Exhibit 10.30
Split Dollar Agreement
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SPLIT -DOLLAR AGREEMENT (Collateral Assignment: Employee Owner)
THIS AGREEMENT made and entered into as of the ____ day of _______, 1999, by and
between Hilb, Xxxxx and Xxxxxxxx Company, a Virginia corporation, with principal
offices and place of business in the Commonwealth of Virginia (hereinafter
referred to as the "Corporation"), and _______________, an individual residing
in the Commonwealth of Virginia (hereinafter referred to as the "Employee"),
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Corporation desires to provide personal life insurance protection
for the Employee, under a policy of life insurance insuring his life
(hereinafter referred to as the "Policy"), which is described in Exhibit A
attached hereto and by this reference made a part hereof, and which was issued
by Nationwide Life Insurance Company or such other insurer as may be identified
on Exhibit A (hereinafter referred to as the "Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on the Policy as an
additional employee benefit for the Employee, on the terms and conditions
hereinafter set forth; and
WHEREAS, the Employee is the owner of the Policy and, as such, possesses all
incidents of ownership in and to the Policy; and
WHEREAS, the Corporation wishes to have the Policy collaterally assigned to it
by the Employee, in order to secure the repayment of the amounts which it will
pay toward the premiums on the Policy;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
contained herein, the parties hereto agree as follows:
I. Purchase of Policy. The Employee has purchased the Policy from the
Insurer in the total face amount as set forth on Exhibit A. The parties hereto
have taken all necessary action to cause the Insurer to issue the Policy, and
shall take any further action which may be necessary to cause the Policy to
conform to the provisions of this Agreement. The parties hereto agree that the
Policy shall be subject to the terms and conditions of this Agreement and of the
Collateral Assignment in the form attached hereto as Exhibit B (the "Collateral
Assignment") relating to the Policy.
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2. Ownership of Policy. The Employee shall be the sole and absolute owner
of the Policy, and may exercise all ownership rights granted to the owner
thereof by the terms of the Policy, subject to the Corporation's interest in the
Policy and except as may otherwise be provided herein.
3. Death Benefit Option. The death benefit option indicated on Exhibit A
shall be applicable. Such election may be changed at anytime upon written
agreement of the parties and shall not alter any rights provided herein.
4. Payment of Premiums. On or before the due date of each Policy premium
or within the grace period provided therein, the Corporation shall pay the full
amount of the premium to the Insurer, and shall, upon request, promptly furnish
the Employee evidence of timely payment of such premium. The Corporation shall
annually furnish the Employee a statement of the amount of income reportable by
the Employee for federal and state income tax purposes, as a result of the
insurance protection provided the Employee's beneficiary.
5. Collateral Assignment. To secure the repayment to the Corporation of
the amount of the premiums on the Policy paid by it hereunder, the Employee has,
contemporaneously herewith, assigned the Policy to the Corporation as collateral
by means of the Collateral Assignment, in the form attached hereto as Exhibit B.
The Collateral Assignment of the Policy to the Corporation hereunder shall not
be terminated, altered or amended by the Employee, without the express written
consent of the Corporation. In the event that the Policy identified on Exhibit A
is revised by the Corporation or in the event an additional policy is added
under this Agreement, the Employee shall execute an additional collateral
assignment in substantially the form attached hereto as Exhibit B to recognize
the Corporation's interest in such policy.
6. Limitations on Employee's Rights in Policy.
a. Except as otherwise provided herein, the Employee shall not
sell, assign, transfer , borrow against, surrender or cancel
the Policy, change the beneficiary designation provision
thereof, nor terminate the dividend election thereof without,
in any such case, the express written consent of the
Corporation.
b. Notwithstanding any provision hereof to the contrary, the
Employee shall have the right to absolutely and irrevocably
give to a donee all of his right, title and interest in and to
the Policy, subject to the Collateral Assignment of the Policy
to the Corporation. The Employee may exercise this right by
executing a written transfer of ownership in the form used by
the Insurer for irrevocable gifts of insurance policies, and
delivering this form to the Corporation. Upon receipt of such
form, executed by the Employee and duly accepted by the donee
thereof, the Corporation shall consent thereto in writing, and
shall thereafter treat the Employee's donee as the sole owner
of all the Employee's right, title and interest in and to the
Policy to the Corporation pursuant hereto. Thereafter, the
Employee shall have no right, title or interest in and to the
Policy, all such rights being vested in and exercisable only
by such donee.
