Exhibit 10.32
SPLIT-DOLLAR AGREEMENT
THIS AGREEMENT made and entered into this 29th day of May,
1998, by and among Interface, Inc., a Georgia corporation, with
principal offices and place of business in the State of Georgia
(hereinafter referred to as the "Corporation"); Xxx X. Xxxxxxxx, of
Atlanta, Georgia (hereinafter referred to as the "Employee"); and Xxxx
Xxxx Xxxxxxxx Xxxxxx, of Atlanta, Georgia, as Trustee of the Xxx X.
Xxxxxxxx Family Trust U/A dated 29 May, 1998 (hereinafter
referred to as the "Owner"),
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Corporation;
WHEREAS, the Corporation is providing life insurance protection
under a policy or policies of life insurance insuring the joint lives
of the Employee and his spouse (hereinafter referred to as the
"Policy"), which is described in Exhibit A attached hereto and by this
reference made a part hereof (the issuer of a Policy is hereinafter
referred to as the "Insurer");
WHEREAS, the Corporation is willing to pay the premiums due on
the Policy as an additional employment benefit for the Employee until
that certain date occurring on the later of the Death of the Employee
or the Employee's spouse, on the terms and conditions hereinafter set
forth;
WHEREAS, Owner is the owner of the Policy and, as such, possesses
all incidents of ownership in and to the Policy;
WHEREAS, the Corporation wishes to have the Policy collaterally
assigned to it by the Owner, in order to secure the repayment of the
amounts which it will pay toward the premiums on the Policy; and
WHEREAS, the parties intend that by such collateral assignment
the Corporation shall receive only the right to such repayment, with
the Owner retaining all other ownership rights in the Policy, as
specified herein;
NOW THEREFORE, in consideration of the premises and of the mutual
promises contained herein the parties agree as follows:
1. Purchase of Policy. The Owner has purchased the Policy from
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the Insurer in the face amount indicated in Exhibit A attached hereto.
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
and of the collateral assignment filed with the Insurer relating to
the Policy.
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2. Ownership of Policy.
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a. The Owner 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.
b. It is the intention of the parties to this Agreement
and the collateral assignment executed by the Owner to the Corporation
in connection herewith that the Owner shall retain all rights which
the policy grants to the owner thereof; the sole right of the
Corporation hereunder shall be to be repaid the amounts which it has
paid toward the premiums on the Policy. Specifically, but without
limitation, the Corporation shall neither have nor exercise any right
as collateral assignee of the Policy which could in any way defeat or
impair the Owner's right to receive the cash surrender value or the
death proceeds of the Policy in excess of the amount due the
Corporation hereunder. All provisions of this Agreement and of such
collateral assignment shall be construed so as to carry out such
intention.
3. Payment of Premiums. On or before the due date of each
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Policy premium, or within the grace period provided therein, the
Corporation shall pay the full amount of the premium to the Insurer,
and shall, upon request, promptly furnish the Employee evidence of
timely payment of such premium. The Corporation shall annually
furnish the Employee a statement of the amount of income reportable by
the Employee for federal and state income tax purposes, as a result of
the insurance protection provided the Owner as the Policy beneficiary.
4. Collateral Assignment. To secure the repayment to the
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Corporation of the amount of the premiums on the Policy paid by it
hereunder, the Owner has, contemporaneously herewith, assigned the
Policy to the Corporation as collateral, under the form used by the
Insurer for such assignments, which collateral assignment specifically
provides that the sole right of the Corporation thereunder is to be
repaid the amounts it has paid toward premiums on the Policy
hereunder. Such repayment shall be made from the cash surrender value
of the Policy (as defined therein) if this Agreement is terminated or
if the Owner surrenders or cancels the Policy, or from the death
proceeds of the Policy if the Employee and his spouse should die while
the Policy and Agreement remain in force. In no event shall the
Corporation have any rights to borrow against or make withdrawals from
the Policy, to surrender or cancel the Policy, nor to take any other
action which would impair or defeat the rights of the Owner in and to
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the Policy. The collateral assignment of the Policy to the
Corporation hereunder shall not be terminated, altered or amended by
the Owner while this Agreement is in effect. The parties hereto agree
to take all action necessary to cause such collateral assignment to
conform to the provisions of this Agreement.
