Document:

Exhibit 10.30

 

ALLIANCE BANK, N.A.

SPLIT DOLLAR AGREEMENT

 

THIS SPLIT DOLLAR AGREEMENT (this “Agreement”) is made as of this 27th day of January, 2009 by and between Alliance Bank, N.A., and Jack H. Webb (the “Employee”).

 

WHEREAS, to encourage the Employee to remain a Employee of the Bank, the Bank is willing to allocate a portion of the death proceeds of a life insurance policy on the Employee’s life to the Employee’s beneficiary(ies) if the Employee dies while actively employed by the Bank. The Bank will pay life insurance premiums from its general assets.

 

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank and the Employee hereby agree as follows.

 

ARTICLE 1

DEFINITIONS

 

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

 

1.1        Employee’s Interest means the benefit set forth in Section 2

 

1.2        Insurer means each life insurance carrier with a Split Dollar Policy Endorsement attached to this Split Dollar Agreement.

 

1.3        Net Amount At Risk means, on any date, the difference in the Death Benefit payable by the insurance carrier and the cash surrender value of the policy(ies) owned by the Bank on the Employee’s life.

 

1.4        Policy means the specific life insurance policy or policies issued by the Insurer(s).

 

1.5        Split Dollar Policy Endorsement means the form required by the Administrator or the Insurer to indicate the Employee’s interest, if any, in a Policy on the Employee’s life.

 

1.6        Termination of Employment means that the Employee shall have ceased to be employed by the Bank for any reason whatsoever, excepting a leave of absence approved by the Bank. For purposes of this Agreement, if there is a dispute over the status of the Employee or the date of termination of the Employee’s service, the Bank shall have the sole and absolute right to decide the dispute.

 

ARTICLE 2

POLICY OWNERSHIP/INTERESTS

 

2.1        Bank Ownership. The Bank is the sole owner of the Policy and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of any death proceeds remaining after the Employee’s Interest has been paid under Section 2.2 of this Split Dollar Agreement.

 

2.2        Employee’s Interest. Upon the Employee’s death before Termination of Employment, the Employee shall have the right to designate the beneficiary(ies) of death proceeds in an amount determined under the schedule set forth in Appendix A to this Agreement but, in no event, an amount in excess of the Net Amount at Risk on the Employee’s date of death. Subject to the terms of this Split Dollar Agreement, the Bank hereby endorses the Employee’s Interest to the Employee and agrees to execute any other or further documents that may be required to effectuate this Split Dollar Agreement. The Employee shall have the right to elect and change settlement options specified in the Policy that may be permitted. However, the Employee, the Employee’s transferee, and the Employee’s beneficiary(ies) or estate shall have no rights or interests in the Policy for that portion of the death proceeds designated in this Section 2.2 if the Employee’s Termination of Employment occurs before the Employee’s death.

 

2.3        Premium Payment. The Bank shall pay any premiums due on the Policy.

2.4        Imputed Income. The Bank shall impute income to the Employee annually to reflect the value of the coverage provided under this Split Dollar Agreement in an amount determined in accordance with applicable federal tax requirements.

 

2.5        Internal Revenue Code Section 1035 Exchanges. The Employee recognizes and agrees that the Bank may after this Split Dollar Agreement is adopted wish to exchange the Policy of life insurance on the Employee’s life for another contract of life insurance insuring the Employee’s life. Provided that the Policy is replaced (or intended to be replaced) with a comparable policy of life insurance, the Employee agrees to provide medical information and cooperate with medical insurance-related testing required by a prospective insurer for implementing the Policy or, if necessary, for modifying or updating to a comparable insurer.

 

ARTICLE 3

BENEFICIARIES

 

3.1        Beneficiary Designations. The Employee shall designate a beneficiary by filing a written designation with the Bank. The Employee’s beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Employee, or if the Employee names a spouse as beneficiary and the marriage is subsequently dissolved. If the Employee dies without a valid beneficiary designation, all payments shall be made to the Employee’s estate.

