Exhibit 10(e)(3)


 


AMENDED AND RESTATED


EMPLOYMENT CONTINUATION AGREEMENT


WITH EXECUTIVE OFFICER


 


This Amended and Restated Employment Continuation Agreement dated as of
November 3, 2008 (“Agreement”) is by and between Protective Life
Corporation, a Delaware corporation (the “Company”), and                                               
(“Executive”).


 


W I T N E S S E T H :


 


WHEREAS, the Company has determined that Executive holds a position
that is critical to the Company;


 


WHEREAS, the Company believes that, if it is confronted with a
situation that could result in a change in ownership or control of the Company,
continuity of management will be essential to its ability to evaluate and
respond to such situation in the best interests of shareholders;


 


WHEREAS, the Company understands that any such situation could be a
distraction to Executive, to the detriment of the Company and its shareholders;


 


WHEREAS, the Company desires to assure itself of Executive’s services
during the period in which it is confronting such a situation, and to provide
Executive with certain financial assurances to enable Executive to perform his
or her responsibilities without undue distraction and without bias due to
Executive’s personal circumstances; and


 


WHEREAS, to achieve these objectives, the Company and Executive have
previously entered into an Employment Continuation Agreement (the “Prior
Agreement”) which provided the Company and Executive with certain rights and
obligations upon the occurrence of a Change of Control (as defined in Section 2);


 


NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and Executive hereby amend and restate the Prior
Agreement to bring it into compliance with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and to make
certain other changes (as so amended and restated, the “Agreement”) as follows:


 


1.               Effective Date.  The
effective date of this Agreement (the “Effective Date”) shall be the date on
which a Change of Control occurs during the term of this Agreement (as provided
in Section 12(c)); provided that (i) anything
in this Agreement to the contrary notwithstanding, if a Change of Control
occurs and if Executive’s employment with the Company is terminated before the
date on which the Change of Control occurs, and if it is reasonably
demonstrated by Executive that such termination of employment (A) was at
the request of a third party who has taken steps reasonably calculated to
effect a Change of Control, or (B) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this Agreement
the “Effective Date” shall mean the date immediately before such termination of
employment, and (ii) except as provided in clause (i) above, if 


 

















 


Executive is not employed by the Company on the date on which a Change
of Control occurs, this Agreement shall be void and without effect.


 


2.               Definition of Change of Control. 
Subject to the provisions of Code Section 409A, a “Change of Control”
shall occur when (i) any one person (or more than one person acting as a
group (as provided in Code Section 409A)) (such person or group, an “Acquiring
Person”) acquires ownership of the Company’s stock that, together with stock
previously held by the Acquiring Person, constitutes more than 50% of the total
fair market value or more than 50% of the total voting power of the Company, or
(ii) a majority of the members of the Board is replaced during any
12-month period by directors whose appointment or election was not endorsed by
a majority of the members of the Board before the date of the appointment or
election, or (iii) an Acquiring Person acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such Acquiring
Person) assets from the Company that have a total gross fair market value equal
to or more than 80% of the total gross fair market value of the Company’s
assets immediately before such acquisition or acquisitions, or (iv) (except
for purposes of Section 1) any other event or transaction occurs that is
declared by resolution of the Board to constitute a Change in Control for
purposes of this Agreement .


 


3.               Employment Period. 
Subject to Section 6, the Company agrees to continue Executive in
its employ, and Executive agrees to remain in the employ of the Company, for
the period (the “Employment Period”) commencing on the Effective Date and
ending on the second anniversary of the Effective Date.


 


4.               Position and Duties.  (a) 
No Reduction in Position.  During
the Employment Period, Executive’s position (including titles), authority and
responsibilities shall be at least commensurate with those held, exercised and
assigned immediately before the Effective Date. 
Executive’s services shall be performed at the location where Executive
was employed immediately before the Effective Date.


 


(b)         Business Time.  From
and after the Effective Date, Executive agrees to devote Executive’s full
attention during normal business hours to the business and affairs of the
Company and to perform faithfully and efficiently the responsibilities assigned
to Executive to the extent necessary to discharge such responsibilities, except
for periods of vacation, sick leave and other leave to which Executive is
entitled. Executive’s continuing to serve on any boards and committees on which
Executive is serving or with which Executive is otherwise associated
immediately before the Effective Date shall not be deemed to interfere with the
performance of Executive’s services for the Company.


