Document:

EVER-12.31.14-10K Ex 10.27

EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is made by and between EverBank Financial Corp ("Company"), a Delaware corporation, and Francis X. Ervin, Jr. ("Employee"), as of the date Employee commences his employment with Employer (the “Effective Date”).

Recitals

A.    Company is engaged in the business of providing financial products and services.

B.    Employee and Company desire to enter into an employment agreement that provides Employee with certain rights and benefits during the term of his employment with Company and in the event of termination of his employment with the Company.

C.    The Company wishes to protect its competitive business interests by providing certain express restrictions on Employee's activities after termination.

NOW, THEREFORE, Company and Employee do hereby covenant and agree as follows:

AGREEMENT

1.    Employment. The Company hereby employs Employee and Employee hereby accepts employment upon the terms and conditions set forth in this Agreement.

2.    Duties and Responsibilities. The Employee is engaged by the Company in an executive capacity as Senior Vice President and Chief Auditor.  Employee is subject to the direction and control of the Board of Directors (the "Board") and shall perform duties as the Board of the Company may from time to time reasonably request. Employee shall report to the Chairman of the Audit Committee of the Board.  Employee agrees that he will serve the Company faithfully and to the best of his ability and devote his full working time to the business affairs of the Company and the promotion of its business in accordance with the Company's reasonable directions and specifications. 

3.    Term. The term of employment hereunder shall begin on the Effective Date and end on the second anniversary of the Effective Date (the “Initial Employment Term”), provided that the Initial Employment Term shall be automatically extended for additional terms of successive one (1) year periods (each, an “Additional Employment Term”) unless the Company or Employee gives written notice to the other at least ninety (90) days prior to the expiration of the Employment Term or then-current Additional Employment Term that the Employee’s employment shall not be so extended.  The Initial Employment Term and each Additional Employment term shall be referred to herein as the “Employment Term.”

4.    Compensation and Benefits.  During the term of this Agreement, in consideration of services rendered hereunder, Employee shall receive:

(a)    Salary. An annual base salary ("Base Salary") equal to the amount of $275,000 and payable at such intervals during the month as the Company regularly pays its other employees, for the period during which the Employee is employed, through and including the date of termination of employment in accordance with the termination provisions of this Agreement. Company shall review Employee's Base Salary at least annually, with the approval of the Board, and may adjust 

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the Base Salary in accordance with historical norms and prevailing economic conditions and considering Employee's job performance.

(b)    Bonus. An incentive bonus in accordance with any incentive bonus plan for executive employees of Company in effect at that time (the "Incentive Bonus Plan") which currently provides Employee with an opportunity to receive a targeted amount of up to sixty percent (60%) of his Base Salary (40% of which will be based upon satisfaction of specified Company performance goals for calendar year 2013 and 20% of which will be based upon satisfaction of specified individual performance goals for calendar year 2013); provided, however, that the Incentive Bonus Plan may be redesigned or altered by the Board to reflect new corporate objectives, new measurement devices, current economic conditions and any new responsibilities then assigned to Employee. Employee shall be eligible to participate in any redesigned Incentive Bonus Plan to the same extent as other executive employees with comparable responsibilities.

(c)    Equity Opportunities.  Employee shall be eligible to participate in Employer’s equity incentive plan.        

(d)    Fringe Benefits. Employee shall be eligible to participate in employee benefits provided by Company on the same basis as its other executive employees.

(e)    Regulations. The provisions of 12 CFR Section 563.39 shall be deemed by Company and Employee to be incorporated into and made a part of this Employment Agreement. Any payments made to Employee pursuant to this Employment Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 USC Section 1828(k) and FDIC regulation 12 CFR Part 359, Golden Parachute and Indemnification Payments.

5.    Termination by Company for Cause. Company shall have the right at any time to terminate the employment of the Employee for Cause.  If Employee is terminated for Cause, Employee's Base Salary and other benefits provided in Section 4 hereof shall terminate as of the effective date of termination and Employee shall forfeit all rights to any other payments provided under this Agreement).  For purposes of this Agreement, "Cause" means:

(a)    Willful Failure to Perform Duties. The willful and substantial failure or refusal of Employee (unless Employee shall be ill or disabled) to perform duties assigned to Employee consistent with his executive position, which failure or refusal is not remedied by Employee within thirty (30) days after written notice of such failure or refusal from the Board or the Chief Executive Officer;

(b)    Material Breach of Fiduciary Duties.  A material breach of Employee's fiduciary duties to the Company (such as obtaining secret profits from the Company), where such breach constituted an act or omission performed or made willfully, in bad faith and without a reasonable belief that such act or omission was within the scope of the Employee's employment hereunder;

(c)    Gross Negligence or Willful Misconduct. Gross negligence or willful misconduct by Employee in the execution of Employee's professional duties which is materially injurious to the Company; or

(d)    Illegal Conduct. Employee's engaging in illegal conduct (other than traffic violations or other minor offenses) which results in a conviction of a felony (or a no contest or nolo 

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contendere plea thereto) which is not subject to further appeal and which is materially injurious to the business or public image of the Company.

6.    Termination by Employee.

         (a)     Good Reason. Employee may terminate this Agreement for Good Reason at any time upon thirty (30) days' prior written notice to Company. "Good Reason" shall exist upon the occurrence of any of the following events:

(i)    Duties Inconsistent with Those Contemplated Herein.  The Company assigns to Employee duties inconsistent with Employee's duties as contemplated under this Agreement; excluding for this purpose an isolated action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Employee;

(ii)    Adverse Change in Duties. An adverse change in Employee's position as a result of significant diminution in Employee's duties or responsibilities, other than an isolated change not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Employee;

(iii)    Reduction in Compensation. The Company reduces the Base Salary of Employee and/or target bonus opportunity under the Incentive Bonus Plan, other than an isolated reduction not occurring in bad faith and which is not remedied by the Company promptly after notice given by Employee or any redesign or alteration of the Incentive Bonus Plan made by the Board to reflect new corporate objectives, new measurement devices or current economic conditions;

(iv)    Relocation of Principal Office. The Company shall require Employee to relocate Employee's principal office beyond a radius of fifty (50) miles from Employee's principal office as of Effective Date (which principal office shall be deemed to be located at 501 Riverside Avenue, Jacksonville, Florida 32202); or

(v)    Company's Breach of Material Obligations. The Company fails to satisfy or perform any of its material obligations set forth in this Agreement.

(b)    Rights and Obligations Upon Termination for Good Reason. In the event of such termination for Good Reason: (1) the Company and Employee shall be released from any and all further obligations under this Agreement, except those stated in Sections 9 (Duties Upon Termination) and 10 (Restrictive Covenants) hereof; and (2) Employee shall be entitled to the following severance benefits and rights.

