SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.27

 

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) dated as of May 6, 2008 (the “Second Restatement Date”), by and between The Phoenix Companies, Inc., a Delaware corporation (the “Company”) and Dona D. Young (the “Executive”).

WITNESSETH

WHEREAS, prior to the Second Restatement Date the Executive served the Company and Phoenix Life Insurance Company (“PLIC”) as the Chief Executive Officer and Chairman and served on the Boards of Directors of the Company  and PLIC (collectively, the “Board”);

WHEREAS, the Company and the Executive entered into an Amended and Restated Employment Agreement as to the terms of her continuing employment dated as of May 18, 2005 (the “Restatement Date”);

WHEREAS , the Company and the Executive desire to enter into the Agreement to bring the Amended and Restated Employment Agreement into compliance with Section 409A of the Internal Revenue Code of 1986, as amended; and

WHEREAS, except as otherwise expressly provided herein, this Agreement shall supersede any prior written agreement entered into between the Executive and the Company prior to the Second Restatement Date with respect to the subject matter hereof, including, without limitation, the agreement dated January 1, 2003 and the Amended and Restated Agreement dated as of January 1, 2008.

NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.

POSITION/DUTIES .

(a)

During the Employment Term (as defined in Section 2 below), the Executive shall serve as the Chief Executive Officer and Chairman of the Company and PLIC.  In this capacity the Executive shall have such duties, authorities and responsibilities commensurate with the position of Chief Executive Officer and any other position she may then hold; in addition, the Executive shall have such other duties and responsibilities as the Board shall designate that are consistent with the Executive’s position.  The Executive shall report directly to the Board.  During the Employment Term, the Company shall use its best efforts to cause the Executive to be re-nominated by the Company to be a member of the Board as necessary so that her membership on the Board may continue uninterrupted during the Employment Term.

(b)

During the Employment Term, the Executive shall devote substantially all of her business time to the performance of her duties with the Company and its affiliates and use good faith efforts to discharge her duties.  However, so long as the following activities do not (individually or in the aggregate) materially interfere with the performance of the Executive’s

 

 

 

duties with the Company and are conducted in compliance with the Company’s Code of Conduct (as in effect from time to time), the Executive may (i) participate in charitable, civic, educational, professional, community or industry affairs or serve on the boards of directors or advisory boards of other companies; provided , however , that the Executive shall not serve as a director on more than three (3) boards of directors or advisory boards of other for-profit companies without the prior written approval of the Board, and (ii) manage her and her family’s personal investments.

2.

EMPLOYMENT TERM .  Subject to earlier termination as provided in this Section 2 or in Section 6, the Executive’s term of employment under this Agreement shall be for the period commencing on the Second Restatement Date and ending on December 31, 2008; provided, however, that , the term of this Agreement shall automatically extend for successive one-year periods without further action by either party hereto on December 31, 2008 and each anniversary thereof, unless either party shall give the other party written notice, at least 90 days prior to the date on which the term would otherwise extend pursuant to this proviso, that she or it does not want the term to so extend.  In no event, however, shall the term of Executive’s employment under this Agreement extend beyond any mandatory retirement date at or after age 65 applicable to the Executive under the Company’s policies and established in a manner consistent with applicable law (the “Mandatory Retirement Date”).  The term of this Agreement, as the same may be extended pursuant to the second preceding sentence, shall hereafter be referred to as the “Employment Term.”

3.

BASE SALARY .  The Company agrees to pay the Executive a base salary (the “Base Salary”) at an annual rate of not less than $950,000, payable in accordance with the regular payroll practices of the Company.  The Executive’s Base Salary shall be subject to annual review by the Board (or a committee thereof) and may be increased, but not decreased, from time to time by the Board.  Once increased, the Executive’s Base Salary may not be decreased below such increased amount.  No increase in Base Salary shall be used to offset or otherwise reduce any obligations of the Company to the Executive hereunder or otherwise.  The Base Salary as increased from time to time shall constitute the “Base Salary” for purposes of this Agreement.

4.

INCENTIVE COMPENSATION .

