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EXHIBIT 10.5.2
SPLIT-DOLLAR INSURANCE AGREEMENT
THIS AGREEMENT is made as of this 1st day of September, 1995, by and
between MICROAGE, INC., a Delaware corporation (hereinafter referred to as
"Corporation"), and XXXXX X. XXXXXX (hereinafter referred to as "Insured").
WHEREAS, Insured plans to acquire insurance on his life of under a
policy issued by Northwestern Mutual Life Insurance Company (hereinafter
referred to as "Insurer"); and
WHEREAS, Corporation wants to assist Insured by paying all premiums due
on the policy; and
WHEREAS, Insured will be the owner of the insurance policy and the
policy will be assigned to Corporation as security for the repayment of the
premiums which Corporation will pay when due on the policy;
The parties, therefore, in consideration of the mutual promises
contained herein, hereby agree as follows:
ARTICLE I
Insured plans to acquire from the Insurer a policy on the life of the
Insured in the face amount of One Million Dollars ($1,000,000) (hereinafter
referred to as the "Policy"). The policy number, face amount and plan of
insurance will be recorded on Schedule A attached to this Agreement and the
Policy will then be subject to the terms of this Agreement. During the term of
this Agreement, Corporation will not exercise nor withhold its consent to the
exercise by Insured of any rights, privileges or options conferred by the terms
of the Policy, except as otherwise provided in Article V, paragraph C hereof.
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ARTICLE II
All premiums due on the Policy which shall be Twenty-Five Thousand Nine
Hundred Seventy-Three Dollars and Sixty-One Cents ($25,973.61) per year, shall
be paid by Corporation until the first to occur of (i) the death of the Insured,
(ii) Insured's termination of employment with Corporation, or (iii) Corporation
has paid seventeen (17) premium payments.
ARTICLE III
A. Insured shall execute and deliver a collateral assignment of the
Policy to Corporation on a form approved by Insurer, as a security interest for
the amounts paid by Corporation towards its share of the premiums to be paid on
the Policy in accordance with Article II of this Agreement. In the event of the
death of Insured pursuant to Article IV hereof, or in the event of the surrender
or acquisition of the Policy pursuant to Article V hereof, such security
interest shall be for an amount equal to the total premiums paid by the
Corporation (less any outstanding loans to Corporation pursuant to Article III,
paragraph B hereof).
B. Corporation may not borrow against the Policy's loan value,
without the prior written approval of Insured.
C. Corporation shall pay all interest with respect to loans made
pursuant to subparagraph B; provided, however, that no payment of interest shall
constitute a premium payment under this Agreement.
D. The term "net cash surrender value" when used in this Agreement
shall mean the gross value as determined by Insurer less any outstanding loans
made to Corporation and interest then due on such loans.
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ARTICLE IV
In the event of the death of Insured, the proceeds of the Policy shall
be divided into two parts and paid by Insurer as follows:
Part A - This part shall be paid to Corporation in an amount equal
to the Corporation's security interest in the Policy as
determined pursuant to Article III, paragraph A hereof.
Corporation shall supply Insurer with any information
necessary for Insurer to determine such amount.
Part B - The balance of the death benefit shall be paid to the
beneficiary designated by the Insured.
ARTICLE V
A. The Insured may, at any time, with the Corporation's prior
written consent, surrender the Policy and receive the net cash surrender value
thereof. Insured shall pay to Corporation an amount equal to Corporation's
security interest in the Policy as determined in Article III, paragraph A
hereof, or may authorize and instruct Insurer to pay such amount directly to
Corporation.
B. Insured may acquire Corporation's interest in the Policy for an
amount equal to the Corporation's security interest in the Policy as determined
in Article III, paragraph A hereof upon the Insured's termination of employment
with Corporation.
C. Except as provided in the collateral assignment or as necessary
to protect Corporation's security interest, Insured shall be entitled to
exercise all of the rights available under the terms of the Policy, except the
Insured may not assign or borrow on the Policy as long as a collateral
assignment is in effect on the Policy.
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ARTICLE VI
A. Subject to Article VI, paragraph B below, this Agreement shall
terminate upon the occurrence of any of the following:
1. Surrender or acquisition of the Policy by Insured, pursuant
to Article V of this Agreement.
2. Cessation of the corporate business.
3. Bankruptcy, receivership or dissolution of Corporation.
4. The termination of Insured's employment with the
Corporation.
