Exhibit 10.18
ASSURANT, INC.
FORM OF CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
THIS CHANGE OF
CONTROL EMPLOYMENT AGREEMENT, dated as of the 1
st
day of January, 2009
(this “Agreement”), by and between Assurant, Inc., a
Delaware corporation (the “Company”), and [Executive]
(the “Executive”).
WHEREAS, the Board of Directors of
the Company (the “Board”), has determined that it is in
the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change of Control (as defined herein). The Board believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company in
the event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements
upon a Change of Control that ensure that the compensation and
benefits expectations of the Executive will be satisfied and that
provide the Executive with compensation and benefits arrangements
that are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
Section 1.
Certain Definitions .
(a) “Effective Date” means the first date during
the Change of Control Period (as defined herein) on which a Change
of Control occurs. Notwithstanding anything in this Agreement to
the contrary, if the Executive’s employment with the Company
is terminated prior to the date on which a Change of Control
occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a
third party that has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with
or anticipation of a Change of Control (such a termination of
employment, an “Anticipatory Termination”) and if such
Change of Control is consummated, then for all purposes of this
Agreement, the “Effective Date” means the date
immediately prior to the date of such termination of
employment.
(b) “Change of Control
Period” means the period commencing on the date hereof and
ending on the second anniversary of the date hereof;
provided , however , that, commencing on the date one
year after the date hereof, and on each annual anniversary of such
date (such date and each annual anniversary thereof, the
“Renewal Date”), unless previously terminated, the
Change of Control Period shall be automatically extended so as to
terminate two years from such Renewal Date, unless, at least 60
days prior to the Renewal Date, the Company shall give notice to
the Executive that the Change of Control Period shall not be so
extended.
(c) “Affiliated Company”
means any company controlled by, controlling or under common
control with the Company.
(d) “Change of Control”
means any of the following events:
(1) Any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either (A) the then-outstanding shares
of common stock of the Company (the “Outstanding Company
Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided , however
, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or
any Affiliated Company or (iv) any acquisition pursuant to a
transaction that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and
1(d)(3)(C);
(2) Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided , however , that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board;
(3) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries
(each, a “Business Combination”), in each case unless,
following such Business Combination, (A) all or substantially
all of the individuals and entities that were the beneficial owners
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of the
then-outstanding shares of common stock (or, for a non-corporate
entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in
the election of directors (or, for a non-corporate entity,
equivalent governing body), as the case may be, of the entity
resulting from such Business Combination (including, without
limitation, an entity that, as a result of such transaction, owns
the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, 30% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of
the members of the board of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or
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(4) Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
Section 2.
Employment Period .
The Company hereby agrees to continue the Executive in the employ
of the Company, subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and
ending on the second anniversary of the Effective Date (the
“Employment Period”). The Employment Period shall
terminate upon the Executive’s termination of employment for
any reason.
Section 3.
Terms of Employment .
(a) Position and Duties . (1) During the
Employment Period, (A) the Executive’s position with the
Company (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at
least commensurate in all respects with the most significant of
those held, exercised and assigned at any time during the 120-day
period immediately preceding the Effective Date, (B) the
Executive’s services for the Company shall be performed at
the office where the Executive was employed immediately preceding
the Effective Date or at any other location less than 30 miles from
such office and (C) the Executive shall not be required to
travel on Company business to a substantially greater extent than
required during the 120-day period immediately prior to the
Effective Date.
(2) During the Employment Period,
and excluding any periods of paid time off and sick leave to which
the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement
for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that, to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b) Compensation .
(1) Base Salary . During the Employment Period,
the Executive shall receive an annual base salary (the
“Annual Base Salary”) at an annual rate at least equal
to 12 times the highest monthly base salary paid or payable,
including any base salary that has been earned but deferred, to the
Executive by the Company and the Affiliated Companies in respect of
the one-year period immediately preceding the month in which the
Effective Date occurs. The Annual Base Salary shall be paid at such
intervals as the Company pays executive salaries generally. During
the Employment Period, the Annual Base Salary shall be reviewed at
least annually, beginning no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective
Date. Any increase in the Annual Base Salary
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shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. The Annual Base
Salary shall not be reduced after any such increase and the term
“Annual Base Salary” shall refer to the Annual Base
Salary as so increased.