(a)

SHORT-TERM BONUS .  During the Employment Term, the Executive shall have the opportunity to earn an annual bonus under the Performance Incentive Plan (or a successor or supplemental annual bonus plan, including, without limitation, any short-term plan referenced in Section 4(f) hereof) (“PIP”), with a target amount not less than 160% of the Executive’s Base Salary, based upon the satisfaction of generally applicable financial criteria (as determined in good faith by the Board or a committee thereof after consultation with the Executive), with a higher or lower amount received for higher or lower achievement (the “PlP Bonus”).  Unless the Executive shall otherwise elect (in accordance with the requirements of applicable law, including, if applicable, Code Section 409A), any amount payable under this Section 4(a) shall be paid to the Executive hereunder not later than March 15 of the calendar year following the year in respect of which such bonus is payable.

(b)

LONG-TERM INCENTIVE COMPENSATION .  During the Employment Term, the Executive shall have the opportunity to earn long-term incentive compensation, in such form and manner as the Board, or a duly authorized committee of the Board, shall determine,

 

2

 

including in cash, Company stock or other Company equity, under the Company’s Long Term Incentive Plan (or a successor or supplemental long-term incentive compensation plan) (“LTIP”), with a target amount for the three (3) year cycle starting in such year not less than the percentage of the Executive’s Base Salary determined below, and based upon the satisfaction of generally applicable financial criteria (as determined in good faith by the Board or a committee thereof after consultation with the Executive), with a higher or lower amount received for higher or lower achievement (the “LTIP Awards”).  The percentage of Base Salary referenced in the immediately preceding sentence shall be (i) 225%, with respect to the cycle commencing in calendar year 2005, (ii) 235%, with respect to the cycle commencing in calendar year 2006, and (iii) 250%, with respect to the cycle commencing in each calendar year during the Employment Term after 2006.  Unless the Executive shall otherwise elect (in accordance with the requirements of applicable law, including, if applicable, Code Section 409A) or the LTIP Award expressly specifies another payment date, any amount payable under this Section 4(b) shall be paid to the Executive hereunder not later than March 15 of the calendar year following the year in which such LTIP Award ceased to be subject to a substantial risk of forfeiture.  For the avoidance of doubt, no portion of the awards referenced in Section 4(c) or 4(d) shall be treated as being made in respect of the Company’s obligations under this Section 4(b).

(c)

RESTRICTED STOCK UNITS .  

(i)

2003 Grant .  Notwithstanding that this Agreement supersedes the employment agreement between the Executive and the Company dated as of January 1, 2003, the terms and conditions of that agreement related to the grant to the Executive of restricted stock units (the “Initial RSUs”) as set forth in Exhibit A thereto shall continue in full force and effect, except that the distribution date referenced in Section 1.4 of such Exhibit A shall be changed to the earlier of (1) six months and one day following Executive’s “separation from service,” as such term is defined under Section 409A or (2) the Executive’s date of death, and the distribution date specified in Section 2.4 of such Exhibit A shall be the distribution date specified in such Section 1.4.

(ii)

2005 Grant .  The Executive was also granted in the Amended and Restated Employment Agreement an additional award of restricted stock units (the “Supplemental RSUs”) in respect of the greatest number of whole units (excluding fractions) equal to or less than the quotient of (x) $1,000,000 and (y) the average of the closing prices of the Company’s common stock as reported on the New York Stock Exchange Composite Tape on the 10 trading days immediately preceding the Restatement Date (the “Average Value”).  The Supplemental RSUs shall vest at the conclusion of the three (3) year period commencing on the Restatement Date, and was issued in accordance with and subject to the terms and conditions set forth in, Annex A hereto, which shall be amended to comply with Section 409A as provided in the amended Annex A hereto.

(d)

PERFORMANCE BASED RESTRICTED STOCK UNITS .  The Executive was also granted in the Amended and Restated Employment Agreement an award of performance based restricted stock units in respect of the greatest number of whole units (excluding fractions) equal to or less than the quotient of (x) $500,000 and (y) the Average Value (the “Performance Based RSUs”).  If the performance criteria established with respect to performance based

 

3

 

restricted stock unit awards granted to other employees of the Company for the long-term incentive plan 2005-07 performance period (the “2007 PSUs”) are satisfied (i) at a level that enables a payment in respect of such 2007 PSUs at or above target levels, the Performance Based RSUs shall vest in full, (ii) at threshold, one-half of the Performance Based RSUs shall vest or (iii) at a level above threshold, but below target, the number of Performance Based RSUs that shall vest shall be determined based on the actual performance achieved, using calculated pro rata between threshold and target levels (e.g., if the actual performance is mid-way between the threshold level and the target level of performance, 75% of the Performance Based RSUs shall vest).  The remaining terms and conditions of the Performance Based RSUs shall be as specified in Annex B hereto, which shall be amended to comply with Section 409A as provided in the amended Annex B hereto.

