Exhibit 10(e)(5)
AMENDED AND
RESTATED
EMPLOYMENT CONTINUATION
AGREEMENT
WITH KEY
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 Andrew S. Martin (“Officer”).
W I T N
E S S E
T H :
WHEREAS, the Company has determined
that Officer 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 Officer, to the
detriment of the Company and its shareholders;
WHEREAS, the Company desires to
assure itself of Officer’s services during the period in
which it is confronting such a situation, and to provide Officer
with certain financial assurances to enable Officer to perform his
or her responsibilities without undue distraction and without bias
due to Officer’s personal circumstances; and
WHEREAS, to achieve these
objectives, the Company and Officer have previously entered into an
Employment Continuation Agreement (the “Prior
Agreement”) which provided the Company and Officer 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
Officer 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
Officer’s employment with the Company is terminated before
the date on which the Change of Control occurs, and if it is
reasonably demonstrated by Officer 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
Officer 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 Officer in its employ, and Officer
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, Officer’s
position (including titles), authority and responsibilities shall
be at least commensurate with those held, exercised and assigned
immediately before the Effective Date. Officer’s
services shall be performed at the location where Officer was
employed immediately before the Effective Date.
(b)
Business Time
. From and after the Effective
Date, Officer agrees to devote Officer’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 Officer to the extent necessary to
discharge such responsibilities, except for periods of vacation,
sick leave and other leave to which Officer is entitled.
Officer’s continuing to serve on any boards and committees on
which Officer is serving or with which Officer is otherwise
associated immediately before the Effective Date shall not be
deemed to interfere with the performance of Officer’s
services for the Company.
5.
Compensation
. (a) Base Salary
. During the Employment Period, Officer shall receive a base
salary at a monthly rate at least equal to the monthly base salary
paid to Officer 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. Officer’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 in Base Salary after the Effective Date shall limit or
reduce any other obligation of the Company hereunder.
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(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, Officer 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 Officer 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 Officer as a target bonus
under any bonus program in which Officer 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 Officer than those applicable
to Officer 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 Officer pursuant to any deferral
programs or arrangements that the Company may make available to
Officer.
(c)
Benefit Plans
. During the Employment
Period, Officer (and, to the extent applicable, Officer’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
Officer’s participation in such plans immediately before the
Effective Date or, if more favorable to Officer, at the level made
available to Officer or other similarly situated employees at any
time thereafter. Officer shall also be entitled to receive
such perquisites as were generally provided to Officer in
accordance with the Company’s policies and practices
immediately before the Effective Date.
(d)
Expenses . During the Employment Period, Officer
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Officer 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 Officer, if such policies and procedures are more
favorable to Officer than those in effect immediately before the
Effective Date.
(e)
Indemnification
. During and after the
Employment Period, the Company shall indemnify Officer and hold
Officer harmless from and against any claim, loss or cause of
action arising from or out of or related in any way to
Officer’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 Officer 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 Officer
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 . Officer’s
employment shall automatically terminate upon Officer’s death
or termination of employment due to Disability (as defined below)
during the Employment Period. For purposes of this Agreement,
“Disability” shall mean Officer’s inability to
perform the duties of Officer’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.
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(b)
Voluntary Termination
. Anything in this Agreement
to the contrary notwithstanding, Officer 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 Officer 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
Officer’s employment for Cause. For purposes of this
Agreement, “Cause” shall mean (i) Officer’s
conviction or plea of nolo contendere to a felony;
(ii) an act or acts of extreme dishonesty or gross misconduct
on Officer’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 Officer of
Officer’s obligations under Section 4, which violations
are demonstrably willful and deliberate on Officer’s part and
which result in material damage to the Company’s business or
reputation.
(d)
Good Reason
. Officer 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 Officer, after
the Effective Date:
(i) (A) the
assignment to Officer of any duties inconsistent in any material
adverse respect with Officer’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
Officer;
(iii) the Company’s
requiring Officer to be based at any office or location more than
20 miles from that location at which Officer performed services
specified under the provisions of Section 4 immediately before
the Change of Control, except for travel reasonably required in the
performance of Officer’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
Officer, be deemed to constitute Good Reason.
(e)
Notice of Termination
. Any termination of
Officer’s employment by the Company for Cause or by Officer
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 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 Officer’s having actual
knowledge of the events giving rise to such
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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 Officer’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 Officer 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 Officer hereunder or preclude Officer from asserting such fact
or circumstance in enforcing Officer’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
Officer’s employment terminates during the Employment
Period.
7.
Obligations of the Company upon
Termination .
(a) Death or Disability . If Officer’s
employment is terminated during the Employment Period by reason of
Officer’s death or Disability, this Agreement shall terminate
without further obligations to Officer or Officer’s legal
representatives under this Agreement other than those obligations
accrued hereunder at the Date of Termination, and the Company shall
pay to Officer (or Officer’s beneficiary or estate)
(i) Officer’s full Base Salary through the Date of
Termination (the “Earned Salary”), (ii) any vested
amounts or benefits owing to Officer under the Company’s
otherwise applicable employee benefit plans and programs, including
any compensation previously deferred by Officer (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 Officer’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, Officer’s employment is
terminated for Cause or voluntarily terminated by Officer (other
than on account of Good Reason following a Change of Control) in
accordance with Section 6(b), the Company shall pay Officer
(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.
(c)
Termination by the Company other
than for Cause and Good Reason Termination by Officer
.
(i)
Lump Sum Payments
. If either (a) the
Company terminates Officer’s employment other than for Cause
during the Employment Period or (b) Officer
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terminates employment for Good
Reason at any time during the Employment Period, then the Company
shall pay to Officer the following amounts:
(A) Officer’s Earned
Salary;
(B) a cash amount (the
“Severance Amount”) equal to the sum of:
(1)
Officer’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 Officer (including any amounts the receipt of which
Officer elected to defer) with respect to the three fiscal years of
the Company (or, if fewer, the number of such fiscal years in which
Officer was an employee of the Company or its affiliates)
immediately before the Change in Control (including, for this
purpose, any AIP Payout (