(i)    Payment. Company shall pay Employee an amount equal to his annual Base Salary in effect  immediately preceding his termination, plus the Employee's target bonus in effect immediately preceeding his termination (collectively, the “Cash Severance Payments”).  The Cash Severance Payments shall be payable in equal installments over a twelve (12) month period (the “Severance Payment Period”), per the normal payroll practices of the Company, less applicable payroll deductions.  Each such payment shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as described in Treas. Reg. Section 1.409A-2(b)(2).  The Cash Severance Payments will be made only if Employee signs a valid general release of claims against the Company and any of its agents or principals on a form provided by the Company and if Employee complies with the terms of Sections 9 (Duties Upon Termination) and 10 

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(Restrictive Covenants), provided, however, that the general release of claims shall not include a release of relating to Employee’s rights hereunder or any claims related to the vesting, exercisability, acceleration, sale or valuation of Employee's Company stocks, stock options or restricted stock.

(ii)    Benefits. The Company shall pay Employee the cost the Company would have incurred had Employee continued group medical, dental, and hospitalization coverage for himself and his eligible dependents under the group health plan(s) sponsored by Company covering the Employee and his eligible dependents at the time of the Employee’s termination of employment (the “Health Coverage”) for twelve (12) months; provided, however, that (A) such Health Coverage shall be provided at the same level of benefits as is generally available to similarly situated employees and is subject to any modifications made to the same health coverage provided to similarly situated employees, including but not limited to termination of the group health plans sponsored by Company; (B) the Company shall pay the excess of the COBRA cost of such coverage over the amount that Employee would have had to pay for such coverage if he had remained employed during the applicable twelve (12) month period and paid the active employee rate for such coverage (the “Monthly COBRA Cost”); and (C) the time during which the Employee receives the Health Coverage shall run concurrently with any period for which the Employee is eligible to elect health coverage under COBRA.  If Employee becomes eligible to receive group health benefits under a program of a subsequent employer or otherwise (including self-employment and coverage available to Employee’s spouse), the Company’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law.  -In order to receive these benefits, Employee must sign a valid general release of claims against the Company and any of its agents or principals (as described in subsection 6(b)(i) above) and comply with the terms of Sections 9 (Duties Upon Termination) and 10 (Restrictive Covenants).

(c)    Employee’s Failure to Renew Employment Term.  A notice by Employee of a non-renewal of the Employment Term pursuant to Section 3 hereof shall be deemed to be a voluntary termination of employment by Employee without Good Reason as of the end of the Employment Term, unless Employee has otherwise terminated this Agreement for Good Reason pursuant to Section 6 hereof.

7.    Termination by Company Without Cause. Company may terminate this Agreement without Cause (as defined in Section 5), upon thirty (30) days' prior written notice to Employee. In the case of such termination by the Company, the Company and Employee shall be released from any and all further obligations under this Agreement, except those stated in Sections 9 (Duties Upon Termination) and 10 (Restrictive Covenants) herein, and Employee shall be entitled to the following severance benefits and rights.

(a)    Payment. Company shall pay Employee an amount equal to the Cash Severance Payments, as defiend in Section 6(b)(i), payable in equal installments over the Severance Payment Period, per the normal payroll practices of the Company, less applicable payroll deductions.  Each such payment shall be treated as a separate payment for purposes of Section 409A of the Code, as described in Treas. Reg. Section 1.409A-2(b)(2).  The Cash Severance Payments will be made only if Employee signs a valid general release of claims against the Company and any of its agents or principals on a form provided by the Company and if Employee complies with the terms of Sections 9 (Duties Upon Termination) and 10 (Restrictive Covenants) herein; provided however that the general release of claims shall not include a release of relating to Employee’s rights hereunder or any claims related to the vesting, exercisability, acceleration, sale or valuation of Employee's Company stocks, stock options or restricted stock.

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(b)    Benefits. The Company shall pay Employee the cost the Company would have incurred had Employee continued Health Coverage for himself and his eligible dependents at the time of the Employee’s termination of employment for  twelve (12) months; provided, however, that (A) such Health Coverage shall be provided at the same level of benefits as is generally available to similarly situated employees and is subject to any modifications made to the same health coverage provided to similarly situated employees, including but not limited to termination of the group health plans sponsored by Company; (B) the Company shall pay the Monthly COBRA Cost; and (C) the time during which the Employee receives the Health Coverage shall run concurrently with any period for which the Employee is eligible to elect health coverage under COBRA.  If Employee becomes eligible to receive group health benefits under a program of a subsequent employer or otherwise (including self-employment and coverage available to Employee’s spouse), the Company’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law. In order to receive these benefits, Employee must sign a valid general release of claims against the Company and any of its agents or principals (as described in subsection 7(a) above) and comply with the terms of Sections 9 (Duties Upon Termination) and 10 (Restrictive Covenants).

(c)    Company’s Failure to Renew Employment Term.  A notice by Company of a non-renewal of the Employment Term pursuant to Section 3 hereof shall be deemed an involuntary termination of Employee by the Company without Cause as of the end of the Employment Term, but Employee may terminate at any time after the receipt of such notice and shall be treated as if he was terminated without Cause as of such date.

8.    Termination Upon Death or Disability. This Agreement shall terminate automatically upon Employee's death or disability. For purposes of the Agreement, Employee shall be deemed disabled if he is physically or mentally unable to discharge his duties hereunder for a period of ninety (90) consecutive days or one hundred twenty (l20) non-consecutive days in any one hundred eighty (180) day period. In the event of Employee's death or disability, Employee's Base Salary shall terminate as of the effective date of termination because of death or disability, and the Company shall pay to Employee or his designated beneficiary or estate the prorated portion (based on the effective date of his termination) of the payment Employee would have received under the Incentive Bonus Plan for the year of Employee's termination. Such payment shall be made at the time the payment would have been made absent death or disability.

9.    Duties Upon Termination. In the event the employment of Employee is terminated for any reason whatsoever, Employee shall deliver immediately to Company all manuals, mailing lists, customer lists, advertising materials, ledgers, supplies, equipment, checks, petty cash, Company credit cards, and all other materials and records containing confidential information of any kind of the Company or its affiliates that may be in Employee's possession or under his control which belong to the Company or its affiliates or have been obtained from the Company or its affiliates by the Employee, including any and all copies of such items previously described in this section.

10.    Restrictive Covenants.

(a)    Acknowledgements.  Subject to the limitations of reasonableness imposed by law, Employee shall be subject to the restrictions set forth in this Section 10.