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c. The Corporation shall hold and be responsible for safeguarding
the Policy; provided, that if the Corporation assigns its
rights under this Agreement with respect to any Policy as
provided herein, the Corporation shall deliver the Policy to
the donee or assignee, and the donee or assignee shall be
responsible for safeguarding the Policy.
7. Collection of Death Proceeds.
a. Upon the death of the Employee, the Corporation shall
cooperate with the beneficiary or beneficiaries designated by
the Employee to take whatever action is necessary to collect
the death benefit provided under the Policy; when such benefit
has been collected and paid as provided herein, this Agreement
shall thereupon terminate.
b. Upon the death of the Employee the Corporation shall have the
unqualified right to receive a portion of such death benefit
equal to the total amount of the premiums paid by it hereunder
reduced by any outstanding indebtedness which was incurred by
the Corporation and secured by the Policy, including any
interest due on such indebtedness. The balance of the death
benefit provided under the Policy, if any, shall be paid
directly to the beneficiary or beneficiaries designated by the
Employee, in the manner and in the amount or amounts provided
in the beneficiary designation provision of the Policy. In no
event shall the amount payable to the Corporation hereunder
exceed the Policy proceeds payable at the death of the
Employee. No amount shall be paid from such death benefit to
the beneficiary or beneficiaries designated by the Employee
until the full amount due the Corporation hereunder has been
paid. The parties hereto agree that the beneficiary
designation provision of the Policy shall conform to the
provisions hereof.
c. Notwithstanding any provision hereof to the contrary, in the
event that, for any reason whatsoever, no death benefit is
payable under the Policy upon the death of the Employee and in
lieu thereof the Insurer refunds all or any part of the
premiums paid for the Policy, the Corporation and the
Employee's beneficiary of beneficiaries shall have the
unqualified right to share such premiums based on their
respective cumulative contributions thereto.
8. Termination of the Agreement During the Employee's Lifetime.
a. This Agreement shall terminate, during the Employee's
lifetime, without notice, upon the occurrence of any of the
following events: (a) total cessation of the Corporation's
business; (b) bankruptcy, receivership or dissolution of the
Corporation; or ( c) termination of Employee's employment by
the Corporation (other than by reason of his death).
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b. In addition, the Employee may terminate this Agreement, while
no premium under the Policy is overdue, by prior written
notice to the Corporation. Such termination shall be effective
as of the date of such notice.
9. Disposition of the Policy on Termination of the Agreement During the
Employee's Lifetime.
a. For sixty (60) days after the date of termination of this
Agreement during the Employee's lifetime, the Employee shall
have the option of obtaining the release of the Collateral
Assignment of the Policy to the Corporation. T o obtain such
release, the Employee shall repay to the Corporation the total
amount of the premium payments made by the Corporation
hereunder, less any indebtedness secured by the Policy which
was incurred by the Corporation and remains outstanding as of
the date of such termination, including any interest due on
such indebtedness. Upon receipt of such amount, the
Corporation shall release the Collateral Assignment of the
Policy, by the execution and delivery of an appropriate
instrument of release.
b. If the Employee falls to exercise such option within such
sixty (60) day period, then, at the request of the
Corporation, the Employee shall execute any document or
documents required by the Insurer to transfer the interest of
the Employee in the Policy to the Corporation. Alternatively,
the Corporation may enforce its right to be repaid the amount
of the premiums on the Policy paid by it from the cash
surrender value of the Policy under the Collateral Assignment
of the Policy- provided that in the event the cash surrender
value of the Policy exceeds the amount due the Corporation,
such excess shall be paid to the Employee. Thereafter, neither
the Employee nor Employee's respective heirs, assigns or
beneficiaries shall have any further interest in and to the
Policy, either under the terms thereof or under this
Agreement.
10. Insurer Not a Party. The Insurer shall be fully discharged from its
obligations under the Policy by payment of the Policy death benefit to
the beneficiary or beneficiaries named in the Policy, subject to the
terms and conditions of the Policy. In no event shall the Insurer be
considered a party to this Agreement, or any modification or amendment
hereof. No provision of this Agreement, nor of any modification or
amendment hereof, shall in any way be construed as enlarging, changing,
varying, or in any other way affecting the obligations of the Insurer
other than as expressly provided in the Policy, except insofar as the
provisions hereof are made a part of the Policy by the Collateral
Assignment executed by the Employee and filed with the Insurer in
connection herewith.
