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EXHIBIT 10.27
MEDICAL INTER-INSURANCE EXCHANGE, INC.
EXECUTIVE SPLIT DOLLAR PLAN
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
COLLATERAL ASSIGNMENT METHOD
THIS AGREEMENT is made this 27th day of December, 1991, by and between Medical
Inter-Insurance Exchange, Inc., a New Jersey (the "Corporation") and Xxxx X.
Xxxxxx (the "Executive").
The Corporation highly values the efforts, abilities and accomplishments of
the Executive; and
The Executive is deemed a member of a select group of management and/or one of
the highly compensated employees of the Corporation; and
The Corporation, as an inducement of such continued employment, wishes to assist
the Executive with his personal life insurance program; and
The Executive agrees to participate in such program to the extent hereinafter
provided.
NOW, THEREFORE, the parties named above agree as follows:
(1) Life Insurance Policy:
(a) In furtherance of the purposes of this Agreement, life insurance
(hereinafter referred to as the "Policy") has been applied for on the
life of the Executive from Confederation Life Insurance Company
(hereinafter called "Insurer"). See Schedule A attached hereto for
particulars on the Policy and any other life insurance policies issued
in connection with this Agreement.
(b) This Agreement is effective as to a particular policy upon execution or
upon issuance and acceptance of such Policy, whichever is later.
(2) Ownership Rights and Duties under the Policy:
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(a) The Executive shall retain and may exercise all incidents and rights of
ownership with respect to the Policy except as otherwise hereinafter
provided.
(b) The Corporation shall have the right to:
1. Obtain Policy loans or other withdrawals to the extent of Part One
of the Policy as defined in Paragraph 8 of this Agreement. The
Policy may be assigned as collateral for such loans or withdrawals.
The interest due on such loans shall be a debt of the Corporation
owed to the Insurer;
2. Collect from the Insurer Part One of the Policy upon the death of
the Insured, upon the termination of this Agreement for any reason
whatsoever, or upon the surrender or maturity of the Policy. Amounts
so collected shall be net of any outstanding Policy loans or
withdrawals made to or by the Corporation.
(c) The Corporation shall be responsible for safeguarding the Policy.
(d) The parties to this Agreement shall execute and forward promptly and
without unreasonable delay, changes in beneficiary designations forms
and documents, including the Policy, as required by the lnsurer, to
facilitate the exercise of any rights of the parties hereto. The
parties hereto shall not be required to execute any documents or take
any action that would impair their own interests under the Policy.
(3) Collateral Assignment:
Concurrently with the execution of this Agreement, the Executive shall
execute a Collateral Assignment of the Policy as security for the premium
advances made by the Corporation. Such Collateral Assignment shall not be
inconsistent with the rights of the parties under this Agreement.
(4) Payment of Premiums:
In each Policy year, the Executive shall contribute an amount equal to
$3,520.00. The Corporation will contribute an amount equal to the annual
premium due to the Insurer less the amount paid by the Executive.
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(5) Use of Dividends:
All dividends attributable to the Policy shall be applied to the
purchase of Paid-Up Additions from the Insurer.
(6) Coordination of Premium Payments:
Before each premium payment, the Executive shall pay the Corporation
his/her share of the contribution, if any, as heretofore agreed.
Upon receipt of the amount which the Executive shall timely contribute
toward payment of the premiums due on the Policy, the Corporation shall
forward the full amount of the premium due on the Policy to the Insurer.
The payment of the premium shall be made on the date the premium is due and
within the grace period allowed by the Policy for the payment of the
premium. Premiums shall be paid in accordance with the Policy.
(7) Payment of Proceeds:
On the Insured's death, the Corporation shall receive Part One of the
Policy, and such party or parties as designated by the Executive, in
writing, shall receive Part Two of the Policy.
(8) Definitions:
(a) Part One is an amount equal to the excess of the proceeds or cash value
of the Policy, as the case may be, over Part Two of the Policy.
Part One of the Policy will be determined net of policy loans made
to Corporation.