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(b)    Definitions.  The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:

“Competitive Services” means the provision of services on behalf of any person or entity principally engaged in the banking, commercial mortgage banking or investment banking business in the capacity of a director, consultant or an executive or officer at a senior level within such entity.
“Confidential Information” means all information regarding the Company, its activities, business or clients that is the subject of reasonable efforts by the Company to maintain its confidentiality and that is not generally disclosed by practice or authority to persons not employed by the Company, but that may not rise to the level of a Trade Secret under applicable law.  “Confidential Information” shall include, but is not limited to, financial plans and data concerning the Company; management planning information; business plans; operational methods; market studies; marketing plans or strategies; customer lists; customer files, data and financial information, details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; business acquisition plans; and new personnel acquisition plans.  “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company.  This definition shall not limit any definition of “confidential information” or any equivalent term under applicable law.
“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association or other entity or enterprise.
“Principal or Representative” means a principal, owner, partner, stockholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative or consultant.
“Protected Customers” means any Person to whom the Company sold its products or services or solicited to sell its products or services during the course of Employee’s employment and (a) with whom Employee had business dealings on behalf of the Company; (b) for whom Employee supervised or coordinated the dealings with the Company; or (c) about whom Employee obtained Trade Secrets or Confidential Information (as defined herein) as a result of his employment.

“Protected Employees” means employees of the Company who were employed by the Company at any time during the course of Employee’s employment and (a) with whom Employee had a supervisory relationship; (b) with whom Employee worked or communicated on a regular basis; or (c) about whom Employee obtained Trade Secrets or Confidential Information as a result of his association with the Company.
“Restricted Period” means the duration of Employee’s employment with the Company and a period of one (1) year from the termination of such employment for any reason whatsoever. 
“Restricted Territory” means the United States of America and any foreign country or territory located within 100 miles of Jacksonville, Florida.

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“Trade Secret” means all information, without regard to form, including, but not limited to, technical or nontechnical data, source codes and object codes for Company software, compilations, formulas, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans, distribution lists or lists of actual or potential customers, advertisers or suppliers, which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.  Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under applicable common law or statutory law.
(c)    Restrictions on Disclosure and Use of Confidential Information and Trade Secrets.  Employee understands and agrees that the Confidential Information and Trade Secrets constitute valuable assets of the Company, and may not be converted to Employee’s own use.  Accordingly, Employee hereby agrees that he shall not, directly or indirectly, at any time during the Restricted Period, reveal, divulge, or disclose to any Person not expressly authorized by the Company any Confidential Information, and Employee shall not, directly or indirectly, at any time during the Restricted Period, use or make use of any Confidential Information in connection with any business activity other than that of the Company.  Throughout the course of his employment and at all times after the date that his employment terminates for any reason, Employee shall not directly or indirectly transmit or disclose any Trade Secret to any Person, and shall not make use of any such Trade Secret, directly or indirectly, for himself or for others, without the prior written consent of the Company.  The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either the Company’s rights or Employee’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices.

Anything herein to the contrary notwithstanding, Employee shall not be restricted from disclosing or using Confidential Information that is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Employee shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Employee.

(d)    Nonrecruitment of Protected Employees.  Employee understands and agrees that the relationship between the Company and each of its Protected Employees constitutes a valuable asset of the Company and may not be converted to Employee’s own use.  Accordingly, Employee hereby agrees that during the Restricted Period, Employee shall not, without the prior written consent of the Company, directly or indirectly, on Employee’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any Protected Employee to terminate his relationship with the Company or to enter into a relationship with any other Person.

(e)    Nonsolicitation of Protected Customers.  Employee understands and agrees that the relationship between the Company and each of its Protected Customers constitutes a valuable asset of the Company and may not be converted to Employee’s own use.  Accordingly, Employee hereby agrees that during the Restricted Period, Employee shall not, without the prior written consent of the Company, directly or indirectly, on Employee’s own behalf or as a Principal or Representative of any Person, solicit, divert, take away or attempt to solicit, divert or take away a Protected Customer for the purpose of providing services similar to those provided by the Company.

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(f)    Noncompetition.  Employee hereby agrees that during the Restricted Period, Employee will not, without prior written consent of the Company, directly or indirectly, engage in, sell or otherwise provide Competitive Services within the Restricted Territory on his own behalf or as a Principal or Representative of any other Person; provided, however, that the parties acknowledge and agree the provisions of this Section 10(f) shall not be deemed to prohibit the ownership by Employee of not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended.

(g)    Covenant to Return Property and Information.  Employee agrees to return all of the Company’s property within seven (7) days following the cessation of his employment for any reason, or at any other time when a demand for such property is made by the Company. Such property includes, but is not limited to, the original and any copy (regardless of the manner in which it is recorded) of all information provided by the Company to Employee, or which Employee has developed or collected in the scope of Employee’s employment with the Company, as well as all Company-issued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices, computers, cell phones, pagers, materials, documents, plans, records, notebooks, drawings, or papers; provided, however, that Employee shall be entitled to retain a copy of this Agreement and any documents relating to his income received from the Company or expenses incurred on behalf of the Company or other information which pertains to his personal income tax returns.

(h)    Remedies for Violation of Restrictive Covenants.  The parties hereto specifically acknowledge and agree that the covenants contained in this Section 10 (the “Restrictive Covenants”) are made and given by Employee in connection with his continued employment with the Company and the goodwill associated therewith and that the remedy at law for any breach of the foregoing would be inadequate.  In the event Employee breaches, or threatens to commit a breach of, any of the Restrictive Covenants, the Company shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Employee from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court or tribunal of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.  Such right and remedy shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity.  Employee agrees that the pendency of any claim whatsoever against the Company shall not constitute a defense to the enforcement of any Restrictive Covenant by the Company.

(i)    Severability.  Employee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time, scope of protected activity, geographic area, and in all other respects.  Each of the Restrictive Covenants shall be considered and construed as separate and independent covenants.  Should any part or provision of any of the Restrictive Covenants be held invalid, void or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or of this Section 10. 

(j)    Reformation.  If any portion of the Restrictive Covenants is found to be invalid or unenforceable because the duration, the territory, or any other provision thereof is considered to be invalid or unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the intent of the Company and Employee in agreeing to the Restrictive Covenants will not be impaired and the provision in question shall be enforceable to the fullest extent of applicable law.

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11.    Limitation of Benefits.

