AMENDED AND RESTATED
SPLIT DOLLAR INSURANCE AGREEMENT
WHEREAS, National Fuel Gas Company (hereinafter, with any of its
subsidiaries, collectively called the "Company"), in recognition of the highly
valued services of Xxxxxxx X. Xxxxxxx (hereinafter called the "Executive"), the
Executive's importance to the success of the Company, and the need of
Executive's family for financial security in the event of Executive's death, has
authorized the adoption of a split dollar insurance agreement benefiting the
Executive; and
WHEREAS, pursuant to such authorization, the Executive and the Company
entered into a certain Split Dollar Death Benefits Agreement dated August 28,
1991, which Agreement has been amended by subsequent agreements dated April 19,
1993 and March 15, 1994; and
WHEREAS, the Executive and the Company desire to amend in certain
respects and to restate in its entirety the terms of such Split Dollar Death
Benefits Agreement, as amended; and
WHEREAS, the Executive has agreed not to participate in any
noncontributory group term life insurance program while employed by the Company;
and
WHEREAS, the Company desires to be reimbursed, upon termination of this
Agreement, for premiums it advances to maintain a life insurance policy or
policies for these purposes; and
WHEREAS, by an Irrevocable Trust Agreement dated January 9, 1998, the
Executive has established a trust (the "Trust") to which the Executive has
assigned all of his interests in the insurance policies described in Section I
of this Agreement.
NOW THEREFORE, for mutual consideration, the receipt and adequacy of which the
Company, the Executive and the Trust each acknowledge, the Company, the
Executive and the Trust agree as follows:
I. LIFE INSURANCE
A. The Trust and the Company are currently the co-owners of one
insurance policy (policy number 3066713) (hereinafter, with any replacement
policy, called the "Co-Owned Policy"), having a total face amount of $2,000,000,
issued by The Guardian Life Insurance Company of America, of New York, New York
(hereinafter the "Insurer") on the life of the Executive.
B. The Trust is currently the owner of five life insurance policies
(policy numbers 3171767, 3181516, 3495552, 3727153 and 3936117), having a total
face amount of $6,283,473 (hereafter, with any additional or replacement
policies, called the "Additional Policies"), issued by the Insurer on the life
of the Executive. (The Co-Owned Policy and the Additional Policies may be
collectively referred to hereinafter as the "Policies.")
C. The Company's ownership of the Co-Owned Policy while this Agreement
is in force shall be equal to the "Company's Interest" as defined in Section V
of this Agreement. The balance of the Co-Owned Policy shall be owned by the
Trust. Except as specifically provided in this Agreement, the Company and the
Trust may exercise all rights and incidents of ownership only with respect to
their respective ownership interest in the Co-Owned Policy.
D. The Trust shall be the sole owner of the Additional Policies and may
exercise all rights and incidents of ownership with respect to the Additional
Policies, except as specifically provided in this Agreement and in certain
collateral assignments of the Additional Policies to the Company, executed in
connection with this Agreement (the "Collateral Assignments").
II. PREMIUMS
The Company shall advance each premium due on the Policies during the
term of this Agreement to the Insurer on or before the premium due date,
extended by any grace period. The Executive or the Trust may elect to reimburse
the Company for all or a portion of any premium due on the Policies. The Company
may elect to offset all or a portion of the premium advances with dividends from
the following policies during the year so indicated: policy numbers 3066713,
3171767, 3181516 and 3495552 beginning in the year 2002; and policy number
3727153 beginning in the year 2003.
III. BENEFICIARY
The Trust may from time to time while this Agreement is in force, by
such written notice to the Insurer as the Insurer may require, designate the
beneficiary or beneficiaries (the "Beneficiary") to receive the policy proceeds,
to the extent provided in Section VI.
IV. TERMINATION OF AGREEMENT
A. This Agreement shall terminate upon the earliest to occur of the
following:
a) February 15, 2010, unless the Company and the Trust agree in
writing to a later date;
b) mutual agreement of the Company and the Trust prior to such
date;
c) the Executive's death.
