exv10w22






Exhibit 10.22




Execution Version




EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT




     AGREEMENT,
dated as of the 7th day of March, 2007, by and between Life of the South
Corporation, a Georgia corporation (the “Company”), and Richard S. Kahlbaugh, a resident of Ponte
Vedra, Florida (the “Executive”).



     WHEREAS, the
Company has entered into an Agreement and Plan of Merger dated March 7, 2007
(the “Merger Agreement”) between the Company, Summit Partners Private Equity Fund VII-A, L.P.,
Summit Partners Private Equity Fund VII-B, L.P., Summit Subordinated Debt Fund III-A, L.P., Summit
Subordinated Debt Fund III-B, L.P., Summit Investors VI, L.P., LOS Acquisition Co. and the
shareholders party thereto, pursuant to which Acquirer will merge with and into the Company;



     WHEREAS, the Company desires to engage the services of the Executive and the Executive desires
to be employed by the Company;



     WHEREAS, the Company desires to be assured that the unique and expert services of the
Executive will be substantially available to the Company, and that the Executive is willing and
able to render such services on the terms and conditions hereinafter set forth; and



     WHEREAS, the Company desires to be assured that the confidential information and good will of
the Company will be preserved for the exclusive benefit of the Company;



     NOW, THEREFORE, in consideration of such employment and the mutual covenants and promises
herein contained, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree as follows:



     Section 1. Employment and Position. Subject to Section 2, the Company hereby employs
the Executive as its President and Chief Executive Officer, and the Executive hereby accepts such
employment under and subject to the terms and conditions hereinafter set forth.



     Section 2. Term. The term of employment under this Agreement shall begin on the
Closing Date (as defined in the Merger Agreement) (the “Effective Date”) and, unless sooner
terminated as provided in Section 6, shall be for a rolling, three-year term (the “Term”) so that
the initial term shall be three years and, on each anniversary of the Effective Date, the Agreement
shall be renewed automatically for an additional year unless either party shall provide written
notice to the other party not less than ninety (90) days prior to the anniversary of the Effective
Date that it or he does not wish to so extend the Agreement. Upon delivery of such notice, the
“Term” of this Agreement shall be the three years following the anniversary of this Agreement that
next follows such notice and this Agreement shall terminate upon the expiration of such Term.
Notwithstanding anything herein to the contrary, this Agreement will automatically be terminated
upon termination of the Merger Agreement.



     Section 3. Duties. The Executive shall perform services in a managerial capacity in a
manner consistent with the Executive’s position as President and Chief Executive Officer, subject
to the general supervision of the Board of Directors of the Company (the “Board”). The



 









 




Executive hereby agrees to devote his full business time and best efforts to the faithful
performance of such duties and to the promotion and forwarding of the business and affairs of the
Company for the Term.




     Section 4. Compensation. (a) Salary. In consideration of the services
rendered by the Executive under this Agreement, the Company shall pay the Executive a base salary
(the “Base Salary”) at the rate of $280,000 per calendar year. The Base Salary shall
be paid in such installments and at such times as the Company pays its regularly salaried
executives and shall be subject to all necessary withholding taxes, FICA contributions and similar
deductions. The Base Salary will be reviewed annually by the Compensation Committee of the Board
and increases shall be made if deemed warranted by the Compensation Committee, in its sole
discretion.



     (b) Annual Bonus. During the Term, the Company from time to time shall
pay the Executive an annual bonus (the “Annual Bonus’). The Annual Bonus shall be calculated as
described in Schedule A hereto. Any compensation paid to the Executive as the Annual Bonus
shall be in addition to the Base Salary, but shall be in lieu of participation in any other
incentive, profit sharing or bonus compensation program which the Company currently maintains;
provided that, to the extent determined by the Board from time to time, the Executive will also be
eligible to participate in profit sharing, incentive compensation or bonus compensation programs
adopted in the future. All Bonus and benefit plans are subject to annual review and change by the
Board relative to key strategic objectives for the year.