(a)    Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any benefit, payment or distribution by the Company to or for the benefit of Employee (whether payable or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as "Payments") would, if paid, be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Code, then the aggregate present value of the Payments shall be reduced (but not below zero) to an amount expressed in present value that maximizes the aggregate present value of the Payments without causing the Payments or any part thereof to be subject to the Excise Tax and therefore nondeductible by the Company because of Section 280G of the Code (the "Reduced Amount").  For purposes of this Section 11, present value shall be determined in accordance with Section 280G(d)(4) of the Code.  The reduction of the Payments due hereunder, if applicable, shall be made in such a manner as to maximize the economic present value of all Payments actually made to Employee, determined by the Determination Firm (as defined in Section 11(b) below) as of the date of the applicable change in control using the discount rate required by Section 280G(d)(4) of the Code.  

(b)    All determinations required to be made under this Section 11, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and Employee (the "Determination Firm") which shall provide detailed supporting calculations both to the Company and Employee within 15 business days of the receipt of notice from Employee that a Payment is due to be made, or such earlier time as is requested by the Company.  All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and Employee.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments hereunder will have been unnecessarily limited by this Section 11 ("Underpayment"), consistent with the calculations required to be made hereunder.  The Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Employee together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code, but no later than December 31 of the year after the year in which the Underpayment is determined to exist.  

(c)    In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 11 shall be of no further force or effect.

12.    Entire Agreement. This Agreement sets forth the entire understanding between the parties with respect to the terms of Employee's employment.  Notwithstanding the forgoing, the terms of the EverBank Profit Sharing and Savings Plan (or any successor plan or plans) and any Option or Restricted Unit Agreements relating thereto to which Employee is a party, and any other benefit plans shall govern the subject matters thereof to the extent not specifically provided otherwise herein. In the event of any inconsistency between any such other agreement and this Agreement, the provisions 

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of this Agreement shall control.  This Agreement cannot be amended except by a writing signed by both parties.

13.    No Waiver.  No waiver of any term or provision of this Agreement shall be deemed to be a waiver of any subsequent breach of such term or provision of this Agreement.

14.    Applicable Law.  This Agreement shall be governed by and construed in accordance with the law of the State of Florida.

15.    Notices.  Any notice which may be given, hereunder, shall be sufficient if in writing and delivered to Employee at 250 Buckner Hill Lane, Fort Mill, South Carolina 29715, and to the Company at 501 Riverside Avenue, Jacksonville, Florida 32202, Attention: Thomas A. Hajda, Executive Vice President and General Counsel, or at such place as either party by written notice designates. Notices shall be effective upon receipt, unless delivery is refused, in which case notice shall be effective on the date of such refusal.

16.    Heirs And Assigns.  This Agreement may be assigned by Company only, and shall be binding upon the parties hereto, their successors and heirs, wherever the context admits or requires.

17.    Severability Clause.  The parties agree that each provision of this Agreement is severable and the invalidity or unenforceability of any one or more of the provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

18.    Inducement or Coercion for Employment.  Employee has executed this Agreement without coercion by Company and pursuant to the advice of Employee's own independent counsel, and no representations or inducements of any kind have been made or provided by Company to obtain Employee's execution of this Agreement other than those specifically contained in this written document.

19.    Disputes.  Except as provided in Section10(h), any dispute relating to or arising under or in connection with this Agreement shall be submitted to mandatory arbitration in Duval County, Florida, in accordance with the Commercial Rules of the American Arbitration Association then in effect, and judgment upon the award rendered pursuant to such arbitration may be entered in any court of competent jurisdiction. In addition to any damages awarded to Employee by the arbitrators, Employee shall be entitled to an award of all fees and expenses of arbitration, including costs and reasonable attorney's fees. If Employee is entitled to be paid or reimbursed for any fees and expenses under this Section 19, the amount reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred.  Employee’s rights to payment or reimbursement of expenses pursuant to this Section 19 shall expire at the end of ten (10) yearsafter the date of termination and such rights shall not be subject to liquidation or exchange for another benefit.
    
20.    Code Section 409A. 

(a)    This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from 

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or compliant with the requirements Section 409A of the Code (“Section 409A”) and applicable advice and regulations issued thereunder. 

(b)    The intent of the parties is that payments and benefits under this Agreement comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  Notwithstanding anything herein to the contrary: (i) if at the time of the Employee’s termination of employment with the Company, the Employee is a “specified employee” as defined in Section 409A and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Employee) until the date that is six (6) months following the Employee’s termination of employment with the Company (or the earliest date as is permitted under Section 409A); (ii) if any other payments of money or other benefits due to the Employee hereunder could cause the application of an accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board that does not cause such an accelerated or additional tax; (iii) to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement and no payment shall be due to the Employee under this Agreement until the Employee would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A; and (iv) each amount to be paid or benefit to be provided to the Employee pursuant to this Agreement, which constitute deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A.  To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to the Employee under this Agreement shall be paid to the Employee on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to the Employee) during any one year may not effect amounts reimbursable or provided in any subsequent year; provided, however, that with respect to any reimbursements for any taxes which the Employee would become entitled to under the terms of this Agreement, the payment of such reimbursements shall be made by the Company no later than the end of the calendar year following the calendar year in which the Employee remits the related taxes. The Company shall consult with the Employee in good faith regarding the implementation of the provisions of this Section 20(b); provided that neither the Company nor any of its employees or representatives shall have any liability to the Employee with respect to thereto.

(c)    Whenever in this Agreement the provision of payment or benefit is conditioned on Employee’s execution and non-revocation of a waiver and release of claims, such waiver and release must be executed, and all revocation periods must have expired, within sixty (60) days after the date of termination of Employee’s employment, but the Company may elect to commence payment at any time during such sixty (60)-day period, provided, however, to the extent that the payment or benefit is “deferred compensation” within the meaning of and subject to Section 409A, such payment shall be made in the later year if the sixty (60) day period spans two taxable years.

(signatures on following page)

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

EVERBANK FINANCIAL CORP

By:                            Date:                    
Joseph D. Hinkel
Chairman of the Audit Committee

By:                            Date:                    
Francis X. Ervin, Jr.

-12-CNO 12.31.2014 EX 10.16

Exhibit 10.16

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the 18th day of December, 2014 is between CNO Services, LLC, an Indiana limited liability company (the “Company”), and Susan L. Menzel (“Executive”).
    
WHEREAS, the Company and Executive entered into an Amended and Restated Employment Agreement dated May 31, 2013, and they now desire to further amend and restate such agreement.

WHEREAS, the continued services of Executive and her managerial and professional experience are of value to the Company.

WHEREAS, the Company desires to have the benefit and advantage of the services of Executive to assist the Company and CNO Financial Group, Inc. (“CNO”) upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Employment.  The Company hereby employs Executive and Executive hereby accepts employment upon the terms and conditions hereinafter set forth.

