Exhibiit 10.16
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SPLIT-DOLLAR AGREEMENT
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THIS AGREEMENT, made and entered into this 1st day of December, 2002,
effective as of September 13, 2002, by and between MasTec, Inc., a Florida
corporation, with principal offices and place of business in the State of
Florida (hereinafter referred to as the "Corporation"), and Xxxxx Mas, an
individual residing in the State of Florida (hereinafter referred
to as the "Employee"),
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Employee wishes to provide life insurance protection for
his family in the event of his death, 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 Xxxx Xxxxxxx Variable Life Insurance Company
(hereinafter referred to as the "Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on the
Policy as an additional employment benefit for the Employee, on the terms
and conditions hereinafter set forth; and
WHEREAS, the Corporation 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 retain such ownership rights, in
order to secure the repayment of the amounts which it will pay toward the
premiums on the Policy;
WHEREAS, pursuant to the interim guidance provided in Notice 2001-10, as
modified by Notice 2002-8 (the "Notices"), the parties to this arrangement
intend to have its income and gift tax consequences determined under
traditional split-dollar economic benefit concepts;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as follows:
1. Statement of Intention. The parties hereto intend that the income
and gift tax consequences of this split-dollar arrangement be governed by
traditional split-dollar economic benefit concepts, in accordance with the
interim guidance provided in the Notices, for arrangements entered into prior
to the adoption of final regulations. The parties hereto agree to
consistently treat this arrangement in accordance with such concepts on all
tax returns and other documents filed by them in connection herewith.
2. Purchase of Policy. The Corporation has purchased the Policy from
the Insurer in the Face Amount of Insurance (as such term is defined in the
Policy) of $80,000,000 and Death Benefit Option A (as such term is defined
in the Policy). One-half of the Policy is subject to this Agreement, the
balance of the Policy is key person insurance, owned by and payable to the
Corporation; all references herein to the Policy shall be to the portion
thereof which is subject hereto. 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 endorsement to the Policy filed with the Insurer.
3. Ownership of Policy.
a. The Corporation 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, except as may otherwise be provided herein;
provided, however, that in no event shall the Corporation have any right to
borrow against or make withdrawals from the Policy.
b. Specifically, the Corporation shall have the sole authority to
direct the manner in which the Policy Account (as such term is defined in the
Policy) established pursuant to the terms of the Policy shall be allocated
among the various investment options from time to time available under the
Policy and to change such allocation from time to time, as provided for in
the Policy.
4. Payment of Premiums. On or before the Anniversary Date of the
Policy (as defined therein), or within the grace period provided therein,
the Corporation shall pay the full amount of each Planned Periodic Premium
(as such term is defined in the Policy) to the Insurer, during the term
hereof, and shall, upon request, promptly furnish the Employee evidence of
timely payment of such premium. Subject to the acceptance of such amount
by the Insurer, the Corporation may also, in its discretion, make additional
premium payments on the Policy. 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 to the Employee's beneficiary hereunder.
5. Designation of Policy Beneficiary/Endorsement.
a. Contemporaneously with the execution of this Agreement, the
Corporation has executed a beneficiary designation for the Policy, under the
form used by the Insurer for such designations, naming the Corporation as
the Policy beneficiary, in order to secure the Corporation's recovery of the
amount due the Corporation hereunder.
b. The Employee may select both the settlement option for payment
of that portion of the death benefit provided under the Policy to which the
Employee is entitled hereunder and the beneficiary or beneficiaries to
receive such portion of the policy proceeds, by specifying the same in a
written notice to the Corporation. Upon receipt of such notice, the
Corporation shall execute and deliver to the Insurer a change of beneficiary
and/or Policy endorsement form necessary to elect the requested settlement
option and to designate the requested person, persons or entity as the
beneficiary or beneficiaries to receive the death proceeds of the Policy in
excess of the amount to which the Corporation is entitled hereunder. The
parties hereto agree to take the action necessary to cause the beneficiary
designation and settlement election provisions of that portion of the Policy
to which the Employee is entitled hereunder to conform to the provisions
hereof; the Corporation shall not terminate, alter or amend such election or
designation for such portion of the Policy, without the express written
consent of the Employee.
