Contract
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Executive Life Program This Split Dollar Agreement is entered into as of 12/01/2001, by and between Xxxxxx Xxxxxxxxxxx, (the “Employee”) (hereinafter, the Employee or this trust shall be referred to as the “Owner” when referred to in that capacity) and Linens ’n Things, Inc., a Delaware corporation (the “Employer”). Recitals Whereas, Employee is eligible for and wishes to participate in the Employer's Executive Life Program (the “Program”); and Whereas, Owner will be the sole owner and possessor of the Policy and assign an interest in the Policy’s death benefit and cash value to the Employer as collateral to secure repayment of Employer’s premium payments with respect to the Policy; and Whereas, it is the intent of the Employer and Owner to define the limited extent of the Employer’s security interest in the Policy; Now, therefore, Employer and Owner mutually agree that: (1) Interests in the Policy Cash Values The Policy, which is the subject of this Split Dollar Agreement, is a variable universal life policy issued by Nationwide Life and Annuity Company (the “Insurer”) Policy Number NO56205610, on the life of the Employee. The interests of the respective parties to this Agreement in the cash value of the Policy shall be apportioned in the following manner: |
| The first part shall be equal to the total amount of the premium payments made on the Policy (including any contributions made to the Insurer in the event of a Change in Control as provided below), which shall be considered part of the “Employer’s Interest”; |
| The second part shall be equal to the excess, if any over the first part, but only to the extent of the amount set forth in the attached Schedule A (which may be modified from time to time by mutual agreement of the Owner and Employer), which shall be considered the “Owner’s Interest”; and, |
| The third part shall be equal to the excess, if any, over the sum of the first two parts and shall be considered part of the “Employer’s Interest”. |
Notwithstanding anything in this Agreement to the contrary, in the event of the bankruptcy or insolvency of the Employer during the term of this Agreement, the Policy, including the Owner’s Interest therein, shall be subject to the claims of creditors of the Employer.
(2) Premium Payments
On or before the due date of each premium payment on the Policies, Employer will pay the entire premium due on the Policy. The Employer will make premium payments as they are due until the termination of service of the Employee with the Employer, or in the event the Employee becomes “disabled” as defined under the Employer-maintained long term disability program, until the Employee’s age 55, provided, however, that upon the happening of a Change in Control Event, the Employer shall pay to the Insurer, in the form of pre-paid premiums, an amount equal to the present value of the remaining premium payments due on the Policy until the Employee attains age 55, such amount to be determined by the Insurer.
The Employee shall have imputed income each year in an amount equal to the annual cost of current death benefit protection on the life of the Employee, measured by the lower of (a) the PS 58 rate, as set forth in Revenue Ruling 55-747 (or the corresponding applicable provision of any future Revenue Ruling), or (b) the Insurer’s current published premium rate for annually renewable term insurance for standard risks.
(3) Death Benefit Amounts
Upon the death of the Employee, and subject to the minimum death benefits provided to the Owner as described below, the death benefit payable to the respective parties to this Agreement shall be paid in the following manner and in the following order:
| First, Employer (or the Employer’s designated beneficiaries) shall receive an amount equal to the total amount of the premium payments made on the Policy as of the time of Employee’s death (including any contributions made to the Insurer in the event of a Change in Control as provided below), accumulated at interest at a rate of 3.4% per annum; |
| Second, the Owner (or the Owner’s designated beneficiaries) shall receive an amount equal to the Owner’s Interest as set forth in the attached Schedule A as of the time of Employee’s death, which may be modified from time to time by mutual agreement of the Owner and Employer, except that in no event, shall the amount of the death benefit to be received by the Owner (or the Owner’s designated beneficiaries) be less than twenty-five thousand dollars ($25,000); |
| And third, Employer (or the Employer’s designated beneficiaries) shall receive the excess, if any, of the Policy proceeds over the amounts set forth in the prior two paragraphs. |
| a) | Death of the Employee; |
| b) | Written agreement of both the Owner and the Employer to terminate this Agreement; |
| c) | Termination of Employee’s employment with the Employer for Cause; |
| d) | Voluntary termination by the Employee of Employee’s service with the Employer unless; |
| (i) | Employer fails to renew Owner’s Employment Agreement prior to the Employee attaining age 60; |
| (ii) | Termination of service is due to any “Constructive Termination Without Cause” as defined in the Employment Agreement; or |
| (iii) | Employee terminates service with the Employer under an “Approved Early Retirement” or “Normal Retirement” as defined in the Employment Agreement; |
| e) | Failure of the Employee or Owner to complete all necessary requirements for the Insurer to issue a policy, including the waiver of investment choices; and, |
| f) | At the sole discretion of the Employer, upon the Employee entering into Competition with the Employer during the “Restriction Period” as defined in the Employment Agreement. |
| “Cause” has the meaning set forth in Section 10(b) of the Employment Agreement. |
| “Change in Control” has the meaning set forth in Section 10(c) of the Employment Agreement. |
| “Competition” has the meaning set forth in Section 13(a) of the Employment Agreement. |
| “Constructive Termination Without Cause” has the meaning set forth in Section 10(c) of the Employment Agreement. |
| “Employment Agreement” ’means the Employment Agreement dated May 3, 2001 between Employee and Employer. |
| “Normal Retirement” has the meaning set forth in Section 10(f) of the Employment Agreement. |
| “Restriction Period” has the meaning set forth in Section 13(b) of the Employment Agreement. |
| “Termination Without Cause” has the meaning set forth in Section 10(c) of the Employment Agreement. |
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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. Entire Agreement; Amendment of Agreement. This Agreement, including only those provisions of the Employment Agreement specifically referred to above, evidences the entire agreement of the parties with respect the subject matter hereof and supercedes all prior discussions or understandings. This Agreement may be altered, amended or modified, including the addition of any additional policy provisions, only by a written agreement signed by the Employer and the Owner. It shall be the responsibility of the Employer to notify the Insurer of any amendments or changes to this Agreement. Governing Law. This Agreement shall be governed by and be construed in accordance with the laws of the State of New Jersey. (9) Named Fiduciary The Employer is designated as the Named Fiduciary of this Agreement for purposes of the Employee Retirement Income Security Act of 1974, as amended. The business address and telephone number of the Named Fiduciary are as follows: Linen N Things, Inc. The Named Fiduciary shall have the authority to control and manage the operation and administration of the Executive Life Program, of which this Agreement forms a part thereof. The Named Fiduciary is empowered to construe and interpret the terms of the Program and this Agreement, to supply omissions consistent with the intent of the Program and the Agreement, and to make all determinations and resolve all disputes regarding eligibility for and the amount of, benefits under the Program and Agreement, consistent with the terms of the Policy. The Named Fiduciary may delegate some or all of its duties and responsibilities to another person or entity (e.g. a committee designated by the Employer), including persons who are not Named Fiduciaries. Any decisions and determinations made by the Named Fiduciary (or its delegate) shall be conclusive and binding on all parties. The Named Fiduciary shall have the sole discretion of carrying out its responsibilities. Any person or entity claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information 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 denial 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. (10) Claims Procedures Any person or entity claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information 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 denial 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. 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 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. Final Decision. The decision on review shall normally be made within thirty (30) 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 sixty (60) 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. IN WITNESS WHEREOF, the Employer and the Owner or the Owner’s Assignee have signed this Split Dollar Agreement, which is effective as of the effective date of the Policy described herein. |
XXXXX XXXXX —————————————— Officer of Corporation SVP Human Resources |
XXXX XXX XXXXXXXXX —————————— Witness Date: 12/01/2001 |
XXXXXX XXXXXXXXXXX —————————— Owner |
