EXHIBIT 10.59
AMENDED AND RESTATED SPLIT-DOLLAR INSURANCE AGREEMENT
THIS AMENDED AND RESTATED SPLIT-DOLLAR INSURANCE AGREEMENT is made and
entered into effective as of this 10th day of March, 2000, by and between
UNIROYAL TECHNOLOGY CORPORATION, a Delaware corporation having its principal
place of business at Two North Tamiami Trail, Suite 900, Sarasota, Florida
34236, (the "Company") and Oliver J. Janney, an individual residing at 1684
Peregrine Point Drive, Sarasota, Florida 34231 (the "Employee").
RECITALS
1. Employee is employed by the Company as its Executive Vice President,
General Counsel and Secretary and has rendered competent and faithful service
resulting in substantial growth and profit to the Company;
2. The Company highly values the efforts, abilities and accomplishments
of Employee and wishes to reward him for his past services;
3. The Company and the Employee have heretofore entered into a
Split-Dollar Insurance Agreement dated as of August 15, 1995 (the "1995
Agreement"), which Agreement was amended by the First Amendment to Split Dollar
Insurance Agreement dated March 10, 2000, and desire to amend such agreement as
so amended and restate it in this Agreement;
4. Employee wishes to provide life insurance protection for his family
in the event of his death, under a policy of life insurance insuring his life
which is described in Exhibit A attached to and by this reference made a part of
this Agreement (the "Policy"), issued by Security Life of Denver (the
"Insurer");
5. The Company, in appreciation for his past services, wishes to assist
Employee with his personal life insurance program and has paid or funded through
a Premium Deposit Fund pursuant to a Non-Standard Premium Deposit Supplement
Contract, the form of which is attached hereto as Exhibit B, the premiums due on
the Policy, as additional employment benefits for the Employee, on the terms and
conditions set forth in this Agreement; and
6. The Employee is the owner of the Policy and, as such, possesses all
incidents of ownership in and to the Policy and wishes to retain such ownership
rights, subject to the assignment described in this Agreement, which secures the
repayment of the amounts which the Company will pay toward the premiums of the
Policy.
NOW THEREFORE, in consideration of the premises and the mutual promises
contained in this Agreement, together with other good and sufficient
consideration the receipt and sufficiency of which are acknowledged by both
parties, the Company and Employee agree as follows:
1. Purchase of Policy.
The Employee has purchased the Policy from the Insurer in the
total face amount of Five Hundred Ten Thousand and No/100 Dollars ($510,000.00).
The parties have taken all necessary action to cause the Insurer to issue the
Policy and agree to take any further action which may be necessary to cause the
Policy to conform to the provisions of this Agreement. The parties agree that
the Policy shall be subject to the terms and conditions of this Agreement and of
the collateral assignment of the Policy filed with the Insurer.
2. Ownership of Policy.
The Employee shall be the sole and absolute owner of the
Policy and shall have and may exercise all the rights and incidents of ownership
granted to the owner by the Policy's terms except as otherwise provided in this
Agreement. Such rights and incidents of ownership include the right to borrow on
security of the Policy but only to the extent that the cash surrender value of
the Policy exceeds the cumulative amount of premiums paid by the Company to such
date, less any indebtedness to the Insurer created in favor of the Company; to
pledge or assign his interest in the Policy for such loans or advances; the
right, in the event of termination of this Agreement, to realize against the
cash value of the Policy (to the extent such cash value exceeds the Company's
interest in the Policy); the right of the Employee's estate in the event of the
Employee's death, to realize against the proceeds of the Policy (to the extent
said proceeds exceed the Company's interest in the Policy); and the right,
subject to the interest of the Company to be reimbursed for its interest in the
Policy, to surrender the Policy. An assignment describing the rights of the
Company shall be filed with the Insurer. The parties agree that the Insurer is
authorized to recognize the rights of either party, as designated in the
assignment. The sole signature of either party shall be sufficient for the
exercise of his or its respective rights, provided that the Company shall not
surrender the Policy as long as the Employee is the owner of the policy, except
as otherwise provided in paragraph 9(b) of this Agreement. Each right under the
Policy shall be exercisable by the owner of the right without the consent of the
other party; however, if the Insurer shall require the signatures of both the
Company and the Employee, the parties agree to co-sign any required documents
and take all steps necessary to permit the exercise of any such right under the
Policy.
3. Beneficiary Designation.
The Employee shall cause the Policy to be endorsed to reflect
the following interests of the parties under this Agreement:
(a) The Company, or any successor, will be the direct
beneficiary of an amount equal to the total amount of premiums paid by the
Company which have not been repaid prior to death, less any indebtedness to the
Insurer created in favor of the Company in respect of the Policy. Wherever the
term "premiums" is used in this Agreement, it will include deposits made by the
Company into the Premium Deposit Fund described in Exhibit B for payment of
future premiums as they become due.