6. Limitations on Corporation's Rights in Policy. Except as otherwise
provided herein, the Corporation shall not sell, assign, transfer, surrender
or cancel the Policy, change the beneficiary designation provision of that
portion of the Policy to which the Employee is entitled hereunder, nor change
the Death Benefit Option thereof without, in any such case, the express
written consent of the Employee.
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, plus 4%, compounded
annually. The next $40,00,000 of the death benefit provided under the
Policy shall be paid directly to the beneficiary or beneficiaries designated
by the Corporation at the direction of the Employee, in the manner and in
the amount or amounts provided in the beneficiary designation provision of
the Policy. The Corporation shall have the unqualified right to receive the
balance, if any, of the death benefit provided under 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 Corporation at the direction of the Employee, until the full amount
due the Corporation for the return of its premiums plus interest 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 shall have the unqualified right to retain such premiums.
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) at any time that the
collective voting securities of the Corporation owned directly or indirectly
by Xxxxx X. Mas, Xxxxx Mas, Xxxx Xxxxxx, Xxxx Xxxxx Mas, and their
respective ancestors and descendants are less than 38% of the outstanding
voting securities of the Corporation (a "Change in Control").
b. In addition, the Employee may terminate this Agreement, while
no premium under the Policy is overdue, by 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 the termination of this
Agreement during the Employee's lifetime, the Employee shall have the
assignable option to purchase the Policy from the Corporation. The purchase
price for the Policy shall be the greater of the total amount of the
premium payments made by the Corporation hereunder or the then cash surrender
value of the Policy. Upon receipt of such amount, the Corporation shall
transfer all of its right, title and interest in and to the Policy to the
Employee or his assignee, by the execution and delivery of an appropriate
instrument of transfer, and this Agreement shall thereupon terminate.
b. If the Employee or his assignee fails to exercise such option
within such sixty (60) day period, then the Corporation may enforce its right
to be repaid for the premiums which it paid hereunder by surrendering or
canceling the Policy for its cash surrender value, or it may change the
beneficiary designation provisions of the Policy, naming itself or any other
person or entity as revocable beneficiary thereof, or exercise any other
ownership rights in and to the Policy, without regard to the provisions
hereof. Thereafter, neither the Employee, his assignee nor their 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 as expressly provided in the
Policy, except insofar as the provisions hereof are made a part of the
Policy by the beneficiary designation executed by the Corporation and
filed with the Insurer in connection herewith.
11. Assignment by Employee. Notwithstanding any provision hereof to
the contrary, the Employee shall have the right to absolutely and
irrevocably assign by gift all of his right, title and interest in and to
this Agreement and to the Policy to an assignee. This right shall be
exercisable by the execution and delivery to the Corporation of a written
assignment, in substantially the form attached hereto as Exhibit B, which
by this reference is made a part hereof. Upon receipt of such written
assignment executed by the Employee and duly accepted by the assignee
thereof, the Corporation shall consent thereto in writing, and shall
thereafter treat the Employee's assignee as the sole owner of all of the
Employee's right, title and interest in and to this Agreement and in and
to the Policy. Thereafter, the Employee shall have no right, title or
interest in and to this Agreement or the Policy, all such rights being
vested in and exercisable only by such assignee.
