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EXHIBIT 10.32
EXHIBIT A
COLLATERAL SECURITY ASSIGNMENT AGREEMENT
This Collateral Security Assignment is made and entered
into effective as of __________, 19__, by the undersigned as the owner (the
"Owner") of Life Insurance Policy Number ______________ (the "Policy") issued
by Manufacturer's Life Insurance Company (the "Insurer") upon the life of Owner
and by Advanced Micro Devices, Inc. a __________ corporation (the "Assignee").
WHEREAS, the Owner is a valued employee of Assignee or a subsidiary
of Assignee, and the Assignee wishes to retain him or her in its or its
subsidiary's employ; and
WHEREAS, to encourage the Owner's continued employment, the Assignee
wishes to pay premiums on the Policy, as more specifically provided for in that
certain Split-Dollar Life Insurance Agreement dated as of ________________,
19__, and entered into between the Owner and the Assignee as such agreement may
be hereafter amended or modified (the "Agreement") (unless otherwise indicated
the terms herein shall have the definitions ascribed thereto in the Agreement);
WHEREAS, in consideration of the Assignee agreeing to make the
premium payments, the Owner agrees to grant the Assignee a security interest in
the Policy as collateral security; and
WHEREAS, the Owner and Assignee intend that the Assignee have no
greater interest in the Policy than that prescribed herein and in the Agreement
and that if the Assignee ever obtains any right or interest in the Policy or
the proceeds thereof, except as provided herein and in the Agreement, such
right or interest shall be held in trust for the Owner to satisfy the
obligations of Assignee to Owner under the Agreement and the Assignee
additionally agrees that its rights to the Policy shall serve as security for
its obligations to the Owner under the Agreement;
NOW, THEREFORE, the Owner hereby assigns, transfers and sets over to
the Assignee for security the following specific rights in the Policy, subject
to the following terms, agreements and conditions:
1. This Collateral Security Assignment is made, and the
Policy is to be held, as collateral security for all liabilities of the Owner
to the Assignee pursuant to the terms of the Agreement, whether now existing or
hereafter arising (the "Secured Obligations"). The Secured Obligations
include: (i) the obligation of the Owner to transfer an amount equal to the
entire cash value in the event that the Owner terminates employment with
Employer for a reason other than a Qualifying Termination and before attaining
his or her Security Release Date; (ii) the obligation of the Owner to pay an
amount of cash to the Company or transfer to the Company that portion of the
cash value which is
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equal to any federal, state or local taxes that Assignee may be required
to withhold and collect (as set forth in Section 12 of the Agreement); (iii)
the obligation of the Owner to pay an amount of cash to the Company or transfer
to the Company that portion of the cash surrender value of the Policy which is
equal to the sum of the outstanding balances on any loans made by Assignee to
the Owner in the event of a Qualifying Event (as set forth in Section 5(c) of
the Agreement; and (iv) the obligation of the Owner to name the Assignee as
beneficiary for a portion of the death benefit under the Policy in the event of
the death of the insured prior to Owner's termination of employment with
Employer in accordance with Section 4 of the Agreement.
2. The Owner hereby grants to Assignee a security interest
in and collaterally assigns to Assignee the Policy and the cash value to secure
the Secured Obligations. However, the Assignee's interest in the Policy shall
be strictly limited to:
(a) The right to be paid the Assignee's portion of the death
benefit in the event of the death of the Owner prior to Owner's termination of
employment with Employer in accordance with Section 4 of the Agreement;
(b) The right to receive an amount equal to the entire cash
value of the Policy (which right may be realized by Assignee's receiving a
portion of the death benefit under the Policy or Owner's causing such amount to
be transferred to Assignee (through withdrawing from or borrowing against the
Policy), in accordance with the terms of the Agreement) if the Owner terminates
employment with Employer for a reason other than a Qualifying Termination
(unless he or she has previously attained his or her Security Release Date);
(c) The right to receive an amount equal to the sum of the outstanding
balances on any loans made by Assignee to the Owner in the event of a
Qualifying Event (as set forth in Section 5(c) of the Agreement); and
(d) The right to receive an amount equal to any federal,
state or local taxes that Assignee may be required to withhold and collect (as
set forth in Section 12 of the Agreement).
3. (a) Owner shall retain all incidents of ownership in the
Policy, and may exercise such incidents of ownership except as otherwise
limited by the Agreement and hereunder. The Insurer is only authorized to
recognize (and is fully protected in recognizing) the exercise of any ownership
rights by Owner if the Insurer determines that the Assignee has been given
notice of Owner's purported exercise of ownership rights in compliance with the
provisions of Section 3(b) hereof and as of the date thirty days after such
notice is given, the Insurer has not received written notification from the
Assignee of Assignee's objection to such exercise; provided that,
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the designation of the beneficiary to receive the death benefits not otherwise
payable to Assignee pursuant to Section 4 of the Agreement may be changed by
the Owner without prior notification of Assignee. The Insurer shall not be
responsible to ensure that the actions of the Owner conform to the Agreement.
(b) Assignee hereby acknowledges that for purposes of this
Collateral Security Assignment, Assignee shall be conclusively deemed to have
been properly notified of Owner's purported exercise of his or her ownership
rights as of the third business day following either of the following events:
(1) Owner mails written notice of such exercise to Assignee by United States
certified mail, postage paid, at the address below and provides the Insurer
with a copy of such notice and a copy of the certified mail receipt or (2) the
Insurer mails written notice of such exercise to Assignee by regular United
States mail, postage paid, at the address set forth below:
Advanced Micro Devices, Inc.
