Thefirst part shall be equal to the total amount of the premium payments made on the Policy (including any contributions made to the Insurer in the event of a Change in Control as provided below), which shall be considered part of the “Employer’s Interest”; |
Thesecond part shall be equal to the excess, if any over the first part, but only to the extent of the amount set forth in the attached Schedule A (which may be modified from time to time by mutual agreement of the Owner and Employer), which shall be considered the “Owner’s Interest”; and, |
Thethird part shall be equal to the excess, if any, over the sum of the first two parts and shall be considered part of the “Employer’s Interest”. |
Notwithstanding anything in this Agreement to the contrary, in the event of the bankruptcy or insolvency of the Employer during the term of this Agreement, the Policy, including the Owner’s Interest therein, shall be subject to the claims of creditors of the Employer.
(2) Premium Payments
On or before the due date of each premium payment on the Policies, Employer will pay the entire premium due on the Policy. The Employer will make premium payments as they are due until the termination of service of the Employee with the Employer, or in the event the Employee becomes “disabled” as defined under the Employer-maintained long term disability program, until the Employee’s age 55, provided, however, that upon the happening of a Change in Control Event, the Employer shall pay to the Insurer, in the form of pre-paid premiums, an amount equal to the present value of the remaining premium payments due on the Policy until the Employee attains age 55, such amount to be determined by the Insurer.
The Employee shall have imputed income each year in an amount equal to the annual cost of current death benefit protection on the life of the Employee, measured by the lower of (a) the PS 58 rate, as set forth in Revenue Ruling 55-747 (or the corresponding applicable provision of any future Revenue Ruling), or (b) the Insurer’s current published premium rate for annually renewable term insurance for standard risks.
(3) Death Benefit Amounts
Upon the death of the Employee, and subject to the minimum death benefits provided to the Owner as described below, the death benefit payable to the respective parties to this Agreement shall be paid in the following manner and in the following order:
First, Employer (or the Employer’s designated beneficiaries) shall receive an amount equal to the total amount of the premium payments made on the Policy as of the time of Employee’s death (including any contributions made to the Insurer in the event of a Change in Control as provided below), accumulated at interest at a rate of 3.4% per annum; |
Second, the Owner (or the Owner’s designated beneficiaries) shall receive an amount equal to the Owner’s Interest as set forth in the attached Schedule A as of the time of Employee’s death, which may be modified from time to time by mutual agreement of the Owner and Employer, except that in no event, shall the amount of the death benefit to be received by the Owner (or the Owner’s designated beneficiaries) be less than twenty-five thousand dollars ($25,000); |
And third, Employer (or the Employer’s designated beneficiaries) shall receive the excess, if any, of the Policy proceeds over the amounts set forth in the prior two paragraphs. |
a) | Death of the Employee; |
b) | Written agreement of both the Owner and the Employer to terminate this Agreement; |
c) | Termination of Employee’s employment with the Employer for Cause; |
d) | Voluntary termination by the Employee of Employee’s service with the Employer unless; |
(i) | Employer fails to renew Owner’s Employment Agreement prior to the Employee attaining age 60; |
(ii) | Termination of service is due to any “Constructive Termination Without Cause” as defined in the Employment Agreement; or |
(iii) | Employee terminates service with the Employer under an “Approved Early Retirement” or “Normal Retirement” as defined in the Employment Agreement; |
e) | Failure of the Employee or Owner to complete all necessary requirements for the Insurer to issue a policy, including the waiver of investment choices; and, |
f) | At the sole discretion of the Employer, upon the Employee entering into Competition with the Employer during the “Restriction Period” as defined in the Employment Agreement. |
“Cause” has the meaning set forth in Section 10(b) of the Employment Agreement. |
“Change in Control” has the meaning set forth in Section 10(c) of the Employment Agreement. |
“Competition” has the meaning set forth in Section 13(a) of the Employment Agreement. |
“Constructive Termination Without Cause” has the meaning set forth in Section 10(c) of the Employment Agreement. |
“Employment Agreement” ’means the Employment Agreement dated May 3, 2001 between Employee and Employer. |
“Normal Retirement” has the meaning set forth in Section 10(f) of the Employment Agreement. |
“Restriction Period” has the meaning set forth in Section 13(b) of the Employment Agreement. |
“Termination Without Cause” has the meaning set forth in Section 10(c) of the Employment Agreement. |
BRIAN SILVA —————————————— Officer of Corporation SVP Human Resources |
MARY ANN BLANCHARD —————————— Witness Date: 12/01/2001 | STEVEN SILVERSTEIN —————————— Owner |