Exhibit 10.18
SPLIT OWNER SPLIT DOLLAR LIFE
INSURANCE
AGREEMENT AND
ASSIGNMENT
This Agreement and Assignment is
entered into as of the 15th day of December, 1994, by and between
Espey, Huston & Associates, Inc., a Texas corporation
(hereinafter referred to as “Espey Huston” or
“Assignee-Owner”) and Wayne J. Overman, an employee of
Espey Huston and the owner of Lincoln National Life Insurance
Company Policy Number 23-7925341 and any supplementary contracts
issued in connection therewith (hereinafter referred to as
“Employee-Owner”) . In this Agreement and Assignment,
Lincoln National Life Insurance Company Policy Number 23-7925341
and any supplementary contracts issued in connection therewith will
be referred to as the “Policy.”
WHEREAS, Employee-Owner is a valued
employee of Assignee-Owner;
WHEREAS, Assignee-Owner desires to
assist Employee-Owner with his personal life insurance program by
paying all or a portion of the monthly premiums due on the
Policy;
WHEREAS, upon Assignee-Owner making
such premium payments on the Policy, Assignee-Owner will have
certain specific and limited Policy ownership rights and interests
in the Policy to the extent of such payments, as provided herein;
and
WHEREAS, this Agreement and
Assignment is intended to qualify as a life insurance employee
benefit as described in Revenue Ruling 64-328;
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned Employee-Owner and
Assignee-Owner hereby agree as follows and the undersigned
Employee-Owner, in consideration of the Policy premiums paid by
Assignee-Owner under paragraphs 1 and 3 as of the effective date of
this Agreement and Assignment and upon each subsequent monthly
Policy premium due date, hereby assigns, transfers, and sets over
certain specific and limited Policy ownership rights and interests
in the Policy, as provided herein (such rights and interests being
the “Limited Policy Ownership Rights” as set forth in
paragraph 4 and the “Policy Interest” as set forth in
paragraph 5) to Assignee-Owner, its successors and assigns, subject
to the following terms and conditions.
1. Payment of Policy Premiums by
Assignee-Owner . Assignee-Owner agrees to pay all or a portion
of the monthly premium due under the Policy for its own benefit
prior to the date on which Assignee-Owner releases and reassigns
its Limited Policy Ownership Rights and Policy Interest to
Employee-Owner under the provisions of paragraph 9 (if such a
release and reassignment occurs) and for the benefit of
Employee-Owner after any such release and reassignment occurs. The
portion of the monthly Policy premium to be paid by Assignee-Owner
will be determined each month in the sole and absolute discretion
of Assignee-Owner. Assignee-Owner will notify Employee-Owner of the
dollar amount of the monthly Policy premium that it will pay at
least 20 days prior to the date on which such premium is
due.
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2. Payments by Employee-Owner
. Employee-Owner may, at his option, pay any portion of the monthly
Policy premium that is not paid by Assignee-Owner and may, at his
option, pay additional amounts that are permitted to be paid under
the terms of the Policy. Employee-Owner will notify Assignee-Owner
of the dollar amount that he will pay under the terms of the Policy
at least 10 days prior to the date on which the monthly Policy
premium is due.
3. Remission of Payments to
Lincoln National Life Insurance Company (hereinafter referred to as
the “Insurance Company”) . Not later than five
business days prior to the monthly premium due date for the Policy,
Assignee-Owner will remit to the Insurance Company the portion of
the premium that it is to pay under paragraph 1 and any amount that
Employee-Owner has elected to pay under paragraph 2 and that
Assignee-Owner has actually received from Employee-Owner not later
than the fifth business day preceding the monthly premium due date
for the Policy.
