Contract
Exhibit
99.1
L
THIS
AGREEMENT, made and entered into as of the 11th day of September, 2006, by
and
among Interface, Inc., a Georgia corporation, with principal offices and
place
of business in the State of Georgia (hereinafter referred to as the
“Corporation”), Xxxx Xxxx Xxxxxxxx Xxxxxx,
as
Trustee (hereinafter with her successor(s) in Trust referred to as the
“Trustee(s)”), and not individually, of the Xxx Xxxxxxxx Xxxxxxxx Family Trust
U/A dated May 29, 1998 (hereinafter referred to as the “Trust”), and Xxx X.
Xxxxxxxx (“Employee” or the “Insured”).
WITNESSETH
THAT:
WHEREAS,
the Corporation currently provides life insurance protection for the Employee
under a Split Dollar Agreement dated May 25, 1998 (the “Existing Split Dollar
Agreement”);
WHEREAS,
the joint and survivor life insurance policy under the current Split Dollar
Agreement is owned by the Trust and has been collaterally assigned to the
Company to secure the repayment of the Company’s premium payments;
WHEREAS,
the Trustee and the Corporation have agreed to cancel the current Split Dollar
Agreement and enter into this new arrangement; and the Employee has consented
to
this new arrangement;
WHEREAS,
under this new Split Dollar Agreement, the Company will provide life insurance
protection for the Employee under a policy (the “Policy”) which is described in
Exhibit A attached hereto and by this reference made a part hereof, and which
was or is being issued by the insurer listed on Exhibit A attached hereto
(the
“Insurer”);
WHEREAS,
the Corporation is willing to pay the premiums on the Policy as an additional
employment benefit for the Employee, until that certain date occurring on
the
later of the death of the Employee or his spouse, on the terms and conditions
hereinafter set forth;
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WHEREAS,
the Corporation will, contemporaneously with the execution of this Agreement,
endorse certain rights in and to the Policy to the Trust;
WHEREAS,
the Corporation is the owner of the Policy and, as such, possesses all incidents
of ownership in and to the Policy;
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;
NOW,
THEREFORE, in consideration of the premises and of the mutual promises contained
herein, the parties hereto agree as follows:
1. Purchase
of Policy.
The
Corporation has purchased or will purchase the Policy from the Insurer in
the
face amount indicated
in Exhibit A attached hereto.
The
parties hereto have taken or will take all necessary action to cause the
Insurer
to issue the Policy, and shall take any further action that 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.
2. Ownership
of Policy.
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.
3. Beneficiary.
The
Trustee(s) may select the beneficiaries to receive the proceeds from the
Policy
to which the Trust is entitled hereunder, 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 the form necessary to designate the requested
persons as the 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 all action necessary to cause the beneficiary designation
provisions of the Policy to conform to the provisions hereof. The Corporation
shall not terminate, alter or amend such designation without the express
written
consent of the Trustee(s).
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4. Payment
of Premiums.
On or
before the due date of the Policy premium, or within the grace period therein,
the Corporation shall pay the full amount of each premium to the Insurer,
and
shall, upon request, promptly furnish the Trustee(s) evidence of timely payment
of such premium. The Corporation shall furnish the Employee an annual statement
of the amount of income reportable by the Employee for federal and state
income
tax purposes which shall be an amount equal to the cost of current life
insurance protection provided to the Employee and his spouse, measured by
the
amount of current life insurance protection provided to the Employee and
his
spouse multiplied by the lowest permissible life insurance premium factor
designated or permitted in guidance published in the Internal Revenue Bulletin,
all as permitted under Treasury Regulation Section 1.61-22(d)(3)(ii) (or
any
corresponding successor provision).
5. Endorsement.
Contemporaneously with the execution of this Agreement, the Corporation shall
execute an endorsement for the benefit of the Trust, endorsing the right
to name
a beneficiary of a part of the death benefit under the Policy as provided
under
this Agreement. Such endorsement shall not be terminated, altered or amended
by
the Corporation, without the express written consent of the Trustee(s). The
parties hereto agree to take all action necessary to cause such endorsement
to
conform to the provisions of this Agreement.
6. Limitation
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 provisions
thereof, nor terminate the dividend elections thereof without, in any such
case,
the express written consent of the Trustee(s).
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7. Policy
Loans.