 


5.               Compensation.  (a) Base
Salary.  During the Employment
Period, Executive shall receive a base salary at a monthly rate at least equal
to the monthly base salary paid to Executive by the Company immediately before
the Effective Date.  The base salary
shall be reviewed at least once each year after the Effective Date, and may be
increased (but not decreased) at any time and from time to time by action of
the Board of Directors or any committee thereof or any individual having
authority to take such action in accordance with the Company’s regular
practices. Executive’s base salary, as it may be increased from time to time,
shall hereafter be referred to as “Base Salary”.  Neither the Base Salary nor any increase 


 


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in Base Salary after the Effective Date shall limit or reduce any other
obligation of the Company hereunder.


 


(b)         Annual Bonus and Incentive Compensation. 
During the Employment Period, in addition to the Base Salary, for each
fiscal year of the Company ending during the Employment Period, Executive shall
be entitled to receive an (i) annual bonus which is at least equal to the
greater of (A) the highest annual bonus, including any bonus provided
under the Company’s Annual Incentive Plan (“AIP”), that had been payable to
Executive in respect of either of the two fiscal years ended immediately before
the Effective Date or (B) the amount that would have been payable to
Executive as a target bonus under any bonus program in which Executive participated
(including the AIP) for the year in which the Effective Date occurs and (ii) long-term
incentive compensation opportunities on terms and conditions no less favorable
to Executive than those applicable to Executive before the Effective Date.  Any amount payable hereunder as an annual
bonus shall be paid later than March 15 of the year following the year for
which the amount is payable, unless electively deferred by Executive pursuant
to any deferral programs or arrangements that the Company may make available to
Executive.


 


(c)          Benefit Plans. 
During the Employment Period, Executive (and, to the extent applicable,
Executive’s dependents) shall be entitled to participate in or be covered under
all pension, retirement, deferred compensation, savings, medical, dental,
health, disability, group life, accidental death and travel accident insurance
plans at a level that is commensurate with Executive’s participation in such
plans immediately before the Effective Date or, if more favorable to Executive,
at the level made available to Executive or other similarly situated employees
at any time thereafter.  Executive shall
also be entitled to receive such perquisites as were generally provided to
Executive in accordance with the Company’s policies and practices immediately
before the Effective Date.


 


(d)         Expenses.  During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in accordance with the policies and procedures
of the Company as in effect immediately before the Effective Date.  Notwithstanding the foregoing, the Company
may apply the policies and procedures in effect after the Effective Date to
Executive, if such policies and procedures are more favorable to Executive than
those in effect immediately before the Effective Date.


 


(e)          Indemnification. 
During and after the Employment Period, the Company shall indemnify
Executive and hold Executive harmless from and against any claim, loss or cause
of action arising from or out of or related in any way to Executive’s
performance as an officer, director or employee of the Company or any of its
subsidiaries or in any other capacity, including any fiduciary capacity, in
which Executive serves at the request of the Company to the maximum extent
permitted by applicable law and the Company’s Certificate of Incorporation and
By-Laws (the “Governing Documents”); provided that
in no event shall the protection afforded to Executive hereunder be less than
that afforded under the Governing Documents as in effect immediately before the
Effective Date.


 


                                                6.               Termination of Employment.  (a) 
Death or Disability.  Executive’s
employment shall automatically terminate upon Executive’s death or termination
of employment due to Disability (as defined below) during the Employment
Period. For purposes of this Agreement, 


 


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“Disability” shall mean Executive’s inability to perform the duties of
Executive’s position, as determined in accordance with the policies and
procedures applicable with respect to the Company’s long-term disability plan
as in effect immediately before the Effective Date.


 


(b)         Voluntary Termination. 
Anything in this Agreement to the contrary notwithstanding, Executive
may, upon not less than 10 days’ written notice to the Company, voluntarily
terminate employment for any reason (including early retirement under the terms
of any of the Company’s retirement plans as in effect from time to time) during
the Employment Period; provided that
any termination of employment by Executive pursuant to Section 6(d) on
account of Good Reason (as defined therein) shall not be treated as a voluntary
termination under this Section 6(b).


