Exhibit 10.9.2
SPLIT DOLLAR LIFE INSURANCE
AGREEMENT
THIS AGREEMENT, made and entered into this ___ day of ________, 1998, by and
between Alliant Techsystems Inc., a Delaware corporation, with principal offices
and place of business in the State of Minnesota (hereinafter referred to as the
"Corporation"), and [NAME], an individual residing in the State of Minnesota
(hereinafter referred to as the "Employee"),
WITNESSETH THAT:
WHEREAS, the Employee is a valued employee of the Corporation; and
WHEREAS, the Corporation, wishes to assist the Employee with his (or
her) personal life insurance program; and
WHEREAS, the Employee wishes to provide life insurance protection for
his (or her) family in the event of his (or her) death, under a policy of life
insurance insuring his (or her) life (hereinafter referred to as the "Policy"),
which is described in Exhibit A attached hereto and by this reference made a
part hereof, and which is issued by Northwestern Mutual Life Insurance Company
(hereinafter referred to as the "Insurer"); and
WHEREAS, the Corporation is willing to pay a portion of the premiums
due on the Policy as an additional employment benefit for the Employee, on the
terms and conditions hereinafter set forth; and
WHEREAS, the Corporation is the owner of the Policy and, as such,
possesses all incidents of ownership in and to the Policy; 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 cash
surrender value on the Policy;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as follows:
1. POLICY OWNERSHIP
The Corporation shall purchase the Policy from the Insurer in the total
face amount of [$000,000]. The parties hereto agree that they will take
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
hereto agree that the Policy shall be subject to the terms and
conditions of this Agreement, of the Executive Life Insurance Agreement
between the parties, and of the endorsement to the Policy filed with
the Insurer.
The Corporation shall be the sole and absolute owner of the Policy, and
may exercise all ownership rights granted to the owner thereof by the
terms of the Policy, except as may otherwise be provided herein.
2. BENEFICIARY DESIGNATION
A. Corporation
Contemporaneously with the execution of this Agreement, the Corporation
has executed a corporate beneficiary designation for the Policy, under
the form used by the Insurer for such designations, in order to secure
the Corporation's recovery of the amount described in Section 3
hereunder. The parties hereto agree to take all action necessary to
cause such Corporate beneficiary designation to conform to the
provisions of this Agreement.
B. Employee
The Employee may select the beneficiary(ies) to receive the portion of
policy proceeds to which the Employee is entitled hereunder, by
specifying the same in a written notice to the Corporation on the form
provided by the Corporation (Exhibit C). Upon receipt of such notice,
the Corporation shall execute and deliver to the Insurer the forms
necessary to designate the requested person(s) as the beneficiary(ies),
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 such Employee beneficiary
designation to conform to the provision of this Agreement. The
Corporation shall not terminate, alter or amend such Employee
beneficiary designation without the express written consent of the
Employee.
3. PAYMENT OF POLICY PROCEEDS
A. Corporation
As long as this Agreement remains in effect, the Corporation shall have
the unqualified right to receive a portion of such Policy equal to the
Policy's cash surrender value as of the date of the Employee's death,
reduced by any indebtedness against the Policy existing at the death of
the Employee (including any interest due on such indebtedness).
B. Employee's Beneficiary
As long as this Agreement remains in effect, the death benefit provided
under the Policy, if any, shall be paid directly to the Employee's
beneficiary or beneficiaries designated by the Corporation at the
direction of the Employee, in the manner and in the amount or amounts
provided in the beneficiary designation provision of the Policy.
C. Limitations
In no event shall the amount payable to the Corporation hereunder
exceed the Policy proceeds payable at the death of the Employee. No
amount shall be paid from such death benefit to the Employee's
beneficiary or beneficiaries designated by the Corporation at the
direction of the Employee, until the full amount due the Corporation
hereunder has been paid. The parties hereto agree that the beneficiary
designation provision of the Policy shall conform to the provisions
hereof. It is understood that, while the Employee is employed by the
Corporation, the Corporation will make premium payments until the
Employee attains age 60. No further payments will be made by the
Corporation after that time. The amount of benefit available subsequent
to the Employee reaching age 60 will be determined by the actual
investment experience in the Policy, however based on current
investment projections and mortality tables, sufficient funds should
have accumulated to provide full face value of the death benefit up to
age 70, and 2/3rds of this amount until age 95, at which point the
policy would cease to exit.
