1. POLICY OWNERSHIP 1.1 James H. Smith III, as successor Trustee under an Irrevocable Trust Agreement with David Pomeroy II, is the owner of a policy of insurance on the life of David Pomeroy II, ("Insured") issued by New York Life Insurance Company...
COLLATERAL ASSIGNMENT SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into effective this 6th day of
January, 1998, by, between and among XXXXXXX COMPUTER RESOURCES,
INC., a Delaware corporation (the "Company"); XXXXX X. XXXXX III
as successor Trustee under an Irrevocable Trust Agreement with
Xxxxx Xxxxxxx XX, as Grantor dated September 24, 1987, ("Owner");
and XXXXX XXXXXXX XX who is a valuable employee of said Company,
("Employee").
WHEREAS, Company is desirous of paying the premiums due on a New
York Life Insurance Company policy on Employee's life as an
employment benefit for the Employee, on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties intend that Owner would collaterally assign
its interest in such policy to Company; and
WHEREAS, the parties intend that by such collateral assignment,
the Company shall retain only the right to such repayment, with
the Owner retaining all other ownership rights in the policy as
specified herein.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1.
POLICY OWNERSHIP
1.1 Xxxxx X. Xxxxx III, as successor Trustee under an
Irrevocable Trust Agreement with Xxxxx Xxxxxxx XX, is the
owner of a policy of insurance on the life of Xxxxx Xxxxxxx
XX, ("Insured") issued by New York Life Insurance Company
("Insurance Company"). The policy number, face amount and
beneficiary of said policy is recorded on Schedule "A"
attached hereto ("Policy"). Said Policy will be
collaterally assigned to the Company as security for the
payments of amounts the Company will contribute for the
premium payments. The Owner shall own the Policy and may
exercise all rights of ownership with respect to it,
subject only to the collateral assignment of the Policy to
Company.
2. PAYMENT OF PREMIUMS
2.1 On or before the due date of each premium on the Policy,
the Company will pay to the Owner or may pay directly to
Insurance Company, an amount equal to the projected premium
charge for the Policy less an amount equal to the value of
the annual economic benefit (as computed for federal income
tax purposes) attributable to the life insurance protection
provided to Employee under this Agreement, which amount
shall be the obligation of and responsibility of the Owner.
2.2 Upon receipt of the amount which the Company is required to
contribute under paragraph 2.1 of this Article, and if the
Company has not exercised its option to make the payment
directly to Insurance Company, the Owner will pay the full
amount of the premium to Insurance Company. The Owner will
pay the premium on the date it is due or within the grace
period allowed by the Policy for the payment of the
premium.
3. ASSIGNMENT OF POLICY
3.1 The Owner shall collaterally assign the Policy to the
Company so as to reflect the respective interests of the
parties under this Agreement. Said assignment has been
executed by the parties on ____________________, 1998, and
made a part of said Policy and this Agreement.
4.
DIVIDENDS
4.1 Any dividend declared on the Policy shall be applied to
purchase paid-up additional insurance on the life of the
Employee. The parties hereto agree that the dividend
election provision of the Policy shall conform to the
provisions hereof.
5.
SURRENDER OF POLICY
5.1 The Owner shall have the sole and exclusive right to
surrender the Policy.
5.2 If the Policy is surrendered, the Owner shall receive the
surrender value of the Policy on behalf of the Company and
shall pay that amount to the Company. The Owner may direct
Insurance Company in writing to draw a check payable to the
Company for that amount.
6. DEATH CLAIM
6.1 Upon the death of the of the Employee, the Company shall
have an interest in the proceeds of the Policy equal to the
premium advance ("Premium Advance"). The Premium Advance
shall be an amount equal to the cumulative total of the
Company's share of the premiums paid on the policy less any
amounts previously repaid by Owner to Company incident
thereto. The balance of proceeds remaining shall be paid
directly by Insurance Company to the beneficiary or
beneficiaries designated by the Policy.