(e)

FUTURE EQUITY GRANTS .  The Board (or a duly authorized committee thereof) shall have the authority, in its sole discretion (but subject to the Company’s governing documents, the terms of any applicable plan, the rules of the New York Stock Exchange and applicable law), but no obligation, to make such additional grants or opportunities available on such terms and conditions, in such form and in such amounts as the Board (or such committee) shall determine.

5.

EMPLOYEE BENEFITS .

(a)

BENEFIT PLANS .  The Executive shall be entitled to participate in any employee benefit plan of the Company and PLIC, including, but not limited to, equity, pension, thrift, profit sharing, medical coverage, education, or other retirement or welfare benefits that the Company or PLIC has adopted or may adopt, maintain or contribute to, for the benefit of its senior executives, at a level commensurate with her position within the Company.

(b)

VACATIONS .  The Executive shall be entitled to annual paid vacation, holidays and floating days in accordance with the Company’s policy applicable to senior executives, but in no event less than the Executive’s paid vacation, holidays and floating days in effect prior to the Second Restatement Date, which vacation may be taken at such times as the Executive elects with due regard to the needs of the Company.

(c)

PERQUISITES .  The Company shall provide to the Executive, at the Company’s cost, all perquisites to which other senior executives of the Company generally are (or become) entitled, and such other perquisites as are suitable to the character of the Executive’s position with the Company and adequate for the performance of her duties hereunder, subject to such specific limits on such perquisites as may from time to time be imposed by the Board.  To the extent legally permissible, the Company shall not treat such amounts or any of the following amounts or benefits as income to the Executive.  In any event, the Executive shall be entitled to receive the following during the Employment Term:

(i)

During the Employment Term, the Executive shall receive all perquisites the Executive was entitled to receive as Chief Executive Officer of the Company immediately prior to the Second Restatement Date; provided that ( x ) any amount of any benefits to be provided during Executive’s taxable year shall not affect the benefits to be provided in any other of Executive’s taxable years; ( y ) the right to in-kind benefits shall

 

4

 

not be subject to liquidation or exchange for another benefit, and ( z ) the reimbursement of any eligible expense is made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.  

(ii)

Subject to the ability of the Company to be able to continue to insure such obligations through the purchase of policies from one or more reputable insurers, the Company shall provide Executive supplemental disability insurance benefits which are substantially the same as those provided to the Executive immediately prior to the Second Restatement Date.

(d)

BUSINESS AND ENTERTAINMENT EXPENSES .  Upon presentation of appropriate documentation, the Executive shall be reimbursed in accordance with the Company’s expense reimbursement policy for all reasonable business and entertainment expenses incurred in connection with the performance of her duties hereunder.

6.

TERMINATION .  The Executive’s employment and the Employment Term shall terminate on the first of the following to occur:

(a)

DISABILITY .  Upon 30 days’ written notice by the Company to the Executive of termination due to Disability, provided that the Executive has not returned to full-time employment within such 30-day period.  For purposes of this Agreement, “Disability” shall mean that by reason of physical or mental illness or incapacity the Executive (i) has been unable to carry out her material duties pursuant to this Agreement for 180 days or more during any 365-day period and (ii) has qualified for long-term disability and health coverage under the terms of the Company’s applicable long-term disability program.  Notwithstanding the foregoing, in the event that the Executive shall incur a separation from service from the Company (within the meaning of Code Section 409A and the regulations and other guidance promulgated thereunder) due to a mental or physical impairment earlier than the time specified in the immediately preceding sentence, then the Executive shall be deemed to have terminated employment due to Disability as of such earlier separation from service.  

(b)

DEATH .  Automatically on the date of death of the Executive.

