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EXHIBIT 10.24
DALLAS SEMICONDUCTOR CORPORATION
SPLIT-DOLLAR INSURANCE AGREEMENT
THIS AGREEMENT is entered into as of this 20th day of July, 2000, by
and between Xxxx Xxxx ("Participant"), whose address is 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx, Xxxxx 00000, and Dallas Semiconductor Corporation, a Delaware
corporation ("Company"), having its principal office and place of business
located at 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000.
WHEREAS, the Company by resolution of the Board of Directors duly
adopted on December 17, 1993 ("Date of Adoption") has adopted the Dallas
Semiconductor Corporation Split-Dollar Insurance Plan to promote the interests
of the Company in retaining the officers and directors of the Company who have
made, and are capable of continuing to make, valuable contributions to the
Company's performance by providing life insurance protection; and
WHEREAS, Participant is a director of the Company who had completed at
least five (5) years of service as a director of the Company on the Date of
Adoption and has expressed a willingness to continue his services as a director
of the Company, or is an officer of the Company at the Vice President level or
above on the Date of Adoption; and
WHEREAS, Participant entered into an agreement with the Company dated
the 15th day of February, 1994, concerning a split-dollar life insurance
arrangement with the Company (the "Prior Agreement"); and
WHEREAS, this Agreement amends, restates and supersedes in its entirety
the terms of the Prior Agreement, effective the date of this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Policy. Participant has applied for, and the Company has caused to be
issued, a policy or policies of permanent life insurance described on Exhibit
"A" attached hereto, with the attributes described in Section 2 hereof (such
policy or policies, together with any additional policy or policies issued with
the consent of Participant in substitution or replacement for any such policy or
policies, are collectively referred to herein as the "Policy") from an insurance
company selected by the Company as described on Exhibit "A" ("Insurer"). The
Company will take all such action as may be necessary or appropriate to cause
the Policy to be maintained in force at all times, so as to provide Participant
with all of the benefits of the Policy and this Agreement.
2. Benefits. The Policy has been structured, based on a specified
interest rate, mortality and other assumptions, to provide Participant (over and
above benefits payable to the Company) with the benefits, during each year in
which the Policy is in force, provided in the
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Policy and those benefits I described on Exhibit "A" attached hereto. The
Company assumes no responsibility or liability with respect to the actual
performance of the Policy.
3. Ownership of Policy. With respect to any Policy, the Participant (or
if Participant so elects, an individual or entity designated by Participant)
shall be the owner of the Policy, and the Participant, subject to the limited
collateral assignment of such Policy to the Company as provided in Section 7
hereof, may exercise all the rights of ownership with respect to the Policy,
including, but not limited to: (a) the right to designate, or change the
designation of, any beneficiary or beneficiaries of the Policy, (b) the right to
pledge the Policy as security for a loan or to obtain from the Insurer a loan
against the surrender or cash value, and in accordance with the terms, of the
Policy, (c) the right to assign or transfer the Policy, in whole or in part, and
(d) the right to sell, surrender or terminate the Policy.
4. Payment of Premiums. All premiums on the Policy shall be paid by the
Company (or in the discretion of the Company, on behalf of the Company by the
trustee [the "Trustee"] of the Dallas Semiconductor Corporation Executive
Split-Dollar Insurance Trust [the "Trust"]). The Company shall never permit the
Policy to lapse. Premium payments paid by the Trustee shall be considered as
payments by the Company for all purposes under this Agreement. While all
premiums on the Policy shall be paid by or on behalf of the Company, that
portion of the premium equal to the amount of income imputed to Participant for
federal and state income tax purposes on the value of the economic benefit of
the life insurance protection provided to Participant shall be deemed to have
been paid by the Company to the Participant and immediately paid by Participant
to the Insurer. If the Company elects to pay the premiums to the Trust, such
payment shall constitute sufficient funds to pay all premiums which may become
due on each such Policy.
5. Change of Control. In the event of the occurrence of a Change of
Control (as hereinafter defined): (a) the Company (or if so directed by the
Company, the Trustee) shall immediately pay to the Insurer all remaining
premiums on the Policy, regardless of whether such premiums are then due, and
(b) the collateral assignment of the Policy to the Company, as provided in
Section 7 hereof shall immediately and fully terminate, and the Participant
shall become fully vested in the entire cash value and death benefit payable
under the Policy. For purposes of this Agreement, a "Change in Control" shall
mean a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Company is then subject to such reporting requirement; provided that,
without limitation, such a Change in Control shall be deemed to have occurred if
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 15% or more of the combined voting power of the Company's then
outstanding securities; (ii) at any time following the date of execution of this
Agreement individuals who are directors of the Company at such date cease for
any reason to constitute a majority of the Board of Directors; (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into
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voting securities of the surviving entity) more than 80% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, except that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than 15% of the combined voting power of the Company's then outstanding
securities shall not constitute a Change in Control of the Company; (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; or (v) the election of any person
other than X. X. Xxxxxxx as Chairman of the Board and Chief Executive Officer of
the Company.
