November 14, 2006
Melinda Urion
2759 NW 161 st
Street
Clive, Iowa 50325
Re: Separation and Release
Agreement
Dear Melinda:
This is written in light of
the indication by Aviva PLC ("Aviva") that it desires and intends
to use its own Chief Financial Officer to conduct the business of
AmerUs Group Co. (“AmerUs”) subsequent to its
acquisition of AmerUs (the "Closing" of the "Merger" pursuant to
the "Merger Agreement"). Consequently, this will confirm our
understanding and agreement (“Agreement”) with respect
to the following:
(i) terms and
conditions primarily associated with your continued employment by
AmerUs during the transition period described below and with the
termination of your employment as Executive Vice President and
Chief Financial Officer of AmerUs (the " Employment
Provisions");
(ii) provisions
amending your Supplemental Benefit Agreement entered into with
AmerUs effective February 3, 2003 (the "Supplemental Benefit
Agreement Provisions");
(iii) the
restrictive covenant provisions (the "Covenant Provisions");
and
(iv) your waiver
and release of AmerUs and Aviva (the "Waiver
Provisions").
All provisions of this
Agreement shall become effective and enforceable when this
Agreement has been completely executed and delivered and the
revocation period described in Paragraph 16 hereof has
passed.
A "Qualifying Termination"
hereunder shall occur only when (i) your employment is terminated
by AmerUs without "Cause" (as defined in Paragraph 1(k) below) and
(ii) prior to such termination, you have continued to devote your
full-time attention, best efforts and cooperation in furthering the
business and interests of AmerUs. The date of any termination of
your employment (whether or not a Qualifying Termination) is called
the "Last Date of Employment". It is agreed that, if you have not
previously resigned, been terminated without Cause after the
Closing or been terminated for Cause, AmerUs shall terminate your
employment without Cause on December 15, 2006; provided, however,
that, if the Closing shall not have occurred before December 15,
2006 and the Merger Agreement shall not have been terminated before
December 15, 2006, AmerUs shall terminate your employment without
Cause immediately af ter the Closing. If the Merger Agreement shall
be terminated, this Agreement shall immediately become null and
void ab initio .
Employment
Provisions
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1.
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The following Employment
Provisions are agreed in consideration of the mutual promises and
assurances made herein:
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a.
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Base Compensation and
MIP – In return for your
full-time attention, best efforts and cooperation in furthering the
business and interests of AmerUs from the date of this Agreement
through your Last Date of Employment, you shall be paid (i) your
regular base compensation ($400,000 annualized) and (ii) a 2006 MIP
bonus of not less than $200,000. Your base compensation shall
continue to be paid bi-monthly consistent with the current payroll
practices of AmerUs. Your 2006 MIP bonus shall be paid in February
2007, provided that your employment shall not have terminated prior
to December 15, 2006 in other than a Qualifying Termination and
provided that there shall be no duplication of any MIP-related
amount paid to you pursuant to MIP amendments made in accordance
with the Merger Agreement. All such payments shall be subject t o
regular withholding and deductions.
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b.
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All*AmerUs Savings &
Retirement Plan – Your active
participation in the 401(k) Savings and Retirement Plan shall end
on your Last Date of Employment. You currently are vested in the
salary deferral and employer matching contributions. In accordance
with the Merger Agreement, AmerUs will amend the Plan prior to the
Closing to provide that the account of any plan participant
involuntarily terminated without cause during the 24-month period
following the Closing shall be fully vested. You acknowledge that
if you resign or are terminated for "cause" (as defined in the
Plan) prior to your normal vesting date of March 1, 2007, the 4%
core contribution shall be forfeited.
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c.
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Supplemental Executive
Retirement Plan (SERP ) – Your participation
in the SERP shall end on your Last Date of Employment. You
currently are vested in the salary deferral and employer matching
contributions. As of March 1, 2007, or, if earlier, upon a
Qualifying Termination, you also will be vested in the 4% core
contribution. If you resign or are terminated for Cause prior to
March 1, 2007, the 4% core contribution shall be forfeited. It is
understood that you have received a SERP statement indicating that
you are vested in the 4% core contribution, but the statement was
in error. However, as indicated in the third sentence of this
paragraph, upon a Qualifying Termination you will be vested in the
4% core contribution.
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d.
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Long-Term Incentive Plan
(LTIP) – You have earned 3,000
performance shares related to the book value per share (BVPS)
component of the 2004 LTIP award. To the extent, if any, payment
has not previously been made in connection with the Merger, this
payment shall be made in February 2007, provided that your
employment shall not have terminated prior to December 15, 2006 in
other than a Qualifying Termination, and shall be based on the
AmerUs stock price on the payment date, if AmerUs stock shall be
publicly traded on such date, or, if not, shall be based on the
"Merger Consideration" (as defined in the Merger Agreement). You
will receive payments with respect to your 2005 and 2006 LTIP
awards in accordance with the Merger Agreement.
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e.
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MIP Deferral Plan
– Your
participation in the MIP Deferral Plan ends on your Last Date of
Employment. Following a Qualifying Termination, to the extent, if
any, payment has not previously been made in connection with the
Merger, you shall receive the shares purchased with your 2004 MIP
deferral and a pro-rated portion of the employer match less
applicable taxes. This distribution will be based on the closing
price of AmerUs stock on your Last Date of Employment, if AmerUs
stock shall be publicly traded on such date, or, if not, shall be
based on the Merger Consideration.
