1
AGREEMENT
AGREEMENT, dated as of February 1, 2001, by and between Phoenix Home Life
Mutual Insurance Company, a New York life insurance company having its executive
offices at Xxx Xxxxxxxx Xxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Company"), and
Xxxxx X. Xxx (the "Executive") residing in West Hartford, Connecticut.
W I T N E S S E T H :
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WHEREAS, the Company's board of directors recognizes that the business
strategies and plans of the Company or, in the event of the Company's
demutualization, of its sole shareholder (the "Holding Company" and the Holding
Company and the Company together, collectively with their subsidiaries,
"Phoenix") may require management of the Company to pursue a merger or other
business combination of the Company or the Holding Company with another company,
which business combination could result in a change in control of the Company, a
consequence of which could be adjustments in the Company's management, including
career changes for executives of the Company, the prospect of which is
unsettling to the Company's management, including the Executive and other
executives of the Company; and
WHEREAS, the Company's board of directors desires to assure a continuing
dedication by the Executive to his/her duties to the Company notwithstanding the
Company's and the Holding Company's strategies and prospects respecting a
business combination and, in particular, believes it imperative, should the
Company or the Holding Company pursue a proposal with respect to a business
combination, for the Executive, without being influenced by the uncertainties of
his/her own situation, to assess and advise the Company's board of directors
whether such proposal (or any alternative) would be in the best interest of the
Company and its policyholders and to assist the Company in taking such other
actions regarding such proposal as might be appropriate; and
WHEREAS, for this reason the Company's board of directors has determined
that it is in the best interests of the Company and its policyholders for the
Company to provide for payment to the Executive of appropriate compensation, in
addition to that which the Company has otherwise provided for the Executive, in
the event the Executive's employment with the Company should terminate under the
circumstances described in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which each party hereby
acknowledges, the Company and the Executive hereby agree as follows:
SECTION 1. EFFECTIVE DATE AND TERM OF AGREEMENT.
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(a) This Agreement is effective and binding on both parties as of the date
hereof and, subject to Section 2(b) hereof and to Section 2(c) hereof,
shall continue to apply in accordance with its terms to a termination
of Executive's employment with the Company occurring on or before
December 31, 2002; provided, however, that, as of January 1, 2001, and
each January 1 thereafter, this Agreement shall automatically be
extended to apply in accordance with its terms to a termination of
Executive's employment with the Company occurring on or before one (1)
additional year has elapsed unless, not later than September 30 of the
preceding year, the Company shall have given notice that it does not
wish so to extend this Agreement; and provided, further, that,
notwithstanding any such notice by the Company not to so extend this
Agreement, if a Change in Control (as hereinafter defined) shall have
occurred, during the original or extended period, this Agreement shall
continue to apply in accordance with its terms to a termination of`
Executive's employment with the Company occurring on or before the
expiration of three (3) years after the occurrence of such Change in
Control. Notwithstanding the present effectiveness of this Agreement
and except to the extent expressly otherwise provided in Sections 1(d)
and 2(b) of this Agreement, the provisions of Sections 3 and 4 of this
Agreement shall become operative only when, as and if there has been a
Change in Control.
