Document:

EXHIBIT 10.2

 

REINSURANCE AGREEMENT

 

between

 

AMERICAN HERITAGE LIFE INSURANCE COMPANY

 

and

 

ALLSTATE LIFE INSURANCE COMPANY

 

RECITALS

 

This Reinsurance
Agreement dated December 17, 2004 (hereinafter “Agreement”) is made and
entered into by and between AMERICAN HERITAGE LIFE INSURANCE COMPANY, a life
insurance company domiciled in the State of Florida (hereinafter “Ceding
Company”) and ALLSTATE LIFE INSURANCE COMPANY, a life insurance company
domiciled in the State of Illinois (hereinafter the “Reinsurer”).

 

WHEREAS, Ceding Company
and Reinsurer desire to enter this Agreement, whereby Ceding Company will cede
on a coinsurance basis 100% of any and all liabilities of the Ceding Company
arising under the Policies, except for certain excluded liabilities.

 

NOW THEREFORE, in
consideration of the above stated premises and the promises and the mutual
agreements set forth below the Ceding Company and the Reinsurer agree as
follows.

 

ARTICLE I

DEFINITIONS

 

Unless otherwise defined
herein, as used in this Agreement the following terms shall have the meanings
ascribed to them below:

 

	
  A.

  	
   

  	
  “Annual Statement” shall mean the Ceding Company’s
  Life and Accident and Health Companies Annual Statement for the General
  Account as filed with the Florida Insurance Department.

  
	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  “Code” shall
  mean the Internal Revenue Code of 1986, as amended.

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  “Effective Date”
  shall mean the effective date of this Agreement, which shall be 11:59pm on
  December 31, 2004.

  

 

 

1

 

 

	
  D.

  	
   

  	
  “Excluded
  Liabilities” shall mean (i) Extra-Contractual Obligations, and
  (ii) liabilities ceded by Ceding Company under Third-Party Reinsurance
  Agreements.

  
	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  “Extra-Contractual
  Obligations” shall mean all liabilities and obligations for consequential,
  extra-contractual, exemplary, punitive, special or similar damages or any
  other amounts due or alleged to be due (other than those arising under the
  express terms and conditions of the Policies) which arise from any real or
  alleged act, error or omission, whether or not intentional, in bad faith or
  otherwise, including without limitation, any act, error or omission relating
  to: (i) the marketing, underwriting, production, issuance, cancellation
  or administration of the Policies; (ii) the handling of claims or disputes
  in connection with the Policies; or (iii) the failure to pay or the
  delay in payment of benefits or claims, under or in connection with the
  Policies.

  
	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  “Net Benefits”
  shall mean the actual amounts paid or incurred by the Ceding Company with respect
  to the Policies for all surrenders, withdrawals (full and partial), death
  benefits, annuitizations, and payments on supplemental contracts, net of
  Excluded Liabilities.

  
	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  “Net Ceded
  Liabilities” shall mean any and all liabilities of the Ceding Company arising
  under the Policies, but shall not include Excluded Liabilities.

  
	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  “Net Statutory
  Liabilities” shall have the meaning set forth in Article V of this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  “Policy or
  Policies” shall mean the annuity contracts defined in Exhibit A which
  are underwritten or reinsured by the Ceding Company.

  
	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  “Statutory
  Reserves” means the statutory reserves of the Ceding Company with respect to
  the Policies determined pursuant to accounting practices prescribed by
  applicable regulatory authorities and in accordance with sound actuarial
  practices, as such reserves would have been included in lines 1, 2, 3, 4, and
  8 of the NAIC Annual Statement Blank page 3 (2003 format)”.

  
	
   

  	
   

  	
   

  
	
  K.

  	
   

  	
  “Third-Party
  Reinsurance Agreements” shall mean any written reinsurance agreements under
  which Ceding Company has ceded liabilities with respect to the Policies,
  other than this Agreement.

  

 

ARTICLE II

BASIS OF REINSURANCE

 

The
Ceding Company agrees to cede and the Reinsurer agrees to accept Net Ceded
Liabilities. The reinsurance provided hereunder shall be on a 100% coinsurance
basis.

 

ARTICLE III

LIABILITY OF REINSURER; COINSURANCE PROVISIONS

 

2

 

	
  A.

  	
   

  	
  All of the Net
  Ceded Liabilities shall be reinsured pursuant to the terms of this Agreement
  as of the Effective Date.

  
	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  The liability of
  the Reinsurer with respect to Policies in force on the Effective Date will
  begin on the Effective Date. The liability of the Reinsurer with respect to
  any application received or any contract issued after the Effective Date and
  reinsured hereunder will begin simultaneously with that of the Ceding
  Company. The Reinsurer’s liability with respect to any Policy will terminate
  on the date the Ceding Company’s liability on such contract terminates.
  However, termination of this Agreement will not terminate the Reinsurer’s
  liability for Net Benefits paid or incurred by the Ceding Company on or after
  the Effective Date and prior to the date of termination. If any of the
  Policies are reduced or terminated by payment of a death benefit, withdrawal
  or surrender, the reinsurance will be reduced proportionately or terminated.

