SPLIT DOLLAR INSURANCE AGREEMENT
THIS AGREEMENT is made and entered into on this 21st day of
February, 1997, by and between XXXXXXX X. XXXXX (hereinafter called
"Employee"), and INTERFACE, INC. (hereinafter called "Employer").
W I T N E S S E T H :
WHEREAS, Employee is a valued employee of Employer, and Employer
wishes to retain him in its employ; and
WHEREAS, Employer, as an inducement to such continued
employment, wishes to assist Employee with his personal life
insurance program;
NOW, THEREFORE, in consideration for the covenants and mutual
promises set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, Employer and Employee agree as follows:
1. POLICY. The life insurance policy to which this Agreement
relates is Policy Number 14196680 (hereinafter called the "Policy")
issued by Northwestern Mutual Life Insurance Company (hereinafter
called "Insurer") on the life of Employee with an initial face amount
of $3,029,695 and an initial annual premium of $89,602.13.
2. EMPLOYEE'S RIGHTS. Employee shall be the owner of the
Policy on his life, and may exercise all ownership rights granted to
the owner thereof by the terms of the Policy; provided, Employee will
not take any action that would impair any right or interest of
Employer in and to the Policy as provided herein. Employer's rights
in and to the Policy shall be limited to its security interest in and
to the cash surrender value of the Policy, as defined therein, and a
portion of the death benefit thereof, as hereinafter provided.
3. PREMIUM PAYMENTS. Employer shall pay to Insurer the entire
premium on the Policy as it becomes due. For purposes of this
Agreement, the term "unreimbursed premium payments" shall mean (i)
the total amount of all premiums on the Policy paid by Employer from
the date hereof, less (ii) any prior reimbursement received by
Employer from Employee.
4. EMPLOYER'S RIGHTS. Employer shall have a right to recover
its interest in the Policy as defined below. To assure recovery by
Employer of its interest in the Policy, Employee shall,
contemporaneously herewith, assign such interest in the Policy to
Employer, under the form of Collateral Assignment attached hereto as
Schedule A, which Assignment gives Employer the limited power to
enforce its right to recover its interest in the Policy. The
interest of Employer in and to the Policy shall be specifically
limited to the following rights:
(a) The right to recover the greater of (i) the amount of
its unreimbursed premium payments, or (ii) the death benefit under
the policy in excess of $1,000,000, upon the death of Employee, as
provided in paragraph 6 below; and
(b) The right to recover the unreimbursed premium payments
in the event of the termination of this Agreement, as provided in
paragraphs 8 and 9 below.
5. DIVIDENDS. Policy dividends shall be applied to purchase
paid-up additional insurance protection.
6. DEATH BENEFIT. Upon the death of Employee, Employer shall
be entitled to receive a portion of the death benefit provided under
the Policy equal to the greater of (i) the total amount of its
unreimbursed premium payments, or (ii) the death benefit under the
Policy in excess of $1,000,000. The balance of the death benefit
provided under the Policy, if any, shall be paid directly to the
beneficiary or beneficiaries designated by Employee, in the manner
and in the amount provided by the beneficiary designation provision
endorsed on the Policy. The beneficiary designation provision of the
Policy shall comply with the provisions of this paragraph.
7. TERMINATION EVENTS. This Agreement may be terminated,
subject to the provisions of paragraphs 8 and 9 below, by mutual
written consent of the parties. Upon the earlier of the date
(i) Employee attains age 65, (ii) Employee's employment with Employer
terminates for any reason whatsoever other than Employee's death, or
(iii) Employee surrenders or cancels the Policy, this Agreement shall
terminate automatically, subject to the provisions of paragraphs 8
and 9 below.
8. EMPLOYEE'S RIGHTS ON TERMINATION. In the event of
termination of this Agreement as provided in paragraph 7 above,
Employee shall have the right to pay to Employer, within 270 days of
the date of termination, an amount equal to Employer's unreimbursed
premium payments. Alternatively, Employee shall have the right,
within 270 days of the date of termination, to apply for a Policy
loan in an amount equal to the unreimbursed premium payments, if
available, and Employee shall direct Insurer to make the check in
payment thereof payable to Employer. Upon receipt of payment,
Employer shall execute an appropriate instrument or release of the
Collateral Assignment of the Policy and any restrictive endorsement
on the Policy. The Policy shall then belong to Employee.
