SPLIT-DOLLAR AGREEMENT
THIS SPLIT DOLLAR AGREEMENT ("Agreement") is made and entered into as of
the 17th day of October, 1995, by and among INTERNATIONAL SPEEDWAY
CORPORATION, a Florida corporation (hereinafter referred to as the
"Corporation"), XXXXXXX X. FRANCE ("Xxxxxxx"), XXXXX XXXX FRANCE ("Xxxxx
Xxxx") and DESERT TRANQUILITY LIMITED PARTNERSHIP, a Nevada limited
partnership, by and through its sole general partner, WESTERN SANDUNE CORP., a
Nevada corporation (the "Owner").
R E C I T A T I O N S
A. William is an executive officer of the Corporation.
X. Xxxxxxx and Xxxxx Xxxx (referred to hereinafter together as the
"Insureds") are husband and wife.
C. The Corporation desires to help Xxxxxxx create a life insurance
program for the benefit of his family by the establishment of a split-dollar
life insurance plan and the payment of a portion of the premiums on the
second-to-die life insurance policies described on Schedule "A" attached
hereto (collectively, the "Policy") on the lives of the Insureds.
D. The Owner possesses or will possess all incidents of ownership in
and to the Policy.
E. The Corporation wishes to have the Policy collaterally assigned to
it by the Owner, in order to secure the repayment of the amounts that the
Corporation paid or will pay in respect of the premiums on the Policy as more
fully specified herein.
F. The parties intend that by such collateral assignment the
Corporation shall receive only the right to such repayment, with the Owner
retaining all other ownership rights in the Policy, as specified herein.
O P E R A T I V E P R O V I S I O N S
IN CONSIDERATION of the foregoing recitations, the mutual covenants of
the parties set forth herein and other good and valuable considerations, the
receipt and sufficiency of which are acknowledged hereby, the parties hereto,
intending legally to be bound, agree as follows:
1. PURCHASE OF POLICY. The Owner has applied to the Insurance
Company for the Policy, and with the assistance of the Corporation, will take
all reasonable steps to cause the Policy to be issued. When the Policy is
issued, the insurance company, policy number, effective date, face amount and
plan of insurance shall be recorded on Schedule A attached hereto, and the
Policy shall become subject to the terms of this Agreement. The Owner owns or
will own the Policy issued by the insurers described on Schedule "A" attached
hereto (collectively, the "Insurer"). The parties hereto have taken or will
take all action that may be necessary to cause the Policy to conform to the
provisions of this Agreement.
2. OWNERSHIP OF POLICY.
(a) The Owner 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.
(b) It is the intention of the parties to this Agreement and the
collateral assignment executed by the Owner in favor of the Corporation in
connection herewith that the Owner shall retain all rights that the Policy
grants to the owner thereof, except the right of the Corporation to its
Collateral Interest in the Policy. The Corporation's "Collateral Interest" in
the Policy shall mean the aggregate sum of all premiums then or theretofore
paid by the Corporation to the Insurance Company and credited to the Policy,
including any amounts considered taxable "economic benefit" to the Insureds as
a result of such premium payments. The Corporation shall neither have nor
exercise any right as collateral assignee of the Policy that could in any way
defeat or impair the Owner's right to receive the death proceeds of the Policy
in excess of the amount due the Corporation hereunder. All provisions of this
Agreement and of such collateral assignment shall be construed so as to carry
out such intention.
3. PAYMENT OF PREMIUMS.
(a) The Owner may elect to pay part or all of any premiums on
the Policy and shall deliver notice of such election to the Corporation on or
before the premium due date.
(b) The Corporation shall advance on behalf of the Owner an
amount equal to all premiums on the Policy not paid by the Owner. The amount
advanced by the Corporation shall not exceed $750,000 per year for a period
not exceeding eight years. The Corporation shall pay all such advances
directly to the Insurer within the grace period following the due date of each
such premium.