 

ARTICLE 4

GENERAL LIMITATIONS

 

4.1        Termination of Employment. Notwithstanding any provision of this Agreement to the contrary, the Employee’s Interest in the Policy shall terminate if the Employee’s employment with the Bank terminates or is terminated for any reason (other than his death while actively employed), and the Bank’s obligations under this Agreement shall terminate as of the effective date of the Employee’s Termination of Employment.

 

4.2        Insurer. The Insurer shall be bound only by the terms of the Policy. Any payments the Insurer makes or actions it takes in accordance with the Policy shall fully discharge it from all claims, suits and demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice of the provisions of this Split Dollar Agreement.

 

ARTICLE 5

CLAIMS AND REVIEW PROCEDURES

 

5.1        Claims Procedure. If the Administrator denies part of or the entire claim, the claimant shall have the opportunity for a full and fair review by the Administrator of the denial, as follows:

 

5.1.1       Initiation: Written Claim. The claimant initiates a claim by submitting to the Administrator a written claim for the benefits.

 

5.1.2       Timing of Administrator Response. The Administrator shall respond to such claimant within 90 days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

 

5.1.3       Notice of Decision. If the Administrator denies part or all of the claim, then the Administrator shall notify the claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

		(a)	the specific reasons for the denial,

		(b)	a reference to the specific provisions of this Agreement on which the denial is based,

		(c)	a description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed,

		(d)	an explanation of this Agreement’s review procedures and the time limits applicable to such procedures, and

		(e)	a statement of the claimant’s right, if any, to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

5.2        Review Procedure. If the Administrator denies part or all of the claim, then the claimant shall have the opportunity for a full and fair review by the Administrator of the denial, as follows:

 

5.2.1       Initiation of Written Request. To initiate the review, the claimant must file with the Administrator a written request for review within 60 days after receiving the Administrator’s notice of denial.

 

5.2.2       Additional Submissions for Information Access. The claimant shall then have the opportunity to submit written comments, documents, records, and other information relating to the claim. The Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

 

5.2.3       Considerations on Review. In considering the review, the Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

5.2.4       Timing of Administrator Response. The Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, then the Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

 

5.2.5       Notice of Decision. The Administrator shall notify the claimant in writing of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

		(a)	the specific reasons for the denial,

		(b)	a reference to the specific provisions of this Agreement on which the denial is based,

		(c)	a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits, and

		(d)	a statement of the claimant’s right, if any, to bring a civil action under ERISA Section 502(a).

 

ARTICLE 6

ADMINISTRATION

 

6.1       Administration. This Split Dollar Agreement shall be administered by an Administrator, which shall consist of the Bank’s board of directors or such committee as the board shall appoint. The Administrator shall also have the discretion and authority to:

 

  (a)        make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Split Dollar Agreement, and

 

  (b)        decide or resolve any and all questions, including interpretations of this Split Dollar Agreement, as may arise in connection with the Split Dollar Agreement.

6.2       Named Agents. In the administration of this Split Dollar Agreement, the Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.

 

6.3       Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation, and application of this Split Dollar Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Split Dollar Agreement.

 

6.4       Indemnity of Administrator. The Bank shall indemnify and hold harmless the members of the Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Split Dollar Agreement, except in the case of willful misconduct by the Administrator or any of its members.

 

6.5       Information. To enable the Administrator to perform its functions, the Bank shall supply full and timely information to the Administrator on all matters relating to the date and circumstances of the retirement, death, or Termination of Employment of the Employee and such other pertinent information as the Administrator may reasonably require.

ARTICLE 7

MISCELLANEOUS

 

7.1       Amendment and Termination. This Split Dollar Agreement shall terminate automatically if the Employee’s Termination of Employment occurs before the Employee’s death. This Split Dollar Agreement shall also terminate upon the occurrence of any one of the following:

		(a)	surrender, lapse, or other termination of the Policy by the Bank, which the Bank reserves the absolute right to do,

		(b)	cessation of the Bank’s business, which is not continued by the Bank’s successor, if any,

		(c)	written notice of termination by the Employee,

		(d)	bankruptcy, receivership, or dissolution of the Bank, or

		(e)	distribution of the death benefit proceeds in accordance with Section 2.2 above.

