SPLIT DOLLAR AGREEMENT (SPECIAL TRUST)
AGREEMENT, made and entered into by and between Tootsie Roll
Industries, Inc., a Virginia corporation (the "Corporation"), and Wendy J.
Gordon, not individually, but as trustee of the Gordon Family 1993 Special
Trust (the "Owner").
WHEREAS, Melvin J. Gordon and Ellen R. Gordon (individually, an
"Employee," and collectively, the "Employees") are presently employed by the
Corporation in which capacity their services have contributed to the
successful operation of the Corporation, and the Corporation and its board of
directors believe it is in the best interest of the Corporation to retain the
services of the Employees; and
WHEREAS, the Corporation is desirous of assisting the Owner in
paying for life insurance on the joint lives of the Employees; and
WHEREAS, the Corporation has determined that this assistance can
best be provided under a "split dollar" arrangement for the insurance
policies (the "policies") owned by the Owner listed on the attached
Schedule A on the joint lives of the Employees; and
WHEREAS, the Corporation and the Owner agree to make the policies
subject to this split dollar agreement; and
WHEREAS, the Owner agrees to assign each policy to the Corporation
as collateral for the premium payments to be made by the Corporation under
this agreement by an instrument of collateral assignment (the "assignment")
and to record such assignment with the respective issuing insurance company.
NOW, THEREFORE, in consideration of the premises, and the services
to be rendered to the Corporation by the Employees, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Owner hereby mutually covenant and agree as follows:
ARTICLE I
PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT
1.1. As long as this agreement is in force, the Owner and the
Corporation agree to pay the amounts and in the manner set forth below.
1.2. The Owner shall pay each year to the Corporation an amount equal to
the economic benefit that would be taxable as gross income for federal income
tax purposes to one or both of the Employees but for the payment by the Owner
of such amount. The Owner shall have the option, exercisable upon 30 days'
written notice delivered to the Corporation, to pay a greater amount to the
Corporation.
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1.3. For purposes of Section 1.2 above, the economic benefit that would
be taxable to one or both of the Employees shall be computed in accordance
with Revenue Rulings 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B 12, and
the Corporation shall be responsible for computing such amount. The
Corporation will advise the Owner of the amount payable by the Owner pursuant
to Section 1.2, and the Owner shall pay that amount directly to the
Corporation.
1.4. In order to facilitate the payment of premiums on the policies, the
Owner and the Corporation agree that the Corporation will forward to the
respective company issuing each policy the entire premiums due on that
policy, if any.
ARTICLE II
POLICY OWNERSHIP
2.1. The Owner shall be the sole owner and beneficiary of the policy.
The Corporation's payment of premiums hereunder shall constitute a liability
of the Owner subject to repayment as provided herein. The Owner agrees to
assign each policy to the Corporation as collateral for such liabilities and
the Corporation shall have those rights granted to it under the assignments
and this agreement. As between the Owner and the Corporation, this agreement
shall take precedence over any provisions of the assignments in case of a
conflict between the terms of this agreement and the assignments.
ARTICLE III
DEATH OF EMPLOYEES
3.1. On the death of the last to die of the Employees while this
agreement is in force, the Owner will pay to the Corporation an amount equal
to the total premiums paid by the Corporation from the date of this agreement
to the date of death of the last to die of the Employees, reduced by the
total payments made to the Corporation by the Owner pursuant to Section 1.2
above.
ARTICLE IV
TERMINATION OF AGREEMENT
4.1. As to each policy, this agreement shall automatically terminate
upon the happening of any of the following events:
(a) At the option of the Corporation, if both the Employees
terminate employment for any reason other than the death of both
Employees. An Employee shall be deemed to be employed by the
Corporation during any period of temporary or permanent disability.
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(b) At the surrender, lapse or termination of the policy.
(c) Upon delivery by the Owner of written notice of such
termination to the Corporation.
(d) Upon failure of the Owner to make a payment required by
Section 1.2 above.
(e) Upon agreement of the parties.