12. 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 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. Claim. A Participant, beneficiary or other person who believes
that he or she is being denied a benefit to which he or she is entitled
(hereinafter referred to as "Claimant"), or his or her duly authorized
representative, may file a written request for such benefit with the
President of the Corporation (the "First Level Reviewer"), setting forth his
or her claim. Such claim must be addressed to the President of the
Corporation, at its then principal place of business.
c. Claim Decision. Upon receipt of a claim, the First Level
Reviewer shall advise the Claimant that a reply will be forthcoming within
a reasonable period of time, but ordinarily not later than ninety days, and
shall, in fact, deliver such reply within such period. However, the First
Level Reviewer may extend the reply period for an additional ninety days for
reasonable cause. If the reply period will be extended, the First Level
Reviewer shall advise the Claimant in writing during the initial 90-day
period indicating the special circumstances requiring an extension and the
date by which the First Level Reviewer expects to render the benefit
determination.
If the claim is denied in whole or in part, the First Level Reviewer
will render a written opinion, using language calculated to be understood
by the Claimant, setting forth:
(1) the specific reason or reasons for the denial;
(2) the specific references to pertinent Plan provisions on which
the denial is based;
(3) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation as to why
such material or such information is necessary;
(4) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, including a statement of the
Claimant's right to bring a civil action under Section 502(a) of ERISA
following an adverse benefit determination on review; and
(5) the time limits for requesting a review of the denial under
Subsection C hereof and for the actual review of the denial under Subsection
D hereof.
d. Request for Review. Within sixty 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 (the "Second Level
Reviewer") review the First Level Reviewer's prior determination. 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 submit written comments, documents, records or other
information relating to the denied claim, which such information shall be
considered in the review under this subsection without regard to whether
such information was submitted or considered in the initial benefit
determination.
The Claimant or his or her duly authorized representative shall be
provided, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information which (i) was relied upon
by the First Level Reviewer in making its initial claims decision, (ii) was
submitted, considered or generated in the course of the First Level Reviewer
making its initial claims decision, without regard to whether such instrument
was actually relied upon by the First Level Reviewer in making its decision
or (iii) demonstrates compliance by the First Level Reviewer with its
administrative processes and safeguards designed to ensure and to verify that
benefit claims determinations are made in accordance with governing Plan
documents and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants. If the Claimant
does not request a review of the First Level Reviewer's determination within
such sixty-day period, he or she shall be barred and estopped from
challenging such determination.
e. Review of Decision. Within a reasonable period of time,
ordinarily not later than sixty days, after the Second Level Reviewer's
receipt of a request for review, it will review the First Level Reviewer's
prior determination. If special circumstances require that the sixty-day
time period be extended, the Second Level Reviewer will so notify the
Claimant within the initial 60-day period indicating the special
circumstances requiring an extension and the date by which the Second Level
Reviewer expects to render its decision on review, which shall be as soon
as possible but not later than 120 days after receipt of the request for
review. In the event that the Second Level Reviewer extends the
determination period on review due to a Claimant's failure to submit
information necessary to decide a claim, the period for making the benefit
determination on review shall not take into account the period beginning on
the date on which notification of extension is sent to the Claimant and
ending on the date on which the Claimant responds to the request for
additional information.
The Second Level Reviewer has discretionary authority to determine
a Claimant's eligibility for benefits and to interpret the terms of the
Plan. Benefits under the Plan will be paid only if the Second Level
Reviewer decides in its discretion that the Claimant is entitled to such
benefits. The decision of the Second Level Reviewer shall be final and
non-reviewable, unless found to be arbitrary and capricious by a court of
competent review. Such decision will be binding upon the Employer and the
Claimant.
If the Second Level Reviewer makes an adverse benefit
determination on review, the Second Level Reviewer will render a written
opinion, using language calculated to be understood by the Claimant, setting
forth:
(1) the specific reason or reasons for the denial;
(2) the specific references to pertinent Plan provisions on which
the denial is based;
(3) a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all
documents, records and other information which (i) was relied upon by the
Second Level Reviewer in making its decision, (ii) was submitted, considered
or generated in the course of the Second Level Reviewer making its decision,
without regard to whether such instrument was actually relied upon by the
Second Level Reviewer in making its decision or (iii) demonstrates
compliance by the Second Level Reviewer with its administrative processes
and safeguards designed to ensure and to verify that benefit claims
determinations are made in accordance with governing Plan documents, and
that, where appropriate, the Plan provisions have been applied consistently
with respect to similarly situated claimants; and
(4) a statement of the Claimant's right to bring a civil action
under Section 502(a) of ERISA following the adverse benefit determination on
such review.
