Winn-Dixie Stores, Inc. and Subsidiaries - Page 29




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          exceed the net cash value of the policy.  The policies provided             
          that at the insured's death, any policy debt will be deducted               
          from the proceeds of that policy.  The policies were the sole               
          security for any loans.  Interest on petitioner's loans was due             
          on each policy anniversary date.  The policies provided for both            
          a fixed and variable loan interest rate.                                    
               The policies were modified by a Renewable Level Term                   
          Insurance Rider.  The rider provided death benefits equal to the            
          amount of death benefits lost as a result of a withdrawal from              
          the account value.  Under the provisions of the rider, petitioner           
          had the option on any policy anniversary date to elect to change            
          from the 11.06-percent policy loan interest rate to a fixed rate            
          of 10 percent in arrears or 9.1 percent in advance which would              
          apply to both old and new policy loans.  For the 1993 COLI policy           
          year March 1, 1993 to 1994, petitioner elected the variable loan            
          interest rate of 11.06 percent.                                             
               The final provisions governing the COLI policies purchased             
          by petitioner in June 1993 were devised to produce results in               
          accord with those set forth in the June 4, 1993, projections                
          contained in appendix B.                                                    
               On July 19, 1993, petitioner entered into an Administrative            
          Services Agreement with Coventry in which petitioner appointed              
          Coventry as the administrator of the COLI pool.  Under the                  







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Last modified: May 25, 2011