EXHIBIT 10.44
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is dated this
11th day of May, 2000 between Indianapolis Life Insurance Company, an Indiana
mutual life insurance company (the "COMPANY") and XXXXX X. XXXXXX (the
"OFFICER").
RECITALS
A. The OFFICER is currently employed by the COMPANY as Chairman, Chief
Executive Officer, and President of the COMPANY.
B. The COMPANY has entered into a Combination and Investment Agreement with
AmerUs Life Holdings, Inc. and American Mutual Holding Company (collectively,
with their successors, "AmerUs"), as a result of which the COMPANY will become a
wholly-owned subsidiary of AmerUs. In connection with this planned affiliation,
the COMPANY and AmerUs have reached certain understandings with respect to the
integration, operation and leadership of AmerUs and the COMPANY after the
Closing (as defined below). These understandings are described in Attachment A
to this Agreement.
C. The COMPANY and AmerUs desire that the OFFICER remain employed by the
COMPANY through and after the closing of the combination described in Section
3.1 of the Combination and Investment Agreement (the "Closing"), and the OFFICER
desires to remain so employed, in accordance with the terms of this Agreement
and the understandings described in Attachment A.
D. The COMPANY and its Board of Directors desire to provide the OFFICER
with employment arrangements with the COMPANY that the Board has determined will
encourage
attention and dedication to the COMPANY by the OFFICER as a member of the
COMPANY's management and will be in the best interests of the COMPANY and its
policyholders (and, after the Closing, AmerUs' shareholders). The OFFICER is
willing to be employed by the COMPANY on the terms and conditions provided in
this Agreement and, in addition, after the Closing, the understandings described
in Attachment A. Accordingly, the parties agree as follows:
I. TERMS OF EMPLOYMENT
A. Term of Employment. The term of employment of the OFFICER by the COMPANY
pursuant to this Agreement will commence on the date of this Agreement (the
"Effective Date") and shall continue until the OFFICER's employment is
terminated by either party as provided in Section III(A).
B. Position and Duties. Prior to the Closing, the OFFICER shall serve
as Chairman, President and Chief Executive Officer of the COMPANY. After the
Closing, the OFFICER shall serve as President and Chief Executive Officer of the
COMPANY and Vice Chairman of AmerUs. The OFFICER shall have such
responsibilities, duties and authority, commensurate with his position, as may
from time to time be assigned to the OFFICER by the COMPANY and, after the
Closing, by AmerUs, consistent with the provisions of this Agreement and, after
the Closing, the understandings set forth in Attachment A. The OFFICER shall
devote substantially all the OFFICER's time, energy and skill during reasonable
business hours to the service of the COMPANY. The OFFICER's office shall be
located at the COMPANY's home office which shall be located in the metropolitan
area of Indianapolis, or as OFFICER and COMPANY may otherwise agree.
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C. Compensation and Related Matters.
1. Salary. During the period of the OFFICER's employment, the COMPANY
shall pay the OFFICER an annual salary at a rate of $527,840 per year, such
salary to be paid in substantially equal installments twice monthly. The
base salary will be reviewed annually and shall be subject to change in
February of each year of this Agreement at the discretion of the Executive
Committee of the COMPANY'S Board of Directors (and, after the Closing, the
AmerUs Board of Directors), taking into account the OFFICER's performance
of the OFFICER's duties during the preceding year and other relevant
factors.
2. Bonus. In addition to salary as provided under Section I(C)(1), the
COMPANY agrees to pay the OFFICER an annual bonus, if earned, as provided
under any then applicable annual incentive plan then in effect for senior
level officers. In addition, prior to the Closing, the COMPANY, by action
of its Board of Directors, will approve a bonus plan for certain senior
officers of the COMPANY to become effective at and contingent upon the
Closing having occurred, pursuant to which the OFFICER will be eligible for
a one-time lump sum cash bonus based on the average closing price of AmerUs
shares of stock during the first ten trading days following the Closing and
determined as follows:
Bonus as a Percentage
Price of AmerUs Of Salary Provided in
Stock Per Share Section I(C)(1)
--------------- ---------------------
Under $21 20%
$21.00 through $23.00 25%
$23.01 through $25.00 30%
$25.01 though $27.00 35%
$27.01 or More 40%
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This bonus will be payable within fifteen business days following the
Closing if this Agreement is then in effect subject to whatever additional
terms and conditions are contained in the bonus plan approved by the Board
of Directors of the COMPANY.
