EXHIBIT 10.25
AMENDMENT, IN TOTO, OF
SPLIT DOLLAR INSURANCE AGREEMENT
THIS AMENDMENT, IN TOTO, to the Split Dollar Insurance Agreement,
dated July 1, 1995, by and between Carrols Corporation (the "Employer") and
Shirley Vituli and Arthur Kunofsky, as Trustees under the Alan Vituli
Insurance Trust dated June 22, 1989 (the "Owner"), is made as of the 3rd
day of April, 1996.
Recitals:
A. The Employer is a corporation duly organized and validly existing
under the laws of the State of New York.
B. Alan Vituli (the "Employee") is a valued and trusted employee of
the Employer.
C. In consideration of the faithful performance of services by the
Employee for the Employer, the Employer wishes to benefit the Employee by
providing life insurance benefits to the Employee under a split dollar
arrangement in accordance with the terms and conditions of this Agreement.
D. The Employer and the Owner have agreed that life insurance policy
no. UO1732239 on the life of the Employee, issued by ITT Hartford (the
"Insurance Company"), with a death benefit of $1,500,000 (the "Policy"),
shall be owned by the Owner subject to the terms and conditions of this
Agreement.
E. The parties intend that this arrangement shall constitute a split
dollar arrangement as described in Rev. Rul. 64-328, 1964-2 C.B. 11.
NOW, THEREFORE, the parties mutually agree as follows:
1. OWNERSHIP OF POLICY.
The Policy has been issued to the Owner as Owner, and the
Owner shall be the sole and exclusive Owner of the Policy.
2. PAYMENT OF PREMIUMS.
The Owner shall pay, either directly to the Insurance Company, or
by annual or more frequent reimbursement to the Employer if the Employer
shall have paid that part of the premium which the Owner is required to pay
hereunder, that portion of the annual gross premium due on the Policy, up
to but not exceeding the entire amount thereof, equal to the economic
benefit (including any economic benefit attributable to the use of the
Policy dividends, if any) provided to the Employee. The economic benefit
shall be defined as the P.S. 58 rates or the Insurance Company's standard
yearly renewable term rate in accordance with the principles set forth in
Rev. Rul. 64-328, 1964-2 C.B. 11 and Rev. Rul. 66-110, 1966-1 C.B. 12.
The Employer shall pay no less than the balance of the premium, if any.
3. RIGHTS IN THE POLICY.
(A) The Owner shall have all of the rights of the Owner under
the Policy and the Owner shall be entitled to exercise all of such rights,
options and privileges (other than those specifically enumerated for the
Employer in Paragraph B of Article 7) without the consent of the Employer.
(B) In consideration of the Employer's agreement to contribute
to the payment of the premiums on the Policy in the manner set forth in
this Agreement, in the event of a termination of this Agreement by the
Owner, pursuant to Subparagraph (i) of Paragraph A of Article 5, the Owner
agrees to repay to the Employer, and the Employer shall be entitled to
receive, at the time and in the manner provided below, the lesser of
"Aggregate Employer Premiums Paid" or the then "Cash Surrender Value" of
the Policy, computed without regard to any outstanding Policy loans.
(C) For purposes of this Agreement, the following definitions
shall apply:
i. "Aggregate Employer Premiums Paid" means the total
premiums paid for the Policy by the Employer and not reimbursed to the
Employer by the Owner, as of the termination date, except premiums for
any extra benefit riders or agreements under the Policy other than
riders providing additional paid-up insurance.
ii. "Cash Surrender Value" means the guaranteed cash value
of the Policy, plus the cash value of any dividend additions as of the
date to which premiums have been paid, plus any dividend credits
outstanding, without regard to any outstanding Policy loans.