(c)

CAUSE .  Immediately upon written notice by the Company to the Executive of a termination for Cause, provided that such notice is given within 90 days after the Chairman of the Executive Committee or the Audit Committee has actual knowledge of the Cause event.  “Cause” shall mean (i) the willful misconduct of the Executive (including, without limitation, a willful material violation of the Code of Conduct) with regard to the Company that is materially injurious to the Company (including, without limitation, material financial or reputational harm); provided , however , that no act or failure to act on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive not in good faith or without reasonable belief that her action or omission was not adverse to the best interests of the Company; (ii) the willful and continued failure of the Executive to attempt in good faith to substantially perform the Executive’s duties with the Company (other that any such failure resulting from incapacity due to physical or mental illness), which failure is not remedied within 15 business days after written notice from the Company specifying the details thereof; or (iii) the conviction of the Executive of (or the plea by the Executive of guilty or nolo contendere to) any

 

5

 

(A) felony or (B) criminal misdemeanor involving fraud, false statements or misleading omissions, embezzlement, bribery, counterfeiting, extortion or an intentional wrongful taking, other than in the case of both (A) and (B), traffic-related offenses or as a result of vicarious liability for acts in which the Executive, except when acting on advice of counsel, had no direct involvement and no actual knowledge; provided that the Executive may be suspended with full compensation and benefits as if she remained in active service during any period prior to a conviction and after an indictment for such a felony or misdemeanor; or (iv) the Executive’s disqualification or bar by any governmental or self-regulatory authority from serving as Chief Executive Officer of the Company, Chairman of the Board or member of the Board, in each case, as a result of disciplinary or similar action and after the conclusion of an appeal from a final administrative determination to a court of first impression; provided that the Executive may be suspended with full compensation and benefits as if she remained in active service during any period prior to the conclusion of such appeal and after such disqualification or bar.

Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause without (i) advance written notice, provided to the Executive not less than five business days prior to the date of termination, setting forth the Company’s intention to consider terminating the Executive, including a statement of the date of termination and the specific basis for such consideration for Cause; (ii) an opportunity for the Executive, together with her counsel, to be heard before the Board before termination and after such notice; (iii) a duly-adopted resolution of the Board, after such opportunity, stating that in accordance with the provisions of the next to last sentence of tins Section 6(d), the actions of the Executive constituted Cause and the basis thereof; and (iv) a written determination provided by the Board setting forth the acts and omissions that form the basis of such termination.  The failure to include any fact in such written determination that contributes to a showing of Cause does not preclude the Company from asserting that fact in enforcing its rights under this Agreement, provided that such fact is generally within the category (of categories (i)-(iv) enumerated in the definition of “Cause” above) specified as the basis for the Cause termination in the written determination and provided , further , in the case of assertions within category (ii) of the definition of “Cause” above, that such later assertion shall not be valid to the extent that, prior to the Cause termination, the Executive had not been given, with respect to such assertion, the required notice and right to effect a remedy.  Any determination by the Board hereunder shall be made by the affirmative vote of at least a two-thirds majority of the members of the Board (other than the Executive).  Any purported termination of employment of the Executive by the Company that does not meet all substantive and procedural requirements of this Section 6 shall be treated for all purposes under this Agreement as a termination without Cause.

(d)

WITHOUT CAUSE .  Upon written notice by the Company to the Executive of an involuntary termination without Cause, other than for death or Disability or on account of the Executive attaining her Mandatory Retirement Date.  

(e)

GOOD REASON .  Upon written notice by the Executive to the Company of a termination for Good Reason, provided that such notice is given within 90 days after the Executive has knowledge of the Good Reason event.  The failure to include any fact in such written notice that contributes to a showing of Good Reason does not preclude the Executive from asserting that fact in enforcing her rights under this Agreement, provided that such later assertion shall not be valid to the extent that, prior to the Good Reason termination, the Company

 

6

 

had not been given, with respect to such assertion, the required notice and right to correct set forth in the following sentence.  “Good Reason” shall mean, without the express written consent of the Executive, the occurrence of any of the following events unless such events are fully corrected in all material respects by the Company within 30 days following written notification by the Executive to the Company that she intends to terminate her employment hereunder for one of the reasons set forth below:

(i)

any reduction or diminution (except temporarily during any period of physical or mental illness or incapacity) of the Executive’s title as Chief Executive Officer, or a material reduction or diminution of the Executive’s then authorities, duties or responsibilities or reporting requirements with the Company;

(ii)

anyone other than the Executive is elected as the Chairman of the Board, unless service by the Executive as Chairman is prohibited by applicable law, regulation, or listing requirements;