4. SETTLEMENT OPTION
The Corporation and the Employee's beneficiary may select a settlement
option as provided in the Policy at the time of distribution.
5. CHOICE OF DIVIDEND OPTION(S)
To the extent the Insurer declares dividends on the Policy, the
Corporation shall have the right to choose the option or combination of
options it desires from among those offered by the Insurer. The
Corporation shall notify the Insurer of its choice.
6. PREMIUM PAYMENT
On or before the due date of each Policy premium, or within the grace
period provided therein, the Corporation shall pay the full amount to
the Insurer.
7. NOTICE TO EMPLOYEE OF TAXABLE COST
The Insurer shall xxxxxxx Xxxxx Executive Benefits and Xxxxx Executive
Benefits shall furnish the Corporation an annual report which shall
include a statement of the amount of income reportable by the Employee
for Federal and State income tax purposes, as a result of the
Corporation's payment of the Policy premium. The Insurer has
represented to the Corporation that it shall use the Insurer's
published rates for individual, initial issue, one-year term policies
for determining the taxable amounts to be included in income by the
Employee and to be deducted by the Corporation. The Insurer has further
represented that such rates are in full compliance with all Internal
Revenue Service regulations and/or rulings regarding its intended use
by the Employee and the Corporation under this Agreement. The
Corporation shall use this information to determine proper withholdings
and tax treatment.
8. PROCEDURE AT EMPLOYEE'S DEATH
Upon the death of the Employee, while the Policy and this Agreement are
in force, the Corporation shall promptly take all reasonable action
requested by the Employee's beneficiary(ies), to obtain their portion
of the death benefit provided under the Policy.
9. 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
determined by the Insurer) 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 the Employee or upon the
election of the Employee hereunder to purchase the Policy from the
Corporation, the Corporation shall promptly take all action necessary
to secure the release or discharge of such encumbrance.
10. TERMINATION OF AGREEMENT
A. Without Notice
This Agreement shall terminate, without notice, upon the occurrence of
any of the following events:
1) the total cessation of the business of the
Corporation;
2) the bankruptcy, receivership or dissolution of the
Corporation;
3) performance of the Agreement's terms following the
death of the Employee; or
4) the Employee's separation from service of the
Corporation.
B. With Notice
In addition, either party may terminate this Agreement unilaterally and
without cause, by written notice to the other party of such intent to
terminate the Agreement. Such termination shall be effective as of the
date specified in such notice.
C. Coincident with the Termination of the Executive Life Insurance
Agreement
At the termination of this Agreement, the Executive Life Insurance
Agreement between the parties shall also terminate unless otherwise
agreed to by the Corporation.
11. AMENDMENT OR TERMINATION AFTER A CHANGE OF CONTROL
Notwithstanding anything herein to the contrary, the Corporation
reserves the right to amend the provisions of the Agreement and to
terminate the Agreement at any time prior to the date of a Change of
Control. During the three (3) years following the date of a Change of
Control, the provisions of this Agreement may not be amended if the
amendment would adversely affect the rights, expectancies, or benefits
of the Employee, or his or her assignee, or his or her beneficiary
under this Agreement (as in effect immediately prior to the Change of
Control) unless the amendment is consented to in writing by the
Employee or his or her assignee. The Agreement may be terminated at any
time during this three (3) year period if and only if such termination
is consented to in writing by the Employee or his or her assignee. The
Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially
all of the benefits and/or assets of the Corporation to assume
expressly all of the liabilities and obligations of the Agreement.
