Exhibit 10.12
 
NORTEK, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN C

TRUST AGREEMENT

 
 
 
TABLE OF CONTENTS
 

 ARTICLE   
 PAGE
   
 
 ARTICLE I  Establishment of Trust
2
   
 
 ARTICLE II  Payments to Plan Participants and Their Surviving Spouses
3
   
 
 ARTICLE III Trustee Responsibility Regarding Payments to Trust Beneficiary When
Company Is Insolvent
4
   
 
 ARTICLE IV  Duties and Powers of the Trustee
6
   
 
 ARTICLE V  Disposition of Income
8
   
 
 ARTICLE VI  Limitation of the Trustee's Liability
9
   
 
 ARTICLE VII  Expenses and Compensation
10
   
 
 ARTICLE VIII  Substitution and Succession of the Trustee
11
   
 
 ARTICLE IX  Accounting Provisions
12
   
 
 ARTICLE X  Amendment and Termination
13
   
 
 ARTICLE XI  Successor Company
14
   
 
 ARTICLE XII  Construction and Payment
15
   
 
 ARTICLE XIII  Miscellaneous
16
   
 

                                                         
 
TRUST AGREEMENT

This Agreement is made by and between Nortek, Inc. (hereinafter the "Company"),
and Edward J. Cooney, as Trustee (hereinafter referred to as the "Trustee").

W I T N E S S E T H:

WHEREAS, the Company has established the Nortek, Inc. Supplemental Executive
Retirement Plan C (the "Plan") for certain of its employees; and

WHEREAS, the Company wishes to establish a trust ("Trust") and to contribute to
the Trust assets that shall be held therein, subject to the claims of the
Company's creditors in the event of the Company's insolvency, as herein defined,
for the benefit of Plan Participants (as defined in Section 2.15 of the Plan)
and their surviving spouses in such manner and at such times as specified in the
Plan; and

WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
Plan maintained for the purpose of providing deferred compensation for a select
group of management or highly-compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974 ("ERISA"); and

WHEREAS, the Trustee has consented to act as trustee of the trust fund and to
hold and distribute the assets transferred to the trustee and accumulated in
respect of the Plan on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the Company and the Trustee hereby agree as set
forth below.

ARTICLE I

Establishment of Trust
 
 

 1.1 The Trust Fund shall consist of such sums of money or other property, in a
form acceptable to the Trustee, as shall from time to time be paid or delivered
to the Trustee pursuant to the Plan which, together with all earnings, profits,
increments and accruals thereon, without distinction between principal and
income, shall constitute the Trust Fund hereby created and established. The
Trust Fund shall be held, administered and disposed of by the Trustee as
provided in this Trust Agreement. The Trust hereby established shall be
irrevocable.      1.2 The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.      1.3 The Trust Fund shall be held separate
and apart from other funds of the Company and shall be used exclusively for the
uses and purposes of Plan Participants and general creditors as herein set
forth. Plan Participants and their surviving spouses shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan Participants and their surviving spouses against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
insolvency, as defined in Article III herein.      1.4 Except as provided below
or in Article III hereof, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust assets
before all payment of benefits have been made to Plan Participants and their
surviving spouses pursuant to the terms of the Plan. If at any time the fair
market value of the Trust fund exceeds an amount equal to 125% of the
accumulated benefit obligation of the Plan (as determined by the Company's
accountants or actuaries for financial reporting purposes), the Trustee shall,
upon the request of the Company, transfer to the Company an amount from the
Trust assets which is not greater than the amount of such excess

  

ARTICLE II

Payments to Plan Participants and Their Surviving Spouses
 
 