(b) For purposes of this Agreement, a change in control of the Company (a
"Change in Control") shall be deemed to have occurred upon the first
occurrence after the date hereof of any of the following events:
(i) the occurrence of such a change in control of the direction and
administration of the Company's or the Holding Company's business as
would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date hereof
and any successor provision of the regulations under the Exchange Act,
if the Company or the Holding Company were required at the time of
such occurrence to report under such provisions (whether or not the
Company is subject to the reporting provisions of Section 12 of the
Exchange Act and to such reporting requirement); or
(ii) if the individuals who, at the beginning of the period commencing two
(2) years earlier, constituted the Company's or the Holding Company's
board of directors cease for any reason to constitute at least a
majority of the such company's board of directors provided however,
that any person who is a "Continuing Director" (as defined below)
shall be deemed for this purpose to have been a member of the board on
the first day of such two-year period; or
(iii)the Company's or the Holding Company's board of directors shall
approve a sale of all or substantially all of the assets of the
Company or the Holding Company, as the case may be, and such
transaction shall have been consummated; or
(iv) if at the time the Company is a stock corporation and, prior to the
fifth anniversary of the effective date of its demutulization, five
percent (5%) or, if after such fifth anniversary, ten percent (10%)
(or, in either case, such higher percentage (not to exceed twenty
percent (20%)) at which approval by the New York Insurance Department
is required to effect such an acquisition) or more of the combined
voting power of securities of the Company or of the Holding Company
are acquired by an individual, entity, any employee benefit plan
sponsored or maintained by the Company or a Subsidiary, or group
acting in concert, in each case, other than the Holding Company or any
of its subsidiaries; or
(v) at any date after the date hereof, the Company or the Holding Company
is voluntarily or involuntarily dissolved or liquidated or otherwise
ceases business operations; or
(vi) the Company's or the Holding Company's board of directors shall
approve any merger, consolidation or like business combination or
reorganization of the Company or the Holding Company, as the case may
be, such transaction shall have been consummated and a majority of the
individuals who constituted directors of the Company or the Holding
Company on the day the board of directors approved such transaction
cease for any reason, at any time within two (2) years after the
consummation of such transaction, to constitute a majority of such
board of directors or of the board of directors of any successor
company resulting from such merger, consolidation, or like business
combination or reorganization; provided, however, that any person who
is a "Continuing Director" (as defined below) shall be deemed for this
purpose to have been a member of the board on the first day of such
two-year period.
For purposes of this Agreement, "Continuing Directors" shall mean (i) the
directors of the Company in office on the date hereof or, in the case of the
Holding Company, its directors immediately preceding any demutualization of the
Company and (ii) any successor to any such director, or any additional director,
who (A) after the date hereof was nominated or selected by a majority of the
Continuing Directors in office at the time of his/her nomination or selection
(other than any such nomination or selection of an individual as a director of
the Company, the Holding Company or any successor to the Company or the Holding
Company who was so nominated or selected in connection with the settlement of a
threatened or actual proxy contest involving or, a proposed or consummated
merger, consolidation or like business combination or reorganization of, the
Company or the Holding Company or (B) who has been accepted in writing as a
Continuing Director for purposes of this Agreement by Executive.
(c) It is hereby provided, however, that in no event shall the
reorganization of the Company from a mutual to a stock company, the
acquisition of its shares by the Holding Company or the initial public
offering of the shares of the Holding Company be treated, individually
or collectively, as a "Change in Control" for purposes of this
Agreement and in no event shall any benefits be payable hereunder as a
result of any such events.
(d) The Company shall be obligated to make the payments and provide the
benefits described in Section 4 hereof following, and the provisions
of Section 3 hereof shall apply to, a Change in Control only if such
Change in Control shall have occurred within the period of Executive's
employment with the Company. Except as provided in the next following
sentence, if the Executive ceases employment prior to the occurrence
of a Change in Control, the Company's and Executive's obligations
shall terminate automatically upon such termination and, except as
provided in Section 5(a) hereof, neither party shall have any
obligation to the other hereunder. If the Company terminates the
Executive's employment during the period established under Section
2(b) of this Agreement other than for Cause, the Executive shall,
solely for purposes of determining his/her right to severance benefits
under this Agreement, be deemed to have remained employed by the
Company until the day following the Change in Control and to have then
been terminated by the company without Cause.
SECTION 2. EMPLOYMENT OF EXECUTIVE.
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(a) Except as provided in Section 2(b) below, nothing in this Agreement
shall affect any right which the Executive may otherwise have to
terminate his/her employment from the Company, nor shall anything in
this Agreement affect any right which the Company may have to
terminate the Executive's employment at any time in any lawful manner,
subject to the Company's obligations at law and to make the payments
and provide the benefits to the Executive pursuant to Section 4 of
this Agreement. It is agreed and understood that this Agreement
supercedes any prior severance agreement which related to change of
control or other business events as determined by the Company and,
which provided benefits substantially similar to those provided under
this Agreement. Any such prior agreement entered into between the
Company or a subsidiary of the Company and the Executive shall be
deemed to be terminated and shall be of no force or effect upon the
execution of this Agreement.