4.2. In the event of a termination under Section 4.1 above, the
Corporation shall be entitled to receive from the Owner within 120 days after
such termination an amount equal to the amount the Corporation would have
been entitled to receive at the death of the last to die of the Employees
under Section 3.1 determined as if such death occurred on the date of such
termination (the "termination amount").
4.3. If full payment of the termination amount is not received by the
Corporation pursuant to Section 4.2 above within the 120-day period, the
remaining amount owed by the Owner to the Corporation shall be deemed to be
in default (the "default amount"). Thereafter, the Owner, at the Owner's
option, immediately shall:
(a) Pay the default amount to the Corporation; or
(b) Transfer complete ownership of the policy to the
Corporation.
ARTICLE V
OTHER PROVISIONS
5.1. The Corporation agrees that it will not merge or consolidate with
another corporation or organization, or permit its business activities to be
taken over by any other organization unless and until the succeeding or
continuing corporation or other organization shall expressly assume the
rights and obligations of the Corporation herein set forth.
5.2. This agreement will be governed by and construed in accordance with
the laws of Illinois, where it is made and to be performed. It sets forth
the entire agreement between the parties concerning the subject matter
thereof, and any amendment or discharge will be made only in writing. This
agreement will bind and benefit the parties and their legal representatives
and successors.
5.3. This agreement shall not be deemed to constitute a contract of
employment between the Corporation and either of the Employees, nor shall any
provision restrict the right of the Corporation to discharge either of the
Employees, or restrict the right of either of the Employees to terminate
employment.
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5.4. For the purposes of the Employee Retirement Income Security Act of
1974 (ERISA), the Corporation will be the "Named Fiduciary" and Plan Adminis-
trator of the split dollar life insurance plan (the "Plan") for which this
agreement is hereby designated the written plan instrument.
5.5. The Corporation's board of directors may authorize a person or
group of persons to fulfill the responsibilities of the Corporation as Plan
Administrator. The Named Fiduciary or the Plan Administrator may employ
others to render advice with regard to its responsibilities under the Plan.
The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties
to the extent not in conflict with ERISA.
5.6. The following Claims Procedure shall control the determination of
benefit payments under the Plan:
(a) Filing of Claim for Benefits
Any person or entity ("Claimant") entitled to benefits under the
Plan or under a policy will file a claim request with the Plan
Administrator with respect to benefits under the Plan and with the
"Insurer" (defined below) with respect to benefits under the
policy. The Plan Administrator will, upon written request of a
Claimant, make available copies of any claim forms or instructions
provided by the Insurer or advise the Claimant where copies of such
forms or instructions may be obtained.
(b) Denial of Claim
A claim for Benefits under the Plan will be denied if the
Corporation determines that the Claimant is not entitled to receive
benefits under the Plan. Notice of a denial shall be furnished to
the Claimant within a reasonable period of time after receipt of
the Claim for Benefit by the Plan Administrator. In the case of
benefits which are provided under the policy, the initial decision
on the claims will be made by the Insurer.
(c) Content of Notice
The Plan Administrator shall provide to every Claimant who is
denied a Claim for Benefits written notice setting forth, in a
manner calculated to be understood by the Claimant, the following:
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent Plan provisions on
which the denial is based:
(iii) A description of any additional material or
information necessary for the Claimant to perfect the claim,
and
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an explanation of why such material or information is necessary;
and
(iv) An explanation of the Plan's Claim Review Procedure
as set forth below.
(d) Review Procedure
The purpose of the Review Procedure is to provide a method by which
a Claimant may have a reasonable opportunity to appeal a denial of
a Claim to the Named Fiduciary for a full and fair review. To
accomplish that purpose, the Claimant or his duly authorized
representative:
(i) May require a review upon written application to the
Named Fiduciary;
(ii) May review pertinent Plan documents; and
(iii) May submit issues and comments in writing.
A Claimant (or his duly authorized representative) shall request a
review by filing a written application for review with the Named
Fiduciary at any time within 60 days after receipt by the Claimant
of written notice of the denial of his claim.