     The annual performance bonus to which the Executive is entitled pursuant to this Section, is
referred to herein as the “Bonus.” Such Bonus shall be paid within thirty (30) days after receipt
of audited financial statements by the Company for the year for which such Bonus is paid, provided
that an earlier draw against the Annual Bonus projected to be earned may at the discretion of the
Board be paid when earnings for the fiscal year can be reasonably determined in accordance with
past practices.



     (c) Deferred Bonus. Commencing for the fiscal year ending December 31, 2007, on or
before May 1 of each year during the Term hereof for which the Company’s annual EBITA targets are
met for the preceding calendar year, the Company shall provide the Executive a deferred bonus (the
“Deferred Bonus”) of $15,000. For every 1% the actual EBITA exceeds the annual EBITA target, the
Deferred Bonus shall be increased by $1,000 up to a maximum aggregate Deferred Bonus of $30,000
annually. The Deferred Bonus shall be paid to a Rabbi Trust account in the Executive’s name and
shall be paid in accordance with the Company’s Deferred Bonus Plan notwithstanding any termination
of the Executive’s employment or other such event and, for the avoidance of doubt, shall be fully
vested and not subject to forfeiture.



     (d) Stock Options. In addition to any benefits the Executive may receive, the
Company may, from time to time, grant the Executive stock options (the “Executive Options”)
exercisable for shares of capital stock of the Company and, subject to the terms of this Agreement,
such Executive Options shall have such terms and provisions as may be determined appropriate by the
Board and consistent with historical option grants to similarly-situated executives of the





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Company under the Company’s stock option plans. At the Effective Time, the Executive shall
receive Executive Options to purchase shares representing 1.6% of the fully diluted equity of the
Company.




     Section 5. Benefits. In addition to the compensation detailed in Section 4 of this
Agreement, the Executive shall be entitled to the following additional benefits:



     Section 5.01. Paid Vacation. The Executive shall be entitled to four (4) weeks paid
vacation per calendar year, such vacation to extend for such periods and shall be taken at such
intervals as shall be appropriate and consistent with the proper performance of the Executive’s
duties hereunder.



     Section 5.02. Insurance Coverage. During the Term, the Executive and/or the
Executive’s dependents, as the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices, policies and programs provided by the
Company to similarly-situated executives of the Company (including, without limitation, medical,
dental and group life insurance plans and programs and the executive medical reimbursement plan) to
the extent applicable generally to other executives of the Company.



     Section 5.03. Reimbursement of Expenses. The Company shall reimburse the Executive
for all reasonable and necessary expenses actually incurred by the Executive directly in connection
with the business affairs of the Company and the performance of his duties hereunder, upon
presentation of proper receipts or other proof of expenditure and subject to such reasonable
guidelines or limitations provided by the Company from time to time. The Executive shall comply
with such reasonable limitations and reporting requirements with respect to such expenses as the
Board may establish from time to time. Except to the extent specifically provided however, the
Executive shall not use Company funds for non-business, non-Company related matters or for personal
matters.



     Section 5.04. Perquisites. During the Term, the Executive shall be entitled to an
automobile allowance of up to $1,100 per month.



     Section 5.05. Other Benefit Plans. During the Term, the Executive shall be entitled
to participate in other incentive, savings, retirement, 401k, deferred compensation and pension
plans, practices, policies and programs as determined by the Board from time to time.



     Section 6. Termination. This Agreement shall be terminated at the end of the Term or
earlier as follows:



     Section 6.01. Death. This Agreement shall automatically terminate upon the death of
the Executive and all rights of the Executive and his heirs, executors and administrators to
compensation and other benefits shall cease, except that the compensation provided in Section 4
shall continue through the end of the month in which the Executive’s death occurs.



     Section 6.02. Permanent Disability. In the event of any physical or mental disability
of the Executive rendering the Executive substantially unable to perform his duties in any material
respect hereunder for a period of at least 180 days out of any twelve-month period, this Agreement
shall terminate automatically. Any determination of disability shall be made by the



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Board in consultation with a qualified physician or physicians selected by the Board and
reasonably acceptable to the Executive. The failure of the Executive to submit to a reasonable
examination by such physician or physicians shall act as an estoppel to any objection by the
Executive to the determination of disability by the Board.