 


(c)          Cause.  The Company may terminate
Executive’s employment for Cause.  For
purposes of this Agreement, “Cause” shall mean (i) Executive’s conviction
or plea of nolo contendere to a felony; (ii) an
act or acts of extreme dishonesty or gross misconduct on Executive’s part which
result or are intended to result in material damage to the Company’s business
or reputation; or (iii) repeated material violations by Executive of
Executive’s obligations under Section 4, which violations are demonstrably
willful and deliberate on Executive’s part and which result in material damage
to the Company’s business or reputation.


 


(d)         Good Reason.  Executive may terminate
employment for Good Reason.  For purposes
of this Agreement, “Good Reason” shall mean the occurrence of any of the
following, without the express written consent of Executive, after the
Effective Date:


 


(i)  (A) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive’s position
(including titles), authority or responsibilities as contemplated by Section 4,
or (B) any other material adverse change in such position (including
titles), authority or responsibilities;


 


(ii)  any failure by the Company to comply with any of the
provisions of Section 5, other than an insubstantial or inadvertent
failure remedied by the Company promptly after receipt of notice thereof given
by Executive;


 


(iii)  the Company’s requiring Executive to be based at any office
or location more than 20 miles from that location at which Executive performed
services specified under the provisions of Section 4 immediately before
the Change of Control, except for travel reasonably required in the performance
of Executive’s responsibilities; or


 


(iv) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by Section 11(b).


 


In no event shall the mere occurrence of a Change of Control, absent
any further impact on Executive, be deemed to constitute Good Reason.


 


(e)          Notice of Termination.  Any
termination of Executive’s employment by the Company for Cause or by Executive
for Good Reason shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 12(e).  For purposes of 


 


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this Agreement, a “Notice of Termination” shall mean a written notice
given, in the case of a termination for Cause, within 10 business days of the
Company’s having actual knowledge of the events giving rise to such
termination, and in the case of a termination for Good Reason, within 180 days
of Executive’s having actual knowledge of the events giving rise to such
termination, and which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and (iii) if the termination
date is other than the date of receipt of such notice, specifies the
termination date of this Agreement (which date shall be not more than 15 days
after the giving of such notice).  The
failure by Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of Executive hereunder or preclude Executive from asserting such fact or
circumstance in enforcing Executive’s rights hereunder.


 


(f)            Date of Termination.  For
purposes of this Agreement, the term “Date of Termination” shall mean (i) in
the case of a termination of employment for which a Notice of Termination is
required, the date of receipt of such Notice of Termination or, if later, the
date specified therein, and (ii) in all other cases, the actual date on
which Executive’s employment terminates during the Employment Period.


 


7.               Obligations of the Company upon Termination.  (a) 
Death or Disability.  If Executive’s
employment is terminated during the Employment Period by reason of Executive’s
death or Disability, this Agreement shall terminate without further obligations
to Executive or Executive’s legal representatives under this Agreement other
than those obligations accrued hereunder at the Date of Termination, and the
Company shall pay to Executive (or Executive’s beneficiary or estate) (i) Executive’s
full Base Salary through the Date of Termination (the “Earned Salary”), (ii) any
vested amounts or benefits owing to Executive under the Company’s otherwise
applicable employee benefit plans and programs, including any compensation
previously deferred by Executive (together with any accrued earnings thereon)
and not yet paid by the Company and any accrued vacation pay not yet paid by
the Company (the “Accrued Obligations”), and (iii) any other benefits
payable due to Executive’s death or Disability under the Company’s plans,
policies, programs or arrangements (the “Additional Benefits”).


 


Any Earned Salary shall be paid in cash in a single lump sum as soon as
practicable, but in no event more than 10 business days (or at such earlier
date required by law), following the Date of Termination.  Accrued Obligations and Additional Benefits
shall be paid in accordance with the terms of the applicable plan, policy,
program or arrangement.


