FORM OF RESTATED SPLIT-DOLLAR INSURANCE AGREEMENT
Exhibit
10.2
FORM
OF RESTATED SPLIT-DOLLAR INSURANCE AGREEMENT
THIS
RESTATED AGREEMENT is entered into as of this 31st day of December, 2008, by and
between Hurco Companies, Inc., an Indiana corporation (the "Employer"), and
________________, (the "Employee").
Recitals
A.
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The
Employee is a valued employee of the Employer, and the Employer wishes to
retain him in its employ.
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B.
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The
Employer, as an inducement to such continued employment, has determined to
assist the Employee with his personal life insurance
program.
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C.
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Prior
to the execution of this restated agreement, the Employer has been
operating a split-dollar insurance program pursuant to which it became the
owner of certain life insurance policies (the "Policies") issued by The
Northwestern Mutual Life Insurance Company on the life of the Employee,
naming the Employer as an insured party and providing the Employee with
the right to designate the beneficiary for a portion of the life insurance
proceeds and certain other
rights.
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D.
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The
Employer and the Employee now wish to amend and restate the terms of the
program by entering into this Restated Split-Dollar Insurance Agreement
(the "Restated Agreement").
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Agreement
Now,
therefore, in consideration of the foregoing and the following mutual
undertakings, the Employer and the Employee agree as follows:
1.
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The
Employer will continue to be the sole owner of the
Policies.
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2.
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In
the event of the Employee's death, the beneficiaries of the Policies shall
have the following interests in the proceeds of the
Policies:
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(a)
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The
Employer shall be the direct beneficiary of the Policies to the extent of
(i) the total premium advances paid to the Insurer, plus (ii) the
Employer's other cash payments to or on behalf of the Employee related to
the Policies, less (iii) the outstanding indebtedness on the Policies
("Primary Interest").
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(b)
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If
the proceeds of the Policies exceed the amount of the Primary Interest,
the Employee's designated beneficiaries shall be the direct beneficiaries
of the remaining proceeds to the extent of 200% of the Employee's annual
compensation rate at his date of death, plus 100% of the Employee's most
recently received bonus as of his date of death ("Secondary
Interest").
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(c)
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If
the proceeds of the Policies exceed the sum of the Primary Interest and
the Secondary Interest, the Employer shall be the direct beneficiary of
any remaining proceeds.
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3.
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The
Employee shall have the right to designate and change direct and
contingent beneficiaries of the Secondary Interest and to elect and change
a payment plan for such beneficiaries with respect to the Secondary
Interest.
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4.
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The
Employer shall pay all premiums on the Policies as they become
due.
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5.
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Policy
dividends shall be applied to purchase paid-up additional insurance
protection.
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6.
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The
Employer shall not sell, surrender, change the insured, or transfer
ownership of the Policies while this Restated Agreement is in
effect.
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7.
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In
the event of the Employee's termination for any reason other than death,
the Restated Agreement shall terminate, and the Employee shall have the
option, for a period of 60 days, to purchase the Policies by paying the
Employer in cash an amount equal to the Primary Interest. The
60-day purchase period will begin six months following the Employee's
termination date. If the Employee does not purchase a Policy
pursuant to this Section, the Employer may sell, surrender, change the
insured, or transfer ownership of the Policy, and the Employee shall
forfeit all rights under the
Policy.
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8.
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The
Restated Agreement shall terminate automatically with respect to the
Policies at the end of the 15th policy year of the first-issued
Policy. In that event, the Employee shall have the option, for
60 days following the Restated Agreement's termination date, to purchase
the Policies by paying the Employer in cash an amount equal to the Primary
Interest. If the Employee does not purchase a Policy pursuant
to this Section, the Employer may sell, surrender, change the insured, or
transfer ownership of the Policy, and the Employee shall forfeit all
rights under the Policy.
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9.