(e) Decision on Review
A decision on review of a denied claim shall be made in the
following manner:
(i) The decision on review shall be made by the Named
Fiduciary, who may in his discretion hold a hearing on the
denied claim. Such decision shall be made promptly, and not
later than 60 days after receipt of the request for review,
unless special circumstances (such as the need to hold a
hearing) require an extension of time for processing, in which
case a decision shall be rendered as soon as possible, but not
later than 120 days after receipt of the request for review.
(ii) The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the Claimant, and specific
references to the pertinent Plan provisions upon which the
decision is based.
5.7. This agreement may be amended or modified in whole or in part by
the Owner and the Corporation in writing at any time.
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5.8. Notwithstanding the provisions of this agreement, each life
insurance company (the "Insurer") which has issued a policy which is subject
to the provisions of this agreement is hereby authorized to act in accordance
with the terms of such policy as if this agreement did not exist, and the
payment or other performance of the contractual obligations by the Insurer,
in accordance with the terms of such policy, shall completely discharge the
Insurer from all claims, suits and demands of all persons whatsoever.
IN WITNESS WHEREOF, the parties hereto have signed this agreement
as of July 10, 1993.
____________________________________
Wendy J. Gordon
not individually, but as trustee
TOOTSIE ROLL INDUSTRIES, INC.
By _________________________________
As its___________________________
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SCHEDULE A (SPECIAL TRUST)
--------------------------
Name Policy No.
---- ----------
Guardian 3733408
John Hancock 80042963
Mass Mutual 8858899
New York Life 44956816
Principal Mutual 6450780
Security Life 1526881
Sun Life 9293268Z
COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 8858899 issued by Massachusetts Mutual Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
________________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By _____________________________________________
Its _______________________________________
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Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By__________________________________
Its____________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 80042963 issued by John Hancock Mutual Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
________________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By________________________________________________
Its __________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY
By ___________________________________
Its ______________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 6450780 issued by Principal Mutual Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By _____________________________________________
Its ________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By ________________________________________
Its ___________________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 1526881 issued by Security Life of Denver Insurance
Company on the life of Ellen R. Gordon, subject to all the terms and con-
ditions of the policy and to all superior liens, if any, which the insurer
may have against the policy. The Assignor by this instrument agrees and the
Assignee by the acceptance of this assignment agrees to the conditions and
provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the insured, the net
proceeds of the policy up to the amount of the Assignee's Interest in
the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its _______________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
SECURITY LIFE OF DENVER INSURANCE
COMPANY
By _____________________________________________
Its ________________________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 44956816 issued by New York Life Insurance Company on
the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject to all the
terms and conditions of the policy and to all superior liens, if any, which
the insurer may have against the policy. The Assignor by this instrument
agrees and the Assignee by the acceptance of this assignment agrees to the
conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_________________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ______________________________________________
Its _________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
NEW YORK LIFE INSURANCE COMPANY
By ______________________________________________
Its _________________________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 3733408 issued by Guardian Life Insurance Company of
America on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By _______________________________________________
Its __________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
GUARDIAN LIFE INSURANCE COMPANY OF
AMERICA
By _____________________________________________
Its ________________________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Family 1993 Special Trust (the "Assignor"), hereby assigns, transfers and
sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 9293268Z issued by Sun Life Assurance Company of
Canada on the life of Ellen R. Gordon, subject to all the terms and con-
ditions of the policy and to all superior liens, if any, which the insurer
may have against the policy. The Assignor by this instrument agrees and the
Assignee by the acceptance of this assignment agrees to the conditions and
provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the insured, the net
proceeds of the policy up to the amount of the Assignee's Interest in
the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its _______________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
SUN LIFE ASSURANCE COMPANY OF CANADA
By ____________________________________________
Its _______________________________________
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SPLIT DOLLAR AGREEMENT (DAUGHTERS REVOCABLE TRUST)
AGREEMENT, made and entered into by and between Tootsie Roll
Industries, Inc., a Virginia corporation (the "Corporation"), and Wendy J.
Gordon, not individually, but as trustee of the Gordon Daughters 1993
Revocable Trust (the "Owner").