(c) It is currently anticipated that on the date first set forth
above and each anniversary date thereof the Corporation shall advance annually
out of its own funds a sufficient sum to make up the requisite net annual
premium (*i.e., the full premium less the amount that the Owner has
contributed). While both Insureds are alive, the Insureds shall be deemed to
receive a taxable economic benefit in an amount equal to the sum of v * qx *
qy' where v = 1/1.025, qx and qy = the annual mortality rates for ages x and
y, respectively, computed from the values in U.S. Life Table 38, and x and y =
the ages of Xxxxxxx and Xxxxx Xxxx, respectively, on the due date of each
annual premium. After the death of the first of the Insureds to die, the
surviving Insured shall be deemed to receive a taxable economic benefit in an
amount equal to the economic benefit based on the surviving Insured pursuant
to the provisions of Rev. Rul. 64-328, 1964-2 CB 11, Rev. Rul. 66-110, 1966-1
CB 12, Rev. Rul. 55-747, 1955-2 CB 228 and Rev. Rul. 67-154, 1967-1 CB 11.
5. PAYMENT OF BONUSES. In order to minimize the tax consequences of
this plan on the Insureds during the term of this Agreement the Corporation
agrees to provide additional annual compensation in the form of a bonus to the
Insureds for a period of no more than 15 years in an amount equal to the
applicable federal income taxes on the taxable economic benefit as a result of
the premium payments by the Corporation plus an amount equal to the applicable
federal income taxes on the aggregate bonuses.
6. COLLATERAL ASSIGNMENT. To secure the repayment to the Corporation
of its Collateral Interest in the Policy, the Owner shall assign the Policy to
the Corporation as collateral, pursuant to the form of collateral assignment
attached hereto as Exhibit "1" (the "Collateral Assignment"). Such repayment
shall not exceed (i) the cash surrender value of the Policy if this Agreement
is terminated or if the Owner surrenders or cancels the Policy, or (ii) the
death proceeds of the Policy if both of the Insureds should die while the
Policy and this Agreement remain in force. In no event shall the Corporation
have any right to borrow against the Policy. The Collateral Assignment of the
Policy to the Corporation hereunder shall not be terminated, altered or
amended by the Owner without the express written consent of the Corporation.
The parties hereto agree to take all action necessary to cause such Collateral
Assignment to conform to the provisions of this Agreement.
7. LIMITATION ON OWNER'S RIGHTS IN POLICY.
(a) The Owner shall take no action with respect to the Policy
that would in any way compromise or jeopardize the Corporation's right to be
repaid its Collateral Interest in the Policy.
(b) The Owner shall have the sole right to surrender or cancel
the Policy and to receive the full cash surrender value of the Policy directly
from the Insurer. Upon the surrender or cancellation of the Policy, the
Corporation shall have the unqualified right to receive its Collateral
Interest in the Policy. Immediately upon receipt of the cash value, the Owner
shall pay to the Corporation its Collateral Interest in the Policy.
8. COLLECTION OF DEATH PROCEEDS.
(a) Following the deaths of both Insureds, the Corporation and
the Owner promptly shall take all action necessary to obtain the death benefit
provided under the Policy.
(b) The Corporation shall have the unqualified right to receive
a portion of such death benefit equal to its Collateral Interest in the
Policy. The balance of the death benefit provided under the Policy, if any,
shall be paid directly to the Owner, pursuant to the beneficiary designation
for the Policy. In no event shall the amount payable to the Corporation
hereunder exceed the Policy proceeds payable at the death of the Insureds. No
amount shall be paid from such death benefit by the Owner until the full
amount due the Corporation hereunder has been paid. The parties hereto agree
that the beneficiary designation provisions of the Policy shall conform to the
provisions hereof.
9. TERMINATION OF AGREEMENT.
(a) This Agreement shall terminate, without notice, upon the
occurrence of (i) the total cessation of the business of the Corporation or
(ii) the bankruptcy, receivership or dissolution of the Corporation.