6. Tax Offset Payments. To the extent that the Participant may be deemed
to have realized gross income in any year for federal and state income tax
purposes or gift tax purposes by reason of this Agreement, including the value
of the insurance protection or other benefits thereunder provided by the Policy
or otherwise as a consequence of the Plan (including, but not limited to the
vesting of benefits to the Participant upon the occurrence of a Change of
Control or otherwise), the Company shall pay to Participant an additional amount
such that the after-tax cost to the Participant is zero.
7. Collateral Assignment of Policy. The Participant shall, and does
hereby, collaterally assign to the Company an interest in the cash values and
death benefit of the Policy as follows:
(a) If the Participant surrenders or sells the Policy, he shall pay
the Company, out of the proceeds of the Policy, an amount equal to the
lesser of (i) the cash value of the Policy, or (ii) the aggregate amount
of premiums paid by the Company with respect to the Policy;
(b) The Company shall be entitled to receive the cumulative premiums
paid for the Policy (the amount indicated in the column headed Death
Benefits Payable to the Company shown on Exhibit "A" attached hereto)
from the death benefits under the Policy. All death benefits payable
under the Policy that exceed the amount paid to the Company under the
preceding sentence shall be paid to the beneficiary or beneficiaries of
the Participant. The amount payable to such beneficiary or beneficiaries
is indicated in the column headed Death Benefit Payable to Participant's
Beneficiary: Individual Coverage shown on Exhibit "A" attached hereto.
If the death benefits payable under this Agreement exceed the aggregate
amount of premiums paid by the Company as set forth on Exhibit "A," such
excess death benefits shall be payable to the Participant's beneficiary
or beneficiaries.
The collateral assignment of the Policy shall not be altered or changed
without the consent of the Company and the Participant.
8. Adjustment of Benefits; Additional Policy Benefits or Riders. The
Company and the Participant may from time to time enter into agreements which
may adjust the value of each party's interests in the Policy. The Participant
may add any rider or endorsement to the Policy.
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If any such rider or endorsement is added upon the written request of the
Company, all premiums with respect to such rider or endorsement shall be paid by
the Company. A Participant shall not be required to withdraw any benefits
payable under the Policy and may elect to apply the value attributable to such
benefits to the purchase of additional benefits payable to the beneficiary or
beneficiaries named by Participant under the Policy, if the Participant so
elects, or to treat such benefits as additional insurance payable to the
beneficiary or beneficiaries of such Policy upon the death of the Participant.
9. Amendment. This Agreement may be amended by the Board of Directors of
the Company; provided, however, that no such amendment shall diminish, abrogate
or change any rights or benefits of the Participant under the Policy or this
Agreement without the Participant's prior written consent, and no amendment of
the Policy or this Agreement shall be made upon or after the occurrence of a
Change of Control without the prior written consent of each Participant.
10. Benefits Cumulative. The benefits to the Participant under this
Agreement shall be cumulative with, and shall not reduce or be deemed to be in
substitution of, any benefits, payments or compensation to which Participant may
otherwise be entitled under any other compensation, benefit, welfare, savings,
retirement or compensation plan of, or for the employees, officers or directors
of, the Company.
11. Further Assurances. The Company and Participant shall enter into,
execute and deliver all such documents, instruments, and other agreements as the
other party may reasonably request, or as the Insurer or Participant may
reasonably require, in order to carry out the intent and purposes of this
Agreement.
12. ERISA Requirements.
(a) Funding Policy. All premiums on the Policy shall be remitted by, or
on behalf of, the Company to the Insurer. The benefits provided by the Policy
shall be paid by the Insurer in accordance with the terms of the Policy and this
Agreement. The payment of such benefits is predicated on the payment of the
required premiums.
(b) Claims and Review Procedures. The following claims procedure shall
apply for purposes of this Agreement. The claims procedure in subparagraph
(b)(1) below shall be followed with respect to benefits provided by the Insurer
under the terms of the Policy. The claims procedure in subparagraph (b)(2) below
shall be followed with respect to benefits, if any, provided directly by the
Company. The Participant (or the other owner of the Policy designated by the
Participant) that owns the Policy (the "Policy Owner") and the Policy Owner's
successors, beneficiaries or representatives, as appropriate (individually or
collectively, "Claimant"), must follow both procedures, if necessary.