WHEREAS, Melvin J. Gordon and Ellen R. Gordon (individually, an
"Employee," and collectively, the "Employees") are presently employed by the
Corporation in which capacity their services have contributed to the
successful operation of the Corporation, and the Corporation and its board of
directors believe it is in the best interest of the Corporation to retain the
services of the Employees; and
WHEREAS, the Corporation is desirous of assisting the Owner in
paying for life insurance on the joint lives of the Employees; and
WHEREAS, the Corporation has determined that this assistance can
best be provided under a "split dollar" arrangement for the insurance
policies (the "policies") owned by the Owner listed on the attached
Schedule A on the joint lives of the Employees; and
WHEREAS, the Corporation and the Owner agree to make the policies
subject to this split dollar agreement; and
WHEREAS, the Owner agrees to assign each policy to the Corporation
as collateral for the premium payments to be made by the Corporation under
this agreement by an instrument of collateral assignment (the "assignment")
and to record such assignment with the respective issuing insurance company.
NOW, THEREFORE, in consideration of the premises, and the services
to be rendered to the Corporation by the Employees, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the
Corporation and the Owner hereby mutually covenant and agree as follows:
ARTICLE I
PAYMENT OF PREMIUMS AND ECONOMIC BENEFIT
1.1. As long as this agreement is in force, the Owner and the
Corporation agree to pay the amounts and in the manner set forth below.
1.2. The Owner shall pay each year to the Corporation an amount equal to
the economic benefit that would be taxable as gross income for federal income
tax purposes to one or both of the Employees but for the payment by the Owner
of such amount. The Owner shall have the option, exercisable upon 30 days'
written notice
-1-
delivered to the Corporation, to pay a greater amount to the Corporation.
1.3. For purposes of Section 1.2 above, the economic benefit that would
be taxable to one or both of the Employees shall be computed in accordance
with Revenue Rulings 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B 12, and
the Corporation shall be responsible for computing such amount. The
Corporation will advise the Owner of the amount payable by the Owner pursuant
to Section 1.2, and the Owner shall pay that amount directly to the
Corporation.
1.4. In order to facilitate the payment of premiums on the policies, the
Owner and the Corporation agree that the Corporation will forward to the
respective company issuing each policy the entire premiums due on that
policy, if any.
ARTICLE II
POLICY OWNERSHIP
2.1. The Owner shall be the sole owner and beneficiary of the policy.
The Corporation's payment of premiums hereunder shall constitute a liability
of the Owner subject to repayment as provided herein. The Owner agrees to
assign each policy to the Corporation as collateral for such liabilities and
the Corporation shall have those rights granted to it under the assignments
and this agreement. As between the Owner and the Corporation, this agreement
shall take precedence over any provisions of the assignments in case of a
conflict between the terms of this agreement and the assignments.
ARTICLE III
DEATH OF EMPLOYEES
3.1. On the death of the last to die of the Employees while this
agreement is in force, the Owner will pay to the Corporation an amount equal
to the total premiums paid by the Corporation from the date of this agreement
to the date of death of the last to die of the Employees, reduced by the
total payments made to the Corporation by the Owner pursuant to Section 1.2
above.
ARTICLE IV
TERMINATION OF AGREEMENT
4.1. As to each policy, this agreement shall automatically terminate
upon the happening of any of the following events:
(a) At the option of the Corporation, if both the Employees
terminate employment for any reason other than the death of both
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Employees. An Employee shall be deemed to be employed by the
Corporation during any period of temporary or permanent disability.
(b) At the surrender, lapse or termination of the policy.
(c) Upon delivery by the Owner of written notice of such
termination to the Corporation.
(d) Upon failure of the Owner to make a payment required by
Section 1.2 above.
(e) Upon agreement of the parties.
4.2. In the event of a termination under Section 4.1 above, the
Corporation shall be entitled to receive from the Owner within 120 days after
such termination an amount equal to the amount the Corporation would have
been entitled to receive at the death of the last to die of the Employees
under Section 3.1 determined as if such death occurred on the date of such
termination (the "termination amount").