9. FAILURE TO REPAY EMPLOYER. If Employee fails to pay to
Employer the amount specified in paragraph 8 above within 270 days of
the date of termination of this Agreement pursuant to the provisions
of paragraph 7 above, Employee agrees to transfer all of its right,
title and interest in the Policy to Employer by executing such
documents as are necessary to transfer such right, title and interest
to Employer.
10. ASSIGNABILITY. Either party may, subject to the
limitations of this Agreement, assign its interest and obligations
under this Agreement; provided, however, that any assignment shall be
subject to the terms of this Agreement.
11. PAID-UP ADDITIONS. Any payments under the Policy to
Employer in connection with the rights granted to Employer in the
Collateral Assignment of the Policy shall first be made from Policy
cash surrender value attributable to the paid-up additional life
insurance purchased by Policy dividends. Employee shall have no
interest in the paid-up additional life insurance protection except
to the extent the death benefit or cash surrender value thereof
exceeds the total amount of Employer's interest in the Policy.
12. INSURER'S OBLIGATIONS. Insurer shall be bound only by the
provisions of the Policy, and any payments made or action taken by it
in accordance therewith shall fully discharge it from all claims,
suits and demands of all persons whatsoever. Insurer shall in no way
be bound by, or be deemed to have notice of, the provisions of this
Agreement.
13. AMENDMENT. This Agreement may not be amended, altered or
modified, except by a written instrument signed by all of the parties
hereto.
14. NOTICES. Any notice, consent or demand required or
permitted 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 party 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 Employer. The date of such mailing shall be deemed the
date of such mailed notice, consent or demand.
15. SUCCESSORS. This Agreement shall bind Employer and its
successors; Employee and his heirs, executors, administrators and
transferees; and any Policy beneficiary.
16. CONTROLLING LAW. This Agreement, and the rights of the
parties hereunder, shall be governed and construed pursuant to the
laws of the State of Georgia.
17. ERISA PROVISIONS. The following provisions are part of
this agreement and are intended to meet the requirements of the
Employee Retirement Income Security Act of 1974:
(a) Employer is hereby designated the "Named Fiduciary"
until resignation or removal by Employer's Board of Directors. As
Named Fiduciary, Employer shall be responsible for the management,
control and administration of this Agreement. Employer may allocate
to others certain aspects of the management and operation of
responsibilities of this Agreement including the employment of
advisors and the delegation of any ministerial duties to qualified
individuals.
(b) The funding policy under this Agreement is that all
premiums on the Policy be remitted to Insurer when due.
(c) Direct payment by Insurer is the basis of payment of
benefits under this Agreement, with those benefits in turn being
based on the payment of premiums as provided in this Agreement.
(d) For claims procedure purposes, the "Claims Manager"
shall be Employer.
(1) If for any reason a claim for benefits under this
Agreement is denied by Employer, the Claims Manager shall
deliver to the claimant a written explanation setting forth the
specific reasons for the denial, pertinent references to the
Agreement paragraph on which the denial is based, such other
data as may be pertinent and information on the procedures to be
followed by the claimant in obtaining a review of his claim, all
written in a manner calculated to be understood by the claimant.
For this purpose:
(A) The claimant's claim shall be deemed
filed when presented orally or in writing to the Claims
Manager.
(B) The Claims Manager's explanation shall
be in writing delivered to the claimant within 90 days of
the date the claim is filed.
(2) The claimant shall have 60 days following his
receipt of the denial of the claim to file with the Claims
Manager a written request for review of the denial. The
claimant or his representative may review pertinent documents
related to this Agreement and in the Claims Manager's possession
in order to prepare the request for review.
(3) 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 claim. The
decision on review shall be in writing and, if denied, 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 Agreement paragraphs on which the
decision is based. If a copy of the decision is not so
furnished to the claimant within such 60 days, the claim shall
be deemed denied on review.
(4) Any payment to a claimant shall to the extent
thereof be in full satisfaction of all claims hereunder against
Employer and the Claims Manager, either of whom may require such
claimant, as a condition to such payment, to execute a receipt
and release therefor in such form as shall be determined by
Employer and the Claims Manager. If receipt and release is
required by the claimant and the claimant does not provide such
receipt and release in a timely enough manner to permit a timely
distribution in accordance with the general timing of
distribution provisions in this Agreement, the payment of any
affected distribution may be delayed until Employer and the
Claims Manager receive a proper receipt and release.