The Corporation shall properly certify, as required by the Insurer, the
extent of Part One of the Policy and payment of such amount shall
release the Insurer from any liability to the Corporation.
(b) Part Two is an amount equal to the greater of (i) the excess of the
proceeds or cash value of the Policy (before reduction on account of
policy loans) over the
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sum of the total premiums (including premiums for any riders) paid by
the Corporation under the Policy; or (ii) the sum of the Executive's
contributions under Paragraph (4), plus interest at 5% per annum
compounded annually on the anniversary date of the Policy.
(9) Termination of Agreement:
This Agreement shall terminate for any of the following reasons:
(a) Performance of its terms, following death of the Insured;
(b) Termination of the Insured's employment with the Corporation for
reasons other than death and disability;
(c) A party's submission of written notice of such intention to the other
party;
(d) Any action by one party that would defeat or impair the interest of
such other party other than death or termination of employment. Such
action shall include, but is not limited to failure to pay premiums as
agreed upon, cancellation of the Policy by any party hereto.
Termination of Agreement because of death, termination of employment,
or termination by notice shall be effective immediately. All other
terminations shall be effective 30 days from any such action.
(10) Repayment for Reasons Other Than Death:
(a) In all instances of termination other than by death, the Corporation
shall certify, as required by the Insurer, the extent of Part One of
the Policy, and payment of such amount shall release the Insurer from
any liability to the Corporation.
(b) Such repayment to the Corporation of the amounts owed it under this
Agreement shall be made from the total cash values of the Policy. All
parties shall execute the documents necessary to facilitate such use of
the total cash values, regardless of any rights any party may have in
such total cash values.
(c) The amounts owed to the Corporation in the event of termination other
than by death shall be Part One of the Policy as defined in Paragraph 8
of this Agreement.
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(11) Disposition of Policy Upon Termination of Agreement:
The Executive may dispose of the Policy upon termination of this Agreement
by sale or otherwise except that no disposition of such Policy shall take
place unless (i) the Corporation has certified to the Insurer that its
interest in such Policy has been satisfied or released, or (ii) the
Executive so certifies and the Corporation does not, within thirty (30)
days after notice thereof, contest such certification.
(12) Named Fiduciary:
This Agreement and other similar agreements constitute the Medical
Inter-Insurance Exchange, Inc., Executive Split-Dollar Plan ("The Plan").
The Director of Executive Benefits of the Corporation is hereby designated
as the Named Fiduciary of the Plan in accordance with the Executive
Retirement Income Security Act of 1974 and shall serve in such capacity
until resignation or removal by the Board of Directors of the Corporation
and appointment of a successor by the duly adopted resolution of the Board.
The business address and telephone number of the Named Fiduciary are:
Medical Inter-Insurance Exchange, Inc.
Two Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
(000)000-0000
The Named Fiduciary shall have the authority to control and manage the
operation and administration of this Plan. However, the Named Fiduciary may
allocate his/her responsibilities for the operation and administration of
the Plan, including the designation of persons who are not Named
Fiduciaries, to carry out fiduciary responsibilities. The Named Fiduciary
shall effect such allocation of his/her responsibilities by delivering to
the Corporation a written instrument signed by him/her that specifies the
nature and extent of the responsibilities allocated, including, if
appropriate, the persons, not Named Fiduciaries, who are designated to
carry out fiduciary responsibilities under this Plan. The Named Fiduciary
of this Plan shall be responsible for making timely delivery of any
required premiums to the Insurer. All Plan documents shall be retained by
the Named Fiduciary and made available for examination at the above
indicated business address. Upon written request, the Plan document and
other information shall be provided to the parties of this Plan.
(13) Claims Procedure
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Benefits shall be payable in accordance with the Plan provisions. Should
the Executive or beneficiary fail to receive benefits to which such
Executive or beneficiary believes he is entitled, a claim may be filed. Any
claim for a Plan benefit hereunder shall be filed by Executive or
beneficiary (claimant) of this Plan by written communication which is made
by the claimant or the claimant's authorized representative which is
reasonably calculated to bring the claim to the attention of the Named
Fiduciary.