(b) In addition, the Corporation or the Owner shall have the
right to terminate this Agreement, by written notice to the other parties
hereto, at any time that the cash surrender value of the Policy equals or
exceeds the aggregate sum of all premiums then or theretofore paid by the
Corporation to the Insurance Company and credited to the Policy, including
amounts considered "economic benefit" to the Insureds as a result of such
premium payments. Such termination shall be effective as of the date of such
notice.
10. DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT.
(a) Within sixty (60) days following the date of the termination
of this Agreement, the Owner shall obtain from the Corporation the release of
the Collateral Assignment of the Policy. To obtain such release, the Owner
shall repay to the Corporation its Collateral Interest in the Policy. Upon
receipt of such amount, the Corporation shall release the Collateral
Assignment of the Policy by the execution and delivery of an appropriate
instrument of release.
(b) If the Owner fails to obtain the release of the Collateral
Assignment within such sixty (60) day period, then the Corporation may enforce
its right to be repaid its Collateral Interest in the Policy from the cash
surrender value of the Policy under the Collateral Assignment of the Policy.
11. INSURER NOT A PARTY. The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefits 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 thereof. No provision of
this Agreement, or of any modification or amendment hereof, shall be construed
in any way 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 Collateral
Assignment executed by the Owner and filed with the Insurer in connection
herewith.
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. All premiums in
respect of the Policy shall be paid to the Insurer when due, pursuant to
Paragraph 3 of this Agreement.
(b) The Corporation shall make all determinations concerning
rights to benefits under this Agreement. Any decision by the Corporation
denying a claim by the Owner for benefits under this Agreement shall be stated
in writing and delivered or mailed to the Owner. Such decision shall set
forth the specific reasons for the denial, written, to the best of the
Corporation's ability, in a manner that may be understood without legal or
actuarial counsel. In addition, the Corporation shall afford a reasonable
opportunity to the Owner for a full and fair review of the decision denying
such claim. In no event shall the Corporation, acting as the named fiduciary,
perform any such act that violates the prohibited transaction rules of the
Employee Retirement Income Security Act of 1974.
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 terminated otherwise, except
as provided herein.
14. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Corporation and the Owner, and their respective
successors and assigns, and the Insureds, and their respective successors,
assigns, heirs, executors and administrators.
15. NOTICE. Any notice, consent, demand or other communication
required or permitted to be given under the provisions of this Agreement shall
be in writing (including telefacsimile transmission or similar writing) and
shall be given to such party at its address or telefacsimile number set forth
on Schedule "B" attached hereto or as given subsequently to the sender by the
addressee. Such notice shall be signed by the party giving or making the
same. If such notice, consent, demand or other communication is mailed to a
party hereto, it shall be sent by United States certified mail, postage
prepaid, properly addressed. Each such notice, consent, demand or other
communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mails as aforesaid or (ii) if given by any
other means, when delivered at the address specified.
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 Nevada.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
CORPORATION:
INTERNATIONAL SPEEDWAY
CORPORATION, a Florida Corporation
Attest: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. France
Xxxx X. Xxxxxxx Xxxxx X. France
Secretary President
WITNESSES: INSUREDS:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. France
Xxxxxx X. Xxxxx XXXXXXX X. FRANCE
/s/ Xxxxxxxxx XxXxxxxx
Xxxxxxxxx XxXxxxxx
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx Xxxx France
Xxxxxx X. Xxxxx XXXXX XXXX FRANCE
/s/ Xxxxxxxxx XxXxxxxx
Xxxxxxxxx XxXxxxxx
OWNER:
DESERT TRANQUILITY LIMITED
PARTNERSHIP, a Nevada Limited
Partnership
By: WESTERN SANDUNE CORP. a Nevada
corporation, its sole general
partner
Attest: /s/ Xxxxxxx X. France By: /s/ Xxxxxxx X. France
Xxxxxxx X. France Xxxxxxx X. France
Secretary President
SCHEDULE "A"
INSURANCE POLICIES
It is agreed, pursuant to the foregoing Split-Dollar Agreement dated
October 17, 1995, that the policies of life insurance described below shall be
subject to the provisions of said Agreement.
