Exhibit 10(e)(3)
AMENDED AND
RESTATED
EMPLOYMENT CONTINUATION
AGREEMENT
WITH EXECUTIVE
OFFICER
This Amended and Restated Employment
Continuation Agreement dated as of November 3, 2008
(“Agreement”) is by and between Protective Life
Corporation, a Delaware corporation (the “Company”),
and
(“Executive”).
W I T N
E S S E
T H :
WHEREAS, the Company has determined
that Executive holds a position that is critical to the
Company;
WHEREAS, the Company believes that,
if it is confronted with a situation that could result in a change
in ownership or control of the Company, continuity of management
will be essential to its ability to evaluate and respond to such
situation in the best interests of shareholders;
WHEREAS, the Company understands
that any such situation could be a distraction to Executive, to the
detriment of the Company and its shareholders;
WHEREAS, the Company desires to
assure itself of Executive’s services during the period in
which it is confronting such a situation, and to provide Executive
with certain financial assurances to enable Executive to perform
his or her responsibilities without undue distraction and without
bias due to Executive’s personal circumstances;
and
WHEREAS, to achieve these
objectives, the Company and Executive have previously entered into
an Employment Continuation Agreement (the “Prior
Agreement”) which provided the Company and Executive with
certain rights and obligations upon the occurrence of a Change of
Control (as defined in Section 2);
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained, the Company and
Executive hereby amend and restate the Prior Agreement to bring it
into compliance with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
and to make certain other changes (as so amended and restated, the
“Agreement”) as follows:
1.
Effective Date
. The effective date of this
Agreement (the “Effective Date”) shall be the date on
which a Change of Control occurs during the term of this Agreement
(as provided in Section 12(c)); provided that
(i) anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if
Executive’s employment with the Company is terminated before
the date on which the Change of Control occurs, and if it is
reasonably demonstrated by Executive that such termination of
employment (A) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control, or
(B) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately before
such termination of employment, and (ii) except as provided in
clause (i) above, if
Executive is not employed by the
Company on the date on which a Change of Control occurs, this
Agreement shall be void and without effect.
2.
Definition of Change of
Control . Subject
to the provisions of Code Section 409A, a “Change of
Control” shall occur when (i) any one person (or more
than one person acting as a group (as provided in Code
Section 409A)) (such person or group, an “Acquiring
Person”) acquires ownership of the Company’s stock
that, together with stock previously held by the Acquiring Person,
constitutes more than 50% of the total fair market value or more
than 50% of the total voting power of the Company, or (ii) a
majority of the members of the Board is replaced during any
12-month period by directors whose appointment or election was not
endorsed by a majority of the members of the Board before the date
of the appointment or election, or (iii) an Acquiring Person
acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such Acquiring Person)
assets from the Company that have a total gross fair market value
equal to or more than 80% of the total gross fair market value of
the Company’s assets immediately before such acquisition or
acquisitions, or (iv) (except for purposes of Section 1)
any other event or transaction occurs that is declared by
resolution of the Board to constitute a Change in Control for
purposes of this Agreement .
3.
Employment Period
. Subject to Section 6,
the Company agrees to continue Executive in its employ, and
Executive agrees to remain in the employ of the Company, for the
period (the “Employment Period”) commencing on the
Effective Date and ending on the second anniversary of the
Effective Date.
4.
Position and Duties
. (a) No Reduction in
Position . During the Employment Period,
Executive’s position (including titles), authority and
responsibilities shall be at least commensurate with those held,
exercised and assigned immediately before the Effective Date.
Executive’s services shall be performed at the location where
Executive was employed immediately before the Effective
Date.
(b)
Business Time
. From and after the Effective
Date, Executive agrees to devote Executive’s full attention
during normal business hours to the business and affairs of the
Company and to perform faithfully and efficiently the
responsibilities assigned to Executive to the extent necessary to
discharge such responsibilities, except for periods of vacation,
sick leave and other leave to which Executive is entitled.
Executive’s continuing to serve on any boards and committees
on which Executive is serving or with which Executive is otherwise
associated immediately before the Effective Date shall not be
deemed to interfere with the performance of Executive’s
services for the Company.
5.
Compensation
. (a) Base Salary
. During the Employment Period, Executive shall receive a
base salary at a monthly rate at least equal to the monthly base
salary paid to Executive by the Company immediately before the
Effective Date. The base salary shall be reviewed at least
once each year after the Effective Date, and may be increased (but
not decreased) at any time and from time to time by action of the
Board of Directors or any committee thereof or any individual
having authority to take such action in accordance with the
Company’s regular practices. Executive’s base salary,
as it may be increased from time to time, shall hereafter be
referred to as “Base Salary”. Neither the Base
Salary nor any increase
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in Base Salary after the Effective
Date shall limit or reduce any other obligation of the Company
hereunder.