If a claim for a Plan benefit is wholly or partially denied, a written
notice of the decision shall be furnished to the claimant by the Named
Fiduciary or his designee within a reasonable period of time after receipt
of the claim by the Plan, which notice shall include the following
information:
(a) The specific reason(s) for the denial;
(b) Specific reference to the pertinent Plan provisions upon which the
denial is based;
(c) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(d) An explanation of the Plan's claim review procedures.
In order that a claimant may appeal a denial of a claim, a claimant or his
duly authorized representative:
(a) May request a review by written application to the Named Fiduciary or
his designee not later than sixty (60) days after receipt by the
claimant of written notification of denial of a claim;
(b) May review pertinent documents; and
(c) May submit issues and comments in writing.
A decision on review of a denied claim shall be made not later than sixty
(60) days after the Plan's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a
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reasonable period of time, but not later than one hundred twenty (120) days
after receipt of a request for review. The decision on review shall be in
writing and shall include the specific reason(s) for the decision and the
specific reference(s) to the pertinent Plan provisions on which the
decision is based.
Notwithstanding anything contained in this Paragraph to the contrary, any
claim for a death benefit under an insurance policy under this Plan shall
be filed with the Insurer by the claimant or his authorized representative
on the form or forms prescribed for such purpose by the Insurer. The
Insurer shall have sole authority for determining whether a death claim
shall or shall not be paid, either in whole or in part, in accordance with
the terms of such insurance contract which may have been purchased on the
life of the Executive.
(14) Amendment of Agreement:
This Agreement may be altered, amended or modified, including the addition
of any extra Policy provisions, by a written agreement signed by the
Corporation and the Executive. The law of the State of New Jersey shall
govern this Agreement. It shall be the obligation of the Corporation to
notify the Insurer of any amendments or changes to this Agreement.
(15) Interpretation of Agreement:
Where appropriate in this Agreement, words used in the singular shall
include the plural and words used in the masculine shall include the
feminine and vice versa.
(16) Liability of Insurer:
No Insurer shall be a party to this Agreement. With respect to any Policy
of insurance issued pursuant to this Agreement, the issuing Insurer shall
have no liability except as set forth in the Policy. Such Insurer shall not
be bound to inquire into or take notice of any of the covenants herein
contained as to policies of life insurance, or as to the application of the
proceeds of such policies.
The Insurer shall be discharged from all liability in making payments of
the proceeds and in permitting rights and privileges under a Policy to be
exercised pursuant to the provisions of the Policy.
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(17) Binding Agreement:
This Agreement shall bind all parties, their successors and assigns and
any Policy beneficiary.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year above stated.
Medical Underwriters, Inc.
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Name of Employer
00-0000000
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Employer Identification Number
By: /s/Xxx Xxxxxxx
---------------------------------
(Named Fiduciary or Officer)
Witness:
/s/Xxxxxxx Xxxxxxxxx /s/Xxxx X. Xxxxxx
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(Executive - if party to Agreement)
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SCHEDULE A
CONFEDERATION LIFE INSURANCE COMPANY
INSURED POLICY NO. FACE AMOUNT POLICY DATE
Xxxx X. Xxxxxx 5172768 $871,747 12/27/91
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COLLATERAL ASSIGNMENT OF SPLIT DOLLARED POLICY
THIS ASSIGNMENT is made this 27 day of December, 1991, by the undersigned
(herein referred to as "Owner") to Medical Inter-Insurance Exchange, Inc., a New
Jersey Corporation (hereinafter referred to as "Corporation"), its successors
and assigns.
1. The subject of this Assignment is a certain life insurance policy, No.
5172768, issued by Confederation Life Insurance Company (hereinafter
referred to as Insurer). See Schedule A of Agreement mentioned in Paragraph
2 below.
