Exhibit 10.2
CAL-MAINE FOODS, INC.
SPLIT DOLLAR LIFE INSURANCE PLAN
Economic Benefit Regime – Endorsement Method
THIS SPLIT DOLLAR LIFE INSURANCE PLAN
(the “Plan”) is established by
Cal-Maine Foods,
Inc.
(the “Company”) as of March 1, 2023.
The purpose of this Plan is to attract, retain, and motivate certain highly compensated or management
employees of the Company by assisting them in purchasing life insurance on his or her life that provides a death
benefit to the employee’s Beneficiary. The Company has determined that this assistance can best be provided
under a "split-dollar" arrangement as defined in IRS Treasury Regulation §§1.61-22(b)(1)&(2). The Company will
pay the life insurance premiums due under this Plan from its general assets.
ARTICLE 1
“Definitions”
1.1
Participant, entitled to benefits, if any, upon the death of the Participant.
1.2
“Beneficiary Designation Form”
shall mean the form established from time to time by the Plan
Administrator that a Participant completes, signs, and returns to the Plan Administrator to designate one or more
Beneficiaries.
1.3
“Code”
shall mean the U.S. Internal Revenue Code of 1986, as amended.
1.4
“Eligible Employee”
deemed eligible to participate in this Plan.
1.5
“Insurer”
described on the Participation Agreement.
1.6
“Participant”
in the Plan; (ii) who elects to participate in the Plan; and (iii) who completes the requirements of Plan participation
listed in Article 2.
1.7
“Participation Agreement”
Eligible Employee to indicate acceptance of participation in this Plan.
1.8
“Plan Administrator”
1.9
“Policy”
shall mean the individual life insurance policy maintained by the Company for purposes
of insuring a Participant’s life under this Plan, as further described in a Participant’s Participation Agreement.
ARTICLE 2
“Participation”
2.1
Selection by Plan Administrator.
Participation in the Plan shall be limited to those Eligible
Employees of the Company selected by the Company in its sole discretion.
2.2
Enrollment Requirements.
Employee shall complete, execute, and return to the Plan Administrator a Participation Agreement and a
Beneficiary Designation Form within the time specified by the Plan Administrator in accordance with the terms
and conditions of the Plan. The Plan Administrator shall establish such other enrollment requirements as it
determines necessary or advisable.
2.3
Eligibility; Commencement of Participation.
enrollment requirements set forth in this Plan and/or required by the Plan Administrator, and provided that the
Policy or Policies on such Eligible Employee have been issued by the Insurer, the Eligible Employee will become
a Participant and thereby will be covered by this Plan and eligible to receive benefits at the time and in the manner
provided herein. A Participant’s participation is limited to only issued Policies where the Participant is the insured.
ARTICLE 3
"Purchase of Policy"
3.1 The Company and all Participants hereto have taken or will take all necessary action to cause the
Insurer to issue the Policies, and shall take any further action which may be necessary to cause a Policy to conform
to the provisions of this Plan. The parties hereto agree that the Policies shall be subject to the terms and conditions
of this Plan and of the endorsements to the Policies filed with the Insurer.
ARTICLE 4
4.1 Title and ownership of a Policy shall reside in the Company for its use and for the use of the
Participants, all in accordance with this Plan. The Company alone may, to the extent of its interest, exercise the
right to borrow or withdraw on the Policy cash value. Where the Company and a Participant (or assignee, with the
consent of the Participant) mutually agree to exercise the right to increase the coverage under the subject Policy
then, in such event, the rights, duties and benefits of the parties to such increased coverage shall continue to be
subject to the terms of this Plan.
ARTICLE 5
“Beneficiary”
5.1 Beneficiary Designation. A Participant shall have the right and power to designate a Beneficiary
or Beneficiaries to receive the Participant’s share of the proceeds payable upon the death of the Participant, and to
elect and change a payment option for such Beneficiary, subject to any right or interest the Company may have in
such proceeds, as provided in this Plan. A Participant shall have the right to name such Beneficiary at any time
prior to the Participant’s death and submit it to the Plan Administrator (or Plan Administrator’s representative) on
the written form provided.
