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EXHIBIT 10.28
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
This Agreement made and entered into between PULITZER PUBLISHING COMPANY,
a Delaware corporation (the "Corporation"), and Xxxxxxx X. Xxxxxx, Trustee of
the Xxxxxxx X. Xxxxxxxx 1996 Life Insurance Trust (the "Trustee").
WHEREAS, the services of Xxxxxxx X. Xxxxxxxx (the "Employee"), the
Employee's experience and knowledge of the affairs of the Corporation, and the
Employee's reputation and contacts in the business are extremely valuable to
the Corporation;
WHEREAS, the Corporation desires that the Employee remain in its service
and wishes to receive the benefit of the Employee's knowledge, experience,
reputation and contacts;
WHEREAS, the Corporation is willing to encourage the Employee's continued
service to the Corporation by joining with the Trustee for the mutual benefit
of the parties hereto in an investment in life insurance on the life of the
Employee so as to provide life insurance protection for the Employee's family;
WHEREAS, the Trustee will be the owner of the Insurance Policies (as
defined below) on the life of the Employee acquired pursuant to the terms of
this Agreement, and the Corporation's Investment (as defined below) in each
Insurance Policy will be represented by an assignment from the Trustee to the
Corporation of certain ownership rights in the Insurance Policy; and
WHEREAS, this Agreement is intended to qualify as a life insurance
employee benefit plan as described in Rev. Rul. 64-328, 1964-2 CB 11.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the Corporation and the Trustee hereby agree
as follows:
ARTICLE I
Definitions
A. "Agreement" means this Agreement, as it may be amended from time to
time.
1.2 "Corporation's Investment" means the interest of the Corporation in an
Insurance Policy, as defined in Section 4.1 of the Agreement.
1.3 "Insurance Policies" means the policy or policies shown on the
attached Exhibit A, together with any other policies that may be added to this
Agreement.
1.4 "Insurer" means the insurance company issuing an Insurance Policy
subject to this Agreement.
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1.5 "Trust" means the trust or trusts created by that certain instrument
dated December 17, 1996, between Xxxxxxx X. Xxxxxxxx, as Grantor, and Xxxxxxx
X. Xxxxxx, as Trustee.
ARTICLE II
Insurance Policies
2.1 The Trustee has purchased insurance on the life of the Employee, for
the benefit of the Trust, under the Insurance Policies and in the amounts shown
on Exhibit A.
ARTICLE III
Premium Payments and Death Benefits
3.1 Subject to the provisions hereof, the Corporation shall pay the actual
premium required to keep each Insurance Policy in force on or before the due
date of the premium payment. The Corporation, in its discretion, may make a
premium payment with respect to each Insurance Policy in an amount greater than
the required amount, provided that such payment will not result in the
Insurance Policy's failing to meet the definition of a life insurance contract
under Section 7702 of the Internal Revenue Code of 1986, as amended.
3.2 The Trustee will elect Death Benefit Option 2 for each Insurance
Policy and may not change the election without the prior written consent of the
Corporation.
ARTICLE IV
Corporation's Investment
4.1 The Corporation's Investment in each Insurance Policy shall be the
greater of (a) the cash surrender value of the Insurance Policy or (b) the sum
of the amounts paid by the Corporation as premiums on the Insurance Policy
reduced by the sum of any withdrawals from the Insurance Policy by the
Corporation; provided, however, that the Corporation's Investment as determined
by this section shall be reduced by the sum of (i) the amount of any
indebtedness which may exist against the Insurance Policy and (ii) the amount
of any unpaid interest on such indebtedness.
4.2 The Trustee will collaterally assign each Insurance Policy acquired
pursuant to the terms of this Agreement to the Corporation as evidence of the
Corporation's Investment. Each collateral assignment will be in substantially
the form attached hereto as Exhibit B and will not be altered or changed
without the prior written consent of the Corporation.
4.3 The Corporation is prohibited from taking any action with respect to
each Insurance Policy which would endanger either the interest of the Trustee
therein or the payment of proceeds in excess of the Corporation's Investment to
any beneficiary designated by the Trustee upon the Employee's death.