(b)
Annual Bonus and Incentive
Compensation .
During the Employment Period, in addition to the Base Salary, for
each fiscal year of the Company ending during the Employment
Period, Executive shall be entitled to receive an (i) annual
bonus which is at least equal to the greater of (A) the
highest annual bonus, including any bonus provided under the
Company’s Annual Incentive Plan (“AIP”), that had
been payable to Executive in respect of either of the two fiscal
years ended immediately before the Effective Date or (B) the
amount that would have been payable to Executive as a target bonus
under any bonus program in which Executive participated (including
the AIP) for the year in which the Effective Date occurs and
(ii) long-term incentive compensation opportunities on terms
and conditions no less favorable to Executive than those applicable
to Executive before the Effective Date. Any amount payable
hereunder as an annual bonus shall be paid later than March 15
of the year following the year for which the amount is payable,
unless electively deferred by Executive pursuant to any deferral
programs or arrangements that the Company may make available to
Executive.
(c)
Benefit Plans
. During the Employment
Period, Executive (and, to the extent applicable, Executive’s
dependents) shall be entitled to participate in or be covered under
all pension, retirement, deferred compensation, savings, medical,
dental, health, disability, group life, accidental death and travel
accident insurance plans at a level that is commensurate with
Executive’s participation in such plans immediately before
the Effective Date or, if more favorable to Executive, at the level
made available to Executive or other similarly situated employees
at any time thereafter. Executive shall also be entitled to
receive such perquisites as were generally provided to Executive in
accordance with the Company’s policies and practices
immediately before the Effective Date.
(d)
Expenses . During the Employment Period, Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Executive in accordance with the
policies and procedures of the Company as in effect immediately
before the Effective Date. Notwithstanding the foregoing, the
Company may apply the policies and procedures in effect after the
Effective Date to Executive, if such policies and procedures are
more favorable to Executive than those in effect immediately before
the Effective Date.
(e)
Indemnification
. During and after the
Employment Period, the Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of
action arising from or out of or related in any way to
Executive’s performance as an officer, director or employee
of the Company or any of its subsidiaries or in any other capacity,
including any fiduciary capacity, in which Executive serves at the
request of the Company to the maximum extent permitted by
applicable law and the Company’s Certificate of Incorporation
and By-Laws (the “Governing Documents”); provided
that in no event shall the protection afforded to Executive
hereunder be less than that afforded under the Governing Documents
as in effect immediately before the Effective Date.
6.
Termination of
Employment .
(a) Death or Disability . Executive’s
employment shall automatically terminate upon Executive’s
death or termination of employment due to Disability (as defined
below) during the Employment Period. For purposes of this
Agreement,
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“Disability” shall mean
Executive’s inability to perform the duties of
Executive’s position, as determined in accordance with the
policies and procedures applicable with respect to the
Company’s long-term disability plan as in effect immediately
before the Effective Date.
(b)
Voluntary Termination
. Anything in this Agreement
to the contrary notwithstanding, Executive may, upon not less than
10 days’ written notice to the Company, voluntarily terminate
employment for any reason (including early retirement under the
terms of any of the Company’s retirement plans as in effect
from time to time) during the Employment Period; provided
that any termination of employment by Executive pursuant to
Section 6(d) on account of Good Reason (as defined
therein) shall not be treated as a voluntary termination under this
Section 6(b).
(c)
Cause . The Company may terminate
Executive’s employment for Cause. For purposes of this
Agreement, “Cause” shall mean
(i) Executive’s conviction or plea of nolo
contendere to a felony; (ii) an act or acts of extreme
dishonesty or gross misconduct on Executive’s part which
result or are intended to result in material damage to the
Company’s business or reputation; or (iii) repeated
material violations by Executive of Executive’s obligations
under Section 4, which violations are demonstrably willful and
deliberate on Executive’s part and which result in material
damage to the Company’s business or reputation.
(d)
Good Reason
. Executive may terminate
employment for Good Reason. For purposes of this Agreement,
“Good Reason” shall mean the occurrence of any of the
following, without the express written consent of Executive, after
the Effective Date:
(i) (A) the assignment to
Executive of any duties inconsistent in any material adverse
respect with Executive’s position (including titles),
authority or responsibilities as contemplated by Section 4, or
(B) any other material adverse change in such position
(including titles), authority or responsibilities;
(ii) any failure by the
Company to comply with any of the provisions of Section 5,
other than an insubstantial or inadvertent failure remedied by the
Company promptly after receipt of notice thereof given by
Executive;
(iii) the Company’s
requiring Executive to be based at any office or location more than
20 miles from that location at which Executive performed services
specified under the provisions of Section 4 immediately before
the Change of Control, except for travel reasonably required in the
performance of Executive’s responsibilities; or
(iv) any failure by the Company
to obtain the assumption and agreement to perform this Agreement by
a successor as contemplated by Section 11(b).
