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EXHIBIT 10.35
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
AGREEMENT made as of the 16th day of June, 1999, by and among PULITZER
INC., a Delaware corporation (the "Company"), and XXXXX X. XXXXXX and XXXXX X.
XXXXX, as trustees ("Trustees"), under Trust Agreements dated September 17,
1996.
WHEREAS, Xxx X. Xxxxxx ("Executive") was employed as a senior executive
officer of Pulitzer Publishing Company and is currently serving as a member of
the Board of Directors of the Company; and
WHEREAS, the Trustees own two survivorship life insurance policies,
Nos. 8,216,111 and 8,216,104 (collectively, the "Policies" and individually a
"Policy"), issued by C.M. Life Insurance Company (the "Insurer") on the joint
lives of the Executive and his wife with face amounts of $2,000,000 and
$1,900,000, respectively; and
WHEREAS, this agreement is being made by the Company in accordance with
the requirements of the Assignment and Assumption Agreement - Employee Benefit
Plans made as of March 18, 1999 between the Company and Pulitzer Publishing
Company.
NOW, THEREFORE, the parties agree as follows:
1. The Policies. The Trustees have applied for and are the owners of
the Policies. The Trustees will maintain physical possession of the Policies
while this agreement is in effect.
2. Payment of Premiums. The Company will pay $248,200 to the Insurer as
an initial Policy premium (of which $124,500 is allocable to Policy No.
8,216,111, and $123,700 is allocable to Policy No. 8,216,104). Thereafter, with
respect to each Policy, the Company will make eight annual payments to the
Insurer in an amount equal to the planned premium specified in the Policy;
provided, however, that the Company will have no obligation to make planned
premium payments under either Policy following the termination of this
agreement. The Company, in its discretion, may make greater premium payments
under the Policies than is required by this agreement, except to the extent that
any such greater payment
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would result in either Policy's failing to meet the definition of a life
insurance contract under Section 7702 of the Internal Revenue Code of 1986.
3. Company's Interest in the Policies. The Company's interest in each
of the Policies shall be equal to (a) minus (b), where (a) is the greater of (1)
the cash surrender value of the Policy or (2) the total amount of premium
payments net of withdrawals made by the Company under the Policy; and (b) is the
amount of any outstanding Policy loan obligation incurred by the Company,
including accrued and unpaid interest thereon. The Company may direct the
investment of the cash value of each of the Policies in accordance with the
provisions thereof. Subject to the written consent of the Trustees, the Company
may withdraw or borrow funds from each of the Policies.
4. Trustees' Rights. The Trustees shall have all rights under each of
the Policies that are not specifically granted to the Company by this agreement,
including, without limitation, the rights to change the beneficiary designation
under the Policy and exercise settlement options under the Policy; provided,
however, that the Trustees may not surrender the Policies, change the death
benefit option under the Policies or otherwise take action that would jeopardize
the Company's right to recover its interest in the Policies without the written
consent of the Company. In the event of an assignment by the Trustees, the
assignee shall possess all of the rights and obligations of the Trustees in the
Policies and under this agreement.
5. Collateral Assignment. The parties will enter into a collateral
assignment agreement to evidence the Company's interest in the Policies set
forth in this agreement. Notwithstanding its interest in the Policies, the
Company shall have no right to take any action that would endanger or impair the
interest of the Trustees in the Policies, including, without limitation, the
right to receive Policy proceeds in excess of the value of the Company's
interest upon the Insureds' death.
6. Termination of Agreement. This agreement will terminate upon the
happening of any one of the following events: (a) the death of the survivor of
the Insureds; (b) delivery by the Trustees to
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the Company of written notice of termination; and (c) with respect to any
Policy, payment in full to the Company of the Company's interest in the Policy.
In the event this agreement terminates by reason of delivery by the Trustees of
written notice of termination, the Trustees shall have 90 days in which to pay
or cause to be paid to the Company the then value of the Company's interest in
the Policies (to the extent not previously paid). Upon the payment of the
Company's interest in the Policies, the Company shall release the collateral
assignment and the collateral assignment will be of no further force or effect.
If the Trustees do not pay or cause such amount to be paid to the Company within
said 90-day period, then (x) the Company may surrender the Policies without the
consent of the Trustees or (y) the Trustees may transfer ownership of the
Policies to the Company, and, in either event, the obligations of the Trustees
under this agreement and the interest of the Trustees in the Policies will
thereupon be discharged and terminated.
