EXHIBIT 10(iii)(A)(3)
On September 1, 1997, Alex. Xxxxx Incorporated was acquired by
Bankers Trust New York Corporation (the "Corporation") and the
Corporation assumed the obligations under the following
Agreement.
SPLIT-DOLLAR INSURANCE AGREEMENT
This Agreement is made as of this _____ day of
_______________________ between Alex. Xxxxx & Sons Incorporated,
a Maryland corporation with offices at 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 (the "Corporation"), and
___________________________________ (the "Employee").
WHEREAS the Corporation and the Employee wish to become co-owners
of one or more life insurance policies on the Employee's life
(the "Policies") to be issued hereunder by Confederation Life
Insurance Company or such other insurance company as shall be
mutually determined by the Corporation and the Employee
("Insurer").
NOW, THEREFORE in consideration of the premises and the mutual
covenants contained herein and other good and valuable
consideration had and received, the parties agree as follows:
ARTICLE I.
Acquisition of Insurance
A. The Corporation and the Employee have applied to Insurer for
a limited payment whole life policy on the Employee's life
(hereinafter called "Initial Policy") in an amount sufficient to
provide a death benefit equal to $600,000 (the "Target Benefit").
B. The Corporation and the Employee acknowledge that the
Corporation shall have the right, for such reasons as the
Corporation deems appropriate, in its sole discretion, to elect
not to pay any premiums due on any of the Policies. The Employee
agrees that neither the Employee, any beneficiary designated by
the Employee, nor the Employee's estate will have any claim
against the Corporation or any Insurer (including CLIC) as a
consequence of any exercise by the Corporation of its
aforementioned right.
C. The Corporation and the Employee will use reasonable efforts
to cause the aforementioned Policies to be issued. When issued,
(i) the policy number; (ii) the issue date; and (iii) the face
amount of the policy will be recorded on Schedule A, attached
hereto. All such Policies will then be subject to the terms of
this Agreement.
ARTICLE II.
Ownership of Insurance and Designation of Beneficiary
If the proceeds of the Policies shall become payable by
reason of the Employee's death, it is agreed that the Insurer
will pay the policy proceeds in the following manner:
A. The Target Benefit of the Policies' proceeds will be paid to
the beneficiary designated by the Employee pursuant to the
Insurer's Designation of Beneficiary and Ownership Rights form.
B. The remainder of the Policies' proceeds shall be paid to the
Corporation.
While the Employee is living, the Employee shall have the
right to change and successively change the beneficiary(ies)
designated under paragraph A above by executing a new beneficiary
designation form in use by the Insurer from time to time. While
the Employee is living, the Corporation, its successors or
assigns, alone shall have the right to change and successively
change the beneficiary designated under subparagraph B above.
The Corporation and the Employee agree to take whatever steps are
necessary, including filing documents requested by the Insurer,
to effectuate the intent of this Agreement.
ARTICLE III.
Payment of Premiums on Policy
A. Subject to Article I, paragraph B, the Corporation will pay
the full amount of each annual premium due pursuant to the terms
of the Policies on the date each such premium is due through the
anticipated pay period for each policy. If dividends and paid-up
whole life insurance additions are insufficient to cover premiums
due after the anticipated pay period, premiums may be paid
pursuant to Article IV.
B. The Employee agrees that the Employee will pay to the
Corporation, as the Employee's share of the first five annual
premiums paid by the Corporation, an amount as indicated on
Schedule B, attached hereto. Following payment of the first five
annual premiums due on each policy, the Corporation and the
Employee shall authorize the Insurer to apply current and
accumulated policy dividends, as well as the value of any
Increasing Whole Life Rider forming part of the Policies, to pay
the entire annual premium to the Insurer due for each year
thereafter.
ARTICLE IV.
Dividends and Policy Loans
A. At the option of the Corporation, any dividends declared by
the Insurer on any Policies issued hereunder may be applied
either (i) to purchase additional paid up insurance on the life
of the Employee, or (ii) to reduce that portion of the premiums
owed by the Corporation on any Policies with respect to which
such dividend is declared or on any other Policies issued on the
Employee's life pursuant to this Agreement. In addition, the
Corporation shall have the right at any time to surrender
existing paid-up dividend whole life insurance additions in order
to reduce premiums on any Policies issued hereunder.