 2.1 The Company shall designate an Administrator ("Administrator") in
accordance with the Plan and the Administrator shall deliver to the Trustee, at
least annually, a schedule ("the Payment Schedule") that indicates the amounts
payable in respect of each Plan Participant who has ceased to be an employee of
the Company and each surviving spouse, that provides a formula or other
instructions acceptable to the Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Plan), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their surviving spouses in accordance with such Payment
Schedule. The Trustee shall make provisions for the reporting and withholding of
any federal, state or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by the Company. The
Administrator shall provide the Trustee with all information necessary to make
such tax withholding provisions and the Trustee shall be entitled to rely on
such information. The Company shall be responsible for the remittance to the
appropriate tax authorities of its share of any applicable employment taxes, as
distinguished from those employment taxes required to be withheld from the
benefits due Plan Participants and their surviving spouses.      2.2 The
entitlement of a Plan Participant or his or her surviving spouses to benefits
under the Plan shall be determined by the Company and/or the Administrator as
provided for in the Plan and any claim for such benefits shall be considered and
reviewed by the Administrator under the procedures set out in the Plan.      2.3
The Company may make payment of benefits directly to Plan Participants or their
surviving spouses as they become due under the terms of the Plan. The Company
shall notify the Trustee of its decision to make payment of benefits directly
prior to the time amounts are payable to participants or their surviving
spouses. In addition, if the principal of the Trust, and any earnings thereon,
are not sufficient to make payments of benefits in accordance with the terms of
the Plan, the Company shall make the balance of each such payment as it falls
due. Trustee shall notify the Company where principal and earnings are not
sufficient to cover payments required by the Payment Schedule under paragraph
2.1 hereof.

 
 
ARTICLE III

Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company Is Insolvent
 
 

 3.1 The Trustee shall cease payment of benefits to Plan Participants and their
surviving spouses if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code or under state
court receivership law.      3.2 At all times during the continuance of this
Trust as provided in paragraph 1.3 hereof, the principal and income of the Trust
shall be subject to claims of general creditors of the Company under federal and
state law as set forth below:      3.2.1 The Board of Directors and the Chief
Executive Officer of the Company shall have the duty to inform the Trustee in
writing of the Company's Insolvency. If 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 determine whether the Company is Insolvent and,
pending such determination, the Trustee shall discontinue payment of benefits to
Plan Participants or their surviving spouses.      3.2.2 Unless the Trustee has
actual knowledge of the Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the Company is
Insolvent. The Trustee may in all events rely on such evidence concerning the
Company's solvency as may be furnished to the Trustee by the Company and that
provides the Trustee with a reasonable basis for making a determination
concerning the Company's solvency.      3.2.3  If at any time the Trustee has
determined that the Company is Insolvent, the Trustee shall discontinue payments
to Plan Participants or their surviving spouses and shall hold the assets of the
Trust for the benefit of the Company's general creditors. While so holding such
assets, the Trustee shall make payments to such creditors if the Company shall
so direct or, if the Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy code or state receivership law, as a court of
competent jurisdiction shall direct. Nothing in this Trust Agreement shall in
any way diminish any rights of Plan Participants or their surviving spouses to
pursue their rights as general creditors of the Company with respect to benefits
due under the Plan or otherwise.      3.2.4  The Trustee shall resume the
payment of benefits to Plan Participants or their surviving spouses in
accordance with Article II of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer Insolvent).    
 3.3  If the Trustee discontinues the payment of benefits from the Trust
pursuant to paragraph 3.2 hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the aggregate amount
of all payments due to Plan Participants or their surviving spouses under the
terms of the Plan for the period of such discontinuance, less the aggregate
amount of any payments made to Plan Participants or their surviving spouses by
the Company in lieu of the payments provided for hereunder during any such
period of discontinuance provided that there are sufficient assets.

 

ARTICLE IV

Duties and Powers of the Trustee
 
 