5.2 Beneficiary Acknowledgement. Once received and acknowledged by the Plan Administrator, the
form shall be effective. A Participant may change a Beneficiary designation at any time by submitting a new form
to the Plan Administrator. Any such change shall follow the same rules as for the original Beneficiary designation
and shall automatically supersede the existing Beneficiary form on file with the Plan Administrator. Upon the
acceptance by the Plan Administrator of a new Beneficiary designation form, all previously filed Beneficiary
designation forms shall be cancelled. The Company shall be entitled to rely on the last Beneficiary designation
form filed by a Participant and accepted by the Plan Administrator prior to the Participant’s death.
5.3 No Beneficiary Designation. If a Participant dies without a valid Beneficiary Designation Form on
file, or if all designated Beneficiaries predecease a Participant , then the Participant’s surviving spouse shall be the
designated Beneficiary. If a Participant has no surviving spouse, the benefits shall be made payable to the personal
representative of the Participant’s estate.
5.4 Facility of Payment. If the Plan Administrator determines in its discretion that a benefit is to be
paid to a minor, to a person legally declared incompetent, or to a person legally deemed incapable of handling the
disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the
guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable
person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem
appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account
of the Participant and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under
the Plan for such distribution amount.
ARTICLE 6
"Premium Payment and Taxable Benefit"
6.1 Premium Payment. The Company shall pay an amount equal to the planned premiums and any
other premium payments that might become necessary to keep a Participant’s Policy in force as determined by the
Insurer. Notwithstanding the forgoing, the Company shall have the absolute and sole right to terminate or
surrender the Policy.
6.2 Taxable Benefit. The Company shall determine the economic benefit attributable to a Participant
based on the life insurance premium factor for the Participant’s age multiplied by the amount of current life
insurance protection payable to the Participant’s Beneficiary. The “life insurance premium factor” is the minimum
amount required to be imputed under Treasury Regulation §1.61-22(d)(3)(ii) or any subsequent applicable
authority.
6.3 Imputed Income. The Company shall impute the economic benefit to the Participant
on an annual
basis, by adding the economic benefit to the Participant’s W-2, or if applicable, Form 1099.
ARTICLE 7
7.1 The Company shall at all times be entitled to one hundred percent (100%) of the Policy cash
value, as
that term is defined in the Policy contract, less any Policy loans and unpaid
interest or cash withdrawals
previously incurred by the Company. Such cash value shall be determined as of the date of surrender or death as the
case may be.
ARTICLE 8
"Rights of Participants or Assignees"
8.1 A Participant may not, without the written consent of the Company, assign to any individual, trust
or other organization, any right, title or interest in the subject Policy nor any rights, options, privileges or duties
created under this Plan, other than the right to name a Beneficiary from time to time.
ARTICLE 9
"Limitations on Company’s Rights in Policy"
9.1 Notwithstanding any provision hereof to the contrary, the Company shall have the right to sell or
surrender a Policy without terminating this Plan, provided: (i) the Company replaces the Policy with a comparable
life insurance policy or arrangement that provides the benefit provided under this Plan; and (ii) the Company and
the Participant (who will not unreasonably withhold his or her signature) execute a new Policy endorsement for
said comparable coverage arrangement, at which time all references to “Policy” hereunder shall refer to such
replacement coverage arrangement. Without limitation, the Policy at all times shall be the exclusive property of the
Company and shall be subject to the claims of the Company’s creditors.
ARTICLE 10
10.1 The Company may pledge or assign a Policy, subject to the terms and conditions of this Plan, for
the sole purpose of securing a loan from the Insurer or from a third party. Interest charges on such loan shall be
paid by the Company. If the Company so encumbers a Policy, other than by a Policy loan from the Insurer, then,
upon the death of the Participant, the Company shall promptly take all action necessary to secure the release or
discharge of such encumbrance.
ARTICLE 11
11.1 Participant’s Benefit. Upon the death of a Participant while this Agreement is in force, the
Participant’s Beneficiary shall be entitled to receive Policy death proceeds in the amount stated in the Participant’s
Participation Agreement. The receipt of this amount by the Beneficiary shall constitute satisfaction of the
Participant’s rights under this Agreement.