11. Named Fiduciary. Determination of Benefits. Claims Procedure and
Administration-
a. The Corporation is hereby designated as the named fiduciary
under this Agreement. The named fiduciary shall have authority
to control and manage the
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operation and administration of this Agreement, and it shall
be responsible for establishing and carrying out a funding
policy and method consistent with the objectives of this
Agreement.
b. (1) Claim. A person who believes that he or she is being
dented a benefit to which he or she is entitled under this
Agreement (hereinafter referred to as a "Claimant") may file a
written request for such benefit with the Corporation, setting
forth his or her claim. The request must be addressed to the
President of the Corporation at its then principal place of
business.
(2) Claim Decision.
Upon receipt of a claim, the Corporation shall advise the
Claimant that a reply will be forthcoming within ninety (90)
days and shall, in fact, deliver such reply within such
period. The Corporation may, however, extend the reply period
for an additional ninety (90) days for reasonable cause.
If the claim is dented in whole or in part, the Corporation
shall adopt a written opinion, using language calculated to be
understood by the Claimant, setting forth: (a) the specific
reason or reasons for such denial; (b) the specific reference
to pertinent provisions of this Agreement on which such denial
is based; ( c) a description of any additional material or
information necessary for the Claimant to perfect his or her
claim and an explanation why such material or such information
is necessary; ( d) appropriate information as to the steps to
be taken if the Claimant wishes to submit the claim for
review; and ( e) the time limits for requesting a review under
subsection (3) and for review under subsection (4) hereof
(3) Request for Review. Within sixty (60) days after the
receipt by the Claimant of the written opinion described
above, the Claimant may request in writing that the Secretary
of the Corporation review the determination of the
Corporation. Such request must be addressed to the Secretary
of the Corporation, at its then principal place of business.
The Claimant or his or her duly authorized representative may,
but need not, review the pertinent documents and submit issues
and comments in writing for consideration by the Corporation.
If the claimant does not request a review of the Corporation's
determination by the Secretary of the Corporation within such
sixty (60) day period, he or she shall be barred and estopped
from challenging the Corporation's determination. .
(4) Review of Decision. Within sixty (60) days after the
Secretary's receipt of a request for review, he or she will
review the Corporation's determination. After considering all
materials presented by the claimant, the Secretary will render
a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth the specific reasons
for the decision and containing specific references to the
pertinent
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provisions of this Agreement on which the decision is based.
If special circumstances require that the sixty (60) day time
period be extended, the Secretary will so notify the Claimant
and will render the decision as soon as possible, but no later
than one hundred twenty (120) days after receipt of the
request for review.
12. Amendment. This agreement may not be amended, altered or modified,
except by a written instrument signed by the Corporation and the
Employee hereto, or their respective successors or assigns, and may not
be otherwise terminated except as provided herein.
13. Binding Effect. This Agreement shall be binding upon and insure to the
benefit of the Corporation and its successors and assigns, and the
Employee, the Employee's successors, assigns, heirs, executors,
administrators and beneficiaries.
14. Notices. Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement shall be in writing, and
shall be signed by the party giving or making the same. If such notice,
consent or demand is mailed to a party hereto, it shall be sent by
United States certified mail, postage prepaid, addressed to such
party's last known address as shown on the records of the Corporation.
The date of such mailing, shall be deemed the date of notice, consent
or demand.
15. Governing Law. This Agreement, and the rights if the parties hereunder,
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia.
16. No Employment Contract. This Agreement shall not be construed as a
contract of employment between the Corporation and the Employee, nor
shall it be construed as creating any obligation for continued
employment of the Employee by the Corporation.
17. Effective Date. The parties agree that this Agreement shall be
effective as of November 15, 1998.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, as of the day and year first above written.
HILB, XXXXX AND XXXXXXXX COMPANY
_______________________________
EMPLOYEE
_______________________________
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EXHIBIT A
The following life insurance policy is subject to the attached Split-Dollar
Agreement:
Insurer _____________________________________
Insured _____________________________________
Policy Number _____________________________________
Face Amount _____________________________________
Death Benefit _____________________________________
Date of lssue _____________________________________
EXHIBIT B
COLLATERAL ASSIGNMENT
For Value Received the undersigned hereby assigns, transfers and sets
over to HILB, XXXXX AND XXXXXXXX COMPANY, a Virginia corporation, its successors
and assigns (herein called the "Assignee"), Policy No. __________ issued by
Nationwide Life Insurance Company (the "Insurer") and any supplementary
contracts issued in connection therewith (said policy and contracts being herein
called the "Policy"), upon the life of ______ ______________ and all claims,
options, privileges, rights, title and interest therein and thereunder (except
as provided in Paragraph C hereof), subject to all the terms and conditions of
the Policy and to all superior liens, if any, which the Insurer may have against
the Policy. The undersigned by this instrument jointly and severally agree and
the Assignee by the acceptance of this assignment agrees to the conditions and
provisions herein set forth.