3. Benefits. The OFFICER shall be entitled to participate in or
receive benefits under any employee benefit plan, arrangements or
perquisite made available by the COMPANY now or in the future to its
employees, officers and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such
plans, arrangements and perquisites. These plans currently include but are
not limited to:
- Annual incentive plan (AIP)
- Long term incentive program, if any
- Deferred Compensation
- Shadow 401(k) Plan
- Officer Physical Examinations
- Excess Retirement Benefit
- Reserved Parking
The COMPANY will obtain commitments from AmerUs pursuant to which (1)
effective promptly after the Closing, the OFFICER will become a participant
in AmerUs' stock option plan for senior executives of AmerUs and its
subsidiaries, and (2) pursuant to that plan, within 30 days of the Closing,
AmerUs will issue to the OFFICER options to purchase no less than 100,000
shares of AmerUs stock.
The OFFICER and the COMPANY agree that the provisions of the COMPANY's
current Long-Term Incentive Plan ("LTIP") applicable to the OFFICER will be
amended so that, contingent on the Closing having occurred, the "growth
factor" (as defined in the LTIP) applicable to the OFFICER's benefits under
the LTIP for calendar year 2000 will
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be tied to the price of AmerUs stock. The "growth factor" for calendar year
2000 will be based on the average closing price of AmerUs shares of stock
during the first ten trading days following the Closing and determined as
follows:
Price of AmerUs Growth Factor for Calendar
Stock Per Share Year 2000
--------------- --------------------------
Under $21 10%
$21.00 through $23.00 12%
$23.01 through $25.00 14%
$25.01 though $27.00 16%
$27.01 or More 18%
The "growth factor" for calendar year 2000 provided in this Section I(C)(3)
will be in lieu of the "growth factor" otherwise provided in the LTIP. For
subsequent years, the "growth factor" provided in the LTIP will be used.
Nothing paid to the OFFICER under any plan, arrangement or perquisite
presently in effect or made available in the future shall be deemed to be
in lieu of the salary and other compensation payable to the OFFICER
pursuant to Section I(C)(1). Any payments or benefits payable to the
OFFICER hereunder with respect to any year during which the OFFICER is
employed for less than the entire year, unless otherwise provided in the
applicable plan or approved by the Executive Committee of the COMPANY'S
Board of Directors, shall be prorated in accordance with the number of days
in such year during which the OFFICER is so employed.
D. Separation Benefit Agreement. Effective as of the date of this
Agreement, the Separation Benefit Agreement (also known as the Termination
Agreement or the Separation Benefit Plan for Officers) between the OFFICER
and the COMPANY is hereby terminated.
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II. DEFINITIONS
A. Company. "COMPANY" means Indianapolis Life Insurance Company.
B. Change of Control. Until the day after the Closing, a "Change of
Control" shall be deemed to have occurred if any of the following occurs:
1. the COMPANY consummates an affiliation with another insurance
company under a mutual holding company or similar structure; or
2. (a) the policyowners (or if applicable, the shareholders) of
the COMPANY approve a transaction providing for: (i) the merger,
consolidation or other combination of the COMPANY with another
corporation (other than a wholly-owned subsidiary) where the COMPANY
is not the surviving or controlling entity; (ii) the sale of all or
substantially all of the assets of the COMPANY; or (iii) the
liquidation or dissolution of all or substantially all of the assets
of the COMPANY; and (b) the transaction so approved is subsequently
closed; or
3. the COMPANY is demutualized or a third party person, including
a "group" as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act"), becomes the beneficial
owner, directly or indirectly, of 25% or more of the combined voting
power of the COMPANY's outstanding voting securities ordinarily having
the right to vote for election of directors of the COMPANY; or
4. individuals who constitute the Board of Directors of the
COMPANY as of the Effective Date (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the Effective Date whose
election, or nomination for election by the COMPANY's policyowners
(or, if applicable, shareholders), was approved by a vote of at least
a
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majority of the directors comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of the Directors of the COMPANY), shall be,
for the purposes of this Agreement, considered as though such person
were a member of the Incumbent Board; or
5. a majority of the Board otherwise determines that a Change of
Control shall have occurred.
Beginning as of the day following the Closing, a "Change of Control"
shall be deemed to have occurred if any Person (as defined in the following
sentence), other than AmerUs and its subsidiaries and any employee benefit
plans thereof, acquires beneficial ownership (as defined in Rule 13d-3 of
the Securities Exchange Act of 1934) of more than 25% of the shares of
stock of AmerUs that are entitled to elect the Board of Directors of
AmerUs. For purposes of the preceding sentence, the term "Person" means any
individual, partnership, joint venture, firm, operation, association,
trust, or other entity, including a group as such term is used in Section
13(d)(c) of the Securities Exchange Act of 1934.
