Exhibit 10.3
AMENDMENT NO. 1
TO
EMPLOYMENT CONTINUATION AGREEMENT
This Amendment No. 1 (this "Amendment") to the Employment Continuation
Agreement dated April 1, 2003 (the "Agreement") by and among Xxxx Xxxxxxx Life
Insurance Company, a Massachusetts corporation (the "Company"), Xxxx Xxxxxxx
Financial Services, Inc., a Delaware corporation ("JHFS"), Xxxxx X. Xxxxxx (the
"Executive"), and Manulife Financial Corporation, a corporation organized under
the laws of Canada ("Manulife"), is dated this 28th day of September, 2003.
WHEREAS, the Agreement provides benefits and protection to the Executive
in the event of a Change in Control or Potential Change in Control (as such
terms are defined in the Agreement);
WHEREAS, JHFS, Manulife and Jupiter Merger Corporation ("Merger Co.") have
entered into an Agreement and Plan of Merger dated as of the date hereof (the
"Merger Agreement") pursuant to which, and subject to the terms and conditions
of which, Merger Co. will merge with JHFS (the "Merger");
WHEREAS, the Company, JHFS, the Executive and Manulife are entering into
this Amendment in reliance upon the acknowledgment by the Company, JHFS, the
Executive and Manulife that the Merger and the other transactions contemplated
by the Merger Agreement will, upon consummation thereof at the Effective Time,
constitute a "Change of Control" under the Agreement; and
WHEREAS, in connection with the Merger, the Company, JHFS and the
Executive desire to amend the Agreement as set forth herein, and, for certain
purposes set forth below, Manulife desires to become a party to this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed among the Company, JHFS, the Executive and
Manulife as follows:
1. All capitalized, undefined terms used in this Amendment and not otherwise
defined herein shall have the meanings assigned thereto in the Agreement.
2. This Amendment shall become effective as of the date first set forth
above; provided, however, that if the Merger Agreement is terminated prior
to the Effective Time (as defined in the Merger Agreement), then this
Amendment shall automatically terminate and shall be of no further force
or effect. Each of the Company, JHFS, the Executive and Manulife
acknowledges that the Merger and the other transactions contemplated by
the Merger Agreement will, upon consummation thereof at the Effective
Time, constitute a "Change of Control" under the Agreement.
3. Section 4 of the Agreement is hereby amended by deleting subsection (a)
thereof in its entirety and substituting the following subsection (a)
therefor:
"(a) Titles, Positions and Duties. During the Employment
Period, the Executive's position (including status, offices and
titles), authority, duties and responsibilities shall be as set
forth below. The Executive's services shall be performed at the
location where the Executive was employed immediately preceding the
Effective Date. During the Employment Period, so long as the
Executive is employed by the Surviving Corporation (as defined in
the Agreement and Plan of Merger, dated September 28, 2003, by and
among Manulife, JHFS and Merger Co. (the "Merger Agreement")) or the
Company:
(i) the Executive shall hold the titles of (A) on and after
the Effective Date, Senior Executive Vice President, U.S. Life
and Long Term Care Products of the Surviving Corporation and
Senior Executive Vice President, U.S. Life and Long Term Care
Products of the Company and (B) on and after the Effective
Date, Senior Executive Vice President of Manulife, provided
that if any other individual having a title of Senior
Executive Vice President of Manulife is assigned one or more
additional or superior titles (or such individual's Senior
Executive Vice President title is supplemented by an
additional or superior title or designation) commensurate with
such individual's responsibilities, duties and authority, then
the Executive shall likewise be assigned one or more
additional or superior titles (or supplemental title or
designation to his Senior Executive Vice President title), as
the case may be, commensurate with the Executive's
responsibilities, duties and authority; and
(ii) the Executive shall, on and after the Effective
Date, (A) be a member of any Executive Committee or Policy
Committee or committee having a similar function (other than
any such committee that is a committee of the Board of
Directors consisting solely of directors (a "Board
Committee")) of Manulife, the Surviving Corporation or the
Company and (B) be a member of any Executive Committee or
Policy Committee or committee having a similar function that
is a Board Committee of the Surviving Corporation or the
Company, but only if the Executive is a director of the
Surviving Corporation or the Company, as the case may be; and
(iii) the Executive shall be responsible for marketing,
sales, product development, financial reporting, service and
business unit specific IT development for U.S. Life and Long
Term Care Products, whether or not such
activities are conducted through the Surviving Corporation;
and
(iv) in his capacity as Senior Executive Vice President,
U.S. Life and Long Term Care Products of the Surviving
Corporation, the Executive shall report solely to the Chairman
and Chief Executive Officer of the Surviving Corporation and
to the Board of Directors of the Surviving Corporation; and
(v) in his capacity as Senior Executive Vice President,
U.S. Life and Long Term Care Products of the Company, the
Executive shall report solely to the Chairman and Chief
Executive Officer of the Company and to the Board of Directors
of the Company; and
(vi) the Executive shall also hold, exercise and be
assigned such responsibilities, duties and authority as are
customarily held and exercised by, and assigned to, an
individual serving as Senior Executive Vice President of a
Canadian and U.S. public company comparable in size, structure
and nature to Manulife. In his capacity as Senior Executive
Vice President of Manulife, the Executive shall report solely
to the Chief Operating Officer and President-Elect and the
Board of Directors of Manulife."
