EXHIBIT 2.I.4
AMENDED AND RESTATED SPLIT DOLLAR AGREEMENT
This AMENDED AND RESTATED SPLIT DOLLAR AGREEMENT (this "Agreement") is
entered into as of June 7, 2002, by and between ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the "Owner")
and AMERICAN CAPITAL STRATEGIES, LTD., a Delaware corporation (the "Employer").
R E C I T A L S
WHEREAS, the Owner and the Employer entered into a Stock Option Exercise
Agreement dated as of September 7, 1999 (the "Exercise Agreement"), pursuant to
which they entered into a Split Dollar Agreement dated as of September 7, 1999
(the "Old Agreement"); and
WHEREAS, as of even date herewith, the Owner and the Employer are entering
into a Release and Covenants Agreement (the "Release Agreement") and the
execution and delivery of this Agreement is a requirement thereunder; and
WHEREAS, the parties hereto desire to amend and restate the Old Agreement in
its entirety.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing and
intending to be legally bound hereby, agree as to amend and restate the Old
Agreement as follows:
1. INTERESTS IN THE POLICY. The Policy that is the subject of this Split
Dollar Agreement is Security Life of Denver Insurance Company (the "Insurer")
Policy Number 610014591 on the life of the Owner (the "Policy"). The Employer's
interest in the cash value and death benefits of the Policy (the "Employer's
Interest") as of any date, shall be equal to the Unamortized Premium Payment (as
defined herein) as of such date with interest accumulated at a rate of 4.5% per
annum. The Owner's interest in the cash value and death benefits of the Policy
(the "Owner's Interest") shall be equal to the remaining cash value and death
benefits of the Policy, if any, in excess of the Employer's Interest, reduced by
any distributions made to the Owner prior to such date.
2. PREMIUM PAYMENTS. The Employer made on or about September 7, 1999, and
will make on each of the first four anniversaries of the September 7, 1999 cash
premium payments on the Policy in the amount of $100,800 (each payment being an
"Annual Premium Payment" and collectively, the "Aggregate Premium Payments").
The Owner has had and shall have imputed income each year in an amount equal to
(a) the annual cost of current death benefit protection on the life of the
Owner, measured by the lower of (i) the PS 58 rate, as set forth in Revenue
Ruling 55-747 (or the corresponding applicable provision of any future Revenue
Ruling), or (ii) the Insurer's current published premium rate for annually
renewable term insurance for standard risks plus, without duplication, and
(b) one-tenth of the Aggregate Premium Payments. The "Unamortized Premium
Payment" as of any date shall be the aggregate Annual Premium Payments made
through such date reduced by 2.5% of the Aggregate Premium Payments on each
October 1, January 1, March 1 and July 1 during the term of the Old Agreement
and this Agreement.
3. DEATH BENEFIT AMOUNTS.
a. In the event of Owner's death prior to the termination of this
Agreement, the death benefit payable to the Employer (or the Employer's
designated beneficiaries) under this Agreement shall be equal to the Employer's
Interest in the Policy at the time of Owner's death.
b. In the event of the Owner's death prior to the termination of this
Agreement, the death benefit payable to the Owner (or the Owner's designated
beneficiaries) shall be the excess of the total death proceeds under the Policy
less the amount payable to the Employer (or the Employer's designated
beneficiaries). Following the termination of this Agreement and upon the
satisfaction of the Employer's Interest in the Policy, the Owner's death benefit
will be equal to the total death benefit provided by the Policy.
c. Owner understands that sufficiency of cash value in the Policy to
provide expected amounts of death benefit under this Agreement may vary as a
result of Policy performance and duration of premium payments and this is in no
event guaranteed by the Employer or the Insurer.
4. OWNERSHIP AND RIGHTS IN THE POLICY.
a. The Policy will be owned exclusively by the Owner. While this Agreement
is in effect, the Employer has a security interest in the Policy under this
Agreement limited exclusively to the Employer's Interest in the Policy;
provided, however, this paragraph 4 shall not in any way limit or affect the
obligations or rights of the parties under that Exercise Agreement.
b. The Owner shall have the right to make any investment choices permitted
by the Policy and that appear on Exhibit A hereto with respect to the cash value
of the Policy. Any other investment choices will require the consent of the
Employer.
c. The Owner's rights shall also include the right to select and change
beneficiaries to receive Owner's death benefits. The Owner will not be permitted
to borrow against, or partially or totally surrender the Policy as long as the
Collateral Assignment remains in force, except as provided in the Exercise
Agreement. Any other rights in the Policy other than those specifically
mentioned in this Agreement must be exercised with the written consent of both
the Owner and the Employer.
d. Notwithstanding anything to the contrary in this Agreement, Owner shall
have the right to assign ownership of the Policy to an insurance trust created
by the Owner, provided that any such assignment shall be made expressly subject
to the rights and interests of the Employer to the Policy created under this
Agreement and under the Exercise Agreement and the trustee thereof shall have
executed such instrument as the Employer may reasonably request confirming such
rights and interests of the Employer.
