Exhibit 10(w)
AMENDMENT TO
EMPLOYMENT AGREEMENT OF
XXXXXX X. XXXXX
This Amendment is made and entered into this 25th day of May, 1999, by and
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between GUARANTEE LIFE INSURANCE COMPANY (the "Company") and XXXXXX X. XXXXX
(the "Executive").
The Employment Agreement originally effective as of March 1, 1995, and
amended as of January 1, 1997, between the Company and the Executive is amended
as follows:
1. The following new paragraph shall be added at the end of Section 4.1,
Base Salary:
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In the event of a Change in Control of the Parent, Executive's Base
Salary for the year in which the Change in Control occurs automatically
shall be increased retroactively to the beginning of such year to the
contingent Base Salary, if any, previously approved by the Compensation
Committee to be paid upon the achievement of the plan earnings for the
year. Any increased Base Salary attributable to periods prior to the date
of the Change in Control shall be paid in a lump sum on the date of the
Change in Control.
2. Section 7.5 shall be amended by adding the following subsections (v)
and (vi):
(v) The relocation of the Executive's principal place of employment by
more than 50 miles from the Executive's then current principal place
of employment.
(vi) The material breach of any provision of this Agreement, which breach
is not cured within ten (10) calendar days of notice thereof to the
Company by the Executive.
3. Section 7.8 shall be added to read as follows:
7.8(a) Acceleration of Vesting on Options. Notwithstanding the
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provisions of the following agreements: Incentive Stock Option Agreement
dated as of December 26, 1995; Nonqualified Stock Option Agreement dated as
of December 26, 1995; Incentive Stock Option Agreement dated as of February
20, 1997; and Nonqualified Stock Option Agreement dated as of April 18,
1997, unless the Compensation Committee shall otherwise determine in the
manner set forth in Section 7.8(b), in the event of a Change in Control,
each Option granted to Executive under any of the foregoing agreements
(regardless of whether such Options are at such time otherwise exercisable)
shall be cancelled in exchange for
a payment of cash of an amount equal to the excess, if any, of the then
Fair Market Value over the Option Price (all as defined in the 1994 Long-
Term Incentive Plan and the agreements with the Executive thereunder).
(b) Alternative Options. Notwithstanding Section 7.8(a), no
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cancellation, acceleration of exercisability, vesting or cash settlement or
other payment shall occur with respect to any Option if the Committee
reasonably determines in good faith prior to the occurrence of a Change in
Control that such option shall be honored or assumed, or new rights
substituted thereunder (such honored, assumed or substituted Option being
hereinafter referred to as an "Alternative Option"), provided that any such
Alternative Option must:
(i) provide Executive with rights and entitlements
substantially equivalent to or better than the rights, terms and
conditions applicable under such Option, including, but not limited
to, an identical or better exercise and vesting schedule and identical
or better timing and methods of payment;
(ii) have substantially equivalent economic value to such
Option (determined at the time of the Change in Control and valuing
the Options at their Fair Market Value less Option price); and
(iii) not affect any of Executive's other rights under the terms
of this Agreement.
An Alternative Option for stock which is not publicly traded shall be
deemed to not be of equivalent economic value.
(c) Restricted Stock and Performance Shares. Upon a Change in Control
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of the Company, all restricted shares and performance shares issued to
Executive, including, but not limited to, shares issued under the Early
Exercise Program, the Matching Share Restricted Stock Award Program, and
the 1994 Long-Term Incentive Plan, shall be fully vested. Any restricted
shares or performance shares not fully vested prior to the Change in
Control shall be transferable in the same manner as other shares of the
Company immediately prior to any Change in Control so that they shall be
exchanged for or converted into shares of the acquiring company on the same
ratio as the Parent's shares were exchanged for or converted into shares of
the acquiring company in the Change in Control transaction. In the event
Executive's nonvested restricted shares or nonvested performance shares are
to be exchanged or converted into nonpublicly traded shares or interests in
a Change in Control transaction, or in the event of a cash acquisition of
the Company or the Parent, Executive shall be entitled to receive the Fair
Market Value of said restricted and performance shares in a lump sum in
cash on the date of the Change in Control. "Fair Market Value" shall have
the same meaning as under the 1994 Long-Term Incentive Plan.
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(d) Deferred Compensation and Phantom Stock Plans. The parties
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acknowledge that Executive is a participant in the Guarantee Life Insurance
Company Deferred Compensation Plan and the Guarantee Life Insurance Company
Phantom Stock Plan, as amended. Notwithstanding the provisions of Section 8
of the Deferred Compensation Plan and Section 6.07 of the Phantom Stock
Plan upon a Change in Control, if the substituted shares of any continued
plan are not publicly traded shares of equal value to the Parent's shares,
Executive's notional shares under said Plans shall become immediately
payable in cash in a lump sum equal to the Fair Market Value of the
Parent's shares on the date of the Change in Control.
4. Section 8.2 shall be amended to read as follows:
8.2. Remedies. The Executive hereby acknowledges and agrees that, in
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the event of any breach or anticipated breach of the covenants contained in
this Section 8, the Company shall be authorized and entitled to obtain from
any court of competent jurisdiction, preliminary and permanent injunctive
relief, as well as an equitable accounting of all profits and benefits
arising out of such violation. These rights and remedies shall be
cumulative, and in addition to any other rights and remedies to which the
Company may be entitled, including the right to damages, directly or
indirectly, sustained by the Company due to the breach or the potential
irreparable injury to the Company as a result of such breach. The Company
shall have the right to offset amounts due Executive against any damages
due the Company.
In the event that the Board of Directors, acting in good faith,
determines that a material breach exists of any or all of the covenants
contained in this Section 8, and the Executive does not cure such breach,
if susceptible of cure, to the satisfaction of the Board of Directors
within 10 days of notice of such breach from the Company, the Executive
will immediately forfeit all unpaid awards and severance benefits otherwise
payable hereunder, and will be further subject to additional injunctive and
pecuniary judgments as described above. This second paragraph of Section
8.2 shall not be applicable from and after the date of a Change in Control
of the Company.
If any court determines that the foregoing covenant, or any part
thereof, is unenforceable for any reason, the duration or scope or other
element of such provision, as the case may be, shall be reduced so that
such provision becomes enforceable and, in its reduced form, such provision
shall then be enforceable and shall be enforced.
5. The Guarantee Life Companies Inc. agrees to and is a party to the
Employment Agreement, and any amendments thereto, insofar as may be necessary to
make the Agreement and amendments binding upon it.
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6. In all other respects, the Employment Agreement shall remain in full
force and effect.
DATED this 25th day of May, 1999.
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THE GUARANTEE LIFE COMPANIES INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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GUARANTEE LIFE INSURANCE COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx
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/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
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