EXHIBIT 10.10
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
AGREEMENT made as of the first of February, 1999, by and between The
Xxxxxxxx Insurance Trust (the "Owner") and PBSJ Corporation (the "Company") a
Florida corporation.
RECITALS
The Company has agreed to enter into a split-dollar life insurance
arrangement with the Owner for the benefit of Xxxxxxx X. Xxxxxxxx (the
"Executive") effective as of the date the first annual insurance premium is paid
(the "effective date"). Such arrangement shall be personal to the Executive and
shall not be construed to grant or imply any right of any employee of the
Company to enter into any similar arrangement. The Company will pay a portion of
the premiums due on a life insurance policy obtained by the Owner, subject to
the condition that an interest in such policy be assigned to the Company as
security for repayment of amounts paid by the Company with respect to the
premiums due on such policy.
NOW, THEREFORE, in consideration of the promises and other valuable
consideration between the parties it is agreed as follows:
ARTICLE I
INSURANCE POLICY
1.1 The following survivorship life insurance policies (each, the
"Policy", or together the "Policies") are subject to the terms of this
Agreement:
Insureds Insurers Policy Numbers
-------- ------- --------------
Xxxxxxx X. Xxxxxxxx Pacific Life Insurance Company VP60747440
Xxxxx Xxxxxxxx Pacific Life Insurance Company VP60767220
1.2 The initial death benefit under each Policy shall equal
$4,500,000.00.
1.3 The Executive or the Owner shall pay that portion of the premium
equal to cost of the insurance provided under the Policy determined at a rate
equal to the lesser of: (I) the Insurer's published one-year term rate for all
standard risks (for a survivorship policy while both Insureds live, and for a
single life policy after the death of the first Insured), or (ii) the Internal
Revenue Service's so-called P.S. 38 rate while both insureds live, or P.S. 58
rate after the death of the first Insured.
1.4 The Company shall pay ten annual premiums in accordance with
Schedule "A" hereto, beginning on the effective date of this Agreement and
continuing on each of the next nine anniversaries thereof, unless this Agreement
is terminated prior to the date any such premium is due. If, in any calendar
year, the Company's ownership interest in the Policies does not result, pursuant
to Section 264(f) of the Internal Revenue Code or a
successor provision, in a reduction in the Company's federal income tax
deduction for interest expense, then the Company shall pay an additional premium
for such calendar year equal to $14,114.00, and any such additional premium(s)
shall be treated the same as the ten annual premiums described in the first
sentence of this paragraph 1.4.
1.5 The Owner shall be obligated and hereby agrees to repay to the
Company the aggregate amount which the Company pays with respect to the Policy
pursuant to paragraph 1.4. This obligation of the Owner to the Company shall be
payable in accordance with the terms of this Agreement.
ARTICLE 11
OWNER'S INTEREST
2.1 The Owner shall be the owner of each Policy, and, subject to the
terms of this Agreement, may exercise all ownership rights granted to the
policyholder by the terms of the Policy, including but not limited to the right
to borrow against the Policy, the right to assign its interest in the Policy,
the right to change the beneficiary of the Policy, the right to exercise
settlement options and the right to surrender or cancel the Policy.
2.2 Upon the death of the second to die of the Insureds under the
Policies, the designated beneficiary shall be entitled to receive that portion
of the death benefit payable under the Policies equal to the aggregate death
benefit provided thereunder minus the Company's interest in the Policies as
determined under paragraph 3.5.
2.3 Subject to paragraph 3.2, the Owner may surrender or cancel a
Policy in whole or in part.
2.4 Subject to paragraph 3.3, the Owner may obtain a loan or withdrawal
of all or any portion of the accumulated cash value under a Policy.
ARTICLE III
COMPANY'S INTEREST
3.1 Upon-the death of the second to die of the Insureds under the
Policies, the Company shall be entitled to receive that portion of the death
benefit under the Policies which equals the Company's interest under the
Policies as determined under paragraph 3.5.
3.2 If a Policy is surrendered or canceled, in whole or in part, the
Company shall be entitled to receive that portion of the net cash surrender
value equal to the Company's interest under the Policies determined under
paragraph 3.5. The remaining portion of the net cash surrender value of the
Policy surrendered or canceled, if any, shall be paid to the Owner.
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3.3 If the Owner borrows from a Policy, or makes a withdrawal under a
Policy, which reduces the aggregate net cash surrender value of the Policy to an
amount less than the Company's aggregate interest in the Policies, then, as a
precondition to receiving the loan or withdrawal proceeds, the Owner shall pay,
or cause to be paid, to the Company an amount equal to the difference between
the Company's interest determined under paragraph 3.5 and the net cash surrender
value immediately after the withdrawal or loan.
3.4 The Company shall have no rights of ownership with respect to a
Policy, but each Policy is subject to the terms of this Agreement and the
provisions of the Collateral Assignment as provided in paragraph 4. 1.
