of the appointment of the successor, the Trustee's responsibility hereunder
shall be limited to managing the assets in its possession and transferring such
assets to the successor, and settling its final account. Neither the Trustee
nor the successor shall be liable for the acts of the other.
ARTICLE IX
DURATION AND TERMINATION OF TRUST AND AMENDMENT
9.1 DURATION AND TERMINATION. The Trust is hereby declared to be
irrevocable and shall continue until (a) all payments required by Section 3.6
have been made or (b) until the Trust Fund contains no assets and retains no
claims to recover assets from the Company or any other person or entity,
whichever shall first occur. Notwithstanding the preceding provisions of this
Section 9.1, unless earlier terminated, the Trust shall terminate twenty-one
(21) years after the death of the last to die of all of the Members and their
issue living on the date of execution of this Trust Agreement; provided,
however, that if at that time the Trust may be continued in force without
violating the rule against perpetuities or any other law of the State of Texas,
then the Trust shall remain in effect until otherwise terminated as provided
hereunder.
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9.2 DISTRIBUTION UPON TERMINATION. If this Trust terminates under
the provisions of Section 9.1, the Trustee shall liquidate the Trust Fund and,
after its final account has been settled as provided in Article IV, shall
distribute to the Company the net balance of any assets of the Trust remaining
after all expenses have been paid and all Benefits, whether or not due and
payable under the terms of the Plan on the date of such termination, have been
paid to the Members and Beneficiaries. Upon making such distribution, the
Trustee shall be relieved from all further liability. The powers of the Trustee
hereunder shall continue so long as any assets of the Trust Fund remain in its
hands.
9.3 AMENDMENT. The Board may from time to time amend, in whole or in
part, any or all of the provisions of this Trust Agreement; provided, however,
that (a) no amendment will be made to this Trust Agreement or the Plan which
will cause this Trust Agreement, the Plan or the assets of the Trust Fund to be
governed by or subject to Part 2, 3 or 4 of Title I of ERISA, (b) no such
amendment shall adversely affect any Benefits to the date of such amendment in
respect of any Member or Beneficiary or the amount of assets of the Trust Fund
available to pay such Benefits, (c) no such amendment shall purport to alter the
irrevocable character of the Trust established under this Trust Agreement, (d)
no such amendment shall increase the duties or responsibilities of the Trustee
unless the Trustee consents thereto in writing, and (e) after the occurrence of
a Change in Control, no amendment will be made to this Trust Agreement without
the consent of a majority of the Members (as determined pursuant to the
provisions of Section 8.1 hereof). Upon receipt of a request from the Board for
an amendment which requires the consent of a majority of the Members, the
Trustee shall be responsible for securing Member consents in a timely fashion,
and unless ordered by a court of competent jurisdiction, shall not reveal to the
Board, the Plan Administrator or any other person any information concerning
such consents, except whether the required majority has been achieved. Any
consent of a Member required under this Section 9.3 shall be deemed given if no
written objection is received by the Trustee from such Member within fourteen
days after request for such consent is sent postpaid by United States registered
or certified mail with return receipt requested to such Member. This Trust
Agreement may be amended, to the extent permitted in this Section 9.3, by an
instrument in writing executed on behalf of First USA, Inc. by its authorized
representatives, consents to which instrument have been obtained from the
required majority of Members if such consents are required.
ARTICLE X
CLAIMS OF COMPANY'S CREDITORS
10.1 INSOLVENCY OF COMPANY. As used in this Article X, the Company
shall be deemed to be "INSOLVENT" if (a) the Company is unable to pay its debts
as they come due, or (b) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code (or any successor federal
statute). In the event that the Company shall be deemed Insolvent, the assets
of the Trust Fund shall be held for the benefit of the general creditors of the
Company (hereinafter referred to as "BANKRUPTCY CREDITORS").
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10.2 TRUSTEE'S RESPONSIBILITIES IF COMPANY MAY BE INSOLVENT.
(a) If at any time the Company or a person claiming to be a creditor
of the Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall within thirty days independently determine whether
the Company is Insolvent and, pending such determination, the Trustee shall
discontinue any payment of Benefits under the Plan and this Trust Agreement and
shall hold the Trust Fund for the benefit of Bankruptcy Creditors. As a
condition of being a Member of the Plan and this Trust Agreement, each Member
hereby waives his priority credit position, if any, under applicable state law.
The Trustee shall resume payments of Benefits under the Plan and this Trust
Agreement in accordance with Section 3.6 hereof only after the Trustee has
determined that the Company is not Insolvent (or is no longer Insolvent, if the
Trustee initially determined the Company to be Insolvent) or upon receipt of an
order of a court of competent jurisdiction requiring such payments. The
Company, by its chief executive officer and its Board of Directors, shall
further be obligated to give the Trustee prompt notice in writing in the event
that the Company becomes Insolvent, with the same consequences as provided in
the preceding two sentences. In determining whether the Company is Insolvent,
the Trustee may rely conclusively upon, and shall be protected in relying upon,
court records showing that the Company is Insolvent, or a current report or
statement from a nationally recognized credit reporting agency showing that the
Company is Insolvent. For purposes of this Trust Agreement, knowledge and
information concerning the Company which is not in the possession of the
Trustee, or its employees, shall not be imputed to the Trustee. The Trustee
shall have no duty or obligation to ascertain whether the Company is Insolvent
unless and until it receives a writing that the Company is Insolvent as
described in the first or third sentence of this Section 10.2(a).
