EXHIBIT 10.8
SPLIT DOLLAR AGREEMENT
This Split Dollar Agreement (the "Agreement") is made and
entered into this 29th day of June, 1999 by and between Nortek,
Inc., a Delaware corporation having a principal place of business
in Providence, Rhode Island (the "Corporation"), and Almon C.
Hall (the "Employee") (the Corporation and the Employee are
hereinafter referred to together as the "Parties").
WITNESSETH:
WHEREAS, the Employee is employed by the Corporation as its
Vice President, Controller and Chief Accounting Officer; and
WHEREAS, the Corporation desires to assist the Employee in
funding insurance on the joint lives of the Employee and his
wife, Suzanne M. Hall (the "Insureds"), the Corporation believing
that providing such assistance is in its best interests; and
WHEREAS, the Employee is the owner of policy [policy number
redacted] (the "Policy") issued by New York Life Insurance
Company (the "Insurer") on the joint lives of the Insureds;
NOW, THEREFORE, for and in consideration of the promises and
mutual covenants expressed herein by each of the Parties, the
Parties agree as follows:
1. The Corporation intends from time to time to pay
premiums due on the Policy. Immediately thereafter, the
Corporation may require payment from the Employee of the
Employee's share (as defined below). If payment from the
Employee is not so required, the
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Corporation shall treat its
payment of the Employee's share (as so defined) as additional
compensation to the Employee. The Employee's share of each
premium shall be that portion of the premium that is equal to the
economic benefit which the Employee would be deemed to have
received and which would be taxable to him for federal income tax
purposes under Revenue Rulings 64-328, 66-110 and any subsequent
rulings or regulations if the entire premium were paid by the
Corporation.
2. The Employee shall be the owner of the Policy and,
except to the extent of the Corporation's Interest in the Policy
as provided herein, shall have and may exercise all the rights of
a policy owner. Dividends shall not be applied to the payment of
premiums unless otherwise agreed by the Corporation and the
Employee.
3. The Employee hereby assigns to the Corporation the
following limited ownership rights in the Policy:
(a) The right to obtain one or more loans or advances
on the Policy to the extent of the Corporation's
Interest in the Policy, in each case only with the
prior consent of the Employee.
(b) The right upon termination of this Agreement to
realize against the cash value of the Policy or
the death proceeds payable under the terms of the
Policy, as the case may be, the Corporation's
Interest in the Policy. For purposes of this
subparagraph, the sale, surrender or transfer of
ownership of the Policy by the Employee shall be
deemed a termination of the Agreement unless
consented to by the Corporation. If this
Agreement terminates during the lifetime of either
of the Insureds, the Corporation shall have no
right of recovery against the Employee in excess
of the then cash surrender value of the Policy.
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4. The Corporation's "Interest" in the Policy as of any
given date shall equal the sum of the Corporation's cumulative
premiums paid to the Insurer with respect to the Policy (whether
paid before or after the date of this agreement), reduced by the
amount of any outstanding indebtedness on the Policy incurred for
the benefit of the Corporation.
5. If not sooner terminated by the mutual agreement of the
Parties, this Agreement shall terminate upon the first to occur
of any one of the following events:
(a) The total cessation of the business of the Corporation;
(b) The bankruptcy, insolvency or dissolution of the
Corporation; or
(c) The death of the survivor of the Insureds.
Upon termination, the rights of the Parties shall be as provided
herein.
6. To secure the repayment to the Corporation of the
amounts due to it under the terms of this Agreement, the Employee
hereby assigns the Policy to the Corporation as collateral to the
full extent of the Corporation's Interest in the Policy. This
collateral assignment of the Policy to the Corporation shall not
be terminated, altered, amended, adversely affected or reduced in
any way by the Employee, without the express written consent of
the Corporation. The Parties hereto agree to execute any
additional collateral assignment forms or documents required by
the Insurer, or which may otherwise be necessary to implement
this Agreement.
7. The Parties agree that this is a private agreement to
which the Insurer is not a party and for which it can assume no
responsibility and, therefore, a copy of the Agreement need not
be filed with the Insurer. The Insurer shall be fully protected
from all liability under the Policy in
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dealing exclusively with
the owner of the Policy and in paying the proceeds of the Policy
in accordance with the collateral assignment and beneficiary
designation provided to the Insurer.
8. If this Agreement is subject to the Employee Retirement
Income Security Act of 1974 ("ERISA"), it shall constitute an
employee welfare benefit plan. If required, the Vice President
and Treasurer of the Corporation is hereby designated as the
named fiduciary under this Agreement for ERISA purposes. The
Vice President and Treasurer shall have discretionary authority
to control and manage the operation, interpretation and
administration of this Agreement and to establish any claims
procedures required by ERISA.
9. Any of the provisions of this Agreement may be amended
or altered, and such changes shall become effective when reduced
to writing and signed by both of the Parties.
10. This Agreement shall be binding upon and inure to the
benefit of the Corporation, and its successors and assigns, and
the Employee, and his successors and assigns.
11. Except to the extent that federal law applies, this
Agreement shall be governed by, and construed in accordance with,
the laws of the State of Rhode Island. However, if and to the
extent that ERISA applies, ERISA shall pre-empt any state laws
(including the laws of the State of Rhode Island) relating to
this Agreement.
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SIGNED and SEALED in two original counterparts as of the
date first above written.
NORTEK, INC.
By: /s/ Richard J. Harris
Its:Vice President and Treasurer,
duly authorized
/s/ Almon C. Hall
Almon C. Hall
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Appendix (prepared by the Company for SEC filing purposes)
to
Exhibit 10.8--Split Dollar Agreement dated as of June 29, 1999
between
the Company and Almon C. Hall
The life insurance policy covered by this Split Dollar
Agreement (the "Agreement") currently provides for a death
benefit of $5,000,000 to be divided between the beneficiary of
the policy and the Company pursuant to the Agreement.
