Exhibit 10(2)
October 23, 1996
HAND DELIVERY
Re: Stock Appreciation Rights
name
The Company hereby confirms the grant to you, effective as of August 15, 1996
(the "Grant Date"), of stock appreciation rights (the "SARs") with respect to
______ shares of the Company's Common Stock ("Common Stock") at a base price of
$34.875 per share (the "Base Price") under the Protective Life Corporation 1996
Stock Incentive Plan (the "Plan"). The Stock Appreciation Rights are subject to
certain restrictions and conditions as set forth in the Plan and as imposed by
the Compensation and Management Succession Committee (the "Committee"). The
following are highlights of certain conditions of the Plan. For complete
details, you should consult the attached copy of the Plan.
1. Exercisability. Except as otherwise provided in the Plan, the SARs shall
become exercisable, subject to the provisions of the Plan, on the fifth
anniversary of the Grant Date. The SARs shall also become exercisable upon a
change of control as set forth in Section 9 of the Plan. Unless an earlier
termination is specified in Section 7 of the Plan, the SARs shall terminate on
the tenth anniversary of the Grant Date (the "Normal Expiration Date").
2. Method of Exercise and Form of Payment. You may exercise any portion of the
SARs that has become exercisable by written notice of exercise to the Chief
Accounting Officer of the Company. As soon as practicable after receipt of a
written exercise notice of any exercisable SARs, the Company shall deliver to
you a certificate or certificates representing the shares of Common Stock
acquired upon the exercise thereof. The number of shares of Common Stock to be
distributed shall be as set forth in Section 6.4 of the Plan.
3. Limitations on and Deferral of Payment. (a) The Committee may defer all or
any portion of any distribution of Common Stock to be made under the Plan to the
extent such distribution, when added to all other payments to be made to a
Participant in a calendar year, would not be deductible compensation paid by the
Company for federal income tax purposes within the meaning of Sec tion 162
(including Section 162(m)) of the Internal Revenue Code of 1986, as amended (the
"Code"). In the event that a distribution or distributions of Common Stock to a
Participant is deferred, the Company will establish for each Participant a
book-entry account (the "Account") representing all such deferred awards.
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(b) Dividends on Deferred Awards. In the event that dividends are paid
by the Company during the deferral period, each Participant's Account shall be
credited with the amount of any dividends which would otherwise have been
payable to such Participant if the number of shares represented by such Account
had been owned directly, and such amount shall be deemed to be reinvested in
additional shares of Stock.
4. Termination of Employment. (a) Death, Disability or Retirement. In the
event your employment with the Company terminates due to death, disability or
retirement, then 100% of the SARs shall be exercisable as of the date of such
termination, and such SARs may be exercised by you or your beneficiary as
designated in accordance with Section 11.2 of the Plan, at any time on or before
the earlier to occur of (i) the Normal Expiration Date or (ii) the day before
the third anniversary of your termination of employment.
(b) Other Termination. In the event your employment with the Company
terminates for any reason other than your death, disability or retirement, then
all unexercised SARs (whether or not then exercisable) shall terminate and be
canceled immediately upon such termination of employment.
5. Forfeiture and Pay-Back of SAR Amount. (a) If within one year after the
exercise of all or a portion of the SARs awarded under the Plan, you voluntarily
terminate your employment with the Company and you become employed by a
competitor of the Company in the financial services industry (which includes,
but is not limited to, working in the insurance, mutual fund, broker-dealer,
financial institution or investment company industries), you agree to pay the
Company within 30 days of commencing such employment an amount, in cash or the
equivalent value in shares of Common Stock, equal to the aggregate of all SAR
amounts attributable to SARs exercised within the one year period prior to the
date of such termination.
(b) If, after your termination of employment, the Committee determines
that, either during or after your employment by the Company or one of its
Subsidiaries, you engaged in conduct that (i) would have permitted the Company
or any of its Subsidiaries to terminate your employment for Cause had you still
been employed or (ii) otherwise results in damage to the business or reputation
of the Company or any of its Subsidiaries, all of the SARs that are still
outstanding at the time of such determination shall immediately terminate and be
canceled immediately upon such determination by the Committee. Upon such a
determination by the Committee, the Company may disregard any attempted exercise
of the SARs by notice delivered prior to such determination, if, at such time,
the Company had not completed the steps necessary to effect such exercise.
6. Nontransferability of Awards. No SARs may be sold, transferred, pledged,
assigned, encumbered, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution.
7. Beneficiary Designation. Benefits remaining unpaid at your death shall be
paid to or exercised by your surviving spouse, if any, or otherwise to your
estate. If you desire to name another beneficiary, you may name any beneficiary
or beneficiaries (who may be named contingently or successively) by whom any
right under the Plan is to be exercised in case of your death by submitting a
form reasonably acceptable to the Company. This designation will be effective
only when filed in writing, with the Chief Accounting Officer of the Company,
during your lifetime. Such designation will revoke all prior designations.
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8. Tax Withholding. Whenever Common Stock is to be issued pursuant to the
exercise of a SAR, the Company shall have the power to withhold, or require you
to remit, an amount sufficient to satisfy Federal, state, and local withholding
tax requirements relating to such transaction, and the Company may defer the
issuance of Common Stock until such requirements are satisfied. The Committee
may permit you to elect, subject to such conditions as the Committee shall
impose, to have shares of Common Stock otherwise issuable upon the exercise of a
SAR withheld to satisfy all or part of your estimated total Federal, state, and
local tax obligation associated with the transaction.
9. Accelerated Vesting and Payment. Unless the Committee shall otherwise
determine in the manner set forth in Section 9.2 of the Plan, in the event of a
Change in Control, each Stock Appreciation Right (regardless of whether such
SARs are at such time otherwise exercisable) shall be canceled in exchange for a
payment in cash of an amount equal to the excess, if any, of the Change in
Control Price over the Base Price for such Stock Appreciation Right.
10. No Guarantee of Employment. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any of its Subsidiaries to
terminate your employment at any time, or confer upon you any right to continue
in the employ of the Company or any Subsidiary.
11. Amendments. The Committee shall have the right, in its sole discretion, to
amend the Plan, from time to time, provided that no such amendment shall impair
your rights under the Plan without your consent. Subject to the preceding
sentence, any alteration or amendment of the Plan by the Committee shall, upon
adoption thereof by the Committee, become and be binding and conclusive on all
persons affected thereby without requirement for consent or other action with
respect thereto by any such person. The Company shall give written notice to you
of any such alteration or amendment of the Plan as promptly as practicable after
the adoption thereof. The Plan may also be amended in a written document signed
by both you and the Company.
12. Interpretation; Construction. Any determination or interpretation by
the Committee under or pursuant to the Plan shall be final and conclusive on all
persons affected hereby
Please sign below indicating that you have received this letter and a copy of
the Plan. Upon signing, please send a signed copy of this memo to Xxxxx XxXxxx.
COMPENSATION AND MANAGEMENT
SUCCESSION COMMITTEE
Xxxx X. XxXxxxx, Xx., Chairman
By signing below, I hereby acknowledge that I have reviewed the Company's 1996
Stock Incentive Plan. I understand that the terms of such Plan reflect the terms
and conditions under which the award was granted. Further, I understand and
agree to be bound by all of the Plan's terms, including Section 8 concerning the
Forfeiture and Pay-Back of SARs.
By:
Signature:
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