  
	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  The reinsurance
  provided under this Agreement is subject to the same limitations and
  conditions as set forth in the Policies.

  
	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Ceding Company
  shall not make any changes after the Effective Date in the provisions and
  conditions of any Policy except with Reinsurer’s prior written consent,
  including, but not limited to any changes to comply with any applicable law,
  rule or regulation. Such consent shall not be unreasonably withheld.

  
	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Some of the
  Policies ceded under this Agreement provide that the Ceding  Company may in its discretion, from time to time, as
  provided in the policy or contract, declare interest rates, cost of insurance
  rates, purchase payments or other non-guaranteed elements that are  or affect required purchase payments or are used to
  determine contract values. The Ceding Company agrees, while this Agreement is
  in effect, to set such discretionary interest rates, cost of insurance rates,
  or other non-guaranteed elements to be declared on the Policies and the
  effective dates thereof only with Reinsurer’s prior written approval.
  However, such prior approval shall not be required so long as Ceding Company
  and Reinsurer remain affiliates. The Ceding Company and Reinsurer  agree to fully cooperate in obtaining any required
  regulatory approvals in connection with setting or changing such
  discretionary interest rates, cost of insurance rates, or other
  non-guaranteed elements.

  
	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Ceding Company
  shall not make any changes or modifications to any of the Policies, nor waive
  or exercise any of its rights under any of the Policies without the prior
  written consent of Reinsurer. However, such prior approval shall not be
  required so long as Ceding Company and Reinsurer remain affiliates.

  
	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Conversions,
  exchanges, or replacements of Policies are not reinsured under this
  Agreement, unless agreed to in writing by Reinsurer.

  

 

 

3

 

ARTICLE IV

CLAIMS

 

	
  A.

  	
   

  	
  Reinsurer shall not be
  liable to pay Ceding Company for any Extra-Contractual Obligations, except to
  the extent such liabilities or obligations arise directly from and are
  proximately caused by the gross negligence or willful acts or omissions of
  Reinsurer, its agents, contractors or employees in the performance of
  Reinsurer’s duties and obligations under this Agreement.

  

 

In the event of a change
in the amount of the Ceding Company’s liability on a Policy due to a
misstatement of age or sex, the Reinsurer’s liability will be changed
proportionately.

 

ARTICLE V

RESERVE TRANSFERS

 

Within forty-five (45)
days of the latter of the Effective Date or the date Ceding Company has
received approval from all necessary regulatory authorities, (“Settlement Date”),
assets consisting of policy loans (including accrued policy loan interest),
cash and investments, accrued investment income, and uncollected or deferred
premiums net of unearned investment income, shall be transferred by Ceding
Company to Reinsurer with a market value amount calculated as of the Effective
Date equal to the “Net Statutory Liabilities” for the Policies reinsured under
this Agreement plus the Interest Maintenance Reserve adjustment for current
year’s liability gains/losses impacting the positive or negative reserve
balance as a result of this transaction. 
The Net Statutory Liabilities shall equal the Statutory Reserves (net of
reserves for any Third-Party Reinsurance Agreements) plus premium deposit funds
plus unearned premiums plus unearned policy loan interest.  Ceding Company shall also pay to Reinsurer
interest on such amount at the rate of four percent (4%) per annum, simple
rate, beginning on the Effective Date and ending on the Settlement Date.

 

ARTICLE VI

SETTLEMENT AND REPORTING

 

A.                         While this Agreement is in effect, Ceding
Company shall pay to Reinsurer no less frequently than quarterly, with respect
to the Policies, a reinsurance premium equal to (or the accounting equivalent
of) the sum of Items (a) and (b) less (c) below, where:

 

(a)                         equals gross premiums  collected by Ceding Company during the
settlement period.

 

(b)                        equals policy loan repayments collected
by Ceding Company with respect to the Policies.

 

 

4

 

 

(c)                         equals gross premiums refunded by Ceding
Company during the settlement period to policyholders.

 

B.                           While this Agreement is in effect,
Reinsurer shall pay to Ceding Company no less frequently than quarterly, a
benefit and expense allowance equal to (or the accounting equivalent of) the
sum of Items (a), (b), (c), (d), (e) and (f), as applicable for the period
since the date of Reinsurer’s last payment to Ceding Company, where:

 

	
  (a)

  	
   

  	
  equals Net Benefits
  paid or incurred by Ceding Company with respect to the Policies.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  equals commissions and
  other sales compensation paid or incurred by Ceding Company with respect to
  the Policies.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  equals premium taxes
  paid or incurred by Ceding Company with respect to the Policies.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  equals policy loan distributions to policyholders
  paid or incurred by Ceding Company with respect to the Policies.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  equals net reinsurance premiums paid or incurred by
  Ceding Company to another reinsurer with respect to the Policies.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  equals adminstrative fees paid or incurred by the
  Ceding Company under third party administration agreements covering the
  Policies ceded under this Agreement.

