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SPLIT DOLLAR AGREEMENT
This Agreement, made as of June 1, 1995, by and between Omnicare
Management Company ("the Corporation"), a Delaware corporation with offices at
2800 Chemed Center, 000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, and Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxx Xxxxxx Xxxxxx ("the Trustees"), as Trustees
under The Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx Irrevocable Insurance Trust
Agreement dated January 25, 1990 ("the Trust").
1. PREMISES
1.1 Xxxxxx X. Xxxxxx (the "Employee") is an employee of the
Corporation and has created the Trust. The Trustees wish to
insure the joint lives of Xxxxxx X. Xxxxxx and his wife,
Xxxxxxx X. Xxxxxx (the "Insureds"), for the benefit and
protection of Xx. Xxxxxx'x family. The Corporation will
help the Trustees provide this insurance coverage by payment
of part of the premiums under a split dollar arrangement,
whereby the Trustees will be the owner of a life insurance
policy which will be collaterally assigned to the
Corporation as security for amounts the Corporation
will contribute for the premium payments.
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2. APPLICATION FOR INSURANCE
2.1 The Trustees have applied to Phoenix Home Life Mutual
Insurance Company for an Executive Equity Life Insurance
Plan on the joint lives of the Insureds for $3,000,000 (the
"Policy").
3. POLICY OWNERSHIP
3.1 The Trustees shall own the Policy and may exercise all
rights of ownership with respect to it, subject only to the
security interest of the Corporation as expressed in this
Agreement and the collateral assignment of the Policy to the
Corporation.
4. PAYMENT OF PREMIUMS
4.1 On or before the due date of each annual premium on the
Policy, the Corporation will pay to Phoenix Home Life
Mutual Insurance Company an amount equal to the greater of
80 percent of the annual premium or the annual premium less the
cost (calculated by application of Internal Revenue Service
Table PS-58) of the portion of the insurance which the
beneficiary or beneficiaries named by the Trustees or their
transferee would be entitled to receive if the
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Insureds died during the policy year for which the annual
premium is paid.
4.2 On or before the due date of each annual premium on the
Policy, the Corporation will pay to the Employee compensation in
the form of a bonus. The bonus payment shall be equal to the
sum of the remainder of the annual premium and an amount
sufficient to pay all federal, state and local income and
employment taxes incurred by the Employee as a result of the
total bonus payment. The bonus payment shall be calculated
assuming that the Employee is in the highest marginal tax
bracket for the applicable tax and that state and local
taxes are not deductible for federal purposes. The bonus
payment will be calculated as follows: the remainder of the
annual premium plus ((the remainder of the annual premium)
times (the sum of the highest marginal tax rates for each of
the applicable federal, state and local income and
employment taxes for individuals)) divided by (one minus
the sum of the highest marginal tax rates for each of the
applicable federal, state and local income and employment
taxes for individuals).
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4.3 On or before the due date of each annual premium on the
Policy, the Trustees will pay to Phoenix Home Mutual Insurance
Company the remainder of the annual premium. The Corporation may
pay the entire premium to Phoenix Home Life Mutual Insurance
Company for convenience, in which case the Trustees will
reimburse the Corporation for the remainder of the annual
premium.
4.4 These premium advances by the Corporation shall apply
specifically to annual premiums due under the Policy up to March
1, 2005 (10 years). However, additional premium advances may be
made by mutual agreement of the parties.
5. ASSIGNMENT OF POLICY
5.1 The Trustees shall collaterally assign the Policy to the
Corporation so as to reflect the respective interests of the
parties under this Agreement, said collateral assignment
("Assignment") having been executed by the parties on the date
of this Split Dollar Agreement, and thus made a part of such
Policy and this Agreement.
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6. USE OF DIVIDENDS
6.1 The dividends declared by Phoenix Home Life Mutual Insurance
Company on the Policy will be used to purchase Option Term with the
balance used to purchase paid-up insurance.
6.2 The dividend option which is specified in paragraph 6.1 of this
Article will not be terminated or changed without a conforming
amendment to this Agreement and unless such change is done in accordance
with the provisions of Part D "Joint Rights" section of the Assignment.
7. SURRENDER OF POLICY
7.1 The Trustees shall have the sole and exclusive right to surrender
the Policy.
7.2 If the Policy is surrendered, the Trustees shall direct the
insurance company in writing to draw a check payable to the Corporation
in an amount equal to the "Assignee's Cash Value Rights", as defined
within the provisions of Part A "Definitions" section of the Assignment.
7.3 If there is a delay in the surrender of the Policy by either party
to this Agreement, and if such delay results in diminished policy
values
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being available to either party, neither party to this Agreement
shall hold the insurance company liable for such diminution in
policy values.