(b) The Employee, or his assignee, will have the right to
designate and change direct and contingent beneficiaries of any remaining
proceeds from the Policy, and to elect and change any settlement options under
the Policy for such beneficiaries.
4. Assignment of Employee's Interest.
Employee shall collaterally assign the Policy to the Company
as security for the repayment of premiums paid by the Company on the Policy. The
collateral assignment, a copy of which is attached to this Agreement as Exhibit
C, will not be altered or changed without the consent of the Company, except
that the Employee may assign his ownership rights to a third party, to the
extent they exceed the Company's interest, as provided in paragraph 2 of this
agreement.
5. Application of Dividends Under Policy.
The Policy as issued is non-participating and, therefore, no
dividends are payable under the Policy. However, if at any time in the future
the Policy becomes participating, any dividend declared on the Policy shall be
applied to purchase one-year term insurance on the life of the Employee in an
amount equal to the cash value of the Policy (as that term is defined therein)
as of the next anniversary of the Policy Date. If the premium for such term
insurance is less than the amount of such dividend, the balance of such dividend
shall be used to reduce the premium payable on the Policy. If such dividend is
not adequate to purchase the specified amount of one-year term insurance on the
life of the Employee, the entire dividend shall be applied to purchase the
maximum amount of term insurance on the life of the Employee which can be
purchased with such dividend. The parties agree that the dividend election
provisions, if any, of the Policy shall conform to the provisions of this
paragraph 5.
6. Payment of Premiums.
All premium payments under the Policy will be made in
accordance with and subject to the following terms and conditions:
(a) The Company has paid or funded the premiums for each year
that this Agreement is in force.
(b) The Employee's W-2 earnings will reflect the Employee's
Share paid by the Company on behalf of the Employee in each year during the term
of this Agreement. The Employee's Share is the annual cost of current life
insurance protection on the life of the Employee, calculated in accordance with
the lower of (i) the PS 58 value set forth in Revenue Ruling 55-747 (or the
corresponding applicable provisions of any future revenue ruling), and (ii) the
Insurer's current published premium rate for annually renewable term insurance
for standard risks for the excess of the current death benefit allocable to the
Employee or his beneficiary or beneficiaries over the portion of the current
death benefit allocable to the Employer under paragraph 2.
(c) In the event of a change of control of the Company, as
defined in Exhibit D, followed by a material diminution of the duties,
compensation or employment benefits of the Employee prior to the termination of
this Agreement, the Company shall forthwith prepay the balance of the premiums
due for the remaining term of the Policy, up to the Employee's sixty-sixth
birthday.
7. Payment of Death Benefit Under Policy.
(a) Upon the death of the Employee, the Company shall promptly
take all action necessary to obtain payment of the death benefit provided under
the Policy.
(b) The Company shall have the unqualified right to receive a
portion of such death benefit equal to the total amount of the premiums paid by
the Company under this Agreement (reduced by any indebtedness owed by the
Company against the Policy existing at the death of the Employee, including any
interest due on such indebtedness). The balance, if any, of the death benefit
provided under the Policy shall be paid directly to the beneficiary or
beneficiaries designated by the Employee, in the manner and in the amount or
amounts provided in the beneficiary designation provision of the Policy, as the
same may have been amended from time to time. In no event shall the amount
payable to the Company exceed the Policy proceeds payable at the death of the
Employee. No amount shall be paid from such death benefit to the beneficiary or
beneficiaries designated by the Employee until the full amount due the Company
has been paid. The parties agree that the beneficiary designation provision of
the Policy shall conform to the provisions of this Agreement.
8. Termination of Agreement.
This Agreement shall terminate, without notice, upon the
occurrence of any of the earliest to occur of the following events: (i) the
bankruptcy, receivership or dissolution of the Company; or (ii) on January 3,
2011.
9. Disposition of Policy on Termination of Agreement.
(a) Upon termination of this Agreement other than by reason of
death of the Employee, the Employee will have a period of one hundred eighty
(180) days in which to pay the Company the sum of one hundred dollars ($100.00)
for the Company's interest in the Policy, including the Company's interest in
the Premium Deposit Fund. Upon receipt of such amount, the Company will release
the collateral assignment of the Policy.
(b) If the Employee or his assignee fails to repay the Company
within the one hundred eighty (180) day period following termination of this
Agreement pursuant to subparagraph 9(a), the Company may enforce any and all of
its rights under the collateral assignment of the Policy.