  

 

C.                           Ceding Company will provide Reinsurer
with accounting reports on a time schedule determined by Reinsurer, which
schedule shall be no less frequently than quarterly within fifteen (15) days
following the end of each calendar quarter. 
These reports will contain sufficient information about the Policies to
enable the Reinsurer to prepare its quarterly and annual financial reports.

 

D.                          Settlements as set out in Article VI,
Paragraphs A and B will occur on a time schedule determined by Reinsurer, which
schedule shall be no less frequently than quarterly within sixty (60) days
following the end of each calendar quarter.

 

ARTICLE VII

TAX MATTERS

 

With respect to this
Agreement, the Ceding Company and the Reinsurer hereby make the election as set
forth in Exhibit B and as provided for in section 1.848-2(g)(8) of
the Treasury 

 

 

5

 

 

Regulations.  Each of the parties hereto agrees to take
such further actions as may be necessary to ensure the effectiveness of such
election.

 

ARTICLE VIII

RESERVE CREDIT

 

The Reinsurer shall, to
the extent necessary, together with all its subsequent retrocessionaires,
establish adequate net reserves, and shall agree in good faith to take any
other steps necessary, pursuant to the requirements of Florida or any other
state or jurisdiction in which the Ceding Company is licensed or accredited,
for the Ceding Company to take statutory credit for reinsurance ceded to an
unadmitted, unauthorized or unaccredited reinsurer, up to the full amount of
the reserve that the Ceding Company would have established for the  Policies if it had retained the Policies.

 

ARTICLE IX

OVERSIGHTS

 

Unintentional clerical
errors, oversights, omissions or misunderstandings in the administration of
this Agreement by either the Ceding Company or the Reinsurer shall not be
deemed a breach of this Agreement provided the clerical error, oversight,
omission or misunderstanding is corrected promptly after discovery.  Both the Ceding Company and the Reinsurer
shall be restored to the positions they would have occupied had such error,
oversight, omission, or misunderstanding not occurred.

 

ARTICLE X

INSPECTION OF RECORDS

 

Either party, their
respective employees or authorized representatives, may audit, inspect and
examine, during regular business hours, at the home office of either party, any
and all books, records, statements, correspondence, reports, trust accounts and
their related documents or other documents that relate to the Policies covered
under this Agreement.  The audited party
agrees to provide a reasonable workspace for such audit, inspection or examination
and to cooperate fully and to faithfully disclose the existence of and produce
any and all necessary and reasonable materials requested by such auditors,
investigators, or examiners. The party performing a routine audit shall provide
no less than five (5) working days advance notice to the other party. The
expense of the respective party’s employee(s) or authorized representative(s) engaged
in such activities will be borne solely by such party.

 

 

6

 

ARTICLE XI

INSOLVENCY

 

A.                         The portion of any risk or obligation
reinsured by the Reinsurer under this Agreement, when such portion is
ascertained, shall be payable on demand of the Ceding Company at the same time
as the Ceding Company shall pay its net retained portion of such risk or
obligation, and the reinsurance shall be payable by the Reinsurer on the basis
of the liability of the Ceding Company under the Policies without diminution
because of the insolvency of the Ceding Company.  In the event of the insolvency of the Ceding
Company and the appointment of a conservator, liquidator or statutory successor
of the Ceding Company, such portion shall be payable to such conservator,
liquidator or statutory successor immediately upon demand, on the basis of claims
allowed against the Ceding Company by any court of competent jurisdiction or,
by any conservator, liquidator or statutory successor of the Ceding Company
having authority to allow such claims, without diminution because of such
insolvency or because such conservator, liquidator or statutory successor has
failed to pay all or a portion of any claims. 
Payments by the Reinsurer as above set forth shall be made directly to
the Ceding Company or its conservator, liquidator or statutory successor.

 

B.                           Further, in the event of the insolvency
of the Ceding Company, the liquidator, receiver or statutory successor of the
insolvent Ceding Company shall give written notice to the Reinsurer of the
pendency of any obligation of the insolvent Ceding Company on any Net Ceded
Liability, whereupon the Reinsurer may investigate such claim and interpose at
its own expense, in the proceeding where such claim is to be adjudicated, any
defense or defenses which it may deem available to the Ceding Company or its
liquidator or statutory successor.  The
expense thus incurred by the Reinsurer shall be chargeable, subject to court
approval, against the insolvent Ceding Company as part of the expenses of
liquidation to the extent of a proportionate share of the benefit which may accrue
to the Ceding Company solely as a result of the defense undertaken by the
Reinsurer.

 

C.                           In the event of the Reinsurer’s
insolvency, any payments due the Reinsurer from the Ceding Company pursuant to
the terms of this Agreement will be made directly to the Reinsurer or its
conservator, liquidator, receiver or statutory successor.

