EXHIBIT 10.11
SPLIT DOLLAR LIFE AGREEMENT
(Policies On Life of Xxxxxx X. Xxxxxxx, Xx.)
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
(POLICIES ON LIFE OF XXXXXX X. XXXXXXX, XX.)
This Split Dollar Life Insurance Agreement is made as of November 24,
1998, by and between XXXXXXX MARITIME CORPORATION, a Delaware corporation (the
"Corporation"), XXXXXX X. XXXXXXX, XX., (its "Employee"), and Xxxxxxxxx X.
Xxxxxxx, as Distributing Trustee (the "Trustee") of the 1998 XXXXXXX FAMILY
GENERATION-SKIPPING TRUST u/t/a dtd. November 12, 1998, by and between Xxxxxx
X. Xxxxxxx, Xx., as trustor and as trustee (the "Trust").
RECITALS
1. The Trustee owns certain policies of insurance on the life of Xxxxxx X.
Xxxxxxx, Xx. (the "Insured"), as shown on the attached Schedule A (each such
policy being referred to herein as the "Policy").
2. The Corporation, the Trustee, and the Employee desire to have an
agreement outlining their respective obligations with respect to the Policy.
3. The parties intend this Agreement to constitute a plan of split dollar
life insurance under Revenue Rulings 64-328 and 66-110.
NOW, THEREFORE, in consideration of the good and valuable consideration
referred to herein, the sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Ownership of the Policy.
(a) The Trustee is the sole owner of the Policy, and may exercise all
incidents of ownership with respect thereto without the Corporation's consent,
subject only to the limited rights given the Corporation under the terms of the
limited collateral assignment provided for herein.
(b) The Trustee shall execute and deliver a limited collateral
assignment to the Corporation as security for repayment of the amount due to
the Corporation under this Agreement. However, the Corporation shall neither
have nor exercise any rights as
collateral assignee of the Policy that could in any way defeat or impair the
Trustee's right to receive the cash surrender value or the death proceeds of
the Policy in excess of the amount due to the Corporation hereunder. In no
event shall the Corporation have the power to change the beneficiary, to
surrender the Policy, to assign the Policy or revoke an assignment, to pledge
the Policy for a loan, or to obtain from the insurer a loan against the
surrender value of the Policy. All provisions of this Agreement and of such
collateral assignment shall be construed so as to carry out such intention. A
form of the Limited Collateral Assignment is attached hereto as Exhibit B.
2. Premium Payments.
(a) The Corporation shall pay the entire premium on the Policy on
or before the date said premium is due or the end of the grace period allowed
for the payment of premiums.
(b) Until this Agreement is terminated, the Trustee shall pay to
the Corporation each year an amount equal to the economic benefit to the
Employee with respect to the Policy as determined under applicable Internal
Revenue Service rulings.
3. Termination of This Agreement. This Agreement shall terminate upon
the first to occur of any one of the following events (the "Termination Event"):
(a) Upon surrender of the Policy by the Trustee to the issuer of
the Policy;
(b) If the full payment required pursuant to paragraph 2(b) of
this Agreement is not made within sixty (60) days after notice from the
Corporation of the amount due;
(c) at the option of the Corporation if the Employee ceases to be
employed by the Corporation; or
(d) bankruptcy, insolvency or dissolution of the Corporation.
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4. Rights Upon Termination. Upon the termination of this Agreement,
(a) the obligations of the Corporation to pay the premiums on the
Policy shall cease; and
(b) within thirty (30) days after the Termination Event, the
Trustee shall pay to the Corporation an amount equal to the lesser of (i) the
Policy cash surrender value or (ii) the amounts paid by the Corporation pursuant
to paragraph 2(a) of this Agreement (reduced by all payments made by the Trustee
under paragraph 2(b)).
5. Rights Upon Death Of Insured. Unless this Agreement is sooner
terminated as provided in this Agreement, within thirty (30) days after the
death of the Insured under the Policy, the Trustee shall pay to the Corporation
an amount equal to the amounts paid by the Corporation pursuant to paragraph
2(a) of this Agreement (reduced by all payments made by the Trustee under
paragraph 2(b)).
6. Insurer Not A Party. The issuer of the Policy is not a party to
this Agreement for any purpose, shall not be obligated to inquire into the
distribution of any monies payable or paid by it under the Policy and shall be
fully discharged from any and all liability under the terms of the Policy upon
payment or other performances in accordance with the terms of the Policy.