3.5 The Company's interest in each Policy is equal to the sum of the
premiums paid by the Company on both Policies in accordance with paragraph 1.4
hereof and not previously repaid to the Company.
3.6 As of the fifteenth (15th) anniversary of the effective date
hereof, the Company shall be entitled to receive that portion of the net cash
surrender value equal to the Company's interest under the Policy determined
under paragraph 3.5 if the Company has not already received such payment.
ARTICLE IV
ASSIGNMENT AND NOTICE
4.1 The Owner will assign an interest in each Policy to the Company as
security for the repayment of the amounts which the Company is entitled to
receive under paragraph 3.5 of this Agreement (the "Collateral Assignment"). The
Collateral Assignment executed with respect to each Policy will be in the form
attached hereto as Schedule "B" and will not be altered or changed without the
consent of the Company.
4.2 While this Agreement is in force and effect, the Owner will neither
sell, surrender, borrow, withdraw or process a claim for benefits under a Policy
without first giving sixty (60) days advance written notice to the Company. In
the event (a) (I) the Company reasonably determines that such sale, surrender,
loan, withdrawal or claim with respect to a Policy adversely affects the
security interest of the Company under this Agreement or the Collateral
Assignment, (ii) the Company notifies the Owner of its determination, in
writing, prior to the expiration of such sixty (60) day period, and (iii) the
Owner proceeds with the sale, surrender, withdrawal, loan or claim without the
agreement of the Company, or (b) the Owner sells, surrenders, borrows, withdraws
or processes a claim for benefits under a Policy without first giving at least
sixty (60) days advance written notice to the Company, then this Agreement may
be immediately terminated by the Company.
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ARTICLE V
TERMINATION OF AGREEMENT
5.1 This Agreement shall terminate on the occurrence of any of the
following events:
(a) at the election of the Owner, if the Company fails for any
reason to make the premium payments scheduled in paragraph 1.4;
(b) upon repayment in full of the amounts which the Company is
entitled to receive under paragraph 3.5 of this Agreement, or
(c) at the election of the Company, in accordance with
paragraph 4.2.
5.2 In the event this Agreement is terminated other than upon full
repayment of the Company, the Owner shall have thirty (30) days in which to
repay the Company its interest in the Policies determined under paragraph 3.5.
Upon receipt of payment in full of the amounts to which the Company is entitled
to under paragraph, 3.5, the Company shall release the Collateral Assignment. In
the event the Owner does not repay the amount which the Company is entitled to
receive under Section 3.5 of this Agreement within this thirty (30) day period,
the Company may enforce any rights which it has under the Collateral Assignment
and may take whatever other action it deems appropriate, at law or in equity, to
collect, or to cause the Owner to repay to the Company, the amount due the
Company by the Owner under this Agreement. The Owner agrees, promptly upon any
such termination, to surrender the Policies to the issuing insurance company for
cancellation and to direct the insurance company to apply the proceeds of such
cancellation to the repayment of the amount due by the Owner to the Company
pursuant to this Agreement.
ARTICLE VI
INSURANCE COMPANIES NOT A PARTY
The issuing insurance companies (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 a Policy acquired pursuant to the terms of this
Agreement; and (e) shall be fully discharged from any and all liability under
the terms of a Policy subject to the terms of this Agreement, upon payment or
other performance of its obligations in accordance with the terms of such Policy
and the related Collateral Assignment.
ARTICLE VII
AMENDMENT OF AGREEMENT
This Agreement shall not be modified or amended except by a written
agreement of the Company and the Owner. This Agreement shall -inure to the
benefit of and shall be binding
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upon the heirs, personal representatives, successors and assigns of each party
to this Agreement.
ARTICLE VIII
AGREEMENT OF FURTHER PERFORMANCE
8.1 Each of the parties, for itself and its heirs, beneficiaries,
personal representatives, trustees, successors and assigns, agrees to take such
further action, do such other things, and execute such other writings as shall
be necessary and proper to carry out the terms and provisions of this Agreement.
8.2 The Owner shall provide, or shall take commercially reasonable
actions to cause the issuing insurance companies or other appropriate party to
provide, such information as may be reasonably requested by the Company with
respect to a Policy which information is necessary or desirable in order to
pen-nit the Company to comply with any financial reporting or disclosure
obligations or reporting, disclosure or other obligations under applicable law.
ARTICLE IX
STATE LAW
This Agreement shall be subject to and shall be construed under the
laws of the State of Florida.
IN TESTIMONY WHEREOF, the Company, pursuant to the proper corporate
authority, has caused this Agreement to be signed on its behalf and attested by
its proper officers and a Trustee of the Owner, has hereunto subscribed his
name, all as of the day and year first above set forth.
THE XXXXXXXX INSURANCE TRUST
By: /S/ XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx, Trustee
PBSJ Corporation
By: /S/ H. XXXXXXX XXX
-----------------------------------
H. Xxxxxxx Xxx
Its President
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