2.    Term.  The effective date of this agreement (the “Agreement”) shall be the date first set forth above (the “Effective Date”).  Subject to the provisions for termination as provided in Section 10 hereof, the term of Executive’s employment under this Agreement shall be the period beginning on the Effective Date and ending on May 31, 2016 (the “Term”).  The Term shall not be automatically renewed and shall end upon any earlier termination of Executive’s employment with the Company.

3.    Duties.  During the Term, Executive shall be engaged by the Company in the capacity of Executive Vice President, Human Resources of the Company and CNO or in such other senior executive capacity as the Chief Executive Officer of CNO shall specify.  Executive shall report to the Chief Executive Officer of CNO or such other senior executive officer as the Chief Executive Officer of CNO may specify regarding the performance of her duties.

4.    Extent of Services.  During the Term, subject to the direction and control of the Chief Executive Officer of CNO, Executive shall have the power and authority commensurate with her executive status and necessary to perform her duties hereunder.  Executive shall devote her entire employable time, attention and best efforts to the business of the Company and, during the Term, shall not, without the consent of the Company, be actively engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage; provided, however, that this shall not be construed as preventing Executive from serving on boards of professional, community, civic, education, charitable and corporate

organizations on which she presently serves or may choose to serve or investing her assets in such form or manner as will not require any services on the part of Executive in the operation of the affairs of the companies in which such investments are made (to the extent not in violation of the non-solicitation provisions of Section 9 hereof); provided, however, that corporate organizations shall be limited to those mutually agreed upon by Executive and the Company.

5.    Compensation.  During the Term:

(a)    As compensation for services hereunder rendered during the Term hereof, Executive shall receive a base salary (“Base Salary”) of Four Hundred Two Thousand Five Hundred Dollars ($402,500) per year payable in equal installments in accordance with the Company’s payroll procedure for its salaried executives.  Salary payments and other payments under this Agreement shall be subject to withholding of taxes and other appropriate and customary amounts.  Executive may receive increases in her Base Salary from time to time, based upon her performance, subject to approval of the Company.

(b)    In addition to Base Salary, Executive will have an opportunity to earn a bonus each year, as determined by the Company, with a target annual bonus equal to 75% of Executive's Base Salary (the “Target Bonus”) and a maximum annual bonus of 150% of Executive's Base Salary with respect to any calendar year, with such bonus payable at such time that other similar payments are made to other Company executives but in no event later than March 15 of the year following the year with respect to which such bonus was payable, unless the bonus amounts to be paid cannot be confirmed and paid on or before March 15, in which event the bonuses will be paid within 15 days after the bonus amounts have been confirmed by the Company.  For purposes of clarification, annual executive bonuses are payable on or before March 15 of the year following the year with respect to which such bonuses are payable, if Executive remains employed with the Company through such date or as otherwise payable under Section 11 of this Agreement.  Notwithstanding the above, a pro-rata portion of the 2013 bonus will be paid at the same time that similar payments are made to other Company executives if Executive remains employed through the end of the Term.  The performance requirements for Target Bonuses will be based on financial and other objective targets that the CNO Board of Directors (the “Board”) or the Human Resources and Compensation Committee of the Board (the “Compensation Committee”) believes are reasonably attainable at the time that they are set.  

(c)     Executive shall be eligible to participate in and receive future grants under any CNO stock or equity-based program offered to senior executives, subject to the discretion of the Board or the Compensation Committee. 

6.    Additional Benefits.  During the Term:

(a)    Executive shall be entitled to participate in such existing executive benefit plans and insurance programs offered by the Company, or which it may adopt from time to time, for its executive management or supervisory personnel generally, in accordance with the eligibility requirements for participation therein.  Nothing herein shall be construed so as to prevent the Company from modifying or terminating any executive benefit plans or programs, or additional benefits, that it may adopt from time to time.  

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(b)    Executive shall be entitled to four weeks of vacation with pay each year.

(c)    Executive may incur reasonable expenses for promoting the Company’s business, including expenses for entertainment, travel, and similar items.  The Company shall reimburse Executive for all such reasonable expenses upon Executive’s periodic presentation of an itemized account of such expenditures in accordance with the Company’s policies and procedures and Section 21 hereof; provided, however, that any such reimbursement will be made no later than March 15 of the year following the year in which the expense was incurred.  The Company agrees to pay Executive an additional amount to cover the incremental additional income taxes incurred by Executive, if any, with respect to payment or reimbursement of any reasonable business expenses pursuant to this subsection (c); provided, however, that any such payment will be made no later than March 15 of the year following the year in which the income tax was incurred. 

(d)    Executive shall be permitted to make elective contributions to any Company-sponsored, non-qualified deferred compensation plan in accordance with the terms of such plan.

7.    Disability.  

(a)     If Executive shall become physically or mentally disabled during the Term to the extent that her ability to perform her duties and services hereunder is materially and adversely impaired (any such incapacity, a “Disability”), her Base Salary, bonus and other compensation provided herein shall continue while she remains employed by the Company; provided, that if such Disability (as determined in the Company’s reasonable judgment, exercised in good faith) continues for at least three (3) consecutive months, the Company may terminate Executive’s employment hereunder, in which case the Company within 10 business days shall pay Executive a cash payment equal to (i) her annual Base Salary as provided in Section 5(a) hereof to the extent earned but unpaid as of the date of termination (“Unpaid Salary”), (ii) the bonus payable pursuant to Section 5(b) for the fiscal year of the Company ending prior to the date of termination (to the extent earned based on performance under the goals and objectives of the applicable plan but not previously paid) (“Unpaid Bonus”) and (iii) Executive’s then accrued but unused vacation (“Unpaid Vacation”) (the Unpaid Salary, Unpaid Bonus and Unpaid Vacation referred to sometimes together as the “Accrued Amounts”).  Additionally, in the event of a termination of employment due to Disability, the Company shall pay to Executive a pro-rata portion of the Target Bonus for the year in which the termination for Disability occurred, payable at the same time when the bonus payment for the year of termination otherwise would have been paid pursuant to Section 5(b).  All options, restricted stock and/or other awards held by Executive on the date of termination for Disability shall vest only through the date of termination according to the normal vesting schedule applicable to such options, restricted stock and/or other awards and Executive shall be treated in accordance with the applicable award agreements.  

(b)     No payments or vesting under this Section 7 will be made if such Disability arose primarily from (a) chronic use of intoxicants, drugs or narcotics (other than drugs prescribed to Executive by a physician and used by Executive for their 

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intended purpose for which they had been prescribed) or (b) intentionally self-inflicted injury or intentionally self-induced illness.