2. The Policy is subject to a Split Dollar Life Insurance Agreement
(hereinafter called the "Agreement"), dated December 27, 1991, between the
Corporation and Xxxx X. Xxxxxx. The Agreement was created to assist Owner
with his or her personal life insurance program as an employee benefit for
a valued key employee. Such Agreement is hereby incorporated into and made
a part of this Assignment.
3. The Owner hereby assigns, transfers and sets over to the Corporation the
following specific limited rights in the Policy and subject to the
following terms and provisions:
(a) This Assignment is made and the Policy is held as collateral security
for the premium advances to the Owner, now existing or hereafter made
by the Corporation, under the terms of the Agreement.
(b) The Corporation's rights in the Policy are to the extent of its
interest in the Policy as stated in Paragraph 8 of the Agreement.
4. Subject to the Agreement, the Corporation shall have a right to obtain from
the Insurer one or more loans or advances against its interest in the cash
surrender values of the Policy.
(a) The Corporation shall be responsible for the payment of interest on any
such loans by the Corporation against such cash surrender values of the
Policy during the term of the Agreement.
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(b) Such loans or withdrawals made by the Corporation against (or from) the
cash surrender values of the Policy shall be treated as repayments of
the Corporation's premium advances by the Owner.
5. The Corporation shall have the right to be repaid to the extent of its
interest:
(a) In the event of the death of the insured on the Policy;
(b) In the event the Policy is lapsed, cancelled or surrendered by the
Owner; or
(c) In the event of the termination of the Split Dollar Agreement.
6. The Corporation is strictly prohibited:
(a) From surrendering the Policy for cancellation; or
(b) From assigning its rights to any person other than to the Owner or to
some other person as the Owner may direct; and
(c) In general, from taking any action which would endanger the interests
of the Owner or endanger the payment of the death proceeds in excess of
its interest in the Policy.
Notwithstanding any provisions of this Assignment to the contrary, the
Corporation shall, when its interest has been satisfied, be obligated
to release this Assignment, or make a reassignment of its interest in
the Policy to the Owner's successors or assigns.
7. Except as specifically provided herein, the Owner shall retain and possess
all other incidents of ownership in the Policy, including, but not limited
to:
(a) The sole and exclusive right to cancel or surrender the Policy for its
cash surrender value, if any;
(b) The right to designate and change the beneficiary of the death proceeds
on the Policy; and
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(c) The right to elect and exercise any optional mode of settlement
permitted by the Policy.
However, all rights retained by the Owner shall be subject to the terms
and conditions of the Agreement.
8. The Insurer shall:
(a) Have no duty or obligation to inquire into or investigate the reason or
validity of the Corporation's request to exercise any of its rights
hereunder, or whether the Owner has notice of it. The Insurer may treat
any such request by the Corporation as an affirmation that the request
conforms to this Assignment and the Agreement and is thereby authorized
to act upon such requests;
(b) Be fully protected in recognizing a request by the Owner to exercise
any right of ownership, whether or not the Corporation has notice of
such request including, but not limited to, the right to surrender the
Policy.
9. Upon request, the Corporation shall forward the Policy to the Insurer for
endorsement of any designation or change of the Policy beneficiary, or any
election of an optional plan for payment of the proceeds. The Corporation
shall forward the Policy for these purposes without unreasonable delay.
10. The exercise of any right given herein to the Corporation, or retained by
the Owner, shall be solely at the option of each party respectively and
shall not require notice or consent of one party to the other.
11. The Corporation shall release and reassign all of its specific rights in
the Policy transferred by this Assignment upon repayment of the premium
advances without unreasonable delay.
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12. The Insurer is not a party to the Agreement or to this Assignment.
IN WITNESS WHEREOF, this Assignment is hereby executed this 27 day of December,
1991.
Witness: OWNER:
/s/ Xxxxxxx Xxxxxxxxx /s/ Xxxx X. Xxxxxx
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THIS DOCUMENT purporting to be an
assignment or declaration is noted subject
to proof and without responsibility for the
sufficiency thereof.
/s/
Vice President
Confederation Life Insurance Company
ATLANTA, GEORGIA