5. The death of Insured.
B. If this Agreement is terminated pursuant to Article VI, paragraph
A.2 or 3. above, Insured shall pay Corporation an amount equal to Corporation's
security interest in the Policy as determined in Article III, paragraph A
hereof. Upon receipt of such amounts, Corporation shall thereupon execute and
deliver to Insured a release of the collateral assignment of the Policy.
C. If this Agreement is terminated pursuant to Article VI, paragraph
A.4 above Insured shall pay Corporation an amount equal to Corporation's
security interest in the Policy as determined in Article III, paragraph A above.
D. If Insured does not remit the amounts described in paragraph B
and D above, within thirty (30) days of the event described in Article VI,
paragraph A.2, 3. or 4., then all obligations of Corporation under this
Agreement shall be terminated and Insured shall transfer the ownership of the
Policy to Corporation.
ARTICLE VII
Insurer is not a party to this Agreement and the obligations of Insurer
are those set forth in the Policy.
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ARTICLE VIII
This Agreement shall be binding upon the parties hereto, their heirs,
legal representatives, successors and assigns.
ARTICLE IX
This Agreement may be altered, amended or modified only by written
instrument signed by Corporation and the Insured.
ARTICLE X
This Agreement shall be construed according to the laws of the State of
Arizona.
ARTICLE XI
Insured may add a rider to the Policy for the benefit of his
beneficiaries. Upon written request by Corporation, Insured will add a rider to
the Policy for the benefit of Corporation. The additional premium for any rider
which is added to the Policy will be paid by the party entitled to receive the
proceeds of the rider.
ARTICLE XII
A. The party designated as the "named fiduciary" for the
Split-Dollar Plan established by this Agreement shall have the
authority to control and manage the operation and administration
of such plan; provided, however, the Insurer shall be the
fiduciary of the plan solely with regard to the review and final
decision on a claim for benefits under its Policy as provided in
Article XIII Claims Procedure, set forth below.
B. The Fiduciary may allocate his responsibilities for the operation
and administration of the Split-Dollar Plan, including the
designation of persons to carry out fiduciary responsibilities
under any such plan. He shall effect such allocation of his
responsibilities by delivering to the Corporation a written
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instrument signed by him that specifies the nature and extent of
the responsibilities allocated, including, the persons who are
designated to carry out these fiduciary responsibilities under
the Split-Dollar Plan, together with a signed acknowledgement of
their acceptance.
ARTICLE XIII
The following claims procedure shall apply to the Split-Dollar Plan:
A. The beneficiary of such Policy shall make a claim for the
benefits provided under the Policy in the manner provided in the
Policy.
B. With respect to a claim for benefits under said Policy, the
Insurer shall be the entity which reviews and makes decisions on
claim denials.
C. If a claim is wholly or partially denied, notice of the decision,
meeting the requirements of paragraph D below, shall be furnished
to the claimant within a reasonable period of time after the
claim has been filed.
D. The Insurer shall provide to any claimant who is denied a claim
for benefits, written notice setting forth in a manner calculated
to be understood by the claimant, the following:
1. The specific reasons for the denial;
2. Specific reference to the pertinent Policy or plan
provisions on which the denial is based;
3. A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary;
4. An explanation of the plan's claim review procedure, as set
forth in paragraph E and F below.
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E. The purpose of the review procedure set forth in this paragraph
and in paragraph F below, is to provide a procedure by which a
claimant under the Split-Dollar Plan may have a reasonable
opportunity to appeal a denial of a claim for a full and fair
review. To accomplish that purpose, the claimant or his duly
authorized representative:
1. May request a review upon written application to the
Insurer;
2. May review pertinent plan documents or agreements; and
3. May submit issues and comments in writing.
A claimant (or his duly authorized representative) shall request
a review by filing a written application for review at any time
within sixty (60) days after receipt by the claimant of written
notice of the denial of his claim.
F. A decision on review of a denial of a claim shall be made in the
following manner:
1. The decision on review shall be made by the Insurer, which
may in its discretion hold a hearing on the denied claim.
The Insurer shall make its decision promptly, unless special
circumstances (such as the need to hold a hearing) require
an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not
later than one hundred twenty (120) days after receipt of
the request for review.
2. The decision on review shall be in writing and shall include
specific reasons for the decisions, written in a manner
calculated to be understood by the claimant, and specific
references to the pertinent Policy or plan provision on
which the decision is based.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MICROAGE, INC., a Delaware Corporation
By /s/ Xxxxxxx X. XxXxxxxx
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Its Chairman and CEO
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By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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