7. Governing Law. This Agreement shall be governed by the laws of the
State of California.
8. Entire Agreement. The Corporation, the Employee and the Trustee
each warrant that no promise, inducement or agreement not contained or referred
to in the Agreement has been made to it or to him in connection with this
Agreement.
9. ERISA Provisions. The Corporation is hereby designated as the
named fiduciary under this Agreement. The named fiduciary shall have the
authority to control and
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manage the operation and administration of this Agreement. The policy for
funding the obligations under this Agreement shall be the payment of premiums
on the Policy.
10. Binding Effect. This Agreement is binding upon and inures to the
benefit of the Corporation, the Employee and the Trustee and their
representatives, agents, servants, employees, heirs, beneficiaries, trustees,
successors, executors, administrators, attorneys, partners, insurers,
stockholders, predecessors and assigns.
11. Trustee Liability. This Agreement, to the extent executed by the
trustee of a trust, is executed by such trustee solely as trustee and not in an
individual capacity. Nothing herein contained shall create any liability on or
require the performance of any covenant by any such trustee individually, nor
shall anything herein contained subject the individual property of any trustee
to any liability.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
XXXXXXX MARITIME CORPORATION
By: /s/ X. Xxxxxxxx
---------------------------------------
X. Xxxxxxxx, Exec. V.P.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, V.P.-TREAS.
/s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxxxx X. Xxxxxxx, Distributing Trustee
u/t/a dtd. November 12, 1998
/s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxxxx, Xx., Employee
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SCHEDULE A
(Policies on Life of Xxxxxx X. Xxxxxxx, Xx.)
INSURANCE COMPANY POLICY DESCRIPTION NO FACE AMOUNT
----------------- --------------------- -----------
Xxxx Xxxxxxx Mutual Variable Life
Life Insurance Co. No. 50,875,001 $20,000,000
Pacific Life Variable Life
Insurance Co. No. VP60712930 $20,000,000
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SCHEDULE B
LIMITED COLLATERAL ASSIGNMENT
-----------------------------
This Limited Collateral Assignment is made by Xxxxxxxxx X. Xxxxxxx, as
Distributing Trustee n/t/a dtd. November 12, 1998, as Assignor, to Xxxxxxx
Maritime Corporation, a Delaware Corporation, as Assignee.
FOR VALUE RECEIVED, the Assignor hereby collaterally assigns to the
Assignee Policy No. ________, issued by ___________________________ (the
"Insurer") in the face amount of __________ (the "Policy"), upon the life of
Xxxxxx X. Xxxxxxx, Xx., on the following terms:
1. The sole purpose of this limited collateral assignment is to secure the
Assignee's right to receive the amount due to it under that certain
Split Dollar
Life Insurance Agreement between the Assignor, the Assignee, and Xxxxxx X.
Xxxxxxx, Xx., dated as of November 24, 1998.
2. This limited collateral assignment includes no incidents of ownership in
the Policy, and the Assignee's interest in the Policy is not assignable to
anyone other than the undersigned or its nominee.
3. The Assignor retains all incidents of ownership in the Policy,
including, without limitation, the power to change the beneficiary, the power to
effect an exchange of the Policy, the power to surrender or cancel the Policy,
the power to assign the Policy or revoke an assignment, and the power to pledge
the Policy for a loan or to obtain from the Insurer a loan against the surrender
value of the Policy.
4. The Insurer is hereby authorized to recognize the Assignee's rights
hereunder without investigating the Assignee's rights under the
Split Dollar
Life Insurance Agreement, the signature of the Assignee shall be sufficient for
the exercise of any rights under the Policy and
LIMITED COLLATERAL ASSIGNMENT
This Limited Collateral Assignment is made by Xxxxxxxxx X. Xxxxxxx, as
Distributing Trustee u/t/a dtd November 12, 1998, as Assignor, to Xxxxxxx
Maritime Corporation, a Delaware Corporation, as Assignee.
FOR VALUE RECEIVED, the Assignor hereby collaterally assigns to the
Assignee policy No. 50,875,001, issued by Xxxx Xxxxxxx Mutual Life Insurance
Co. (the "Insurer") in the face amount of Twenty Million dollars ($20,000,000)
(the "Policy"), upon the life of Xxxxxx X. Xxxxxxx, Xx., on the following terms:
1. The sole purpose of this limited collateral assignment is to
secure the Assignee's right to receive the amount due to it under that certain
Split Dollar Life Insurance Agreement between the Assignor, the Assignee, and
Xxxxxx X. Xxxxxxx, Xx., dated as of November 24, 1998.
