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EXHIBIT 10.19
SPLIT DOLLAR INSURANCE AGREEMENT
THIS AGREEMENT made and entered into as of the 10th day of October,
1993, by and between XXXXXX METALCRAFT CO., an Illinois corporation, with
principal offices and place of business in the State of Illinois in Morton,
Illinois (hereinafter referred to as the "Corporation"), and XXXXX X.
XXXXXXXXX, an individual residing at 00 Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
(hereinafter referred to as the "Employee");
WITNESSETH:
WHEREAS, the Employee is employed by the Corporation as _____________
______________________ of the Corporation; and
WHEREAS, the Employee, on September 14, 1993, applied to Protective
Life Insurance Company (hereinafter referred to as the "Insurer") for life
insurance in the specified amount of $300,000; and
WHEREAS, pursuant to the aforesaid application, the Insurer issued its
flexible premium adjustable life insurance policy under the Insurer's program
known as Patriot 100 Plus in the initial face amount of $300,000 dated October
10, 1993 as Policy No. B00212920 hereinafter the "Policy"); and
WHEREAS, the Corporation in recognition of the Employee's invaluable
management skills, knowledge of the Corporation's business and contributions to
earnings and profits, desires to obtain key executive death protection for its
estimated losses in the event of the Employee's premature death; and
WHEREAS, the Corporation agrees to receive, by way of an assignment, a
limited Policy ownership interest in the Policy on the life of the Employee and
to pay premiums under the method described herein; and
WHEREAS, the Employee agrees to make the Policy subject to this
Agreement in exchange for the Employer's willingness to pay a portion of the
Policy premiums due on the Policy; and
WHEREAS, this Agreement is intended to qualify as a split dollar life
insurance plan as described in Revenue Ruling 64-328;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as follows:
1. Policy Subject to This Agreement; Term. The Policy shall be
subject to the terms and conditions of this Agreement during the term hereof.
The term of this Agreement shall commence
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on October 10, 1993 and shall expire October 10, 2019, unless earlier
terminated as hereafter provided.
2. Premium Payments. The Corporation has paid to the Insurer an
initial premium on the Policy of $2,300.00. The Corporation agrees to continue
to pay twenty-five (25) additional annual premiums of $2,300.00 each, which
represents the cumulative increasing P.S. 58 costs for the assigned death
benefit to the Corporation of $183,633 during the term of this Agreement,
averaged and levelized over a period of twenty-six (26) years commencing on the
date of issuance of the Policy, for a term of twenty-six (26) years of
protection. The annualized amount of premiums is reflected in Column 1 on
Exhibit A attached hereto and made a part hereof by this reference. Employee
agrees to pay any remaining portion of the planned periodic premiums due with
respect to the Policy. The Policy may, at the Employee's discretion, provide
for the waiver of premium on the Employee's disability. If it does so provide,
the cost thereof shall be borne by the Employee, the prior provisions of this
Section 2 to the contrary notwithstanding.
3. Assignment of Limited Policy Ownership Interest. The Employee
does hereby assign, transfer and set over to the Corporation, its successors
and assigns, a specific and limited policy ownership interest in the Policy in
consideration of the premium payment paid by the Corporation as required
hereunder.
4. Corporation's Policy Interest Defined. The limited policy
ownership interest hereby assigned by the Employee to the Corporation is as
follows:
A. Upon death of Employee. In the event of the
Employee's death during the term, the Corporation's policy interest
shall be an amount equal to $183,633 of death protection under the
limited policy ownership created hereunder, increased by the amount,
if any, of unearned premiums resulting from the pre-payment of
premiums by the Corporation plus any amount in the "unearned premium
account" as hereinafter defined. Any remaining death proceeds shall
be payable to Employee's designated beneficiary pursuant to the
Policy. For purposes of this Agreement, the "unearned premium
account" means the amount by which the Corporation's levelized premium
payments required pursuant to this Agreement exceeds the amount of the
P.S. 58 costs for the assigned death benefits accrued during the term
of the Policy until the date of termination of the Policy, as
reflected in Column 2 of Exhibit A attached.