Company Policy # Face Amount Insureds
Connecticut General 7016557 $12,500,000.00 Xxxxxxx X.
Insurance Company France and Xxxxx
Xxxx France
Xxxx Xxxxxxx Mutual 80126808 $ 7,800,000.00 Xxxxxxx X.
Life Insurance Company France and Xxxxx
Xxxx France
SCHEDULE "B"
ADDRESS OF PARTIES
International Speedway Corporation
Attn: Xxxx X. Xxxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxx Xxxxx, Xxxxxxx 00000-0000
Desert Tranquility Limited Partnership
c/o Western Sandune Corp.
000 Xxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxx, Xxxxxx 00000
Xxxxxxx X. France
Xxxxx Xxxx France
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
EXHIBIT "1"
FORM OF COLLATERAL ASSIGNMENT
COLLATERAL ASSIGNMENT OF LIFE INSURANCE POLICY
A. FOR VALUE RECEIVED, the undersigned (hereinafter the "Owner")
hereby assigns, transfers and sets over to INTERNATIONAL SPEEDWAY CORPORATION,
a Florida corporation, its successors and assigns (hereinafter the
"Assignee"), the following specific rights (and only those specific rights) in
and to the policies listed on Exhibit A issued by the respective insurers
(hereinafter the "Insurers") shown on Exhibit A, and any supplementary
contract or contracts issued in connection therewith (said policies and any
such contracts hereinafter the "Policies"), insuring the lives of Xxxxxxx X.
France and Xxxxx Xxxx France (hereinafter the "Insureds"), subject to all the
terms and conditions of the Policies and to all superior liens, if any, which
the Insurers may have against the Policies. The Owner, by this Assignment, and
the Assignee, by acceptance of the assignment of the Policies to it hereunder,
agree to the terms and conditions contained herein.
B. This assignment is made, and the Policies are to be held as
collateral security for, all liabilities of the Owner to the Assignee, now
existing or hereafter arising under and pursuant to that certain Split-Dollar
Agreement, by and between the Owner and the Assignee dated of even date
herewith (hereinafter the "Agreement"). The Owner reserves all rights and
powers in and to the Policies, except those specific, limited rights granted
in the Policies to the Assignee hereby, as security for the liabilities of the
Owner to the Assignee under the Agreement.
C. It is expressly agreed that the Assignee's interest in the
Policies under and by virtue of this Assignment shall be limited to the
following specific rights, and no others: (a) the right to be paid the amount
due it under the Agreement by recovering said amount out of the net death
proceeds of the Policies, upon the death of the survivor of the Insureds; and
(b) the right to be paid the amount due it under the Agreement by recovering
said amount from the net cash surrender proceeds of the Policies, in the event
the Policies are surrendered or canceled by the Owner. The Assignee shall have
no other rights or powers in and to the Policies as a result of the assignment
to it hereunder and specifically shall not have the right or power to borrow
against or obtain loans or advances on the Policies, make withdrawals from the
Policies, nor cancel or surrender the Policies.
