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EXHIBIT 10.23
SPLIT-DOLLAR AGREEMENT
AGREEMENT dated as of September 12, 1991 (the "Agreement") by and among
MKS Instruments, Inc., a Massachusetts corporation (the "Corporation"), Xxxx X.
Xxxxxxxx of Lexington, Massachusetts (the "Employee"), and Xxxx X. Xxxxxxxx of
Lexington, Massachusetts and Xxxxxx X. Xxxxxxx of Xxxxxxxx, Massachusetts, as
Trustees of the Xxxxxx X. Xxxxxxxx Insurance Trust of January 10, 1986 (the
"Owner").
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Employee wishes to provide life insurance protection for
his family in the event of his death under a policy of life insurance insuring
his life and the life of Xxxxxx X. Xxxxxxxx (the "Policy") which is described in
Exhibit A hereto (and by this reference is hereby made subject to this
Agreement) issued by Pacific Mutual Life Insurance Company (the "Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on the
Policy as an additional employment benefit for the Employee on the terms and
conditions hereinafter set forth; and
WHEREAS, the Owner is the owner of the Policy and, as such, possesses
all incidents of ownership in and to the Policy; and
WHEREAS, the Corporation wishes to have the Policy collaterally
assigned to it by the Owner in order to secure the repayment of the amounts
which the Corporation will pay toward the premiums on the Policy; and
WHEREAS, the parties hereto intend that by such collateral assignment
the Corporation shall receive only the right to such repayment with the Owner
retaining all other ownership rights in and to the Policy:
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NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein and for other valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:
(1). Purchase of Policy: The Owner will, contemporaneously with the
execution hereof, purchase the Policy from the Insurer in the total face amount
of $5,000,000. The parties hereto agree that they will take all necessary action
to cause the Insurer to issue the Policy and shall take any further action which
may be necessary to cause the Policy to conform to the provisions of this
Agreement. The parties hereto agree that the Policy shall be subject to the
terms and conditions of this Agreement and of the collateral assignment filed
with the Insurer relating to the Policy.
(2). Ownership of Policy:
(a). The Owner shall be the sole and absolute owner of the
Policy and may exercise all ownership rights granted to the owner
thereof by the terms of the Policy, except as may otherwise be provided
herein.
(b). It is the intention of the parties to this Agreement and
to the collateral assignment referred to herein that the Owner shall
retain all rights which the Policy grants to the owner thereof and that
the sole right of the Corporation hereunder shall be to be repaid the
amounts which it has paid toward the premiums of the Policy.
Specifically, but without limitation, the Corporation shall neither
have nor exercise any right as collateral assignee of the Policy which
could in any way
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defeat or impair the right of the Owner to receive the cash surrender value or
the death proceeds of the Policy in excess of the amount due the Corporation
hereunder.
(3). Payment of Premiums: Except as otherwise provided herein, on or
before the due date of each Policy premium, or within the grace period provided
therein, the Corporation shall pay the full amount of the premium to the
Insurer, and shall, upon request, promptly furnish the Employee evidence of
timely payment of such premium. The Corporation shall annually furnish the
Employee a statement of the amount of income reportable by the Employee for
federal and state income tax purposes as a result of the insurance protection
provided the Owner as the beneficiary of the Policy.
(4). Collateral Assignment: To secure the repayment to the Corporation
of the amount of the premiums on the Policy paid by the Corporation under the
terms of this Agreement, the Owner has, contemporaneously with the execution
hereof, assigned the Policy to the Corporation as collateral, which collateral
assignment specifically provides that the sole right of the Corporation
thereunder is to be repaid the amounts it has paid toward the premiums on the
Policy. Such repayment shall be made from the cash surrender value of the Policy
(as defined therein) if this Agreement is terminated or if the Owner surrenders
or cancels the Policy or from the death proceeds of the Policy, if any, if the
Employee or any other insured should die while the Policy and this Agreement
remain in force. In no event shall the Corporation have any right to borrow
against or make withdrawals from the Policy or to surrender or cancel the Policy
or to take any other action which would impair
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or defeat the rights of the Owner in and to the Policy. The collateral
assignment of the Policy to the Corporation hereunder shall not be terminated,
altered, or amended by the Owner while this Agreement is in effect. The parties
hereto agree to take all action necessary to cause such collateral assignment to
conform to the provisions of this Agreement.
(5). Limitations on Rights of Owner in and to Policy:
(a). The Owner shall take no action with respect to the Policy
which would in any way compromise or jeopardize the right of the
Corporation to be repaid the amounts it has paid toward the premiums on
the Policy while this Agreement is in effect.