 4.1 The Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that the Trustee shall
incur no liability to any person for any action taken pursuant to a direction,
request or approval given by the Company or the Administrator which is
contemplated by, and in conformity with, the terms of the Plan or this Trust and
is given in writing by the Company or the Administrator. In the event of a
dispute between the Company and a party, the Trustee may apply to a court of
competent jurisdiction to resolve the dispute.      4.2 The Trustee shall invest
and reinvest the Trust Fund, without distinction between principal and income.
In addition to the powers and authority granted to the Trustee pursuant to state
law, the provisions of ERISA (to the extent applicable), and the common law, the
Trustee shall have the power and authority:      4.2.1 To purchase or subscribe
for and invest in any securities, but not including any securities of the
Trustee or any affiliate of the Trustee if the Trustee is a corporation, and to
retain any such securities in the Trust Fund. Without in any way intending to
limit the generality of the foregoing, the said term "securities" shall be
deemed to include common and preferred stocks, mortgages, debentures, bonds,
notes or other evidences of indebtedness, and other forms of securities. All
rights associated with assets of the Trust shall be exercised by the Trustee or
the person designated by the Trustee. The Trustee may invest and reinvest all or
a portion of the Trust Fund in shares of any open-ended investment fund or
company.      4.2.2 To deal with all or any part of the Trust Fund; to acquire
any property by purchase, subscription, lease, or other means; to sell for cash
or on credit, convey, lease for long or short terms, or convert, redeem, or
exchange all or any part of the Trust Fund; to hold part of the Trust Fund
uninvested or in savings accounts or certificates of deposit including those
offered by the Trustee if the Trustee is a bank, or in money market funds
managed by the Trustee or an affiliate of the Trustee.      4.2.3 To vote, or
give proxies to vote, any stock or other security, and to waive notice of
meetings, to oppose, participate in, and consent to the reorganization, merger,
consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith and to deposit securities under
deposit agreements.      4.2.4 To register any investment held in the Trust in
its own name or in the name of its nominee, or to hold any investment in bearer
form, but the books and records of the Trustee shall at all times show that all
such investments are part of the Trust.      4.2.5 To make, execute, acknowledge
and deliver any and all documents, deeds and conveyance, and any and all other
instruments necessary or appropriate to carry out the powers herein granted.    
 4.2.6 To enforce by suit or otherwise, or to waive, its rights on behalf of the
Trust Fund, and to defend claims asserted against it or the Trust Fund; to
compromise, adjust and settle any and all claims against or in favor of it or
the Trust Fund.      4.2.7 To renew, extend, or foreclose any mortgage or other
security; to bid on property in foreclosure; to take deeds in lieu of
foreclosure, with or without paying a consideration therefor.      4.2.8 To
employ agents, investment advisers, consultants and actuaries necessary for the
operation of the Trust and to request the advice and assistance of counsel,
including counsel for the Company, or other counsel designated by the
Administrator or by the Trustee.      4.2.9 In the event that the Company
authorizes the transfer of all or a portion of the assets of the Trust to an
insurance company, to enter into and execute on behalf of the Trust all such
documents and instruments necessary or appropriate to carry out such transfer.  
   4.2.10 To do all such other acts, execute all such other instruments and take
such other proceedings and exercise all such other privileges and rights with
relation to any asset constituting a part of the Trust as are necessary to carry
out the purpose of the Trust, and no person dealing with the Trustee shall be
bound to see to the application of any money or property paid or delivered to
the Trustee or to inquire into the validity or propriety of any such
transaction.      4.3 No persons dealing with the Trustee shall be under any
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.      4.4 The Trustee may make any distribution required hereunder
by mailing its check for the specified amount, or delivering the specified
property, to the person to whom such distribution or payment is to be made, at
such address as may have been last furnished to the Trustee, or if no such
address shall have been furnished, to such person in care of the Company, or to
the Administrator or (if so directed by the Administrator) by crediting the
account of such person or by transferring the funds to such person's account by
bank or wire transfer.

 
 
ARTICLE V

Disposition of Income

 
During the term of this Trust, all income received, net of expenses and taxes,
shall be accumulated and reinvested.

 
ARTICLE VI

Limitation of the Trustee's Liability
 
 

 6.1 The Trustee shall be accountable only for funds actually received by it
hereunder and shall have no duty or liability to determine that the amount of
the funds received by it comply with the provisions of the Plan. If the Company
has established a contract with an insurance company to carry out the purposes
of the Plan, the Trustee shall not be liable for the acts or omissions of such
insurance company, or be under an obligation to invest or otherwise manage the
portion of the Trust Fund which is subject to the management of such insurance
company.      6.2 Whenever the Trustee is required or authorized to take any
action hereunder pursuant to any written direction or notice of the
Administrator or the Company, the Trustee, acting in accordance with such
direction or notice, shall not be responsible for the administration of such
Plan or Trust, for the correctness of any payments or disbursements from the
Trust, or for any other action taken by the Trustee in accordance with such
written direction or notice. Such direction or notice shall be sufficient
protection to the Trustee if contained in a writing signed by the Administrator
or such other person authorized to execute documents on behalf of the
Administrator, in the case of direction or notice required to be given by the
Administrator; or by any officer of the Company, in the case of direction or
notice required to be given by the Company, and the Trustee has actual knowledge
that the payment or disbursement is improper or incorrect.      6.3 The Company
shall indemnify and hold harmless the Trustee from and against any losses,
costs, damages or expenses, including reasonable attorneys' fees, which the
Trustee may incur or pay out by reason of (i) the Trustee's acting in accordance
with the directions of the Company or the Administrator or failing to act in the
absence of such directions; (ii) the Trustee's exercise and performance of its
powers and duties hereunder, unless the same are determined to be due to the
Trustee's negligence, bad faith or willful misconduct; (iii) any (alleged or
actual) action or inaction on the part of the Company or the Administrator,
unless such losses, costs, damages, or expenses arise out of the Trustee's
negligence, bad faith, or willful misconduct; or (iv) the failure of the Plan to
be exempt from the requirements of Parts 2, 3 and 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended. In addition, in the event
that the Trustee undertakes or defends any litigation (including but not limited
to any audit, proceeding or any other administrative action of any state, local
or federal taxing authority) arising in connection with the Trust Fund, the
Company agrees to indemnify the Trustee against the Trustee's reasonable costs,
expenses, and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) relating thereto and to be primarily liable for such
payments. If the Company does not pay such costs, expenses, and liabilities
described in this paragraph in a reasonably timely manner, the Trustee may
obtain payment from the Trust Fund.