(b) In the event any person or organization commences any steps necessary
in accordance with law to effect a Change in Control (including,
without limitation, the solicitation of proxies with respect to the
election of directors in opposition to the nominees of the board of
directors of the Company or the Holding Company or, if the Company is
converted to a stock company, the commencement of a tender or exchange
offer for the percentage of the Company's or Holding Company's voting
securities as described in Section 1(b)(iv) hereof,), the Executive
agrees that, in order to receive the benefits provided by this
Agreement, he/she will not voluntarily leave the employ of the Company
and will continue to perform his/her regular duties and to render
his/her services on a full-time basis to the Company and the Company
agrees to continue to employ the Executive in each case, until such
person or organization has abandoned or terminated its efforts to
effect a Change in Control (as determined by the Board of Directors)
or until a Change in Control has occurred.
(c) Should the Executive voluntarily terminate his/her employment before
any effort to effect a Change in Control has commenced, or after any
such effort has been abandoned or terminated without effecting a
Change in Control and at a time when no other such effort is then in
process, this Agreement shall at such time lapse and be of no further
force or effect.
SECTION 3.TERMINATION FOLLOWING CHANGE IN CONTROL.
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(a) If a Change in Control of the Company shall have occurred, the
Executive shall be entitled to the benefits provided in Section 4
hereof upon any subsequent termination of his/her employment within
three (3) years following such Change in Control, unless (i) in
connection with such termination, the Executive becomes employed with
a former division of the Company or the Holding Company or a
subsidiary of either as a result of a sale or spin-off of such
division or subsidiary, on substantially equivalent terms as, or
better terms than, those in effect immediately prior to the Change in
Control, or (ii) such termination is (A) due to the Executive's death
or Retirement (as hereinafter defined) or (B) by reason of discharge
by the Company by reason of the Executive's Disability (as hereinafter
defined) or for Cause (as hereinafter defined), (C) or by the
Executive other than for Good Reason as herein after defined.
(b) If following a Change in Control, the Executive's employment shall be
terminated by the Company for Cause or by the Executive for other than
Good Reason, the Company shall pay to the Executive his/her full Base
Salary (as hereinafter defined) through the Date of Termination (as
defined in Section 3(e) hereof) at the rate in effect at the time
Notice of Termination (as defined in Section 3(d) hereof) is given and
any amounts and benefits to be paid to the Executive in accordance
with the terms of his/her employment (notwithstanding that a Change in
Control shall have occurred), including any vested benefits under any
Phoenix employee benefit and the Company shall have no further
obligations to the Executive under this Agreement.
(c) For purposes of this Agreement:
(i) "Disability" shall mean such physical or mental condition of the
Executive as shall have rendered the Executive unable (with reasonable
accommodation by the Company), for a period of more than one hundred
eighty (180) days, to perform the essential functions of his/her job
and as leads the Company's board of directors, in its sole discretion,
to determine to remove the Executive from his/her position and to
appoint his/her successor in order to provide, in the judgment of such
board for the proper conduct of the Company's business.
Notwithstanding the foregoing, no termination shall be treated as on
account of Disability unless the Executive is eligible at the time of
such termination to receive benefits under the Company's Short Term
Disability Plan or Long Term Disability Plan in accordance with the
terms of those plans.
If the Executive is entitled to benefits under either or both of such
plans, he/she shall be entitled to receive the benefits provided thereunder, and
shall be entitled to receive the payments and benefits provided by Section 4
hereof, provided that, in the event that at any time prior to the earlier of (A)
the first anniversary of the Executive's Date of Termination and (B) the third
anniversary of the date on which the Change in Control occurred, Executive is no
longer eligible for benefits provided under either the Company's Short Term
Disability Plan or Long Term Disability Plan, he/she shall be entitled to the
benefits provided under Section 4 of this Agreement as though his/her employment
were terminated by the Company without Cause on the date upon which his/her
eligibility for such benefits ceases unless the Company shall offer him
employment, to commence immediately, at least the same or greater duties and
responsibilities as he/she received, held or performed immediately prior to
his/her termination for Disability. It is hereby provided that, if the Executive
returns to work as provided above, the Executive shall be entitled to exercise
the right to terminate his/her employment as provided in Section 3(c)(iv)(F)
hereof within a thirty-day period following the first anniversary of his/her
return to work. It is further provided that, if the Executive is no longer
eligible for Disability benefits as described above after the expiration of the
time period described in "(A)" and "(B)" above, he/she shall be entitled to
fifty (50%) of the payments and one half the benefit continuation period
provided under Section 4 hereof in the same manner and subject to the same
conditions as otherwise described above upon cessation of Disability.