4.3. If full payment of the termination amount is not received by the
Corporation pursuant to Section 4.2 above within the 120-day period, the
remaining amount owed by the Owner to the Corporation shall be deemed to be
in default (the "default amount"). Thereafter, the Owner, at the Owner's
option, immediately shall:
(a) Pay the default amount to the Corporation; or
(b) Transfer complete ownership of the policy to the
Corporation.
ARTICLE V
OTHER PROVISIONS
5.1. The Corporation agrees that it will not merge or consolidate with
another corporation or organization, or permit its business activities to be
taken over by any other organization unless and until the succeeding or
continuing corporation or other organization shall expressly assume the
rights and obligations of the Corporation herein set forth.
5.2. This agreement will be governed by and construed in accordance with
the laws of Illinois, where it is made and to be performed. It sets forth
the entire agreement between the parties concerning the subject matter
thereof, and any amendment or discharge will be made only in writing. This
agreement will bind and benefit the parties and their legal representatives
and successors.
5.3. This agreement shall not be deemed to constitute a contract of
employment between the Corporation and either of the Employees, nor shall any
provision restrict the right of the Corporation to discharge either of the
Employees,
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or restrict the right of either of the Employees to terminate employment.
5.4. For the purposes of the Employee Retirement Income Security Act of
1974 (ERISA), the Corporation will be the "Named Fiduciary" and Plan
Administrator of the split dollar life insurance plan (the "Plan") for which
this agreement is hereby designated the written plan instrument.
5.5. The Corporation's board of directors may authorize a person or
group of persons to fulfill the responsibilities of the Corporation as Plan
Administrator. The Named Fiduciary or the Plan Administrator may employ
others to render advice with regard to its responsibilities under the Plan.
The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties
to the extent not in conflict with ERISA.
5.6. The following Claims Procedure shall control the determination of
benefit payments under the Plan:
(a) Filing of Claim for Benefits
Any person or entity ("Claimant") entitled to benefits under the
Plan or under a policy will file a claim request with the Plan
Administrator with respect to benefits under the Plan and with the
"Insurer" (defined below) with respect to benefits under the
policy. The Plan Administrator will, upon written request of a
Claimant, make available copies of any claim forms or instructions
provided by the Insurer or advise the Claimant where copies of such
forms or instructions may be obtained.
(b) Denial of Claim
A claim for Benefits under the Plan will be denied if the
Corporation determines that the Claimant is not entitled to receive
benefits under the Plan. Notice of a denial shall be furnished to
the Claimant within a reasonable period of time after receipt of
the Claim for Benefit by the Plan Administrator. In the case of
benefits which are provided under the policy, the initial decision
on the claims will be made by the Insurer.
(c) Content of Notice
The Plan Administrator shall provide to every Claimant who is
denied a Claim for Benefits written notice setting forth, in a
manner calculated to be understood by the Claimant, the following:
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent Plan provisions on
which the denial is based:
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(iii) A description of any additional material or
information necessary for the Claimant to perfect the claim,
and an explanation of why such material or information is
necessary; and
(iv) An explanation of the Plan's Claim Review Procedure
as set forth below.
(d) Review Procedure
The purpose of the Review Procedure is to provide a method by which
a Claimant may have a reasonable opportunity to appeal a denial of
a Claim to the Named Fiduciary for a full and fair review. To
accomplish that purpose, the Claimant or his duly authorized
representative:
(i) May require a review upon written application to the
Named Fiduciary;
(ii) May review pertinent Plan documents; and
(iii) May submit issues and comments in writing.
A Claimant (or his duly authorized representative) shall request a
review by filing a written application for review with the Named
Fiduciary at any time within 60 days after receipt by the Claimant
of written notice of the denial of his claim.
(e) Decision on Review
A decision on review of a denied claim shall be made in the
following manner:
(i) The decision on review shall be made by the Named
Fiduciary, who may in his discretion hold a hearing on the
denied claim. Such decision shall be made promptly, and not
later than 60 days after receipt of the request for review,
unless special circumstances (such as the need to hold a
hearing) require an extension of time for processing, in which
case a decision shall be rendered as soon as possible, but not
later than 120 days after receipt of the request for review.