 
 
ARTICLE VII

Expenses and Compensation
 
The Trustee, other than a trustee who is also an employee or officer of the
Company, shall be paid such reasonable compensation as shall from time to time
be agreed upon by the Trustee and the Company. All administrative expenses,
charges, taxes and assessments of the Trust Fund and Trustee's fees shall be the
obligation of the Company.
 
Any such fees may be paid from the Trust Fund, but the Company shall reimburse
the Trust Fund for all such payments within seven (7) business days.

 
ARTICLE VIII

Substitution and Succession of the Trustee
 
 

 8.1 The Trustee may resign at any time by giving written notice to the
Administrator. Such resignation shall become effective thirty (30) days
thereafter or upon the appointment of a successor Trustee, whichever occurs
first. In the event a successor Trustee is not appointed within thirty (30)
days, the Trustee may turn over the assets of the Trust to the Administrator as
successor Trustee. Except as provided below, the Administrator may remove the
Trustee by giving thirty (30) days written notice to the Trustee of such intent
to remove, and by then giving written notice of the appointment of a successor
Trustee. The removal shall become effective upon acknowledgment of the receipt
of the assets of the Trust by the successor Trustee. Each successor Trustee
under this Trust shall be appointed in writing by the Administrator and shall
accept the Trust in writing. Such successor Trustee shall become vested with any
estate, property, right, power and duty of the predecessor Trustee hereunder
with like effect, as if originally named Trustee. No successor Trustee shall be
liable for any act or failure of any predecessor Trustee, and with the approval
of the Administrator, a successor Trustee may accept the account rendered and
the property delivered to it by the predecessor Trustee without in so doing
incurring any liability or responsibility with respect to acts of default, if
any, of the predecessor Trustee.      8.2 If the Trustee is a corporation, any
corporation into which the Trustee may merge or with which it may consolidate,
or any corporation resulting from any merger or consolidation to which the
Trustee may be a party, shall be the successor of the Trustee hereunder, without
the execution or filing of any additional instrument or the performance of any
further act.

 
 
ARTICLE IX

Accounting Provisions
 
 

 9.1 The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made in the
administration of the Trust Fund.      9.2 Within a reasonable time after the
close of each fiscal year, or of any termination of the duties of the Trustee
hereunder, the Trustee shall prepare and deliver to the Administrator an account
of its acts and transactions as Trustee during such fiscal year or during such
period from the close of the last fiscal year to the termination of the
Trustee's duties, respectively, including a statement of the then current value
of the Trust Fund. Any such account shall be deemed accepted and approved by the
Administrator, and the Trustee shall be relieved and discharged, as if such
account had been settled and allowed by a judgment or decree of a court of
competent jurisdiction, unless protested by written notice to the Trustee within
sixty (60) days of receipt thereof by the Administrator.      9.3 The Trustee or
the 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 herein provided or for the determination of any question
of construction or for instructions. In any such action or proceeding it shall
be necessary to join as parties only the Trustee and the Administrator (although
the Trustee may also join such other parties as it may deem appropriate), and
any judgment or decree entered therein shall be conclusive.

