Document:

Exhibit 10.7

 

STANLEY ASSOCIATES, INC.

EXECUTIVE DEFERRED COMPENSATION AND EQUITY INCENTIVE
PLAN TRUST

 

This Agreement made this 5th day of March 2004, by and between Stanley
Associates, Inc. (the “Company”) and Riggs Bank N.A. (the “Trustee”);

 

WHEREAS, Company has adopted the Stanley Associates, Inc. Executive
Deferred Compensation and Equity Incentive Plan (the “Plan”);

 

WHEREAS, Company has incurred or expects to incur liability for
deferred compensation under the terms of the Plan with respect to the individuals
participating in the Plan (the “Plan Recipients”) who receive Cash Awards or
Trust Awards under the Plan;

 

WHEREAS, Company wishes to establish a trust (hereinafter called “Trust”)
and to contribute to the Trust assets that shall be held therein, subject to
the claims of Company’s creditors in the event of Company’s insolvency, as
herein defined, until paid to Plan Recipients and their beneficiaries in such
manner and at such times as specified in the Plan(s);

 

WHEREAS, it is 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; and

 

WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan(s);

 

NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:

 

Section 1.       Establishment
of Trust

 

(a)               Company
hereby deposits with Trustee in trust $100.00, which shall become the principal
of the Trust to be held, administered and disposed of by Trustee as provided in
this Trust Agreement.

 

(b)              The
Trust hereby established is revocable by the Company, but shall become
irrevocable upon a Change of Control, as herein defined.

 

(c)               The
Trust is intended to be a grantor trust, of which 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.

 

(d)              The
principal of the Trust, and any earnings thereon shall be held separate and
apart from other funds of Company and, except to the extent the Trust is
revoked by the Company, and except as otherwise provided herein, shall be used
exclusively for the uses and purposes of Plan Recipients and general creditors
as herein set forth. Plan Recipients and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets

 

 

of the Trust. Any rights created under the
Plan and this Trust Agreement shall be mere unsecured contractual rights of
Plan Recipients and their beneficiaries against Company. Any assets held by the
Trust shall be subject to the claims of Company’s general creditors under
federal and state law in the event of insolvency, as defined in Section 3(a)
herein.

 

(e)               Company,
in its sole discretion, may at any time, or from time to time, make additional
deposits of cash, securities (including stock or obligations of the Company) or
other property in trust with Trustee to augment the principal to be held,
administered and disposed of by Trustee as provided in this Trust Agreement. Neither
Trustee nor any Plan Recipient or beneficiary shall have any right to compel
such additional deposits.

 

Section 2.       Payments
to Plan Participants and Their Beneficiaries

 

(a)               Company
shall deliver to Trustee a schedule (the “Payment Schedule”) that indicates the
amounts payable in respect of each Plan Recipient (and his or her
beneficiaries), that provides a formula or other instructions acceptable to
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,
Trustee shall make payments to the Plan Recipients and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and
paid by Company.

 

(b)              The
entitlement of a Plan Recipient or his or her beneficiaries to benefits under
the Plan shall be determined by Company or such party as it shall designate
under the Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set out in the Plan.

 

(c)               Company
may make payment of benefits directly to the Plan Recipients or their
beneficiaries as they become due under the terms of the Plan. Company shall
notify Trustee of its decision to make payment of benefits directly prior to
the time amounts are payable to the Plan Recipients or their beneficiaries. 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, Company shall make the balance of each such payment as it falls due. Trustee
shall notify Company where principal and earnings are not sufficient.

 

Section 3.       Trustee
Responsibility Regarding Payments to Trust Beneficiary When  Company is
Insolvent

 

(a)               Trustee
shall cease payment of benefits to the Plan Recipients and their beneficiaries
if the Company is insolvent. Company shall be considered insolvent for purposes
of this Trust Agreement if (i) Company is unable to pay its debts as they
become due, or (ii) Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.

 

(b)              At
all times during the continuance of this Trust, as provided in Section 1(d)
hereof, the principal and income of the trust shall be subject to claims of
general creditors of Company under federal and state law as set forth below.

 

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(c)               The
Board of Directors and the Chief Executive Officer of Company shall have the
duty to inform Trustee in writing of Company’s insolvency. If a person claiming
to be a creditor of Company alleges in writing to Trustee that Company has
become insolvent, Trustee shall determine whether Company is insolvent and,
pending such determination, Trustee shall discontinue payment of benefits to the
Plan Recipients or their beneficiaries.

 

(d)              Unless
Trustee has actual knowledge of Company’s insolvency, or has received notice
from Company or a person claiming to be a creditor alleging that Company is
insolvent, Trustee shall have no duty to inquire whether Company is insolvent. Trustee
may in all events rely on such evidence concerning Company’s solvency as may be
furnished to Trustee and that provides Trustee with a reasonable basis for
making a determination concerning Company’s solvency.

