Exhibit 10.15
CHANGE IN CONTROL
AGREEMENT
This CHANGE IN CONTROL AGREEMENT
(this “Agreement”) dated as of
, 2008, is entered into by and among Horace Mann Educators
Corporation, a Delaware corporation (“HMEC” or the
“Parent Company”), Horace Mann Service Corporation, an
Illinois corporation (the “Employer Company” and,
together with HMEC, the “Company”), and
(the “Executive”).
WHEREAS , the Company considers the maintenance of a
sound and vital senior management to be essential to protecting and
enhancing the interests of the Parent Company and its subsidiaries,
including the Employer Company, hereinafter collectively referred
to as the “Group;”
WHEREAS, the Company recognizes that, as is the case with
many publicly owned corporations, the possibility of a change in
control of the Group may arise and that such possibility, and the
uncertainty and questions that it may raise among senior
management, may result in the departure or distraction of senior
management personnel to the detriment of the Group;
WHEREAS, accordingly the Company has determined that
appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the
Company’s senior management to their assigned duties and
long-range responsibilities without distraction in circumstances
arising from the possibility of a change in control of the
Group;
WHEREAS, the Company believes it important and in the
best interests of the Group, should the Group face the possibility
of a change in control, that the senior management of the Company
be able to assess and advise the Board of Directors of the Company
(the “Board”) whether such a proposed change in control
would be in the best interests of the Group and to take such other
action regarding such a proposal as the Board might determine to be
appropriate, without senior management being influenced by the
uncertainties of their own employment situations;
WHEREAS, the Executive is an employee of the Company;
and
WHEREAS, in order to induce the Executive to remain in
the employ of the Company in the event of any actual or threatened
change in control of the Group, the Company has determined to set
forth the severance benefits that the Company will provide to the
Executive under the circumstances set forth below.
NOW THEREFORE,
in consideration of the foregoing
recitals, and the mutual covenants and agreements contained in this
Agreement and for other good and valuable consideration, the
parties hereto agree as follows:
1. Definitions.
Terms not otherwise defined in this
Agreement shall have the meanings set forth in this section
1.
(a) Base Year.
The “Base Year” shall be
the twelve (12) month period immediately
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preceding a Change in
Control.
(b) Cash Compensation.
“Cash Compensation”
shall mean the sum of (i) the Executive’s annual base
salary for the year in which the Date of Termination occurs and
(ii) an amount equal to the average of the annual cash bonus
paid to the Executive under the Horace Mann Incentive Compensation
Program (or such similar program as may replace the Incentive
Compensation Program) in the three (3) fiscal years (or such
fewer year) as the Executive may have been employed by the Company
immediately preceding the year in which the Date of Termination
occurs.
(c) Cause.
“Cause” shall mean
serious, willful misconduct by the Executive such as, for example,
the commission by the Executive of a Felony arising from specific
conduct of the Executive that reasonably relates to his or her
qualification or ability (personal or professional) to perform his
or her duties to the Group or a perpetration by the Executive of a
common law Fraud against the Group. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated 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 two-thirds of the entire membership of the Board at a
meeting of the Board called and held for the purpose of considering
his or her termination for Cause (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board). The
resolution of the Board shall contain a finding that in the good
faith opinion of the Board the Executive was guilty of conduct
constitutes “Cause” as defined above and specifying the
particulars thereof in detail. Notwithstanding the foregoing, the
Executive shall have the right to contest his or her termination
for Cause.
(d) Change in Control.
A “Change in Control”
shall mean the first to occur of any of the following
events:
(i) the consummation of any merger,
consolidation or reorganization or sale or other disposition of all
or substantially all of the assets of HMEC (a “Business
Combination”), in each case, unless, immediately following
such Business Combination, all or substantially all of the
individuals and entities that were the beneficial owners of
outstanding voting securities of HMEC immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the company resulting from such Business Combination
(including, without limitation, a company that, as a result or such
transaction, owns HMEC or all or substantially all of HMEC’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 voting
securities of HMEC;
(ii) the approval by the
shareholders of HMEC of any plan or proposal for the complete
liquidation or dissolution of HMEC;
(iii) any “Person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)),
excluding for this purpose (x) HMEC or any subsidiary of HMEC,
and (y) any employee benefit plan of HMEC or any subsidiary of
HMEC, or any person or entity organized, appointed or established
by the
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Company for or pursuant to the terms
of any such plan that acquires beneficial ownership of voting
securities of HMEC, is or becomes, directly or indirectly, the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), of securities of HMEC that represent more than 50%
of the combined voting power of HMEC’s then outstanding
securities; provided, however, that no Change in Control shall be
deemed to have occurred as a result of a change in ownership
percentage resulting solely from an acquisition of securities by
the Company; or
(iv) the persons who constitute the
Board as of the date hereof (the “Incumbent Directors”)
cease for any reason, including, without limitation, as a result of
a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority thereof; provided, however, that any
person becoming a member of the Board subsequent to the date hereof
shall be considered an Incumbent Director if such person’s
election or nomination for election was approved by a vote of at
least 50% of the members of the Board who were Incumbent Directors
at the date of such election giving effect to the provisions of
this clause; provided, further, that any such person whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of members of the Board
or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board, including by
reason of agreement intended to avoid or settle any such actual or
threatened contest or solicitation, shall not be considered an
Incumbent Director.
(e) Constructive Termination.
“Constructive Termination” shall mean any of the
following events:
(i) any material diminution in the
Executive’s duties or responsibilities to the
Group;
(ii) any required relocation of the
Executive from his or her present work site to another site more
than fifty (50) miles from the present work site;
(iii) a diminution in the
Executive’s annual base salary of more than ten percent
(10%) below the Executive’s salary for the Base Year;
or
(iv) a material diminution in the
Executive’s potential annual cash bonus opportunity under the
Horace Mann Incentive Compensation Program (or such similar program
as may replace the Incentive Compensation Program).
Notwithstanding the preceding, a
Constructive Termination shall not be deemed to have occurred until
and unless the Executive provides written notice to the Company
within ninety (90) days after the initial existence of one of
the above conditions and the Company is provided thirty
(30) days to remedy the condition and fails to do
so.
(f) Date of Termination.
“Date of Termination” shall mean the effective date of
the Notice of Termination which results (on such effective date) in
the Executive’s separation from service (as that term is
defined in Section 409A of the Internal Revenue Code of 1986,
as amended, and guidance issued hereunder).
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2. Termination Following Change in
Control.
(a) Termination of Employment
. If a Change in Control shall have occurred while the Executive is
still an employee of the Company, the Executive shall be entitled
to the compensation provided in Section 3 if, within two
(2) years after the Change in Control, the Executive’s
employment is terminated by (i) the Company without Cause or
(ii) the Executive due to Constructive Termination.
(b) Notice of Termination.
Any purported termination of the Executive’s employment by
the Company or the Executive shall be communicated by a Notice of
Termination to the other party in accordance with Section 10.
The Notice of Termination shall set forth in reasonable detail the
reasons for termination and, if termination is for Cause, the facts
and circumstances claimed to provide a basis for termination of the
Executive’s employment and, in the case of a Constructive
Termination, the information specified in
Section 10.
3. Severance Compensation upon
Termination of Employment. If the Executive becomes entitled to
compensation pursuant to Section 2(a), then the Company
shall:
(a)