 

If this Split Dollar Agreement is terminated, the Bank may in its sole discretion retain or terminate the Policy.

 

7.2       Binding Effect. This Agreement shall bind the Employee and the Bank and their beneficiaries, survivors, executors, administrators, and transferees.

 

7.3       Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner without the consent of the Administrator.

 

7.4       Applicable Law. Except to the extent preempted by federal law, the validity, interpretation, construction, and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflict of laws of such state.

 

7.5       Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Employee concerning the subject matter hereof. No rights are granted to the Employee’s beneficiary(ies) under this Agreement other than those specifically set forth herein.

 

7.6       Severability. If for any reason any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held invalid, and to the full extent consistent with law each such other provision shall continue in full force and effect. If any provision of this Agreement is held invalid in part, such invalidity shall not affect the remainder of such provision, and to the full extent consistent with law the remainder of such provision shall, together with all other provisions of this Agreement, continue in full force and effect.

7.7       Headings. The captions and section headings in this Agreement are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.

 

7.8       Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice.

 

	 	(a)	If to the Bank:

Chairman

Compensation Committee

Board of Directors

Alliance Bank, N.A.

120 Madison Street

Syracuse, New York 13202

		(b)	If to the Employee:

the address maintained in the records of the Bank

 

and to such other or additional person or persons as either party shall have designated to the other party in writing by like notice.

 

7.10     Successors. The Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Bank to expressly assume and agree to perform this Split Dollar Agreement in the same manner and to the same extent that the Bank would be required to perform this Split Dollar Agreement if no succession had occurred.

IN WITNESS WHEREOF, the Employee and a duly authorized Bank officer have executed this Agreement as of the day and year first written above.

	
 

		
ALLIANCE BANK, N.A.

	
 

			
 

	
/s/ Jack H. Webb

		
By:

	
/s/ Lowell A. Seifter

	
Jack H. Webb

		
 

	
 

Appendix A

 

Schedule of Employee’s Interest Under Section 2.2

of the Split Dollar Agreement with Jack H. Webb*

	
Year of Death

	
 

	
Employee’s Interest Under Section 2.2

	
 

	
 

	

	
2010

	
 

	
$958,152

	
 

	
 

	

	
2011

	
 

	
$1,114,890

	
 

	
 

	

	
2012

	
 

	
$1,268,799

	
 

	
 

	

	
2013

	
 

	
$1,432,353

	
 

	
 

	

	
2014

	
 

	
$1,605,706

	
 

	
 

	

	
2015

	
 

	
$1,788,379

	
 

	
 

	

	
2016

	
 

	
$1,980,482

	
 

	
 

	

	
2017 or later

	
 

	
$2,129,831

	*	The Employee’s Interest is the lesser of (i) the dollar amount specified above or (ii) the Net Amount at Risk; provided the Employee is employed by the Bank on his date of death.Exhibit 10.1

 

2014 Management Incentive Plan (MIP)

 

	I.	Purpose

The 2014 MIP is designed to provide an incentive for key members of the MiMedx Group, Inc. (MiMedx or Company) management team to exceed the 2014 Business Plan and reward those management team members with deserving performance.

The goals of the 2014 MIP are:

 

		1.	To increase shareholder value.

 

		2.	To achieve and exceed the 2014 Business Plan for Consolidated MiMedx and each Division of the Company.

 

		3.	To reward key individuals for demonstrated performance that is sustained throughout the year.

 

		4.	To enhance the Company’s ability to be competitive in the marketplace for executive talent and attract, retain and motivate a high-performing and high-potential management team.

	II.	MIP Program Period

This program is in effect from January 1, 2014 through December 31, 2014.  The program is subject to adjustment by the Company at any time during or after the program period.  In the event of a program adjustment, an addendum will be published to inform eligible participants.

	III.	MIP Participation and Eligibility

Participation and eligibility are determined by the MIP Compensation Committee at its sole discretion.  No individual is automatically included in the MiMedx 2014 MIP.  Only those individuals approved by the Compensation Committee and confirmed in writing are eligible.  Verbal comments or promises to any employee or past practices are not binding on MiMedx or any of its divisions or subsidiaries in any manner.