8.    Disclosure of Information.  Executive acknowledges that, in and as a result of her employment with the Company, she has been and will be making use of, acquiring and/or adding to confidential information of the Company and its affiliates of a special and unique nature and value.  As a material inducement to the Company to enter into this Agreement and to pay to Executive the compensation stated in Section 5, as well as any additional benefits stated herein, Executive covenants and agrees that she shall not, at any time while she is employed by the Company or at any time thereafter, directly or indirectly, divulge or disclose for any purpose whatsoever, any confidential information (whether or not specifically labeled or identified as “confidential information”), in any form or medium, that has been obtained by or disclosed to her as a result of her employment with the Company and which the Company or any of its affiliates has taken appropriate steps to safeguard, except to the extent that such confidential information (a) becomes a matter of public record or is otherwise available to the general public, other than as a result of any act or omission of Executive, (b) is required to be disclosed by any law, regulation or order of any court or regulatory commission, department or agency, in which event Executive shall give prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order or confidential treatment, (c) must be disclosed to enable Executive properly to perform her duties under this Agreement or (d) was developed by Executive prior to her employment by the Company.  Upon the termination of Executive’s employment, Executive shall return such information (in whatever form) obtained from or belonging to the Company or any of its affiliates which she may have in her possession or control.

9.    Covenants against Solicitation.  Executive acknowledges that the services she is to render to the Company and its affiliates are of a special and unusual character, with a unique value to the Company and its affiliates, the loss of which cannot adequately be compensated by damages or an action at law.  In view of the unique value to the Company and its affiliates of the services of Executive for which the Company has contracted hereunder, because of the confidential information to be obtained by, or disclosed to, Executive as set forth in Section 8 above, and as a material inducement to the Company to enter into this Agreement and to pay to Executive the compensation stated in Section 5 hereof, as well as any additional benefits stated herein, and other good and valuable consideration, Executive covenants and agrees that throughout the period Executive remains employed or compensated hereunder and for one year thereafter, Executive shall not, directly or indirectly, anywhere in the United States of America (i) solicit or attempt to convert to other insurance carriers or other corporations, persons or other entities providing these same or similar products or services provided by the Company and its affiliates, any customers or policyholders of the Company or any of its affiliates; or (ii) solicit for employment or employ any individual who was employed by the Company or any of its affiliates during the term of Executive’s employment with the Company.  Should any particular covenant or provision of this Section 9 be held unreasonable or contrary to public policy for any reason, including, without limitation, the time period, geographical area, or scope of activity covered by any restrictive covenant or provision, the Company and Executive acknowledge and agree that such covenant or provision shall automatically be deemed modified such that the contested covenant or provision shall have the closest effect permitted by applicable law to the original 

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form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law. 

10.    Termination.  During the Term:

(a)    Either the Company or Executive may terminate her employment at any time for any reason upon written notice to the other.  The Company may terminate Executive’s employment for Just Cause pursuant to Section 10(b) below or in a Control Termination pursuant to Section 10(c) below.  Executive’s employment shall also terminate (i) upon the death of Executive or (ii) after Disability of Executive pursuant to Section 7 hereof.

(b)    The Company may terminate Executive’s employment at any time for Just Cause.  For purposes of this Agreement, “Just Cause” shall mean: 

 (i)  (A) material breach by Executive of this Agreement not cured within 15 days after written notice to Executive by the Company, (B) a material breach of Executive’s duty of loyalty to the Company or its affiliates not cured within 15 days after written notice to Executive by the Company, or (C) willful malfeasance or fraud or dishonesty of a substantial nature in performing Executive’s services on behalf of the Company or its affiliates, which in each case is willful and deliberate on Executive’s part and committed in bad faith or without reasonable belief that such breach or action is in the best interests of the Company or its affiliates; 

(ii)  Executive’s use of alcohol or drugs (other than drugs prescribed to Executive by a physician and used by Executive for their intended purposes for which they had been prescribed) or other repeated conduct which materially and repeatedly interferes with the performance of her duties hereunder, which materially compromises the integrity or the reputation of the Company or its affiliates, or which results in other substantial economic harm to the Company or its affiliates; 

(iii)  Executive’s conviction by a court of law, admission that he is guilty, or entry of a plea of nolo contendere with regard to a felony or other crime involving moral turpitude; 

(iv)  Executive’s unscheduled absence from her employment duties other than as a result of illness or disability, for whatever cause, for a period of more than three (3) consecutive days, without consent from the Company prior to the expiration of the three (3) day period; 

(v)  Executive’s failure to take action or to abstain from taking action, as directed in writing by a member of the Board or a higher ranking executive of the Company or CNO, where such failure continues after Executive has been given 

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written notice of such failure and at least five (5) business days thereafter to cure such failure; or

(vi)  Any intentional wrongful act or omission by Executive that results in the restatement of CNO’s financial statements due to a violation of the Sarbanes-Oxley Act of 2002.

No termination shall be deemed to be a termination by the Company for Just Cause if the termination is as a result of Executive refusing to act in a manner that would be a violation of applicable law or where Executive acts (or refrains from taking action) in good faith in accordance with directions of a member of the Board or higher ranking executive but was unable to attain the desired results because such results were inherently unreasonable or unattainable.

(c)    The Company may terminate Executive’s employment in a Control Termination.  A "Control Termination" shall mean any termination by the Company (or its successor) of Executive’s employment for any reason within six months in anticipation of or within two years following a Change in Control.

The term "Change in Control" shall mean the occurrence of any of the following:

(i) the acquisition (other than an acquisition in connection with a “Non-Control Transaction”) by any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "beneficial ownership" (as such term is defined in Rule 13d-3 promulgated under the 1934 Act), directly or indirectly, of securities of CNO or its Ultimate Parent representing 51% or more of the combined voting power of the then outstanding securities of CNO or its Ultimate Parent entitled to vote generally with respect to the election of the Board or the board of directors of CNO’s Ultimate Parent; or 
(ii) as a result of or in connection with a tender or exchange offer or contest for election of directors, individual board members of CNO (identified as of the date of commencement of such tender or exchange offer, or the commencement of such election contest, as the case may be) cease to constitute at least a majority of the Board; or 
(iii) the consummation of a merger, consolidation or reorganization with or into CNO unless (x) the stockholders of CNO immediately before such transaction beneficially own, directly or indirectly, immediately following such transaction securities representing 51% or more of the combined voting power of the then outstanding securities entitled to vote generally with respect to the election of the board of directors of CNO (or its successor) or, if applicable, the Ultimate Parent and (y) individual board members of CNO (identified as of the date that a binding agreement providing for such transaction is signed) constitute at least a majority of the board of directors of CNO (or its successor) or, if applicable, the Ultimate Parent (a transaction to which clauses (x) and (y) apply, a “Non-Control Transaction”).  

