Exhibit 10.41
SPLIT DOLLAR
AGREEMENT
THIS
AGREEMENT made and entered into this 18th day of December, 2008,
effective as of August 18, 2005, by and between OSI RESTAURANT
PARTNERS, LLC (formerly known as OUTBACK STEAKHOUSE, INC.), with
principal offices and place of business in the State of Florida
(hereinafter referred to as the “Company”), SHAMROCK
PTC, LLC, TRUSTEE OF THE CHRIS SULLIVAN 2008 INSURANCE TRUST DATED
JULY 17, 2008 (hereinafter referred to as the “Trust”),
and WILLIAM T. SULLIVAN, TRUSTEE OF THE CHRIS SULLIVAN NON-EXEMPT
IRREVOCABLE TRUST DATED JANUARY 5, 2000 and THE CHRIS SULLIVAN
EXEMPT IRREVOCABLE TRUST DATED JANUARY 5, 2000 (collectively the
“Prior Trusts”).
WITNESSETH
THAT:
WHEREAS,
Chris T. Sullivan (the “Employee”) is employed by the
Company;
WHEREAS,
the Prior Trusts entered into a split-dollar life insurance
arrangement with the Company, effective as of November 7, 1999 (the
“1999 Agreement”) to govern the rights and obligations
of the Trust and the Company with respect to life insurance policy
numbers 58050001 and 58051001, each insuring the life of the
Employee, each with face amounts of $6,219,128 as of January 31,
2008 (individually a “Policy” and collectively the
“Policies”), both issued by John Hancock Variable Life
Insurance Company (the “Insurer”);
WHEREAS,
the Company had been paying all the premiums on the Policies as an
additional employment benefit for the Employee;
WHEREAS,
the Prior Trusts had collaterally assigned the Policies to the
Company in order to secure the repayment of the premium payments
made by the Company;
WHEREAS,
because of the potential application of Section 402 of the
Sarbanes-Oxley
Act of 2002
(the “Act”) to the 1999 Agreement, the Company
suspended the payment of all premium advances due under the 1999
Agreement as of the effective date of the Act;
WHEREAS,
in order to maintain a split-dollar life insurance arrangement for
the Policies with the Company in light of the Act, the Prior Trusts
agreed to transfer ownership of the Policies to the Company and to
enter into this Agreement, to convert the 1999 Agreement from a
collateral assignment split-dollar arrangement to an endorsement
split-dollar arrangement, and in order to have the income and gift
tax consequences of the arrangement determined under traditional
split-dollar economic benefit concepts, rather than imputed
interest, the Prior Trusts agreed that, on termination of the
arrangement (as provided herein), the Company will be entitled to
recover the greater of its premium advances or the Policies’
respective cash values, ignoring surrender or other similar
charges;
WHEREAS,
the Policies have been reissued, as described herein, to the
Company as the owner of each;
WHEREAS,
after the Policies were transferred to the Company, the Company
released its collateral assignments of each of the Policies with
the Insurer and the Company designated the Prior Trusts as the
beneficiary of the Policies to the extent of any proceeds remaining
after repayment of the amount due the Company;
WHEREAS,
due to the pending termination of the Prior Trusts, the Trustee of
the Prior Trusts has agreed to substitute the Trust as a party to
this Agreement, in place of the Prior Trusts;
WHEREAS,
the parties acknowledge that the Company is entitled to repayment
of the amounts it has paid toward the premiums on each of the
Policies under the 1999 Agreement prior to the transfer of the
Policies to the Company;
WHEREAS,
the Company is the owner of each of the Policies and, as such,
possesses all incidents of ownership in and to the Policies, except
as otherwise provided herein; and
WHEREAS,
the Company wishes to retain such ownership rights, in order to
secure the repayment of the amount due it under the 1999 Agreement
and hereunder;
NOW,
THEREFORE, in consideration of the premises and of the mutual
promises contained herein, the parties hereto agree as
follows:
1.
Purchase of Policies . The Trust had
previously purchased the Policies from the Insurer; the Policies
have been reissued to the Company as the owner, each with face
amounts of $6,219,128 (as of January 31, 2008) and Increasing Death
Benefit Option (as such term is defined in the
Policies). The parties hereto will take all necessary
action to cause both of the Policies to conform to the provisions
of this Agreement. The parties hereto agree that the
Policies shall be subject to the terms and conditions of this
Agreement and of the endorsement to each of the Policies or
beneficiary designation filed with the Insurer in accordance
herewith.
2.
Ownership of Policies . The Company shall
be the sole and absolute owner of both of the Policies, and may
exercise all ownership rights granted to the owner thereof by the
terms of each of the Policies, except as may otherwise be provided
herein.