For the purpose of this Agreement, a "Change of Control" shall mean any
of the following events:
(a) the acquisition by any person or group of beneficial
ownership of 20% or more of either the then outstanding stock or the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors,
except that (I) no such person or group shall be deemed to own
beneficially (1) any securities acquired directly from the Corporation
pursuant to a written agreement with the Corporation, or (2) any
securities held by the Corporation or a subsidiary (as defined below)
or any employee benefit plan (or any related trust) of the Corporation
or a subsidiary (as defined below), and (II) no Change of Control shall
be deemed to have occurred solely by reason of any such acquisition by
a corporation with respect to which, after such acquisition, more than
60% of both the then outstanding common shares of such corporation and
the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors are then beneficially owned, directly or indirectly, by the
persons who were the beneficial owners of the stock and voting
securities of the Corporation immediately before such acquisition, of
the then outstanding stock and the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote
generally in the election of directors, as the case may be;
(b) individuals who, as the date hereof, constitute the board
of directors of the Corporation (the "Incumbent Directors") cease for
any reason to constitute at least a majority of the board of directors
of the Corporation; provided that any individual who becomes a director
after the date hereof whose election, or nomination for election by the
Corporation's stockholders was approved by a vote or written consent of
at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an
Incumbent Director, but excluding, for this purpose,
any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election
of the directors of the Corporation (as such terms are used in Rule
14a-11 under the Securities Exchange Act of 1934, as amended ("1934
Act"); or
(c) approval by the stockholders of the Corporation of (I) a
merger, reorganization or consolidation with respect to which the
individuals and entities who were the respective beneficial owners of
the stock and voting securities of the Corporation immediately before
such merger, reorganization or consolidation do not, after such merger,
reorganization or consolidation, beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding common
shares and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of
the Corporation resulting from such merger, reorganization or
consolidation, (II) a liquidation or dissolution of the Corporation or
(III) the sale or other disposition of all or substantially all of the
assets of the Corporation.
For purposes of this definition, "person" means such term as
used in Securities Exchange Commission ("SEC") Rule 13d-5(b) under the
1934 Act; "beneficial owner" means such term as defined in SEC Rule
13d-3 under the 1934 Act; "group" means such term as defined in Section
13(d) of the 1934 Act; "subsidiary" means a corporation as defined in
Section 425(f) of the Internal Revenue Code of 1986, as amended
("Code") with the Corporation being treated as the employer corporation
for purposes of this definition of subsidiary; and "stock" means the
common stock of the Corporation, par value $.01, or any other common
stock that the Corporation may issue from time to time.
12. DISPOSITION OF POLICY UPON TERMINATION OF AGREEMENT
For thirty (30) days after the date of the termination of this
Agreement, the Employee shall have the assignable option to purchase
the Policy from the Corporation. The purchase price for the Policy
shall be an amount equal to the cash surrender value, including
dividend accumulations and the cash value of dividend additions
existing in the Policy at the end of the period of which premiums have
been paid. If the Policy shall then be encumbered by assignment, policy
loan, or otherwise, the Corporation shall either remove such
encumbrance, or reduce the sale price to the Employee by the total
amount of indebtedness outstanding against the Policy. Upon receipt of
such amount, the Corporation shall transfer all of its rights, title
and interest in and to the Policy to the Employee or his or her
assignee, by the execution and delivery of an appropriate instrument of
transfer.
If the Employee or his or her assignee fails to exercise such option
within such thirty (30) day period, then the Corporation may enforce
its right to be repaid for the cash surrender value which it paid
hereunder by surrendering or canceling the Policy for its cash
surrender value, or it may change the beneficiary designation
provisions of the Policy, naming itself or any other person or entity
as revocable beneficiary thereof, or exercise any other ownership
rights in and to the Policy, without regard to the provisions thereof.
Thereafter, neither the Employee, his or her assignee nor their heirs,
assigns or beneficiaries shall have any further interest in and to the
Policy, either under the terms thereof or under this Agreement.
13. EMPLOYEE'S RIGHT TO ASSIGN INTEREST
Assignment of any or all of the rights or benefits provided under this
Agreement or of any or all of the rights or benefits provided under the
Executive Life Insurance Agreement between the parties has significant
tax consequences. Therefore, unless otherwise agreed to in writing by
the Corporation, the Employee shall not assign any right or benefit
provided under this Agreement and any attempt to do so shall be void.
Upon written consent of the Corporation, an assignment shall be
exercisable by the execution and delivery to the Corporation of a
written assignment, in substantially the form attached hereto as
Exhibit B, which shall be attached to the Agreement and by this
reference is made a part hereof. Upon receipt of such written
assignment, executed by the Employee, and duly accepted by the assignee
thereof, the Corporation shall consent thereto in writing, and shall
thereafter treat the Employee's assignee as the sole owner of all the
Employee's right, title and interest in and to this Agreement, the
Policy and the Executive Life Insurance Agreement between the parties.