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The
Insurer shall be bound only by the provisions of the Policies and any
endorsements, and any payments made or action taken by it in accordance
with the Policies and any endorsements shall fully discharge it from all
claims, suits and demands of all persons whatsoever. It shall
in no way be bound by or be deemed to have notice of the provisions of
this Restated Agreement.
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10.
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The
Employee shall have the right to assign any part or all of the Employee's
interest in the Policies and this Restated Agreement to any person, trust,
or other entity by execution of a written assignment delivered to the
Employer and to the Insurer.
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11.
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Subject
to Section 13, the Employer and Employee may amend this Restated Agreement
at any time by written amendment signed by the Employer and
Employee
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12.
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This
Restated Agreement shall bind and inure to the benefit of the Employer and
its successors and assigns; the Employee and his heirs, executors,
administrators and assigns; and any beneficiary of the
Policies.
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13.
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This
Restated Agreement shall be interpreted and applied in a manner consistent
with the applicable standards for nonqualified deferred compensation plans
established by Internal Code Section 409A and its interpretive regulations
and other regulatory guidance. To the extent that any terms of
this Restated Agreement would subject the Employee to gross income
inclusion, interest, or additional tax pursuant to Code Section 409A,
those terms are to that extent superseded by, and shall be adjusted to the
minimum extent necessary to satisfy, the applicable Code Section 409A
standards.
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14.
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The
following provisions are part of this Restated Agreement and are intended
to meet the requirements of the Employee Retirement Income Security Act of
1974 with respect to the benefit plan ("Plan") established by this
Restated Agreement:
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(a)
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The
named fiduciary shall be the
Employer.
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(b)
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The
funding policy under this Plan is that all premiums on the Policies be
remitted to the Insurer when due.
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(c)
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Direct
payment by the insurer is the basis of payment of benefits under this
Plan, with those benefits in turn being based on the payment of premiums
as provided in the Plan.
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(d)
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For
claims procedure purposes, the "Claims Manager" shall be the
Employer.
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(1)
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The
Employee may claim Plan benefits by filing a written application with the
Claims Manager. The Claims Manager will notify the claimant of
its decision within 90 days of the date the claim is filed. If
special circumstances require an extension of time, the Claims Manager may
extend the period for up to 90 days by notifying the claimant of the
extension in writing, the reason for the extension, and the expected
decision date.
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(2)
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If
a claim for Plan benefits is denied, the Claims Manager will deliver to
the claimant a written explanation setting forth the specific reasons for
the denial; references to the specific Plan provisions on which the denial
is based; 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 a description of the Plan's
review procedures and the claimant's right to bring a civil action in
federal court following any denial of the claim on
review.
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(3)
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The
claimant shall have 60 days following receipt of the claim denial to file
with the Claims Manager a written request, signed by the claimant or his
authorized representative, for review of the denial. For such
review, the claimant or his representative may submit written comments,
documents, records, and other information relating to the
claim. In addition, the claimant may, upon request and free of
charge, have reasonable access to and copies of all documents, records,
and other information relevant to the
claim.
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(4)
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In
completing the review, the Claims Manager will take into account all
submitted information, without regard to whether it was submitted as part
of the initial claim. Within 60 days of the request for review,
the Claims Manager will decide the issue on review and notify the
claimant. If special circumstances require an extension of
time, the Claims Manager may extend the period for up to 60 days by
notifying claimant of the extension in writing, the reason for the
extension, and the expected decision
date.
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(5)
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If
the claim in denied on review, the Claims Manager will notify the claimant
of the decision in writing and will include specific reasons for the
denial; specific references to the pertinent Plan provisions on which the
denial is based; a description of the claimant's right to receive, upon
request and free of charge, reasonable access to and copies of all
documents, records, and other information relevant to the claim; and an
explanation of the claimant's right to bring a civil action in federal
court.
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IN
WITNESS WHEREOF, the parties have executed this Restated Agreement.
HURCO
COMPANIES, INC.
by
_______________________________
Signature
_______________________________
Title
EMPLOYEE
__________________________________
Signature
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