 

ARTICLE XII

ARBITRATION

 

A.                         Prior
to initiation of arbitration, the Reinsurer and Ceding Company agree that they
will first negotiate diligently and in good faith to agree on a mutually
satisfactory resolution of any dispute. 
Provided, however that if any such dispute cannot be resolved within
sixty (60) days (or such longer period as the parties may agree) after written
notice invoking the negotiation period of this Article is delivered by
either party, the Reinsurer and the 

 

 

7

 

                                      Ceding
Company agree that they will submit this dispute to arbitration as described
below.

 

B.                           The
Reinsurer and the Ceding Company intend that any and all disputes between them
under or with respect to this Agreement be resolved without resort to any
litigation.  Any and all disputes or
differences between the Ceding Company and the Reinsurer arising out of this Agreement,
including, but not limited to, disputes or differences relating to the
interpretation or performance of this Agreement, its formation or validity, or
any transaction under this Agreement, whether arising before or after
termination, shall be submitted to arbitration. 
Arbitration shall be the sole method of dispute resolution, regardless
of the insolvency of either party, unless the conservator, receiver, liquidator
or statutory successor is specifically exempted from arbitration proceeding by
applicable state law of the insolvency.

 

C.                           Arbitration
shall be initiated by the delivery of written notice of demand for arbitration
(“Arbitration Notice”) by one party to another. 
Such written notice shall contain a brief statement of the issue(s),
remedies sought, and the failure of the parties to reach amicable agreement as
provided in Paragraph A above.

 

D.                          The arbitrators and umpire shall be
present or former disinterested officers of life reinsurance or insurance
companies other than the two parties to this Agreement or any company owned by,
or affiliated with, either party.  Each
party shall appoint an individual as arbitrator and the two so appointed shall
then appoint the umpire.  If either party
refuses or neglects to appoint an arbitrator within thirty (30) days after
delivery of the Arbitration Notice, the other party may appoint the second
arbitrator.  If the two arbitrators do
not agree on an umpire within thirty (30) days of the appointment of the second
appointed arbitrator, each of the two arbitrators shall nominate three individuals.  Each arbitrator shall then decline two of the
nominations presented by the other arbitrator. 
The umpire shall be chosen from the remaining two nominations by drawing
lots.

 

E.                            The
arbitration hearings shall be held in the city in which the Reinsurer’s head
office is located or any such other place as may be mutually agreed.  Each party shall submit its case to the
arbitrators and umpire within one hundred and eighty (180) days of the
selection of the umpire or within such longer period as may be agreed.

 

F.                            The
arbitration panel shall make its decision with regard to the custom and usage
of the insurance and reinsurance business. 
The arbitration panel shall interpret this Agreement as an honorable
engagement; they are relieved of all judicial formalities and may abstain from
following strict rules of law.  The
arbitration panel shall be solely responsible for determining what evidence
shall be considered and what procedure they deem appropriate and necessary in
the gathering of such facts or data to decide the dispute.

 

 

8

 

G.                           The
decision in writing of the majority of the arbitration panel shall be final and
binding upon the parties.  Judgment may
be entered upon the final decision of the arbitration panel in any court having
jurisdiction.

 

H.                          The jointly incurred costs of the
arbitration are to be borne equally by both parties.  Jointly incurred costs are specifically
defined as any costs that are not solely incurred by one of the parties (e.g.,
attorneys’ fees, expert witness fees, travel to the hearing site, etc.).  Costs incurred solely by one of the parties
shall be borne by that party.  Once the
panel has been selected, the panel shall agree on one billable rate for each of
the arbitrators and umpire and that sole cost shall be disclosed to the parties
and become payable as a jointly incurred cost as described above.

 

ARTICLE XIII

PARTIES TO AGREEMENT

 

This Agreement is solely
between the Ceding Company and the Reinsurer.   
Except as otherwise provided herein, the terms and provisions of this
Agreement are intended solely for the benefit of the parties hereto, and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other person, and no
such rights shall be conferred upon any person or entity not a party to this
Agreement.  Ceding Company shall be and
remain directly and solely liable to any insured, contract owner, or beneficiary
under any contract reinsured hereunder.

 

ARTICLE XIV

DURATION OF
AGREEMENT  AND TERMINATION

 

A.                         Duration.  This
agreement will be effective as of the Effective Date, and will be unlimited as
to its duration.

 

B.                           Termination for New Business. 
This agreement may be terminated for new business by either party with
sixty (60) days prior written notice.

 

ARTICLE XV

GENERAL PROVISIONS

 

A.                         Entire Agreement. 
This Agreement supercedes any and all prior discussions and
understandings between the parties and constitutes the entire Agreement between
the Reinsurer and the Ceding Company with respect to the Policies.  There are no understandings between the
parties other than as expressed in this Agreement.