 


(b)         Cause and Voluntary Termination.  If,
during the Employment Period, Executive’s employment is terminated for Cause or
voluntarily terminated by Executive (other than on account of Good Reason
following a Change of Control) in accordance with Section 6(b), the
Company shall pay Executive (i) the Earned Salary in cash in a single lump
sum as soon as practicable, but in no event more than 10 business days (or such
earlier date required by law), following the Date of Termination, and (ii) the
Accrued Obligations in accordance with the terms of the applicable plan,
policy, program or arrangement.


 


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(c)          Termination by the Company other than for
Cause and Good Reason Termination by Executive.


 


(i)                           Lump Sum Payments.  If
either (a) the Company terminates Executive’s employment other than for
Cause during the Employment Period or (b) Executive terminates employment
for Good Reason at any time during the Employment Period, then the Company
shall pay to Executive the following amounts:


 


(A)      Executive’s
Earned Salary;


 


(B)        a cash
amount (the “Severance Amount”) equal to three (3) times the sum of


 


(1)  Executive’s annual Base Salary; and


 


(2)  the greater of (i) the average of the
bonus amount payable (including any amounts payable under the AIP) to Executive
(including any amounts the receipt of which Executive elected to defer) with
respect to the three fiscal years of the Company (or, if fewer, the number of
such fiscal years in which Executive was an employee of the Company or its
affiliates) immediately before the Change in Control (including, for this
purpose, any AIP Payout (as defined in Section 7(c)(i)(C)) or (ii) the
average of the bonus amount payable (including any amounts payable under the
AIP) to Executive (including any amounts the receipt of which Executive elected
to defer) with respect to the three fiscal years of the Company (or, if fewer,
the number of such fiscal years in which Executive was an employee of the
Company or its affiliates) immediately before the Date of Termination
(including, for this purpose, any AIP Payout); and


 


(3)  the amount determined by dividing (i) the
sum of the Grant Values (as defined below) for the Regular Grants (as defined
below) made in the calendar year in which the Change of Control occurred and in
the previous two calendar years (or, if the Change of Control occurred in a
calendar year in which Executive and other similarly-situated senior executives
have not received a Regular Grant, the Regular Grants made in the three
calendar years preceding the calendar year in which the Change of Control
occurred); provided that any calendar year in which
Executive was not an employee of the Company or its affiliates shall be
disregarded, by (ii) the number of calendar years taken into account
pursuant to clause (i) above.  A
Regular Grant shall mean any grant or award of performance shares, stock
appreciation rights, restricted stock, stock options or other long-term
stock-based incentives; provided that
any “special” or “one-time” grant or award (as determined by the Committee)
shall not be deemed a Regular Grant.  The
Grant Value of any Regular Grant means (a) the value of each such Regular
Grant as of the date of grant (as determined or approved by the Committee), or (b) if
no such value has been 


 


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established
by the Committee, the value of each such Regular Grant as of the date of grant
as determined by application of the Black-Scholes pricing model or such
valuation methodology as may have been regularly used by the Company or its
independent compensation consultant before the Change of Control.  Notwithstanding the foregoing, (a) the
Grant Value of Executive’s Regular Grants in 2006 shall be $              ;
(b) the Grant Value of Executive’s Regular Grants in 2007 shall be $                ;
and (c) the Grant Value of Executive’s Regular Grants in 2008 shall be $                .


 


(C) 
if Executive has an annual cash bonus opportunity (including a cash bonus  opportunity under the AIP) outstanding and
unpaid as of the Date of Termination, a cash payment (the “AIP Payout”) equal
to (1) if the Date of Termination is before December 31 of the fiscal
year of the Company to which such bonus opportunity relates, an amount equal to
Executive’s target bonus opportunity under such bonus plan for such fiscal
year, and (2) if the Date of Termination is on or after December 31
of the fiscal year of the Company to which such bonus opportunity relates, an
amount equal to the amount Executive would have received under such bonus plan
for such fiscal year based on actual achievement of the performance goals with
respect thereto (assuming, for this purpose, that all subjective performance
measures are achieved at a level equal to the greater of the level determined
by the Company pursuant to the terms of such bonus plan and 100%).  Payment of the AIP Payout shall be in lieu of
payment of any annual cash bonus opportunity otherwise due and payable with
respect to the fiscal year of the Company referred to in this Section 7(c)(i)(C).