D. Notwithstanding this Assignment, the Owner shall specifically
retain all incidents of ownership in and to the Policies, including, but not
limited to: (a) the sole right to cancel or surrender the Policies and receive
the surrender value thereof at any time provided by the terms of the Policies
and at such other times as the Insurers may allow; (b) the sole right to
collect and receive all distributions or shares of surplus, dividend deposits
or additions to the Policies now or hereafter made or apportioned thereto, and
to exercise any and all options contained in the Policies with respect
thereto; (c) the sole right to exercise all non-forfeiture rights permitted by
the terms of the Policies or allowed by the Insurers and to receive all
benefits and advantages derived therefrom; (d) the sole right to designate and
change the beneficiaries of the Policies (for any amount in excess of the
amount due the Assignee under the Agreement); (e) the sole right to elect any
optional mode of settlement permitted by the Policies or allowed by the
Insurer: (f) the sole right to borrow against, obtain loans or advances on,
or make withdrawals from the Policies; (g) the sole right to assign the
Policies (subject to this Assignment and Agreement); and (h) the sole right to
collect directly from the Insurers that portion of the net death proceeds of
the Policies in excess of those proceeds payable to the Assignee under the
Agreement; provided, however, that all of the foregoing rights retained by the
Owner in the Policies shall be subject to the terms and conditions of the
Agreement.
E. Notwithstanding anything in this Assignment to the contrary, the
Insurers shall be under no obligation to monitor the obligation of the
Assignee hereunder to pay to the persons entitled thereto any amounts received
from the Insurers remaining after payment of the then existing liabilities of
the Owner to the Assignee under the Agreement; the Insurers shall have no
obligation or liability to any person or entity if the Assignee fails to pay
such amounts as required hereunder.
F. The Insurers are hereby authorized to recognize, and are protected
in recognizing, the Assignee's claims to amounts due it hereunder without
investigating the validity of its claim thereto, the reason for any action
taken by the Assignee, the validity or accuracy of the amount of any of the
liabilities of the Owner to the Assignee under the Agreement, the existence of
any default therein, the giving of any notice required herein, or the
application to be made by the Assignee of any amounts to be paid to the
Assignee. The sole receipt of the Assignee for any amounts received by it
shall be a full discharge and release therefor to the Insurer.
G. Except as otherwise provided in the Agreement, the Assignee shall
be under no obligation to pay any premium on the Policies or the principal of
or interest on any loans or advances on the Policies, whether or not obtained
by the Assignee, or any other charges on the Policies.
H. The Insurers shall be fully protected in recognizing the request
made by the Owner for cancellation or surrender of the Policies, with or
without the consent of the Assignee, and upon such cancellation or surrender,
the Policies shall be terminated and be of no further force or effect.
I. Upon the full payment of the liabilities of the Owner to the
Assignee pursuant to the Agreement, the Assignee shall promptly release this
Assignment and thereby reassign to the Owner all specific rights in the
Policies included herein.
J. The Assignee may take or release other security, may grant
extensions, renewals or indulgences with respect to the obligations of the
Owner to the Assignee under the Agreement, or may apply the proceeds of the
Policies hereby assigned or any amount received on account of the policies by
the exercise of any right permitted under this assignment, without resorting
to or regard to other security for such obligations, if any.
K. In the event of any conflict between the provisions of this
Assignment and the provisions of the Agreement with respect to the Policies or
the Assignee's rights therein, the provisions of this Assignment shall
prevail.
L. The Owner declares that no proceedings in bankruptcy are pending
against the Owner, and that the Owner's property is not subject to any
assignment for the benefit of creditors of the Owner.
Signed and sealed this ______ day of October, 1995.
DESERT TRANQUILITY LIMITED
PARTNERSHIP, a Nevada limited
partnership
By: WESTERN SANDUNE CORP., a
Nevada corporation, its sole general
partner
By: _________________________________
Xxxxxxx X. France, President
ACKNOWLEDGMENT OF INSURANCE COMPANY
The undersigned Insurance Company hereby acknowledges receipt of an original
counterpart of this Collateral Assignment and that the same has been filed at
its home office and noted on its records.
Dated: ______________________, 1995 By: ____________________________
President or Authorized Officer
EXHIBIT A
The policies of life insurance described below, on the lives of Xxxxxxx
X. France and his wife, Xxxxx Xxxx France, are subject to the provisions of
this Assignment.
Company Policy # Face Amount