C. Cause. For the purposes of this Agreement, the COMPANY shall have
"Cause" to terminate OFFICER's employment hereunder only upon:
1. the willful and continued failure by the OFFICER to
substantially perform the OFFICER's duties with the COMPANY after a
written demand for substantial performance is delivered to the OFFICER
by the Board. Such demand shall specifically identify the manner in
which the Board believes that the OFFICER has not substantially
performed the OFFICER's duties; or
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2. the willful engaging by the OFFICER in "Misconduct" materially
and demonstrably injurious to the COMPANY. As used in this Agreement,
Misconduct shall include, but is not limited to:
- theft or embezzlement
- destruction or misuse of COMPANY property
- any crime against the COMPANY
- commission of crimes on COMPANY property such as assault,
battery, theft from a co-worker
- serious disruption of the work environment including but not
limited to fighting, drunkenness, harassment of fellow employees
and insubordination
- possession, use or sale of illegal drugs on COMPANY property
- possession or use of firearms on COMPANY property
- falsification of employment application
- unauthorized disclosure of confidential information
D. Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without the employee's express consent, the occurrence within two (2)
years after a Change of Control of the COMPANY of any one or more of the
following:
1. other than changes in duties and responsibilities associated
with a promotion, the assignment to the OFFICER of any duties
inconsistent with, or a diminution of, the OFFICER's position, duties,
responsibilities and status with the COMPANY (except as otherwise
expressly provided in Section I(B) or, after the Closing, anything in
Attachment A that applies to OFFICER) on the day immediately prior to
a Change of Control of the COMPANY or any removal of the OFFICER from,
or any failure to reelect the OFFICER to such position;
2. a reduction by the COMPANY or AmerUs in the OFFICER's base
salary in effect on the day immediately prior to a Change of Control
of the COMPANY;
3. the material reduction by the COMPANY or AmerUs in award
opportunity levels available to the OFFICER under all bonus and
incentive plans, in the
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aggregate, in which the OFFICER is eligible to participate, except
that Section II(D)(3) shall not include changes in award opportunity
levels available to OFFICER so long as such changes are made as part
of a change in such bonus or incentive plans affecting similarly
situated officers of the COMPANY or AmerUs as a whole;
4. the COMPANY or AmerUs requiring the OFFICER to be based at an
office location other than in or around the Indianapolis metropolitan
area;
5. the failure of a successor to the COMPANY to assume and agree
to perform this Agreement;
6. any material breach by the COMPANY of any provision of this
Agreement;
7. a material departure, after the Closing, without the OFFICER's
prior written consent, from the understandings described in Attachment
A;
8. the failure of the OFFICER to be elected Vice Chairman of
AmerUs following the Closing;
9. the failure of the OFFICER to be elected to the Board of
Directors of AmerUs following the Closing; or
10. after the Closing, the failure of AmerUs to issue stock
options to the OFFICER in accordance with Section I(C)(3), or the
failure of AmerUs to fulfill any other obligations under this
Agreement.
Notwithstanding the foregoing, "Good Reason" shall not include any job
changes incidental to pending voluntary retirement by the OFFICER or
disability of the OFFICER.
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III. TERMINATION OF EMPLOYMENT
A. Termination. During the term of this Agreement, the OFFICER's
employment may be terminated by either party with thirty (30) days written
notice. Notice of termination shall not be required if the termination is
for Cause. The notice shall indicate reason for termination and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the OFFICER's employment.
B. Benefits upon Retirement by the OFFICER. Upon Retirement by the
OFFICER, the COMPANY shall pay an Enhanced Retirement Benefit as follows:
1. Monthly Benefit. If Retirement occurs at or after the OFFICER
reaches age 65, the monthly benefit shall be equal to 1/12 of an
amount equal to seventy-five percent (75%) of the OFFICER's final base
salary (determined as of the OFFICER's termination date) ("Base
Salary"). For Retirement before the OFFICER reaches age 65, the
monthly benefit shall be subject to the standard actuarial reduction
factors set forth in the Indianapolis Life Insurance Company
Employees' Pension Plan, provided that the monthly benefit shall never
be less than 1/12 of an amount equal to 50% of Base Salary. This
monthly benefit is subject to reduction under Section III(B)(3) and
(4).
2. Benefits Upon the OFFICER's Death. The Enhanced Retirement
Benefit payable under this Section III(B) shall continue for the life
of the OFFICER. After the OFFICER's death, if the OFFICER's spouse
survives him, the benefit payments under this Section III(B) shall
continue to the OFFICER's spouse until her death, in the same monthly
amount that was payable to the OFFICER as of the first day of the month
in which his death occurred, but if and only if, at the time of his
death, (a) the OFFICER was receiving his benefits under the COMPANY's
Pension Plan in the form of a joint and
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100% survivor annuity with his spouse as contingent annuitant; or (b)
the OFFICER had not yet begun drawing benefits under the COMPANY's
Pension Plan.