B. Upon Cancellation or Termination of the Policy. In
the event the Employee elects to surrender or cancel the Policy during
the term, the Corporation shall receive such share of the Policy cash
values as
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are attributable to the Corporation's prepaid premiums and any
unearned premium account. In the event such cash values are
insufficient to repay any amount due the Corporation, the Employee
agrees to pay any difference to the Corporation. No further benefits
shall be payable to the Corporation hereunder. Any remaining cash
value shall inure to the benefit of the Employee.
5. Employee's Retained Incidents of Ownership. Except as to the
limited policy ownership rights specifically granted the Corporation herein,
Employee retains all incidents of ownership (including the right to surrender
or cancel the Policy and the right to borrow or withdraw against the Policy).
Employee's right to borrow shall be limited to an amount equal to the maximum
loan value reduced by any prepaid premiums and unearned premium account of the
Corporation. Employee's right to withdraw from the Policy cash values under
the Policy's partial surrender provisions shall be limited to the allowable
partial surrender value under the Policy reduced by any prepaid premiums and
any unearned premium account in favor of the Corporation. In the event
Employee's Policy loans and accrued interest or, alternatively, the sum of
Employee's cash withdrawals, reduce the Corporation's earlier-stated death
benefit, the Employee agrees to contribute to the Policy such sums as are
required to maintain the integrity of such death benefits.
6. Possession of Policy. If the above-described Policy is in the
possession of the Corporation, the Corporation will, upon notice and request,
forward the Policy without unreasonable delay to the Insurer if required by the
Insurer for any Policy transaction or change.
7. Insurer Action. The Insurer shall be bound only by the
provisions of and endorsements on the Policy, and any payments made or actions
taken by it in accordance therewith shall fully discharge it from all claims,
suits and demands of all persons whatsoever. It shall in no way be bound by or
be deemed to have notice of the provisions of this Agreement.
8. Release of Corporation's Limited Ownership Interest. Upon
Employee's request and upon full payment to the Corporation of its Policy
interest, as earlier defined, the Corporation agrees to release and reassign
its ownership rights to the Policy to the Employee.
9. Premium Waiver. If the Policy contains a disability waiver of
premium provision or waiver of monthly deduction, any waived amounts shall be
considered for all purposes of this Agreement as having been paid by the
Employee and all provisions herein relating to Policy cash values and death
proceeds shall be construed accordingly should such premium waiver become
effective.
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10. Termination of the Agreement. This Agreement shall terminate
during Employee's lifetime on the first to occur of the following: (a)
expiration of the term of this Agreement as set forth in Section 1 hereof; (b)
surrender of the Policy by the Employee, who has the sole and exclusive right
of surrender; (c) by written notice by either the Corporation or the Employee
to the other; (d) upon termination of Employee's employment. Upon termination
of this Agreement, the Corporation shall receive an amount equal to the
Corporation's prepaid premiums and any unearned premium account at the time of
such termination and the Corporation's interest in the Policy shall thereafter
cease.
11. Special 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. The named fiduciary: The Corporation.
B. The funding policy under this Agreement is that all
premiums on the Policy be remitted to the Insurer when due.
C. Direct payment by the 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. The claims procedure under this Agreement shall be as
follows:
(1) If for any reason a claim for benefits under
this Agreement is denied by the Corporation, it shall deliver
to the claimant a written explanation setting forth the
specific reason for the denial, pertinent references to the
Agreement 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 in writing to the Corporation.
(B) The Corporation's explanation shall
be in writing delivered to the claimant within ninety
(90) days of the date the claim is filed.
(2) The claimant shall have sixty (60) days
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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 claim or his representative may submit
pertinent documents and written issues and comments.
(3) The Corporation shall decide the issue on
review and furnish the claimant with a copy within sixty (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 reference to the pertinent Agreement provisions on
which the decision is based. If a copy of the decision is not
so furnished to the claimant within such sixty (60) days, the
claim shall be deemed denied on review.
12. No Contract of Employment. Neither this Agreement, nor any
provisions hereof, nor any action taken by the Corporation pursuant hereto,
shall be construed as giving to the Employee the right to be retained in the
employ of the Corporation, nor shall it limit or restrict the right of the
Corporation to terminate the employmennt of the Employee with or without cause.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
ATTEST: XXXXXX METALCRAFT CO.
By:______________________ By:________________________________
Xxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx XX,
Secretary President
___________________________________
Xxxxx X. Xxxxxxxxx
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