5. Limitations on Owner's Rights in Policy.
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a. The Owner shall take no action with respect to the
Policy which would in any way compromise or jeopardize the
Corporation's right to be repaid the amounts it has paid toward
premiums on the Policy while this Agreement is in effect.
b. The Owner shall have the sole right to surrender or
cancel the Policy, and to receive the full cash surrender value of the
Policy directly from the Insurer. Upon the surrender or cancellation
of the Policy, the Corporation shall have the unqualified right to
receive the lesser of the cash surrender value or the total amount of
the premiums paid by it hereunder. Immediately upon receipt of the
cash value of the Policy from the Insurer, the Owner shall pay to the
Corporation the portion of such cash value to which it is entitled
hereunder and shall retain the balance, if any; upon such receipt and
payment, this Agreement shall thereupon terminate.
6. Collection of Death Proceeds.
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a. Upon the death of the Employee and his spouse, the
Corporation and the Owner shall cooperate to take whatever action is
necessary to collect the death benefit provided under the Policy; when
such benefit has been collected and paid as provided herein, this
Agreement shall thereupon terminate.
b. Upon the death of the Employee and his spouse, the
Corporation shall have the unqualified right to receive a portion of
such death benefit equal to the total amount of premiums paid by it
hereunder. The balance of the death benefit provided under the
Policy, if any, shall be paid directly to the Owner, in the manner and
in the amount or amounts provided in the beneficiary designation
provision of the Policy. 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 owner 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.
c. Notwithstanding any provision hereof to the contrary,
in the event that, for any reason whatsoever, no death benefit is
payable under the Policy upon the death of the Employee and his
spouse, and in lieu thereof the Insurer refunds all or any part of the
premiums paid for the Policy, the Corporation and the Owner shall have
the unqualified right to share such premiums based on the amounts paid
by the Corporation and the amounts paid by the Employee, if any.
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7. Termination of the Agreement During the Employee's Lifetime.
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a. This Agreement shall terminate, during the Employee's
lifetime, without notice, upon the occurrence of any of the following
events: (a) total cessation of the Corporation's business or (b)
bankruptcy, receivership or dissolution of the Corporation.
b. In addition, the Owner may terminate this Agreement,
while no premium under the Policy is overdue, by written notice to the
other parties hereto. Such termination shall be effective as of the
date of such notice.
8. Disposition of the Policy on Termination of the Agreement
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During the Employee's Lifetime.
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a. For sixty (60) days after the date of the termination
of this Agreement during the Employee's lifetime, the Owner shall have
the option of obtaining the release of the collateral assignment of
the Policy to the Corporation. To obtain such release, the Owner
shall repay to the Corporation the total amount of the premium payment
made by the Corporation hereunder. Upon receipt of such amount, the
Corporation shall release the collateral assignment of the Policy, by
the execution and delivery of an appropriate instrument of release.
b. If the Owner fails to exercise such option within such
sixty (60) day period, then, at the request of the Corporation, the
Owner shall execute any document or documents required by the insurer
to transfer the interest of the Owner in the Policy to the
Corporation. Alternatively, the Corporation may enforce its right to
be repaid the amount of the premiums on the Policy paid by it from the
cash surrender value of the Policy under the collateral assignment of
the Policy; provided that in the event the cash surrender value of the
Policy exceeds the amount due the Corporation, such excess shall be
paid to the Owner. Thereafter, neither the Owner nor the Owner's
successors, assigns or beneficiaries shall have any further interest
in and to the Policy, either under the terms thereof or under this
Agreement.
9. Insurer Not a Party. The Insurer shall be fully discharged
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from its obligations under the Policy by payment of the Policy death
benefit to the beneficiary or beneficiaries named in the Policy,
subject to the terms and conditions of the Policy. In no event shall
the Insurer be considered a party to this Agreement, nor any
modification or amendment hereof, shall in any way be construed as
enlarging, changing, varying or in any other way affecting the
obligations of the insurer as expressly provided in the Policy, except
insofar as the provisions hereof are made a part of the Policy by the
collateral assignment executed by the Owner and filed with the Insurer
in connection herewith.