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For purposes of this Agreement, “Ultimate Parent” shall mean the parent corporation (or if there is more than one parent corporation, the ultimate parent corporation) that, following a transaction, directly or indirectly beneficially owns a majority of the voting power of the outstanding securities entitled to vote with respect to the election of the board of directors of CNO (or its successor).
(d)    At Executive's option, she may terminate employment with the Company "With Reason" provided one or more of the following conditions are met: (i) any reduction in Executive's Base Salary or Target Bonus without her consent, or (ii) there is a "Change in Control" as defined in Section 10(c) and, following Executive's written request made prior to the Change in Control, the ultimate parent entity or entities directly or indirectly gaining control of a majority of the Board or outstanding securities entitled to vote with respect to the Board fails to affirm and guarantee the Company's current and future obligations under this Agreement; provided that the events described in clauses (i) and (ii) above shall constitute With Reason only if the Company fails to cure such event (if capable of being cured) within 30 days after receipt from Executive of written notice of the event which constitutes With Reason; provided, further, that With Reason shall cease to exist for an event on the 60th day following the later of its occurrence or Executive’s knowledge thereof, unless Executive has given the Company written notice thereof prior to such date.
(e)    Upon termination of Executive’s employment with the Company for any reason (whether voluntary or involuntary), Executive shall be deemed to have voluntarily resigned from all positions that Executive may then hold with the Company and any of its affiliates; provided that such deemed resignation shall not adversely affect Executive’s rights to compensation or benefits under this Agreement and shall not affect the determination of whether Executive's termination was for Just Cause or With Reason.
		
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	Payments Following Termination.

(a)    In the event that Executive’s employment is terminated by the Company for Just Cause or if Executive voluntarily resigns, then (i) the Company within 10 business days shall pay Executive a cash payment of her Base Salary as provided in Section 5(a) hereof that was earned but unpaid as of the date of termination (the “Termination Date”) and (ii) no bonus for the year of termination will be earned or paid to Executive.  All stock options, restricted stock and/or other awards held by Executive on the Termination Date shall be treated in accordance with the applicable award agreements. 

(b)    In the event Executive’s employment is terminated by the death of Executive, then the Company shall pay Executive’s estate within 30 days (i) the Accrued Amounts and (ii) a pro-rata portion of the Target Bonus for the year in which her death occurs.  All stock options, restricted stock and/or other awards held by Executive on the Termination Date shall be treated in accordance with the applicable award agreements.

(c)  In the event that Executive is terminated by the Company without Just Cause (and other than a termination due to expiration of the Term, death, Disability or a Control 

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Termination) or by Executive With Reason, then the Company shall pay Executive within 30 days of the Termination Date the Accrued Amounts.  Additionally, following such a termination, Executive shall be entitled to receive (i) a bonus pursuant to Section 5(b) based on CNO’s actual performance for the year in which Executive is terminated (prorated for the partial year period ending on the Termination Date), payable at the same time when such bonus amount normally would have been paid pursuant to Section 5(b), and (ii) a cash lump sum equal to the sum of her annual Base Salary and Target Bonus.  All stock options, restricted stock and/or other awards held by Executive on the date of termination shall be treated in accordance with the applicable award agreements. 

(d)  In the event that Executive is terminated by the Company (or its successor) in a Control Termination as so defined, then the Company shall pay Executive within 30 days of the Termination Date the Accrued Amounts.   Additionally, following such a termination, Executive shall be entitled to receive (i) a bonus pursuant to Section 5(b) based on CNO’s actual performance for the year during which Executive is terminated (prorated for the partial year period ending on the Termination Date), payable at the same time when such bonus amount would have been paid pursuant to Section 5(b), and (ii) a cash lump sum equal to two times the sum of (A) her Target Bonus and (B) her annual Base Salary.  All stock options, restricted stock and/or other awards held by Executive upon the occurrence of a Change in Control shall be treated in accordance with the applicable award agreements. 

(e)    Notwithstanding anything to the contrary, payment of any severance under this Agreement is conditioned upon the execution by Executive of a separation and release agreement in a form acceptable to the Company and the observation of such waiting or revocation periods, if any, before and after execution of the agreement by Executive as are required by law, such as, for example, the waiting or revocation periods required for a waiver and release to be effective with respect to claims under the Age Discrimination in Employment Act, provided that the Company delivers to Executive such agreement within seven days of the Termination Date.

12.    Character of Termination Payments.  The amounts payable to Executive upon any termination of her employment shall be considered severance pay in consideration of past services rendered on behalf of the Company and her continued service from the date hereof to the date she becomes entitled to such payments and shall be the sole amount of severance pay to which Executive is entitled from the Company and its affiliates upon termination of her employment during the Term.  Executive shall have no duty to mitigate her damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any such other compensation.

13.    Representations of the Parties.

(a)    The Company represents and warrants to Executive that (i) this Agreement has been duly authorized, executed and delivered by the Company and constitutes valid and binding obligations of the Company; and (ii) the employment of Executive on the 

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terms and conditions contained in this Agreement will not conflict with, result in a breach or violation of, constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to: (A) the certificate of formation, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company is a party or bound or to which its property is subject, or (C) any statute, law, rule, regulation, judgment, order or decree applicable to the Company, or any regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company.

(b)    Executive represents and warrants to the Company that: (i) this Agreement has been duly executed and delivered by Executive and constitutes a valid and binding obligation of Executive; and (ii) neither the execution of this Agreement by Executive nor her employment by the Company on the terms and conditions contained herein will conflict with, result in a breach or violation of, or constitute a default under any agreement, obligation, condition, covenant or instrument to which Executive is a party or bound or to which her property is subject, or any statute, law, rule, regulation, judgment, order or decree applicable to Executive of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over Executive or any of her property.

14.    Arbitration of Disputes; Injunctive Relief.

(a)    Arbitration.  Except as provided in subsection (b) below, any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by binding arbitration in the City of Indianapolis, Indiana, in accordance with the laws of the State of Indiana by three arbitrators, one of whom shall be appointed by the Company, one by Executive, and the third of whom shall be appointed by the first two arbitrators.  If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third arbitrator shall be appointed by the Chief Judge of the United States District Court for the Southern District of Indiana.  The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators, which shall be as provided in this Section.  Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  All reasonable costs and expenses (including fees and disbursements of counsel) incurred by Executive pursuant to this Section 14 shall be paid on behalf of or reimbursed to Executive promptly by the Company; provided, however, that in the event the Company prevails in such proceedings, Executive shall immediately repay all such amounts to the Company.

