EXHIBIT 10.3
The Registrant has entered into a Collateral Assignment Split Dollar
Insurance Agreement in the form attached hereto with Xxxxxx X. Xxxxxxx, Xx., M.
Xxxxx Xxxxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx, Xxxxxx Xxxxx and Xxxxxxx X.
Xxxxxxxx. Pursuant to Instruction 2 to Item 601 of Regulation S-K, the
individual agreements are not being filed.
COLLATERAL ASSIGNMENT SPLIT DOLLAR
INSURANCE AGREEMENT
THIS AGREEMENT is made the 15th day of November, 1996, by and between
Xxxxxx Half International Inc. (hereinafter called "the Corporation") and
__________ (hereinafter called the "Trust").
WHEREAS, _____________ ("the Employee") is a valued employee of the
Corporation, and the loss of Employee would impair the Corporation's operations;
WHEREAS, in order to retain the services of Employee, the Corporation is
willing to enter into a split dollar plan with the Trust so that it may carry
insurance on Employee's life;
WHEREAS, the Trust will be on the owner of the policy of insurance on the
Employee's life acquired pursuant to the terms of this Agreement and the policy
will be assigned to the Corporation as security for the repayment of all or part
of the amounts which the Corporation will contribute toward payment of the
premiums due on the policy;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is agreed between the parties as follows:
1. APPLICATION FOR INSURANCE. The Trust will apply to ITT Hartford Life and
Annuity Insurance Company ("Hartford") for a policy on Employee's life in the
face amount of $_______ and the Trust and the Employee will do everything
reasonably necessary to cause the policy to be issued. When the policy is
issued, the policy number, face amount, and policy of insurance shall be
recorded on Schedule A attached hereto and the policy of insurance shall then be
subject to the terms of this Agreement.
2. OWNERSHIP OF INSURANCE. The Trust shall be the owner of the policy on
Employee's life acquired pursuant to the terms of this Agreement, and the Trust
may exercise all the rights of ownership with respect to the policy except as
otherwise hereinafter provided. Notwithstanding the terms of the policy, the
Trust hereby agrees that at least 25% of the policy's cash value shall at all
times be invested in one or more of the policy's bond funds.
3. PAYMENT OF PREMIUMS ON POLICY. The Trust will pay Hartford the portion
of the annual premium that is equal to the value of the "economic benefit" of
the life insurance protection that would otherwise be imputed income for federal
income tax purposes to the Employee for the year, i.e., the cost of such
protection determined using the lesser of the IRS' "P.S. 58 rates" (or such
successor rates) or Hartford's term insurance rates. The Corporation will pay
Hartford the balance of the annual premium.
Each year the Corporation shall provide a written statement to the Trust showing
the Corporation's current contribution to Hartford and its aggregate
contributions.
4. COLLATERAL ASSIGNMENT OF POLICY. The Trust hereby collaterally assigns
the policy on Employee's life, acquired pursuant to the terms of this Agreement,
to the Corporation as security for the obligations under Sections 6, 7 and 8
hereof. This collateral assignment will not be altered or changed without the
consent of the Corporation.
5. SURRENDER OR TERMINATION OF POLICY. Subject to Section 7, while this
Agreement is in force and effect, the Trust will neither sell, surrender nor
otherwise terminate the policy on Employee's life, acquired pursuant to the
terms of this Agreement, without the Corporation's consent.
6. DEATH CLAIMS.
(a) When the Employee dies, the Corporation shall be entitled to receive
from the policy an amount equal to the lesser of (i) the aggregate amount of its
contributions pursuant to Section 3 (without any interest) or, (ii) the policy's
death benefit. Upon receipt of such amount, the Corporation releases the
collateral assignment of the policy made by the Trust pursuant to Section 4 of
this Agreement.
(b) When the employee dies, the Trust shall be entitled to receive any
amount of the death benefits provided under the policy on the Employee's life in
excess of the amount payable to the Corporation under paragraph (a) of this
Section 6. This amount shall be paid under the policy settlement option elected
by the Trust.
7. TERMINATION OF AGREEMENT. This Agreement shall terminate on the
occurrence of any of the following events:
(a) cessation of the Corporation's business;
(b) written notice given by either party to the other;
(c) termination of the employment of the Employee;
(d) bankruptcy, receivership or dissolution of the Corporation;
(e) upon the election of the aggrieved party if either the Corporation or
the Trust fails for any reason to make the contribution required by Section 3 of
this Agreement toward payment of any premium due on the policy on the Employee's
life acquired pursuant to the terms of this Agreement, provided that any
election to terminate this Agreement under this clause must be made within
ninety days after the failure to make the required contribution occurs;
(f) repayment by the Trust of the contributions made by the Corporation
under Section 3 of this Agreement (without interest) of, if less, the policy's
then cash value, provided that upon receipt of such repayment the Corporation
releases the collateral assignment of the policy made by the Trust pursuant to
Section 4 of this Agreement.
8. DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT. If this Agreement is
terminated under paragraph (a), (b), (c), (d) or (e) of Section 7 of this
Agreement, the Trust shall have thirty days in which to repay the Corporation
the lesser of (a) the amount which the Corporation has contributed toward
payment of the premiums due on the policy (without any interest) or, (b) the
policy's then cash value. The Corporation shall take all reasonable steps
necessary or desirable to assist the Trust in making the repayment including,
but not limited to, consenting to the Trust's borrowing from or encumbering the
policy. Upon receipt of this amount, the Corporation shall release the
collateral assignment of the policy; if the Trust does not repay such amount,
the Corporation may enforce any rights which it has under the collateral
assignment of the policy.
9. INVESTMENT REPRESENTATIONS. The Corporation makes no representations to
the Employee or Trust regarding the suitability of the Hartford insurance policy
as an investment, its income or estate tax consequences, the tax consequences of
this Agreement or the solvency of Hartford. The Corporation further makes no
representations that the policy will be sufficient to provide any benefits. The
Employee and the Trust are not relying on the Corporation in entering into this
Agreement and acknowledge that they have consulted their own tax and financial
advisors regarding any and all associated risk factors.
10. INDIVIDUAL LIABILITY. The only liability of the Trust hereunder is to
make the payments specified in Sections 6, 7 and 8 hereof and such liability is
limited to the amounts specified in such sections. In addition, such amounts
shall be satisfied solely from the policy. The Trust shall have no liability if
the policy is insufficient to satisfy such obligations. Neither the Employee,
any heirs, beneficiaries or assigns shall have any liability under this
Agreement.
11. INSURANCE COMPANY NOT A PARTY. The Hartford
(a) shall not be deemed to be a party to this Agreement for any purpose nor
in any way responsible for its validity;
(b) shall not be obligated to inquire as to the distribution of any monies
payable or paid by it under the policy on the Employee's life acquired pursuant
to the terms of this Agreement;
(c) shall be fully discharged from any and all liability under the terms of
any policy issued by it, which is subject to the terms of this Agreement, upon
payment or other performance of its obligations in accordance with the terms of
such policy.
12. AMENDMENT OF AGREEMENT. This Agreement shall not be modified or amended
except by a writing signed by the Corporation and the Trust. This Agreement
shall be binding upon the heirs, administrators or executors and the successors
and assigns of each party to this Agreement.
In Witness Whereof, the parties hereto have executed this Agreement as of
the date above first written.
Trust
By:________________________________
XXXXXX HALF INTERNATIONAL INC.
By:________________________________
Corporate Seal
Attest:
_______________________________
Secretary