 

ARTICLE X

Amendment and Termination
 
 

 10.1 This Trust Agreement may be amended by a written instrument executed by
the Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Plan or shall make the Trust revocable.    
 10.2 The Trust shall not terminate until the date on which Plan Participants
and their surviving spouses are no longer entitled to benefits pursuant to the
terms of the Plan unless sooner revoked as hereinafter provided in this
paragraph. Upon the written approval of all Plan Participants and all surviving
spouses receiving benefits pursuant to the terms of the Plan, the Company may
terminate this Trust prior to the time all benefit payments under the Plan have
been made. Upon termination of the Trust, any assets remaining in the Trust
shall be returned to the Company.

 
 
ARTICLE XI

Successor Company
 
Unless this Trust be sooner terminated, a successor to the business of the
Company, by whatever form or manner resulting, which succeeds said Company under
the Plan as therein provided shall, upon notice in writing from the
Administrator that all action required by the Plan to effect such succession has
been taken, also succeed to all the rights, powers and duties of such Company
hereunder.

 
ARTICLE XII

Construction and Payment
 
 

 12.1 The Trust shall be construed and administered according to the laws of the
jurisdiction in which the principal office of the Trustee is located. In any
question of interpretation or other matter of doubt, the Trustee may rely upon
the opinion of counsel for the Company or Administrator or any other attorney at
law designated by the Company with approval of the Trustee.      12.2 No person
having any present or future interest in the Trust shall have any right to
assign, transfer, encumber, commute or anticipate his payment under this Trust
and such payment shall not in any way be subject to any legal process or levy of
execution upon, or attachment or garnishment proceeding against, the same for
the payment of any claim against any person having an interest hereunder, nor
shall such payment be subject to the jurisdiction of any family court,
bankruptcy court or insolvency proceedings.

 
 
ARTICLE XIII

Miscellaneous
 
 

 13.1 The titles to the Articles in this Trust Agreement are included for
convenience of reference only and are not to be used in interpreting this Trust
Agreement.      13.2 Neither the gender nor the number (singular or plural) of
any word shall be construed to exclude another gender or number when a different
gender or number would be appropriate.      13.3 This Trust Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which shall together constitute only one Trust Agreement.  
   13.4 Communications to the Trustee shall be sent to the Trustee's principal
office or to such other address as the Trustee may specify in writing. No
communication shall be binding upon the trustee until it is received by the
Trustee. Communications to the Administrator or the Company shall be sent to the
Company's principal office or to such other address as the Company may specify
in writing.

 
 
 
IN WITNESS WHEREOF, the Company and the Trustee have caused this instrument to
be executed this 19th day of July, 2004.

 
 

 COMPANY:  Nortek, Inc.                 By: /s/Edward J. Cooney               
       Signature of Officer      TRUSTEE: /s/Edward J. Cooney                   
     Edward J. Cooney        

 
 
 

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

In Providence on the 19th day of July, 2004, before me personally appeared
Edward J. Cooney, to me known and known by me to be theVP & Treasurer of and the
person who executed the foregoing instrument for and on behalf of Nortek, Inc.
and he acknowledged said instrument by him executed to be the free act and deed
of Nortek, Inc. and his own free and voluntary act and deed in his capacity as
VP & Treasurer of said Company.
 

         
   
   
    /s/Julia L. McGwin                                              Notary
Public   My Commission Expires: 11/19/2005

 

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

In Providence on the 19th day of July, 2004, before me personally appeared
Edward J. Cooney, to me known and known by me to be the person who executed the
foregoing instrument and he acknowledged said instrument by him executed to be
his own free and voluntary act and deed.
 

         
   
   
    /s/Julia L. McGwin                                           Notary Public  
My Commission Expires:  11/19/2005

 
 
 
 
FIRST AMENDMENT
TO THE
NORTEK, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN C
TRUST AGREEMENT
 
WHEREAS, Nortek, Inc. (the "Company") established the Nortek, Inc. Supplemental
Executive Retirement Plan C (the "Plan") for certain of its employees; and
 
WHEREAS, the Company established the Supplemental Executive Retirement Plan C
Trust Agreement (the "Trust"); and
 
WHEREAS, the Trust provides that the Company may, from time to time, amend said
Trust.
 
NOW, THEREFORE, the Trust is hereby amended and revised to reflect the
following:
 
1.    That each and every reference to Trustee shall mean Richard L. Bready and
Edward J. Cooney
 
IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed
this 18th day of April, 2005
 

        NORTEK, INC.  
   
   
  By:   /s/ Edward J. Cooney