IN WITNESS WHEREOF the parties have signed, sealed and delivered
this Agreement in the presence of:
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx (SEAL)
Witness XXXXXXX X. XXXXX
EMPLOYER:
INTERFACE, INC.
Xxxxx X. Xxxxxx
Witness
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Sr. Vice Pres. & Sec.
[CORPORATE SEAL]
SCHEDULE A
COLLATERAL ASSIGNMENT
THIS ASSIGNMENT is made and entered into effective this 21st day
of February, 1997 by the undersigned as owner (hereinafter called
"Owner") of Life Insurance Policy No. 14196680 issued by Northwestern
Mutual Life Insurance Company (hereinafter called "Insurer") and any
supplementary contracts issued in connection therewith (said policies
and contracts being herein called the "Policy"), upon Owner's life to
INTERFACE, INC. (hereinafter called "Assignee").
W I T N E S S E T H :
WHEREAS, Owner is a valued employee of Assignee;
WHEREAS, Assignee desires to assist Owner with his personal
life insurance program by paying the premiums due on the Policy, as
more specifically provided for in that certain Split Dollar Insurance
Agreement, of even date herewith, between Owner and Assignee
(hereinafter called the "Agreement"); and
WHEREAS, in consideration of Assignee agreeing to pay said
premiums, Owner agrees to grant Assignee an interest in the Policy as
collateral security for the payment to Assignee by Owner of
Assignee's interest in the Policy (as defined in the Agreement);
NOW, THEREFORE, for value received, the undersigned hereby
assigns, transfers and sets over to Assignee, its successors and
assigns, the following specific rights in the Policy, subject to the
following terms and conditions:
1. ASSIGNMENT. This Assignment is made, and the Policy is to
be held, as collateral security for all obligations of Owner to
Assignee, either now existing or that may hereafter arise, pursuant
to the terms of the Agreement.
2. ASSIGNEE'S RIGHTS. Assignee's interest in the Policy shall
be limited to:
(a) The right to recover the greater of (i) the amount of
its unreimbursed premium payments, or (ii) the death benefit under
the policy in excess of $1,000,000, upon the death of Owner as
provided in paragraph 6 of the Agreement; and
(b) The right to recover the unreimbursed premium payments
in the event of termination of the Agreement, as provided in
paragraphs 8 and 9 of the Agreement.
3. OWNER'S RIGHTS. Owner shall retain all incidents of
ownership in the Policy; provided, however, that all rights retained
by Owner shall be subject to the terms and conditions of the
Agreement.
4. FORWARDING OF POLICY. Upon request, Assignee shall forward
the Policy to Insurer, without unreasonable delay, for any
endorsement or change of beneficiary, any election of optional mode
of settlement, or the exercise of any other right reserved by Owner
hereunder.
5. INSURER'S RELIANCE. Insurer is hereby authorized to
recognize Assignee's claims to rights hereunder without investigating
the reason for any action taken by Assignee, the validity or amount
of any of the liabilities of Owner to Assignee under the Agreement,
the existence of any default therein, the giving of any notice
required herein, or the application to be made by Assignee of any
amounts to be paid to Assignee. The signature of Assignee shall be
sufficient for the exercise of any rights under the Policy assigned
hereby to Assignee and the receipt of Assignee for any sums received
by it shall be a full discharge and release therefore to Insurer.
6. INSURER'S PROTECTION. Insurer shall be fully protected in
recognizing the requests made by Owner for surrender of the Policy
with or without the consent of Assignee and upon such surrender the
Policy shall be terminated and shall be of no further force and
effect.
7. END OF ASSIGNMENT. Upon full satisfaction of Owner's
obligations under the Agreement, Assignee shall reassign to Owner the
Policy and all specific rights included in this Collateral
Assignment.
IN WITNESS WHEREOF, Owner and Assignee have signed, sealed and
delivered this Collateral Assignment in the presence of:
OWNER:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx (SEAL)
Witness XXXXXXX X. XXXXX
ASSIGNEE:
INTERFACE, INC.
Xxxxx X. Xxxxxx
Witness
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Sr. Vice Pres. & Sec.
[CORPORATE SEAL]