3.
Designation of Policies Beneficiary/Endorsement
. The Company has executed a beneficiary designation for
and/or an endorsement to each of the Policies, using the form
required by the Insurer, naming itself as the beneficiary of the
policy death proceeds in an amount equal to the greater of the
total amount of the premiums paid by it hereunder (including all
such premiums paid pursuant to the 1999 Agreement) or the cash
value of each of the Policies (excluding surrender charges or other
similar charges or reductions), and naming the Trust as the
beneficiary of any balance of the policy death proceeds provided
under each of the Policies.
4.
Election of Settlement Option . The Trust
may select the settlement option for payment of the death benefit
provided under each of the Policies in excess of the amount due the
Company hereunder, by specifying the same in a written notice to
the Company. The Company
shall promptly
execute and deliver to the Insurer the forms necessary to elect the
requested settlement option and to designate the Trust as the
beneficiary to receive the death proceeds of each of the Policies
in excess of the amount to which the Company is entitled
hereunder. The parties hereto agree to take all action
necessary to cause the beneficiary designation and settlement
option provisions of the Policies to conform to the provisions
hereof. The Company shall not terminate, alter or amend
such designation or election without the express written consent of
the Trust.
5.
Payment of Premiums . On or before the due
date of each Policy premium, or within the grace period provided
therein, the Company shall pay the full amount of the annual
premium on each of the Policies to the Insurer, and shall, upon
request, promptly furnish the Trust evidence of timely payment of
such premium. Subject to the acceptance of such amount
by the Insurer, the Company may, in its discretion, at anytime and
from time to time, make additional premium payments on each of the
Policies. The Company shall annually furnish the
Employee a statement of the amount of income reportable by the
Employee for any Federal, state or local taxes, as applicable, as a
result of the insurance protection provided the Trust as the
Policies’ beneficiary.
6.
Additional Payment to Employee . Upon the
Employee reaching 65 years of age and while this Agreement is still
in existence, the Company shall pay to the Employee, on or before
March 15th of each year, as additional compensation, an amount
equal to the estimated Federal, state and local taxes, as
applicable, on the amount of income reportable by the Employee as a
result of the insurance protection provided the Policy beneficiary
or beneficiaries hereunder for the immediately preceding calendar
year assuming the highest Federal, state and local tax, income tax
bracket for a married individual or single individual as the case
may be.
7.
Limitations on Company’s Rights in Policies
. Notwithstanding any other provision hereof or either
of the Policies, the Company shall not sell, assign, transfer,
surrender or cancel either of the Policies, change the beneficiary
designation of either of the Policies, change the Death Benefit
Option provision, or decrease the Face Amount of Insurance Death
Benefit, without, in any such case, the express written consent of
the Trust.
8.
Policy Loans .
a. The
Company may pledge or assign either of the Policies, subject to the
terms and conditions of this Agreement, for the sole purpose of
securing a loan from the Insurer or from a third
party. The amount of any such loan, including
accumulated interest thereon, shall not exceed the lesser of (i)
the cumulative amount of the premiums on such Policy paid by the
Company hereunder (including all such premiums paid pursuant to the
1999 Agreement), less any portion thereof previously recovered by
the Company through a loan from or against or a withdrawal from
such Policy permitted hereunder; or (ii) the cash surrender value
of such Policy (as defined therein) as of the date to which
premiums have been paid. Interest charges on such loan
shall be paid by the Company. If the Company so
encumbers a Policy, other than by a policy loan from the Insurer,
then, upon the death of the Employee or upon the election of the
Trust hereunder to purchase such Policy from the Company, the
Company shall promptly repay such loan from the death proceeds of
such Policy or the amount received from the Employee for the
purchase of such Policy, as the case may be, and thereafter shall
promptly take all action necessary to secure the release or
discharge of such encumbrance.
b. The
Company may make withdrawals from a Policy, subject to the terms
and conditions hereof. The amount of any such withdrawal
shall not exceed the lesser of: (i) cumulative amount of
the premiums on such Policy paid by the Company hereunder
(including all such premiums paid pursuant to the 1999 Agreement),
less any portion thereof previously
recovered by
the Company through a loan from or against a withdrawal from such
Policy permitted hereunder; or (ii) the cash surrender value of
such Policy (as defined therein) as of the date to which premiums
have been paid, and shall reduce the amount to which the Company
would otherwise be entitled hereunder.
9.
Collection of Death Proceeds .
a. Upon
the death of the Employee, the Company shall cooperate with the
Trust to take whatever action is necessary to collect
the