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Because you are a
"key officer" of the organization, the distribution of your 2005
and 2006 MIP deferrals in this non-qualified plan is subject to the
restrictions imposed under Section 409A of the Internal
Revenue Code and regulations and rulings issued thereunder. As a
result, to the extent, if any, that payment has not previously been
made in connection with the Merger, the distribution of shares
purchased with your 2005 and 2006 MIP deferrals and the pro-rated
employer match on these deferrals may be suspended for six months
from your Last Date of Employment. This distribution will be based
on the closing AmerUs stock price on your Last Date of Employment,
if AmerUs stock shall be publicly traded on such date, or, if not,
shall be based on the Merger Consideration.
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f.
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Vacation Pay
– You shall
be paid an amount with respect to any accrued and unused vacation
due you in the month following your Last Date of Employment in
accordance with AmerUs policies and practices. You shall not be
entitled to carry over more than eighty (80) hours from 2006 into
2007.
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g.
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Other Benefits
– Any
additional benefits you receive (including, without limitation, car
allowance, tax preparation service, professional license
reimbursement, matching gift participation, Mayo Executive Health
Program, premium discounts for any
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individual life or
annuity policies) shall end on your Last Date of Employment, except
as, and unless, continued pursuant to your Supplemental Benefit
Agreement.
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h.
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409A Indemnity
. AmerUs agrees
that it will timely amend and operate any and all of its
non-qualified deferred compensation plans and arrangements in which
you participate to comply with the requirements of Section 409A of
the Internal Revenue Code, or an applicable exception to such
requirements, and that it will indemnify you, on a fully
tax-adjusted basis, for any additional income taxes, penalties,
interests, and related expenses resulting from any failure of
AmerUs to so timely amend and operate such plans and
arrangements.
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i.
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Change in Location
. You understand
and agree that, subject to the sole discretion of the Chief
Executive Officer or the Board of Directors of AmerUs, you may be
relieved of certain or all of your current duties between the time
this Agreement is executed and your Last Date of Employment, or you
may be asked to perform your duties from a mutually agreed-upon
location, other than AmerUs. In such event, you shall be obliged to
continue to use your best efforts to cooperate with the transition
process associated with your departure in a manner that furthers
the business and interests of AmerUs.
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j.
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Rights to Vested
Benefits . You will retain all rights
to vested benefits, if any, under any AmerUs retirement plans in
accordance with the terms of those plans.
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k.
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Termination for
Cause . You agree that your
employment and AmerUs’ obligations hereunder may be
terminated for Cause. In the event of such termination for Cause,
you shall receive only base salary payments through the date of
such termination. You agree in the event of a termination for Cause
you shall not be entitled to any other benefits under this
Agreement or the Supplemental Benefit Agreement and that any rights
and benefits you may have under the employee benefit plans and
programs of AmerUs, in which you are a participant, shall be
determined in accordance with the terms and provisions of those
plans given the circumstances surrounding your termination. You
understand and agree in the event of your termination for Cause
your obligations under Paragraphs 4-11 hereof remain in effect. For
purposes of this Agreement, "Cause" is defined as personal
dishonesty related to your employment with AmerUs, gross negligence
related to your employment with AmerUs, willful misconduct related
to your employment with AmerUs, breach of fiduciary duty related to
your employment with AmerUs involving personal profit,
intentional
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failure to perform
stated duties, or your conviction of any felony or misdemeanor
involving dishonesty or moral turpitude, which, in each case, has
not been cured by you within 30 days after a written notice is
delivered to you by AmerUs, which specifically identifies the
circumstances which constitute Cause.
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l.
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Performance Bonus
. Upon a
Qualifying Termination, you shall be entitled to receive a bonus of
not more than $50,000, the exact amount to be determined by the
Chief Executive Officer of AmerUs, based on your performance
through your Last Date of Employment.
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m.
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Initial Separation
Payment . When this Agreement has been
completely executed and delivered and the revocation period
described in Paragraph 16 hereof has passed, you shall become
entitled to receive a payment in the amount of $25,000, which shall
become payable at the end of your Last Day of Employment (the
"Initial Separation Payment").
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n.
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Final Separation
Agreement . A form of Final Separation
Agreement is attached hereto as Exhibit A. You will be asked to
execute a Final Separation Agreement substantially in the form
attached hereto on or after your Last Day of Employment; however,
the provisions of this Agreement are not contingent upon your
execution of the Final Separation Agreement.
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o.
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409A Effect on Certain
Payments . Notwithstanding any
provision to the contrary in this Agreement (and as briefly
discussed with respect to MIP deferral payments in Paragraph 1(e)),
if you are deemed on the Last Date of Employment to be a "specified
employee" within the meaning of that term under Code Section
409A(a)(2)(B), then, with regard to any payment or the provision of
any benefit that is required to be delayed in compliance with
Section 409A(a)(2)(B), such payment or benefit shall not be made or
provided (subject to the last sentence of this paragraph) prior to
the earlier of (i) the expiration of the six (6)-month period
measured from the date of your "separation from service" (as such
term is defined in Treasury Regulations issued under Code Section
409A) or (ii) the date of your death (the "Deferral Period"). Upon
the expiration of the Deferral Period, all payments and benefits
deferred pursuant to this paragraph (whether they would have
otherwise been payable in a single sum or in installments in the
absence of such deferral) shall be paid or reimbursed to you in a
lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. Notwithstanding the
foregoing, to the extent that the foregoing applies to the
provision of any ongoing welfare benefits to you that would not
be
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required to be
delayed if the premiums therefore were paid by you, you shall pay
the full cost of premiums for such welfare benefits during the
Deferral Period and the Employer shall pay you an amount equal to
the amount of such premiums paid by you during the Deferral Period
promptly after its conclusion.
Supplemental Benefit
Agreement Provisions
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2.
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The parties agree that your
Supplemental Be
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