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The Corporation is specifically prohibited from surrendering the Insurance
Policies for cancellation except as provided in section 6.2 hereof. However,
the Corporation is specifically authorized to borrow against or pledge the
Insurance Policies, to direct the investments of the cash values of the
Insurance Policies in accordance with the provisions thereof and to withdraw
funds from the Insurance Policies; provided, however, that if the loans or
withdrawals from the Insurance Policies result in the Trustee's being liable
for income taxes, the Corporation shall pay to the Trustee the amount of such
income taxes.
4.4 The Trustee specifically has the power to assign all rights of the
Trustee in the Insurance Policies and under this Agreement, change the
beneficiary designations of the Insurance Policies and exercise settlement
options under the Insurance Policies. In the event of an assignment, the
assignee shall possess all of the rights and obligations of the Trustee in the
Insurance Policies and under this Agreement. The Trustee has all rights to the
Insurance Policies not specifically granted to the Corporation by this
Agreement, except that the Insurance Policies may not be surrendered nor the
death benefit option be changed without the prior written consent of the
Corporation.
4.5 The Trustee shall have the right, exercisable from time to time
without the consent of the Corporation, to reduce the death benefit of the
Insurance Policies, provided that any reduction shall be made in accordance
with the provisions of each Insurance Policy, including, without limitation,
the requirement that the face amount of the Insurance Policy which remains
after the reduction shall be equal to or greater than the minimum face amount
determined in accordance with the Table of Minimum Face Amount Percentages
set forth in the Insurance Policy.
ARTICLE V
Termination
5.1 This Agreement shall terminate only upon the happening of any one of
the following events: (a) mutual consent of the Corporation and the Trustee;
(b) termination of employment of the Employee for any reason other than (i)
retirement on or after age 65, (ii) retirement on or after age 62 upon at least
four months prior written notice to, and with the prior written consent of, the
Corporation, (iii) disability, or (iv) death; (c) delivery by the Trustee to
the Corporation of written notice of termination; (d) surrender of all of the
Insurance Policies with the consent of both the Corporation and the Trustee;
and (e) payment in full to the Corporation at any time of the Corporation's
Investment in each Insurance Policy, and upon such payment the Corporation
shall release the collateral assignment(s) and deliver the Insurance Policies
to the Trustee.
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ARTICLE VI
Termination of Corporation's Investment
6.1 Upon the death of the Employee, the Corporation shall receive from the
proceeds of each Insurance Policy payable upon such death the full amount of
the Corporation's Investment in such Insurance Policy. The balance of the
proceeds of such Insurance Policy shall be paid (a) to the beneficiary or
beneficiaries designated by the Trustee, or (b) if no such beneficiary has been
designated, to the Trust.
6.2 In the event of the termination of this Agreement under Article V
(except as provided in section 5.1(e) of Article V), the Trustee shall have 90
days in which to pay to the Corporation an amount equal to the sum of the
Corporation's Investment in each Insurance Policy. Upon the payment of such
amount, the Corporation shall release the collateral assignment(s) of the
Insurance Policies. If the Trustee does not pay such amount to the Corporation
within the 90 day period, (a) the Corporation may surrender such Insurance
Policies without the consent of the Trustee or (b) the Trustee may transfer
ownership of the Insurance Policies to the Corporation, in either event
discharging in full the obligation of the Trustee to pay to the Corporation an
amount equal to the sum of the Corporation's Investment in each Insurance
Policy and terminating all rights of the Trustee to the Insurance Policies
under this Agreement.
ARTICLE VII
Insurers
7.1 The Insurer issuing an Insurance Policy shall not be deemed to be a
party to this Agreement for any purpose or responsible in any way for its
validity or enforcement. The Insurer shall not be obligated to inquire as to
the distribution or application of any monies payable or paid by the Insurer
under the Insurance Policy if the Insurer makes appropriate payment or
otherwise performs its contractual obligations in accordance with the terms of
the Insurance Policy. The Insurer shall be bound only by the provisions of,
and endorsements to, the Insurance Policy. Any payments made or actions taken
by the Insurer in accordance with the Insurance Policy shall fully discharge
the Insurer from liability.