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10. Named Fiduciary, Determination of Benefits, Claims Procedure
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and Administration.
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a. The Corporation is hereby designated as the named
fiduciary under this Agreement. The named fiduciary shall have
authority to control and manage the operation and administration of
this Agreement, and it shall be responsible for establishing and
carrying out a funding policy and method consistent with the
objectives of this Agreement.
b. (1) Claim.
A person who believes that he or she is being denied a
benefit to which he or she is entitled under this Agreement
(hereinafter referred to as the "Claimant") may file with the
Corporation a written request for such benefit, setting forth his or
her claim. The request must be addressed to the President of the
Corporation at its then principal place of business.
(2) Claim Decision.
Upon receipt of a claim, the Corporation shall advise
the Claimant that a reply will be forthcoming within ninety (90) days
and shall, in fact, deliver such reply within such period. The
Corporation may, however, extend the reply period for an additional
ninety (90) days for reasonable cause.
If the claim is denied in whole or in part, the
Corporation shall adopt a written opinion, setting forth: (a) the
specific reason or reasons for such denial; (b) the specific
reference to pertinent provisions of this Agreement on which such
denial is based; (c) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and
an explanation why such material or information is necessary; (d)
appropriate information as to the steps to be taken if the Claimant
wishes to submit the claim for review; and (e) the time limits for
requesting a review under subsection (3) and for review under
subsection (4) hereof.
(3) Request for Review.
Within sixty (60) days after the receipt by the
Claimant of the written opinion described above, the Claimant may
request in writing that the Secretary of the Corporation review the
determination of the Corporation. Such request must be addressed to
the Secretary of the Corporation, at its then principle place of
business. The Claimant or his or her duly authorized representative
may, but need not, review the pertinent documents and submit issues
and comments in writing for consideration by the Corporation. If the
Claimant does not request a review of the Corporation's determination
by the Secretary of the Corporation within such sixty (60) day period,
he or she shall be barred and estopped from challenging the
Corporation's determination.
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(4) Review of Decision.
Within sixty (60) days after the Secretary's receipt of
a request for review, he or she will review the Corporations
determination. After considering all materials presented by the
Claimant, the Secretary will render a written opinion, setting forth
the specific reasons for the decision and containing specific
references to the pertinent provisions of this Agreement on which the
decision is based. If special circumstances require that the sixty
(60) day time period be extended, the Secretary will so notify the
Claimant and will render the decision as soon as possible, but no
later than one hundred twenty (120) days after receipt of the request
for review.
11. Amendment. This Agreement may not be amended, altered or
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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.
12. Binding Effect. This Agreement shall be binding upon and
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inure to the benefit of the Corporation and its successors and
assigns, and the Employee, the Owner, and their respective successors,
assigns, heirs, executors, administrators and beneficiaries.
13 Notice. Any notice, consent or demand required or permitted
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to be given under the provisions of this Agreement by one party to
another shall be in writing, shall be signed by the party giving or
making the same and may be given either by delivering the same to such
other personally, or by mailing the same, by United States certified
mail, postage prepaid, to such party, addressed to his, her or its
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.
14. Governing Law. This Agreement, and the rights of the
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parties hereunder, shall be governed by and construed in accordance
with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, in duplicate, as of the day and year first above written.
INTERFACE, INC., a Georgia corporation
By /s/Xxxxx X. Xxxxxxx
Officer: Sr. V.P.
(Title)
ATTEST:
/s/Xxxxxxx X. Xxxxxxx
Secretary
/s/ Xxx X. Xxxxxxxx
Xxx X. Xxxxxxxx, Employee
/s/ Xxxx Xxxx Xxxxxxxx Xxxxxx
Xxxx Xxxx Xxxxxxxx Xxxxxx, Trustee,
Owner
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