Thereafter, the Employee shall have no right, title or interest in and
to this Agreement, the Policy, or the Executive Life Insurance
Agreement between the parties, all such rights being vested in and
exercisable only by such assignee.
14. CLAIMS PROCEDURE
A. Filing of a claim for benefits.
The beneficiary of the Policy shall make a claim for the
benefits provided under the Policy and this Agreement by
contacting the administrative assistant for Alliant
Techsystems Inc. at the following location:
Xxxxx Executive Benefits
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
Xxxxx Executive Benefits shall contact the Insurer and take
all reasonable and necessary actions to assist the beneficiary
of the Policy under this Agreement in filing a claim.
B. Claim denial.
With respect to a claim for benefits under said Policy, the
Insurer shall be the entity which reviews and makes decisions
on claim denials according to the terms of the Policy.
C. Notification to claimant of decisions.
Within ninety (90) days after the filing of a claim, the
Insurer shall notify the claimant in writing (meeting the
requirements of Section 16D hereafter), whether the claim is
upheld or denied in whole or in part or shall furnish the
claimant a written notice describing the specific
circumstances requiring a specified amount of additional time
(but not more than one hundred eighty (180) days from the date
the claim was filed) to reach a decision on the claim.
D. Content of notice.
The Insurer shall provide, to any claimant who is denied a
claim for benefits, written notice setting forth, in a manner
calculated to be understood by the claimant, the following:
1) The specific reason or reasons for the denial;
2) Specific reference to pertinent Policy provision or
provisions of this agreement on which the denial is
based;
3) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
4) An explanation of the Agreement's claim review
procedure, as set forth in Sections 16E and 16F
following.
E. REVIEW PROCEDURE.
The purpose of the review procedure set forth in this Section
16E and Section 16F, following, is to provide a method by
which a claimant under the Policy may have a reasonable
opportunity to appeal a denial of claim for a full and fair
review. To accomplish that purpose, the claimant or his/her
duly authorized representative:
1) May request a review upon written application to the
Insurer;
2) May review pertinent Policy and Agreement
documentation as provided in Section 22; and
3) May submit issues and comments in writing.
A claimant or duly authorized representative shall request a
review by filing a written application for review at any time
within sixty (60) days after receipt by the claimant of
written notice of the denial of the claim.
F. DECISION ON REVIEW.
A decision on review of a denial of claim shall be made in the
following manner:
1) The decision on review shall be made by the Insurer,
which may, in its discretion, hold a hearing on the
denied claim. The Insurer shall make its decision
promptly, unless special circumstances (such as the
need to hold a hearing) require an extension of time
for processing, in which case a decision shall be
rendered as soon as possible, but no later than one
hundred twenty (120) days after receipt of the
request for review.
2) The decision on review shall be in writing and shall
include specific reasons for the decision, written in
a manner calculated to be understood by the claimant,
and include specific references to the pertinent
Policy or provisions of the agreement on which the
decision is based.
15. AMENDMENT
This 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.
16. CONTINUATION
The Agreement shall be binding upon and inure to the benefit of the
Corporation and its successors and assigns, and the Employee, his or
her successors, assigns, heirs, executors, administrators and
beneficiaries.
17. 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 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.
18. GOVERNING LAWS
This agreement, and the rights of the parties hereunder, shall be
governed by and construed in accordance with the laws of the State of
Minnesota.
19. NO CONTRACT OF EMPLOYMENT
Neither the terms of this Agreement nor the benefits provided hereunder
nor the continuance thereof shall be a contract of employment for any
employee, and the Corporation shall not be obligated to continue this
Agreement. The terms of this Agreement shall not give any employee the
right to be retained in the employment of the Corporation.
20. HEADINGS
Headings at the beginning of sections are for convenience of reference,
shall not be considered part of this Agreement, and shall not influence
its construction. The provisions of this Agreement shall be construed
as a whole in such manner as to carry out the provisions thereof and
shall not be construed separately without relation to the context.
Notwithstanding anything to the contrary, if any provision of this
Agreement shall be held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this
Agreement.