     Section 6.03. By the Company For Cause.  The employment of the Executive
may be terminated by the Company for Cause (as defined below) at any time effective upon written
notice to the Executive. For purposes hereof, the term “Cause” shall mean that the Board has by
resolution at a duly called meeting of the Board determined that any one or more of the following
has occurred:




     (a) The Executive shall have been convicted of, or shall have pleaded guilty or nolo
contendere to, any felony or any crime involving moral turpitude or misrepresentation;




     (b) The Executive shall have failed or refused to carry out the reasonable and lawful
instructions of the Board (other than as a result of illness or disability) concerning
duties or actions consistent with the Executive’s position as President and Chief Executive
Officer and such failure or refusal shall have continued for a period of ten (10) days
following written notice from the Board;




     (c) the Executive shall have breached any provision of Section 8 or 9 hereof; or




     (d) the Executive shall have committed any fraud, embezzlement, misappropriation of
funds, misrepresentation, breach of fiduciary duty or other material act of dishonesty
against the Company.




     (e) the Executive shall have engaged in any gross or willful misconduct resulting in a
substantial loss to the Company or substantial damage to its reputation.




     Notwithstanding the foregoing, the occurrence of the event specified in (c) above shall
not constitute Cause unless the Company gives Executive written notice that such event
constitutes Cause and the Executive thereafter fails to cure such event within thirty (30)
days after receipt of such notice.



     Section 6.04. By the Company without Cause. The Company may terminate the Executive’s
employment at any time without Cause effective upon written notice to the Executive.



     Section 6.05. By the Executive Voluntarily. The Executive may terminate this
Agreement at any time effective upon at least 30 days prior written notice to the Company.



     Section 6.06. By the Executive for Good Reason. The Executive may terminate this
Agreement effective upon written notice to the Company for Good Reason. Such notice must provide a
detailed explanation of the Good Reason. Any such termination shall be treated for purposes of
this Agreement as a termination by the Company without Cause. For this purpose, the term “Good
Reason” shall mean: (i) the assignment to the Executive of any duties



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inconsistent in any substantial respect with the Executive’s position, authority or
responsibilities as contemplated by Section 1 of this Agreement or any duties which are illegal or
unethical; (ii) any material failure to pay the compensation or benefits described in Sections 4 or
5 of this Agreement; or (iii) the relocation by the Company of the Executive’s primary place of
employment with the Company to a location not within a 50 mile radius of Jacksonville, Florida.
Notwithstanding the foregoing, in the event the Executive provides notice of Good Reason contained
in subclause (i) of the immediately preceding sentence, the Company shall have the opportunity to
cure such Good Reason within 30 days of receiving such notice.




     Section 7. Termination Payments and Benefits.



     Section 7.01. Voluntary Termination, Termination For Cause. Upon any termination of
this Agreement either (i) voluntarily by the Executive or (ii) by the Company for Cause as provided
in Section 6.03, all payments, salary and other benefits hereunder shall cease at the effective
date of termination. Notwithstanding the foregoing, the Executive shall be entitled to receive
from the Company (a) all Base Salary earned or accrued through the date the Executive’s employment
is terminated, (b) reimbursement for any and all monies advanced in connection with the Executive’s
employment for reasonable and necessary expenses incurred by the Executive through the date the
Executive’s employment is terminated and (c) all other payments and benefits to which the Executive
may be entitled under the terms of any applicable compensation arrangement or benefit plan or
program of the Company, including any earned and accrued, but unused vacation pay, any Annual Bonus
for a prior year provided the Executive was employed on December 31 of such year and any Deferred
Bonus earned in prior years and held in trust for the Executive (collectively, “Accrued Benefits”),
except that, for purposes of this Agreement, Accrued Benefits shall not include any entitlement to
Annual Bonus, Deferred Bonus for the then current year, or any severance under any Company
severance policy generally applicable to the Company’s salaried employees.



     Section 7.02. Termination without Cause or for Good Reason. In the event that this
Agreement is terminated by the Company without Cause, or by the Executive for Good Reason, the
Executive shall be entitled to receive, as his exclusive right and remedy in respect of such
termination, (i) his Accrued Benefits, (ii) as long as the Executive does not violate the
provisions of Section 8 and Section 9 hereof, severance pay equal to the Executive’s then current
monthly Base Salary, payable in accordance with the Company’s regular pay schedule, for twelve (12)
months from the date of termination of employment, (iii) at the times the Company pays its
executive bonuses in accordance with its general payroll policies, an amount equal to that portion
of the Annual Bonus which but for his termination would have been earned by the Executive during
the year of his termination (pro-rated based on a formula, the denominator of which shall be 365
and the numerator of which shall be the number of days during the year of his termination during
which the Executive was employed by the Company on an active status) (the “Pro-Rated Bonus”) and
(iv) the Executive and the Executive’s family shall continue to be covered, upon the same terms and
conditions as described hereinabove, by the same or equivalent medical, dental, and life insurance
coverages as in effect for the Executive immediately prior to the termination of his employment,
until the earlier of (A) the expiration of the period for which he receives severance pay pursuant
to clause (ii) above or (B) the date the Executive has commenced new employment and has thereby
become eligible for comparable benefits, subject to the Executive’s rights under COBRA.



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     Section 7.03. Termination due to Death or Permanent Disability. In the event that
this Agreement is terminated due to the death or Permanent Disability of the Executive, the
Executive, or his estate or designated beneficiary, as the case may be, shall receive (i) Accrued
Benefits and (ii) the Pro-Rated Bonus. In addition, the Executive and his family shall continue to
be covered for a period of one (1) year, upon the same terms and conditions as described
hereinabove, by the same or equivalent medical, dental, and life insurance coverage as in effect
for the Executive immediately prior to the termination of his employment because of Death or
Permanent Disability.



     Section 7.04. Accrued Benefits. Notwithstanding anything else herein to the contrary,
all Accrued Benefits to which the Executive (or his estate or beneficiary) is entitled shall be
payable in cash promptly upon termination of his Employment Period, except as otherwise
specifically provided herein, or under the terms of any applicable policy, plan or program.



     Section 7.05. No Other Benefits. Except as specifically provided in this Section 7,
the Executive shall not be entitled to any compensation, severance or other benefits from the
Company or any of its subsidiaries or affiliates upon the termination of this Agreement for any
reason whatsoever. Payment by the Company of all Accrued Benefits and other amounts and
contributions to the cost of the Executive’s participation in the Company’s group health and dental
plans that may be due to the Executive under the applicable termination provision of Section 6
shall constitute the entire obligation of the Company to the Executive.



     Section 7.06 Survival of Certain Provisions. Provisions of this Agreement shall
survive any termination of employment if so provided herein or if necessary or desirable fully to
accomplish the purposes of such provision, including, without limitation, the obligations of the
Executive under Section 8 and 9 hereof. The obligation of the Company to make payments to or on
behalf of the Executive under Section 7 hereof is expressly conditioned upon the Executive’s
continued full performance of obligations under Section 8 and Section 9 hereof and execution of a
waiver releasing claims against the Company substantially in the form attached hereto. The
Executive recognizes that, except as expressly provided in Section 7, no compensation is earned
after termination of employment.



     Section 7.07 Public Statement of Termination. In the event the Executive’s employment
terminates for any reason, the Company and the Executive shall agree upon a public statement
pertaining to the Executive’s termination of employment, and the terms of said statement shall not
be subject to subsequent modification by either party unless required by law; provided, however,
that in the event the Company and the Executive are unable in good faith to agree on such a
statement, the Company may make public statements as are necessary to comply with the law.



     Section 7.08 Limitation on Benefits on Termination. (a) Anything in this Agreement
to the contrary notwithstanding and except as set forth below, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise) (a “Payment”) would be treated as an “excess parachute payment” (as defined in Section
280G(b)(1) of the Internal Revenue Code of 1986 as amended (the “Code”)), then the Company and the
Executive shall modify such Payments so that such Payments shall not cause



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the Company to make an “excess parachute payment.” The Company and the Executive agree to
work together in good faith, and consistent with applicable law, to modify such Payments in a way
so as to have the least impact on the Executive and his Payments.