The
Corporation may pledge or assign the Policy, subject to the terms and conditions
of this Agreement, for the sole purpose of securing a loan from the Insurer
or
from a third party. The amount of such loan, including accumulated interest
thereon, shall not exceed the lesser of (i) the amount of the premiums on
the
Policy paid by the Corporation hereunder, or (ii) the cash value of the Policy
(as defined therein) as of the date to which premiums have been paid. Interest
charges on such loan shall be paid by the Corporation. If the Corporation
so
encumbers the Policy, other than by a policy loan from the Insurer, then,
upon
the death of the Employee and his spouse, or upon the election of the Trustee(s)
hereunder to purchase the Policy from the Corporation, the Corporation shall
promptly take all action necessary to secure the release or discharge of
such
encumbrance.
8. Collection
of Death Proceeds.
a. Upon
the
death of the Employee and his spouse, the Corporation shall promptly take
all
action necessary to obtain 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 and his spouse, the Corporation shall have the unqualified
right to receive a portion of the Policy’s death benefit equal to the
greater
of the total amount of the premiums paid by the Corporation hereunder or
the
then cash value of the Policy,
reduced
by any indebtedness against the Policy existing at the death of the Employee
and
his spouse (including any interest due on such indebtedness). The balance
of the
death benefit provided under the Policy, if any, shall be paid in the manner
and
in the amount or amounts provided in the beneficiary designation applicable
to
the Policy. In no event shall the amount payable to the Corporation under
the
Policy exceed the total proceeds payable at the death of the Employee and
his
spouse under the Policy. No amount shall be paid from a death benefit under
the
Policy to the beneficiary or beneficiaries until the full amount due the
Corporation under the Policy has been paid to the Corporation. The parties
hereto agree that the beneficiary designation applicable to the Policy shall
conform to the provisions hereof.
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9. Termination
of the Agreement During the Employee’s Lifetime.
a. This
Agreement shall terminate without notice upon the occurrence of any of the
following events: (1) the total cessation of the business of the Corporation;
or
(2) the bankruptcy, receivership or dissolution of the Corporation.
b. In
addition, the Trustee(s) 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.
10.
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Disposition
of the Policy on Termination of the Agreement During the
Employee’s
Lifetime.
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a. For
sixty
(60) days after the date of the termination of this Agreement, the Trust
shall
have the assignable option to purchase the Policy from the Corporation. The
purchase price of the Policy shall be the greater
of the total amount of the premiums paid by the Corporation hereunder or
the
then cash value of the Policy,
less any
indebtedness secured by the Policy, which remains outstanding as of the date
of
such termination, including interest on such indebtedness. Upon receipt of
such
amount, the Corporation shall transfer all of its right, title and interest
in
and to the Policy to the Trust or the Trust’s assignee, by the execution and
delivery of an appropriate instrument of transfer.
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b. If
the
Trust or the Trust’s assignee fails to exercise such option within such sixty
(60) day period, then the Corporation may enforce its right to be paid the
greater
of the total amount of the premiums paid by the Corporation hereunder or
the
then cash value of the Policy
by
surrendering or canceling the Policy for its cash 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 Trust nor the Trust’s assignee or beneficiaries shall
have any further interest in and to the Policy, either under the terms thereof
or under this Agreement.
11. Insurer
Not a Party.
The
Insurer shall be fully discharged from its obligations under the Policy by
payment of the Policy’s 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, and none of the provisions herein 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.
12. Named
Fiduciary, Claims Procedure and Administration.
a. Named
Fiduciary.
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.
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b. Claim
Procedure.
A
person who believes that he or she is being denied 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.
c. 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 denied
in
whole or in part, the Corporation shall adopt a written opinion, using language
calculated to be understood by the Claimant, setting forth: (1) the specific
reason or reasons for such denial; (2) the specific reference to pertinent
provisions of this Agreement on which such denial is based; (3) 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; (4) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review; and (5) the time limits for
requesting a review under subsection d. and for review under subsection e.
hereof.
d. 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 Secretary. 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.
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e. 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 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.
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 upon the Trust, the Trust’s successors, assigns,
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 Georgia without giving
effect to its conflicts of laws provisions.
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17. Termination
of Existing Split Dollar Agreement.
The
Existing Split Dollar Agreement is hereby terminated by the
parties.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement, in duplicate,
as of the day and year first above written.
INTERFACE,
INC.
By: /s/
Xxxxxxx X.
Xxxxxxx
Print
Name:
Xxxxxxx X.
Xxxxxxx
Print
Title:
Senior Vice
President
/s/
Xxx X.
Xxxxxxxx
Xxx
X. Xxxxxxxx
/s/
Xxxx Xxxx Xxxxxxxx Xxxxxx, as
Trustee
Xxxx
Xxxx Xxxxxxxx Xxxxxx, As Trustee,
and
not individually, of the Xxx X. Xxxxxxxx Family
Trust
U/A dated May 29, 1998
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