(iii)

the assignment to the Executive of duties or responsibilities that are materially inconsistent with, and adverse to, her position;

(iv)

a material breach by the Company of any provision of this Agreement, including, but not limited to, any reduction in Base Salary and target levels with respect to the PIP Bonus (other than any reductions therein expressly permitted under Section 4(a) of this Agreement) or LTIP Awards, or any failure timely to pay any part of Executive’s compensation (including Base Salary and any bonus, if any) when due or to provide the benefits or perquisites contemplated herein;

(v)

the failure of the Company to obtain and deliver to the Executive a reasonably satisfactory written agreement from any successor to the Company to assume and agree to perform this Agreement;

(vi)

the Company giving Executive notice pursuant to Section 2 hereof that it does not want to extend the Employment Term as provided in such Section;

(vii)

the giving of a notice of non-renewal or non-extension by the Company of, or failure of the Company to elect to extend, after the agreement would otherwise expire, the change in control agreement then existing between the Company and the Executive, which event the Executive may treat as a Good Reason Event either at the time of the giving of the notice or upon the expiration of such change in control agreement; or

(viii)

the Executive’s no longer serving as a member of the Board unless (a) she resigned from the Board or (b) service by the Executive as a member of the Board is prohibited by applicable law, regulation, or listing requirements.

Suspension of the Executive with full compensation and benefits (in accordance with clause (iii) or (iv) of the definition of “Cause” set forth in the first paragraph of Section 6(c)) and

 

7

 

termination of Executive’s employment on account of her attaining her Mandatory Retirement Date shall not constitute a basis for a Good Reason termination.

(f)

WITHOUT GOOD REASON .  Upon not less than 10 days’ advance written notice by the Executive to the Company of the Executive’s voluntary termination of employment without Good Reason, provided that the Company may, in its sole discretion, elect to make such termination effective earlier than as of the date that is specified in such notice.

7.

CONSEQUENCES OF TERMINATION .

(a)

DISABILITY .  In the event the Executive’s employment is terminated as a result of Disability, the Company shall pay or provide the Executive

(i)

any unpaid Base Salary through the date of termination and any accrued but unused vacation;

(ii)

any unpaid bonus as declared or, if not then declared, as determined by the Board in good faith, with respect to any year or years ending prior to the date of termination, including the PIP Bonus and any LTIP Award for any completed performance period, which unpaid bonus shall be paid when it would otherwise be paid in such year of termination;

(iii)

reimbursement for any unreimbursed expenses (in accordance with Section 5(d)) incurred through the date of termination; and

(iv)

all other payments, benefits or fringe benefits to which the Executive may be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this Agreement, in accordance with the terms thereof (collectively, “Accrued Benefits”).  

In addition, after the Executive’s termination of employment as a result of Disability, the Executive shall receive:

(y)

a cash payment equal to the PIP Bonus for the year in which termination occurs, based on the target level payable, at such time in the following year as the PIP Bonus would otherwise have been paid to her pursuant to Section 4(a); and

(z)

full payment of any LTIP Award granted under this Agreement (or any similar award made prior to the Second Restatement Date) that is payable upon the achievement of performance criteria (other than stock price) over a pre-determined performance period, including, without limitation, the Performance Based RSUs awarded pursuant to Section 4(d) and any other performance share award (each such LTIP Award and similar previously granted award, a “Performance-Based LTIP Award”), with payment for each performance period determined as if the Executive were a participant for the full term of each of applicable performance period and paid at target levels, with payment to be made at the same time such amounts would have been paid to her pursuant to Section

 

8

 

4(b) or 4(d), whichever is applicable, had she continued to be in the Company’s employment;

provided , however , that notwithstanding subclauses (x) and (y) the excess, if any, of any PIP Bonus or Performance Based LTIP Award which is payable based on target over the amount, if any, that would have been payable based on the actual level of the PIP Bonus or Performance Based-LTIP Award that would have been earned based on performance shall not be paid prior to six months and one day following the date of the Executive’s termination of employment (or the date of Executive’s death, if earlier).  All of the Initial RSUs referenced in Section 4(c) and all of the Supplemental RSUs referenced in Section 4(d) and any other outstanding unvested equity awards (other than any Performance-Based LTIP Awards, which are addressed above) held by the Executive shall immediately vest upon the Executive’s termination as a result of Disability and shall be paid out in accordance with the terms of the applicable plan or award agreement, and all vested stock options held by the Executive shall remain exercisable for a period of two (2) years thereafter, but in no event longer than the stated term of such options (the “Post-Termination Exercise Period”).

