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EXHIBIT 10.36
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
AGREEMENT made as of the 24th day of June, 1999, by and among PULITZER
INC., a Delaware corporation (the "Company"), and XXXXX X. XXXXXXX and XXXXX X.
XXXXXXX, as trustees ("Trustee"), under Trust Agreement dated June 3, 1999.
WHEREAS, Xxxxxx X. Xxxxxxx ("Executive") is employed as a senior
executive officer of the Company; and
WHEREAS, the Trustee is the owner of a survivorship life insurance
policy, No. 8,215,876 (the "Policy"), issued by C.M. Life Insurance Company (the
"Insurer") on the joint lives of the Executive and his wife with a face amount
of $2,800,000; and
WHEREAS, this agreement is being made by the Company in accordance with
the requirements of the Assignment and Assumption Agreement - Employee Benefit
Plans made as of March 18, 1999 between the Company and Pulitzer Publishing
Company.
NOW, THEREFORE, the parties agree as follows:
1. The Policy. The Trustee has applied for and is the owner of the
Policy. The Trustee will maintain physical possession of the Policy while this
agreement is in effect.
2. Payment of Premiums. The Company will pay $199,500 to the Insurer as
an initial Policy premium and, thereafter, will make eight annual payments to
the Insurer, each in an amount equal to the planned premium specified in the
Policy; provided, however, that the Company will have no obligation to make
planned premium payments under the Policy following the termination of this
agreement. The Company, in its discretion, may make greater premium payments
under the Policy than is required by this agreement, except to the extent that
any such greater payment would result in the Policy's failing to meet the
definition of a life insurance contract under Section 7702 of the Internal
Revenue Code of 1986.
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3. Company's Interest in the Policy. The Company's interest in the
Policy shall be equal to (a) minus (b), where (a) is the greater of (1) the cash
surrender value of the Policy or (2) the total amount of premium payments net of
withdrawals made by the Company under the Policy; and (b) is the amount of any
outstanding Policy loan obligation incurred by the Company, including accrued
and unpaid interest thereon. The Company may direct the investment of the cash
value of the Policy in accordance with the provisions thereof. Subject to the
written consent of the Trustee, the Company may withdraw or borrow funds from
the Policy.
4. Trustee's Rights. The Trustee shall have all rights under the Policy
that are not specifically granted to the Company by this agreement, including,
without limitation, the rights to change the beneficiary designation under the
Policy and exercise settlement options under the Policy; provided, however, that
the Trustee may not surrender the Policy, change the death benefit option under
the Policy or otherwise take action that would jeopardize the Company's right to
recover its interest in the Policy without the written consent of the Company.
In the event of an assignment, the assignee shall possess all of the rights and
obligations of the Trustee in the Policy and under this agreement.
5. Collateral Assignment. The parties will enter into a collateral
assignment agreement to evidence the Company's interest in the Policy as set
forth in this agreement. Notwithstanding its interest in the Policy, the Company
shall have no right to take any action that would endanger or impair the
interest of the Trustee in the Policy, including, without limitation, the right
to receive the Policy proceeds in excess of the value of the Company's interest
upon the Insureds' death.
6. Termination of Agreement. This agreement will terminate upon the
happening of any one of the following events: (a) the termination of the
Executive's employment by the Company for "cause" (as that term is defined in
the Executive's employment agreement with the Company); (b) the death of the
survivor of the Insureds; (c) delivery by the Trustee to the Company of written
notice of termination; and (d) payment in full to the Company of the Company's
interest in the Policy. In the
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event this agreement terminates for reasons other than the death of the
Insureds, the Trustee shall have 90 days in which to pay or cause to be paid to
the Company the then value of the Company's interest in the Policy (to the
extent not previously paid). Upon the payment of the Company's interest in the
Policy, the Company shall release the collateral assignment of the Policy and
the collateral assignment will be of no further force or effect. If the Trustee
does not pay or cause such amount to be paid to the Company within said 90-day
period, then (x) the Company may surrender the Policy without the consent of the
Trustee or (y) the Trustee may transfer ownership of the Policy to the Company,
and, in either event, the obligations of the Trustee under this agreement and
the interest of the Trustee in the Policy will thereupon be discharged and
terminated.
7. Death of Insureds. If this agreement is not sooner terminated, then,
upon the death of the survivor of the Insureds, the Company shall be entitled to
receive from the proceeds of the Policy the then value of the Company's interest
in the Policy, and the balance of the proceeds of the Policy shall be paid to
the Trustee or such other beneficiary or beneficiaries as shall have been
designated by the Trustee under the Policy.
8. Insurer Not a Party. The Insurer is not a party to this agreement
and shall have no liability except as set forth in each Policy. The Insurer
shall not be bound to inquire into or take notice of the provisions of this
agreement or to inquire as to the application of any payments made by it
pursuant to the terms of the Policy.
9. Amendment. This agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and may only be amended or
modified, in whole or in part, by the Trustee and the Company in writing.
10. Assignment and Successors. This agreement will be binding upon and
inure to the benefit of the parties and their respective legal representatives
and successors and assigns.
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11. Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have entered into this agreement
as of the date first above written.
PULITZER INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Trustee
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Trustee
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SPLIT DOLLAR COLLATERAL ASSIGNMENT
Issuing Company: C.M. Life Insurance Company ("Insurer")
Policy No.: 8,215,876 ("Policy")
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Insured: Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx ("Insured")
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Owner/Assignor: Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, Trustees, under Trust
Agreement dated June 3, 1999 ("Assignor")
Assignee: Pulitzer Inc. ("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 then value of the Assignee's interest in the Policy as
set forth in the Split Dollar Agreement.
(2) Upon the death of the Insured, the right to
obtain that portion of the death proceeds as is equal to the then
value of the Assignee's interest in the Policy as set forth in the
Split Dollar Agreement.
3. Notwithstanding any other provision of this Assignment, the
Assignee shall have the right to make investment allocations of net premiums, to
make transfers of values among the Policy investment options, and, subject to
the Assignor's consent, the right to borrow money from the policy 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 6(e) of the Split Dollar Agreement) and if the Assignee is not paid
an amount equal to the then value of its interest in the
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Policy 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 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 Policy investment options 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.
PULITZER INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Trustee
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Trustee
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