5. ASSIGNMENT OF POLICY TO SECURE EMPLOYER'S PAYMENTS. To secure
Employer's Interest in the Policy under this Agreement, Owner has collaterally
assigned the Policy to the Employer by signing the separate Collateral
Assignment. The Collateral Assignment cannot be altered without the Employer's,
Owner's and Insurer's consent.
6. TERMINATION OF SPLIT DOLLAR AGREEMENT. This Agreement will terminate
upon the earliest to occur of the following:
a. Death of the Owner and the payment to Employer of all amounts due it
hereunder;
b. Written agreement of both the Owner and the Employer to terminate this
Agreement;
c. The breach by the Owner of the Owner's Obligations under the Release of
the Agreement, or the termination of Owner's obligations under the Release
Agreement, including the termination of the Restricted Period in accordance with
Paragraph 3(f) thereof; or
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d. A release of the Collateral Assignment pursuant to Section 7 herein.
Upon termination of this Agreement, the Employer shall receive the Employer's
Interest in the Policy as soon as is practical, but in no event shall receipt be
later than sixty (60) days from the earliest of the dates listed above. In the
event of termination of this Agreement for reason other than the death of the
Owner, the payment of the Employer's Interest in the Policy and under this
Agreement shall be satisfied either directly from the cash value of the Policy
and any scheduled premium payments set forth in section 2 of this Agreement
which have not yet been made by Employer, or by direct payment by the Owner, at
the discretion of the Owner. In this event, the recovery of the Employer's
Interest shall be limited to the cash value of the Policy at that time. In this
event, the recovery of the Employer's Interest shall be limited to the cash
value of the Policy at that time. In the event of termination of this Agreement
by reason of the death of the Owner, the Employer's Interest in the Policy and
under this Agreement shall be satisfied through direct payment from the Insurer
from the Policy proceeds.
7. RELEASE OF COLLATERAL ASSIGNMENT. Upon receipt of the Employer's
Interest in the Policy, as provided above, either whether from the Policy, or
from the Owner, the Employer will release the Collateral Assignment. Upon
satisfaction of the Employer's Interest in the Policy, the Owner shall have
unrestricted ownership to the Policy, subject to the terms of the Exercise
Agreement.
8. MISCELLANEOUS.
a. NOT AN EMPLOYMENT AGREEMENT. This Agreement does not in any way
constitute an employment agreement, and the Employer reserves the right to
terminate Owner's employment to the same extent as though this Agreement did not
exist. This Agreement may be amended at any time by written agreement signed on
behalf of the Employer and by the Owner.
b. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Employer and its successors and assigns, and to the Owner and the
Owner's heirs, executor or personal representative and beneficiaries.
c. NOTICES. Any notice, consent or demand required or permitted under this
Agreement shall be made in writing and shall be signed by the party making the
notice, consent, or demand. Such notice shall be sent by United States certified
mail, postage pre-paid and shall be sent to the other party's last known address
as shown on the records of the Employer. The date of such mailing shall be
deemed to be the date of such notice, consent or demand.
d. GOVERNING LAW. This Agreement shall be governed by and be construed in
accordance with the laws of the State of Maryland, without reference to the
conflicts of laws provisions thereof.
9. CLAIMS PROCEDURES.
a. CLAIMANTS. Any person or entity claiming a benefit, requesting an
interpretation or ruling under the Plan (hereinafter referred to as "Claimant")
shall present the request in writing to the Employer, which shall respond in
writing as soon as practicable. If the claim or request is denied, the written
notice of denial shall state the reason for denial, with specific reference to
the provisions on which the denials is based, a description of any additional
material or information required and an explanation of why it is necessary, and
an explanation of the program's claims review procedure.
b. REVIEW OF CLAIM. Any Claimant whose claim or request is denied or who
has not received a response within sixty (60) days may request a review by
notice given in writing to the Employer. Such
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request must be made within sixty (60) days after receipt by the Claimant of the
written notice of denial, or in the event Claimant has not received a response
sixty (60) days after receipt by the Employer of Claimant's claim or request.
The claim or request shall be reviewed by the Employer which may, but shall not
be required to, grant the Claimant a hearing. On review, the Claimant may have
representation, examine pertinent documents, and submit issues and comments in
writing.
c. FINAL DECISION. The decision or review shall normally be made within
sixty (60) days after the Employer's receipt of Claimant's claim or request. If
an extension of time is required for a hearing or other special circumstances,
the Claimant shall be notified and the time limit shall be one hundred twenty
(120) days. The decision shall be in writing and shall state the reason and the
relevant provisions. All decisions on review shall be final and bind all parties
concerned.
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IN WITNESS WHEREOF, the Employer and the Owner have executed and delivered
this Amended and Restated Split Dollar Agreement as of the date first set forth
above.
AMERICAN CAPITAL STRATEGIES. LTD.
By:
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Name:
Title:
OWNER
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Witness
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