B. The Employee hereby consents to and agrees that the
Corporation, without notice to the Employee, may obtain policy
loans in any amount which shall not exceed the amount of the "net
premium outlay" as defined in Article V, paragraph A. Such loans
may be obtained from the Insurer or from others. The Employee
will execute and deliver any documents reasonably required by any
lender to evidence such loans. Interest on any such loans paid
by the Corporation shall be recovered by the Corporation as if
such interest (including compounded interest) was part of the
"net premium outlay" as defined in Article V, paragraph A.
The decision as to whether or not to obtain policy loans is
at the sole option of the Corporation. Nothing in this section
shall limit the Corporation's right pursuant to Article I,
paragraph B, to let the Policies be cancelled for failure to pay
premiums.
ARTICLE V.
Recovery by Corporation of its Premium Outlay
A. For purposes of this Agreement, "net premium outlay" means
the sum of the total annual premiums paid by the Corporation on
any Policies issued hereunder plus any interest (including
compounded interest) paid by the Corporation on account of loans
obtained for the purpose of paying premiums beyond the
anticipated pay period, less amounts paid by the Employee
pursuant to Article III.
B. If any Policies issued hereunder are cancelled during the
Employee's lifetime for any reason within five (5) years from the
date hereof, then, except as provided in Article XI, the entire
cash surrender value accrued under any such Policies shall be
paid to the Corporation in satisfaction of the amount of the
Corporation's net premium outlay even if the amount of such cash
surrender value exceeds said premium outlay. If the cash
surrender value paid to the Corporation is less than the
Corporation's net premium outlay, the Employee shall have no
obligation to repay such deficit amount to the Corporation.
C. If any Policies issued hereunder are cancelled for any
reason during the Employee's lifetime after the expiration of
five (5) years from the date hereof, the Insurer will pay the
Corporation the entire cash surrender value within thirty (30)
days. Only that portion of the cash surrender value of any such
Policies which equals the Corporation's net premium outlay with
respect to such Policies shall be retained by the Corporation.
Any cash surrender value in excess of the Corporation's net
premium outlay shall be paid to the Employee by the Corporation
as agent for the Insurer. If the cash surrender value paid to
the Corporation is less than the Corporation's net premium
outlay, the Employee shall have no obligation to repay such
deficit amount to the Corporation.
ARTICLE VI.
Additional Policy Benefits
Upon mutual consent, the Corporation and the Employee may agree
upon additional policy benefits and agree as to the manner in
which the premiums for such benefits shall be paid.
ARTICLE VII.
Maryland Law to Govern
This Agreement shall be subject to and shall be construed under
the laws of the State of Maryland without giving effect to
principles of conflict of laws.
ARTICLE VIII.
Employee Agrees Not To Take Certain Action
The Employee shall take no action with respect to the Policies
which would in any way compromise or jeopardize the Corporation's
rights described in the Agreement, including, without limitation,
the Corporation's right to be repaid the Policies' premium
amounts paid by the Corporation toward premiums on the Policies.
ARTICLE IX.
Death Claims
When the Employee dies, death benefits will be paid as outlined
in Article II hereof.
ARTICLE X.
Termination of Agreement
This Agreement shall terminate on written notice given by either
party to the other.
ARTICLE XI.
Disposition of Policy on Termination of Agreement
If this Agreement is terminated, the Corporation shall notify the
Insurer and such notification shall serve as a cancellation of
the Policies described in Article V, unless prior to such
notification the Employee repays to the Corporation the amount of
its net premium outlay, in which case the Corporation agrees to
cooperate with the Employee to cause the Employee to become the
sole owner of the Policies and to have the Corporation withdraw
from any aspect of the Policies. If any such Policies are
encumbered by policy loans when the net premium outlay is being
repaid, the Corporation shall either remove the encumbrance or
reduce the amount to be paid by the Employee to the Corporation
by the amount of the indebtedness, which indebtedness shall be
assumed and become the obligation of the Employee.
ARTICLE XII.
Terms of Policy to Control
The Insurer shall be fully discharged from any and all liability
under the terms of any Policies issued by it hereunder, upon
payment or other performance of its obligations in accordance
with the terms of such Policies.
ARTICLE XIII.
Miscellaneous
A. This Agreement shall not be modified or amended except by a
writing signed by the Corporation and the Employee. This
Agreement shall be binding upon the heirs, administrators or
executors and the successors and assigns of each party to this
Agreement.
B. The parties shall execute and deliver any additional
documents which are required to give full force and effect to the
transactions contemplated hereunder.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first above written.
By:
Employee
Alex. Xxxxx & Sons Incorporated
By:
