Exhibit 10.18
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SPLIT-DOLLAR AGREEMENT
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THIS AGREEMENT, made and entered into this 1st day of November, 2002, by
and between MasTec, Inc., a Florida corporation, with principal offices and
place of business in the State of Florida (hereinafter referred to as the
"Corporation"), and Xxxxxx Xxxxxxxxxx, an individual residing in the State of
Florida (hereinafter referred to as the "Employee"),
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Employee wishes to provide life insurance protection for
his family, under a policy of life insurance (hereinafter referred to as the
"Policy"), insuring his life and the life of his wife, Xxx Xxxxxxxxxx
(hereinafter jointly referred to as the "Insureds"), which Policy is
described in Exhibit A attached hereto and by this reference made a part
hereof, and which is being issued by Xxxx Xxxxxxx Variable Life Insurance
Company (hereinafter referred to as the "Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on the
Policy as an additional employment benefit for the Employee, on the terms and
conditions hereinafter set forth; and
WHEREAS, the Corporation is the owner of the Policy and, as such,
possesses all incidents of ownership in and to the Policy; and
WHEREAS, the Corporation wishes to retain such ownership rights, in
order to secure the repayment of the amounts which it will pay toward the
premiums on the Policy;
WHEREAS, pursuant to the interim guidance provided in Notice 2001-10,
as modified by Notice 2002-8 (the "Notices"), the parties to this arrangement
intend to have its income and gift tax consequences determined under
traditional split-dollar economic benefit concepts;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as follows:
1. Statement of Intention. The parties hereto intend that the income
and gift tax consequences of this split-dollar arrangement be governed by
traditional split-dollar economic benefit concepts, in accordance with the
interim guidance provided in the Notices, for arrangements entered into
prior to the adoption of final regulations. The parties hereto agree to
consistently treat this arrangement in accordance with such concepts on
all tax returns and other documents filed by them in connection herewith.
2. Purchase of Policy. The Corporation will contemporaneously purchase
the Policy from the Insurer in the Face Amount of Insurance (as such term is
defined in the Policy) of $18,000,000 and Death Benefit Option A (as such
term is defined in the Policy). The parties hereto agree that they will
take all necessary action to cause the Insurer to issue the Policy, and shall
take any further action which may be necessary to cause the Policy to conform
to the provisions of this Agreement. The parties hereto agree that the
Policy shall be subject to the terms and conditions of this Agreement and of
the endorsement to the Policy filed with the Insurer.
3. Ownership of Policy.
a. 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; provided,
however, that in no event shall the Corporation have any right to borrow
against or make withdrawals from the Policy.
b. Specifically, the Corporation shall have the sole authority to
direct the manner in which the Policy Account (as such term is defined in
the Policy) established pursuant to the terms of the Policy shall be
allocated among the various investment options from time to time available
under the Policy and to change such allocation from time to time, as
provided for in the Policy.
4. Payment of Premiums. On or before the Anniversary Date of the
Policy (as defined therein), or within the grace period provided therein,
the Corporation shall pay the full amount of each Planned Periodic Premium
(as such term is defined in the Policy) to the Insurer, during the term
hereof, and shall, upon request, promptly furnish the Employee evidence
of timely payment of such premium. Subject to the acceptance of such amount
by the Insurer, the Corporation may also, in its discretion, make additional
premium payments on the Policy. The Corporation shall annually furnish the
Employee a statement of the amount of income reportable by the Employee for
federal and state income tax purposes, as a result of the insurance
protection provided to the Employee's beneficiary hereunder.
5. Designation of Policy Beneficiary/Endorsement.
a. Contemporaneously with the execution of this Agreement, the
Corporation has executed a beneficiary designation for the Policy, under the
form used by the Insurer for such designations, naming the Corporation as
the Policy beneficiary, in order to secure the Corporation's recovery of the
amount due the Corporation hereunder.
b. The Employee may select both the settlement option for payment
of the death benefit provided under the Policy to which the Employee's
beneficiary is entitled hereunder and the beneficiary or beneficiaries to
receive such portion of the policy proceeds, by specifying the same in a
written notice to the Corporation. Upon receipt of such notice, the
Corporation shall execute and deliver to the Insurer a change of
beneficiary and/or Policy endorsement form necessary to elect the requested
settlement option and to designate the requested person, persons or entity
as the beneficiary or beneficiaries to receive the death proceeds of the
Policy in excess of the amount to which the Corporation is entitled
hereunder. The parties hereto agree to take the action necessary to cause
the beneficiary designation and settlement election provisions to conform
to the provisions hereof; the Corporation shall not terminate, alter or
amend such election or designation without the express written consent of
the Employee.
6. Limitations on Corporation's Rights in Policy. Except as otherwise
provided herein, the Corporation shall not sell, assign, transfer, surrender
or cancel the Policy, nor change the beneficiary designation or the
settlement option selected by the Employee, without, in any such case, the
express written consent of the Employee.
7. Collection of Death Proceeds.
a. Upon the death of the Employee, the Corporation shall cooperate
with the beneficiary or beneficiaries designated by the Employee to take
whatever action is necessary to collect 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 Corporation shall have the
unqualified right to receive a portion of such death benefit equal to the
total amount of the premiums paid by it hereunder, plus 4%, compounded
annually. The balance of the death benefit provided under the Policy shall
be paid directly to the beneficiary or beneficiaries designated by the
Corporation at the direction of the Employee, in the manner and in the
amount or amounts provided in the beneficiary designation provision of the
Policy. The Corporation shall have the unqualified right to receive the
balance, if any, of the death benefit provided under the Policy. In no event
shall the amount payable to the Corporation hereunder exceed the Policy
proceeds payable at the death of the Employee. No amount shall be paid from
such death benefit to the beneficiary or beneficiaries designated by the
Corporation at the direction of the Employee, until the full amount due the
Corporation for the return of its premiums plus interest hereunder has
been paid. The parties hereto agree that the beneficiary designation
provision of the Policy shall conform to the provisions hereof.
c. Notwithstanding any provision hereof to the contrary, in the event
that, for any reason whatsoever, no death benefit is payable under the
Policy upon the death of the Employee and in lieu thereof the Insurer
refunds all or any part of the premiums paid for the Policy, the Corporation
shall have the unqualified right to retain such premiums.
8. Termination of the Agreement During the Employee's Lifetime.
a. This Agreement shall terminate, during the Employee's lifetime,
without notice, upon the occurrence of any of the following events: (a)
total cessation of the Corporation's business; (b) bankruptcy, receivership
or dissolution of the Corporation; or (c) the six (6) year anniversary of
this Agreement.
b. In the event that there is a Change in Control of the Corporation on
or before the four (4) year anniversary of this Agreement, the Corporation
shall take whatever action is necessary to assure that the premium payments
required to be made pursuant to Section 4 hereof continue through said
anniversary. For purposes hereof, a Change in Control shall be deemed to
occur if at any time the collective voting securities of the Corporation
owned directly or indirectly by Xxxxx X. Mas, Xxxxx Mas, Xxxx Xxxxxx, Xxxx
Xxxxx Mas, and their respective ancestors and descendants in the Corporation
are less than 38% of the outstanding voting securities of the Corporation.
c. In addition, the Employee may terminate this Agreement, while no
premium under the Policy is overdue, by written notice to the Corporation.
Such termination shall be effective as of the date of such notice.
9. Disposition of the Policy on Termination of the Agreement During
the Employee's Lifetime.
a. For sixty (60) days after the date of the termination of this
Agreement during the Employee's lifetime, the Employee shall have the
assignable option to purchase the Policy from the Corporation. The
purchase price for the Policy shall be the total amount of the premium
payments made by the Corporation hereunder, plus 4%, compounded annually.
Upon receipt of such amount, the Corporation shall transfer all of its
right, title and interest in and to the Policy to the Employee or his
assignee, by the execution and delivery of an appropriate instrument of
transfer, and this Agreement shall thereupon terminate.
b. If the Employee or his assignee fails to exercise such option within
such sixty (60) day period, then the Corporation may enforce its right to be
repaid for the premiums which it paid hereunder by surrendering or canceling
the Policy for its cash surrender value, or it may change the beneficiary
designation provisions of the Policy, naming itself or any other person or
entity as revocable beneficiary thereof, or exercise any other ownership
rights in and to the Policy, without regard to the provisions hereof.
Thereafter, neither the Employee, his assignee nor their heirs, assigns or
beneficiaries shall have any further interest in and to the Policy, either
under the terms thereof or under this Agreement.
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. Assignment by Employee. Notwithstanding any provision hereof to
the contrary, the Employee shall have the right to absolutely and
irrevocably assign by gift all of his right, title and interest in and to
this Agreement and to the Policy to an assignee. This right shall be
exercisable by the execution and delivery to the Corporation of a written
assignment, in substantially the form attached hereto as Exhibit B, which by
this reference is made a part hereof. Upon receipt of such written
assignment executed by the Employee and duly accepted by the assignee
thereof, the Corporation shall consent thereto in writing, and shall
thereafter treat the Employee's assignee as the sole owner of all of the
Employee's right, title and interest in and to this Agreement and in and to
the Policy. Thereafter, the Employee shall have no right, title or interest
in and to this Agreement or the Policy, all such rights being vested in and
exercisable only by such assignee.
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, and it shall be
responsible for establishing and carrying out a funding policy and method
consistent with the objectives of this Agreement.
b. Claim. A Participant, beneficiary or other person who believes
that he or she is being denied a benefit to which he or she is entitled
(hereinafter referred to as "Claimant"), or his or her duly authorized
representative, may file a written request for such benefit with the
President of the Corporation (the "First Level Reviewer"), setting forth
his or her claim. Such claim must be addressed to the President of the
Corporation, at its then principal place of business.
c. Claim Decision. Upon receipt of a claim, the First Level Reviewer
shall advise the Claimant that a reply will be forthcoming within a
reasonable period of time, but ordinarily not later than ninety days, and
shall, in fact, deliver such reply within such period. However, the First
Level Reviewer may extend the reply period for an additional ninety days for
reasonable cause. If the reply period will be extended, the First Level
Reviewer shall advise the Claimant in writing during the initial 90-day
period indicating the special circumstances requiring an extension and the
date by which the First Level Reviewer expects to render the benefit
determination.
If the claim is denied in whole or in part, the First Level Reviewer
will render a written opinion, using language calculated to be understood
by the Claimant, setting forth:
(1) the specific reason or reasons for the denial;
(2) the specific references to pertinent Plan provisions on which
the denial is based;
(3) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation as to
why such material or such information is necessary;
(4) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review, including a statement of
the Claimant's right to bring a civil action under Section 502(a) of
ERISA following an adverse benefit determination on review; and
(5) the time limits for requesting a review of the denial under
Subsection C hereof and for the actual review of the denial under
Subsection D hereof.
d. Request for Review. Within sixty days after the receipt by the
Claimant of the written opinion described above, the Claimant may request in
writing that the Secretary of the Corporation (the "Second Level Reviewer")
review the First Level Reviewer's prior determination. Such request must be
addressed to the Secretary of the Corporation, at its then principal place
of business. The Claimant or his or her duly authorized representative may
submit written comments, documents, records or other information relating
to the denied claim, which such information shall be considered in the
review under this subsection without regard to whether such information was
submitted or considered in the initial benefit determination.
The Claimant or his or her duly authorized representative shall be
provided, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information which (i) was relied upon
by the First Level Reviewer in making its initial claims decision, (ii) was
submitted, considered or generated in the course of the First Level Reviewer
making its initial claims decision, without regard to whether such instrument
was actually relied upon by the First Level Reviewer in making its decision
or (iii) demonstrates compliance by the First Level Reviewer with its
administrative processes and safeguards designed to ensure and to verify that
benefit claims determinations are made in accordance with governing Plan
documents and that, where appropriate, the Plan provisions have been applied
consistently with respect to similarly situated claimants. If the Claimant
does not request a review of the First Level Reviewer's determination within
such sixty-day period, he or she shall be barred and estopped from
challenging such determination.
e. Review of Decision. Within a reasonable period of time,
ordinarily not later than sixty days, after the Second Level Reviewer's
receipt of a request for review, it will review the First Level Reviewer's
prior determination. If special circumstances require that the sixty-day
time period be extended, the Second Level Reviewer will so notify the
Claimant within the initial 60-day period indicating the special
circumstances requiring an extension and the date by which the Second Level
Reviewer expects to render its decision on review, which shall be as soon
as possible but not later than 120 days after receipt of the request for
review. In the event that the Second Level Reviewer extends the
determination period on review due to a Claimant's failure to submit
information necessary to decide a claim, the period for making the benefit
determination on review shall not take into account the period beginning
on the date on which notification of extension is sent to the Claimant
and ending on the date on which the Claimant responds to the request for
additional information.
The Second Level Reviewer has discretionary authority to determine a
Claimant's eligibility for benefits and to interpret the terms of the Plan.
Benefits under the Plan will be paid only if the Second Level Reviewer
decides in its discretion that the Claimant is entitled to such benefits.
The decision of the Second Level Reviewer shall be final and non-reviewable,
unless found to be arbitrary and capricious by a court of competent review.
Such decision will be binding upon the Employer and the Claimant.