7. Death of Insureds. If this agreement is not sooner terminated, then,
upon the death of the survivor of the Insureds, the Company shall be entitled to
receive from the proceeds of each of the Policies the then value of the
Company's interest in the Policy, and the balance of the proceeds of the Policy
shall be paid to the Trustees or such other beneficiary or beneficiaries as
shall have been designated by the Trustees under the Policy.
8. Insurer Not a Party. The Insurer is not a party to this agreement
and shall have no liability except as set forth in each Policies. The Insurer
shall not be bound to inquire into or take notice of the provisions of this
agreement or to inquire as to the application of any payments made by it
pursuant to the terms of the Policies.
9. Amendment. This agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and may only be amended or
modified, in whole or in part, by the Trustees and the Company in writing.
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10. Assignment and Successors. This agreement will be binding upon and
inure to the benefit of the parties and their respective legal representatives
and successors and assigns.
11. Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have entered into this agreement
as of the date first above written.
PULITZER INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Trustee
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Trustee
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SPLIT DOLLAR COLLATERAL ASSIGNMENT
Issuing Company: C.M. Life Insurance Company ("Insurer")
Policy No.: 8,216,104 and 8,216,111 ("Policy")
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Insured: Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx ("Insured")
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Owner/Assignor: Xxxxx X. Xxxxxx and Xxxxx X. Xxxxx, Trustees, under Trust
Agreements dated September 17, 1996 ("assignor")
Assignee: Pulitzer Inc. ("assignee")
RECITALS
A. The Assignor desires to assign to the Assignee a collateral
interest in the Policy as collateral for certain liabilities of the Assignor to
the Assignee pursuant to the Split-Dollar Life Insurance Agreement between the
Assignor and the Assignee (the "Split Dollar Agreement") regarding the Policy in
accordance with Rev. Rul. 64-328, 1964-2 CB 11.
B. The Assignee, by accepting this Assignment, agrees to the terms
and conditions hereof.
ASSIGNMENT
1. FOR VALUE RECEIVED, the Assignor hereby assigns, transfers and
sets over to the Assignee, its successors and assigns, a collateral interest in
and to the Policy, subject to all of the terms and conditions of the Policy and
to all superior liens, if any, which the Insurer may have against the Policy.
2. (a) It is expressly agreed that the Assignee's collateral
interest in the Policy shall be strictly limited to the following:
(1) Upon surrender of the Policy, the right to
obtain the then value of the Assignee's interest in the Policy as
set forth in the Split Dollar Agreement.
(2) Upon the death of the Insured, the right to
obtain that portion of the death proceeds as is equal to the then
value of the Assignee's interest in the Policy as set forth in the
Split Dollar Agreement.
3. Notwithstanding any other provision of this Assignment, the
Assignee shall have the right to make investment allocations of net premiums, to
make transfers of values among the Policy investment options, and, subject to
the consent of the Assignor, the right to borrow money from the Policy and/or
make withdrawals but not in excess of the then cash surrender value of the
Policy. If the Split Dollar Agreement is terminated at any time (other than in
accordance with Section 6(c) of the Split Dollar Agreement) and if the Assignee
is not paid an amount equal to the then value of its interest in the
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Policy within 90 days thereafter, the Assignee may surrender the Policy
without the consent of the Assignor.
4. Subject to paragraph 3 above, all other rights and interests in
the Policy, including, but not limited to, the right to surrender the Policy,
the right to designate the beneficiary of the death proceeds under the Policy in
excess of the Assignee's collateral interest and the right to reduce the death
benefit in accordance with the Split Dollar Agreement, shall be retained by the
Assignor, except the Assignor shall not have the right to make loans on the
Policy, transfers of values among the Policy investment options or withdrawals
from the Policy and the Assignor may surrender the Policy or change the death
benefit option only with the consent of the Assignee.
5. The Insurer is hereby authorized to recognize the claims of the
Assignee hereunder without any investigation thereof, or giving notice to
anyone, including the Assignor, and the Insurer shall not be responsible for the
application by the Assignee of any amounts paid by the Insurer. The signature of
the Assignee alone shall be sufficient for the exercise of its rights under the
Policy assigned hereby, and the receipt of the Assignee for any sums received by
it shall be a full discharge and release of the Insurer therefor.
6. The Assignor declares that there are no proceedings in
bankruptcy pending against the Assignor and that the Assignor's property is not
subject to any assignment for the benefit of creditors.
7. While this Assignment is in force, the Assignor directs that
all premium notices be sent to the Assignee at the address furnished by the
Assignee.
8. All provisions of this Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
PULITZER INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Trustee
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Trustee
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