B. If the Executive's employment with the Company is terminated for
Cause, as hereinafter defined, or if the Executive engages in Competition, as
hereinafter defined, with the Company, whether or not the Executive's employment
with the Company has been terminated, the Company may terminate this Agreement
by written notice to the Executive and the Trust. In the event of termination
under this Subsection B, the Executive and the Trust shall forfeit all rights
under this Agreement, and, notwithstanding anything in this Agreement, the
Company shall be entitled to any and all interests in the Policies.
V. REPAYMENT TO THE COMPANY
Upon termination of this Agreement during the Executive's life as
described in Section IV A(a) and (b), the Company shall be entitled to repayment
of an amount (the "Company's Interest") determined as follows:
A. With respect to three of the Additional Policies (policy numbers
3936117, 3171767, 3181516), the Company shall be entitled to repayment of the
total premiums advanced by the Company to maintain such policies since their
issuance, less any amount reimbursed to the Company by the Executive or the
Trust.
B. With respect to two of the Additional Policies (policy numbers
3495552 and 3727153), the Company shall be entitled to the entire cash surrender
value of such policies.
C. With respect to the Co-Owned Policy (policy number 3066713), the
Company shall be entitled to an amount sufficient to bring the total repayment
for all policies hereunder to $6,047,000.
If full repayment is not made within 60 days of termination of this Agreement,
the Company may, with respect to the Additional Policies, enforce its rights
under the Collateral Assignments. Upon receipt of the Company's Interest in any
of the Additional Policies, the Company will promptly release the Collateral
Assignment thereof. With respect to the Co-Owned Policy (policy number 3066713),
the Company shall be entitled to an amount sufficient to bring the total
repayment for all policies hereunder to $6,047,000.
VI. DEATH BENEFIT AND REPAYMENT TO THE COMPANY WHILE AGREEMENT IS IN FORCE
A. If this Agreement terminates by reason of the Executive's death, the
proceeds of the Policies shall be paid as follows:
a) The Company shall receive an amount equal to the total premiums
paid by the Company to maintain the Policies since their issuance,
less any amount reimbursed to the Company by the Executive or the
Trust.
b) The Beneficiary shall be paid the sum of $8,000,000 (the "Death
Benefit").
c) Any remaining policy proceeds after satisfaction of a) and b)
shall be paid to the Company.
B. The Company shall notify the Insurer of the amount of the Death
Benefit within 30 days of the death of the Executive while this Agreement is in
force, and the Death Benefit shall be paid to the Beneficiary under the
settlement option elected by the Trust.
VII. OTHER COMPANY BENEFITS
The Executive shall have no right to participate in any
non-contributory group-term life insurance plan maintained by the Company. In
other respects, the benefits provided to the Executive under this Agreement and
the Policies shall be separate from and in addition to other benefits that may
be offered by the Company to the Executive, including any non-contributory
accidental death and dismemberment coverage that the Company maintains.
VIII. POLICY LOANS
While this Agreement is in force, neither the Company nor the Trust
shall borrow against or pledge the Policies as security for any debt.
IX. ASSIGNMENT OF THE POLICIES AND THIS AGREEMENT
The Policies shall not be assigned, transferred, pledged, surrendered
or otherwise encumbered or alienated without the written consent of the Company.
Any assignee pursuant to this Section and any other successor to the Trust's
interest in the Policies shall be bound by this restriction.
X. REPLACEMENT OF THE POLICIES
The Company shall have the right to replace the Policies with a new
policy or policies, with the consent of the Trust.
XI. AMENDMENT
This Agreement may be altered, amended or modified only by a written
agreement signed by the Company and the Trust. This Agreement and any amendments
hereto shall be binding upon the Company, the Executive, the Trust and their
legal representatives, successors, beneficiaries and assigns. In the event that
the Company becomes a party to any merger, consolidation or reorganization, this
Agreement shall remain in full force and effect as an obligation of the Company
or its successors in interest.
XII. DEFINITION OF TERMS
A. "Cause" means serious, willful misconduct in respect of the
Executive's obligations to the Company that has damaged or is likely to damage
the Company, including (without limitation) any endeavor by the Executive,
directly or indirectly, to interfere in the business relations of or otherwise
harm the Company, as the Company shall reasonably determine.
