{"id":39888,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/executive-life-insurance-plan-monsanto-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"executive-life-insurance-plan-monsanto-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/executive-life-insurance-plan-monsanto-corp.html","title":{"rendered":"Executive Life Insurance Plan &#8211; Monsanto Corp."},"content":{"rendered":"<pre>\nEXECUTIVE LIFE INSURANCE PLAN\n\n\n\n\nTABLE OF CONTENTS\n\n                                                                 \nIntroduction..........................................................1\n\nPlan Overview\n\nBenefits.....................................................2\n\nPremiums.....................................................3\n\nCoverage Amounts.............................................4\n\nCash Value...................................................4\n\nOptions at Retirement........................................4\n\n\"What happens if . . .\"......................................5\n\nSummary......................................................6\n\nEligibility..................................................6\n\nEnrollment............................................................7\n\nTax Considerations....................................................7\n\n\n\n\n\n\n    INDEX\n\n\n    Active Employee Coverage.................2,4,6\n    AD&amp;D Insurance ............................1,2\n    Assignment of Ownership......................7\n\n    Beneficiary................................3,7\n    Benefits at Death........................2,4,6\n    BMF Compensation Strategies..................5\n    Business Travel Accident\n             Insurance.........................1,2\n\n    Cash Value of Policy.......................4,7\n    Collateral Assignment, Monsanto............2,7\n    Connecticut General..........................5\n\n    Disabled Employee (T&amp;PD).....................5\n\n    Eligibility..................................6\n    Enrollment...................................7\n    Estate Planning..............................7\n\n    Evidence of Insurability.................2,4,6\n    Illness, Life Threatening....................6\n    Interest Credits...........................2,4\n\n    Loans Against Cash Value...............2,4,6,7\n\n    Premiums.....................................3\n\n    Regular Monsanto Coverage....................1\n    Retiree Coverage.......................2,4-5,6\n\n    Salary Increases.............................4\n    Statements, Annual...........................5\n    Summary......................................6\n    Surrender of Policy......................2,4,6\n\n    Tax Considerations.........................3,7\n    Terminating Employee.........................5\n\n    Withdrawals from Cash Value............2,4,6,7\n\n\n\n\n\n\n\nINTRODUCTION\n\n   The following describes the Monsanto Executive (Split Dollar) Life\nInsurance Program, which becomes effective January 1, 1988. There are\nfour sections:\n\n* OVERVIEW - explains the benefits of the split dollar program, and how\n  it works.\n* ELIGIBILITY - lists evidence of insurability requirements.\n* ENROLLMENT - explains the enrollment procedure.\n* TAX CONSIDERATIONS - reviews current insurance industry understanding\n  of tax implications.\n\nBY WAY OF REVIEW . . .\n\n   Before describing the new Split Dollar program, let's quickly review\nthe normal life insurance coverage provided to salaried employees and\nretirees:\n\nACTIVE EMPLOYEES\n\n* Group Term coverage providing a death benefit of two and one-half times\n  annual base pay.\n* Accidental Death and Dismemberment (AD&amp;D) coverage of one times annual\n  base pay.\n* Business Travel Accident coverage of one and one-half times annual base pay.\n\nRETIRED EMPLOYEES\n\n* A death benefit equal to 62 1\/2% of final base pay if you retire with 20 or\n  more years of service, 37 1\/2% with 10 to 20 years.\n\n   Monsanto provides this protection at no cost to employees and retirees.\nHowever, each year the individual pays income tax on the \"value\" of the\nGroup Term coverage in excess of $50,000, since this is an economic benefit\nresulting in \"imputed income\" to the individual, according to tax\nregulations. The \"value\" is determined from a government table and is based\non age and coverage amount.