(ii) "Retirement" shall mean that the Executive shall have retired after
reaching the normal or (at the Executive's election) an early
retirement date provided in the Company's retirement plans as in
effect on the date of the Change in Control. (iii) "Cause" shall mean
any one of the following events:
(A) the conviction of the Executive in a court of law of a felony or of
any crime involving the misuse or misappropriation of money or other
property of another; or
(B) the Executive's failure or refusal to perform legal directives of the
Company's board of directors or executive officers of the Company, as
applicable, which directives are consistent with the scope and nature
of the Executive's employment duties and responsibilities and which
failure or refusal is not remedied by the Executive within thirty (30)
days after notice of such non-performance is given to Executive; or
(C) the performance by the Executive of any act inconsistent with the
Executive's duties hereunder that results in a material adverse effect
on Phoenix; or
(D) any willful misconduct or illegal conduct by the Executive that has a
material adverse effect on Phoenix; or
(E) any action by the Executive which materially violates Phoenix's
conflict of interest policy, as in effect of the date immediately
prior to the Change in Control.
Notwithstanding the foregoing provisions of this subparagraph, the
Executive shall not be deemed to have been terminated for Cause for the purposes
of this Agreement by reason of any imperfection in the performance of his/her
duties to the Company, unless and until (i) there shall have been delivered to
the Executive a resolution duly adopted by the affirmative vote of not less than
a majority of the entire membership of the Company's board of directors of the
Company (or that of its successor) at a meeting called and held for such purpose
(after reasonable notice to the Executive and an opportunity for the Executive,
together with his/her counsel, to be heard before the board of directors),
finding in the good faith opinion of the board of directors that the Executive
was guilty of conduct so constituting Cause and stating the particulars thereof
in detail; and (ii) the Executive shall have had a reasonable period, not to
exceed sixty (60) days to remedy any correctable problem. In the event of
termination of the Executive's employment for Cause, the Executive shall be
entitled to such benefits, if any, under the Company's retirement, insurance and
other benefit plans and programs as may be provided thereby, in such
circumstances, as if the Executive and the Company had not entered into this
Agreement.
(iv) "Good Reason" shall mean:
(A) without the Executive's express written consent, any reduction in
his/her title or any material reduction in his/her position, duties or
responsibilities from the title, position, duties or responsibilities
held or exercised by the Executive prior to the Change in Control; or
(B) a change of more than twenty-five miles in the location where the
Executive regularly provides his/her services to the Company without
the Executive's consent; or
(C) a reduction by the Company of the Executive's Base Salary (as
hereinafter defined) or Target Incentive Compensation (as hereinafter
defined); or
(D)(1) a material reduction in the benefits provided or the contributions
made by the Company under any qualified or non-qualified pension,
retirement or defined contribution plans in which the Executive
participated immediately prior to the Change in Control, (2) a
material reduction in the health or long term disability benefits
available to the Executive and his/her eligible dependents from those
benefits in effect immediately prior to the Change in Control or a
material change in the conditions for the Executive to become eligible
for the same post-retirement health benefits provided to retirees
immediately prior to the Change in Control or, (3) a material
reduction in the aggregate value of other welfare benefits available
to the Executive immediately prior to the Change in Control;
(E) a material reduction in the long-term incentive compensation
opportunities made available to the Executive from those opportunities
made available, on average, during the three year period ended with
the last day of the last fiscal year ended prior to the Change of
Control;
(F) any purported termination by the Company of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(d) hereof; provided however, that,
notwithstanding anything else contained herein to the contrary, any
termination of employment by the Executive for any reason within the
thirty-day period following the first anniversary of the date on which
a Change in Control occurs shall, for all purposes of the Agreement,
be treated as a termination for Good Reason.
(v) "Base Salary" shall mean the annual salary paid to the Executive
immediately prior to the Change in Control of the Company.