(c) In the event of the prepayment of the premiums for the
balance of the term of the Policy pursuant to Section 6(c) above, the Employee
may satisfy the interest of the Company in the Policy under this Agreement by
payment to the Company of one dollar ($1.00). Upon receipt of such payment, the
Company shall cooperate with the Employee in releasing the Company's security
interest, including execution and delivery of any document reasonably necessary
to evidence the release of such security interest.
10. Discharge of Insurer.
The Insurer shall be fully discharged from its obligations
under the Policy by payment of the Policy death benefit to the Company and the
other beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy and its legal endorsements. In no event shall the
Insurer be considered a party to this Agreement or any subsequent amendment or
modification of this Agreement. No provision of this Agreement, nor of any
modification or amendment to this Agreement, 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 of this Agreement are made a part of the Policy by the beneficiary
designation executed by the Company and filed with the Insurer pursuant to the
provisions of this Agreement.
11. Employee's Right to Assign.
Notwithstanding any other provision of this Agreement to the
contrary, the Employee shall have the right to assign absolutely and irrevocably
by gift to any assignee all of his right, title and interest in and to this
Agreement and to the Policy.
12. Named Fiduciary & Claims Procedure.
(a) The Employee Benefits Committee of the Company (the
"Committee") is hereby designated as the named fiduciary under this Agreement.
The named fiduciary shall have authority to control and manage the operation and
administration of this Agreement and shall be responsible for establishing and
carrying out a funding policy and method consistent with the objectives of this
Agreement.
(b) The Committee shall make all determinations concerning
rights to benefits under this Agreement. Any decision by the Committee denying a
claim by the Employee or his beneficiary for benefits under this Agreement shall
be in writing and delivered or mailed to the Employee or such beneficiary. Such
decision shall set forth the specific reasons for the denial, written to the
best of the Committee's ability in a manner that may be understood without legal
or actuarial counsel. In addition, the Committee shall afford a reasonable
opportunity to the Employee or such beneficiary for a full and fair review of
the decision denying such claim.
13. Amendment or Modification.
This Agreement may not be amended, altered or modified except
by a written instrument of like formality and effect signed by the parties or
their respective successors or assigns.
14. Binding Effect.
This Agreement shall be binding upon and enure to the benefit
of the Company, its successors and assigns, and the Employee, his successors,
assigns, heirs, executors, administrators and beneficiaries.
15. Notices.
Any notice, consent or demand required or permitted to be
given under the terms of this Agreement shall be in writing and shall be signed
by the party giving or making it. If such notice, consent or demand is mailed to
a party, it shall be sent by United States certified mail, postage prepaid,
addressed to such party's address set forth at the beginning of this Agreement
or such other address as shall have been designated by notice pursuant to this
paragraph 15. The date of mailing shall be deemed the date of the notice,
consent or demand.
16. Governing Law.
This Agreement and the rights and obligations of the parties
shall be governed by and construed in accordance with the laws of the State of
Florida.
17. Miscellaneous.
(a) When used in this Agreement, the singular shall include
the plural and the masculine shall include the feminine.
(b) Headings for the separate paragraphs of this Agreement
have been inserted solely for convenience of reference and shall not constitute
a part of or affect the interpretation, validity or effect of any provisions of
this Agreement.
(c) This Agreement contains the final, exclusive and complete
expression of the understanding of the Employee and the Company with respect to
the subject matter hereof, superseding any prior or contemporaneous agreement or
representation, oral or written, between them.
(d) The parties may execute this Agreement in counterparts,
each of which will be deemed to be an original and all of which shall constitute
one and the same instrument. This Agreement shall become effective when one or
more counterparts have been signed by and delivered to each party.
(e) If any covenant or other provision of this Agreement is
deemed to be contrary to law or unenforceable, that covenant or provision will
be considered severable from the remainder of this Agreement. The
unenforceability of any such covenant or provision shall not affect the
validity, interpretation or effect of the remainder of this Agreement or the
application of such covenant or provision to other circumstances not contrary to
law.
(f) Any action or right belonging to or required to be taken
by the Company, except any action required to be taken by the Committee, may be
exercised by appropriate action of the Company's Board of Directors, the
Company's Chief Executive Officer or President, or by any other officer of the
Company authorized to take such action by the Company's Chief Executive Officer
or President.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
UNIROYAL TECHNOLOGY CORPORATION
ATTEST:
By:_____________________ By:____________________________
Its Secretary Its President
By:____________________________
Oliver J. Janney
EXHIBIT A
DESCRIPTION OF LIFE INSURANCE POLICY
Insurer: Security Life of Denver
Insured & Owner: Oliver J. Janney
Policy Number: 1542027
Face Amount: $510,000
Policy Date: July 18, 1995
EXHIBIT B
SECURITY LIFE OF DENVER INSURANCE COMPANY
Non-Standard Premium Deposit Fund Supplement Contract
Policy #: Policyowner:
This is a supplement to the above policy between the policyowner ("You") and
Security Life of Denver Insurance Company ("SLD"). The following terms govern
any deposit accepted by SLD.