(i) Filing a Claim for Insurance Benefits. A Claimant shall make a
claim for benefits provided by the Insurer by submitting a written claim
and proof of claim to the Insurer in accordance with procedures and
guidelines established from time to time by the Insurer. On written
request, the Company, acting as the "Plan Administrator," shall provide
copies of any claim forms or instructions, or advise the Claimant how to
obtain
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such forms or instructions. The Insurer shall decide whether the claim
shall be allowed. If a claim is denied in whole or in part, the Insurer
shall notify the Claimant and explain the procedure for reviewing a
denied claim.
(ii) Filing a Claim for Any Other Benefit. The following claims
procedure shall apply with respect to all benefits other than those
provided by the Insurer:
(A) Filing a Claim; Notification to Claimant of Decision: The
Claimant shall make a claim in writing in accordance with procedures
and guidelines established from time to time by the Plan
Administrator, which claim shall be delivered to the Plan
Administrator. The Plan Administrator shall review and make the
decision with respect to any claim. If a claim is denied in whole or
in part, written notice thereof shall be furnished to the Claimant
within thirty days after the claim has been filed. Such notice shall
set forth:
(1) the specific reason or reasons for the denial;
(2) specific reference to the provisions of this Agreement
on which denial is based;
(3) a description of any additional material or information
necessary for the Claimant to perfect a claim and an
explanation of why such material or information is necessary;
and
(4) an explanation of the procedure for review of the
denied claim.
(B) Procedure for Review: Any Claimant whose claim has been
denied in full or in part may individually, or through the
Claimant's duly authorized representative, request a review of the
claim denial by delivering a written application for review to the
Plan Administrator at any time within sixty days after receipt by
the Claimant of written notice of the denial of the claim. Such
request shall set forth in reasonable detail:
(1) the grounds upon which the request for review is based
and any facts in support thereof; and
(2) any issues or comments which the Claimant considers
pertinent to the claim.
Following such request for review, the Plan Administrator fully
and fairly shall review the decision denying the claim. Prior to the
decision of the Plan Administrator, the Claimant shall be given an
opportunity to review pertinent documents.
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(C) Decision on Review: A decision on the review of a claim
denied in whole or in part shall be made in the following manner:
(1) The decision on review shall be made by the Plan
Administrator, which shall consider the application and any
written materials submitted by the Claimant in connection
therewith. The Plan Administrator, in its sole discretion, may
require the Claimant to submit such additional documents or
evidence as the Plan Administrator may deem necessary or
advisable in making such review.
(2) The Plan Administrator will render a decision upon a
review of a denied claim within sixty days after receipt of a
request for review. If special circumstances (such as the need
to hold a hearing on any matter pertaining to the denied claim)
warrant additional time, the decision will be rendered as soon
as possible, but not later than one hundred twenty days after
receipt of a request for review. Written notice of any such
extension will be furnished to the Claimant prior to the
commencement of the extension.
(3) The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the Claimant, and specific
references to the provisions of this Agreement on which the
decision is based. The decision of the Plan Administrator on
review shall be final and conclusive upon all persons. If the
decision on review is not furnished to the Claimant within the
time limits prescribed in subparagraph (c)(2) above, the claim
will be deemed denied on review.
13. Legal Fees. The Company shall pay to the Participant and his
beneficiary or beneficiaries upon demand all legal fees and expenses incurred by
the Participant or his beneficiary or beneficiaries in seeking to obtain or
enforce any right or benefit provided by the Policy and this Agreement.
14. Successors; Binding Agreement.
(a) In addition to the requirements of Section 5 of this Agreement, the
Company will, upon the request of Participant, require any proposed successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession were to take place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Participant to all rights,
compensation and other benefits from the Company in the same amount and on the
same terms as the Participant would otherwise be entitled hereunder. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
such successor to its business and/or assets as aforesaid, by operation of law,
or otherwise.
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(b) Subject to the provisions of Section 14(a) above, the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
(a) the Company and its successors and assigns and (b) the Participant and his
respective heirs, executors, administrators and legal representatives.
15. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
16. Miscellaneous. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. The obligations of the Company under this Agreement shall survive
the expiration of this Agreement.
17. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Chief
Executive Officer with a copy to the Chief Financial Officer, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
18. Indemnification.
(a) The Company hereby agrees to indemnify and hold harmless the
Participant and any beneficiary or beneficiaries of Participant against any and
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by Participant or any beneficiary
or beneficiaries or Participant in connection with any threatened, pending or
completed action, suit, or proceeding, whether formal or informal, or civil,
criminal, administrative, legislative, arbitrative or investigative (hereinafter
a "Proceeding") to which the Participant or any beneficiary or beneficiaries of
Participant is, was, or at any time becomes a party, or is threatened to be made
a party, in any way arising out of, based upon or incident to this Agreement or
any of the rights, benefits and obligations provided for herein.
(b) The expenses (including attorneys' fees) incurred by Participant or
any beneficiary or beneficiaries of Participant in defending any Proceeding
shall be advanced by the Company at the request of the Participant or any such
beneficiary or beneficiaries. Any
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judgments, fines or amounts to be paid in settlement shall also be advanced by
the Company to the Participant or any beneficiary or beneficiaries of
Participant upon request.
19. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
20. Headings. Headings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.
21. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the 20th day of July, 2000.
DALLAS SEMICONDUCTOR CORPORATION
By: /s/ X. X. Xxxxxxx
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/s/ Xxxx Xxxx
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Xxxx Xxxx, Participant
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EXHIBIT "A"
NAME OF PARTICIPANT: Xxxx Xxxx
NAME OF INSURED: Xxxx Xxxx
INSURER: Nationwide Policy No. N056104180
Death Benefit
Payable to Participant's Death Benefit
Policy Year Beneficiary: Payable to
Ending, April 15 Individual Coverage Company
---------------- ------------------------ -------------
2001 3,434,000 194,462
2002 3,434,000 284,683
2003 3,434,000 284,683
2004 3,434,000 284,683
2005 3,434,000 284,683
2006 3,434,000 284,683
2007 3,434,000 284,683
2008 3,434,000 284,683
2009 3,434,000 284,683
2010 3,434,000 284,683
2011 3,434,000 284,683
2012 3,434,000 284,683
2013 3,434,000 284,683
2014 3,434,000 284,683
2015 3,434,000 284,683
2016 3,434,000 284,683
2017 3,434,000 284,683
2018 3,434,000 284,683
2019 3,434,000 284,683
2020 3,434,000 284,683
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AMENDMENT TO
DALLAS SEMICONDUCTOR CORPORATION
SPLIT-DOLLAR INSURANCE AGREEMENT
THIS AMENDMENT TO DALLAS SEMICONDUCTOR CORPORATION SPLIT-DOLLAR
INSURANCE AGREEMENT is entered into as of this 23rd day of January, 2001, by and
between Xxxx Xxxx ("Participant") and Dallas Semiconductor Corporation, a
Delaware corporation ("Company").
WHEREAS, Participant entered into a Split-Dollar Insurance Agreement
with the Company dated July 20, 2000 ("Agreement"); and
WHEREAS, the Company desires to amend the Agreement in the manner set
forth below and has requested the consent of Participant to such amendment;
NOW, THEREFORE, in consideration of the payment by the Company to
Participant of the sum of $10.00 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Participant,
Participant and the Company agree as follows:
1. Section 4. Section 4 is divided into subsections (a) and (b).
Existing Section 4 entitled "Payment of Premiums" is designated as Section 4(a),
and the following language is inserted as Section 4(b):
"(b) All premiums on the Policy shall be paid upon request or demand
by Participant or Participant's Insurer without regard to whether or not
the Participant is an employee or director of the Company, the
Participant's responsibilities to the Company or any other circumstance,
such obligation to pay to be absolute, continuing, irrevocable and
unconditional and not subject to any set-off, counterclaim, recoupment,
reduction, diminution or any defense of any kind or nature whatsoever."
2. Section 5. Section 5 is deleted in its entirety and the following is
substituted in its place:
"Reserved."
3. Section 6. The words "(including, but not limited to the vesting of
benefits to the Participant upon the occurrence of a Change of Control or
otherwise)" appearing in lines 4, 5 and 6 of Section 6 are deleted.
4. Section 9. The words "and no amendment of the Policy or this
Agreement shall be made upon or after the occurrence of a Change of Control
without the prior written consent of each Participant" found in lines 4 and 5 of
Section 9 are deleted.
5. Section 14. Subsection (a) of Section 14 is amended to delete the
words "In addition to the requirements of Section 5 of this Agreement" appearing
in line 1 thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the 23rd day of January, 2001.
DALLAS SEMICONDUCTOR CORPORATION
By: /s/ Xxxx X. Xxx
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/s/ Xxxx X. Xxxx
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Xxxx Xxxx, Participant
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