11.2 Company’s Benefit. Upon the death of the Participant while this Agreement is in force, the
Company shall be entitled to receive the remainder of the Policy death proceeds not payable under Section 11.1
above.
11.3 Benefit Paid by Insurer. The benefit payable to a Participant’s Beneficiary shall be paid solely by
the Insurer from the proceeds of the Policy on the life of the Participant. In no event shall the Company be
obligated to pay a death benefit under this Plan from its general funds. Should an Insurer refuse or be unable to pay
death proceeds endorsed to Participant under the express terms of this Plan, or should the Company cancel a Policy
for any reason, neither a Participants nor his or her Beneficiary shall be entitled to a death benefit.
11.4 Suicide or Misstatement. The amount of the benefit payable to a Participant’s Beneficiary may be
reduced or eliminated if Participant fails or refuses to take a physical examination, to truthfully and completely
supply such information or complete any forms as may be required by the Company or Insurer, or otherwise fails
to cooperate with the requests of the Company or the Insurer, or if the Participant dies under circumstances such
that the Policy does not pay a full death benefit (e.g., in the case of suicide within the exclusionary period of the
Policy); provided, however the Company shall evaluate the reason for the denial, and upon advice of legal counsel
and in its sole discretion, consider judicially challenging any denial.
ARTICLE 12
"Termination of the Plan”
12.1 This Plan shall terminate upon the occurrence of any one of the following:
(1) The total cessation of the business of the Company;
(2) The bankruptcy, receivership or dissolution of the Company;
(3) The termination of the Insured’s employment;
(4) The Participant’s “Disability,” as that term is defined in the Company’s separate Supplemental
Executive Retirement Plan;
(5) The Company’s “Change in Control,” as that term is defined in the Company’s separate
Supplemental Executive Retirement Plan;
(6) While the Participant is living by written notice thereof by either the Company or the
Participant to the other;
(7) Surrender, lapse, or other termination of the Policy by the Company; or
(8) Upon distribution of the death benefit proceeds in accordance with Article X.
Upon the termination of this Plan, the Company may make such disposition of the Policy as it determines
to be appropriate. Participants will have no rights in such Policies or the death benefit proceeds thereof, if this Plan
is terminated.
ARTICLE 13
"Insurer Not a Party��
13.1 The Insurer shall be fully discharged from its obligations under a Policy by payment of the
Policy’s death benefit to the Beneficiary or Beneficiaries named in the Policy, subject to the terms and conditions
of the Policy. In no event shall the Insurer be considered a party to this Plan, or any modification or amendment
hereof, and none of the provisions herein shall in any way be construed as enlarging, changing, varying or in any
other way affecting the obligations of the Insurer as expressly provided in the Policy, except insofar as the
provisions hereof are made a part of the Policy by the Beneficiary designation executed by the Company and filed
with the Insurer in connection herewith.
ARTICLE 14
"Administration”
14.1 Plan Administrator. For purposes of the Employee Retirement Income Security Act of
1974 (“ERISA”), as amended, the Company or its designee will be the "Named Fiduciary" and Plan Administrator
of the split-dollar life insurance plan for which this agreement is hereby designated the written plan instrument.
The Named Fiduciary or the Plan Administrator may employ others to render advice with regard to its
responsibilities under this Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others and
may exercise any other powers necessary for the discharge of its duties to the extent not in conflict with ERISA.
14.2 Plan Administrator Duties. The Plan Administrator shall have the discretion and authority to: (i)
make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan; and (ii)
decide or resolve any and all questions, including interpretations of this Plan, as may arise in connection with this
Plan.
14.3 Binding Effect of Decisions. Any decision or action of the Plan Administrator with respect to any
question arising out of or in connection with the administration, interpretation, and application of this Plan and the
rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any
interest in this Plan.
14.4 Indemnity of Plan Administrator. The Company shall indemnify and hold harmless the members
of the Plan Administrator, and those to whom management and operation responsibilities of the Plan have been
delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Plan, except in the case of willful misconduct by the Plan Administrator or any of its
members.
ARTICLE 15
"Claims and Review Procedures”
15.1 Written Claim. A person who believes that he or she is being denied a benefit to which he or she is
entitled under this Plan (a “Claimant”) may file a written request for such benefit with the Plan Administrator, setting
forth his or her claim. The request must be addressed to the Company at its then principal place of business.
