EXHIBIT 10.16
SPLIT-DOLLAR AGREEMENT
THIS AGREEMENT made and entered into as of this 30th day of November, 1999,
by and between American Software, Inc., a Georgia corporation (hereinafter
referred to as the "Corporation"), and Xxxxx Xxxxxxx Xxxxxxxxx as trustee of
the J & N Xxxxxxxxx Trust dated December 23, 1998 (hereinafter referred to as
the "Trustee").
WITNESSETH THAT:
WHEREAS, Xxxxx X. Xxxxxxxxx is employed by the Corporation as its President
and Chief Executive Officer (the "Employee"); and
WHEREAS, the Corporation wishes to provide life insurance protection for the
Employee in the event of the his death during the terms of this Agreement, and
death benefits to the Trustee; and
WHEREAS, the Corporation would like to acquire certain variable universal
life insurance on the life of the Employee in the initial face amount of
$2,043,952 and a term insurance policy in the initial face amount of $1,114,931
(total face amount of $3,158,883) which is described in Exhibit "A" attached
hereto and by this reference made apart hereof (collectively, the "Policy") to
be issued by National Life of Vermont National Life Insurance Company (the
"Insurer").
NOW, THEREFORE, in consideration of the premises and of the mutual promises
contained herein, the parties hereto agree as follows:
1. 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.
2. Beneficiary Designation. The Trustee may select the settlement option
for payment of the death benefit provided under the Policy and the Trustee
shall be the beneficiary to receive the portion of Policy proceeds in
excess of the amount the Corporation is entitled to hereunder, by
specifying the same in the beneficiary designation provision of the Policy.
During the term of this Agreement, the amount the Corporation is entitled
to shall be paid in one lump sum to the Corporation in an amount equal to
the Corporation's basis in the Policy (the "Corporation's Premium
Reimbursement"); the Corporation shall not terminate, alter or amend such
designation without the express written consent of the Trustee. The parties
hereto agree to take all action necessary to cause the beneficiary
designation and settlement election provisions of the Policy to conform to
the provisions hereof.
3. Policy Dividends. 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 provisions of
the Policy shall conform to the provisions hereof.
4. Payment of Premiums. On or before the due date of each Policy
premium, or within the grace period provided therein, the Corporation shall
pay to the Insurer the full amount of such premium, and shall, upon request
promptly furnish the Trustee evidence of timely payment of such premium.
5. Employee Compensation Portion. The excess of the premium payment over
the annual cost of the current life insurance protection on the life of the
Employee (measured by the lower of the PS 58 rate, set forth in Rev. Rul.
55-747, 1955-2, C.B. 228 or the corresponding applicable provision premium
rate for annual renewable term insurance for standard risks) shall be
included in the Employee's income for federal income tax purposes and
reported to the Employee on federal tax form W-2.
6. Designation of Policy Beneficiary/Endorsement. As of the execution
date of the Agreement, the Corporation has executed a beneficiary
designation form and/or an endorsement to the Policy, under the form used
by the Insurer for such designations or endorsements; such beneficiary
designation or
endorsement shall not be terminated, altered or amended by the Corporation,
without the express written consent of the Trustee. The parties hereto
agree to take all action necessary to cause such beneficiary designation or
endorsement to conform to the provisions of this Agreement.
7. Limitations on Corporation's Rights in Policy. Except as otherwise
provided herein, the Corporation shall not surrender or cancel the Policy,
change the beneficiary designation provisions thereof, nor change the
dividend election thereof without, in any such case, the express written
consent of the Trustee;
8. Collection of Death Proceeds and Amount that the Trustee is Entitled
to Collect.
a. Upon the death of the Employee, the Corporation shall cooperate
with the Trustee to 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, the Trustee shall have the
unqualified right to receive a portion of such death benefit equal to
the cash surrender value of the Policy, determined immediately prior to
the date of death and, reduced by the Corporation's Premium
Reimbursement, in the manner provided in the beneficiary designation
provision of the Policy; the Corporation's Premium Reimbursement shall
be paid to the Corporation.
9. Termination of Agreement. This Agreement shall terminate during the
Employee's lifetime, without notice, upon the occurrence of any of the
following events: (a) the total cessation of the business of the
Corporation; (b) the bankruptcy, receivership or dissolution of the
Corporation; or (c) the termination of Employee's employment by the
Corporation (other than by reason of his death). In the event of the
termination of this Agreement, either the Trustee or the Employee may
purchase the Policy from the Corporation for the Corporation's Premium
Reimbursement.
10. Insurer Not a Party. The Insurer shall be fully discharged from its
obligations under the Policy by payment of the Policy 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. No
provision of this Agreement, nor of any modification or amendment hereof,
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.
11. Named Fiduciary. In the event that this Agreement is deemed to be an
Employee Welfare Benefit Plan, as such term is used in the Employee
Retirement Income Security Act, the Corporation is designated the named
fiduciary. The named fiduciary shall have the authority to control and
manage the operation of this Agreement. The Corporation shall thereafter
make all determinations concerning rights to benefits under this Agreement.
Any decision by the Corporation denying a claim by the beneficiary for
benefits under this Agreement shall be in writing and delivered or mailed
to the Trustee. Such decision shall state the specific reasons for the
denial. The Corporation shall afford a reasonable opportunity for a full
and fair review of the decision denying such claim.
12. 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.
13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Corporation and its successors and assigns, and the
Trustee, its successors and assigns.
14. 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.
15. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, as of the day and year first above written.
American Software, Inc.
/s/ Xxxxxxx X. Xxxxxxx
By: _________________________________
CFO
Its: ________________________________
ATTEST:
/s/ Xxxxx XxXxxxx
_________________________________
Secretary
/s/ Xxxxx Xxxxxxx Xxxxxxxxx
_____________________________________
Xxxxx Xxxxxxx Xxxxxxxxx
Trustee
/s/ Xxxxx X. Xxxxxxxxx
_____________________________________
Xxxxx X. Xxxxxxxxx
The following life insurance policy is subject to the attached Split-Dollar
Agreement:
Insurer: NATIONAL LIFE OF VERMONT NATIONAL LIFE INSURANCE COMPANY
Insured: XXXXX X. XXXXXXXXX
Policy Number: C01000101
Face Amount: Universal Life--$2,043,952 Term Life--$1,114,931
Date of Issue: August 1, 1999