8. DEATH CLAIMS
8.1 Upon the death of the Insureds, the Corporation shall have
an interest in the proceeds of the Policy equal to the
"Assignee's Death Benefit Share", as defined within the
provisions of Part A "Definitions" section of the Assignment.
The balance of proceeds remaining shall be paid directly by the
insurance company to the beneficiary or beneficiaries designated
in the Policy.
9. TERMINATION OF AGREEMENT
9.1 This Agreement shall terminate upon the first to occur of
(i) surrender of the Policy by the Trustees, (ii) written notice
of termination given by the Trustees to the Corporation, and
(iii) March 1, 2005.
9.2 Prior to termination of this Agreement, the Trustees shall
direct the insurance company in writing to draw a check payable
to the Corporation for an amount equal to the
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"Assignee's Cash Value Interest", as defined within the
provisions of Part A "Definitions" section of the Assignment.
Upon receipt of this amount, the Corporation shall release the
security interest of the Corporation expressed in this
Agreement and the Assignment.
10. SPECIAL PROVISIONS
The following provisions are part of this Plan and are intended
to meet the requirements of the Employee Retirement Income
Security Act of 1974:
10.01 -- The named fiduciary: The Secretary of the Company
10.02 -- The funding policy under this Plan is that all
premiums on the Policy be remitted to the Insurer
when due.
10.03 -- Direct payment by the Insurer is the basis of
payment of benefits under this Plan, with those
benefits in turn being based on the payment of
premiums as provided in the Plan.
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10.04 - For claims procedure purposes, the "Claims Manager" shall be
the Secretary of the Company.
(a) If for any reason a claim for benefits under this Plan
is denied by the Company, the Claims Manager 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:
(1) The claimant's claim shall be deemed filed when
presented orally or
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in writing to the Claims Manager.
(2) The Claims Manager's explanation shall be in writing
delivered to the claimant within 90 days of the date
the claim is filed.
(b) The claimant shall have 60 days following his/her receipt of
the denial of the claim to file with the Claims Manager a
written request for review of the denial. For such review,
the claimant or his/her representative may submit pertinent
documents and written issues and comments.
(c) 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/her claim. The decision on
review shall be in
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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 claims shall be
deemed denied on review.
11. AMENDMENT AND BINDING EFFECT
11.1 This embodies all agreements by the parties made with
respect to the Policy. The Agreement shall not be modified or
amended except by a writing signed by the parties. The Agreement
shall be binding upon the parties, their heirs, legal
representatives, successors and assigns.
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00. GOVERNING LAW
12.1 This Agreement shall be subject to and shall be construed
under the laws of the State of Ohio.
Executed by the parties at Cincinnati, Ohio, as of June 1, 1995.
OMNICARE MANAGEMENT COMPANY
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- -------------------------
Witness Signature, Corporate Title
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- --------------------------
Witness Xxxxxx X. Xxxxxx
Trustee
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- --------------------------
Witness Xxxxxx X. Xxxxxx
Trustee
/s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxx Xxxxxx Xxxxxx
----------------------------- --------------------------
Witness Xxxxxx Xxxxxx Xxxxxx
Trustee
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EXHIBIT A
OMNICARE, INC.
SPLIT DOLLAR AGREEMENT
"Change of Control" shall mean: The Corporation obtains actual
knowledge that any of the following events has occurred: (i) any person other
than the Corporation or any Subsidiary has become the beneficial owner of 15%
or more of the combined voting power of the Corporation's then outstanding
voting securities; (ii) the stockholders of the Corporation have approved: (1)
an agreement to merge or consolidate with or into another corporation and the
Corporation or another corporation wholly-owned by the Corporation, is not the
surviving corporation, or (2) an agreement to sell or otherwise dispose of all
or substantially all of the assets of the Corporation (including a plan of
liquidation); or (iii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors cease for
any reason to constitute at least a majority of the Board of Directors, unless
the nomination for the election by the Corporation's stockholders of each new
director was approved by a vote of at least one-half of the persons who were
directors at the beginning of the two-year period.
For purposes of this definition, a person shall be deemed the
"beneficial owner" of any securities (i) which such person or any of its
Affiliates or Associates beneficially owns, directly or indirectly; or (ii)
which such person or any of its Affiliates or Associates has, directly or
indirectly, (1) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (2) the right to vote
pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other person with which such
person or any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
any securities.
For purposes of this definition, a "person" shall mean any individual,
firm, company, partnership, other entity or group, and the terms "Affiliate" or
"Associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as in effect on
June 1, 1995.
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