Exhibit 10.13
SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
THIS AGREEMENT is made and entered into as of this 30th day of August,
1995, by and between The Gradall Company (the "Company") and Barry L. Phillips
(the "Executive").
WITNESSETH THAT:
WHEREAS, the Company is the owner of a life insurance policy issued by The
New England Mutual Life Insurance Company (the "Insurer") insuring the life of
the Executive, as further described on Exhibit A hereto (the "Policy");
WHEREAS, the Policy is subject to a split dollar endorsement in favor of
the Executive (the "Split Dollar Endorsement"); and
WHEREAS, the Company and the Executive desire to convert the Policy to a
collateral assignment split dollar arrangement on the terms set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. CONVERSION OF POLICY TO COLLATERAL ASSIGNMENT. The Company shall assign,
set over, and transfer unto the Executive all of the Company's right title and
interest in and to the Policy, subject to and at the same time that the
Executive executes a collateral assignment of the Policy in favor of the
Company, securing the Executive's obligation to pay to the Company the
"Company's Interest" in the Policy, determined in accordance with the provisions
of Section 5 hereof. The Company's Interest in the Policy shall at no time vest
in or inure to the benefit of the Executive, but shall at all times inure to the
benefit of the Company, whether as a result of the Company's ownership of the
Policy, or as a result of the collateral assignment of the Policy to the
Company, which shall be deemed to occur simultaneously with the transfer of
ownership of the Policy to the Executive.
2. PAYMENT OF PREMIUMS BY THE EXECUTIVE. From and after the date of this
Agreement, the Executive shall pay that portion of the premium due under the
Policy as is equal to the lesser of (a) the PS-58 cost of the insurance coverage
provided by the Policy, or (b) the Insurer's current published premium rate for
annually renewable term insurance for standard risks in an amount equal to the
coverage provided by the Policy. Premium amounts payable by the Executive
pursuant to this Section 2 shall be withheld by the Company from compensation
which is otherwise payable to the Executive, including amounts to be paid by the
Company to the Executive pursuant to Section 4 hereof.
3. PAYMENTS OF PREMIUMS BY THE COMPANY. On or before the due date of the
Policy premium, or within any applicable grace period, the Company shall pay the
full
amount of the premium due on the Policy, including that portion thereof,
withheld from the Executive's compensation, pursuant to Section 2 hereof.
4. BONUS. On or before the due date of the Policy premium, the Company
shall pay the Executive a bonus in an amount equal to 100% of that portion of
the premium on the Policy to be paid by the Executive pursuant to Section 2
hereof. The Company is hereby authorized to withhold from such bonus that
portion of the premium on the Policy to be paid by the Executive pursuant to
Section 2 hereof.
5. REPAYMENT OF THE COMPANY'S INTEREST. Except as provided by Section 7
hereof, the Company shall be repaid an amount equal to the Company's Interest
(as hereinafter defined) upon the earlier to occur of (a) the surrender or
cancellation of the Policy, provided that such cancellation does not result from
the Company's failure to pay premiums on the Policy as required by Section 3
hereof, or (b) the death of the Executive. For the purposes of this Agreement,
the term "Company's Interest" shall mean the sum of (a) the greater of (i) the
cash surrender value of the Policy, as of the date of this Agreement, or (ii)
the cumulative total premium paid by the Company under the Policy since the
effective date of the Split Dollar Endorsement to the date of this Agreement;
plus (b) the cumulative total premium paid by the Company after the date of this
Agreement, pursuant to Section 3 hereof, less the amount paid by or on behalf of
the Executive pursuant to Section 2 hereof (the "Company's Interest"). Except as
provided by Section 7 hereof, and unless otherwise paid by the Executive, the
Company's Interest shall be repaid from the cash surrender value of the Policy
(as defined therein) upon the surrender or cancellation of the Policy, or from
the death proceeds of the Policy upon the death of the Executive.
6. COLLATERAL ASSIGNMENT, OWNERSHIP OF POLICY. To secure the Executive's
obligation to pay the Company the Company's Interest, the Executive has,
contemporaneously herewith, assigned the Policy to the Company as collateral,
pursuant to the form attached hereto as Exhibit B, which collateral assignment
specifically provides that the sole right and interest of the Company in the
Policy is to be paid the Company's Interest pursuant to the terms of Section 5
and Section 6 hereof. Upon the Company's receipt of the Company's Interest or as
provided in Section 7 hereof, the Company shall release the collateral
assignment of the Policy, by execution and delivery to the Executive of an
appropriate instrument of release. Except as set forth in this Section 6, the
Company shall have no rights or interest in the Policy. Subject to the limited
collateral assignment to the Company provided for herein, the Executive shall be
the sole and exclusive owner of the Policy and shall possess and be entitled to
exercise all the rights of the owner of the Policy including, but not limited
to, the right to designate the beneficiaries of and collect the proceeds payable
upon death under the Policy, select settlement and investment options, borrow on
the security of the Policy (to the extent the cash surrender value of the Policy
exceeds the Company's Interest) and to assign, surrender or cancel the Policy.