15.2 Timing of Response. Upon receipt of a claim, the Plan Administrator shall advise the Claimant that a
reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Plan
Administrator may, however, extend the reply period for an additional ninety (90) days for reasonable cause. If the
claim is denied in whole or in part, the Plan Administrator shall adopt a written opinion, using language calculated to
be understood by the Claimant, setting forth:
(1) The specific reason or reasons for such denial;
(2) The specific reference to pertinent provisions of this Plan on which such denial is based;
(3) A description of any additional material or information necessary for the Claimant to perfect his or
her claim and an explanation why such material or such information is necessary;
(4) Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for
review; and
(5) The time limits for requesting a review under Section 15.3 and for review under Section 15.4
hereof.
15.3 Request for Review. Within sixty (60) days after the receipt by the Claimant of the written opinion
described in Section 15.2, the Claimant may request in writing that the determination of the Plan Administrator be
reviewed. Such request must be addressed to the Company, at its then principal place of business. The Claimant or his
or her duly authorized representative may, but need not, review the pertinent documents and submit issues and
comments in writing for consideration by the Plan Administrator. If the Claimant does not request a review of the Plan
Administrator’s determination within such sixty (60) day period, he or she shall be barred and estopped from
challenging the Plan Administrator’s determination.
15.4 Review of Decision. The Plan Administrator will review its determination within sixty (60) days after
receipt of a request for review. After considering all materials presented by the Claimant, the Plan Administrator will
render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific
reasons for the decision and containing specific references to the pertinent provisions of this Plan on which the
decision is based. If special circumstances require that the sixty (60) day time period be extended, the Plan
Administrator will so notify the Claimant and will render the decision as soon as possible, but no later than one
hundred twenty (120) days after receipt of the request for review.
ARTICLE 16
"Amendment"
16.1 This Plan may not be amended, altered, or modified, except by a written instrument signed by the
parties hereto, or their respective successors or assigns, and may not be otherwise terminated except as provided
herein.
ARTICLE 17
"Miscellaneous"
17.1 Binding Effect. This Plan shall be binding upon and inure to the benefit of the Company and its
successors and assigns, and upon the death of a Participant, the Participant’s successors, assigns, heirs, executors,
administrators and beneficiaries.
17.2 No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give
a Participant the right to remain an employee of the Company, nor does it interfere with the Company’s right to
discharge a Participant. It also does not require a Participant to remain an employee nor interfere with the
Participant’s right to terminate employment at any time.
17.3 Notices. Any notice, consent or demand required or permitted to be given under the provisions of
this Plan shall be in writing, and shall be signed by the party giving or making the same. If such notice, consent or
demand is mailed to a party hereto, it shall be sent by United States certified mail, postage prepaid, addressed to
such party’s last known address as shown on the records of the Company. The date of such mailing shall be
deemed the date of notice, consent or demand.
17.4 Applicable Law. This Plan and the rights of the parties hereunder, shall be governed by and
construed according to the laws of the State of Nebraska, except to the extent preempted by the laws of the United
States of America.
17.5 Gender. Whenever in this Plan words are used in the masculine or neutral gender, they shall be
read and construed as in the masculine, feminine or neutral gender, whenever they should so apply.
17.6 No Third Party Beneficiaries. The benefits of this Plan shall not inure to any third party. This Plan
shall not be construed as creating any rights, claims, or cause of action against the Company or any of its officers,
directors, agents, or employees in favor of any person or entity other than the Participant.
17.7 Severability. If any one or more of the provisions hereof is declared invalid, illegal, or
unenforceable in any jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired, and that invalidity, illegality, or unenforceability in one jurisdiction shall not
affect the validity, legality, or enforceability of the remaining provisions hereof.
17.8 Entire Agreement. This written plan document, along with a Participant’s Policy endorsement,
Beneficiary Designation Form, and Participation Agreement, constitutes the entire agreement between the
Company and the Participant as to the subject matter hereof. No rights are granted to a Participant under this Plan
other than those specifically set forth herein.
IN WITNESS WHEREOF,