Terminated Employees:  If a participant terminates from the Company, the following guidelines will be used for all voluntary or involuntary terminations as well as terminations due to a Reduction in Force:  Incentives are only earned by employees in good standing on the date payment is made.  Participants terminating employment prior to the date of payment are not eligible for any incentive payment, regardless of the reason for termination of employment.

First Time Participants:  New management employees hired or promoted into an eligible position will be able to begin participating in the MIP on the first day of the first full month in the eligible position.  The Base Bonus will be prorated based on the number of months employed in the eligible position.  No incentives will be earned or paid for new hires beginning employment after September 30, 2014.

Existing Participants:  Participants who transfer during the period January 1, 2014 through December 31, 2014 from one MIP eligible position to another MIP eligible position, having either a higher or lower Base Bonus, will begin participating at the new MIP level on the first day of the first full month in the new position.  The participant’s Base Bonus will be prorated for the months employed in each eligible position.

Leave of Absence:  Participants who have been on an approved leave of absence for medical or other reasons for greater than 60 cumulative days during the year will receive a prorated portion of their earned Base Bonus.  The earned Base Bonus for participants on approved leaves of absence of less than 60 cumulative days will not be prorated based on the period of approved leave.  Participants who have been on an approved leave of absence for medical or other reasons for greater than 120 cumulative days during the year will not be eligible to earn any amount of MIP for the year.

	II.	MIP Administration

The Executive Compensation Committee will be responsible for the methods of calculation and administration of the Plan.  The Executive Compensation Committee will be comprised of the Chairman & CEO; President & Chief Operating Officer; Chief Financial Officer; and Vice President Human Resources & Administration.

The Company may change the plan from time to time in any respect.  All decisions made on behalf of the Company by the MiMedx Board of Directors or the Executive Compensation Committee relative to the plan are final and binding.  The determination of compliance with the individual objectives established under the plan for an employee shall be made by the Executive Compensation Committee in its sole discretion.

	V.	MIP Incentive Determination and Payment

The 2014 MIP provides for the determination of a Base Bonus expressed as a percentage of the participant’s annual salary in effect at the end of the program period or the end of each respective period when a participant transfers from one MIP eligible position to another.

Participants approved for MIP participation as of January 1, 2014 are eligible for a full year’s participation not subject to proration.  All incentives earned under the MIP will be measured and paid annually.

2

Earned incentives are paid primarily in the form of cash compensation. However, at the sole discretion of the MiMedx Board of Directors, payment of earned incentives may be made in the form of equivalent value stock options and/or restricted stock, provided the total amount of the earned incentive paid in the form of cash compensation is no less than fifty percent (50%) of the total earned incentive amount.

	VI.	MIP Participants

  The 2014 MIP participants include the CEO, plus the direct reports to the CEO.

	VII.	MIP Method of Calculation

Each participant’s incentive will be calculated based on the achievement of a financial target and individual objectives.  Base bonus for all MIP participants is divided into a two financial components. 90% of the base bonus is allocated to 2014 Revenue performance and 10% is allocated to 2014 MiMedx Earnings Before Interest, Taxes, Depreciation, Amortization and Share Based Compensation Expense (“MiMedx EBITDA”) performance.

The financial thresholds for 2014 Revenue and 2014 MiMedx EBITDA indicate the level of respective performance where partial payouts commence. Increased partial payouts are indicated for respective 2014 Revenue and 2014 MiMedx EBITDA Performance above the financial threshold and below the financial target. The respective 2014 Revenue and 2014 MiMedx EBITDA targets indicate the point at which the respective target base bonuses are earned.  Provided a minimum MiMedx EBITDA Floor is achieved, each partial payout threshold and target base bonus payout is determined independent of the other. For purposes of calculating the earned amount of MIP allocated to MiMedx EBITDA performance and Revenue performance, the total Base Bonuses of all eligible participants is referred to as the Base Bonus Pool. Based on the MiMedx EBITDA performance (specific to MiMedx EBITDA performance at 6 designated Levels) and MiMedx Revenue performance (specific to revenue performance at 12 designated Levels), the MIP is calculated as follows:

 

EBITDA Performance

 

		o	MiMedx EBITDA < Level 1 = no incentive earned for MiMedx EBITDA component.

		o	MiMedx EBITDA at Level 1 = 10% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA at Level 2 = 25% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA at Level 3 = 50% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA at Level 4 = 75% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA at Level 5 = 90% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA at Level 6 = 100% of MiMedx EBITDA component funded.

		o	MiMedx EBITDA > Level 6 = 100% of MiMedx EBITDA component funded. Excess Bonus Pool funded based upon Revenue performance greater than 100% of revenue target as described below.