(b)    Executive acknowledges that a breach or threatened breach by Executive of Sections 8 or 9 of this Agreement will give rise to irreparable injury to the Company and that money damages will not be adequate relief for such injury.  Notwithstanding paragraph (a) above, the Company and Executive agree that the Company may seek and obtain injunctive relief, including, without limitation, temporary restraining orders, preliminary injunctions and/or permanent injunctions, in a court of proper jurisdiction to restrain or prohibit a breach or threatened breach of Section 8 or 9 of this Agreement.  

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Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to the Company for such breach or threatened breach, including the recovery of damages from Executive.  

15.    Notices.  Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered mail to her residence, in the case of Executive, or to the business office of its General Counsel, in the case of the Company.

16.    Waiver of Breach and Severability.  The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party.  In the event any provision of this Agreement is found to be invalid or unenforceable, it may be severed from the Agreement, and the remaining provisions of the Agreement shall continue to be binding and effective.

17.    Entire Agreement.  Other than any equity award agreements entered into pursuant to the CNO Amended and Restated Long-Term Incentive Plan or any subsequent incentive plan, this instrument contains the entire agreement of the parties and, as of the Effective Date, supersedes all other obligations of the Company and its affiliates under other agreements or otherwise.  The compensation and benefits to be paid under the terms of this Agreement are in lieu of all other compensation or benefits to which Executive is entitled from CNO, the Company, and its affiliates, and upon termination of Executive’s employment with the Company Executive will not be entitled to receive any severance or other payments beyond those specified in this Agreement.  This Agreement may not be changed orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

18.    Binding Agreement and Governing Law; Assignment Limited.  This Agreement shall be binding upon and shall inure to the benefit of the parties and their lawful successors in interest (including, without limitation, Executive’s estate, heirs and personal representatives) and, except for issues or matters as to which federal law is applicable, shall be construed in accordance with and governed by the laws of the State of Indiana.  This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without the prior written consent of the other.

19.    Indemnification.  If Executive was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that she is or was an officer or employee of the Company or any of its affiliates, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by Executive in connection therewith and such indemnification shall continue as to Executive if she ceases to be an officer or employee and shall inure to the benefit of Executive's heirs, executors and administrators; provided, however, that the Company shall indemnify Executive in connection with a Proceeding (or part thereof) initiated by Executive only if such Proceeding (or part 

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thereof) was authorized by the managing member of the Company.  The right to indemnification conferred in this paragraph shall include the obligation of the Company to pay the expenses incurred in defending any such Proceeding in advance of its final disposition (an “Advance of Expenses”); provided, however, that, if and to the extent that the Delaware General Corporation Law requires, an Advance of Expenses incurred by Executive in her capacity as an officer or employee shall be made only upon delivery to the Company of an undertaking, by or on behalf of Executive, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that Executive is not entitled to be indemnified for such expenses under this paragraph or otherwise.

20.     No Third Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not intended to confer third-party beneficiary rights upon any other person.

21.    Section 409A.  This Agreement is intended to comply with Section 409A of the Code and will be interpreted accordingly.  References under this Agreement to Executive’s termination of employment shall be deemed to refer to the date upon which Executive has experienced a “separation from service” within the meaning of Section 409A of the Code.  Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s separation from service with the Company Executive is a “specified employee” as defined in Section 409A of the Code (and any related regulations or announcements thereunder) and the deferral of the commencement of any payments or benefits otherwise payable hereunder or payable under any other compensatory arrangement between Executive and the Company or any of its affiliates as a result of such separation from service is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s separation from service (or the earliest date as is permitted under Section 409A of the Code), at which point all payments deferred pursuant to this Section 21 shall be paid to Executive in a lump sum and (ii) if any payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner that does not cause such an accelerated or additional tax.  To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(l)(iv).  Additionally, to the extent that Executive’s receipt of any in-kind benefits from the Company or its affiliates must be delayed pursuant to this Section 21 due to her status as a “specified employee,” Executive may elect to instead purchase and receive such benefits during the period in which the provision of benefits would otherwise be delayed by paying the Company (or its affiliates) for the fair market value of such benefits (as determined by the Company in good faith) during such period.  Any amounts paid by Executive pursuant to the preceding sentence shall be reimbursed to Executive as described above on the date that is six months following her separation from service.  Each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code.  The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 21, provided that neither the 

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Company nor any of its employees or representatives shall have any liability to Executive with respect thereto.

22.  Effect of Excise Tax and Limit on Golden Parachute Payments.

(a)     Contingent Reduction of Parachute Payments. If there is a change in ownership or control of CNO that would cause any payment or distribution by the Company or any of its subsidiaries or any other person or entity to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (each, a “Payment”, and collectively, the “Payments”) to be subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any interest or penalties incurred by Executive with respect to such excise tax, the “Excise Tax”), then Executive will receive the greatest of the following, whichever gives Executive the highest net after-tax amount (after taking into account federal, state, local and social security taxes): (1) the Payments or (2) one dollar less than the amount of the Payments that would subject Executive to the Excise Tax (the “Safe Harbor Amount”). If a reduction in the Payments is necessary so that the Payments equal the Safe Harbor Amount, then the reduction will be determined in a manner which has the least economic cost to Executive and, to the extent the economic cost is equivalent, will be reduced in the inverse order of when payment would have been made to Executive, until the reduction is achieved.  Any reductions pursuant to this Section shall be made in a manner intended to be consistent with the requirements of Section 409A of the Internal Revenue Code.

(b)    Determination of the Payments. All determinations required to be made under this Section, including whether and when the Safe Harbor Amount is required and the amount of the reduction of the Payments and the assumptions to be utilized in arriving at such determination, shall be made by the Company which shall provide detailed supporting calculations to Executive.  Executive shall cooperate with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax.
(c)     Adjustments.    As a result of the uncertainty in the application of Section 4999 of the Code at the time of a determination hereunder, it is possible that Payments will be made which should not have been made under clause (a) of this Section (“Overpayment”) or that additional Payments which are not made pursuant to clause (a) of this Section should have been made (“Underpayment”).  In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.  In the event that there is a final determination by the Internal Revenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises under this Agreement, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.  
23.      Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written, effective as of the Effective Date.

	
	
	COMPANY:

	CNO SERVICES, LLC

	 

	/s/ Edward J. Bonach

	Edward J. Bonach

	President

	 

	 

	EXECUTIVE:

	 

	/s/ Susan L. Menzel

	Susan L. Menzel

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