A. This assignment is made pursuant to that certain Split-Dollar
Agreement between the undersigned and the Assignee dated _______________, 1999
(the "Agreement") .
B. It is expressly agreed that, without detracting from the
generality of the foregoing, the following specific rights are included in this
assignment and pass by virtue hereof:
1. The sole right to collect from the Insurer the net
proceeds of the Policy when it becomes a claim by death or maturity;
2. The sole right to surrender the Policy and receive
the surrender value thereof at any time provided by the terms of the
Policy and at such other times as the Insurer may allow;
3. The sole right to obtain one or more loans or
advances on the Policy, either from the Insurer or, at any time, from
other persons, and to pledge or assign the Policy as security for such
loans or advances;
4. The sole right to collect and receive all
distributions or shares of surplus, dividend deposits or additions to
the Policy now or hereafter made or apportioned thereto, and to
exercise any and all options contained in the Policy with respect
thereto; provided, that unless and until the Employer shall notify the
Insurer in writing to the contrary , the distributions or shares of
surplus, dividend deposits and additions shall continue on the plan in
force at the time of this assignment; and
5. The sole right to exercise all nonforfeiture rights
permitted by the terms of the Policy or allowed by the Insurer and to
receive all benefits and advantages derived therefrom.
C. It is expressly agreed that the following specific rights, so
long as the Policy has not been surrendered, are reserved and excluded from this
assignment and do not pass by virtue hereof:
1. The right to collect from the Insurer any disability
--benefit payable in cash that does not reduce the amount of insurance;
2. The right to designate and change the beneficiary;
3. The right to elect any optional mode of settlement
permitted by the Policy or allowed by the Insurer; but the reservation
of these rights shall in no way impair the right of the Employer to
surrender the Policy completely with all its incidents or impair any
other right of the Employer and any designation or change of
beneficiary or election of a mode of settlement shall be made subject
to this assignment and to the rights of the Employer.
D. This assignment is made and the Policy is to be held as
collateral security for any and all liabilities of the undersigned to the
Assignee, either now existing or that may hereafter arise in the ordinary course
of business between the undersigned and the Assignee, including, but not limited
to the Employer's Interest in the Policy as that term is defined in the
Agreement (all of which liabilities secured or to become secured are herein
called "Liabilities").
E. The Assignee covenants and agrees with the undersigned as
follows:
1. That any balance of sums received hereunder from the
Insurer remaining after payment of the then existing Liabilities,
matured or unmatured, shall be paid by the Assignee to the persons
entitled thereto under the terms of the Policy had this assignment not
been executed;
2. That the Assignee will upon request forward without
unreasonable delay to the Insurer the Policy for endorsement of any
designation or change of beneficiary or any election of an optional
mode of settlement.
F. The Insurer is hereby authorized to recognize the Assignee's
claims to rights hereunder without investigating the reason for any action taken
by the Assignee, or the validity or the amount of the Liabilities or the
existence of any default therein, or the giving of any notice or otherwise, or
the application to be made by the Assignee of any amounts to be paid to the
Assignee. The sole signature of the Assignee shall be sufficient for the
exercise of any rights under the Policy assigned hereby and the sole receipt of
the Assignee for any sums received shall be a full discharge and release
therefor to the Insurer. Checks for all or any part of the sums payable under
the Policy and assigned herein shall be drawn to the exclusive order of the
Assignee and in such amounts as may be requested by the Assignee.
G. The exercise of any right, option, privilege or power given
herein to the Assignee shall be at the option of the Assignee, but the Assignee
may exercise any such right, option, privilege or power without notice to or
assent by the undersigned, or without affecting the liability of or releasing
any interest hereby assigned by the undersigned.
H. The Assignee may take or release other security , may release
any party primarily or secondarily liable for any of the Liabilities, may grant
extensions, renewals or indulgences with respect to the Liabilities, or may
apply to the Liabilities in such order as the Assignee shall determine the
proceeds of the Policy hereby assigned or any amount received on account of the
Policy by the exercise of any right permitted under this assignment without
resorting to such other security.
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I. In the event of any conflict between the provisions of this
assignment and the provisions of any note or other evidence of any Liability
with respect to the Policy or any rights of collateral security therein, the
provisions of this assignment shall prevail.
J. The undersigned declares that no proceedings in bankruptcy are
pending against him and this his property is not subject to any assignment for
the benefit of creditors.
Signed and sealed this ______ day of April, 1999.
SIGN
HERE
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