ENDORSEMENT SPLIT-DOLLAR AGREEMENT
THIS AGREEMENT made and entered into as of
the 8th day of June, 1995, by and among Chase Corporation, of
Braintree, Massachusetts, a Massachusetts corporation (the
"Corporation"), Xxxxxx X. Xxxxx, of Cohasset, Massachusetts ("ELC")
and Xxxxx Xxxxx, in her capacity as the trustee of the ELC Irrevocable
Life Insurance Trust, an agreement of trust dated May 27, 1995
(referred to hereunder, together with any additional or successor
trustees serving under said agreement, as the "Trustee").
WITNESSETH THAT:
WHEREAS, ELC is employed as a consultant by the Corporation and
serves as a Director on its Board of Directors; and
WHEREAS, ELC wishes to provide life insurance protection for his
family in the event of his death under a policy of life insurance
insuring his life and the life of his wife, Xxxxxx X. Xxxxx, (the
"Policy"), which is described in Exhibit A attached hereto and by this
reference made a part hereof, and which is being issued by
Metropolitan Life Insurance Company (the "Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on
the Policy on the terms and conditions hereinafter set forth; and
WHEREAS, the Corporation and the Trustee share ownership of the
Policy, with rights as designated herein; and
WHEREAS, the Corporation wishes to retain such ownership rights
in order to secure the repayment of the amounts which it will pay
toward the premiums on the Policy;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. Purchase of Policy.
The Corporation and the Trustee shall
purchase the Policy from the Insurer in the total face amount of
$4,123,000. The parties have taken all necessary action to cause the
Insurer to issue the Policy, and shall take any further action which
may be necessary to cause the Policy to conform to the provisions of
this Agreement. The parties agree that the Policy shall be subject
to the terms and conditions of this Agreement and of the endorsement
to the Policy filed with the Insurer.
2.Ownership of Policy.
The Corporation and the Trustee shall be the absolute owners of
the Policy, and may exercise their respective ownership rights granted
to them by the terms of the Policy and the terms of this Agreement,
as are provided herein. If any terms of the Policy and this Agreement
shall conflict, the terms of this Agreement shall control.
3.Election of Settlement Option and Beneficiary.
The Trustee may select the settlement
option for payment of the death benefit provided under the Policy and
the beneficiary or beneficiaries to receive the portion of Policy
proceeds to which the Trustee is entitled hereunder, by specifying the
same in a written notice to the Corporation. Upon receipt of such
notice, the Corporation and the Trustee shall execute and deliver to
the Insurer the forms necessary to elect the requested settlement
option and to designate the requested person, persons or entity as the
beneficiary or beneficiaries to receive the death proceeds of the
Policy in excess of the amount to which the Corporation is entitled
hereunder. The parties hereto agree to take all action necessary to
cause the beneficiary designation and settlement election provisions
of the Policy to conform to the provisions hereof. The Corporation
shall not terminate, alter or amend such designation or election
without the express written consent of the Trustee.
4.Policy Dividends.
Any dividend declared on the Policy shall be
applied to purchase paid-up additional insurance
on the lives of ELC and his wife, Xxxxxx X.
Xxxxx. The parties agree that the dividend
election provisions of the Policy shall conform
to the provisions of this agreement.
5.Payment of Premiums.
On or before the due date of each Policy
premium, or within any applicable grace period, the Corporate shall
pay the full amount of the premium to the Insurer, and shall, upon
request, promptly furnish ELC, or his wife, Xxxxxx X. Xxxxx, if he is
not living, and the Trustee evidence of that timely payment. The
Corporation shall annually furnish ELC, or his wife, Xxxxxx X. Xxxxx,
if he is not living, and the Trustee a statement of the amount of
income reportable by ELC or his wife, Xxxxxx X. Xxxxx, for federal and
state income tax purposes, if any, as a result of the insurance
protection provided.
6.Designation of Policy
Beneficiary/Endorsement.
Contemporaneously with the execution of
this Agreement, the Corporation and the Trustee have executed a
beneficiary designation for and/or an endorsement to the Policy, under
the form used by the Insurer for such designations, in order to secure
the Corporation's recovery of the amount of the premiums on the Policy
paid by the Corporation hereunder. Such beneficiary designation or
endorsement shall not be terminated, altered or amended by the
Corporation without the express written consent of the Trustee. The
parties hereto agree to take all action necessary to cause such
beneficiary designation or endorsement to conform to the provisions
of this Agreement.
7. Limitations on Corporation's Rights in Policy.
Except as otherwise provided herein, the
Corporation shall not sell, assign, transfer, surrender or cancel the
Policy, change the beneficiary designation provisions thereof, nor
terminate the dividend election thereof without, in any such case, the
express written consent of the Trustee.
8. Policy Loans.
The Corporation may pledge or assign the
Policy, subject to the terms and conditions of this Agreement, for the
sole purpose of securing a loan from the Insurer or from a third
party. The amount of such loan, including accumulated interest
thereon, shall not exceed the lesser of (I) the amount of the premiums
on the Policy paid by the Corporation hereunder, or (ii) the cash
surrender value of the Policy (as defined therein) as of the date to
which premiums have been paid. Interest charges on such loan shall
be paid by the Corporation. If the Corporation so encumbers the
Policy, other than by a Policy loan from the Insurer, then, upon the
death of ELC and his wife, Xxxxxx X. Xxxxx, or upon the election of
the Trustee to purchase the Corporation's ownership interest in the
Policy, the Corporation shall promptly take all action necessary to
secure the release or discharge of such encumbrance.