In no event shall the mere
occurrence of a Change of Control, absent any further impact on
Executive, be deemed to constitute Good Reason.
(e)
Notice of Termination
. Any termination of
Executive’s employment by the Company for Cause or by
Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 12(e). For purposes of
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this Agreement, a “Notice of
Termination” shall mean a written notice given, in the case
of a termination for Cause, within 10 business days of the
Company’s having actual knowledge of the events giving rise
to such termination, and in the case of a termination for Good
Reason, within 180 days of Executive’s having actual
knowledge of the events giving rise to such termination, and which
(i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so
indicated, and (iii) if the termination date is other than the
date of receipt of such notice, specifies the termination date of
this Agreement (which date shall be not more than 15 days after the
giving of such notice). The failure by Executive to set forth
in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right
of Executive hereunder or preclude Executive from asserting such
fact or circumstance in enforcing Executive’s rights
hereunder.
(f)
Date of Termination
. For purposes of this
Agreement, the term “Date of Termination” shall mean
(i) in the case of a termination of employment for which a
Notice of Termination is required, the date of receipt of such
Notice of Termination or, if later, the date specified therein, and
(ii) in all other cases, the actual date on which
Executive’s employment terminates during the Employment
Period.
7.
Obligations of the Company upon
Termination .
(a) Death or Disability . If Executive’s
employment is terminated during the Employment Period by reason of
Executive’s death or Disability, this Agreement shall
terminate without further obligations to Executive or
Executive’s legal representatives under this Agreement other
than those obligations accrued hereunder at the Date of
Termination, and the Company shall pay to Executive (or
Executive’s beneficiary or estate) (i) Executive’s
full Base Salary through the Date of Termination (the “Earned
Salary”), (ii) any vested amounts or benefits owing to
Executive under the Company’s otherwise applicable employee
benefit plans and programs, including any compensation previously
deferred by Executive (together with any accrued earnings thereon)
and not yet paid by the Company and any accrued vacation pay not
yet paid by the Company (the “Accrued Obligations”),
and (iii) any other benefits payable due to Executive’s
death or Disability under the Company’s plans, policies,
programs or arrangements (the “Additional
Benefits”).
Any Earned Salary shall be paid in
cash in a single lump sum as soon as practicable, but in no event
more than 10 business days (or at such earlier date required by
law), following the Date of Termination. Accrued Obligations
and Additional Benefits shall be paid in accordance with the terms
of the applicable plan, policy, program or arrangement.
(b)
Cause and Voluntary
Termination . If,
during the Employment Period, Executive’s employment is
terminated for Cause or voluntarily terminated by Executive (other
than on account of Good Reason following a Change of Control) in
accordance with Section 6(b), the Company shall pay Executive
(i) the Earned Salary in cash in a single lump sum as soon as
practicable, but in no event more than 10 business days (or such
earlier date required by law), following the Date of Termination,
and (ii) the Accrued Obligations in accordance with the terms
of the applicable plan, policy, program or arrangement.
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(c)
Termination by the Company other
than for Cause and Good Reason Termination by Executive
.
(i)
Lump Sum Payments
. If either (a) the
Company terminates Executive’s employment other than for
Cause during the Employment Period or (b) Executive terminates
employment for Good Reason at any time during the Employment
Period, then the Company shall pay to Executive the following
amounts:
(A)
Executive’s Earned
Salary;
(B)
a cash amount (the “Severance
Amount”) equal to three (3) times the sum of
(1) Executive’s annual
Base Salary; and
(2) the greater of
(i) the average of the bonus amount payable (including any
amounts payable under the AIP) to Executive (including any amounts
the receipt of which Executive elected to defer) with respect to
the three fiscal years of the Company (or, if fewer, the number of
such fiscal years in which Executive was an employee of the Company
or its affiliates) immediately before the Change in Control
(including, for this purpose, any AIP Payout (as defined in
Section 7(c)(i)(C)) or (ii) the average of the bonus
amount payable (including any amounts payable under the AIP) to
Executive (including any amounts the receipt of which Executive
elected to defer) with respect to the three fiscal years of the
Company (or, if fewer, the number of such fiscal years in which
Executive was an employee of the Company or its affiliates)
immediately before the Date of Termination (including, for this
purpose, any AIP Payout); and
(3) the amount determined by
dividing (i) the sum of the Grant Values (as defined below)
for the Regular Grants (as defined below) made in the calendar year
in which the Change of Control occurred and in the previous two
calendar years (or, if the Change of Control occurred in a calendar
year in which Exec