(b) If the Trustee determines that the Company is Insolvent, the
Trustee shall hold the assets of the Trust Fund for the benefit of the
Bankruptcy Creditors, and shall disburse the assets of the Trust Fund to satisfy
such claims as a court of competent jurisdiction shall direct.
(c) If the Trustee discontinues payment of Benefits pursuant to
Section 10.2(a) and subsequently resumes such payments, the first payment to a
Member or Beneficiary following such discontinuance shall include an aggregate
amount equal to the difference between the payments that would have been made to
such Member or Beneficiary, as applicable, under this Trust Agreement but for
this Section 10.2 and the aggregate payments actually made to such Member or
Beneficiary, as applicable, by the Company pursuant to the Plan during any such
period of discontinuance. In the event that upon resumption of payments
pursuant to the preceding sentence, the assets of the Trust Fund are
insufficient to pay Benefits in full, Benefit payments to the affected Members
and Beneficiaries shall be prorated so as to equitably apportion the assets of
the Trust Fund among all affected Members and Beneficiaries in proportion to
their Benefits.
10.3 TRUST RECOVERY OF PAYMENTS TO CREDITORS. In the event that at
any time an amount is paid from the Trust Fund to Bankruptcy Creditors of the
Company, the Trustee shall demand that the Company deposit into the Trust Fund a
sum equal to the amount paid by the Trust
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Fund to such Bankruptcy Creditors and, if such payment is not made within ninety
days of such demand, the Trustee shall take such action as it deems prudent or
advisable to recover payment.
ARTICLE XI
ADOPTING ENTITIES
It is contemplated that other corporations, associations, partnerships
or proprietorships that have adopted the Plan may adopt this Trust Agreement and
thereby become the Company. Any such entity, whether or not presently existing,
may become a party hereto by appropriate action of its officers without the need
for approval of its board of directors or noncorporate counterpart or of the
Board. The provisions of the Trust Agreement shall apply separately and equally
to each Company and its Members and their Beneficiaries in the same manner as is
expressly provided for First USA, Inc. and its Members and their Beneficiaries,
except that (a) the power to appoint or otherwise affect the Trustee and the
power to amend the Trust Agreement shall be exercised by the Board alone, and
(b) the determination of whether a Change in Control has occurred shall be based
solely on First USA, Inc.
ARTICLE XII
MISCELLANEOUS
12.1 LAWS OF THE STATE OF TEXAS TO GOVERN. This Trust Agreement and
the Trust hereby created shall be construed and regulated by the laws of the
State of Texas.
12.2 TITLES AND HEADINGS NOT TO CONTROL. The titles to Articles and
headings of Sections in this Trust Agreement are placed herein for convenience
of reference only and, in case of any conflict, the text of this Trust
Agreement, rather than such titles or headings, shall control.
12.3 CHANGE IN CONTROL. As used in this Trust Agreement, the term
"CHANGE IN CONTROL" shall mean the occurrence of one or more of the following
events: (a) First USA, Inc. shall not be the surviving entity in any merger,
consolidation or other reorganization to which it is a party (or survives only
as a subsidiary of an entity other than a previously wholly-owned subsidiary of
First USA, Inc.); (b) First USA, Inc. sells, leases or exchanges all or
substantially all of its assets to any other person or entity (other than a
wholly-owned subsidiary of First USA, Inc.); (c) First USA, Inc. is dissolved
and liquidated or adopts a plan of dissolution and liquidation; (d) any person
or entity, including a "group" as contemplated by Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, acquires or gains ownership or
control (including, without limitation, power to vote) of more than 50% of the
outstanding shares of First USA, Inc.'s voting stock (based upon voting power);
or (e) as a result of or in connection with a contested election of directors,
the persons who were directors of First USA, Inc. before such election shall
cease to constitute a majority of the Board. First USA, Inc., by its chief
executive officer and its Board of Directors, shall be obligated to give the
Trustee prompt notice in writing
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of the occurrence of a Change in Control. In the event the Trustee receives such
a notice or if at any time a Member or a Beneficiary of a deceased Memberalleges
in writing to the Trustee that a Change in Control has occurred, the Trustee
shall within thirty days independently determine whether a Change in Control has
occurred and, pending such determination, the Trustee shall assume that a Change
in Control has occurred for all purposes of this Trust Agreement and the Plan.