9.Collection of Death Proceeds.
A. Upon the death of ELC and his wife,
Xxxxxx X. Xxxxx, the
Corporation and the Trustee shall promptly take all action necessary
to obtain the death benefit provided under the Policy. When such
benefit has been collected and paid as provided herein, this Agreement
shall terminate.
B. Upon the death of ELC and his wife,
Xxxxxx X. Xxxxx, the
Corporation shall have the unqualified right to receive a portion of
such death benefit equal to the total amount of the premiums paid by
it, reduced by any indebtedness against the Policy existing at the
death of ELC and his wife, Xxxxxx X. Xxxxx, including any interest due
on such indebtedness. The balance of the death benefit provided under
the Policy, if any, shall be paid directly to the beneficiary or
beneficiaries designated by the Corporation and the Trustee, in the
manner and in the amount or amounts provided in the beneficiary
designation provision of the Policy. In no event shall the amount
payable to the Corporation exceed the Policy proceeds payable at the
death of ELC and his wife, Xxxxxx X. Xxxxx. No amount shall be paid
from such death benefit to the beneficiary or beneficiaries designated
by the Trustee until the full amount due the Corporation has been
paid. The parties hereto agree that the beneficiary designation
provision of the Policy shall conform to the provisions of this
Agreement.
C. Notwithstanding any provision hereof
to the contrary, in the
event that, for any reason whatsoever, no death benefit is payable
under the Policy upon the death of ELC and his wife, Xxxxxx X. Xxxxx,
and in lieu thereof the Insurer refunds all or any part of the
premiums paid for the Policy, the Corporation and the Trustee shall
have the unqualified right to share such premiums based on their
respective cumulative contributions thereto.
10.Option to Purchase Policy.
During such time as either one or both of
ELC and his wife, Xxxxxx X. Xxxxx, is living, the Trustee shall have
the assignable option to purchase the Corporation's ownership interest
in the Policy from the Corporation. The purchase price for the Policy
shall be the total amount of the premium payments made by the
Corporation hereunder, less any indebtedness secured by the Policy
which remains outstanding as of the date of such termination,
including interest on such indebtedness. Upon receipt of such amount,
the Corporation shall transfer all of its right, title and interest
in and to the Policy to the Trustee or its assignee, by the execution
and delivery of an appropriate instrument of transfer.
11. Assignment.
Notwithstanding any provision hereof to
the contrary, the Trustee shall have the right to absolutely and
irrevocably assign by gift all of its right, title and interest in and
to this Agreement and to the Policy to an assignee. This right shall
be exercisable by the execution and delivery to the Corporation of a
written assignment. Upon receipt of such written assignment executed
by the Trustee and duly accepted by the assignee thereof, the
Corporation shall consent thereto in writing, and shall thereafter
treat the assignee as the sole owner of all of the Trustee's right,
title and interest in and to this Agreement and in and to the Policy.
Thereafter, the Trustee shall have no right, title or interest in and
to this Agreement or the Policy, all such rights being vested in and
exercisable only by such assignee.
12. Names Fiduciary, Determination of
Benefits, Claims, Procedure and
Administration.
The Corporation is hereby designated as
the named fiduciary under this Agreement. The named fiduciary shall
have authority to control and manage the operation and administration
of this Agreement, and it shall be responsible for establishing and
carrying out a funding Policy and method consistent with the
objectives of this Agreement.
13.Amendment.
The Agreement may not be amended, altered
or modified,
except by a written instrument signed by the parties hereto, or their
respective successors or assigns, and may not be otherwise terminated
except as provided herein.
14.Binding Effect.
This Agreement shall be binding upon and
inure to the
benefit of the Corporation and its successors and assigns, and ELC,
the Trustee, and their respective successors, assigns, heirs,
executors, administrators and beneficiaries.
15. Notice.
Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement shall be in writing, and
shall be signed by the party giving or making the same. If such
notice, consent or demand is mailed to a party hereto, it shall be
sent by United States certified mail, postage prepaid, addressed to
such party's last known address as shown on the records of the
Corporation. The date of such mailing shall be deemed the date of
notice, consent or demand.
16. Governing Law.
This Agreement, and the rights of theparties hereunder, shall be
governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, as of the day and year first above written.
Chase Corporation
By s/s Xxxxx X. Xxxxx
President
s/s Xxxxxx X. Xxxxx
s/s Xxxxx Xxxxx
Xxxxx Xxxxx, as trustee of the
ELC Irrevocable Life Insurance
Trust dated May 27, 1995.
EXHIBIT A
The following life insurance Policy is subject to the attached
Split-Dollar Agreement"
Insurer: Metropolitan Life Insurance Company
Insured: Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx
Policy Number: 950650078A
Face Amount: $4,123,000
Policy Date: June 8, 1995
Date of Issue: June 8, 1995