 

(e)               If
at any time Trustee has determined that Company is insolvent, Trustee shall
discontinue payments to the Plan Recipients or their beneficiaries and shall
hold the assets of the Trust for the benefit of Company’s general creditors. Nothing
in this Trust Agreement shall in any way diminish any rights of the Plan Recipients
or their beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the Plan or otherwise.

 

(f)               Trustee
shall resume the payment of benefits to Plan Recipients or their beneficiaries
in accordance with Section 2 of this Trust Agreement only after Trustee has
determined that Company is not insolvent (or is no longer insolvent).

 

(g)              Provided
that there are sufficient assets, if Trustee discontinues the payment of
benefits from the Trust pursuant to Section 3(a) hereof and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to the Plan Recipients or
their beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to the Plan Recipients
or their beneficiaries by Company in lieu of the payments provided for
hereunder during such period of discontinuance.

 

Section 4.       Payments
to Company

 

(a)               Except
as provided in Section 3 or Section 4(b) hereof, after the trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payments
of benefits have been made to the Plan Recipients and their beneficiaries
pursuant to the terms of the plan.

 

(b)              Notwithstanding
anything to the contrary, however, whenever a Plan Recipient has incurred a
forfeiture in accordance with the Plan, including, but not limited to, Sections
8.4 and 8.12(c) of the Plan, the Trustee shall, upon application of Company
without any further request, deliver to Company any Trust assets (including
without limitation any shares of the stock of the Company) with respect to
which a Plan Recipient’s rights have been forfeited.

 

Section 5.       Investment
Authority

 

(a)               Trustee
may invest in securities (including stock or rights to acquire stock) or
obligations issued by Company. All rights associated with assets of the Trust
shall be exercised by Trustee or the person designated by Trustee, and shall in
no event be exercisable by or rest with the Plan Recipients, except that voting
and dividend rights with respect to Trust assets will

 

3

 

be exercised by Trustee as directed by
Company; provided, however, that no Plan Recipient shall participate in any
decision or exercise any right on behalf of Company with respect to such voting
and dividend rights.

 

(b)              Company
shall have the right at anytime, 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 Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.

 

Section 6.       Disposition
of Income

 

During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be returned to Company.

 

Section 7.       Accounting
by Trustee

 

Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within sixty (60) days following the close of each
calendar year and within sixty (60) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the
close of the last proceeding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.

 

Section 8.       Responsibility
of Trustee

 

(a)               Trustee
shall act with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in like capacity and familiar with
such matters would use in the conduct of a an enterprise of a like character
and with like aims, provided, however, that Trustee shall incur no liability to
any person for any action taken pursuant to a direction, request or approval
given by Company which is contemplated by, and in conformity with, the terms of
the Plan or this Trust and is given in writing by Company. In the event of a
dispute between Company and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

 

(b)              If
Trustee undertakes or defends any litigation arising in connection with this
Trust, Company agrees to indemnify Trustee against Trustee’s costs, expenses
and liabilities (including, without limitation, attorney’s fees and expenses)
related thereto and to be primarily liable for such payments. If Company does
not pay such costs, expenses and liabilities in a reasonably timely manner,
Trustee may obtain payment from the Trust.

 

(c)               Trustee
may consult with legal counsel (who may also be counsel for Company generally)
with respect to any of its duties or obligations hereunder.

 

4

 

(d)              Trustee
may hire agents, accountants, actuaries, investment advisors, financial
consultants or other professionals to assist it in performing any of its duties
or obligations hereunder.

 

(e)               Trustee
shall have, without exclusion, all powers conferred on trustees by applicable
law, unless expressly provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, Trustee shall have no power
to name a beneficiary of the policy other than the Trust, to assign the policy
(as distinct from conversion of the policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any borrowing
against such policy.

 

(f)               Notwithstanding
any powers granted to Trustee pursuant to this Trust Agreement or to applicable
law, Trustee shall not have any power that could give this Trust the objective
of carrying on a business and dividing the gains therefrom, within the meaning
of section 301.7701-2 of the Procedure of Administrative Regulations
promulgated pursuant to the Internal Revenue Code.

 

Section 9.       Compensation
and Expenses of Trustee

 

Company shall
pay all administrative and Trustee’s fees and expenses. If not so paid, the
fees and expenses shall be paid from the Trust.

 

Section 10.     Resignation
and Removal of Trustee

 

(a)               Trustee
may resign at any time by written notice to the Company, which shall be
effective sixty (60) days after receipt of such notice unless Company and
Trustee agree otherwise.

 

(b)              Trustee
may be removed by Company on sixty (60) days notice or upon shorter notice
accepted by Trustee, provided, however, that upon a Change of Control, as
defined herein, Trustee may not be removed by Company for two (2) years.