(b)

DEATH .  In the event the Executive’s employment is terminated as a result of the Executive’s death, the Executive’s estate or legal representative shall receive the same payments and benefits as if the Executive’s employment were terminated as a result of Disability (except that she will receive death benefits instead of disability benefits).

(c)

TERMINATION FOR CAUSE, WITHOUT GOOD REASON OR ON ACCOUNT OF MANDATORY RETIREMENT .  If the Executive’s employment should be terminated ( i ) by the Company for Cause, ( ii ) by the Executive without Good Reason or ( iii ) on account of the Executive attaining her Mandatory Retirement Date, the Company shall pay to the Executive any Accrued Benefits.  

(d)

TERMINATION WITHOUT CAUSE OR FOR GOOD REASON .  If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, the Company shall pay or provide the Executive with the following payments and benefits:

(i)

the Accrued Benefits;

(ii)

subject to Section 22(b), an immediate lump sum cash payment (and in all events not later than 90 days after the date the Executive’s employment terminates) equal to two (2) times the sum of:

(A)

the Base Salary; and

(B)

the PIP Bonus, based on the greater of (1) the stated target bonus for the year of termination and (2) the average of the PIP Bonuses (or, for years prior to 2005, the management incentive bonuses) earned by the Executive in the last two full fiscal years completed prior to termination.

 

9

 

(iii)

at such time as PIP Bonuses would be payable to Executive in accordance with Section 4(a) had she continued in the Company’s employment, a pro-rata portion of the PIP Bonus the Executive would have earned for the year of her termination of employment (determined by multiplying the amount of said actual earned bonus by a fraction, the numerator of which is the number of days during the applicable year of termination that the Executive was employed by the Company and the denominator of which is 365);

(iv)

in respect of any Performance-Based LTIP Award for any performance period ending in the year of Executive’s termination of employment or any performance period beginning after December 31, 2008 and regardless of when ending, a pro-rata portion of such Performance-Based LTIP Award, equal to the product of (x) the actual bonus that would have been earned for that performance period, and (y) a fraction, the numerator of which is the number of days the Executive was employed by the Company during the applicable performance period and the denominator of which is the number of days in such performance period (the “LTIP Fraction”).  Except as expressly provided in subclause (vi) below, any pro-rated payment in respect of any Performance-Based LTIP Award, shall be payable to the Executive at such time in the year following the end of the performance period as such the Performance-Based LTIP Award would otherwise have been paid to her pursuant to Section 4(b);

(v)

in respect of each performance period beginning prior to January 1, 2009 and ending in any year after the year of Executive’s termination of employment, a pro-rata portion of such Performance-Based LTIP Award, equal to the product of (x) at least the target amount payable in respect of such Performance-Based LTIP Award and (y) the LTIP Fraction; provided, however, that the excess, if any, of any Performance Based LTIP Award which is payable based on target over the amount, if any, that would have been payable based on the actual level of the Performance Based-LTIP Award earned based on performance shall not be paid prior to six months and one day following the date of the Executive’s termination of employment (or the date of Executive’s death, if earlier);

(vi)

all of the Initial RSUs referenced in Section 4(c)(i), all of the Supplemental Units referenced in Section 4(c)(ii) and all of the Performance Based RSUs referenced in Section 4(d) shall immediately vest upon the Executive’s termination and be payable in accordance with the terms of the applicable plan or agreement and, with regard to all other equity grants (other than any Performance-Based LTIP Awards other than the Performance Based RSUs, each of which is addressed in Section 7(d)(v)), pro rata vesting of the next tranche, to be vested based upon the relative number of days employed from the prior vesting date (or grant date if no prior vesting) to the next vesting date and the Post-Termination Exercise Period and paid in accordance with the terms of the applicable plan or agreement;

(vii)

the Executive (and, to the extent applicable, the Executive’s dependents) shall be entitled, after the date of termination until the second anniversary thereof (the “ End Date ”), to continue participation in all of the employee and executive plans providing medical, dental and long-term disability benefits that the Executive participated

 

