EXHIBIT 10.41
PERSONAL AND CONFIDENTIAL
March 14, 2006
Mr.
Wolverine Tube, Inc.
Corporate Headquarters
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
RE: AMENDMENT TO SPLIT DOLLAR AGREEMENT DATED MAY 1, 1999
Dear :
On July 30, 2002, the Xxxxxxxx-Xxxxx Act became effective and now
prohibits a public company from extending credit in the form of a personal loan
to a director or executive officer. While the Securities and Exchange Commission
has not provided any official guidance, our Company's interpretation and that of
most public companies is that additional premium payments under life insurance
policies subject to split dollar arrangements are likely to be characterized as
new loans and thus prohibited by Xxxxxxxx-Xxxxx. In view of this legal
prohibition, we have not made additional premium payments under your Split
Dollar Agreement since the enactment of Xxxxxxxx-Xxxxx. Initially we were
hopeful there would be a grandfathering of existing arrangements by the SEC but
this now is considered very unlikely.
Because of the Xxxxxxxx-Xxxxx loan prohibitions, it is necessary that
we modify the terms of your existing Split Dollar Agreement. We propose amending
your Agreement as follows:
o The Company's interest in your policy will continue and will be
limited to the amount of premiums previously paid by the Company
which, in your case, is $_____________. The Company's right to
recover this amount and the timing of such recovery remains
subject to the terms of your Agreement.
o The Company will be responsible for the payment of all future
annual premiums for your Sun Life of Canada policy on your behalf
commencing _______________, 2004, and the provision in paragraph
2 of your Agreement regarding premium payments by the Company and
yourself no longer will be applicable. The annual premium payment
initially will be $____________ and it will be treated as
additional compensation to you for federal and state income and
payroll tax purposes and will be reported in the Company's proxy
disclosures, if applicable. You will not be required to reimburse
the Company for these future premium payments. The Company
reserves the right to modify the amount of the premium payment
and the period over which premiums will be paid to take into
account the investment return on the policy.
o The death benefit coverage under the new arrangement initially
will be $_____________. An illustration of the projected death
benefit and cash surrender value is attached. The illustration is
only an estimate based upon an assumed investment return. Your
policy is a variable universal life insurance policy and the
actual investment results will necessarily vary from the
projection. The Company retains the right to make the investment
selections from the options available under the policy. The death
benefit formula under your Agreement (i.e., function of your
salary less an offset) remains applicable to determine the amount
of your death benefit coverage.
o The Company will provide you with a bonus amount that will
substantially cover the tax costs to you of the Company's making
future premium payments. The bonus payment will be calculated
with an assumed marginal federal and state income tax rate of 35%
and will be subject to required federal and state tax
withholding. Following the end of each year, the Company will
supplement the gross-up payment if you can demonstrate that your
marginal tax rate for the preceding tax year was more than 2%
higher than the assumed marginal tax rate of 35%.
If you agree to amend the terms of your Split Dollar Agreement as
described above, please sign below and return a copy of this amendment to me at
your earliest convenience. Your current Split Dollar Agreement, including but
not limited to the allocation of rights, termination and the collateral
assignment provisions, will remain applicable except to the extent the Agreement
is modified by the preceding provisions.
Yours very truly,
Xxx Xxxxx
Director, Corporate Human Resources
AGREED TO AND ACCEPTED
------------------------------- -----------------------------------
Witness Name
-----------------------------------
Date
