Exhibit 10(u)
SPLIT DOLLAR AGREEMENT
This AGREEMENT (the "Agreement") is made on_______________, between
FURNITURE BRANDS INTERNATIONAL, INC., a Delaware corporation (the "Company"),
and _______________________________of ________________ (the "Employee" and the
"Owner").
The Company desires to assist the Employee in providing permanent insurance
protection for his family and to supplement existing Company benefits for the
Employee.
In pursuit of this desire, the Owner has applied to the insurance company
named in Schedule A (the "Insurance Company") for a policy of insurance on the
life of the Employee and the Insurance Company has issued that policy in the
face amount and under the policy number also shown in Schedule A (the "Policy").
The Company and the Owner have agreed to share the cash value and death benefits
of the Policy.
Therefore, in consideration of the mutual covenants contained herein, the
parties agree as follows:
ARTICLE 1: OWNERSHIP OF INSURANCE
The Owner shall be the owner of the Policy and may exercise all rights of
ownership with respect to the Policy, except as otherwise provided in the
Agreement.
ARTICLE 2: PAYMENT OF PREMIUMS ON POLICY
On or before the due date of each annual premium on the Policy, the Company
will pay to the Insurance Company, on behalf of the Owner, that portion of the
annual premium which equals the "cost" of the insurance which the beneficiary or
beneficiaries named in the policy would be entitled to receive if the employee
were to die during the policy year for which the annual premium was paid. This
amount is deemed to be the "Owner's Contribution" toward payment of the
premiums. The Owner's premium share is determined by the amount of death benefit
payable in the event of the Employee's death in that year, multiplied by the
lesser of: (a) the Insurance Company's net yearly renewable term rate per
thousand dollars in insurance coverage; or (b) the Internal Revenue Service's
"PS58" rate. The Company will also pay the cost of any Waiver of Premium
provisions.
Upon payment of the Owner's premium share by the Company, the Employee
shall be deemed immediately to have received compensation equal to the total of
(i) the Owner's premium share, as determined in the first paragraph of the
Article 2; and (ii) the cost of any Waiver of Premium provision paid by the
Company.
The Company will also pay the balance of the premium due to the Insurance
Company, which amount is deemed to be the "Company's Contribution" toward
payment of the premium. This payment shall not be deemed to be compensation to
the Employee.
Schedule A provides the current allocation of annual premium which is based
upon the benefit payable in the event of the Employee's death and the Insurance
Company's current dividend scale. .
ARTICLE 3: ELECTION OF DIVIDEND OPTION
All dividends declared by the Insurance Company on the Policy shall be
applied to purchase additional paid up insurance or a blend of paid up additions
and one year term insurance on the life of the Employee. The dividend option
which is elected will not be terminated or changed without the Company's
consent.
ARTICLE 4: ASSIGNMENT OR TERMINATION OF POLICY
The Owner will collaterally assign the Policy to the Company as security
for the repayment of the amounts which the Company will pay toward the premiums
due on the Policy. The Collateral Assignment will not be changed without the
Company's consent.
While this Agreement is in effect, the Owner will neither sell, surrender,
withdraw any portion of the policy's cash value, nor otherwise terminate the
Policy without the Company's consent.
ARTICLE 5: DEATH CLAIMS
In the event of the death of the Employee while this Agreement is in
effect, the Company will be entitled to receive a portion of the death benefits
provided under the Policy. The amount to which the Company will be entitled will
be the aggregate amount of the Company's contributions.
When the Employee is deceased, the beneficiary or beneficiaries named in
the Policy will be entitled to receive the amount of the death benefit in excess
of the amount payable to the Company under the first paragraph of this Article
5. This amount will be paid under any settlement option elected by the Owner.
ARTICLE 6: TERMINATION OF AGREEMENT
This Agreement will terminate upon the occurrence of any of the following
events:
(a) cessation of the Company's business;
(b) written notice given by either party to the other;
(c) termination (including by retirement) of the Employee's
employment by the Company;
(d) bankruptcy, receivership or dissolution of the Company; or
(e) repayment in full by the Owner of the contributions made by the
Company under the third paragraph of Article 2 of this Agreement,
provided that upon receipt of such repayment the Company releases
the Collateral Assignment of the Policy made by the Owner
pursuant to Article 4 of this Agreement.