 


(D)       the Accrued Obligations.


 


Subject to Section 7(f), the Earned Salary and Severance Amount shall
be paid in cash in a single lump sum as soon as practicable, but in no event
more than 10 business days (or such earlier date required by law), following
the Date of Termination.  Subject to Section 7(f),
the AIP Payout shall be paid in cash in a single lump sum (a) if payable
under Section 7(c)(i)(C)(1), as soon as practicable, but in no event more
than 10 business days (or such earlier date required by law), following the
Date of Termination, and (b) if payable under Section 7(c)(i)(C)(2),
as soon as practicable, but in no event later than the earlier of (i) 30
business days (or such earlier date required by law) following the Date of
Termination and (ii) March 15 of the year following the calendar year
for which the AIP Payout is payable. 
Accrued Obligations shall be paid in accordance with the terms of the
applicable plan, policy, program or arrangement.


 


(ii)                        Supplemental Retirement Payment.  If
Executive is entitled to receive the Severance Amount described in Section 7(c)(i),
Executive shall be entitled to receive a supplemental retirement payment,
payable in a cash lump sum, equal in value to the actuarial equivalent (as
defined below) of (A) the monthly benefit payable to Executive (expressed
as a life annuity payable commencing at the later of the Date of Termination
and age 65) determined by adding three years to 


 


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Executive’s credited service as determined at Executive’s Date of
Termination under the terms of Company’s qualified defined benefit pension plan
and supplemental or excess pension plan (collectively, the “Pension Plans”) as
in effect immediately before the Change in Control (subject to any maximum on
credited service set forth in the Pension Plans), minus
(B) the monthly benefit payable to Executive (expressed as a life annuity
payable commencing at the later of the Date of Termination and age 65)
determined pursuant to the terms of all defined benefit pension plans
(including the Pension Plans), active or frozen, in which Executive is a
participant at Executive’s Date of Termination if such plans are sponsored by
the Company or its successors or affiliates.


 


For purposes of this Agreement, “actuarial equivalent” shall mean a
benefit actuarially equal in value to the value of a given benefit in a given
form or schedule, based upon (1) the mortality table or tables (including
any set backs of ages) used to calculate actuarial equivalents under the
Pension Plans as of the date on which an actuarial equivalent is being
determined under this Agreement and (2) an interest rate equal to the sum
of (A) the yield on U.S. 10-year Treasury Notes at constant maturity as
most recently published by the Federal Reserve Bank of New York before
Executive’s Date of Termination; provided, however,
that if such yield has not been so published within 90 days before Executive’s
Date of Termination, the interest rate shall be the yield on substantially
similar securities on the business day before Executive’s Date of Termination
as determined by Regions Bank N.A. upon the request of either the Company or
Executive, plus (B) .75%.


 


For purposes of making the foregoing determinations, at the request of
Executive in writing within 5 days of Executive’s receipt of Notice of
Termination or Executive’s Date of Termination, but in either event at the
Company’s expense, the independent pension consultants most recently used by
the Company in connection with its qualified pension plan before the Change in
Control shall be engaged and shall certify the benefits due to Executive under
this Section 7(c)(ii) in writing within 30 days after the Date of
Termination.  In any event, the
supplemental retirement payment shall be paid to Executive (subject to Section 7(f))
no later than 45 days after the Date of Termination.  If the amount to be offset under clause (B) of
the first paragraph of this Section 7(c)(ii) has not been determined
within 30 days after the Date of Termination, no such offset shall be
permitted.