3. Effect of Defined Benefit Plans. Beginning as of the first day
of the first month in which the OFFICER is entitled to draw a pension
benefit under any defined benefit portion of the COMPANY's Pension
Plan (as defined in Section III(B)(5)), the monthly benefit described
in Section III(B)(1) shall be reduced by the amount of the monthly
benefit that the OFFICER is then entitled to draw (in the form of a
joint and 100% survivor annuity, if the OFFICER is then married, or in
the form of a single life annuity, if the OFFICER is then unmarried)
under the COMPANY's Pension Plan, irrespective of whether the OFFICER
elects to begin drawing benefits under the Pension Plan. If the
OFFICER does not begin drawing benefits under any defined benefit
portion of the COMPANY's Pension Plan on the earliest date on which he
is entitled to begin drawing them, then, as of the first day of the
month in which he begins drawing benefits from the COMPANY's Pension
Plan, the amount of the reduction applicable under this Section
III(B)(3) shall be increased to equal the amount of the monthly
benefit that the OFFICER draws under the COMPANY's Pension Plan.
Notwithstanding the foregoing, in the event the COMPANY's Pension Plan
is terminated, an offset shall still be calculated based on the
OFFICER's age 65 accrued benefit as of the plan termination date
(including any increase in his accrued benefit from an allocation of
excess assets) adjusted for early payment based on the COMPANY's
Pension Plan actuarial reduction factors to the date that payment is
to commence under Section III(B)(1).
4. Effect of Defined Contribution Plans. Beginning as of the
first day of the first month in which the OFFICER is entitled to draw
a retirement benefit under any
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defined contribution portion of the COMPANY's Pension Plan (as defined
in Section III(B)(5)), the monthly benefit described in Section
III(B)(1) shall be further reduced by the Monthly Base Amount. The
"Monthly Base Amount" is an amount calculated by (i) crediting with an
8% per annum compound interest rate through the Retirement date the
maximum amount that the COMPANY would be permitted to contribute in
the aggregate to the OFFICER's accounts under such plans after the
Closing, assuming the OFFICER has made the maximum permitted deferral;
and (ii) then determining the monthly amount that would be payable
under a net single premium joint and 100% survivor annuity purchased
on the retirement date with the amount calculated under clause(i),
with an initial payment on the retirement date, which utilizes the
method of determining assumptions present in the Indianapolis Life
Insurance Company Employees' Pension Plan.
5. Definitions. For purposes of this Section III(B), the term
"Pension Plan" means the combination of the Indianapolis Life
Insurance Company Employees' Pension Plan (which is a qualified
defined benefit pension plan) and the Indianapolis Life Insurance
Company Excess Benefit Plan (which is an unfunded plan of deferred
compensation for a select group of management and highly compensated
employees), together with any successor or replacement plans,
including any defined contribution plan, in which the OFFICER may
participate from time to time. The term "Retirement" means termination
of the OFFICER's employment with the COMPANY, for any reason, after he
has reached age 53, except that the term "Retirement" does not include
termination by the COMPANY for Cause.
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6. General Creditor. The OFFICER's interest in the Enhanced
Retirement Benefit payable under this Section III(B) shall be that of
an unsecured general creditor of the COMPANY, with no secured or
preferential right to any assets of the COMPANY or any other party.
Any property held by the COMPANY for the purpose of generating cash
flow for benefit payments shall remain its general, unpledged, and
unrestricted assets. The COMPANY's obligations under this Section
III(B) shall be an unfunded and unsecured promise to pay benefits in
the future. At its discretion, the COMPANY may establish one or more
trusts, with such trustees as the COMPANY's Board of Directors may
approve, for the purpose of providing for the payment of benefits
under this Section III(B). Whether or not such a trust is irrevocable,
its assets shall at all times be subject to the claims of the
COMPANY's general creditors in the event of the COMPANY's insolvency.
To the extent that any benefits under this Section III(B) are paid
from such a trust, the COMPANY shall have no further obligation to pay
those benefits. Benefits not paid from the trust shall remain the
COMPANY's obligation.
7. Nonalienability. Rights to benefits payable under this Section
III(B) are not subject in any way to anticipation, alienation,
assignment, sale, transfer, pledge, or encumbrance.
C. Benefits upon Termination for a Change of Control or Good Reason.
If, after a Change of Control, the COMPANY terminates the OFFICER's
employment without Cause, or the OFFICER terminates employment for Good
Reason, the OFFICER, in lieu of any other separation benefits, shall be
entitled to receive the following benefits as severance benefits and as
compensation for the Covenants set forth in Section IV of this Agreement,
provided that the OFFICER executes the waiver and release described in
Section III(C)(6).