 

Revenue Performance

		o	Revenue < Level 1 = no incentive earned for Revenue component.

		o	Revenue at Level 1 = 15% of Revenue.

		o	Revenue at Level 2 = 40% of Revenue.

		o	Revenue at Level 3 = 60% of Revenue.

		o	Revenue at Level 4 = 80% of Revenue.

		o	Revenue at Level 5 = 95% of Revenue.

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		o	Revenue at Level 6 = 100% of Revenue.

		o	Revenue at Level 7 = 110% of Revenue and EBITDA funded.

		o	Revenue at Level 8 = 125% of Revenue and EBITDA funded.

		o	Revenue at Level 9 = 140% of Revenue and EBITDA funded.

		o	Revenue at Level 10 = 160% of Revenue and EBITDA funded.

		o	Revenue at Level 11 = 190% of Revenue and EBITDA funded.

		o	Revenue at Level 12 = 200% of Revenue and EBITDA funded. The maximum MIP amount is limited to two (2) times the participant’s Base Bonus.

Financial Gatekeeper: MiMedx EBITDA component is a gatekeeper for the Revenue component. If Gross MiMedx EBITDA (before the respective Revenue payout) performance is unfavorable to the MiMedx EBITDA Floor, no payout for Revenue performance can be made. If Gross MiMedx EBITDA performance is favorable to the MiMedx EBITDA Floor, the Revenue component is paid out independent of and in addition to the EBITDA component.

	VIII.	MIP Excess Bonus or Other Amounts

Following the funding of all Base Bonuses, if MiMedx Revenue performance is greater than 100% of the Revenue Target (Level 6), the participant may earn an Excess Bonus. The excess bonus is earned at the above designated percentage of the Revenue component and the EBITDA component (levels 7 through 12). An Excess Bonus Pool will be funded not to exceed two (2) times the total of all Base Bonus amounts.

As determined by the MiMedx Board of Directors in its sole discretion, a participant may be eligible to earn a portion of the participant’s Base Bonus allocated to MiMedx EBITDA performance that may exceed the amount as calculated above provided the MiMedx EBITDA performance is favorable to the specified MiMedx EBITDA Floor.

	IX.	MIP and OIP Miscellaneous

Nothing in the MIP shall be deemed to constitute a contract for the continuance of employment of the participants or bring about a change of status of employment.  Neither the action of the Company in establishing this program, nor any provisions hereof, nor any action taken by the Company shall be construed as giving any employee the right to be retained in the employ of the Company for any period of time, or to be employed in any particular position, or at any particular rate of remuneration.

Further, nothing contained herein shall in any manner inhibit the day-to-day conduct of the business of the Company and its subsidiaries, which shall remain within the sole discretion of management of the Company; nor shall any requirements imposed by management or resulting from the conduct of the business of the Company constitute an excuse for, or waiver from, compliance with any goal established under this plan.

No persons shall have any right, vested or contingent, or any claim whatsoever, to be granted any award or receive any payment hereunder, except payments of awards determined and payable in accordance with the specific provisions hereof or pursuant to a specific and properly approved agreement regarding the granting or payment of an award to a designated individual.

4

Neither this program, nor any payments pursuant to this program, shall affect, or have any application to, any of the Company’s life insurance, disability insurance, PTO, medical or other related benefit plans, whether contributory or non-contributory on the part of the employee except as may be specifically provided by the terms of the benefit plan.

All payments pursuant to this program are in gross amounts less applicable withholdings.

MiMedx reserves the right to apply a participant’s incentive payment against any outstanding obligations owing to the Company.

 

 

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