 

B.                           Notices.  Any notice or
communication given pursuant to this Agreement must be in writing and (1) delivered
personally, (2) sent by facsimile transmission, (3) delivered by
overnight express, or (4) sent by registered or certified mail, postage
prepaid, to such 

 

 

9

 

 

address
or addresses each party may designate from time to time for receipt of notices
or communications.  The initial notice
addresses are as follows:

 

	
  If to the
  Reinsurer:

  	
   

  	
  Allstate Life
  Insurance Company

  
	
   

  	
   

  	
  3100 Sanders Rd.

  
	
   

  	
   

  	
  Northbrook,
  Illinois 60062

  
	
   

  	
   

  	
  Attn:  Steve Shebik, Vice President, Finance

  
	
   

  	
   

  	
  Facsimile No.: (847)
  326-5054

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Ceding
  Company:

  	
   

  	
  American
  Heritage Life Insurance Company

  
	
   

  	
   

  	
  1776 American
  Heritage Life Drive

  
	
   

  	
   

  	
  Jacksonville,
  Florida 32224-6688

  
	
   

  	
   

  	
  Attention:  Greg Guidos, Chief Financial Officer

  
	
   

  	
   

  	
  Facsimile No.:
  (904) 992-2658

  

 

All
notices and other communications required or permitted under the terms of this
Agreement that are addressed as provided in this Article XV shall: (1) if
delivered personally or by overnight express, be deemed given upon delivery; (2) if
delivered by facsimile transmission, be deemed given when electronically
confirmed; and (3) if sent by registered or certified mail, be deemed
given when received.  Any party from time
to time may change its address for notice purposes by giving a similar notice
specifying a new address, but no such notice shall be deemed to have been given
until it is actually received by the party sought to be charged with the
contents thereof.

 

C.                           Expenses.  Except as may
be otherwise expressly provided in this Agreement, whether or not the
transactions contemplated hereby are consummated, each of the parties hereto
shall pay its own costs and expenses incident to preparing for, entering into
and carrying out this Agreement and the consummation of the transactions
contemplated hereby.

 

D.                          Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and
the same instrument and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.

 

E.                            Amendment.  Any
modification or modification to this Agreement shall be null and void unless
made by a written instrument executed by both parties hereto.

 

F.                            Assignment; Bind Effect. 
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by either of the
parties hereto without the prior written consent of the other party, which
consent shall not be unreasonably withheld, and any such assignment that is
attempted without such consent shall be null and void.  Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties and their 

 

 

10

 

 

respective successors and permitted assigns.

 

G.                           Invalid Provisions. 
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under any present or future law, and if the rights or obligations
of the parties hereto under this Agreement will not be materially and adversely
affected thereby, (1) such provision shall be fully severable; (2) this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; and (3) the
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom.

 

H.                          Waiver.  Any term or
condition of this Agreement may be waived in writing at any time by the party
that is entitled to the benefit thereof. 
A waiver on one occasion shall not be deemed to be a waiver of the same
or any other breach or nonfulfillment on a future occasion.  All remedies, either under the terms of this
Agreement, or by law or otherwise afforded, shall be cumulative and not
alternative, except as otherwise provided by law.

 

I.                               Headings, etc. 
The headings used in this Agreement have been inserted for convenience
and do not constitute matter to be construed or interpreted in connection with
this Agreement.  Unless the context of
this Agreement otherwise requires, (1) words using the singular or plural
number also include the plural or singular number, respectively; (2) the
terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder,”
and derivative or similar words refer to this entire Agreement (including the
exhibits hereto); (3) the term “Article” refers to the specified Article of
this Agreement; (d) the term “Exhibit” refers to the specified Exhibit attached
to this Agreement; and  (e) the term
“party” means, on the one hand, the Ceding Company, and on the other
hand, the Reinsurer.

 

J.                              Offset.  Any debits or
credits incurred after the Effective Date in favor of or against either the
Ceding Company or the Reinsurer with respect to this Agreement are deemed
mutual debits or credits, as the case may be, and shall be set off against each
other dollar for dollar.

 

K.                          Compliance with Laws. 
The parties hereto shall at all times comply with all applicable laws in
performing their obligations under this Agreement.

 

L.                            Survival.
All provisions of this Agreement shall survive its termination to the extent
necessary to carry out the purposes of this Agreement or to ascertain and
enforce the parties’ rights or obligations hereunder existing at the time of
termination.

 

M.                       Calendar
Days.  Unless otherwise specified, all references to
“day” in this Agreement shall mean calendar days.

 

 

11

 

 

IN WITNESS HEREOF, the
parties to this Agreement have caused it to be duly executed in duplicate by
their respective officers on the dates shown below.