          (b) All determinations required to be made under this Section 7.08 and the assumptions to be
utilized in arriving at such determination, shall be made by the Company’s independent auditors or
such other certified public accounting firm reasonably acceptable to the Executive as may be
designated by the Company. The Executive shall be entitled, to the extent permitted by law and not
adverse to the Company, to elect which Payments shall be modified or reduced so that, using the
assumptions of the accounting firm referred to herein, no Payment shall be treated as an “excess
parachute payment.” If the Executive fails to identify which Payments shall be reduced as provided
herein within 10 days of the Company’s written request therefor, then the Company shall be entitled
to determine which Payments shall be modified or reduced such that no Payment shall be treated as
an “excess parachute payment.”




          (c) This Section 7.08 shall be interpreted so as to avoid the imposition of excise taxes on
the Executive under Section 4999 of the Code or the disallowance of a deduction to the Company
pursuant to Section 280G(a) of the Code with respect to amount payable, or to be provided, under
this Agreement. Notwithstanding the foregoing, in no event will any of the provisions of this
Section 7.08 create, without the consent of the Executive, an obligation on the part of the
Executive to refund any amount to the Company following payment of such amount.




     Section 8. Proprietary Information; Inventions in the Field.



     Section 8.01. Proprietary Information. In the course of service to the Company, the
Executive will have access to confidential specifications, know-how, strategic or technical data,
marketing research data, product research and development data, manufacturing techniques,
confidential customer lists, sources of supply and trade secrets, all of which are confidential and
may be proprietary and are owned or used by the Company, or any of its subsidiaries or affiliates.
Such information shall hereinafter be called “Proprietary Information” and shall include any and
all items enumerated in the preceding sentence and coming within the scope of the business of the
Company or any of its subsidiaries or affiliates as to which the Executive may have access, whether
conceived or developed by others or by the Executive alone or with others during the period of
service to the Company, whether or not conceived or developed during regular working hours.
Proprietary Information shall not include any records, data or information which are in the public
domain during or after the period of service by the Executive provided the same are not in the
public domain as a consequence of disclosure directly or indirectly by the Executive in violation
of this Agreement.



     Section 8.02. Fiduciary Obligations. The Executive agrees that Proprietary
Information is of critical importance to the Company and a violation of this Section 8.02 and
Section 8.03 would seriously and irreparably impair and damage the Company’s business. The
Executive agrees that he shall keep all Proprietary Information in a fiduciary capacity for the
sole benefit of the Company.



     Section 8.03. Non-Use and Non-Disclosure. The Executive shall not during the Term or
at any time thereafter (a) disclose, directly or indirectly, any Proprietary Information to any



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person other than the Company or Executives thereof at the time of such disclosure who, in the
reasonable judgment of the Executive, need to know such Proprietary Information or such other
persons to whom the Executive has been specifically instructed to make disclosure by the Board and
in all such cases only to the extent required in the course of the Executive’s service to the
Company or (b) use any Proprietary Information, directly or indirectly, for his own benefit or for
the benefit of any other person or entity. At the termination of his employment, the Executive
shall deliver to the Company all notes, letters, documents and records which may contain
Proprietary Information which are then in his possession or control and shall destroy any and all
copies and summaries thereof.




     Section 8.04. Assignment of Inventions. The Executive agrees to assign and transfer
to the Company or its designee, without any separate remuneration or compensation, his entire
right, title and interest in and to all Inventions in the Field (as defined below), together with
all United States and foreign rights with respect thereto, and at the Company’s expense to execute
and deliver all appropriate patent and copyright applications for securing United States and
foreign patents and copyrights on Inventions in the Field and to perform all lawful acts, including
giving testimony, and to execute and deliver all such instruments that may be necessary or proper
to vest all such Inventions in the Field and patents and copyrights with respect thereto in the
Company, and to assist the Company in the prosecution or defense of any interference which may be
declared involving any of said patent applications, patents, copyright applications or copyrights.
For the purposes of this Agreement, the words “Inventions in the Field” shall include any
discovery, process, design, development, improvement, application, technique, or invention, whether
patentable or copyrightable or not and whether reduced to practice or not, conceived or made by the
Executive, individually or jointly with others (whether on or off the Company’s premises or during
or after normal working hours) while in the employ of the Company, and which was or is directly or
indirectly related to the Business of the Company or any of its subsidiaries, or which resulted or
results from any work performed by any Executive or agent thereof during the Term.