ARTICLE VIII
Amendments and Binding Effect
8.1 This Agreement shall not be modified or amended except by a written
instrument signed by the Corporation and the Trustee. This Agreement shall be
binding upon and inure to the benefit of the assigns and the successors of the
parties to this Agreement.
8.2 The provisions of this Agreement shall be construed and enforced
according to the laws of the State of Delaware.
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ARTICLE IX
Miscellaneous
9.1 The Corporation is the named fiduciary of the plan established by this
Agreement (the "Plan") for purposes of the Employee Retirement Income Security
Act of 1974, as amended, and shall have the authority to control and manage the
operation and administration of the Plan.
9.2 The funding policy of the Plan will be through premium payments to the
Insurer pursuant to this Agreement.
9.3 The basis of payments from the Plan will consist of payments by the
Insurer in accordance with each Insurance Policy.
9.4 If for any reason a claim for benefits under the Plan is denied, the
Corporation 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 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 Corporation.
(b) the Corporation's explanation shall be in writing delivered
to the claimant within 90 days of the date the claim is filed.
The claimant shall have 60 days following his receipt of the denial of the
claim to file with the Corporation a written request for review of the denial.
For such review, the claimant or his representative may submit pertinent
documents and written issues and comments.
9.5 The Corporation 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 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 claim shall be deemed
denied on review.
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ARTICLE X
Notice
10.1 All Notices which are required by or may be given pursuant to the
terms of this Agreement must be in writing and must be delivered personally,
sent by certified mail, return receipt requested, first-class, postage prepaid,
or sent for next business day delivery by a nationally recognized overnight
delivery serve as follows:
If to Corporation: Pulitzer Publishing Company
Attn: Xxxxx X. Xxxxxxx
000 Xxxxx Xxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
If to Trustee: Xxxxxxx X. Xxxxxx, Trustee
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any of the addresses or addresses set forth above may be changed from time to
time by written notice from the party requesting the change. Such notices and
other communications will for all purposes of this Agreement be treated as
being effective immediately if delivered personally, or five days after mailing
by certified mail, return receipt requested, first-class postage prepaid, or
one business day after deposit for next business day delivery by a nationally
recognized overnight delivery service.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
27th day of December, 1996.
PULITZER PUBLISHING COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
XXXXXXX X. XXXXXXXX 1996 LIFE INSURANCE
TRUST
By /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Trustee
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EXHIBIT A
The policy or policies covered by the foregoing Split Dollar Life
Insurance Agreement between Pulitzer Publishing Company and Xxxxxxx X. Xxxxxx,
Trustee, include the following:
Insurer Policy No. Initial Face Amount
-------- ---------- -------------------
Massachusetts Mutual Life
Insurance Company 0025511 $5,000,000.00
EXECUTED this 27th day of December, 1996.
PULITZER PUBLISHING COMPANY
By /s/ Xxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
XXXXXXX X. XXXXXXXX 1996 INSURANCE TRUST
By /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Trustee
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EXHIBIT B
SPLIT DOLLAR COLLATERAL ASSIGNMENT
Issuing Company: Massachusetts Mutual Life Insurance Company ("Insurer")
Policy No.: 0025511 ("Policy")
--------------------------------------------
Insured: Xxxxxxx X. Xxxxxxxx ("Insured")
--------------------------------------------
Owner/Assignor: Xxxxxxx X. Xxxxxx, Trustee under the Xxxxxxx X. Xxxxxxxx
1996 Insurance Trust
("Assignor")
Assignee: Pulitzer Publishing Company ("Assignee")
RECITALS
A. The Assignor desires to assign to the Assignee a collateral interest in
the Policy as collateral for certain liabilities of the Assignor to the
Assignee pursuant to the Split-Dollar Life Insurance Agreement between the
Assignor and the Assignee (the "Split Dollar Agreement") regarding the Policy
in accordance with Rev. Rul. 64-328, 1964-2 CB 11.