 

 

ALLSTATE LIFE INSURANCE COMPANY

 

	
  By:

  	
  /s/ James P.
  Zils

  
	
   

  	
   

  
	
  Name: 

  	
  James P. Zils

  
	
   

  	
   

  
	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
  Date

  	
  December 17,
  2004

  

 

 

 AMERICAN HERITAGE LIFE INSURANCE COMPANY

 

	
  By:

  	
  /s/ Samuel H.
  Pilch

  
	
   

  	
   

  
	
  Name:

  	
  Samuel H. Pilch

  
	
   

  	
   

  
	
  Title:

  	
  Group Vice
  President

  
	
   

  	
   

  
	
  Date

  	
  December 17,
  2004

  

 

 

12

 

EXHIBIT A

ELIGIBLE AND
INELIGIBLE POLICIES

 

Policies reinsured under
this Agreement shall be Single Premium Deferred Annuities with form number
A-D031 (11.99)

 

 

13

 

EXHIBIT B

TAX ELECTION

 

The Ceding Company and
the Reinsurer hereby make an election pursuant to Treasury Regulations Section 1.848-2(g)(8).  This election shall be effective for the tax
year during which the Effective Date falls and all subsequent taxable years for
which this Agreement remains in effect. 
Unless otherwise indicated, the terms used in this Exhibit are
defined by reference to Treasury Regulations Section 1.848-2 as in effect
on the date hereof.  As used below, the
term “party” or “parties” shall refer to the Ceding Company or
the Reinsurer, or both, as appropriate.

 

1.                             The party with the Net Positive
Consideration (as defined in Section 848 of the Code and related Treasury
Regulations) with respect to the transactions contemplated under this Agreement
for any taxable year covered by this election will capitalize specified policy
acquisition expenses with respect to such transactions without regard to the
general deductions limitation of Section 848(c)(1) of the Code.

 

2.                             The parties agree to exchange information
pertaining to the amount of Net Consideration (as defined in Section 848
of the Code and related Treasury Regulations) under this Agreement each year to
ensure consistency or as is otherwise required by the Internal Revenue
Service.  The exchange of information
each year will follow the procedures set forth below:

 

                                      

	
  (a)

  	
   

  	
  By April 1
  of each year, the Ceding Company will submit a schedule to the Reinsurer of
  its calculation of the Net Consideration for the preceding calendar year.
  This schedule of calculations will be accompanied by a statement signed by an
  authorized representative of the Ceding Company stating the amount of the Net
  Consideration the Ceding Company will report in its tax return for the
  preceding calendar year.

  

 

	
  (b)

  	
   

  	
  Within thirty
  (30) days of the Reinsurer’s receipt of the Ceding Company’s calculation, the
  Reinsurer may contest such calculation by providing an alternative
  calculation to the Ceding Company in writing. If the Reinsurer does not
  notify the Ceding Company that it contests such calculation within said
  30-day period, the calculation will be presumed correct and the Reinsurer
  shall also report the Net Consideration as determined by the Ceding Company
  in the Reinsurer’s tax return for the preceding calendar year.

  

 

	
  (c)

  	
   

  	
  If the Reinsurer
  provides an alternative calculation of the Net Consideration pursuant to
  clause (b), the parties will act in good faith to reach an agreement as to
  the correct amount of Net Consideration within thirty (30) days of the date
  the Ceding Company receives the alternative calculation from the Reinsurer.
  When the Ceding Company and the Reinsurer reach agreement on an amount of Net
  Consideration, each party shall report the applicable amount in their
  respective tax returns for the preceding calendar year.

  

.

 

 

14Exhibit 10.1

 

CHASE CORPORATION

 

RESTRICTED
STOCK AGREEMENT UNDER THE 2005 INCENTIVE PLAN

 

This
Restricted Stock Agreement (the “Agreement”),
dated as of                 ,
is by and between Chase Corporation (the “Company”) and                   
(the “Restricted Stockholder”).

 

1.             Grant
of Award.  Pursuant to the terms of
the Chase Corporation 2005 Incentive Plan (the “Plan”), effective as of                     
(the “Grant Date”), the Company hereby grants to the Restricted Stockholder a
targeted award of            
shares of the Company’s common stock, par value $.10 per share (the “Target
Grant”),  subject to the terms and
conditions of this Agreement and the Plan. 
As more fully described below, the shares granted hereby are subject to
forfeiture by the Restricted Stockholder if certain criteria are not satisfied.

 

2.             Performance
Period.  The Target Grant is subject
to a “performance measurement period” based on the actual results of the
Company for the fiscal year beginning on               
and ending on                   
(“Performance Period”).

 

3.             Performance
Criteria.  For the performance
period, a targeted performance measure has been set as [Earnings Before Tax (EBT)] of $                  
(the “Target”).  If the Target is
achieved during the Performance Period, 100% of the Target Grant will awarded,
subject to the vesting provisions set forth in this Agreement.

 

The number of shares of Common Stock in the Target
Grant may increase or decrease depending on whether the “Threshold” performance
measure or “Stretch” performance measure have been achieved during the
Performance Period.  The Threshold
performance measure must be achieved in order to receive any percentage of the
Target Grant.