You have requested to make a deposit to a Premium Deposit Fund (the "Fund") for
the sole purpose of paying future premiums as they become due. The attached
schedule sets out: (a) how many future premiums you wish to pay; (b) the date
you wish to make the deposit; (c) the interest rate SLD will credit to your fund
(the "fund interest rate"); and (d) the amount you must deposit for payment of
each future premium. The required deposit will be the initial balance of the
Fund.
If you agree to the following terms and conditions, including the surrender
charge that may apply (see Withdrawal and Surrender, below), sign this form and
send it to us along with the deposit.
This offer automatically ends if, prior to the deposit due date on the schedule,
SLD does not receive the signed form, the deposit and a completed Form W-9 as
interest credited will be reported annually as income. You must then make a new
request in order to make a deposit.
TERMS AND CONDITIONS:
The Fund Balance: The Fund balance is the deposit; less premium paid from the
fund; plus interest on the Fund balance at the fund interest rate.
Payments of Premiums: On the premium due date, the premium due set out in the
schedule will be paid from the Fund. The Fund is not part of your cash value or
policy loan value.
Withdrawal and Surrender: You may withdraw the entire balance of the Fund at any
time. If you do so, a withdrawal charge will be imposed. You may not make a
partial withdrawal. The amount of the withdrawal charge will be 5% of the Fund
balance if the period during which the Fund is scheduled to make premium
payments is less than nine years, as indicated on the schedule on the back of
this agreement. The amount of the withdrawal charge will be 10% of the Fund
balance if the period during which the Fund is scheduled to make premium
payments is nine years or longer, as indicated on the schedule on the back of
this agreement.
A termination of your policy by surrender will constitute a withdrawal of the
entire Fund and will subject the entire balance of the Fund to the applicable
withdrawal charge stated above.
Changes: You cannot change the schedule without our written consent.
Death: At the death of the insured, any remaining fund balance plus interest on
such remaining balance will be added to the policy's death proceeds.
Agreed to this_______ day of_______ , 2000
By:____________________ By:_________________________________________
Policy owner Security Life of Denver Insurance Company
Schedule for Non-standard Premium Deposit Fund Supplement Contract
Policy #: 1542027 Insured:
Policyowner:
Required Deposit:
Deposit Due Date: 4-4-00
Fund Interest Rate: 5.68%
Number of Premiums to be Paid from Fund: 11
First Premium to be Paid by Fund: 7-18-00
Actual
Premium Fund Capital Interest/ Ending
Due Date Balance W/Drawn Discount Premium Balance
03/21/2000
07/18/00
07/18101
07/18/02
07/18/03
07/18/04
07/18/05
07/18/06
07/18/07
07/18/08
07/18/09
07/18/10
The required deposit is a prepayment of the premiums shown on this schedule. We
do not guarantee that this deposit will be sufficient to keep the policy in
force.
Agreed to this________day of__________, 2000
By:___________________ By:_________________________________________
Policy Owner Security Life of Denver insurance Company
EXHIBIT C
COLLATERAL ASSIGNMENT
OF LIFE INSURANCE POLICY
The following life insurance policy (the "Policy") is subject to the terms and
conditions of the attached Split-Dollar Insurance Agreement:
Insurer: Security Life of Denver
Insured: Oliver J. Janney
Policy No.: 1542027
Face Amount: Five Hundred Ten Thousand Dollars ($510,000)
Policy Date: July 18, 1995
Owner: Oliver J. Janney
By:_______________________
Oliver J. Janney
EXHIBIT D
CHANGE OF CONTROL
For purposes of Section 6(c) of this Agreement, a "change in control" shall be
deemed to have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(A) Any Person is or becomes the "beneficial owner" within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934 (the "Exchange Act"), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; or
(B) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new director (other than a
director designated by a Person who has entered into an agreement with the
Company to effect a transaction described in paragraphs (A), (C) or (D) of this
Exhibit D) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved (other than approval given in connection with an actual or threatened
proxy or election contest) cease for any reason to constitute a majority
thereof; or
(C) The stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining or
outstanding or by being converted into voting securities of the surviving entity
or parent entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities of the Company
or such surviving entity (or parent entity) outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in which no Person
acquires more than 30% of the combined voting power of the Company's then
outstanding securities; or
(D) The shareholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction having a similar
effect).
For the purpose of the foregoing definition, "Persons" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.