(vi) "Target Incentive Compensation" shall mean the target incentive
award(s) that may be earned by achievement of specified performance
objectives, under the annual and long term incentive compensation plan
or plans in which the Executive participated immediately prior to the
Change in Control of the Company.
(d) Any purported termination of the Executive's employment by the Company
by reason of the Executive's Disability or for Cause, or by the
Executive for Good Reason, shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 5(f)
hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice given by the Executive or by the Company, as the
case may be, which shall indicate the specific basis for termination
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for the determination of the payments
required to be made under this Agreement; provided, however, that the
Executive shall not be entitled to give a Notice of Termination to the
effect that he/she is terminating his/her employment with the Company
for Good Reason after the expiration of ninety (90) days following the
last to occur of the events claimed by him to constitute Good Reason.
(e) For purposes of this Agreement, "Date of Termination" shall mean (i)
if the Executive's employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of
his/her duties during such thirty-day period) and (ii) if the
Executive's employment is terminated for Cause or Good Reason, the
date specified in the Notice of Termination, which shall be not more
than thirty (30) days after such Notice of Termination is given. If
within twenty (20) days after any Notice of Termination is given, the
party who receives such Notice of Termination notifies the other party
that a Dispute (as defined below) exists, the parties agree to pursue
promptly the resolution of such dispute with reasonable diligence.
Pending the resolution of any such Dispute, the Company shall make the
payments and provide the benefits provided for in Section 4 hereof to
the Executive. In the event that it is finally determined, either by
mutual written agreement of the parties, by a binding arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or as to which the time for
appeal therefrom has expired and from which no appeal has been
perfected), that a challenged termination by the Company by reason of
the Executive's Disability or for Cause was justified, or that a
challenged termination by the Executive for Good Reason was not
justified, then all sums paid by the Company to the Executive from the
Date of Termination specified in the Notice of Termination until final
resolution of the Dispute pursuant to this Section 3(f), less any
amount otherwise required to be paid to the Executive in such
circumstances under the terms of his/her employment, shall be repaid
promptly by the Executive to the Company, with interest from the time
of payment to the Executive to the date of repayment to the Company at
the "prime rate" from time to time announced by The Chase Manhattan
Bank, N.A. to be in effect during such period for loans to commercial
borrowers. In the event that it is finally determined that a
challenged termination by the Company by reason of the Executive's
Disability or for Cause was not justified, or that a challenged
termination by the Executive for Good Reason was justified, then the
Executive shall be entitled to retain all sums paid to the Executive
pending resolution of the Dispute.
(f) For purposes of this Agreement, "Dispute" shall mean (i) in the case
of the Company's termination of Executive's employment as an executive
of the Company for Disability or Cause, that the Executive challenges
the existence of Disability or Cause and (ii) in the case of the
Executive's termination of his/her employment with the Company for
Good Reason, that the Company challenges the existence of Good Reason.
SECTION 4. PAYMENTS AND BENEFITS UPON TERMINATION.
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(a) If required pursuant to Section 3(a) hereof, the Company will pay to
the Executive as compensation for services rendered:
(i) Severance Benefits:
(A) not later than the fifteenth day after the Date of Termination, the
Executive's Base Salary through the Date of Termination, any accrued
and unpaid vacation time, and any other benefits then earned and
payable to Executive through the Date of Termination in accordance
with the terms of his/her employment; and
(B) a lump sum severance payment equal to two and one-half (2 1/2) times
the sum of (1) and (2), (1) the Executive's Base Salary and, (2) an
amount equal to the highest of the last three (3) years of incentive
compensation under the Company's Mutual Incentive Plan (or any
successor plan) or similar annual incentive plan applicable to the
Executive; and
(C) a lump sum severance payment equal to a full payment of all current
long term cash cycles under the company's Long Term Incentive Plan.
The payment will be calculated based on a straight line projection of
the results to date of all current cash cycles, or the average payout
of the last two completed long term cycles, expressed as a percent of
target, whichever is higher. Payment for each cycle will be calculated
as if the Executive was a plan participant for the full term of each
of the current long term cash cycles.