4. APPLICATION OF POLICY DIVIDENDS.
Any annual dividend attributable to the Policy shall be applied
as determined by the Owner for each year of the Policy, except that:
(A) No dividends that would constitute income to the Owner
(under applicable federal income tax or trust accounting rules) shall be
used or applied toward, or contributed to the payment of, premiums on the
Policy; and
(B) No portion of the cash value of the Policy shall be used or
applied toward, or contributed to, the payment of premiums on the Policy or
for the purchase of paid-up insurance if any of such cash value would
thereby constitute income to the Owner under applicable federal income tax
or trust accounting rules.
5. TERMINATION OF AGREEMENT.
(A) Subject to fulfillment of the obligations arising upon
termination as hereinafter set forth, this Agreement shall terminate on the
first to occur of the following events:
i. Delivery of written notice of termination by the Owner to
the Employer, whereupon the Owner, in the Owner's sole discretion,
shall take one of the following actions:
a. Surrender the Policy and pay to the Employer the
amount to which the Employer is entitled under Paragraph B of Article
3.
b. Retain all or a portion of the Policy and pay to
the Employer the amount to which the Employer is entitled under
Paragraph B of Article 3.
ii. The Employee's death, whereupon the Employer shall be
entitled to receive that portion of the death benefit in excess of
$1,500,000, up to, but not exceeding, the Aggregate Employer Premiums
Paid as of the date of death of the Employee and not previously
reimbursed to the Employer.
(B) Notwithstanding the foregoing, in no event shall the
Employer have any ownership or security interest in any assets of the
Owner, including, but not limited to, the Policy.
6. PROVISION REGARDING THE INSURANCE COMPANY.
The parties acknowledge and agree as follows:
(A) The Insurance Company shall be bound only by the provisions
of the Policy and any endorsement thereto.
(B) Any payment made or actions taken by the Insurance Company
in accordance with the provisions of the Policy and any endorsement thereto
shall fully discharge the Insurance Company from all claims, suits and
demands of all persons whatsoever.
(C) The Insurance Company shall not be deemed a party to, or to
have notice of, this Agreement or the provisions hereof and shall have no
obligation to see to the performance of the obligations of the parties
hereunder.
7. RIGHTS OF PARTIES.
(A) The Owner retains all rights in the Policy not specifically
assigned to the Employer including, but not limited to, the following
rights:
i. Subject to Paragraph B of Article 3, the right to surrender
the Policy and receive the surrender value.
ii. The right to collect from the Insurance Company any
disability benefit payable in cash that does not reduce the amount of
insurance.
iii. Subject to Subparagraph (ii) of Paragraph A of Article 5, the
right to designate and change the beneficiary.
iv. The right to elect any optional mode of settlement permitted
by the Policy or allowed by the Insurance Company.
v. The right to exercise all non-forfeiture rights permitted by
the terms of the Policy or allowed by the Insurance Company and to
receive all benefits and advantages derived therefrom.
vi. All other rights contained in the Policy except those of the
Employer, as provided in Paragraph B of this Article 7.
(B) The Employer shall have the following rights:
i. The right to borrow upon the cash value of the Policy to pay
premiums.
ii. The right to obtain one or more loans or advances on the
Policy, either from the Insurance Company or from other persons, and
to pledge or assign the Policy as security for such loans or advances,
to the extent of its interest in the Policy.
8. AMENDMENT.
This Agreement may be altered, amended or modified, including the
addition of any extra Policy provisions, but only by a written instrument
signed by all of the parties.
9. ASSIGNMENT.
A party may assign such party's interests and obligations under
this Agreement at any time subject to the terms and conditions of this
Agreement.
10. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New
York.
11. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the parties
with respect to the subject matter hereof. Any and all prior agreements or
understandings with respect to such matters are hereby superseded.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement
this 3rd day of April, 1996.
CARROLS CORPORATION
Attest:
By: /S/ RICHARD V. CROSS
/S/ JOSEPH ZIRKMAN
[SEAL]
ALAN VITULI INSURANCE TRUST,
DATED JULY 22, 1989
By:/S/ SHIRLEY VITULI
Shirley Vituli, Trustee
By:/S/ ARTHUR KUNOFSKY
Arthur Kunofsky, Trustee