\n\n\n\n\n\nPLAN OVERVIEW\n\n   By enrolling in the Monsanto Executive Life Insurance plan, you will own\na universal life insurance policy issued by Connecticut General Life\nInsurance Company. This policy will replace most of your existing Group Term\ncoverage and will provide you with\n\n* HIGHER DEATH BENEFITS (both before and after you retire) and\n\n* INCREASED FINANCIAL FLEXIBILITY by giving you access to the cash value of\n  the policy in excess of Monsanto's contributions.\n\n   The program is called \"split dollar\" because both you and Monsanto share\nthe cost and the ownership of the policy.\n\nSPLIT DOLLAR PLAN BENEFITS\n\nAs an active employee, you will have\n\n* A DEATH BENEFIT EQUAL TO FOUR TIMES YOUR ANNUAL BASE PAY PLUS ALL PREMIUMS\n  --------------------------------------------------------------------------\n  YOU HAVE PAID, and\n  --------------\n\n* regular AD&amp;D and Business Travel Accident coverage, and\n\n* the ability to make withdrawals or borrow against the cash value of the\n  policy in excess of Monsanto's contribution. (This will reduce the death\n  benefit by a like amount, in exchange for your use of the money before\n  death.)\n\nIf you retire at or after age 62, you will have\n\n* A DEATH BENEFIT EQUAL TO TWO TIMES YOUR FINAL BASE PAY PLUS ALL PREMIUMS\n  ------------------------------------------------------------------------\n  YOU HAVE PAID - which can be sustained long after premium payments have\n  -------------\n  ended (to approximately age 90), and\n\n* the same ability to make withdrawals or borrow against the cash value of\n  the policy, or\n\n* you can cash in - \"surrender\" - the policy. In this case, Monsanto will be\n  reimbursed for its premiums, but you keep the remainder of the cash value\n  (less a small surrender charge). At that time, you'll have to pay taxes on\n  the excess over your contributions.\n\n   Interest credits will accumulate on a tax-deferred basis. Connecticut\nGeneral will provide illustrations of the cash value buildup to you at your\nenrollment session.\n\n   Making withdrawals, borrowing against the cash value of your policy, or\nsurrendering the policy can have tax implications. See the \"Tax\nConsiderations\" section, page 7.\n\n   Monsanto's share of the policy ownership is a collateral assignment of\nthe case value and\/or death benefits of the policy equal to the premiums it\nhas paid. Thus, the policy provides sufficient death benefits to reimburse\nMonsanto for the premiums it has paid (but this does not affect any of your\nbenefits as described above).\n\n   You can enroll for a lesser amount of coverage. However, if you later\ndecide you want to increase the coverage, the agreement of Monsanto and\nConnecticut General will be required. Connecticut General will require\nadditional evidence of insurability.\n\n   Note that for overview purposes, the death benefits described above are\nreferred to as being provided by the Split Dollar policy. In actuality, the\nfirst $50,000 of the death benefit will continue to be provided under the\nGroup Term policy (because there's no imputed income tax to you on that\namount). You will not have to pay any premiums for this coverage. The normal\nAD&amp;D and Business Travel Accident coverage will also continue to be provided\nunder the existing policies. The remainder of your coverage will be provided\nby the Split Dollar policy.\n\n\n\n\n\nPLAN OVERVIEW\n(continued)\n\nPREMIUM PAYMENTS . . . YOURS AND MONSANTO'S\n\n   During the premium payment period, both you and Monsanto pay premiums.\n\n   You pay a portion of the premium equal to the \"term\" cost of the coverage\nprovided by the policy for your beneficiaries. As with term insurance\npolicies, this cost will increase with age. At the time of enrollment, you\nwill be provided with illustrative charts showing your projected premium\npayments, based on your age. Here's a sampling of the cost per year per\n$1,000 of death benefit:\n\n                                      Your Annual Premium\/\n                Age                     $1,000 Insurance\n                ---                     ----------------\n\n                40                           $  .60\n                45                              .80\n                50                             1.13\n                55                             1.58\n                60                             2.87\n                65                             4.60\n\n   Monsanto pays the premiums in excess of the \"term\" cost.