 

(c)               If
Trustee resigns within two (2) years after a Change of Control, as defined
herein, Company shall apply to a court of competent jurisdiction for the
appointment of a successor Trustee or for instructions.

 

(d)              Upon
resignation or removal of Trustee and appointment of a successor Trustee, all
assets shall subsequently be transferred to the successor Trustee. The transfer
shall be completed within sixty (60) days after receipt of notice of
resignation, removal or transfer, unless Company extends the time limit.

 

(e)               If
Trustee resigns or is removed, a successor shall be appointed, in accordance
with Section 11 hereof, by the effective date of resignation or removal under
paragraph(s) (a) or (b) of this section. If no such appointment has been made,
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.

 

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Section 11.     Appointment
of Successor

 

If Trustee resigns or is removed in
accordance with Section 10(a) or (b) hereof, Company may appoint any third
party, such as a bank trust department or other party that may be granted
corporate trustee powers under state law, as a successor to replace trustee
upon resignation or removal. The appointment shall be effective when accepted
in writing by the new Trustee, who shall have all of the rights and powers of
the former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or successor Trustee to evidence the transfer.

 

Section 12.     Amendment
or Termination

 

(a)               This
Trust may be amended by a written instrument executed by Trustee and Company. Notwithstanding
the foregoing, no such amendment shall conflict with the terms of the Plan(s)
or shall make the Trust revocable after it has become irrevocable in accordance
with Section 1(b) hereof.

 

(b)              The
Trust shall not terminate until the date on which the Plan Recipients and their
beneficiaries are no longer entitled to benefits pursuant to the terms of the
Plan(s) unless sooner revoked in accordance with Section 1(b) hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Company.

 

Section 13.     Miscellaneous

 

(a)               Any
provision of this Trust Agreement prohibited by law shall be ineffective to the
extent of any such prohibition, without invalidating the remaining provisions
hereof.

 

(b)              Benefits
payable to the Plan Recipients and their beneficiaries under this Trust
Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.

 

(c)               This
Trust Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia.

 

(d)              For
purposes of this Trust, Change of Control shall mean the occurrence of one of
the following:  (i) the purchase or other
acquisition by any person, entity or group of persons, within the meaning of
section 13(d) or 14(d) of the Securities Exchange Act of 1934 (“Act”), or any
comparable successor provisions, of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of 20 percent or more of either the
outstanding shares of common stock or the combined voting power of Company’s
then outstanding voting securities entitled to vote generally; (ii) the
approval by the stockholders of Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were
stockholders of Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50 percent of the
combined voting power entitled to vote generally in the election of directors
of the reorganized, merged or consolidated Company’s then outstanding
securities; (iii) the liquidation or dissolution of Company or of the sale of
all or substantially all of Company’s assets; or (iv) the consummation of a
sale of more than 50% of the Company’s outstanding stock to persons who are not
shareholders of the Company prior to such sale other than pursuant to an
initial public offering of the common stock of the Company.

 

6

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered effective as of the date first written
above.

 

 

	
  STANLEY ASSOCIATES, INC.

  
	
   

  
	
  By:

  	
  /s/ Philip O. Nolan

  	
   

  
	
   

  	
  Name: Philip O. Nolan

  
	
   

  	
  Title:President and Chief Executive Officer

  
	
   

  
	
   

  
	
  RIGGS BANK N.A.

  
	
  TRUSTEE

  
	
   

  
	
   

  
	
  By:

  	
  /s/ John A. Murphy

  	
   

  
	
   

  	
  Name: John A. Murphy

  
	
   

  	
  Title: Vice President and Trust Officer

  

 

7Exhibit
10.12

AMENDMENT NO. 1, dated as of June 28, 2006,
to the Stanley Associates, Inc. Executive Deferred Compensation and Equity Plan
(the “2002 Plan”).

WHEREAS, pursuant to
resolutions of the Board of Directors (the “Board”) of Stanley
Associates, Inc. (the “Company”) dated May 4, 2006, the Board deemed it
advisable and in the best interests of the Company and its shareholders that
the Company commence preparations relating to a proposed underwritten initial
public offering of shares of common stock (the “Offering”), par value $0.01
per share, of the Company; and

WHEREAS the Board has
determined that it is advisable and in the best interests of the Company and
its stockholders to amend the 2002 Plan as provided below in preparation for
the Offering;

NOW, THEREFORE, be it
resolved that:

1.  The second sentence of Section 7.9 of the
2002 Plan is hereby deleted in its entirety and replaced with the following:

“7.9         Upon a Public Offering, the rights and obligations of the
Company and the Recipients set forth in Sections 7.5, 7.6 and 7.7 shall lapse
and terminate.”

2.  This Amendment will be governed by the laws
of the state of Delaware.

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