     Section 8.05 Return of Documents. All notes, letters, documents, records, tapes and
other media of every kind and description relating to the business, present or otherwise, of the
Company or its affiliates and any copies, in whole or in part, thereof (collectively, the
“Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of
the Company. The Executive shall safeguard all Documents and shall surrender to the Company at the
time his employment terminates, or at such earlier time or times as the Board or its designee may
specify, all Documents then in the Executive’s possession or control.



     Section 9. Restrictions on Activities of the Executive



     Section 9.01. Acknowledgments. The Executive and Company agree that he is being
employed hereunder in a key capacity with the Company and that the Company is engaged in a highly
competitive business and that the success of the Company’s business in the marketplace depends upon
its goodwill and reputation for quality and dependability. The Executive and Company further agree
that reasonable limits may be placed on his ability to compete against the Company as provided
herein to the extent that they protect and preserve the legitimate business interests and good will
of the Company.



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     Section 9.02. General Restrictions.



          (a) During the Term and for the Non-Competition Period (as defined below), and during any time
the Executive is receiving severance payments under this Agreement, the Executive will not
(anywhere in the world where the Company or any of its subsidiaries then conducts business) engage
or participate in, directly or indirectly, as principal, agent, employee, employer, consultant,
investor or partner, or assist in the management of, or provide advisory or other services to, or
own any stock or any other ownership interest in, or make any financial investment in, any business
which is Competitive with the Company (as defined below); provided that the ownership of not more
than 2% of the outstanding securities of any class listed on an exchange or regularly traded in the
over-the-counter market shall not constitute a violation of this Section 9.02. For purposes of
this Agreement, a business shall be considered “Competitive with the Company” only if it offers
products or provides marketing, administration or related services for payment protection or
insurance or engages in any other business the Company and/or its subsidiaries are engaged in or
have taken steps to be engaged in prior to Executive’s termination of employment.




          (b) For purposes of this Agreement, the “Non-Competition Period” shall mean the longer of (i)
the Term and (ii) a period of twelve (12) consecutive months after the Executive’s employment
terminates and (iii) the period during which the Company is paying any amounts to the Executive
hereunder or otherwise providing benefits to the Executive.





	 	 	Section 9.03. Executives, Customers and Suppliers.





          (a) During the Term and the Non-Solicitation Period (as defined below), the Executive will not
solicit, or attempt to solicit, any officer, director, consultant or Executive of the Company or
any of its subsidiaries or affiliates to leave his or her engagement with the Company or such
subsidiary or affiliate nor will he call upon, solicit, divert or attempt to solicit or divert from
the Company or any of its affiliates or subsidiaries any of their customers or suppliers, or
potential customers or suppliers, of whose names he was aware during the term of his employment
with the Company; provided, however, that nothing in this Section 9.03 shall be deemed to prohibit
the Executive from calling upon or soliciting a customer or supplier during the Non-Solicitation
Period if such action relates solely to a business which is not Competitive with the Company; and
provided, further, however, that nothing in this Section 9.03 shall be deemed to prohibit the
Executive (i) from soliciting or hiring any Executive of the Company or any of its subsidiaries or
affiliates, if such Executive is a member of the Executive’s immediate family; (ii) from placing
advertisements in newspapers or other media of general circulation advertising employment
opportunities; and (iii) from hiring persons who respond to such advertisements, provided that they
were not otherwise solicited by the Executive in violation of this section.




          (b) For purposes of this Agreement, the “Non-Solicitation Period” shall mean the longer of (i)
the Term and (ii) a period of twenty-four (24) consecutive months after the Executive’s employment
terminates and (iii) the period during which the Company is paying any amounts to the Executive
hereunder or otherwise providing benefits to the Executive.