\n\n   Premiums are payable until you reach age 65 (or until 10 years of program\nparticipation if later). After deductions for administrative fees and for\nrisk charges, the remainder of the premiums is credited to the cash value of\nthe policy which accumulates interest on a tax-deferred basis. The premium\namount is set so that payments will end at age 65 (or after 10 payment years\nif later), and there will be sufficient cash value to sustain the policy to\nage 90 (assuming interest credits of 8 1\/4% per year).\n\n   As a normal death benefit, your beneficiaries will receive all the\npremiums you have paid - in addition to the four times annual base pay as an\nactive employee or two times final base pay as a retiree.\n\nCOMPARING YOUR COSTS UNDER SPLIT DOLLAR AND REGULAR MONSANTO COVERAGE . . .\n\n   Under the Split Dollar plan, you are paying premiums with after-tax\ndollars for coverage over $50,000.\n\n   Under the regular Monsanto coverage, you pay income tax on the \"value\" of\nthe Group Term coverage in excess of $50,000.\n\n   Typically, the cost per year per $1,000 coverage will be less to you\nunder the Split Dollar plan than the imputed income tax under the regular\nMonsanto program. (Of course, coverage under the Split Dollar plan is\nhigher, so your total cost will be determined by the cost per $1,000 times\nyour coverage.)\n\n   Finally the Split Dollar plan is not term insurance. In addition to\nproviding a death benefit, your policy will also build cash value. This\ngives you additional financial flexibility. The policy becomes self\nsustaining at age 65 (or after 10 years of participation if later) and you\npay no more premiums.\n\n\n\n\n\nPLAN OVERVIEW\n(continued)\n\nCOVERAGE AMOUNTS TIED TO BASE PAY\n\n   As an active employee, your death benefits are based on your annual base\npay, and increase automatically as your base pay increases.\n\n   As a retiree, your benefits are based on final base pay at retirement.\n\nDETERMINING YOUR POLICY'S CASH VALUE\n\n   The cash value of your policy equals\n\n         YOUR CONTRIBUTIONS,\n\n    plus MONSANTO'S CONTRIBUTIONS,\n\n   minus A 5% (OF PREMIUMS) FRONT-END ADMINISTRATIVE CHARGE\n\n   minus A MORTALITY CHARGE (the cost charged by the insurance company to\n         insure that portion of the death benefit in excess of the policy's\n         cash value)\n\n    plus INTEREST CREDITS on the balance.\n\n   If you cash in (\"surrender\") the policy, you receive its current cash\nvalue minus the company's contributions and minus a small surrender charge\n(which ends in the tenth policy year).\n\nMAKING ADDITIONAL CONTRIBUTIONS . . .\n\n   Within legal limits, you can also invest additional money in the policy\nand receive interest credits on a tax-deferred basis. This will build up\ncash value, but this is not a primary purpose of the program. You will\nprobably find it financially attractive to make additional contributions\nonly if you expect to leave the money in for an extended period of time and\nsurrender the policy after termination or retirement.\n\nOPTIONS AT RETIREMENT\n\n   You have considerable financial flexibility after you retire.\n\n   IF YOU RETIRE AT OR AFTER AGE 62 AND WISH TO MAINTAIN YOUR POLICY, you\nand Monsanto continue to pay premiums until you reach 65 (or for the balance\nof 10 payment years if later). Then, the policy becomes self-sustaining to\nage 90 (assuming annual interest credits of at least 8 1\/4%). In other\nwords, when premiums end, risk charges are paid out of the cash value of the\npolicy. You will then have to pay imputed income tax on the \"term\" cost of\nthe insurance, but you will be able to make withdrawals from the cash value\nto pay these taxes.\n\n   If interest is credited at a different rate, the policy's\nself-sustainment will end at a different age. The rate currently being\ncredited by Connecticut General is 9%.\n\n   IN ADDITION, YOU WILL HAVE THESE OTHER OPTIONS AFTER YOU RETIRE:\n\n        *  CONTINUE THE POLICY, BUT WITH REDUCED COVERAGE. This will also\n           reduce the risk charges paid out of the policy's cash value and\n           also your imputed income tax.\n\n        *  MAKE ADDITIONAL WITHDRAWALS OR BORROW AGAINST THE CASH VALUE OF\n           THE POLICY, OR\n\n        *  SURRENDER YOUR POLICY.\n\n\n\n\n\nPLAN OVERVIEW\n(continued)\n\n   IF YOU RETIRE BEFORE AGE 62, MONSANTO WILL GENERALLY DISCONTINUE PAYMENT\nOF PREMIUMS AND RECOVER ITS PREMIUMS AT THAT TIME. You will have the option\nof continuing the policy on your own or surrendering the policy and taking\nthe cash value in excess of Monsanto's contributions. Also, if you have at\nleast 10 years of Benefit Service, sufficient funding will be provided to\nfund coverage at least equal to regular Group Term coverage for salaried\nemployees. This assumes you make no withdrawals and continue to pay the\n\"term\" cost of the reduced coverage until you reach age 65 (or 10 years of\nparticipation if later).