7.
TERMINATION OF AGREEMENT
7.1 This Agreement shall terminate upon surrender of the Policy
by the Owner or upon thirty (30) days written notice of
termination given by either party to the other, by
registered mail at the party's last known address.
7.2 On termination, the Owner shall have thirty (30) days from
the effective date of termination in which to remit to
Company without interest the then existing Premium Advance.
Upon receipt of this amount, the Company shall release the
collateral assignment on the Policy.
- 2 -
7.3 If the Owner does not remit the described amount within the
thirty (30) day period, the Owner shall obtain the Policy's
surrender value. In that case, Owner shall receive the
surrender value of the Policy on behalf of the Company with
respect to the then existing Premium Advance and pay that
amount to the Company. The Insurance Company may be
directed by the Owner in writing to draw a check payable in
that amount to the Company.
8.
INSURANCE COMPANY
8.1 Any payments made or action taken by Insurance Company in
accordance with the provisions of the Policy and the
collateral assignment of the Policy shall fully discharge
it from all claims, suits and demands of all persons.
9.
AMENDMENT AND BINDING EFFECT
9.1 This embodies all agreements by the parties made with
respect to the Policy. This Agreement may not be modified
or amended except by a writing signed by the parties. The
Agreement shall be binding upon the parties, their heirs,
legal representatives, successors and assigns.
10.
GOVERNING LAW
10.1 This Agreement shall be subject to and shall be construed
under the laws of the Commonwealth of Kentucky.
11. MISCELLANEOUS
11.1 The following provisions are intended to meeting the
requirements of the Employee Retirement Income Security Act
of 1974.
(a) The named fiduciary shall be the Company.
(b) The funding policy under this Agreement is that all
premiums on the Policy be remitted to the Insurance
Company 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 the Plan.
(d) For claims procedure purposes, the "claims manager"
shall be the chief financial officer of the Company.
(i) If for any reason a claim for benefits under this
Agreement is denied by the Company, the claims
manager shall deliver to the claimant a written
explanation setting forth the specific reasons
for the denial, pertinent references to the
Agreement section on which the denial is based,
- 3 -
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 orally and in writing to the
claims manager.
(B) The claims manager's explanation shall be in
writing delivered to the claimant within
ninety (90) days of the date the claim is
filed.
(ii) The claimant shall have sixty (60) days following
his receipt of the denial of the claim to file
with the claims manager a written request for
review of the denial. For such review, the
claimant or his representative may submit
pertinent documents and written issues and
comments.
(iii) The claims manager shall decide the issue on
review and furnish the claimant with a copy
within sixty (60) days of receipt of the claim'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 references 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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement at Hebron, Kentucky, on the day and year first above
written.
XXXXXXX COMPUTER RESOURCES, INC.
By_______________________________
_________________________________
Xxxxx X. Xxxxx III, Successor
Trustee
_________________________________
- 4 -
Xxxxx Xxxxxxx XX - Employee
- 5 -
SCHEDULE A
Policy No. Face Amount
Beneficiary
46 190 933 $1,000,000.00 Xxxxx X. Xxxxx III, or his
successor, as Successor
Trustee under the Xxxxx X.
Xxxxxxx XX Irrevocable Trust
Agreement dated September 24,
1987.
- 6 -
INSURER: New York Life Insurance Company
POLICY #:
46 190 933
INSURED:
Xxxxx Xxxxxxx XX
OWNER:
Xxxxx X. Xxxxx III, successor Trustee under an
Irrevocable Trust Agreement dated September 24, 1987,
with Xxxxx X. Xxxxxxx XX, as Grantor
COLLATERAL ASSIGNEE:
Xxxxxxx Computer Resources, Inc.
This Collateral Assignment Split Dollar Agreement was recorded by
New York Life Insurance Company on ________________, 1998.
NEW YORK LIFE INSURANCE
COMPANY
By:
_____________________________
(Name and
Title)
- 7 -