The Trustee shall have no duty or obligation to ascertain whether a Change in
Control has occurred unless it receives a written notice as described in either
of the pre ceding two sentences. In determining whether a Change in Control has
occurred, the Trustee may, in its sole discretion, make such additional
inquiries and/or take such additional measures as it deems necessary, including,
but not limited to, interviewing appropriate persons, requesting affidavits,
soliciting oral or written testimony under oath, or engaging such independent
third parties as the Trustee may deem necessary to assist in making such
determination. Notwithstanding the foregoing, if at any time First USA, Inc.
notifies the Trustee in writing that the Trustee should interpret this Trust
Agreement and the Plan as if a Change in Control had occurred, then for all
purposes of this Trust Agreement and the Plan, the Trustee shall so interpret
this Trust Agreement and the Plan. Once the notice described in the preceding
sentence is received by the Trustee, it may not be rescinded by First USA, Inc.
12.4 SUCCESSORS AND ASSIGNS. This Trust Agreement may not be
assigned by either party without the prior written consent of the other, and any
purported assignment without such prior written consent shall be null and void.
This Trust Agreement shall be binding upon the successors and permitted assigns
of each party hereto.
12.5 CONTROLLING DOCUMENT. Should an inconsistency or conflict exist
between the specific terms of this Trust Agreement and those of the Plan, then
the relevant terms of this Trust Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be executed as of the day and year first above written.
FIRST USA, INC.
BY: /s/ Philip E. Taken
---------------------------------
Senior Vice President
WACHOVIA BANK OF NORTH
CAROLINA, N.A., TRUSTEE
BY: /s/ Joe O. Long
---------------------------------
Senior Vice President
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[OPINION OF PHILIP E. TAKEN, ESQ.]
EXHIBIT 5.1
June 27, 1996
First USA, Inc.
1601 Elm Street, 47th Floor
Dallas, Texas 75201
Ladies and Gentlemen:
I am General Counsel to First USA, Inc., a Delaware corporation (the
"Company"), and have acted as such in connection with the approval by the Board
of Directors of the Company of the First USA Deferred Compensation Plan (the
"Plan"), the reservation for issuance by the Company under the Plan of up to
70,000 shares (the "Shares") of Company Common Stock, par value $.01 per share,
and the registration by the Company under the Securities Act of 1933, as amended
(the "Securities Act") of the issuance of the Shares and the Deferred
Compensation Obligations of the Company under the Plan (the "Deferred
Compensation Obligations').
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Securities Act").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
(i) the Registration Statement on Form S-8 to be filed herewith with the
Securities and Exchange Commission (the "Commission") under the Securities Act
(together with all exhibits thereto, the "Registration Statement"); (ii) the
Plan; (iii) the First USA Deferred Compensation Trust Agreement, dated as of
June 27, 1996, between First USA, Inc. and Wachovia Bank of North Carolina,
N.A., as Trustee (the "Trust Agreement"); (iv) the Restated Certificate of
Incorporation and By-laws of the Company, each as currently in effect; (v) a
specimen of the certificates to be used to represent the Shares; and (vi)
certain resolutions of the Board of Directors of the Company relating to the
Plan, the Trust Agreement and the Shares. I have also examined originals or
copies, certified or otherwise identified to my satisfaction, of such records of
the Company and such agreements, certificates of public officials, certificates
of officers or other representatives of the Company and others, and such other
documents, certificates and records, as I have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such latter documents. I have also assumed
that the certificates
<PAGE>
representing the Shares will be signed by facsimile or otherwise by authorized
officers of the Company and of the transfer agent for the Common Stock and
registered by the registrar for the Common Stock and conform and will conform to
the specimens thereof examined by me. As to any facts material to the opinions
expressed herein which were not independently established or verified, I have
relied upon oral or written statements and representations of officers and other
representatives of the Company and others.
I am admitted to the Bar in the State of Texas, and do not express any
opinion as to the laws of any other jurisdiction except for the general
corporate laws of the State of Delaware and federal laws.
Based upon and subject to the foregoing, I am of the opinion that (i) the
Plan and the Trust Agreement have been duly and validly approved by the Company,
(ii) the Deferred Compensation Obligations have been duly and validly authorized
by the Company, and (iii) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms and conditions of the Plan and the
Trust Agreement, each as amended, and against payment therefor, will be validly
issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. This opinion is limited to the
matters stated herein, and no opinion is implied or may be inferred beyond the
matters expressly stated. This opinion is delivered solely to you in connection
with the Registration Statement and may not be relied upon by any other party
and is not to be used, circulated, quoted or otherwise referred to for any other
purpose without my express written permission.
Very truly yours,
Philip E. Taken
Senior Vice President and General Counsel
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
First USA, Inc. (Form S-8 to be filed on or about June 26, 1996), pertaining to
the First USA Deferred Compensation Plan, of our report dated July 19, 1995 with
respect to the consolidated financial statements of First USA, Inc., included
and incorporated by reference in its Annual Report (Form 10-K) for the year
ended June 30, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
June 25, 1996