 

	
  

  Performance

  	
   

  	
  Measurement / 

  EBT

  	
   

  	
  Measurement as a

  % of the Target

  Measurement

  	
   

  	
  Payout % of

  Target Award

  	
   

  
	
  Threshold

  	
   

  	
  $

  	
  [    

  	
  ]

  	
  80

  	
  %

  	
  50

  	
  %

  
	
  Target

  	
   

  	
  $

  	
  [    

  	
  ]

  	
  100

  	
  %

  	
  100

  	
  %

  
	
  Stretch

  	
   

  	
  $

  	
  [    

  	
  ]

  	
  120

  	
  %

  	
  150

  	
  %

  

 

If the actual results of the Performance Period fall
between the Threshold and the Target the award will be prorated between 50% and
100% of the Target Grant.  If the actual
results fall between Target and Stretch, the award will be prorated between
100% and 150% of the Target Grant.  Furthermore
if the actual results of the performance measurement period exceed 120% of the
Target measurement, the award will increase on a similar pro rated basis with
no cap on the total award.  The award
ultimately made at the end of the Performance Period shall be referred to as
the “Restricted Stock Award”.

 

 

Actual results may be adjusted at the sole discretion
of the Compensation Committee of the Board of Directors for any non-recurring
or special items occurring during the year that impacted Revenue or EBT (either
positively or negatively) during the measurement period.

 

4.             Restrictions
on Stock.  Until the termination of
restrictions as provided in Section 5 hereof, the Restricted Stock may not
be sold, assigned, transferred, pledged or otherwise encumbered except as
provided in this Agreement.  No rights or
interests of the Restricted Stockholder under this Agreement or under the Plan
may be assigned, encumbered or transferred other than (i) to the extent
permitted and in accordance with such procedures adopted by the Administrator
from time to time and (ii) by will or the laws of descent and
distribution.  The naming of a designated
beneficiary will not constitute a transfer.

 

5.             Termination of Restrictions.

 

(a)           Vesting.  The Restricted Stock Award shall vest and
become nonforfeitable and all restrictions set forth in Section 5 hereof
shall lapse, on                                             
(the “Vest Date”), provided the Restricted Stockholder’s service with the
Company has not terminated or ceased on or prior to the Vest Date.

 

(b)           Termination of Service.  If the Restricted Stockholder’s status as an
employee, consultant or director of the Company is terminated prior to the Vest
Date by reason of the Restricted Stockholder’s retirement, death or disability
(as determined by the Administrator or the Company terminating his service
without cause, the Restricted Stock Award shall vest, pro-rated on the date
service is terminated, and the restrictions on the pro-rated vested shares
shall lapse on the date of termination of service.  If the Restricted Stockholder’s status as an
employee, consultant or director of the Company is terminated by the Restricted
Stockholder or by the Company for cause prior to the Vest Date, the Restricted
Stock Award will immediately and irrevocably be forfeited and neither the Restricted Stockholder nor
any successors, heirs, assigns, or legal representatives of the Restricted
Stockholder shall thereafter have any further rights or interest in such
forfeited Restricted Stock or the certificates thereof. For purposes of this
subsection (b), service will be considered as continuing uninterrupted during
any bona fide leave of absence approved in writing by the Company so long as
the Restricted Stockholder’s right to reemployment or survival of his service
arrangement with the Company is guaranteed either by statute or by contract.

 

(c)           Acceleration of Vesting upon
Change in Control.  Unless otherwise
provided for in the vote granting such restricted stock, upon the consummation
of a transaction resulting in a Change in Control of the Company prior to the
Vest Date, all restrictions remaining on any Restricted Stock shall lapse.

 

6.             Rights as Stockholder.  Upon the issuance of a certificate or
certificates representing the Restricted Stock, the Restricted Stockholder
shall thereupon be a stockholder and, subject to the provisions of Section 4
hereof, have all the rights of a stockholder with respect to such Restricted
Stock, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Restricted Stock; provided,
however, that such Restricted Stock and any new, additional or different
securities the Restricted Stockholder may become entitled to receive with
respect to such Restricted Stock by virtue of a stock split, dividend or other
change in the corporate or capital structure of the Company shall be subject to

 

2

 

the vesting and
forfeiture provisions, restrictions on transfer and other restrictions set
forth in this Agreement and the Plan.

 

7.             Stock Certificates; Legend.  Certificates for Restricted Stock shall be issued in
the Restricted Stockholder’s name and shall be held by the Company until the
Restricted Stock shall become vested and all restrictions thereon have
lapsed.  The Company shall serve as attorney-in-fact
for the Restricted Stockholder during the period during which the Restricted
Stock are unvested with full power and authority in the Restricted Stockholder’s
name to assign and convey to the Company any Restricted Stock held by the
Company for the Restricted Stockholder if the Restricted Stockholder forfeits
the shares under the terms of the this Agreement and the Plan.  Certificates representing the Restricted
Stock shall bear the following legend:

 

“The Shares represented by this Stock Certificate have been granted as
restricted stock under the Chase Corporation 2005 Equity Incentive Plan.  The Shares represented by this Stock
Certificate may not be sold, exchanged, assigned, transferred, pledged, hypothecated
or otherwise encumbered or disposed of unless the restrictions set forth in the
Restricted Share Agreement between the registered holder of these Shares and
Chase Corporation shall have lapsed.