4. Assignee-Owner’s Limited
Policy Ownership Rights . Except in those circumstances in
which Assignee-Owner agrees or elects to release and reassign its
Limited Policy Ownership Rights and Policy Interest to
Employee-Owner or his personal beneficiary named under the Policy
under the provisions of paragraph 9, Assignee-Owner, alone, will,
to the extent of its Policy Interest (as determined in paragraph
5), receive from Employee-Owner an amount equal to such Policy
Interest upon the surrender or cancellation of the
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Policy by Employee-Owner, upon the termination
of Employee-Owner’s employment with Assignee-Owner, or upon
the termination of this Agreement and Assignment by mutual written
consent of Employee-Owner and Assignee-Owner in accordance with
paragraph 8. Assignee-Owner’ s rights that are set forth in
the preceding sentence of this paragraph 4 are referred to in this
Agreement and Assignment as “Limited Policy Ownership
Rights.” Assignee-Owner will not have the right to borrow
against the Policy’s loan value, or to withdraw (under the
“Withdrawal” or “Partial Surrender”
provisions of the Policy) from the Policy’s cash values.
Unless and until Assignee-Owner releases and reassigns its Limited
Policy Ownership Rights and Policy Interest to Employee-Owner under
either of the first two sentences of paragraph 9, Employee-Owner
will not have the right to borrow against the Policy’s loan
value, or to withdraw (under the “Withdrawal” or
“Partial Surrender” provisions of the Policy) from the
Policy’s cash values.
5. Assignee-Owner’s Policy
Interest . In the event Employee-Owner surrenders or cancels
the Policy, Employee-Owner’s employment with Assignee-Owner
terminates, or Employee-Owner and Assignee-Owner terminate this
Agreement and Assignment by mutual written consent in accordance
with paragraph 8, Assignee-Owner’s Policy Interest will be an
amount equal to the lesser of “Assignee-Owner’s
Cumulative Premium Payments” or “Assignee-Owner’s
Share of the Policy’s Cash Surrender Value.” For this
purpose, “Assignee-Owner’s Cumulative Premium
Payments” shall refer to the sum of all premium payments on
the Policy made by
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Assignee-Owner under paragraphs 1 and 3. For
this purpose and for purposes of paragraph 9,
“Assignee-Owner’s Share of the Policy’s Cash
Surrender Value” shall be determined by multiplying the
Policy’s total cash surrender value by a fraction, the
numerator of which is the Assignee-Owner’ s Cumulative
Premium Payments and the denominator of which is the sum of the
Assignee-Owner’s Cumulative Premium Payments plus
Employee-Owner’s total premium payments, if any, and other
contributions, if any, with respect to the Policy under paragraphs
2 and 3. This Agreement will cover and this Assignment will include
any interest that Assignee-Owner may have in the Policy prior to
the effective date of this Agreement and Assignment or prior to the
date that this Agreement and Assignment is executed.
Assignee-Owner’s Policy Interest that is set forth in this
paragraph 5 is referred to in this Agreement and Assignment as
Assignee-Owner’s “Policy Interest,” and the
specific circumstances in which Assignee-Owner will be entitled to
the benefit of its Policy Interest are set forth in paragraph
4.
6. Employee-Owner’s
Retained Incidents of Ownership . Except as to the Limited
Policy Ownership Rights and the Policy Interest specifically
granted to Assignee-Owner herein, and except as otherwise provided
herein, Employee-Owner retains all incidents of ownership under the
Policy (including the right to designate beneficiaries).
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7. Employee-Owner’s Right
to Transfer . Employee-Owner will have the right to transfer
all or any part of his interest in the Policy and this Agreement
and Assignment to any person, entity or trust by execution of a
written Assignment delivered to Assignee-Owner and to the Insurance
Company. Assignee-Owner’s rights and interests in the Policy
shall not be affected by any such transfer.
8. Termination of Agreement and
Assignment . This Agreement (other than the portion of the
Agreement that relates to Employee-Owner’s assignment of the
Limited Policy Ownership Rights and the Policy Interest to
Assignee-Owner) will terminate on the first to occur of the
following: (a) the surrender or cancellation of the Policy by
Employee-Owner, who will have the sole and exclusive right of
surrender or cancellation without Assignee-Owner’s consent,
(b) the termination of Employee-Owner’s employment with
Assi