4. Section 6(d) of the Agreement is hereby amended by deleting subsection (i)
thereof in its entirety and substituting the following subsection (i)
therefor:
"(i) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive's
position, authority or responsibilities, as contemplated by Section
4 of this Agreement, or any other material adverse change or
significant reduction in position, titles, reporting lines,
authority or responsibilities, other than any such assignment
inconsistent with the foregoing that is inadvertent and cured by the
Company or JHFS, as applicable, within ten (10) business days after
receipt by the Board of Directors of the Company or the Board of
Directors of JHFS, as applicable, of written notice thereof given by
the Executive;"
5. Section 6(d) of the Agreement is amended by deleting subsection (ii)
thereof in its entirety and substituting the following subsection (ii)
therefor:
"(ii) any failure by the Company or JHFS to comply with any of
the provisions of Section 5 (other than Section 5(c)) of this
Agreement, other than an insubstantial or inadvertent failure
that is cured by the Company or JHFS, as applicable, within ten (10)
business days after receipt by the Board of Directors of the Company
or the Board of Directors of JHFS, as applicable, of written notice
thereof given by the Executive;"
6. Section 7(b-2) of the Agreement is further amended by adding the words
"(with twenty (20) years payment guaranteed)" immediately following the
words "for the remainder of his lifetime" and immediately before the words
", except that".
7. By executing this Amendment, Manulife hereby expressly assumes and agrees
to perform the Agreement, as amended by this Amendment, in accordance with
Section 13 thereof; provided, however that the Executive hereby
acknowledges and agrees that in no event shall anything in this Amendment
(or the Agreement) be construed or applied to entitle the Executive to
receive payments or benefits under the Restated Agreement that are
duplicative of any payments or benefits provided to the Executive by any
of the Company, JHFS or Manulife under any other agreement or plan that
provides for payments or benefits upon a change of control. Manulife
further acknowledges and agrees to be bound by (1) the methodologies for
determining the amounts payable to the Executive pursuant to the
provisions of Sections 7(c), 7(d) and 7(f) of the Agreement and (2) the
amounts that would be payable to the Executive if the Executive were
entitled to receive the payments and benefits set forth in such Sections
as of the Closing Date (as such term is defined in the Merger Agreement)
in each case as such methodologies and amounts are set forth on Schedule A
attached hereto. Manulife acknowledges that, in accordance with the
Agreement, the Company shall designate in writing primary and alternate
Accountants to Manulife on or prior to the Closing Date.
8. Except as amended by this Amendment, all other terms of the Agreement
shall remain in full force and effect; provided, that, until the earlier
to occur of (i) the date that this Amendment terminates and is of no
further force and effect pursuant to Section 2 of this Amendment and (ii)
the Effective Time of the Merger, the Company, JHFS and the Executive each
hereby agrees and acknowledges that the Agreement (as amended by this
Amendment) shall not be amended without the prior written consent of
Manulife.
9. Subject to Section 8 of this Amendment, this Amendment shall be subject to
the "Miscellaneous" provisions contained in Section 14 of the Agreement,
which are incorporated by reference herein, provided that any notice or
other communication under the Agreement or this Amendment to be delivered
to Manulife shall be provided to the following address in accordance with
Section 14(e) of the Agreement: Manulife Financial Corporation, 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0, attention: General Counsel. This
Amendment may be executed in or more counterparts and by the different
parties hereto in separate counterparts, each of which when executed shall
be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and the Company, JHFS and Manulife have caused this Amendment to be executed in
their respective names and on their behalf, all as of the day and year first
above written.
XXXX XXXXXXX LIFE INSURANCE COMPANY
By:_________________________________
Name: Xxxxx X'Xxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
XXXX XXXXXXX FINANCIAL
SERVICES, INC.
By:_________________________________
Name: Xxxxx X'Xxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
EXECUTIVE:
____________________________________
Xxxxx X. Xxxxxx
MANULIFE FINANCIAL CORPORATION
By:_________________________________
Name: Xxxxxxx X'Xxxxxxxxxx
Title: President and Chief Executive Officer
Signature Page to Amendment to Employment Continuation Agreement
