1
EXHIBIT 10.18
SPLIT DOLLAR AGREEMENT
This Agreement, made on June 1, 1995, by and between Chemed
Corporation ("the Corporation"), a Delaware corporation with offices at 2600
Chemed Center, 000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, and Xxxx X. Xxxx
("the Trustee"), as Trustee under The Xxxx X. Xxxx Irrevocable Insurance Trust
Agreement dated August 18, 1994 ("the Trust").
1. PREMISES
1.1 Xxxx X. Xxxx is an employee of the
Corporation and has created the Trust. The
Trustee wishes to insure the life of Xx. Xxxx for
the benefit and protection of Xx. Xxxx'x family.
The Corporation will help the Trustee provide this
insurance coverage by payment of part of the
premiums under a split dollar arrangement, whereby
the Trustee will be the owner of a life insurance
policy which will be collaterally assigned to the
Corporation as security for amounts the
Corporation will contribute for the premium
payments.
2. APPLICATION FOR INSURANCE
2.1 The Trustee has applied to Phoenix Home Life
Mutual Insurance Company for an Executive Equity
Life Insurance Plan on the life of Xx. Xxxx for
$2,116,000 ("Policy").
2
3. POLICY OWNERSHIP
3.1 The Trustee shall own the Policy and may
exercise all rights of ownership with respect to
it, subject only to the security interest of the
Corporation as expressed in this Agreement and the
collateral assignment of the Policy to the
Corporation.
4. PAYMENT OF PREMIUMS
4.1 On or before the due date of each annual
premium on the Policy, the Corporation will pay to
Phoenix Home Life Mutual Insurance Company an
amount equal to the greater of 80 percent of the
annual premium or the annual premium less the cost
(calculated by application of Internal Revenue
Service Table PS-58) of the portion of the
insurance which the beneficiary or beneficiaries
named by Xx. Xxxx or their transferee would be
entitled to receive if Xx. Xxxx died during the
policy year for which the annual premium is paid.
4.2 On or before the due date of each annual
premium on the Policy, the Corporation will pay to
Phoenix Home Life Mutual Insurance Company, on
behalf of the Trustee, the remainder of the annual
premium. This payment will constitute
compensation to Xx. Xxxx in the form of a bonus
2
3
and will be considered paid by the Trustee for
purposes of the Assignment (as defined in Article
5).
4.3 These premium advances by the Corporation
shall apply specifically to annual premiums due
under the Policy up to Xx. Xxxx'x age of 65.
However, additional premium advances may be made
by mutual agreement of the parties.
5. ASSIGNMENT OF POLICY
5.1 The Trustee shall collaterally assign the
Policy to the Corporation so as to reflect the
respective interests of the parties under this
Agreement, said collateral assignment
("Assignment") having been executed by the parties
on the date of this Split Dollar Agreement, and
thus made a part of such Policy and this
Agreement.
6. USE OF DIVIDENDS
6.1 The dividends declared by Phoenix Home Life
Mutual Insurance Company on the Policy will be
used to purchase Option Term with the balance used
to purchase paid-up insurance.
6.2 The dividend option which is specified in
paragraph 6.1 of this Article will not be
terminated or changed without a conforming
amendment to this Agreement and unless such
3
4
change is done in accordance with the provisions
of Part D "Joint Rights" section of the
Assignment.
7. SURRENDER OF POLICY
7.1 The Trustee shall have the sole and exclusive
right to surrender the Policy.
7.2 If the Policy is surrendered, the Trustee
shall direct the insurance company in writing to
draw a check payable to the Corporation in an
amount equal to the "Assignee's Cash Value
Rights", as defined within the provisions of Part
A "Definitions" section of the Assignment.
7.3 If there is a delay in the surrender of the
Policy by either party to this Agreement, and if
such delay results in diminished policy values
being available to either party, neither party to
this Agreement shall hold the insurance company
liable for such diminution in Policy values.
8. DEATH CLAIMS
8.1 Upon the death of Xx. Xxxx the Corporation
shall have an interest in the proceeds of the
Policy equal to the "Assignee's Death Benefit
Share", as defined within the provisions of Part A
"Definitions" section of the Assignment. The
balance of proceeds remaining shall be paid
4
5
directly by the insurance company to the
beneficiary or beneficiaries designated in the
Policy.
9. TERMINATION OF AGREEMENT
9.1 This Agreement shall terminate upon surrender
of the Policy by the Trustee or upon thirty (30)
days' written notice of termination given by
either party to the other by registered mail at
the party's last known address.
9.2 Prior to termination of this Agreement, the
Trustee shall direct the insurance company in
writing to draw a check payable to the Corporation
for an amount equal to the "Assignee's Cash
Value Interest", as defined within the provisions
of Part A "Definitions" section of the Assignment.
Upon receipt of this amount, the Corporation shall
release the security interest of the Corporation
expressed in this Agreement and the Assignment.
10. SPECIAL PROVISIONS
The following provisions are part of this Plan and
are intended to meet the requirements of the
Employee Retirement Income Security Act of 1974:
10.01 - The named fiduciary: The
Secretary of the Company
5
6
10.02 - The funding policy under
this Plan is that all
premiums on the Policy be
remitted to the Insurer when
due.
10.03 - Direct payment by the
Insurer is the basis of
payment of benefits under
this Plan, with those
benefits in turn being based
on the payment of premiums as
provided in the Plan.
10.04 - For claims procedure
purposes, the "Claims Manager"
shall be the Secretary of the
Company.
(a) If for any reason a claim for
benefits under this Plan is
denied by the Company, the
Claims Manager shall deliver
to the claimant a written
explanation setting forth the
specific reasons for the
denial, pertinent references
to the Plan section on which
the denial is based, such
other data as may be
pertinent and information on
the procedures to be followed
by
6
7
the claimant in obtaining a review of
his claim, all written in a manner
calculated to be understood by the
claimant. For this purpose:
(1) The claimant's claim shall be
deemed filed when presented
orally or in writing to the
Claims Manager.
(2) The Claims Manager's
explanation shall be in
writing delivered to the
claimant within 90 days of
the date the claim is filed.
(b) The claimant shall have 60 days
following his/her receipt of the denial
of the claim to file with the Claims
Manager a written request for review of
the denial. For such review, the
claimant or his/her representative may
submit pertinent documents and written
issues and comments.
7
8
(c) The Claims Manager shall decide
the issue on review and furnish the
claimant with a copy within 60 days
of receipt of the claimant's
request for review of his/her
claim. 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, as well as specific
references to the pertinent Plan
provisions on which the decision is
based. If a copy of the decision is
not so furnished to the claimant
within such 60 days, the claims
shall be deemed denied on
review.
11. AMENDMENT AND BINDING EFFECT
11.1 This embodies all agreements by the parties
made with respect to the Policy. The Agreement
shall not be modified or amended except by a
writing signed by the parties. The Agreement
shall be binding upon the parties,
8
9
their heirs, legal representatives, successors
and assigns.
12. GOVERNING LAW
12.1 This Agreement shall be subject to and shall
be construed under the laws of the State of Ohio.
Executed by the parties at Cincinnati, Ohio, as of June 1, 1995.
CHEMED CORPORATION
/s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxx, Secretary
------------------------ ------------------------------
Witness Signature, Corporate Title
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxx, Trustee
------------------------ ------------------------------
Witness Trustee
9