(D) except as provided below, a lump sum severance payment equal to the
excess of (1) the present value of the retirement benefits (whether or
not otherwise vested) the Executive would have accrued under the
Company's qualified and non-qualified defined benefit retirement plans
in which the Executive was participating at the Date of Termination
(the "Applicable Retirement Plans") had he/she continued to work for
the Company for two and one-half (2 1/2) additional years from his/her
Date of Termination at the same rate of compensation that would
otherwise be taken into account for purposes of determining his/her
accrued benefits at the Date of Termination and received as
compensation for such services the severance benefits payable under
sub-clause (B) of this Section 4 and achieved the age that he/she
would have achieved at the end of such two and one-half (2 1/2) year
period over (2) the present value on the Date of Termination of all
the Executive's vested accrued benefits under such Applicable
Retirement Plans.
For this purpose, all calculations of present value shall be made based on
the actual assumptions used on the date immediately prior to the occurrence of a
Change in Control under whichever of the Applicable Retirement Plans the
benefits would otherwise have been provided.
It is hereby provided that if, as of the Executive's Termination Date, the
Executive has satisfied the requirements for early retirement eligibility as
provided under the Applicable Retirement Plans, then, at the Executive's option,
in lieu of the lump sum benefit described above, the value of such benefit shall
be payable in the form of a non-qualified monthly annuity determined as provided
under the Applicable Retirement Plans and payable in the same benefit form and
at the same time as other benefits under such Applicable Retirement Plans.
(E) a lump sum severance payment equal to the present value of the two and
one-half (2 1/2) years of Company matching contributions under the Company's
qualified and non-qualified defined contribution savings plans based on the
level of matching contribution in effect for the Executive on the Date of
Termination.
(ii) Continuation of Benefits. Effective with the Date of Termination, the
Executive shall be entitled after the Date of Termination until the
two and one-half year anniversary of the Date of Termination (the "End
Date"), to continue participation in all of the Company's group
health, group life employee benefits and long term disability plans
(the "Group Benefit Plans"). To the extent any such benefits cannot be
provided under the terms of the applicable plan, policy or program,
the Company shall provide a comparable benefit under another plan or
from the Company's general assets. The Executive's participation in
the Group Benefit Plans will be on the same terms and conditions
(including, without limitation, any condition that the Executive make
contributions toward the cost of such coverage on the same terms and
conditions generally applicable to similarly situated employees and,
including coverage eligibility for the Executive's spouse and
dependent children) that would have applied had the Executive
continued to be employed by the Company through the End Date.
(iii)Outplacement Services. The Executive shall be provided at the
Company's expense with outplacement services customary for executives
at his/her level (including, without limitation, office space and
telephone support services) provided by a qualified and experienced
third party provider mutually selected by the Company and the
Executive.
(iv) Deemed Vesting for Certain Benefits. Effective as of the Date of
Termination, the Executive shall be deemed to have met all service and
other requirements for full vesting of benefits under all company
stock option or other stock or equity compensation plans in which the
Executive participates to the extent that the Executive had not
already vested in such benefits as of the Date of Termination. The
value of any benefits as reasonably determined by the Company and not
otherwise payable under such above-referenced plans, shall be payable
hereunder as a lump sum at the same time and in the same manner as
amounts specified in Section 4(a)(i) above.
(b) Certain Further Payments by the Company.
(i) In the event that any amount or benefit paid or distributed to, or on
behalf of the Executive pursuant to this Agreement, taken together
with any amounts or benefits otherwise paid or distributed to or on
behalf of the Executive by the Company or any affiliated company
(collectively, the "Covered Payments"), are or become subject to the
tax (the "Excise Tax") imposed under Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), or any similar tax that
may hereafter be imposed, the Company shall pay to the Executive at
the time specified in Section 4(b)(iv) below an additional amount (the
"Tax Reimbursement Payment") such that the net amount retained by the
Executive with respect to such Covered Payments, after deduction of
any Excise Tax on the Covered Payments and any Federal, state and
local income or employment tax and Excise Tax on the Tax Reimbursement
Payment provided for by this Section 4(b), but before deduction for
any Federal, state or local income or employment tax withholding on
such Covered Payments, shall be equal to the amount of the Covered
Payments.