13. Amendment. This Agreement may not be amended, altered or modified,
except by a written instrument signed by the parties hereto, or their
respective successors or assigns, and may not be otherwise terminated except
as provided herein.
14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Corporation and its successors and assigns, and the
Employee, his successors, assigns, heirs, executors, administrators and
beneficiaries.
15. 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.
16. Governing Law. This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws
of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, as of the day and year first above written.
MASTEC, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx, President
ATTEST:
/s/ Xxxxxxx Xxxxxxx
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Secretary
"Corporation"
/s/ Xxxxx Mas
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XXXXX MAS
"Employee"
EXHIBIT A
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The following life insurance policy is subject to the attached Split-Dollar
Agreement:
Insurer: Xxxx Xxxxxxx Variable Life Insurance Company
Insured: Xxxxx Mas
Policy Number: 59 416 001
Face Amount: $40,000,000 of the $80,000,000 face amount of the Policy
Death Benefit Option: A
Date of Issue: August 27, 2002
EXHIBIT B
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THIS ASSIGNMENT, dated this 1st day of December, 2002.
WITNESSETH THAT:
WHEREAS, the undersigned (the "Assignor") is the Employee under
that certain Split-Dollar Agreement between MasTec, Inc., a Florida
corporation (the "Company") and Xxxxx Mas dated 1st day of December, 2002,
effective as of September 13, 2002 (the "Split-Dollar Agreement"), which
Split-Dollar Agreement confers upon the undersigned certain rights and
benefits with regard to one or more policies of insurance insuring the
Assignor's life; and
WHEREAS, pursuant to the provisions of said Split-Dollar
Agreement, the Assignor retained the right, exercisable by the execution
and delivery to the Company of a written form of assignment, to absolutely
and irrevocably assign all of the Assignor's right, title and interest in
and to said Split-Dollar Agreement to an assignee; and
WHEREAS, the Assignor desires to exercise said right;
NOW, THEREFORE, the Assignor, without consideration, and
intending to make a gift, hereby absolutely and irrevocably assigns, gives,
grants and transfers to XXXXX MAS IRREVOCABLE TRUST (the "Assignee"), all of
the Assignor's right, title and interest in and to the Split-Dollar
Agreement and said policies of insurance, intending that, from and after
this date, the Split-Dollar Agreement be solely between the Company and
the Assignee and that hereafter the Assignor shall neither have nor retain
any right, title or interest therein.
/s/ Xxxxx Mas
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Xxxxx Mas, Assignor
Page 2, EXHIBIT B
ACCEPTANCE OF ASSIGNMENT
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The undersigned Assignee hereby accepts the above assignment of all
right, title and interest of the Assignor therein in and to the Split-Dollar
Agreement, and the undersigned hereby agrees to be bound by all of the terms
and conditions of said Split-Dollar Agreement, as if the original Employee
thereunder.
XXXXX MAS IRREVOCABLE
TRUST DATED
December 1st, 2002
/s/ JRM
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Trustee Assignee
Dated: December 1, 2002
CONSENT TO ASSIGNMENT
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The undersigned Company hereby consents to the foregoing assignment of
all of the right, title and interest of the Assignor in and to the Split-
Dollar Agreement, to the Assignee designated therein. The undersigned
Company hereby agrees that, from and after the date hereof, the undersigned
Company shall look solely to such Assignee for the performance of all
obligations under said Split-Dollar Agreement which were heretofore the
responsibility of the Assignor, shall allow all rights and benefits provided
therein to the Assignor to be exercised only by said Assignee, and shall
hereafter treat said Assignee in all respects as if the original
Employee thereunder.
MASTEC, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx, President
Dated: December 1, 2002
