SPLIT DOLLAR LIFE INSURANCE AGREEMENT
AGREEMENT made as of the 24th day of June, 1999, by and among PULITZER INC., a Delaware corporation (the "Company"), and TANSY K. RIDGWAY and BRIAN H. RIDGWAY, as trustees ("Trustee"), under Trust Agreement dated June 3, 1999.
WHEREAS, Ronald H. Ridgway ("Executive") is employed as a senior executive officer of the Company; and
WHEREAS, the Trustee is the owner of a survivorship life insurance policy, No. 8,215,876 (the "Policy"), issued by C.M. Life Insurance Company (the "Insurer") on the joint lives of the Executive and his wife with a face amount of $2,800,000; and
WHEREAS, this agreement is being made by the Company in accordance with the requirements of the Assignment and Assumption Agreement - Employee Benefit Plans made as of March 18, 1999 between the Company and Pulitzer Publishing Company.
NOW, THEREFORE, the parties agree as follows:
1. The Policy. The Trustee has applied for and is the owner of the Policy. The Trustee will maintain physical possession of the Policy while this agreement is in effect.
2. Payment of Premiums. The Company will pay $199,500 to the Insurer as an initial Policy premium and, thereafter, will make eight annual payments to the Insurer, each in an amount equal to the planned premium specified in the Policy; provided, however, that the Company will have no obligation to make planned premium payments under the Policy following the termination of this agreement. The Company, in its discretion, may make greater premium payments under the Policy than is required by this agreement, except to the extent that any such greater payment would result in the Policy's failing to meet the definition of a life insurance contract under Section 7702 of the Internal Revenue Code of 1986.
3. Company's Interest in the Policy. The Company's interest in the Policy shall be equal to (a) minus (b), where (a) is the greater of (1) the cash surrender value of the Policy or (2) the total amount of premium payments net of withdrawals made by the Company under the Policy; and (b) is the amount of any outstanding Policy loan obligation incurred by the Company, including accrued and unpaid interest thereon. The Company may direct the investment of the cash value of the Policy in accordance with the provisions thereof. Subject to the written consent of the Trustee, the Company may withdraw or borrow funds from the Policy.
4. Trustee's Rights. The Trustee shall have all rights under the Policy that are not specifically granted to the Company by this agreement, including, without limitation, the rights to change the beneficiary designation under the Policy and exercise settlement options under the Policy; provided, however, that the Trustee may not surrender the Policy, change the death benefit option under the Policy or otherwise take action that would jeopardize the Company's right to recover its interest in the Policy without the written consent of the Company. In the event of an assignment, the assignee shall possess all of the rights and obligations of the Trustee in the Policy and under this agreement.
5. Collateral Assignment. The parties will enter into a collateral assignment agreement to evidence the Company's interest in the Policy as set forth in this agreement. Notwithstanding its interest in the Policy, the Company shall have no right to take any action that would endanger or impair the interest of the Trustee in the Policy, including, without limitation, the right to receive the Policy proceeds in excess of the value of the Company's interest upon the Insureds' death.
6. Termination of Agreement. This agreement will terminate upon the happening of any one of the following events: (a) the termination of the Executive's employment by the Company for "cause" (as that term is defined in the Executive's employment agreement with the Company); (b) the death of the survivor of the Insureds; (c) delivery by the Trustee to the Company of written notice of termination; and (d) payment in full to the Company of the Company's interest in the Policy. In the
event this agreement terminates for reasons other than the death of the Insureds, the Trustee shall have 90 days in which to pay or cause to be paid to the Company the then