(ii) For purposes of determining whether any of the Covered Payments will
be subject to the Excise Tax and the amount of such Excise Tax:
(A) such Covered Payments will be treated as "parachute payments" within
the meaning of Section 280G of the Code, and all "parachute payments"
in excess of the "base amount" (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise Tax, unless, and
except to the extent that, in the good faith judgment of the Company's
independent certified public accountants appointed prior to the Change
in Control Date or tax counsel selected by such Accountants (the
"Accountants"), the Company has a reasonable basis to conclude that
such Covered Payments (in whole or in part) either do not constitute
"parachute payments" or represent reasonable compensation for personal
services actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the "base amount," or such
"parachute payments" are otherwise not subject to such Excise Tax, and
(B) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Accountants in accordance with the
principles of Section 280G of the Code.
(iii)For purposes of determining the amount of the Tax Reimbursement
Payment, the Executive shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal rate of
Federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, and
(B) any applicable state and local income taxes at the highest applicable
marginal rate of taxation for the calendar year in which the Tax
Reimbursement Payment is to be made, net of the maximum reduction in
Federal Income taxes which could be obtained from the deduction of
such state or local taxes if paid in such year.
(iv) In the event that the Excise Tax is subsequently determined by the
Accountants or pursuant to any proceeding or negotiations with the
Internal Revenue Service to be less than the amount taken into account
hereunder in calculating the Tax Reimbursement Payment made, the
Executive shall repay to the Company, at the time that the amount of
such reduction in the Excise Tax is finally determined, the portion of
such prior Tax Reimbursement Payment that would not have been paid if
such Excise Tax had been applied in initially calculating such Tax
Reimbursement Payment, plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code.
Notwithstanding the foregoing, in the event any portion of the Tax
Reimbursement Payment to be refunded to the Company has been paid to
any Federal, state or local tax authority, repayment thereof shall not
be required until actual refund or credit of such portion has been
made to the Executive, and interest payable to the Company shall not
exceed interest received or credited to the Executive by such tax
authority for the period it held such portion. The Executive and the
Company shall mutually agree upon the course of action to be pursued
(and the method of allocating the expenses thereof) if the Executive's
good faith claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the Accountants
or pursuant to any proceeding or negotiations with the Internal
Revenue Service to exceed the amount taken into account hereunder at
the time the Tax Reimbursement Payment is made (including, but not
limited to, by reason of any payment the existence or amount of which
cannot be determined at the time of the Tax Reimbursement Payment),
the Company shall make an additional Tax Reimbursement Payment in
respect of such excess (plus any interest or penalty payable with
respect to such excess) at the time that the amount of such excess is
finally determined.
(v) The Tax Reimbursement Payment (or portion thereof) provided for in
Section 4(b)(i) above shall be paid to the Executive not later than
ten (10) business days following the payment of the Covered Payments;
provided, however, that if the amount of such Tax Reimbursement
Payment (or portion thereof) cannot be finally determined on or before
the date on which payment is due, the Company shall pay to the
Executive by such date an amount estimated in good faith by the
Accountants to be the minimum amount of such Tax Reimbursement Payment
and shall pay the remainder of such Tax Reimbursement Payment
(together with interest at the rate provided in Section 1274(b)(2)(B)
of the Code) as soon as the amount thereof can be determined, but in
no event later than 45 calendar days after payment of the related
Covered Payment. In the event that the amount of the estimated Tax
Reimbursement Payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to
the Executive, payable of the fifth business day after written demand
by the Company for payment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
SECTION 5. GENERAL
------------------
(a) The Executive, after termination of his/her employment by the Company,
shall retain in confidence any confidential or proprietary information
known to him concerning Phoenix and its business so long as such
information is not publicly disclosed and shall not use such
information in any way injurious to Phoenix except for any disclosure
to which an authorized officer of the Holding Company has consented or
any disclosure or use required by any order of any governmental body
or court (including legal process). If requested, the Executive shall
return to Phoenix any memoranda, documents or other materials
possessed by the Executive and containing confidential or proprietary
information of Phoenix. Further, the Executive agrees not to induce,
encourage or solicit either directly or indirectly, any employee,
officer, agent, broker, registered representative, manager, to
terminate his/her relationship with the Company, its subsidiaries or
affiliates for a period of eighteen (18) months.