 


(iii)                     Continuation of Benefits. If Executive is entitled to receive the
Severance Amount described in Section 7(c)(i), Executive (and, to the
extent applicable, Executive’s dependents) shall be entitled, after the Date of
Termination and until the earlier of (A) the second anniversary of the
Date of Termination (the “End Date”) or (B) the date Executive becomes
eligible for comparable benefits under a similar plan, policy or program of a
subsequent employer, to continue participation in all of the Company’s employee
welfare benefit plans including the Company’s hospital, medical, accident,
disability, and life insurance plans (the “Benefit Plans”) as were generally
provided to Executive in accordance with the Company’s policies and practices
immediately before the Effective Date. 
To the 


 


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extent any such benefits cannot be provided under the terms of the
applicable plan, policy or program, the Company shall pay Executive an amount
equal to the cost to the Company of providing such coverage at the same time as
the Severance Amount is payable to Executive. 
Executive’s participation in the Benefit Plans will be on the same terms
and conditions that would have applied had Executive continued to be employed
by the Company through the End Date.  To
the extent any Benefit Plan is a self-insured group health or dental benefit
plan, then in addition to any other limitation provided hereunder, the period
of coverage provided by this Section 7(c)(iii) under such
self-insured group health or dental benefit plan shall not exceed the period of
time during which Executive would be entitled to receive continuation coverage
under Code Section 4980B (“COBRA”) if Executive had elected such coverage
and paid the premiums required by COBRA. 
To the extent that immediately preceding sentence applies, the Company
shall pay Executive an amount equal to the cost of such COBRA continuation
coverage for a period equal to the excess of (i) 24 months minus (ii) the
number of months of COBRA coverage initially available to Executive, as
determined in good faith by the Company, at the same time as the Severance
Amount is payable to Executive.


 


(d)         Discharge of the Company’s Obligations. 
Except as expressly provided in the last sentence of this Section 7(d),
the amounts payable to Executive pursuant to this Section 7 (whether or
not reduced pursuant to Section 7(e)) following termination of Executive’s
employment shall be in full and complete satisfaction of Executive’s rights
under this Agreement and any other claims Executive may have in respect of
employment by the Company or any of its subsidiaries.  Such amounts shall constitute liquidated
damages with respect to any and all such rights and claims and, upon Executive’s
receipt of such amounts, the Company shall be released and discharged from any
and all liability to Executive in connection with this Agreement or otherwise
in connection with Executive’s employment with the Company and its
subsidiaries.  Nothing in this Section 7(d) shall
be construed to release the Company from its commitment to indemnify Executive
and hold Executive harmless as provided in Section 5(e).


 


(e)          Certain Further Payments by the Company.


 


(i)  If any amount or benefit paid or distributed to Executive
pursuant to this Agreement, taken together with any amounts or benefits otherwise
paid or distributed to Executive by the Company or any affiliated company
(including any distribution or payment made pursuant to the terms of the
Company’s compensation plans or arrangements) (collectively, the “Covered
Payments”) are or become subject to the tax (the “Excise Tax”) imposed under
Code Section 4999 or any similar tax that may hereafter be imposed, the
Company shall pay to Executive at the time specified in Section 7(e)(v) an
additional amount (the “Tax Reimbursement Payment”) such that the net amount
retained by 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 7(e), but before deduction for any Federal, state or local
income or employment tax 


 


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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 Code Section 280G,
and as all “parachute payments” in excess of the “base amount” (as defined
under Code Section 280G(b)(3)) 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 before the
Effective Date or tax counsel selected by such accountants (collectively, 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 Code Section 280G(b)(4)(B)) 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 Code Section 280G.


 


(iii)  For
purposes of determining the amount of the Tax Reimbursement Payment, 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)  If 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, 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 Code Section 1274(b)(2)(B).  Notwithstanding the foregoing, if 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
Executive, and interest payable to the Company shall not exceed interest
received or credited to Executive by such tax authority for the period it held
such portion.  Executive and the Company
shall mutually agree upon the course of action to be pursued (and the method of
allocating the expenses thereof) if Executive’s good faith claim for refund or
credit is denied.


 


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If 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 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 but in no event later than
December 31 of the year following the calendar year in which such excess
is paid by Executive.


 


(v)  The Tax Reimbursement Payment (or portion thereof) provided
for in Section 7(e)(i) shall be paid to Executive not later than 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 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
Code Section 1274(b)(2)(B)) 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.  If 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 Executive, payable on the fifth business day after written demand by the
Company for payment (together with interest at the rate provided in Code Section 1274(b)(2)(B)).