ARTICLE 7: DISPOSITION OF POLICY ON TERMINATION OF AGREEMENT
If this Agreement is terminated under any sub-paragraphs (a) through (d) of
Article 6, the Owner shall repay the Company the aggregate amount of the
Company's contributions. Said repayment to be made within thirty (30) days of
such termination event. Upon receipt of that amount, the Company shall release
the Collateral Assignment of the Policy. If the Owner does not repay the
aggregate amount of the Company's contributions within this thirty (30) day
period, the Company may enforce any rights which it has under this Agreement,
the Collateral Assignment, and/or the premium Retrieval Agreement.
Anything in this Article 7 to the contrary notwithstanding, the parties may
agree by a separate addendum delivered contemporaneously herewith, that the
Company will defer the request for repayment under this Agreement for such
period of time after retirement as may be appropriate to realize for the Owner
the full benefits contemplated hereby.
ARTICLE 8: POLICY LOANS
The Company has the right to borrow from the Policy an amount not to exceed
the aggregate amount of the Company's contributions.
The Owner has the right to borrow from the Policy an amount equal to this
total premium share and the corporation will consent to such loans. Any loans
exceeding the Employee's total premium share must be approved by the Company.
Each party is solely responsible for payment of interest on monies borrowed
from the Policy by such party.
ARTICLE 9: INSURANCE COMPANY NOT A PARTY
The Insurance Company: (a) will not be deemed to be a party to this
Agreement nor be in any way responsible for its validity; (b) will not be
obligated to inquire as to the distribution of any monies payable or paid by it
under the Policy.
ARTICLE 10: AMENDMENT OF AGREEMENT
This Agreement may not be amended except by a writing signed by the Company
and the Owner. This Agreement will be binding upon the heirs, administrators or
executors, and the successors and assigns of each party to this Agreement.
The Owner reserves the right to assign all of his or her rights and
obligations under this Agreement.
This Agreement contains the entire understanding of the parties and there
has been no reliance on any other representations.
ARTICLE 11: LIMITATION OF COMPANY'S LIABILITY
The Company's sole liability under this Agreement will be to make its
contribution to the annual premium cost in accordance with Schedule A. The
Company is in no way responsible for the tax consequences of this transaction to
the Employee or the Owner, and/or the content of the Policy, and/or the content
of accuracy of any schedules, publications or other documents presented by the
Insurance Company or its agents with respect thereto.
ARTICLE 12: APPLICABLE LAW
This Agreement is subject to and will be construed under the law of the
State of Delaware.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
ATTEST: FURNITURE BRANDS INTERNATIONAL, INC.
By: ___________________________________ By: __________________________________
(Officer Name and Title) (Officer Name and Title)
_______________________________________ ______________________________________
(Witness) (Employee)
PREMIUM RETRIEVAL AGREEMENT
Agreement made this __________ day of __________________ by and between
FURNITURE BRANDS INTERNATIONAL, INC., (hereinafter called "the Corporation") and
___________________ of the city of ________________, State of
_______________________, (hereinafter called "the employee")
A Split Dollar Agreement has been entered into on . The purpose of this
Agreement is for the Corporation to assist the Employee in acquiring a
substantial life insurance policy to supplement existing Employee Benefit
Programs. In accordance with this Agreement, The Guardian Life Insurance Company
has issued Policy No. ___________ on the life of the Employee dated with a face
amount of $___________. It is the Corporation's intent to be responsible for a
substantial portion of the premiums payable with the understanding that these
premium advances are fully recoverable by the Corporation at the Employee's
retirement or in the event of his death or disability.
In the event of the Employee's voluntary termination of employment prior to
the Corporation's having cash equity in the Split Dollar Insurance Policy equal
to its cumulative premium contributions, the Employee hereby agrees to satisfy
any lack of full recovery by the Corporation within thirty (30) days of his
termination, per the attached schedule. This Premium Retrieval Agreement is not
assignable.
FURNITURE BRANDS
INTERNATIONAL, INC.:
ATTEST: By: ______________________________
(Officer Name and Title)
FURNITURE BRANDS ______________________________
INTERNATIONAL ,INC. (Employee)
By: ________________________________ ______________________________
(Officer Name and Title) (Witness)