2. This limited collateral assignment includes no incidents of
ownership in the Policy, and the Assignee's interest in the Policy is not
assignable to anyone other than the undersigned or its nominee.
3. the Assignor retains all incidents of ownership in the Policy,
including, without limitation, the power to change the beneficiary, the power to
effect an exchange of the Policy, the power to surrender or cancel the Policy,
the power to assign the Policy or revoke an assignment, and the power to pledge
the Policy for a loan or to obtain from the Insurer a loan against the surrender
value of the Policy.
4. The Insurer is hereby authorized to recognize the Assignee's rights
hereunder without investigating the Assignee's rights under the
Split Dollar
Life Insurance Agreement, the signature of the Assignee shall be sufficient for
the exercise of any rights under the Policy and
the receipt of the Assignee for any sums received by it shall be a full
discharge and release to the Insurer.
5. Upon full payment to the Assignee of the amount due to the Assignee
under the
Split Dollar Life Insurance Agreement, the Assignee shall execute all
documents required by the Insurer or the Assignor to release this Limited
Collateral Assignment.
This Limited Collateral Assignment is entered into on January 12, 1999.
ASSIGNOR
/s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxxxx X. Xxxxxxx,
as Distributing Trustee
u/t/a dtd. November 12, 1998
ASSIGNEE
XXXXXXX MARITIME CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, V.P. TREAS.
By: /s/ X. Xxxxxxxx
----------------------------------
X. Xxxxxxxx
E.V.P
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LIMITED COLLATERAL ASSIGNMENT
This Limited Collateral Assignment is made by Xxxxxxxxx X. Xxxxxxx, as
Distributing Trustee u/t/a dtd. November 12, 1998, as Assignor, to Xxxxxxx
Maritime Corporation, a Delaware Corporation, as Assignee.
FOR VALUE RECEIVED, the Assignor hereby collaterally assigns to the
Assignee Policy No. VP60712930 issued by Pacific Life Insurance Co. (the
"Insurer") in the face amount of Twenty Million Dollars ($20,000,000) (the
"Policy"), upon the life of Xxxxxx X. Xxxxxxx, Xx., on the following terms:
1. The sole purpose of this limited collateral assignment is to secure the
Assignee's right to receive the amount due to it under that certain
Split Dollar
Life Insurance Agreement between the Assignor, the Assignee, and Xxxxxx X.
Xxxxxxx, Xx., dated as of November 24, 1998.
2. This limited collateral assignment includes no incidents of ownership in
the Policy, and the Assignee's interest in the Policy is not assignable to
anyone other than the undersigned or its nominee.
3. The Assignor retains all incidents of ownership in the Policy,
including, without limitation, the power to change the beneficiary, the power to
effect an exchange of the Policy, the power to surrender or cancel the Policy,
the power to assign the Policy or revoke an assignment, and the power to pledge
the Policy for a loan or to obtain from the Insurer a loan against the surrender
value of the Policy.
4. The Insurer is hereby authorized to recognize the Assignee's rights
hereunder without investigating the Assignee's rights under the
Split Dollar
Life Insurance Agreement; the signature of the Assignee shall be sufficient for
the exercise of any rights under the Policy and the receipt of the Assignee for
any sums received by it shall be a full discharge and release to the Insurer.
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5. Upon full payment to the Assignee of the amount due to the Assignee
under the
Split Dollar Life Insurance Agreement, the Assignee shall execute all
documents required by the Insurer or the Assignor to release this Limited
Collateral Assignment.
This Limited Collateral Assignment is entered into on January 12, 1999.
ASSIGNOR
/s/ XXXXXXXXX X. XXXXXXX
------------------------------
Xxxxxxxxx X. Xxxxxxx,
as Distributing Trustee
u/t/a dtd. November 12, 1998
ASSIGNEE
XXXXXXX MARITIME CORPORATION
By: /s/ XXXXXXX XXXXXXXX
------------------------------
Xxxxxxx Xxxxxxxx
Exec. V.P.
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Xxxxxx X. Xxxxxxx, X.X. Xxxxx.
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