B. "Competition" means any employment, consulting contract or other
arrangement, before or after the termination of the Executive's employment with
the Company, with any person or entity that is then or becomes engaged in a
business enterprise of any sort that is, in any material respect, competitive
with the Company, or any assistance by the Executive to any such enterprise in
engaging in such competition.
XIII. NONINTERFERENCE
The Executive and the Trust covenant that the Executive, the Trust, any
Assignee and the Beneficiary shall not interfere with the Company's rights under
this Agreement or take any voluntary action that causes the Policies to fail or
lapse, in whole or in part. The Executive, the Trust, any Assignee and the
Beneficiary will cooperate with Company and the Insurer in all respects in
obtaining and maintaining the Policies and shall, if necessary, use their best
efforts to provide, from time to time, such evidence of insurability as the
Insurer may require.
XIV. MISCELLANEOUS
A. If any part of this Agreement or the application of any part to
certain persons or circumstances shall be invalid or unenforceable, the
remainder of the Agreement shall continue to be effective.
B. This Agreement shall be construed and regulated under the laws of
the State of New York.
C. The Executive understands that the benefits provided under this
Agreement will or may result in taxable income to him and the Company reserves
the right to implement tax withholding respecting such amounts as and when it
may deem such withholding appropriate.
XV. ERISA PROVISIONS
This Agreement constitutes part of a welfare benefit plan ("Welfare
Plan") and, as such, the following provisions are part of this Agreement and are
intended to meet the requirements of Title I of the Employee Retirement Income
Security Act of 1974 ("ERISA"):
1. The named fiduciary of the Welfare Plan is the Company.
2. The funding policies under the Welfare Plan are that
all premiums on the Policies be remitted to the
Insurer by the Company when due. The Executive or the
Trust may elect to reimburse the Company for all or a
portion of any premium due on the Policies.
3. Direct payment by the Insurer is the basis of payment
of benefits under this Agreement.
4. For claims procedure purposes with respect to claims
asserted under the Welfare Plan, the "Claims Manager"
shall be Xxxxxx X. Xxxxx, or such other person as may
be designated from time to time by the Company.
a. If for any reason a claim for benefits is
made by a participant under the Welfare Plan
("Claimant") and is denied by the Company,
the Claims Manager shall deliver to the
Claimant a written explanation specifying
the reasons for the denial, the provisions
on which such denial is based, such other
data as may be pertinent, and the procedures
available to the Claimant to obtain review
of the claim, all written in a manner
calculated to be understood by the Claimant.
For this purpose,
(i) the claim shall be deemed filed when
presented in writing to the Claims
Manager; and
(ii) the Claims Manager's explanation
shall be in writing delivered to the
Claimant within 90 days of the date
the claim is filed.
b. The Claimant shall have 60 days following
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 or her representative may
submit pertinent documents and written issues
and comments.
c. The Claims Manager shall have discretion to
decide the issue on review and shall furnish
the Claimant with a copy of the decision
within 60 days of receiving the Claimant's
request for review of the claim. The decision
on review shall be written in a manner
calculated to be understood by the Claimant
and shall specify the reasons for the
decision, as well as the provisions on which
the decision is based. If a copy of the
decision is not so furnished to the Claimant
within such 60 days, the claim shall be deemed
denied on review.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set opposite their respective signatures, to be effective on the 15th day
of June, 2000.
NATIONAL FUEL GAS COMPANY
July 26, 2000 By:/s/Xxxxxx X. Xxxxxxxx
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Date Xxxxxx X. Xxxxxxxx
President
/s/Xxxxx X. Xxxxxxx
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Witness
EXECUTIVE:
July 21, 2000 /s/Xxxxxxx X. Xxxxxxx
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Date Xxxxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxxxxx
-------------------------------
Witness
TRUSTEE:
July 31, 2000 /s/Xxxxxx X. Xxxxxxx
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Date Xxxxxx X. Xxxxxxx, as Trustee of the Trust
under the Agreement dated January 9, 1998
/s/Xxxxxxxxx X. Xxxxxxx
-------------------------------
Witness