(b). The Owner may pledge or assign the Policy, subject to the
terms and conditions of this Agreement, in order to secure a loan from
the Insurer or from a third party, in an amount which shall not exceed
the cash surrender value of the Policy (as defined therein) as of the
date to which premiums have been paid, less the amount paid toward the
premiums on the Policy by the Corporation. Interest charges on such
loan shall be the responsibility of and be paid by the Owner. For any
Policy year in which the Owner borrows hereunder, the Corporation shall
be correspondingly relieved of its obligation to pay any amounts toward
premiums for such Policy year to the extent of such borrowing.
(c). The Owner shall have the sole right to surrender or
cancel the Policy and to receive the full cash surrender value of the
Policy directly from the Insurer. Upon the surrender or cancellation of
the Policy, the Corporation shall have
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the unqualified right to receive a portion of the cash surrender value
equal to the total amount of the premiums paid by the Corporation under
the terms of this Agreement. Immediately upon receipt of the cash value
of the Policy from the Insurer, the Owner shall pay to the Corporation
the portion of such cash value to which the Corporation is entitled
under the terms of this Agreement and shall retain the balance, if any.
Upon such receipt and payment this Agreement shall thereupon terminate.
(6). Collection of Death Proceeds:
(a). Upon the death of the second to die of the Employee and
Xxxxxx X. Xxxxxxxx, the Corporation and the Owner shall cooperate to
take whatever action is necessary to collect the death benefit, if any,
provided under the Policy, and when such death benefit, if any, has
been collected and paid as provided herein, this Agreement shall
thereupon terminate.
(b). Upon the death of the second to die of the Employee and
Xxxxxx X. Xxxxxxxx, the Corporation shall have the unqualified right to
receive a portion of such death benefit, if any, equal to the total
amount of the premiums paid by the Corporation under the terms of this
Agreement; provided, however, that, if the Owner shall deem it to be in
the best interests of the Owner as evidenced by the written consent of
the Owner, the Owner may, upon the death of the first to die of the
Employee and Xxxxxx X. Xxxxxxxx, repay the Corporation the total amount
of the premiums paid by the Corporation under the terms of this
Agreement. The balance of the death benefit provided under the Policy,
if any, shall be paid directly to the
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Owner in the manner and in the amount or amounts provided in the
beneficiary designation provision of the Policy. In no event shall the
amount payable to the Corporation hereunder exceed the proceeds of the
Policy payable at the death of the second to die of the Employee and
Xxxxxx X. Xxxxxxxx. No amount shall be paid from such death benefit to
the Owner until the full amount due the Corporation hereunder has been
paid. The parties hereto agree that the beneficiary designation
provision of the Policy shall conform to the provisions hereof.
(c). Notwithstanding any provision hereof to the contrary, in
the event that, for any reason whatsoever, no death benefit is payable
under the Policy upon the death of the second to die of the Employee
and Xxxxxx X. Xxxxxxxx and in lieu thereof the Insurer refunds all or
any part of the premiums paid for the Policy, the Corporation and the
Owner shall have the unqualified right to share such premiums based on
their respective cumulative contributions thereto.
(7). Termination of Agreement During Lifetime of Employee:
(a). This Agreement shall terminate during the lifetime of the
Employee without notice upon the occurrence of any of the following
events: (a) total cessation of the business of the Corporation; or (b)
the bankruptcy, receivership, or dissolution of the Corporation.
(b). In addition, the Owner may terminate this Agreement,
while no premium under the Policy is overdue, by written notice to the
other parties hereto. Such termination shall be effective as of the
date of such written notice.
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(8). Disposition of Policy on Termination of Agreement During Lifetime
of Employee:
(a). For sixty (60) days after the date of the termination of
this Agreement during the lifetime of the Employee, the Owner shall
have the option of obtaining the release of the collateral assignment
of the Policy to the Corporation. To obtain such release, the Owner
shall repay to the Corporation the total amount of the premium payments
made by the Corporation under the terms of this Agreement. Upon receipt
of such amount, the Corporation shall release the collateral assignment
of the Policy by the execution and delivery of an appropriate
instrument of release.
(b). If the Owner fails to exercise such option described in
Section (8)(a) above within such sixty (60) day period, then, at the
request of the Corporation, the Owner shall execute any document or
documents required by the Insurer to transfer the interest of the Owner
in the Policy to the Corporation. Alternatively, the Corporation may
enforce its right to be repaid the amount of the premiums on the Policy
paid by it from the cash surrender value of the Policy under the
collateral assignment of the Policy; provided, however, that, in the
event the cash surrender value of the Policy exceeds the amount due the
Corporation, such excess shall be paid to the Owner. Thereafter,
neither the Owner nor its successors or assigns shall have any further
interest in and to the Policy either under the terms thereof or under
this Agreement.