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     Section 9.04. THE EXECUTIVE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES
HE OR SHE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT
HIM OR HER, IN THE EVENT OF TERMINATION OF HIS OR HER EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD
SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF SECTION 8 OR 9 HEREOF, FOR EXAMPLE, BY
USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR SOME OF THEM, IN THE SERVICE OF A NON-COMPETITOR.



     Section 10. Remedies. It is specifically understood and agreed that any breach of
the provisions of Section 8 or 9 of this Agreement is likely to result in irreparable injury to the
Company and that the remedy at law alone will be an inadequate remedy for such breach, and that in
addition to any other remedy it may have, the Company shall be entitled to enforce the specific
performance of this Agreement by the Executive and to seek both temporary and permanent injunctive
relief (to the extent permitted by law) without bond and without liability should such relief be
denied, modified or violated. Neither the right to obtain such relief nor the obtaining of such
relief shall be exclusive or preclude the Company from any other remedy.



     Section 11. Severable Provisions. The provisions of this Agreement are severable and
the invalidity of any one or more provisions shall not affect the validity of any other provision.
In the event that a court of competent jurisdiction shall determine that any provision of this
Agreement or the application thereof is unenforceable in whole or in part because of the duration
or scope thereof, the parties hereto agree that said court in making such determination shall have
the power to reduce the duration and scope of such provision to the extent necessary to make it
enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full
extent permitted by law.



     Section 12. Notices. All notices hereunder, to be effective, shall be in writing and
shall be delivered by hand or mailed by certified mail, postage and fees prepaid, as follows:



	 	 	 	 	 
	 

	 	If to the Company:
	 	Life of the South Corporation
	 

	 	 	 	100 West Bay Street
	 

	 	 	 	PO Box 44130
	 

	 	 	 	Jacksonville, Florida 32231-4130
	 

	 	 	 	Facsimile No: (904) 354-4525
	 

	 	 	 	Attention: Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Summit Partners, L.P.
	 

	 	 	 	222 Berkeley Street
	 

	 	 	 	18th Floor
	 

	 	 	 	Boston, MA 02116
	 

	 	 	 	Facsimile No.: (617) 824-1100
	 

	 	 	 	Attention: J.J. Kardwell
	 
	 	 	 	 
	 

	 	 	 	Weil, Gotshal & Manges LLP
	 

	 	 	 	100 Federal Street, 34th Floor
	 

	 	 	 	Boston, MA 02110






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	 	 	 	Facsimile No.: (617) 772-8333
	 

	 	 	 	Attention: Steven M. Peck
	 
	 	 	 	 
	 

	 	If to the Executive:
	 	Richard S. Kahlbaugh
	 

	 	 	 	25330 Marsh Landing Parkway
	 

	 	 	 	Ponte Vedra, Florida 32082





or to such other address as a party may notify the other pursuant to a notice given in accordance
with this Section 12.





	 	 	Section 13. Miscellaneous.





     Section 13.01. Amendment. This Agreement constitutes the entire Agreement between the
parties hereto with regard to the subject matter hereof, superseding all prior understandings and
agreements, whether written or oral. This Agreement may not be amended or revised except by a
writing signed by the parties.



     Section 13.02. Assignment and Transfer. The provisions of this Agreement shall be
binding on and shall inure to the benefit of any such successor in interest to the Company.
Neither this Agreement nor any of the rights, duties or obligations of the Executive shall be
assignable by the Executive, nor shall any of the payments required or permitted to be made to the
Executive by this Agreement be encumbered, transferred or in any way anticipated, except as
required by applicable laws. This Agreement shall not be terminated by the merger or consolidation
of the Company with any corporate or other entity or by the transfer of all or substantially all of
the assets of the Company to any other person, corporation, firm or entity. However, all rights of
the Executive under this Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, estates, executors, administrators, heirs and
beneficiaries. All amounts payable to the Executive hereunder shall be paid, in the event of the
Executive’s death, to the Executive’s estate, heirs or representatives.



     Section 13.04 Waiver of Breach. A waiver by the Company or the Executive of any
breach of any provision of this Agreement by the other party shall not operate or be construed as a
waiver of any other or subsequent breach by the other party.



     Section 13.05. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior agreements among the
parties. Notwithstanding the foregoing, the provisions of Section 7.8 of the Merger Agreement are
not superseded by this Agreement and are in addition to those contained in Section 9 herein.