7. RELEASE OF THE COMPANY'S INTEREST. Upon the termination of the
Executive's employment with the Company, for any reason, whether voluntary or
involuntary, with or without cause, the Company's Interest in the Policy shall
terminate, without any payment to the Company by the Executive or from the
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Policy. Upon the termination of the Executive's employment with the Company, the
Company shall release the collateral assignment of the Policy, by execution and
delivery to the Executive of an appropriate instrument of release, without the
payment to the Company of any consideration.
8. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the
earliest to occur of any of the following events:
a. surrender of the Policy by the Executive;
b. delivery by the Executive of written notice of termination to the
Company; or
c. the termination of the Executive's employment with the Company,
whether voluntary or involuntary, with or without cause, for any
reason including the death of the Executive.
Upon the termination of this Agreement all obligations of the Company pursuant
to Sections 3 or 4 hereof shall cease. Notwithstanding the termination of this
Agreement, the provisions of Sections 5, 6 and 7 of the Agreement shall survive
the termination of this Agreement.
9. INSURER. The Insurer shall be fully discharged from its obligations
under the Policy by complying with the terms thereof and those of any collateral
assignment executed by and filed with the Insurer in connection herewith. The
insurer shall not be bound by or deemed to have notice of the provisions of this
Agreement.
10. NAMED FIDUCIARY, DETERMINATION OF BENEFITS, CLAIMS PROCEDURE AND
ADMINISTRATION. The following provisions are intended to meet the requirements
of the Employee Retirement Income Act of 1974.
a. The Company 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. (1) Claim. If the Executive believes he is being denied a benefit
to which he is entitled under this Agreement, he may file a
written request for such benefit with the Company, setting forth
his or her claim. The request must be addressed to the President
of the Company at its then principal place of business.
(2) Claim Decision. Upon receipt of a claim, the Company shall
advise the Executive that a reply will be forthcoming within
ninety (90) days and shall, in fact, deliver such reply
within such period. The
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Company may, however, extend the reply period for an
additional ninety (90) days for reasonable cause. If the
claim is denied in whole or in part, the Company shall adopt
a written opinion, using language calculated to be
understood by the Executive, setting forth: (a) the specific
reason or reasons for such denial; (b) the specific
reference to pertinent provisions of this Agreement on which
such denial is based; (c) a description of any additional
material or information necessary for the Executive to
perfect his claim and an explanation why such material or
such information is necessary; (d) appropriate information
as to the steps to be taken if the Executive wishes to
submit the claim for review; and (e) the time limits for
requesting a review under subsection (3) and for review
under subsection (4) hereof.
(3) Request for Review. Within sixty (60) days after the receipt
by the Executive of the written opinion described above, the
Executive may request in writing that the Secretary of the
Company review the determination of the Company. Such
request must be addressed to the Secretary of the Company,
at its then principal place of business. The Executive or
his duly authorized representative may, but need not, review
the pertinent documents and submit issues and comments in
writing for consideration by the Company. If the Executive
does not request a review of the Company's determination by
the Secretary of the Company within such sixty (60) day
period, he shall be barred and estopped from challenging the
Company's determination.
(4) Review of Decision. Within sixty (60) days after the
Secretary's receipt of a request for review, he will review
the Company's determination. After considering all materials
presented by the Executive, the Secretary will render a
written opinion, written in a manner calculated to be
understood by the Executive, setting forth the specific
reasons for the decision and containing specific references
to the pertinent provisions of this Agreement on which the
decision is based. If special circumstances require that the
sixty (60) day time period be extended, the Secretary will
so notify the executive and will render the decision as soon
as possible, but no later than one hundred twenty (120) days
after receipt of the request for review.
11. 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.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to the
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benefit of the Company and its successors and assigns, and the Executive and his
successors, assigns, heirs, executors, administrators and beneficiaries.
13. NOTICE. 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 Company. The date of such mailing shall be deemed the date of
notice, consent or demand.
14. 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
Ohio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, as of the day and year first above written.
The Company THE GRADALL COMPANY
By: /s/ Bruce A. Jonker
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ATTEST:
/s/ Joseph H. Keller Jr.
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Secretary
The Executive /s/ Barry L. Phillips
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Barry L. Phillips
EXHIBIT "A"
COMPANY: The New England Mutual Life Insurance Company
POLICY NO.: 6801161
DATE OF POLICY:
INSURED PERSON(S): Barry L. Phillips
DEATH BENEFIT: $500,000
OWNER OF POLICY: The Gradall Company, subject to the transfer of ownership
to the Insured pursuant to the terms of this Agreement
ANNUAL PREMIUM: $9,865.00
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