EXHIBIT 10.19
AGREEMENT
This Agreement dated as of November 1, 1999 is by and between UnumProvident
Corporation, a Delaware corporation and its predecessors (the "Company"), and
Xxxxx X. Xxx III (the "Executive").
WHEREAS, the Company (as successor-in-interest to Unum Corporation and
Provident Companies, Inc.) and the Executive have previously executed an amended
and restated Employment Agreement dated as of May 25, 1999 (the "Employment
Agreement") providing for the compensation, benefits and terms and conditions of
the Executive's employment with the Company; and
WHEREAS, it has been mutually agreed that Executive's employment with the
Company will cease on November 1, 1999, and the Executive and the Company agree
that such termination shall be treated as a termination pursuant to Section 5(a)
of the Employment Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1 The terms of the Employment Agreement shall be followed in all respects,
except as such terms are modified herein. Capitalized terms not defined
herein shall have the meanings ascribed to such terms in the Employment
Agreement.
2 Subject to the Company's satisfaction of its obligations under this
Agreement, the Executive agrees to release the Company from all
compensation and benefit related claims arising during his employment
with the Company that are not provided for in the Employment Agreement,
as modified by this Agreement.
3 The Executive and the Company each agrees that Executive's last day of
employment with the Company will be November 1, 1999 (which shall be the
"Date of Termination" for purposes of Section 4(e) of the Employment
Agreement without the need to provide "Notice of Termination" under
Section 4(d) of the Employment Agreement), and Executive and Company
each agrees that
a. Executive will continue to receive his current Annual Base Salary
through November 1, 1999, and payment therefor will be paid on
normal payroll dates as a part of customary Company practice;
b. In full settlement of the provisions of Section 5(a)(i)A of the
Employment Agreement concerning payment of a lump sum within thirty
days after the
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Date of Termination, the Company shall pay Executive nine million
dollars ($9,000,000) in cash according to the following schedule:
(1) $6,000,000 to be paid on March 31, 2000; (2) the remaining
$3,000,000 to be paid in four equal installments of $750,000 on each
of July 3, 2000, October 2, 2000, January 2, 2001 and April 2, 2001;
c. Executive will not receive any payment of a partial bonus for 1999
as provided for in Section 5(a) (i)B(y) of the Employment Agreement;
d. In full satisfaction of (1) the Retirement Benefit specified in
Section 3(b)(v) of the Employment Agreement, (2) all benefits
accrued under all nonqualified defined benefit retirement plans
maintained by the Company and (3) the provisions of Section 5(a)(i)C
of the Employment Agreement (concerning payment in a lump sum thirty
days after the Date of Termination of the actuarial present value of
the Retirement Benefit), the Company shall pay Executive on March
31, 2000 an amount in cash equal to eleven million four hundred and
forty-four thousand seven hundred and eighty-six dollars
($11,444,786). The Executive's accrued benefit under the Company's
tax-qualified defined benefit plan will be paid in accordance with
the elections available under such tax-qualified defined benefit
plan; and
e. Executive and his spouse shall receive the medical and dental
benefits provided in Section 5(a) (ii) of the Employment Agreement,
including the limitation that premium payments for such coverage
shall not exceed in the aggregate one million dollars ($1,000,000).
4 As to the incentive awards provided for in Section 3(b)(iii) of the
Employment Agreement, the Company and Executive agree as follows:
a. The issuance to Executive of 250,000 shares of the Company's common
stock as Restricted Stock immediately after the Effective Date of
the Merger is forfeited; and
b. The terms of the grant to Executive of options to purchase 500,000
shares of the Company's common stock at $55.1799 per share (the
market price specified under the Stock Option Plan on June 30,1999)
for a term of ten years from the date of grant are as set forth in
the Non-Qualified Stock Option Agreement attached hereto as Exhibit
A; provided, that such options shall be fully vested and immediately
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exercisable as of November 1, 1999, and shall remain exercisable for
the remainder of the term of the grant; provided, further, that this
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Agreement shall be considered incorporated into and form a part of
the Employment Agreement for purposes of such Non-Qualified Stock
Option Agreement.
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5 Company and Executive agree that as of November 1, 1999 there are no
other amounts or benefits due Executive through such date or thereafter
from or under any other plan, program, policy or agreement of the
Company as contemplated in Section 5(a)(iv) of the Employment Agreement
that have not been paid, except as set forth on Exhibit B hereto.
6 For the avoidance of doubt, the Company acknowledges its obligations to
pay any gross-up amount required by Section 8 of the Employment
Agreement.
7 Executive agrees to resign as a member of the Company's Board of
Directors, as Chairman of the Board of Directors and as Chairman of the
Executive Committee of the Board of Directors effective November 1, 1999
pursuant to the letter attached hereto as Exhibit C and such letter of
resignation is hereby accepted effective on such date.
8 Company shall continue to provide Executive with staff support through
December 31, 1999 and with membership privileges and usage consistent
with past practice in the Cumberland Club in Portland, Maine through
December 31, 1999.
9 Company shall pay Executive's reasonable attorneys fees and expenses
incurred in connection with the negotiation and execution of this
Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and the
Company has caused this Agreement to be executed in its name and on its behalf,
all as of the date first written above.
EXECUTIVE
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Xxxxx X. Xxx III
UnumProvident Corporation
By:
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Secretary
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EXHIBIT A
STOCK OPTION AGREEMENT
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EXHIBIT B
AMOUNTS DUE UNDER OTHER COMPANY PLANS
1. $3,491,000 payable to Executive under deferred compensation arrangements
with the Company as of October 31, 1999 and including credited interest
through December 31, 1999 will be paid on January 3, 2000.
2. On March 31, 2000, (a) the amount of $348,000, representing the scheduled
payment due from Executive pursuant to the terms of the Collateral
Assignment Split-Dollar Agreement and Release, dated December 20, 1995, by
and among the Company, the Executive and the Executive's spouse and the
Collateral Assignment, dated December 20, 1995, by and between the same
parties (collectively, the "Insurance Agreements") will be waived in
accordance with Section 3(b)(v) of the Employment Agreement and the Company
acknowledges its obligation under such section to gross up the amount
forgiven for applicable federal, state and local taxes which are estimated
to total approximately $341,791 and (b) the Company shall release any claims
under the Insurance Agreements and the Policy (as defined in the Insurance
Agreements).
3. Amounts due under any tax-qualified retirement plan in which Executive has
accrued but unpaid benefits.
4. $10,000 retiree life insurance policy (provided by the Company at no cost to
the Executive).
5. Ability to convert Executive's group life insurance coverage obtained by the
Company to an individual policy with all future premiums to be paid by
Executive.
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EXHIBIT C
[LETTER OF RESIGNATION]
November 1, 1999
To: Board of Directors
UnumProvident Corporation
By this letter I am resigning as a member of the Board of Directors of
UnumProvident Corporation and all positions I currently hold on the Board of
Directors or with committees thereof effective November 1, 1999.
Sincerely,
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Xxxxx X. Xxx III
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