If the Second Level Reviewer makes an adverse benefit determination
on review, the Second Level Reviewer will render a written opinion, using
language calculated to be understood by the Claimant, setting forth:
(1) the specific reason or reasons for the denial;
(2) the specific references to pertinent Plan provisions on which
the denial is based;
(3) a statement that the Claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents,
records and other information which (i) was relied upon by the Second Level
Reviewer in making its decision, (ii) was submitted, considered or generated
in the course of the Second Level Reviewer making its decision, without
regard to whether such instrument was actually relied upon by the Second
Level Reviewer in making its decision or (iii) demonstrates compliance by
the Second Level Reviewer with its administrative processes and safeguards
designed to ensure and to verify that benefit claims determinations are made
in accordance with governing Plan documents, and that, where appropriate,
the Plan provisions have been applied consistently with respect to similarly
situated claimants; and
(4) a statement of the Claimant's right to bring a civil action under
Section 502(a) of ERISA following the adverse benefit determination on such
review.
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 otherwise terminated except
as provided herein.
14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Corporation and its successors and assigns, and the
Employee, his successors, assigns, heirs, executors, administrators and
beneficiaries.
15. 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.
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 Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate, as of the day and year first above written.
MASTEC, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx, President
ATTEST:
/s/ Xxxxx Xxxxx
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Assistant Secretary
"Corporation"
/s/ Xxxxxx Xxxxxxxxxx
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XXXXXX XXXXXXXXXX
"Employee"
EXHIBIT A
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The following life insurance policy is subject to the attached
Split-Dollar Agreement:
Insurer: Xxxx Xxxxxxx Variable Life Insurance Company
Insureds: Xxxxxx Xxxxxxxxxx and Xxx Xxxxxxxxxx
Policy Number: 20075875
Face Amount: $18,000,000
Death Benefit Option: A
Date of Issue: October 24, 2002
EXHIBIT B
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THIS ASSIGNMENT, dated this 1st day of December 2002.
WITNESSETH THAT:
WHEREAS, the undersigned (the "Assignor") is the Employee under that
certain Split-Dollar Agreement between MasTec, Inc., a Florida corporation
(the "Company") and Xxxxxx Xxxxxxxxxx dated 1st day of December, 2002 (the
"Split-Dollar Agreement"), which Split-Dollar Agreement confers upon the
undersigned certain rights and benefits with regard to one or more policies
of insurance insuring the Assignor's life; and
WHEREAS, pursuant to the provisions of said Split-Dollar Agreement, the
Assignor retained the right, exercisable by the execution and delivery to
the Company of a written form of assignment, to absolutely and irrevocably
assign all of the Assignor's right, title and interest in and to said
Split-Dollar Agreement to an assignee; and
WHEREAS, the Assignor desires to exercise said right;
NOW, THEREFORE, the Assignor, without consideration, and intending to
make a gift, hereby absolutely and irrevocably assigns, gives, grants and
transfers to MasTec, Inc. (the "Assignee"), all of the Assignor's right,
title and interest in and to the Split-Dollar Agreement and said policies
of insurance, intending that, from and after this date, the Split-Dollar
Agreement be solely between the Company and the Assignee and that hereafter
the Assignor shall neither have nor retain any right, title or interest
therein.
/s/ Xxxxxx Xxxxxxxxxx
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Assignor
Page 2, EXHIBIT B
ACCEPTANCE OF ASSIGNMENT
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The undersigned Assignee hereby accepts the above assignment of all
right, title and interest of the Assignor therein in and to the Split-
Dollar Agreement, and the undersigned hereby agrees to be bound by all of
the terms and conditions of said Split-Dollar Agreement, as if the original
Employee thereunder.
XXXXXX XXXXXXXXXX IRREVOCABLE
TRUST DATED
December 1st, 2002
/s/ Xxxxxx Xxxxxx
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Trustee
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Assignee
Dated: 1st day of December, 2002
CONSENT TO ASSIGNMENT
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The undersigned Company hereby consents to the foregoing assignment of
all of the right, title and interest of the Assignor in and to the Split-
Dollar Agreement, to the Assignee designated therein. The undersigned
Company hereby agrees that, from and after the date hereof, the undersigned
Company shall look solely to such Assignee for the performance of all
obligations under said Split-Dollar Agreement which were heretofore the
responsibility of the Assignor, shall allow all rights and benefits
provided therein to the Assignor to be exercised only by said Assignee, and
shall hereafter treat said Assignee in all respects as if the original
Employee thereunder.
MASTEC, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx, President
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx,
Exec VP and CFO
NOTARIZED
Dated: 1st day of December, 2002