\n\nWHAT HAPPENS IF . . .\n\nWHAT HAPPENS IF YOU TERMINATE BEFORE AGE 62?\n\n   If you terminate, the company will discontinue payment of premiums and\nwill recover its premiums at the time of your termination or retirement\n(unless the company elects to exercise its discretion to continue the\npayment of premiums and\/or delay recovery of its premiums to a later time).\n\n   You can maintain the policy by reimbursing Monsanto for the premiums it\nhas paid and continuing future premium payments personally. The cash to\nrepay Monsanto can be borrowed or withdrawn from the policy or paid from\npersonal funds. This repayment to Monsanto would terminate the split dollar\nagreement and Monsanto would have no future ownership rights in the policy\ncash values or death benefits. Alternatively, you can surrender the policy.\nMonsanto would recoup its premiums at that time and the remaining cash value\nwould be yours to use as you choose.\n\nWHAT HAPPENS IF YOU BECOME DISABLED?\n   If you become totally and permanently disabled under the Disability\nIncome Plan, Monsanto will pay the entire premium. You will not be required\nto contribute. You will have to pay taxes on the \"term\" costs, which will be\nimputed to you as additional income.\n\nOTHER CONSIDERATIONS\n   In the event that the mortality or any other charges to the contract\nreduce the policy's cash value so that the company's interest in the policy\nmay be impaired, the company will be allowed to recover its costs or to make\narrangements with the insured so that the company's interests remain intact.\n\nANNUAL STATEMENT\n   You will receive an annual statement which will provide current, personalized\ninformation about your policy. This will inform you of your current death\nbenefits, cash value, interest credits and mortality charges.\n\nFOR MORE INFORMATION\n\nThe broker:   BMF Compensation Strategies\n              613 Northwest Loop, Suite 500\n              San Antonio, TX 78216\n              (512) 366-0618\n\n              Mr. Norm Bevan - President\n              Ms. Colette Wagh - Vice President\n\nMonsanto:     Robert N. Abercrombie - Director, Corporate Benefits - 4-2775\n\nInsurance     Connecticut General        (for information about the status\n  company:    Hartford, CT 06152         of your policy, amounts available\n              (203) 726-7764             for loans or withdrawals, etc.)\n\n              Mr. Louis Sumsky - Assistant Vice President\n\n\n\n\n\n\nSPLIT DOLLAR\nSUMMARY\n\n   Here's a summary of the Monsanto Executive (Split Dollar) Life Insurance\nplan:\n\nAS AN ACTIVE EMPLOYEE . . .\nNORMAL\nDEATH BENEFIT\n-------------\nFour times annual\nbase pay, plus all\ncontributions.\n\nFLEXIBILITY\n-----------\nYou can make withdrawals\nor borrow against the\nPolicy's cash value.\n\nINCOME TAXES\nON IMPUTED INCOME\n-----------------\nYou have no imputed income\nbecause you are your\npaying premiums equal to\nthe \"term\" cost of the\ncoverage.\n\nAS A RETIREE (AT OR AFTER AGE 62) . . .\nNORMAL\nDEATH BENEFIT\n-------------\nTwo times final base\npay, plus all your\ncontributions.\n\nFLEXIBILITY\n-----------\nYou can\n* continue full coverage\n* continue reduced\n  coverage\n* make withdrawals\n  or borrow against the\n  policy's cash value in\n  excess of company\n  contributions,\n* surrender the policy,\n  and receive cash value\n  in excess of company\n  contributions.\n\nINCOME TAXES\nON IMPUTED INCOME\n-----------------\nWhile you pay premiums\nyou own no imputed income\ntax. When your premiums\nend, you pay imputed taxes\non the \"term\" cost of the\ncoverage.\n\nELIGIBILITY\n\n   The Monsanto Executive (Split Dollar) Life Insurance plan is available to\ndesignated members of the Monsanto Management Council as of January 1, 1988.\nNew members will become eligible when so designated by the Director of\nCorporate Personnel.\n\n   For eligible current members, coverage is guaranteed if you are actively\nat work on October 1, 1987, and have not missed work more than three days\ndue to illness or injury during the preceding 90-day period. If you are age\n61 or over on June 30, 1988, or if your initial coverage substantially\nexceeds one million dollars, medical information will be required by\nConnecticut General to establish the gross premium - in other words, the\ntotal premium you and Monsanto pay. Your premiums will not be higher than\nthe normal \"term\" cost for a person your age.