10

 

in prior to the date of termination, other than supplemental long-term disability policies, (collectively, the “ Continuing Benefit Plans ”); provided that coverage (with regard to medical and dental benefits for the period after the end of the eighteen (18)-month period following the date of termination) shall be deemed to be monthly, in-kind payments of the premiums and will be taxable income to the Executive; and provided further that the participation by the Executive (and, to the extent applicable, the Executive’s dependents) in any Continuing Benefit Plan shall cease on the date, if any, prior to the End Date on which the Executive becomes eligible for benefits under a similar plan, policy or program of a subsequent employer.  To the extent the plan is a “self-insured medical reimbursement plan” under Section 105(h) of the Code and such coverage would be discriminatory thereunder, the premiums (both during and after the eighteen (18)-month period) shall be treated as taxable income to the Executive and the Executive shall be grossed-up therefor on a monthly basis at the same time as the premium is deemed paid, such that the Executive shall have no after-tax cost therefor or for the gross-up; provided further that any gross-up that would be paid within the Delay Period (as defined in Section 22 hereof) shall not be paid during such period, but shall be paid immediately thereafter;

(viii)

subject to Section 22(b), an amount equal to the lump sum value (based on the actuarial assumptions used under the respective plan) of two years of additional service and age credit for pension purposes under any qualified or nonqualified defined benefit type pension plan or arrangement of the Company (with the Base Salary used as the salary component of “final average earnings” for purposes of this calculation), which payments shall be made at the same time as the payment described in subclause (ii) above;

(ix)

subject to Section 22(b), an amount equal to two (2) years of the maximum Company matching contribution (assuming the Executive deferred the maximum amount and continued to earn her then current Base Salary) under any type of qualified or nonqualified deferred compensation plan sponsored by the Company, which amount shall be paid at the same time as the payment described in subclause (ii) above;

(x)

notwithstanding the terms and conditions of any such plan, program or arrangement, if at the time of her termination of employment the Executive shall not have attained the age generally required to be treated as a retiree (it being recognized that her service to date is sufficient to meet any service condition to such status and that it is expected she would attain such age were her employment to continue for the initial term of this Agreement), the Executive shall be deemed to have met any and all conditions to qualify for all rights and benefits available as a retiree under any such plan, program or arrangement (other than any plan qualified under Section 401(a) of the Code), and shall be treated as having met the conditions to qualify for retirement for all purposes under each such plan, program or arrangement (other than any plan qualified under Section 401(a) of the Code).  Subject to Section 22(b), the benefits that the Executive would have been able to receive from the Company’s Section 401(a) plan had she qualified to retire at the date of her termination will be paid to Executive on a non-qualified basis from the Company’s general assets until such time as Executive is eligible to receive such benefits from the Section 401(a) plan.  If the Executive is eligible for retiree status under the

 

11

 

Company’s medical reimbursement plan by reason of this Section 7(d)(ix) (and not otherwise) and if it is self-insured, the Company shall, instead of providing coverage for the Executive thereunder for any period after the Executive’s right to continued coverage under COBRA expires, purchase for the benefit of Executive an insurance policy that provides the Executive with medical benefits coverage as close as reasonably available from a reputable provider the coverage to which she would have been provided to her under the Company’s self-insured plan; and

(xi)

outplacement services at a level commensurate with the Executive’s position for up to two (2) years after such termination of employment.  For a period of six (6) months after the Executive’s termination, the Company shall make available to the Executive office space and secretarial support at a level commensurate with the Executive’s position.  The Executive shall pay to the Company the cost of such space and support on a monthly basis.  The Company, at the end of the six month period shall promptly reimburse the Executive for the amounts so paid.

(e)

RETIREMENT .  To the extent the Executive qualifies to be treated as a “retiree” under any plan, program, grant or agreement (or to the extent that the Executive is afforded such status under Section 7(d)(ix)), the Executive shall have the benefit of said classification with regard to a benefit to the extent that it is more favorable to the Executive than the provisions otherwise provided herein.  

8.

RELEASE .  Any and all payments made and benefits provided under this Agreement to the Executive upon termination of employment, including but not limited to, those referenced in Section 7, shall be contingent upon the full execution of a general release of all claims by the Executive against the Company and its affiliates in the form attached hereto as Annex C within sixty (60) days following such termination of employment, provided that the payment of the Accrued Benefits shall not be contingent on the execution of such re