 


(f)          Delay of Payments.  Any provision of this Agreement to the
contrary notwithstanding and subject to Code Section 409A, if Executive is
a Specified Employee (as defined below), any payments due under this Agreement
to Executive that are treated as deferred compensation for purposes of Code Section 409A
(such as the Severance Amount) and that are payable on account of a termination
of employment shall be made on the later to occur of the time otherwise
specified in this Section 7 and the first business day after the date that
is six months after Executive’s Date of Termination (or, if earlier, within 15
business days after the date of death of Executive). Executive will be a
Specified Employee if, with respect to April 1 of each calendar year
(beginning April 1, 2005) and for the 12-month period thereafter,
Executive meets the definition of “key employee” of the Company under Code Section 416(i) (without
regard to Code Section 416(i)(5)) at any time during the preceding
calendar year, all as provided in Code Section 409A.


 


8.             Non-exclusivity of Rights. 
Except as expressly provided herein, nothing in this Agreement shall
prevent or limit Executive’s continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Executive may qualify, or limit or otherwise
prejudice such rights as Executive may have under any other agreements with the
Company or any of its affiliated companies. 
Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company or any of its
affiliated companies at or 


 


11

















 


subsequent to the Date of Termination shall be payable in accordance
with such plan or program.


 


9.             Full Settlement.  The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including any set-off, counterclaim, recoupment, defense or
other right which the Company may have against Executive or others whether by
reason of the subsequent employment of Executive or otherwise.


 


10.       Legal Fees and Expenses.  If
Executive asserts any claim in any contest (whether initiated by Executive or
by the Company) as to the validity, enforceability or interpretation of any
provision of this Agreement, the Company shall pay Executive’s legal expenses (or
cause such expenses to be paid) in accordance with Section 12(j) of
this Agreement, including Executive’s reasonable attorney’s fees, on a
quarterly basis, upon presentation of proof of such expenses; provided that Executive shall reimburse the Company for such
amounts, plus simple interest thereon at the 90-day United States Treasury Bill
rate as in effect from time to time, compounded annually, if Executive shall
not prevail, in whole or in part, as to any material issue as to the validity,
enforceability or interpretation of any provision of this Agreement.


 


11.       Successors.  (a)  This Agreement is
personal to Executive and, without the prior written consent of the Company,
shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by Executive’s legal
representatives.


 


(b)  This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors.  The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.


 


12.       Miscellaneous.  (a) 
Applicable Law; Interpretation. 
This Agreement shall be governed by and construed and conferred in
accordance with the laws of the State of Delaware applied without reference to
principles of conflict of laws.  If any
provision of this Agreement is invalid or unenforceable, the validity and
enforceability of the remaining provisions hereof shall not be affected.  The masculine shall include the feminine (and
vice versa), the single shall include
the plural (and vice versa), and the words “include”
and “including” shall be deemed to be followed by the phrase “without
limitation” unless the context clearly requires otherwise.  This Agreement may be executed by manual or
facsimile signature.  The headings in
this Agreement are solely for convenience and shall not affect the meaning or
interpretation of this Agreement.


 


(b)   Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement shall be resolved by binding arbitration.  The arbitration shall be held at a site
selected by the arbitrators and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American 


 


12

















 


Arbitration Association then in effect at the time of the arbitration,
and otherwise in accordance with principles which would be applied by a court
of law or equity.  The arbitrator shall
be acceptable to both the Company and Executive.  If the parties cannot agree on an acceptable
arbitrator, the dispute shall be heard by a panel of three arbitrators, one
appointed by each of the parties and the third appointed by the other two
arbitrators.


 


(c)   Agreement Term, Termination and Amendment.  The initial term of this Agreement shall
begin on the date hereof and shall terminate on May 1, 2012.  On each May 1 beginning May 1,
2009, the term of this Agreement shall automatically extend by one year unless
at least 30 days prior to such May 1 the Board of Directors of the Company
determines, and the Company so notifies Executive, that there will be no such
extension.  The determination made by the
Board of Directors as set forth in the preceding sentence shall not be
effective if it is reasonably demonstrated by Executive that such determination
(i) was at the request of a third party who has taken steps reasonably
calculated to effect a Change of Control, or (ii) otherwise arose in
connection with or anticipation of a Change of Control.  This Agreement may be amended or modified
only by a written agreement signed by the parties hereto or by their respective
successors and legal representatives.