One AMD Place, M/S 181
Sunnyvale, California 94088
Attn: Corporate Compensation Manager
The foregoing address shall be the appropriate address for such notices to be
sent unless and until the receipt by both Owner and the Insured of a written
notice from Assignee of a change in such address.
(c) Notwithstanding the foregoing, Owner and Assignee hereby
agree that, until Assignee's security interest in the Policy is released,
Assignee shall from time to time designate one or more individuals (the
"Designee"), who may be officers of Assignee, who shall be entitled to adjust
the death benefit under the Policy and to administer the investments under the
Policy; provided, however, that the Designee may only increase, but not
decrease, the death benefit in effect on the date that the Policy is issued;
provided further, that the Designee may only direct the investments under the
Policy in funds offered by the Insurer under the Policy. Assignee shall notify
the Insurer in writing of the identity of the Designee and any changes in the
identity of the Designee. Until Assignee's security interest in the Policy is
released, no other party may adjust the death benefit or direct the investments
under the Policy without the consent of the Assignee and the Owner.
4. If the Policy is in the possession of the Assignee, the
Assignee shall, upon request, forward the Policy to the Insurer without
unreasonable delay for endorsement of any designation or change of beneficiary
or the exercise of any other right reserved by the Owner.
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5.(a) Assignee shall be entitled to exercise its rights under the
Agreement by delivering a written notice to Insurer, executed by the Assignee
and the Owner or the Owner's beneficiary, requesting either (1) a withdrawal or
nonrecourse policy loan equal to the amount to which Assignee is entitled under
Sections 5, 6 or 12 of the Agreement and transfer of such withdrawn or borrowed
amount to Assignee or (2) the payment to the Assignee of that portion of the
death benefit under the Policy to which the Assignee is entitled under Section
4 of the Agreement. So long as the notice is also signed by Owner or his or
her beneficiary, Insurer shall pay or loan the specified amounts to Assignee
without the need for any additional documentation.
(b) Upon receipt of a properly executed notice complying with
the requirements of subsection (a) above, the Insurer is hereby authorized to
recognize the Assignee's claims to rights hereunder without the need for any
additional documentation and without investigating (1) the reason for such
action taken by the Assignee; (2) the validity or the amount of any of the
liabilities of the Owner to the Assignee under the Agreement; (3) the existence
of any default therein; (4) the giving of any notice required herein; or (5)
the application to be made by the Assignee of any amounts to be paid to the
Assignee. The receipt of the Assignee for any sums received by it shall be a
full discharge and release therefor to the Insurer.
6. Upon the full payment of the liabilities of the Owner to
the Assignee pursuant to the Agreement, the Assignee shall execute an
appropriate release of this Collateral Security Assignment.
7. The Assignee shall have the right to request of the
Insurer and/or the Owner notice of any action taken with respect to the Policy
by the Owner.
8.(a) The Assignee and the Owner intend that in no event shall the
Assignee have any power or interest related to the Policy or its proceeds,
except as provided herein and in the Agreement, notwithstanding the provisions
of any other documents including the Policy. In the event that the Assignee
ever receives or may be deemed to have received any right or interest beyond
the limited rights described herein and in the Agreement, such right or
interest shall be held in trust for the benefit of the Owner and be held
separate from the property of the Assignee.
(b) In order to further protect the rights of the Owner, the
Assignee agrees that its rights to the Policy and proceeds thereof shall serve
as security for the Assignee's obligations to the Owner as provided in the
Agreement. Assignee hereby grants to Owner a security interest in and
collaterally assigns to Owner any and all rights it has in the Policy, and
products
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and proceeds thereof, whether now existing or hereafter arising pursuant to the
provisions of the Policy, the Agreement, this Collateral Security Assignment or
otherwise, to secure Assignee's obligations ("Assignee Obligations") to Owner
under the Agreement, whether now existing or hereafter arising. The Assignee
Obligations include all obligations owed by the Assignee to Owner under the
Agreement, including without limitation: (i) the obligation to purchase the
Policy designating Owner as the owner and to make the premium payments required
under Section 3 of the Agreement and (ii) the obligation to do nothing which
may, in any way, endanger, defeat or impair any of the rights of Owner in the
Policy as provided in the Agreement. In no event shall this provision be
interpreted to reduce Owner's rights in the Policy or expand in any way the
rights or benefits of the Assignee under the Agreement. In the event that
Owner terminates employment with Employer for any reason prior to a Qualifying
Event, this security interest and collateral assignment granted by Assignee to
Owner shall automatically expire and be deemed waived. Nothing in this
provision shall prevent the Assignee from receiving its share of the death
benefits under the Policy as provided in Section 4 of the Agreement.
9. Assignee and Owner agree to execute any documents
necessary to effectuate this Collateral Security Assignment pursuant to the
provisions of the Agreement. All disputes shall be settled as provided in
Section 13 of the Agreement. The rights under this Collateral Security
Assignment may be enforced pursuant to the terms of the Agreement.
IN WITNESS WHEREOF, the Owner and Assignee have executed this
Collateral Security Assignment effective the day and year first above written.
___________________________________
, Owner
ADVANCED MICRO DEVICES, INC.
By: ______________________________
Title: ___________________________
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