     Section 13.06 Withholding. The Company shall be entitled to withhold from any amounts
to be paid or benefits provided to the Executive hereunder any federal, state, local, or foreign
withholding or other taxes or charges which it is from time to time required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any question as to the amount or
requirement of any such withholding shall arise.



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     Section 13.07. Captions. Captions herein have been inserted solely for convenience of
reference and in no way define, limit or describe the scope or substance of any provision of this
Agreement.



     Section 13.08. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and shall have the same effect as if the
signatures hereto and thereto were on the same instrument.



     Section 13.09. Governing Law. This Agreement shall be construed under and enforced in
accordance with the internal laws of the State of Florida.



[Remainder of page left intentionally blank]






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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a sealed
instrument as of the day and year first above written.



	 	 	 	 	 
	 	LIFE OF THE SOUTH CORPORATION

 	 
	 	By:  	/s/
W. Dale Bullard	 
	 	 	Name: 	 W. Dale Bullard	 
	 	 	Title:  	E.V.P.	 
	 
	 	/s/ Richard S. Kahlbaugh	 	 
	 	Richard S. Kahlbaugh	 
	 	 	 
	 	 	 
	 	 	 



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Execution Version




Schedule A




Annual Bonus Parameters


The Executive shall be entitled to an Annual Bonus based on the achievement of certain EBITA (as
defined below) targets by the Company, as follows:



The EBITA target for the fiscal year ending December 31, 2007 (the “2007 Target EBITA”) is $20.3
million.




	 	 	 
	Percent of 2007 Target EBITA	 	Bonus Available as Percent of Base Salary
	Less than 95%
	 	0%
	95%
	 	17%
	100%
	 	32.5%
	125%
	 	65%
	150%
	 	97.5%
	Above 152%
	 	100%





Any level of Company performance which falls between two specific points set forth in the above
charts under “Percent of 2007 Target EBITA” shall entitle Executive to receive a percentage of Base
Salary determined on a straight-line basis between two such points.



For each fiscal year after the fiscal year ending December, 2007, the Annual Bonus shall be based
on the percent growth over the prior year’s EBITA as follows:




	 	 	 
	Percent Growth Over Prior Year’s EBITA	 	Bonus Available as Percent of Base Salary
	Less than 10%
	 	0%
	10%
	 	17%
	15%
	 	32.5%
	44%
	 	65%
	At or above 75%
	 	100%





Any level of Company performance which falls between two specific points set forth in the above
charts under “Percent Growth Over Prior Year’s EBITA” shall entitle Executive to receive a
percentage of Base Salary determined on a straight-line basis between two such points.



Notwithstanding the foregoing, if actual EBITA in any fiscal year after the fiscal year ending
December 31, 2007 is not equal to or greater than the amount indicated for such fiscal year below,
then no Annual Bonus shall be paid to the Executive for that fiscal year:




	 	 	 
	Fiscal Year Ending	 	EBITA
	December 31, 2008
	 	$21.21 million
	December 31, 2009
	 	$23.33 million
	December 31, 2010
	 	$25.67 million






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	Fiscal Year Ending	 	EBITA
	December 31, 2011
	 	$28.24 million
	December 31, 2012
	 	$31.06 million (increasing 10% each year thereafter)





For purposes of calculating any Annual Bonus, EBITA for any fiscal year is defined as consolidated
net income of the Company after adding back interest expense, income tax expense and amortization
and, for any fiscal year, after taking into account any bonuses paid to any executive of the
Company, including the Annual Bonus. The Executive shall only be eligible to receive the Annual
Bonus if he is employed by the Company on December 31 of the year for which the Annual Bonus is to
be paid. For the sake of clarity, EBITA will fully take into account and be burdened by all
bonuses paid to any executive of the Company, including the Annual Bonus. The 2007 EBITA target
will be adjusted to reflect transaction expenses associated with the consummation of the
transactions contemplated by the Merger Agreement and discontinued Selling Shareholder Expenses (as
defined in the Merger Agreement).









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Execution Version




Exhibit 1

Form of Waiver