 


(d)   Entire Agreement. This Agreement shall
constitute the entire agreement between the parties hereto with respect to the
matters referred to herein and, without limiting the generality of the
foregoing, any Employment Continuation Agreement executed between the Company
and Executive before the date of this Agreement is hereby terminated.  There are no promises, representations,
inducements or statements between the parties other than those that are expressly
contained herein.  Executive is entering
into this Agreement of Executive’s own free will and accord, and with no
duress, has read this Agreement, and understands it and its legal consequences.


 


(e)   Notices. 
All notices and other communications hereunder shall be in writing and
shall be given by hand-delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:


 


	
  If to Executive:

  	
   

  	
  at the home address of Executive as set forth in the
  records of the Company

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Protective Life Corporation

  
	
   

  	
   

  	
  2801 Highway 280 South

  
	
   

  	
   

  	
  Birmingham, Alabama 
  35223

  
	
   

  	
   

  	
  Attn: General Counsel

  



 


or to such other address as either party shall have furnished to the
other in writing in accordance herewith. 
Notices and communications shall be effective when actually received by
the addressee.


 


(f)   Confidentiality. 
Executive agrees to keep the terms of this Agreement confidential and
agrees not to voluntarily disclose any information concerning this Agreement to
anyone except Executive’s spouse, parents, legal counsel or accountant and
provided that they (each and all) agree at Executive’s risk to keep such
information confidential and not disclose it to others; provided
that this nondisclosure provision does not prohibit disclosure (1) at the 


 


13

















 


direction or with the consent of the President or an Executive Vice
President of the Company, (2) to tax agencies, (3) as required by law
or court order, or (4) as may be necessary to enforce Executive’s rights
under this Agreement.


 


(g)   Tax Withholding. 
The Company may withhold from any amounts payable under this Agreement
such Federal, state, local, or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.


 


(h) Waivers.  The
failure of Executive or the Company to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right Executive or the
Company may have hereunder, including the right of Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or of any other provision or right of this Agreement.


 


(i)   Employment at Will.  Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between
Executive and the Company, the employment of Executive by the Company is “at
will” and, subject to Section 1, Executive’s employment may be terminated
by either Executive or the Company at any time prior to the Effective Date, in
which case Executive shall have no further rights under this Agreement.


 


(j)   Reimbursement of Expenses.  Except as permitted by Code Section 409A,
(i) the right to reimbursement of expenses under this Agreement shall not
be subject to liquidation or exchange for another benefit, (ii) the amount
of expenses eligible for reimbursement under this Agreement provided during any
taxable year shall not affect the expenses eligible for reimbursement to be
provided in any other taxable year, provided that the foregoing clause (ii) shall
not be violated without regard to expenses reimbursed under any arrangement
covered by Code Section 105(b) solely because such expenses are
subject to a limit related to the period the arrangement is in effect and (iii) such
payments shall be made on or before the last day of Executive’s taxable year
following the taxable year in which the expense was incurred.


 


(k)   Termination of Employment.  For all purposes of this Agreement, Executive
shall not have “termination of employment” (and corollary terms) from the
Company unless and until Executive has a “separation from service” (as
determined under Code Section 409A as uniformly applied in accordance with
such rules as shall be established from time to time by the Company).


 


(l)   Amendment to LTIP.  Executive hereby agrees to the terms of the
Company’s Long-Term Incentive Plan as amended and restated as of December 31,
2008 (the “Amended LTIP”) and to the application of terms of the Amended LTIP
to any awards previously granted to Executive.


 


[This Agreement is continued and signed on the following page.]


 


14

















 


IN WITNESS
WHEREOF, the Company and Executive have duly executed this Agreement as of the
day and year first above written.


 


 


	
   

  	
   

  	
  PROTECTIVE
  LIFE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John
  D. Johns

  
	
   

  	
   

  	
  Title:

  	
  Chairman
  of the Board, President and

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  
							



 


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