(b) If litigation shall be brought to enforce or interpret any provision
contained herein or any third party shall commence any litigation
challenging the validity or enforceability of this Agreement, the
Company shall pay the Executive for attorneys' fees and disbursements
reasonably incurred by the Executive in connection with such
litigation promptly upon presentation thereof and the Company shall
pay prejudgment interest to Executive, if any, calculated at the prime
rate (as provided by section 3(e) hereof) from the date that payment
should have been made under this Agreement to the date of payment.
(c) The Company's obligation to make the payments and to provide the
benefits to the Executive required hereby are absolute and
unconditional and shall not be affected by any setoff, claim,
counterclaim, recoupment or other right which the Company may have
against the Executive or anyone else. All amounts payable by the
Company hereunder shall be payable without notice or demand. The
Executive shall not be required to seek or take any employment or
undertake any other business activities in order to mitigate the
payments and benefits required to be provided to the Executive
pursuant to this Agreement and the payments and benefits so required
to be provided to the Executive shall not be mitigated by any earnings
of the Executive resulting from any employment or other business
activities the Executive may undertake after the termination of
his/her employment with the Company.
(d) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or the
Holding Company, by written agreement to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, the term "Company" shall mean
the Company as herein before defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
required by this Section 5(c) or which otherwise becomes bound by the
terms and provisions of this Agreement by operation of law.
(e) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts or other
benefits would still be payable or made available to the Executive
hereunder if he/she had continued to live, all such amounts, or
benefits, unless otherwise provided herein, shall be paid or otherwise
made available in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there be no such
designee, to the Executive's estate.
(f) For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered by hand or upon
receipt if mailed by United States registered mail, return receipt
requested, postage prepaid, or by a nationally recognized overnight
courier service (appropriately marked for overnight delivery). Such
notices and communications are to be addressed as follows:
If to the Executive: Xxxxx X. Xxx
000 Xxxxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
If to the Company: Phoenix Home Life Mutual Insurance Company
0 Xxxxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Attention: General Counsel
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
(g) This Agreement constitutes the entire agreement and understanding
between the Executive and the Company concerning termination of the
Executive's employment with the Company subsequent to a Change in
Control; the parties hereby acknowledging, however, that this
Agreement provides for certain payments and benefits to the Executive
to be determined by the Company's employee benefit programs and plans
and, to the extent so provided, such programs and plans constitute
part of the agreement and understanding between Executive and the
Company concerning termination of Executive's employment with the
Company subsequent to a Change in Control. No assurances or
representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement.
(h) No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing,
signed by the Executive and an authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a
waiver of any similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement shall be governed by
the laws of the State of Connecticut without giving effect to the
provisions, principles, or policies thereof relating to choice or
conflict of laws.
(i) The invalidity or unenforceability of any provisions of this Agreement
in any circumstance shall not affect the validity or enforceability of
such provision in any other circumstance or the validity or
enforceability of any other provision of this Agreement, and except to
the extent such provision is invalid or unenforceable, this Agreement
shall remain in full force and effect. Any provision in this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating or affecting the
remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
(j) Any dispute or controversy arising under or in connection with this
Agreement shall be settled by arbitration in accordance with the rules
of the American Arbitration Association then in effect and any such
arbitration award shall be final and binding on the parties. Judgment
may be entered on the arbitrator's award in any court of competent
jurisdiction. In the event of any breach or threatened breach of the
provisions of Section 5(a) hereof by the Executive, Phoenix, in
addition to any other rights and remedies it may have, shall be
entitled to seek an injunction from any court having equity
jurisdiction without being required to post a bond or other security
and without having to prove the inadequacy of the available remedies
at law, it being acknowledged and agreed that any such breach or
threatened breach by the Executive will cause irreparable injury to
Phoenix and that money damages will not provide an adequate remedy to
Phoenix.
(k) This Agreement may be executed in more than one counterpart, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument and agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
Phoenix Home Life Mutual [Print Name Below Signature]
Insurance Company
By: By:
Its: Name:
Title:
Agreement-PHL-2.5.doc