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1. Severance Pay. The COMPANY shall pay the OFFICER an amount equal
to two (2) times the sum of (x) the OFFICER's then current annual salary
pursuant to Section I(C)(1) hereof and (y) the greater of (i) the target
bonus amount applicable to the OFFICER under the annual incentive plan in
effect as of the date of this Agreement and (ii) the target bonus amount
for that year as defined in the then applicable annual incentive plan. At
the sole discretion of the COMPANY's Board of Directors, the benefit shall
be paid to the OFFICER either as a lump sum payment within thirty (30) days
after the effective date of termination or the benefit may be paid on
regular pay days over twenty-four (24) months (effective as of the next
regular pay day following the effective date of termination). In the event
of the OFFICER's death before all payments under this paragraph have been
made, the payments will be continued to the OFFICER's Spouse or, if no
Spouse is living at the time of any such payment, such remaining payments
will be made to the Estate of the deceased OFFICER.
2. Welfare Benefits.
(a) Except as otherwise provided in Section III(C)(2)(b), for an
eighteen (18) month period after the OFFICER's termination, the COMPANY
will provide for continuation of medical/dental plan benefits pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). The
OFFICER shall pay the monthly premiums for COBRA coverage; however, the
COMPANY shall pay the OFFICER a $250 cash stipend per month toward such
premium for the 18-month period following the OFFICER's termination (which
amount may be paid in one lump sum or on a per-month basis at the COMPANY's
option), thereby subsidizing such premium. This amount shall be
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paid by the COMPANY whether or not the OFFICER elects to continue his COBRA
benefits and whether or not the OFFICER receives medical benefits from
another employer during such eighteen (18) month period. Notwithstanding
the foregoing, in no event shall the OFFICER be provided the benefits
described in Section III(C)(2)(a) after the OFFICER first becomes entitled
to Medicare.
(b) If, at the time of the OFFICER's termination, the OFFICER meets
the eligibility requirements for the COMPANY's retiree medical benefits,
the provision of those retiree medical benefits to the OFFICER will satisfy
the COMPANY's obligation under Section III(C)(2)(a), and the provisions of
the retiree medical benefits plan shall control over any contrary
provisions of Section III(C)(2)(a).
(c) For a twenty-four (24) month period after such termination, in
addition to the medical benefits described in Section III(C)(2)(a) and (b),
the COMPANY will arrange to provide the OFFICER with life insurance
benefits that are the same or substantially similar to the life insurance
benefits the OFFICER was receiving on the day immediately prior to
termination. The OFFICER shall contribute to the cost of these benefits to
the same extent that such contributions were required for the benefit prior
to termination. In no event shall the OFFICER be provided the benefits
described in Section III(C)(2)(c) after the OFFICER's Normal Retirement
Date (as defined in the Indianapolis Life Insurance Company Employees'
Pension Plan, as in effect on the date of the Agreement) unless the Officer
is eligible for retiree life insurance coverage under the COMPANY's
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welfare benefit plans, in which case the OFFICER will be entitled to
retiree life insurance coverage in accordance with the terms of the
applicable plan.
3. Out Placement Services. The OFFICER shall be provided with out
placement services at the expense of the COMPANY commensurate with those
provided to terminated officers of comparable level and made available
through and at the facilities of a reputable and experienced vendor.
4. Enhanced Retirement Benefits. The OFFICER shall receive the
Enhanced Retirement Benefits described in Section III(B) of this Agreement,
except that such benefits shall not commence until the second anniversary
of the effective date of termination.
5. Additional Benefit. If any portion of any payments received by
the OFFICER from the COMPANY shall be subject to the tax imposed by section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor statutory provision ("Excess Parachute Payments"), the COMPANY
shall pay to the OFFICER such additional amounts as are necessary so that,
after taking into account any tax imposed by Section 4999 or any successor
statutory provision only on any Net Excess Parachute Payments (hereinafter
defined), as well as on payments made pursuant to this sentence, the
OFFICER is in the same after-tax position that he would have been in if
such Section 4999 or any successor statutory provision did not apply and no
payments were made pursuant to this sentence. "Net Excess Parachute
Payments" shall mean that amount equal to the excess, if any, of a) all
Excess Parachute Payments over b) all "parachute payments" (as that term is
defined in Section 28OG of the Code) attributable to the acceleration of
the right to exercise stock options (or any right to receive cash in
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lieu thereof) under any plan of the COMPANY or any successor or person
whose actions result in a Change of Control of the COMPANY.