\n\n   Medical information will also be required, and Connecticut General\nreserves the right to establish a different gross premium, in the following\ncircumstances:\n\n* you have been absent for more than three days due to illness or injury\n  during the 90-day period ending October 1, 1987, or you are not actively at\n  work on that day,\n\n* you elect not to enroll for full coverage during this initial offering,\n  but later request additional coverage,\n\n* your cumulative salary increases exceed 8% compounded annually.\n\n   In the above three circumstances, if the medical information indicates\nthat you have a life-threatening illness, the insurance company also\nreserves the right to deny coverage.\n\n   Similar underwriting requirements will apply to employees who become\neligible for the program after October 1, 1987.\n\n\n\n\nENROLLMENT\n\n   To enroll, you will need to meet with a representative of the insurance\nbrokerage firm, BMF Compensation Strategies. You are invited to have your\npersonal advisor and your spouse at that meeting. You will receive\npersonalized information to illustrate premiums, death benefits and cash\nvalues in the future.\n\n   Any medical information requirements applicable in your situation will be\nreviewed with you at that meeting.\n\n   When you enroll, you will designate a beneficiary for your share of the\ndeath benefit from your policy, or you can assign ownership of your policy\nto another person or to a trust. Whatever your decision, you will also\nexecute a collateral assignment and split dollar agreement in favor of\nMonsanto permitting it to recover the premiums it has paid from the cash\nvalue or death benefit of the policy.\n\n   Since the split dollar program significantly increases your life\ninsurance benefits, it will likely have an impact on your estate, financial\nand tax planning. Before enrolling, you are encouraged to review this\nprogram with your advisors in these areas to determine the most favorable\nstrategy for the ownership of the policy and the beneficiary(ies) to be\ndesignated for the proceeds. The forms to be completed at enrollment will\nrequire precise wording in these areas.\n\nTAX\nCONSIDERATIONS\n\n   The tax information contained below and elsewhere in this program summary\nis based on current insurance industry interpretations and practice for\nsimilar policies. But there are no specific regulations or tax rulings on\nthis program, so you may want to review the subject with your tax advisor.\n\nAccording to general insurance industry practice under current tax law:\n\n* Death benefits are not subject to federal income tax unless the policy is\n  transferred for valuable considerations.\n\n* Like all life insurance, death benefits are subject to federal estate\n  taxes unless excluded from your estate through a timely, irrevocable\n  transfer of ownership. Irrevocable assignment may have give tax\n  considerations.\n\n* The buildup of cash value in the policy is not considered taxable as it\n  accrues.\n\n* Withdrawals of cash value may or may not be taxable, depending on the\n  timing and amount of withdrawal.\n\n* Loans against cash value are not considered taxable unless the policy is\n  later surrendered or the loan is defaulted.\n\n* Interest on loans is deductible according to the phase-out schedule for\n  consumer loans.\n\n* You have no imputed income from the policy as long as you are paying the\n  \"term\" cost of coverage. When premium payments end, you have imputed\n  income equal to the \"term\" cost of coverage.\n\n   Because of the absence of definitive regulations and recent changes in\nthe tax code, be sure to consult your tax advisor about gift and estate tax\nconsequences, and before making a withdrawal or loan.\n\n   The company reserves the right to amend or end this program, based on any\nchanges in the tax laws.\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8249],"corporate_contracts_industries":[9451],"corporate_contracts_types":[9540,9539],"class_list":["post-39888","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-monsanto-co","corporate_contracts_industries-manufacturing__chemicals","corporate_contracts_types-compensation__benefits","corporate_contracts_types-compensation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39888"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39888"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39888"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}