(2) Annual Bonus . In
addition to the Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual
bonus (the “Annual Bonus”) in cash at least equal to
the product of Annual Base Salary and the greater of (A) the
Executive’s target percentage under the Company’s
applicable bonus plan or any comparable percentage under any
predecessor or successor Company plan for the year immediately
preceding the Effective Date and (B) the Executive’s
target percentage, as determined immediately prior to the Effective
Date, under the Company’s applicable bonus plan or any
comparable percentage under any predecessor or successor Company
plan for the year in which the Effective Date occurs (such product,
the “Highest Annual Bonus”). Each such Annual Bonus
shall be paid no later than two and a half months after the end of
the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus
pursuant to an arrangement that meets the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), excluding arrangements authorized
pursuant to Treasury Regulation § 1.409A-1(e).
(3) Long-Term Cash and Equity
Incentives, Savings and Retirement Plans . During the
Employment Period, the Executive shall be entitled to participate
in all long-term cash incentive, equity incentive, savings and
retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and the
Affiliated Companies, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and the Affiliated Companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(4) Welfare Benefit Plans
. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
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(5) Expenses . During
the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and the Affiliated Companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies. In no event shall the reimbursements under this
Section 3(b)(5) be made later than the end of the calendar
year next following the calendar year in which such expenses were
incurred. The amount of such expenses that the Company and/or the
Affiliated Companies are obligated to pay in any given calendar
year shall not affect the expenses that the Company and/or the
Affiliated Companies are obligated to pay in any other calendar
year, and the Executive’s right to have the Company and/or
the Affiliated Companies pay such expenses may not be liquidated or
exchanged for any other benefit.
(6) Paid Time Off .
During the Employment Period, the Executive shall be entitled to
paid time off in accordance with the most favorable plans,
policies, programs and practices of the Company and the Affiliated
Companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
Section 4.
Termination of Employment
. (a) Death or Disability . The
Executive’s employment shall terminate automatically if the
Executive dies during the Employment Period. If the Company
determines in good faith that the Disability (as defined herein) of
the Executive has occurred during the Employment Period (pursuant
to the definition of “Disability”), it may give to the
Executive written notice in accordance with Section 11(b) of
its intention to terminate the Executive’s employment. In
such event, the Executive’s employment with the Company shall
terminate effective one year after receipt of such notice by the
Executive (the “Disability Effective Date”),
provided that, within thirty days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. “Disability” means the
absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness that is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative (such agreement as to
acceptability not to be unreasonably withheld).
(b) Cause . The
Company may terminate the Executive’s employment during the
Employment Period with or without Cause. “Cause”
means:
(1) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties (as contemplated by
Section 3(a)(1)(A)) with the Company or any Affiliated Company
(other than any such failure resulting from incapacity due to
physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board
or the Chief Executive Officer of the Company believes that the
Executive has not substantially performed the Executive’s
duties, or
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(2) the willful engaging by the
Executive in illegal conduct or gross misconduct that is materially
and demonstrably injurious to the Company.
For purposes of this
Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon (A) authority given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company (the “Applicable Board”), (B) the
instructions of the Chief Executive Officer of the Company or a
senior officer of the Company or (C) the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Applicable Board
(excluding the Executive, if the Executive is a member of the
Applicable Board) at a meeting of the Applicable Board called and
held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Applicable
Board), finding that, in the good faith opinion of the Applicable
Board, the Executive is guilty of the conduct described in
Section 4(b)(1) or 4(b)(2), and specifying the particulars
thereof in detail.