6. The OFFICER agrees that the benefits described in Sections
III(C)(1), (2)(a), (b), (c), (3), (4) and (5) shall be contingent upon the
OFFICER's execution of a written waiver and release, in a form determined
by the COMPANY, by which the OFFICER will agree, on behalf of himself and
his representatives, heirs, successors, agents, and all other persons who
could assert a claim based on the OFFICER's relationship or dealings with
the COMPANY or AmerUs or any of their subsidiaries, to waive, release, and
promise never to assert any and all claims that exist or may exist against
the COMPANY, AmerUs, and their respective subsidiaries, affiliates,
directors, officers, employees, agents, successors, and assigns arising out
of or connected with any act, omission, or event occurring in whole or in
part on or before the date the OFFICER signs the waiver and release. The
waiver and release will include, but will not be limited to the following:
(a) any and all claims of wrongful discharge, breach of contract
(including any claim of contractual restriction on the COMPANY's right
to terminate the OFFICER's employment), breach of public policy,
negligent or intentional tort, or any other theory of recovery;
(b) any and all claims of discrimination under any federal,
state, or local law prohibiting discrimination on the basis of age,
race, color, sex, national origin, handicap, disability, or other
protected characteristic, including, but not limited to, claims under
the Age Discrimination in Employment Act of 1967 (as amended by the
Older Workers Benefit Protection Act of 1990), Title VII of the
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Civil Rights Act of 1964, the Equal Pay Act of 1963, The Americans
With Disabilities Act, and any state or local human rights or fair
employment practices law; and
(c) any other rights, actions, causes of action, charges, suits,
demands and claims in law or equity, enforceable constitutionally,
statutorily, or under the common law of the United States or any of
its states, territories, or subdivisions.
The waiver and release expressly will not waive any of the OFFICER's rights
or claims that may arise after the date that the OFFICER signs the waiver
and release. In addition, the waiver and release expressly will not waive
any of the following rights the OFFICER may have as an employee or former
employee of the COMPANY:
(x) to receive vested benefits under any benefit plan that, by
its terms, specifically provides for the vesting of benefits,
including any qualified retirement plans;
(y) to convert any insurance benefits under an employee benefit
plan, to the extent that the plan allows for conversion; or
(z) to continue health insurance coverage as provided by COBRA.
D. Benefits upon Any Other Termination. If employment is terminated for
any other reason than set forth in Section III(B) or (C), the OFFICER's
compensation and other benefits set forth in this Agreement shall terminate and
no severance or termination benefits shall be payable. The OFFICER shall be
bound by the Covenants set forth in Section IV.
IV. COVENANTS BY THE OFFICER
A. Non-Solicitation. During the two-year period beginning on the date of
termination of the OFFICER's employment with the COMPANY (the "Restricted
Period"),
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neither the OFFICER nor any Controlled Affiliate will, without the
prior written consent of the Company, solicit for employment, employ in any
capacity or advise or recommend to any other person that it employ or solicit
for employment any person who is, on the date hereof or who hereafter becomes,
prior to the termination of the OFFICER's employment with the COMPANY, a
Professional Associate of the COMPANY, AmerUs or any COMPANY-Related Entity and
who was employed by or under contract with such entity within twelve (12) months
before the time of such solicitation, employment, advice or recommendation. A
"Professional Associate" is any person or entity who is an officer, executive,
manager or agent of the Company, AmerUs or any COMPANY-Related Entity. A
"COMPANY-Related Entity" means all subsidiaries and affiliates of the COMPANY
and of AmerUs, together with allied marketing organizations, insurance sales
general agents, brokers, agents and agencies, joint venture partners and other
allied organizations. During the Restricted Period, the OFFICER shall not
initiate or facilitate the employment of any Professional Associate by any other
person, it being understood that this means that the OFFICER shall have no
contact regarding such employment with any Professional Associate so employed
prior to such employment and that the OFFICER shall not suggest or otherwise
indicate to any other person that such person should approach or otherwise
contact such Professional Associate. As used in this Agreement, "Controlled
Affiliate" means any company, partnership, firm or other entity as to which the
OFFICER possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise. For purposes of this
Section IV(A), the terms "employ" and "employment" include any relationship
under which services are provided in return for compensation. Notwithstanding
the foregoing,
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this Section IV(A) will not apply if the OFFICER's employment is terminated by
the COMPANY without Cause and the OFFICER is not entitled to receive any
severance benefits.