(9). Insurer Not a Party: The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefit to the
beneficiary
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or beneficiaries named in the Policy, subject to the terms and conditions of the
Policy. In no event shall the Insurer be considered a party to this Agreement or
any modification or amendment hereof. No provision of this Agreement, nor of any
modification or amendment hereof, shall in any way be construed as enlarging,
changing, varying, or in any other way affecting the obligations of the Insurer
as expressly provided in the Policy, except insofar as the provisions hereof are
made a part of the Policy by the collateral assignment executed by the Owner and
filed with the Insurer in connection herewith.
(10). Named Fiduciary; Determination of Benefits; Claims Procedure and
Administration:
(a). The Corporation is hereby designated as the named
fiduciary under this Agreement. The Corporation, as the named fiduciary
under this Agreement, shall have authority to control and manage the
operation and administration of this Agreement, and the Corporation
shall be responsible for establishing and carrying out a funding policy
and method consistent with the objectives of this Agreement.
(b). (1) Claim. A person who believes that he or she is being
denied a benefit to which he or she is entitled under this Agreement (a
"Claimant") may file a written request for such benefit with the
Corporation setting forth his or her claim. The request must be
addressed to the President of the Corporation at its principal place of
business.
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(2) Claim Decision. Upon receipt of a claim, the Corporation
shall advise the Claimant in writing that a reply will be forthcoming
within ninety (90) days and shall deliver such reply within such ninety
(90) day period. The Corporation may, however, extend the reply period
for an additional ninety (90) days for reasonable cause. If the claim
is denied in whole or in part, the Corporation shall adopt a written
opinion, using language calculated to be understood by the Claimant,
setting forth: (a) the specific reason or reasons for such denial; (b)
the specific reference to pertinent provisions of this Agreement on
which such denial is based; (c) a description of any additional
material or information necessary for the Claimant to perfect his or
her claim and an explanation why such material or such information is
necessary; (d) appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review; and (e) the time
limits for requesting a review under Subsection (3) of this Section and
for review under Subsection (4) of this Section.
(3) Request for Review. Within sixty (60) days after the
receipt by the Claimant of the written opinion described above, the
Claimant may request in writing that the Clerk of the Corporation
review the determination of the Corporation. Such request shall be
addressed to the Clerk of the Corporation at its principal place of
business. The Claimant or his or her duly authorized representative
may, but need not, review the pertinent documents and submit issues and
comments in writing for consideration by the Clerk of the Corporation.
If the Claimant does not request a review by the Clerk of the
Corporation of the
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determination by the Corporation within such sixty (60) day period, the
Claimant shall be barred and estopped from challenging the
determination of the Corporation.
(4) Review of Decision. Within sixty (60) days after the
Clerk's receipt of a request for review, he or she will review the
determination of the Corporation. After considering all materials
presented by the Claimant, the Clerk will render a written opinion,
written in a manner calculated to be understood by the Claimant,
setting forth the specific reasons for the decision and containing
specific references to the pertinent provisions of this Agreement on
which the decision is based. If special circumstances require that the
sixty (60) day time period be extended, the Clerk will so notify the
Claimant and will render the decision as soon as possible, but no later
than one hundred twenty (120) days after receipt of the request for
review.
(11). Amendment: This Agreement may not be amended, altered, or
modified, except by a written instrument signed by all of the parties hereto, or
their respective successors or assigns, and may not be otherwise terminated,
except as provided herein.
(12). Binding Effect: This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors, assigns,
heirs, executors, administrators, and beneficiaries.
(13). Notice: Any notice, consent, or demand required or permitted to
be given under the provisions of this Agreement shall be in writing, and shall
be signed by the party giving or making the same. If such notice, consent, or
demand is mailed
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to a party hereto, it shall be sent by United States certified mail, postage
prepaid, return receipt requested, addressed to such party's last known address
as shown on the records of the Corporation. The date of such mailing shall be
deemed the date of the notice, consent, or demand.
(14). Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of The Commonwealth of Massachusetts applicable to
a contract made and to be performed solely within The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
an instrument under seal, all as of the day, month, and year first written
above.
MKS INSTRUMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Controller
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
XXXXXX X. XXXXXXXX INSURANCE
TRUST OF JANUARY 10, 1986
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, as Trustee
and not individually
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, as Trustee
and not individually
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EXHIBIT A
The following described life insurance policy is subject to the
Split-Dollar Agreement to which this Exhibit A is attached:
Insurer: Pacific Mutual Life Insurance Company
Insured: Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx
Owner: Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxx as Trustees of the Xxxxxx X.
Xxxxxxxx Insurance Trust of January 10, 1986
Policy Number: 1A22406290
Face Amount: $5,000,000
Date of Issue: September 1, 1991
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