(ii) The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the Claimant, and specific
references to the pertinent Plan provisions upon which the
decision is based.
5.7. This agreement may be amended or modified in whole or in part by
the
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Owner and the Corporation in writing at any time.
5.8. Notwithstanding the provisions of this agreement, each life
insurance company (the "Insurer") which has issued a policy which is subject
to the provisions of this agreement is hereby authorized to act in accordance
with the terms of such policy as if this agreement did not exist, and the
payment or other performance of the contractual obligations by the Insurer,
in accordance with the terms of such policy, shall completely discharge the
Insurer from all claims, suits and demands of all persons whatsoever.
IN WITNESS WHEREOF, the parties hereto have signed this agreement
as of July 10, 1993.
________________________________________________
Wendy J. Gordon
not individually, but as trustee
TOOTSIE ROLL INDUSTRIES, INC.
By _____________________________________________
As its ______________________________________
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SCHEDULE A (DAUGHTERS REVOCABLE TRUST)
--------------------------------------
Name Policy No.
---- ----------
Metropolitan 930750242A
Northwestern Mutual 12606422
Principal Mutual 6450724
Prudential 79728873
COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Daughters 1993 Revocable Trust (the "Assignor"), hereby assigns, transfers
and sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 6450724 issued by Principal Mutual Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its _______________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By ____________________________________________
Its _______________________________________
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COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Daughters 1993 Revocable Trust (the "Assignor"), hereby assigns, transfers
and sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 12606422 issued by Northwestern Mutual Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its _______________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By ____________________________________________
Its ________________________________________
-2-
COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Daughters 1993 Revocable Trust (the "Assignor"), hereby assigns, transfers
and sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 930750242A issued by Metropolitan Life Insurance
Company on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its ________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
METROPOLITAN LIFE INSURANCE COMPANY
By ____________________________________________
Its ________________________________________
-2-
COLLATERAL ASSIGNMENT (SPLIT DOLLAR)
1. Wendy J. Gordon, not individually but as trustee of the Gordon
Daughters 1993 Revocable Trust (the "Assignor"), hereby assigns, transfers
and sets over to Tootsie Roll Industries, Inc., a Virginia corporation (the
"Assignee"), to the extent of the amounts defined in and owing from time to
time from Assignor to Assignee under that certain Split Dollar Agreement
dated July 10, 1993, between Assignor and Assignee (the "Assignee's
Interest"), Policy No. 79728873 issued by Prudential Insurance Company of
America on the joint lives of Melvin J. Gordon and Ellen R. Gordon, subject
to all the terms and conditions of the policy and to all superior liens, if
any, which the insurer may have against the policy. The Assignor by this
instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth.
2. It is expressly agreed that only the following specific rights are
included in this assignment and may be exercised solely by the Assignee:
(a) The right to obtain, upon surrender of the policy by the
Assignor, an amount of the cash surrender proceeds up to the amount of
the Assignee's Interest in the policy.
(b) The right to collect, upon the death of the last to die of the
insureds, the net proceeds of the policy up to the amount of the
Assignee's Interest in the policy.
3. The insurer hereby is authorized to recognize the Assignee's claim
to rights hereunder without investigating the reason for any action taken by
the Assignee, or the giving of any notice, or the application to be made by
the Assignee of any amounts to be paid to the Assignee. The sole signature
of the Assignee shall be sufficient for the exercise of its rights under the
policy and the sole receipt of the Assignee for any sums received shall be a
full discharge and release therefor to the insurer.
Dated: July 10, 1993.
_______________________________________________
Wendy J. Gordon, not individually, but as trustee
Assignor
TOOTSIE ROLL INDUSTRIES, INC.
Assignee
By ____________________________________________
Its ________________________________________
-1-
Accepted an executed counterpart of this Collateral Assignment as of the
date last above written.
PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By ____________________________________________
Its ________________________________________
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