B. Confidential Information. The OFFICER acknowledges that, through the
OFFICER's status with the COMPANY, the OFFICER has, and will have, possession of
important, confidential information and knowledge as to the COMPANY's and
AmerUs' business, including, but not limited to, knowledge of marketing and
operating strategies, franchise agreements, financial results and projections,
future plans, the provisions of important contracts entered into by the COMPANY
or AmerUs, and possible acquisitions. The OFFICER agrees that such knowledge and
information constitute a vital part of the business of the COMPANY and AmerUs
and are by their nature trade secrets and confidential information (collectively
"Confidential Information"). The OFFICER agrees that he shall not, so long as
the COMPANY or AmerUs or a successor thereto remains in existence, divulge,
communicate, furnish or make accessible (whether orally or in writing or books,
articles or any other medium) to any individual, firm, partnership or
corporation any knowledge and information with respect to Confidential
Information directly or indirectly useful in any aspect of the business of the
COMPANY or AmerUs; provided, however, that such Confidential Information may be
disclosed by the OFFICER pursuant to judicial process, provided that the OFFICER
shall give the COMPANY prompt notice of any such required disclosure and shall
cooperate with the COMPANY, at its option and its expense, in resisting such
disclosure. As used in the preceding sentences, "Confidential Information" shall
not include any knowledge or information which:
1. is or becomes available to others, other than as a result of
breach by the OFFICER of this Section IV;
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2. was available to the OFFICER on a nonconfidential basis prior to
its disclosure to the OFFICER through the OFFICER's status as an OFFICER of
the COMPANY; or
3. becomes available to the OFFICER on a nonconfidential basis from
a third party (other than the COMPANY or its representatives) who is not
bound by any confidentiality obligation to the COMPANY.
C. No Competition. Except as otherwise provided in this Section IV(C),
during the Restricted Period, neither the OFFICER nor any of his Controlled
Affiliates will render any services within the United States, directly or
indirectly, as an employee, officer, consultant, or in any other capacity, to
any individual, firm, corporation or partnership engaged in activities
competitive with any activities in which the COMPANY or its subsidiaries or
affiliates are engaged. During the Restricted Period, the OFFICER shall not,
without the prior written consent of the COMPANY, hold any equity interest in
any firm, partnership, or corporation that competes with the COMPANY, except
that beneficial ownership by the OFFICER (together with any one or more members
of the OFFICER's immediate family and together with any entity under the
OFFICER's direct or indirect control) of less than 1% of the outstanding shares
of capital stock of any corporation that may be engaged in any of the same lines
of business as the COMPANY, which stock is listed on a national securities
exchange or publicly traded in the over-the-counter market, shall not constitute
a breach of the covenants set forth in this Section IV(C). Notwithstanding the
foregoing, (1) this Section IV(C) will not apply if the OFFICER's employment
with the COMPANY is terminated by the COMPANY without Cause or by the OFFICER
for Good Reason; and (2) in any event, this Section IV(C) will not apply after
the Closing.
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D. Remedy for Breach. The OFFICER agrees that the provisions of Section
IV may not be adequately enforced by an action for damages and that, in the
event of a breach thereof by the OFFICER, the COMPANY shall be entitled to apply
for and obtain injunctive relief in any court of competent jurisdiction to
restrain the breach or threatened breach of such violation or otherwise to
enforce specifically such provisions against such violation.
V. MISCELLANEOUS
A. Modifications. No provisions of this Agreement may be amended,
supplemented, modified, canceled, or discharged unless such amendment,
supplement, modification, cancellation or discharge is agreed to in a writing
signed by the OFFICER and a duly authorized officer of the COMPANY (other than
the OFFICER), and no provisions hereof may be waived except in writing so signed
by or on behalf of the party granting such waiver. 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 similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement shall be governed
by and interpreted in accordance with the laws of the State of Indiana
regardless of its place of execution or performance.
B. Binding Agreement. This Agreement and all rights and obligations of
the parties hereunder shall inure to the benefit of and be binding upon the
parties' respective personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees, successors and assigns.
The OFFICER shall not have any right to assign this Agreement or any rights
arising hereunder.
C. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three (3)
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arbitrators in Indiana in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction; provided, however, that the COMPANY shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the provisions of
Section IV and the OFFICER hereby consents that such restraining order or
injunction may be granted without the necessity of the COMPANY posting any bond.
The expense of such arbitration shall be borne by the COMPANY.
D. Severability. No provision of this Agreement that is held to be
unenforceable shall in any way invalidate any other provisions of this
Agreement, all of which shall remain in full force and effect.
E. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the COMPANY: Chairman, Executive Committee
of the Board of Directors
Indianapolis Life Insurance Company
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
and, after the closing, a copy to: Xxxxxx X. Xxxxx
Senior Vice President
American Mutual Holding Company
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
If to the OFFICER: Xxxxx X. Xxxxxx
00000 Xxxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
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or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notice of changes of address shall
be effective only upon receipt.
F. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written by any
officer, employee or representative of any party hereto, and any prior agreement
of the parties hereto in respect of the subject matter contained herein.