B. The Assignee, by accepting this Assignment, agrees to the terms and
conditions hereof.
ASSIGNMENT
1. FOR VALUE RECEIVED, the Assignor hereby assigns, transfers
and sets over to the Assignee, its successors and assigns, a
collateral interest in and to the Policy, subject to all of the terms
and conditions of the Policy and to all superior liens, if any, which
the Insurer may have against the Policy.
2. (a) It is expressly agreed that the Assignee's collateral
interest in the Policy shall be strictly limited to the following:
(1) Upon surrender of the Policy, the right to obtain
the whole of the surrender proceeds payable under the terms of
the Policy (taking into account any outstanding Policy loan).
(2) Upon the death of the Insured, the right to obtain
that portion of the death proceeds as is equal to the greater of
the Aggregate Premiums Paid (as hereinafter defined) or the
surrender proceeds payable under the terms of the Policy (taking
into account any outstanding Policy loan).
(b) For the purposes of this Assignment, the Aggregate
Premiums Paid at any time equals the then cumulative net premiums paid
by the Assignee under the Policy reduced by the sum of (i) any
indebtedness which may exist against the Policy, (ii) any unpaid
interest on such indebtedness and (iii) any withdrawals from the
Policy; provided, however, that Aggregate Premiums Paid shall not
include premiums waived pursuant to the terms of any disability waiver
of premiums rider to the Policy.
3. Notwithstanding any other provision of this Assignment, the
Assignee shall have the right to make loans on the Policy, to allocate
net premiums among the Guaranteed Principal Account (as defined in the
Policy) and the divisions of the Separate Account (as defined in the
Policy), to make transfers of values among the Guaranteed Principal
Account and the divisions of the Separate Account, and to make
withdrawals but not in excess of the then cash surrender value of the
Policy. If the Split Dollar Agreement is terminated at any time
(other than in accordance with Section 5.1(e) of Article V of the
Split Dollar Agreement) and if the Assignee is not paid an amount
equal to its collateral interest in the Policy
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within 90 days thereafter, the Assignee may surrender the Policy
without the consent of the Assignor.
4. Subject to paragraph 3 above, all other rights and
interests in the Policy, including, but not limited to, the right
to surrender the Policy, the right to designate the beneficiary
of the death proceeds under the Policy in excess of the
Assignee's collateral interest and the right to reduce the death
benefit in accordance with Section 4.5 of Article IV of the Split
Dollar Agreement, shall be retained by the Assignor, except the
Assignor shall not have the right to make loans on the Policy,
transfers of values among the Guaranteed Principal Account and
divisions of the Separate Account or withdrawals from the Policy
and the Assignor may surrender the Policy or change the death
benefit option only with the consent of the Assignee.
5. The Insurer is hereby authorized to recognize the
claims of the Assignee hereunder without any investigation
thereof, or giving notice to anyone, including the Assignor, and
the Insurer shall not be responsible for the application by the
Assignee of any amounts paid by the Insurer. The signature of
the Assignee alone shall be sufficient for the exercise of its
rights under the Policy assigned hereby, and the receipt of the
Assignee for any sums received by it shall be a full discharge
and release of the Insurer therefor.
6. The Assignor declares that there are no proceedings
in bankruptcy pending against the Assignor and that the
Assignor's property is not subject to any assignment for the
benefit of creditors.
7. While this Assignment is in force, the Assignor
directs that all premium notices be sent to the Assignee at the
address furnished by the Assignee.
8. All provisions of this Assignment shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
Signed at New York, New York on December 27, 1996 .
---------------------- --------------------
(City and State) (Date)
XXXXXXX X. XXXXXXXX 1996 INSURANCE TRUST
[Assignor]
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Trustee
ACCEPTANCE OF ASSIGNMENT
Date: December 27, 1996
-----------------
PULITZER PUBLISHING COMPANY
[Assignee]
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
