CORNETT LOAN FORGIVENESS AGREEMENT
This Cornett Loan Forgiveness Agreement ("Agreement") is made and entered into by and between
AMERICAN CAPITOL INSURANCE COMPANY ("Employer"), a Texas life insurance company, and
JOHN D. CORNETT ("Employee"), an individual resident of Houston, Harris County, Texas, hereinafter
sometimes referred to in the singular as "party" and in the plural as "parties."
1. The following recitals are hereby adopted and agreed to by the parties:
1.1 The definitions set forth below apply to the words used in these recitals.
1.2 Employee owns a Life Insurance Policy issued by Metropolitan Life Insurance Company which is the subject
of the Split Dollar Agreement between Employee and Employer, which Split Dollar Agreement is hereby
incorporated by reference thereto for all purposes.
1.3 Employee and Employer are parties to the Cornett Employment Agreement which is hereby incorporated
herein by reference thereto for all purposes.
1.4 The Split Dollar Agreement provides that premiums paid by Employer on the Life Insurance Policy are
subject to repayment out of the Life Insurance Policy Proceeds, as set forth in the Split Dollar Agreement, thus
creating a Loan.
1.5 The parties understand that forgiveness by Employer of the Loan, or any portions thereof, will constitute
taxable income to Employee for the year in which such forgiveness takes place and all conditions precedent to
such forgiveness have been fulfilled and/or expire, but each party is responsible for the tax consequences of the
compensation provided by this Agreement, and no assurances regarding tax consequences have been given by
either party to the other.
1.6 The parties intend by this Loan Forgiveness Agreement to establish a program under which the Loan is
forgiven in incremental amounts but each such forgiveness shall be subject to the fulfillment or continued existence
of specified conditions or obligations, as the case may be, as set forth herein.