INDIANAPOLIS LIFE
INSURANCE COMPANY THE OFFICER
BY: /s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
------------------------------------ -----------------------------
Xxxxx X. Xxxxxx
NAME: Xxxx X. Xxxxx
---------------------------------
TITLE: Chairman, Executive Committee
---------------------------------
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ATTACHMENT A
ATTACHMENT A
OUTLINE FOR POST AFFILIATION INTEGRATION, OPERATION AND LEADERSHIP
1. General principles:
- merger of businesses and organizations, not an acquisition
- post closing focus on strengths of each organization by blending
together the best critical competencies of each and applying a best
practices approach
- cost savings are important in order to get the benefits of increased
scale; also important is that the "pain" of cost savings and future
growth are shared by both organizations
- holding company model; with decentralized, semi-autonomous business
units
- create "one company" and avoid an "us versus them" mentality
- emphasis on leadership and on articulating overall corporate
strategies and visions
2. Business operations / programs to be headquartered, focused or located in,
or managed from, the following locations:
a. Indianapolis:
- PPGA and other non-career distribution management & strategy
- niche / interest sensitive whole life products product
development and manufacturing
- term products
- private label business
- development of enterprise wide "customer care model", with IT
support
b. Des Moines:
- corporate headquarters
- holding company operations and services
- consolidated financial / "Wall Street" relationships / rating
agency relationships
- investor relations
- public company compliance and reporting
- investments
- asset and liability management
- participating whole life products and UL products
- career, PPGA and ongoing alternative distribution
- human resources & administration of company wide benefit and
welfare plans (with "on-site" personnel, similar to present
AmerUs structure)
- IT (with "on-site" personnel, similar to present AmerUs
structure)
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- legal & general counsel (with "on-site" personnel, similar to
present AmerUs structure)
c. Topeka:
- continuing annuity operations, distribution and product
development
- IL Annuity operations, distribution and product development moved
to Topeka
x. Xxxxxxxx:
- Banker's present business operations
- New York business
- ongoing UL operations, distribution and product development and
private label
3. Management structure and corporate leadership roles:
- must correspond with item 2 above; key management roles to be filled
from both organizations (details to be developed mutually by CEOs)
- cross reporting: some Indianapolis Life managers will report to AmerUs
managers; some AmerUs managers will report to Indianapolis Life
managers (details to be developed mutually by CEOs)
- Indianapolis Life CEO to be President and CEO of "Indianapolis Group"
and to report directly to AmerUs CEO
- strong, high level strategic leadership role for Indianapolis Life CEO
in whole organization, not just Indianapolis; specific duties to
include:
- contribute to strategic leadership for combined organization
- management of distribution initiatives at Indianapolis Life (as
discussed by CEOs)
- head the variable operations for the combined enterprise,
including AmerUs' AVLIC relationship
- head the company wide efforts on the "customer care" model
- continuation of private label leadership o lead the integration
and cost reduction task force
- build the appropriate e-business structure for the combined
enterprise
- management and key employee employment arrangements to assure success
of integration and long-term strategies (retention and incentive
agreements)
4. Board seat arrangements:
- Indianapolis Life board members, including Indianapolis Life CEO, to
join AmerUs board, with overall composition in rough proportion to
shares distributed to Indianapolis Life policyholders (individuals to
be discussed and agreed upon by CEOs)
- continued presence of Indianapolis Life board members on Indianapolis
Life board, with overall composition in reverse proportion to AmerUs
board (individuals to be discussed and agreed upon by CEOs)
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- Indianapolis CEO to join AmerUs board as Vice Chairman
5. Special Indianapolis commitments:
- continuation of Indianapolis Life name and brand
- continuation of Indianapolis presence, with employment at or near
historical levels (but subject to enterprise wide reductions
contemplated by the transaction)
- continuation of prominent historical role in community involvement and
sponsorships, under leadership of Indianapolis Life CEO
- continuation of corporate giving at or above current levels
- where there are redundancies, every effort will be made to handle any
job elimination through retirement, attrition, buyouts and
reassignment of existing employees and to avoid involuntary
terminations, and associates affected by any functional realignments
will be offered new positions and choices, if possible
6. Other arrangements and principles:
- expense savings commitments by both Indianapolis Life and AmerUs,
under plans to be mutually developed by teams appointed by CEOs;
process to begin upon signing so that plans are developed and approved
before closing
- plans to implement the items under 2 and 3, including post-affiliation
roles of the two management teams, to be mutually developed by teams
appointed by CEOs; process to begin upon signing so that plans are
developed and approved before closing
- post closing job reductions from AmerUs and Indianapolis Life
organizations to be shared roughly proportionately by those
organizations subject to business needs
- continuation of decentralization for HR, financial, actuarial, legal
and IT
The product lines, distribution systems and other operations of the combined
companies will need to be rationalized over time to meet the competitive demands
of the marketplace, to achieve the economies inherent in the Strategic
Reorganization/Combination and to create value for all shareholders.
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