 

Upon the vesting of the
Restricted Stock, the Company shall so notify the Secretary of the Company and
the Secretary shall obtain from the Company certificates representing all such
shares that have vested, which certificates shall not bear any restrictive
endorsement making reference to this Agreement, and shall deliver such
certificates to the Restricted Stockholder.

 

8.             No
Right to Continued Employment.  This
Agreement shall not confer upon the Restricted Stockholder any right with
respect to continuance of employment by, or service with, the Company, nor shall it
interfere in any way with the right of the Company to terminate the Restricted
Stockholder’s service at any time and for any reason.

 

9.             Adjustment
to Common Stock.  In the event of any
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Common Stock other than a normal cash dividend, the Committee shall make
approximate and equitable adjustments in the Restricted Stock corresponding to
adjustments made by the Committee in the number and kind of shares which may be
issued under the Plan.  Any new,
additional or different securities to which the Restricted Stockholder shall be
entitled in respect of Restricted Stock by reason of such adjustment shall be
deemed to be Restricted Stock and shall be subject to the same terms,
conditions and restrictions as the Restricted Stock so adjusted.

 

10.           Withholding Taxes.  The Restricted Stockholder acknowledges that the
Company is not responsible for the tax consequences to the Restricted
Stockholder of the granting or vesting of the Restricted Stock, and that it is
the responsibility of the Restricted Stockholder to consult with the Restricted
Stockholder’s personal tax advisor regarding all matters with respect to the
tax consequences of the granting and vesting of the Restricted Stock.  The Company shall have the right to deduct
from the Restricted Stock or any payment to be made with respect to the
Restricted Stock any amount that federal, state, local or foreign tax law
required to be withheld with respect to the Restricted Stock or any such
payment.  Alternatively, the Company may 

 

3

 

require that the
Restricted Stockholder, prior to or simultaneously with the Company incurring
any obligation to withhold any such amount, pay such amount to the Company in
cash or in shares of the Company’s Common Stock (including shares of Common
Stock retained from the Restricted Share Award creating the tax obligation),
which shall be valued at the Fair Market Value of such shares on the date of
such payment.  In any case where it is
determined that taxes are required to be withheld in connection with the issuance,
transfer or delivery of the shares, the Company may reduce the number of shares
so issued, transferred or delivered by such number of shares as the Company may
deem appropriate to comply with such withholding.  The Company may also impose such conditions
on the payment of any withholding obligations as may be required to satisfy
applicable regulatory requirements under the Exchange Act.

 

11.           Governing
Law.  This Agreement shall be
construed and administered in accordance with and governed by the laws of the
Commonwealth of Massachusetts (without giving effect to any conflict or choice
of laws provisions thereof that would cause the application of the domestic
substantive laws of any other jurisdiction).

 

12.           Notice of Election Under Section 83(b).
If the Restricted Stockholder makes an election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, and the regulations and rulings
promulgated thereunder, he will provide a copy thereof to the Company within
thirty days of the filing of such election with the Internal Revenue Service.

 

13.           Notices. 
Any notice hereunder to the Company shall be addressed to the Company at
its principal business office, 26 Summer Street, Bridgewater, Massachusetts
02324 and any notice hereunder to the Restricted Stockholder shall be sent to
the address reflected on the records of the Company, subject to the right of
either party to designate at any time hereafter in writing some other address.

 

14.           Amendment of
Agreement.  The Company may amend,
modify  or terminate this Agreement, provided
that the Restricted Stockholder’s consent to such action shall be required unless the Company determines that
the action, taking into account any related action, would not materially and
adversely affect the Restricted Stockholder.

 

15.           Successors and
Assigns; No Third Party Beneficiaries. 
Except as otherwise expressly provided herein, the provisions hereof
shall inure to the benefit of, and
be binding upon, the successors, assigns, heirs, executors and administrators
of the parties hereto.  There are no
third party beneficiaries of this Agreement.

 

16.           Entire Agreement.  This Agreement and the Plan constitute the
full and entire understanding and agreement of the parties with regard to the
Restricted Stock and supersede in their entirety all other prior agreements, whether
oral or written, with respect thereto.

 

17.           Severability.  In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Agreement shall not in any way be affected
or impaired thereby, and each provision of this Agreement shall be enforced to
the fullest extent permitted by law.

 

18.           Waivers.  Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of such provision or any other provision hereof.

 

4

 

19.           Defined Terms.  Capitalized terms used but not defined in this
Agreement will have the meanings specified in the Plan.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the          day of                       ,
200     .

 

	
  RESTRICTED
  STOCKHOLDER  

  	
  CHASE
  CORPORATION  

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:  

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
																	

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]