21. INSURER
This Insurer is located and may be contacted at the following address:
Northwestern Mutual Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000
22. POLICY REVIEW
A copy of the Policy and this Agreement may be reviewed by the
Employee, his or her beneficiary(ies) or his or her assignees during
normal working hours at the following address:
Alliant Techsystems Inc.
000 Xxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
A copy of the Policy and this Agreement may be obtained by the
Employee, his or her beneficiary(ies) or his or her assignee at a
reasonable cost to such person.
23. FRINGE BENEFIT ONLY
The benefit provided by this Agreement is a fringe benefit only. The
Employee has no option to take cash from the Corporation in lieu of
this benefit. This benefit is not being provided in lieu of a raise or
bonus, or as part of a salary reduction program. This benefit shall not
be treated as compensation for purposes of any retirement plan of the
Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, as of the day and year first above written.
ALLIANT TECHSYSTEMS INC.
By
------------------------------
Vice President Human Resources
------------------------------
[NAME]
EXHIBIT A
THE FOLLOWING LIFE INSURANCE POLICY IS SUBJECT TO THE ATTACHED SPLIT
DOLLAR LIFE INSURANCE AGREEMENT:
Insurer ____________________________________________________
Insured ____________________________________________________
Policy Number ____________________________________________________
Face Amount ____________________________________________________
Dividend Option ____________________________________________________
Date of Issue ____________________________________________________
EXHIBIT B
IRREVOCABLE ASSIGNMENT OF SPLIT DOLLAR LIFE INSURANCE AGREEMENT AND
EXECUTIVE LIFE INSURANCE AGREEMENTS
THIS ASSIGNMENT, dated this ________ day of _____________, 19____,
WITNESS THAT:
WHEREAS, the undersigned (the "Assignor") is the Employee party to that certain
Split Dollar Life Insurance Agreement and Executive Life Insurance Agreement
(the "Agreements"), dated as of __________________, by and between the
undersigned and Alliant Techsystems, Inc. (the "Corporation"), which Agreements
confer upon the undersigned certain rights and benefits with regard to one or
more policies of insurance insuring the Assignor's life; and
WHEREAS, pursuant to the provisions of said Agreements, the Assignor retained
the right, exercisable after written consent of the Corporation by the execution
and delivery to the Corporation of a written form of assignment, to absolutely
and irrevocably assign all of the Assignor's right, title, and interest in and
to said Agreements; and the policies of insurance insuring the Assignor's life;
to an assignee;
WHEREAS, the Assignor desires to exercise said right; and
WHEREAS, the Corporation, by signing this instrument consents to such
assignment;
NOW, THEREFORE, the Assignor, without consideration, and intending to make a
gift, hereby absolutely and irrevocably assigns, gives, grants, and transfer to
__________________________, (the "Assignee") all of the Assignor's right, title
and interest in and to the Agreements, and said policies of insurance intending
that, from and after this date, the Agreements be solely between the Corporation
and the Assignee and that hereafter, the Assignor shall neither have nor retain
any right, title, or interest therein.
------------------------------
Assignor
ACCEPTANCE OF ASSIGNMENT
The undersigned Assignee hereby accepts the above assignment of all right,
title, and interest of the Assignor therein in and to the Agreements and the
policies of insurance on the life of the Assignor, by and between such Assignor
and the Corporation, and the undersigned hereby agrees to be bound by all of the
terms and conditions of said Agreements, and policies of life insurance on the
life of the Assignor, as if the original employee party thereto.
------------------------------
Assignee
Dated: _________________
CONSENT TO ASSIGNMENT
The undersigned Corporation hereby consents to the foregoing assignment of all
of the right, title, and interest of the Assignor in and to the Agreement the
policies of insurance on the life of the Assignor, by and between the Assignor
and the Corporation, to the Assignee designated therein. The undersigned
Corporation hereby agrees that, from and after the date hereof, the undersigned
Corporation shall look solely to such Assignee for the performance of all
obligations under said Agreements, and policies of insurance on the life of the
Assignor where were heretofore the responsibility of the Assignor to be
exercised only by said Assignee, and shall hereafter treat said Assignee in all
respects as if the original employee party thereto.
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By
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Secretary, Board of Directors
Dated: _____________