(c) Good Reason . The
Executive’s employment may be terminated during the
Employment Period by the Executive for Good Reason or by the
Executive voluntarily without Good Reason. “Good
Reason” means actions taken by the Company resulting in a
material negative change in the employment relationship. For these
purposes, a “material negative change in the employment
relationship” shall include, without limitation:
(1) the assignment to the Executive
of duties materially inconsistent with the Executive’s
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 3(a), or a material diminution in such
position, authority, duties or responsibilities or a material
diminution in the budget over which the Executive retains
authority;
(2) a material diminution in the
authorities, duties or responsibilities of the person to whom the
Executive is required to report, including a requirement that the
Executive report to an officer or employee instead of reporting
directly to the Applicable Board;
(3) (i) a reduction of ten
(10) percent or greater of any element of the compensation
required to be provided to the Executive in accordance with any of
the provisions of Section 3(b)(1) through 3(b)(3); or
(ii) a material reduction of the aggregate benefits required
to be provided to the Executive under the remaining provisions of
Section 3(b) of this Agreement;
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(4) the Company’s requiring
the Executive (i) to be based at any office or location other
than as provided in Section 3(a)(1)(B) resulting in a material
increase in the Executive’s commute to and from the
Executive’s primary residence (for this purpose an increase
in the Executive’s commute by 30 miles or more shall be
deemed material) or (ii) to be based at a location other than
the principal executive offices of the Company if the Executive was
employed at such location immediately preceding the Effective
Date;
(5) any other action or inaction
that constitutes a material breach by the Company of this
Agreement; or
(6) any failure by the Company to
comply with and satisfy Section 10(c).
In order to invoke a termination for
Good Reason, the Executive shall provide written notice to the
Company of the existence of one or more of the conditions described
in clauses (1) through (5) within 90 days following the
Executive’s knowledge of the initial existence of such
condition or conditions, specifying in reasonable detail the
conditions constituting Good Reason, and the Company shall have 30
days following receipt of such written notice (the “Cure
Period”) during which it may remedy the condition. In the
event that the Company fails to remedy the condition constituting
Good Reason during the applicable Cure Period, the
Executive’s “separation from service” (within the
meaning of Section 409A of the Code) must occur, if at all,
within two years following such Cure Period in order for such
termination as a result of such condition to constitute a
termination for Good Reason. The Executive’s mental or
physical incapacity following the occurrence of an event described
above in clauses (1) through (5) shall not affect the
Executive’s ability to terminate employment for Good Reason
and the Executive’s death following delivery of a Notice of
Termination for Good Reason shall not affect the Executive’s
estate’s entitlement to severance payments benefits provided
hereunder upon a termination of employment for Good
Reason.
(d) Notice of Termination
. Any termination by the Company for Cause, or by the Executive
for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 11(b).
“Notice of Termination” means a written notice that
(1) indicates the specific termination provision in this
Agreement relied upon, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated and (3) if the Date of
Termination (as defined herein) is other than the date of receipt
of such notice, specifies the Date of Termination (which Date of
Termination shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the
Executive’s or the Company’s respective rights
hereunder.
(e) Date of Termination
. “Date of Termination” means (1) if the
Executive’s employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or such later date specified in the
Notice of Termination, as the case may be, (2) if the
Executive’s employment is terminated by the Company other
than for Cause or Disability, the date on which the Company
notifies the Executive of such termination, (3) if the
Executive resigns without Good Reason, the date on which the
Executive notifies the Company of such termination and (4) if
the Executive’s employment is terminated by reason of death
or Disability, the date of death of the Executive or the Disability
Effective Date, as the case may be.
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Section 5.
Obligations of the Company
upon Termination . (a) By the Executive for Good
Reason; By the Company Other Than for Cause, Death or
Disability . If, during the Employment Period, the Company
terminates the Executive’s employment other than for Cause,
Death or Disability or the Executive terminates employment for Good
Reason:
(1) the Company shall pay to the
Executive, in a lump sum in cash within 60 days after the Date of
Termination (subject to the Executive’s execution and
nonrevocation, within fifty-two (52) days after the Date of
Termination, of the general release attached hereto as Appendix A),
the aggregate of the following amounts:
(A) the sum of (i) the
Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (ii) the
Executive’s business expenses that are reimbursable pursuant
to Section 3(b)(5) but have not been reimbursed by the Company
as of the Date of Termination; (iii) the Executive’s
Annual Bonus for the fiscal year immediately preceding the fiscal
year in which the Date of Termination occurs, if such bonus has
been determined but not paid as of the Date of Termination;
(iv) any accrued paid time off to the extent not theretofore
paid (the sum of the amounts described in subclauses (i),
(ii
