Document:

exv10w4

Exhibit 10.4

December 22, 2008

Donald A. Sherman

c/o Delphi Capital Management, Inc.

590 Madison Avenue, 30th Floor

New York, New York 10022

Amendment and Restatement of Restricted Share Unit Award Agreement

Dear Don:

     This letter will serve as notice that, by action of the Compensation Committee (the
“Committee”) of the Board of Directors of Delphi Financial Group, Inc. (the “Company”), the terms and conditions of the award made to you effective February 16, 2007 of
17,144 Restricted Share Units (the “Units”), pursuant to the Company’s 2003 Employee Long-Term
Incentive and Share Award Plan, as amended (the “Plan”), as described in the Award Agreement dated
February 28, 2007 (the “Prior Award Agreement”), have, pursuant to Section 9(d) of the Plan, been
amended and restated in accordance with the terms hereof.

     In connection with such amendment and restatement, this letter will serve to replace the Prior
Award Agreement in its entirety with respect to the terms of the Units, which, as so amended and
restated, are as follows (with all capitalized terms used but not defined below having the meanings
set forth in the Plan):

     The Units entitle you to receive 17,144 shares of the Company’s Class A Common Stock (the
“Stock”) upon the earliest of (a) your death or Disability (as defined below), (b) the expiration
of such Delay Period (as defined below) as may be required by the penultimate paragraph of this
letter following your “separation from service” (which term, as used herein, shall have the
definition contained in Treas. Reg. § 1.409A-1(h)) with the Company or a Subsidiary thereof (i) by
reason of your Occupational Disability (as defined below) that does not also qualify as a
Disability or normal retirement in accordance with the policies set by the Company’s Board of
Directors (the “Board”), (ii) by the Company or such Subsidiary other than for
Cause (as defined below), (iii) by you for Good Reason (as

 

 

Donald A. Sherman

December 22, 2008

Page 2

defined below), or (iv) for any reason
following a Change of Ownership of the Company, (c) an event or condition that constitutes both a
Change of Ownership of the Company and a “change in control event” (which term, as used herein,
shall have the definition contained in Treas. Reg. § 1.409A-3(i)(5)(i)) with respect to the
Company, and (d) with respect to the Applicable Vested Percentage of such number of shares of the
Stock only, the expiration of such Delay Period as may be required by the penultimate paragraph of
this letter following your “separation from service” with the Company or a Subsidiary thereof for
any reason. The “Applicable Vested Percentage,” with respect to the Units, shall be equal to zero
until February 8, 2010, on which date such percentage shall be increased to thirty-three and one
third percent (33 1/3%), with such percentage to be increased by an additional 33 1/3% on each of
February 8, 2011 and February 8, 2012.

     However, if your employment with the Company or a Subsidiary thereof terminates other than (a)
by the Company or such Subsidiary not for Cause or by you for Good Reason, (b) due to your death,
Disability, Occupational Disability, or normal retirement in accordance with the policies set by
the Board, or (c) for any reason following a Change of Ownership of the Company, the Units will,
except as to the Applicable Vested Percentage thereof then in effect, be forfeited to the Company.
In addition, notwithstanding anything set forth above or otherwise in this letter, if your
employment is terminated by the Company or a Subsidiary thereof for Cause, the Units will be
forfeited to the Company.

     For purposes of the foregoing, with respect to the Units:

     “Cause” means (a) conviction of a felony or other crime involving fraud, dishonesty or moral
turpitude, (b) fraud with respect to the business of the Company or a Subsidiary thereof, or (c)
gross neglect of duties of your office specified in writing by the Board. For purposes hereof, you
shall not be deemed to have been terminated for Cause until the later to occur of (i) the 30th day
after notice of termination is given to you and (ii) the delivery to you of a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the members of the Board at a
meeting called and held for that purpose, and at which you together with your counsel were given an
opportunity to be heard, finding that you were guilty of

 

 

Donald A. Sherman

December 22, 2008

Page 3

conduct described in this definition of
“Cause”, and specifying the particulars thereof in detail.

     “Good Reason” means your voluntary termination of employment within 120 days after the
occurrence without your express written consent of any of the following events, provided that you
give notice to the Company at least 30 days in advance requesting that the situation be remedied,
and the situation remains unremedied upon expiration of such 30-day period: (i) your removal from,
or any failure to reelect you to, the position of President and Chief Operating Officer of the
Company, except in connection with your termination for Cause, Occupational Disability, or
Disability or termination by you other than for Good Reason; or (ii) reduction in your rate of base
salary for any fiscal year to less than 100 percent of the rate of your base salary, as in effect
on the date on which the Units were awarded; (iii) failure of the Company or a Subsidiary thereof
to continue in effect any retirement, life insurance, medical insurance or disability plan in which
you were participating on the date on which the Units were awarded unless the Company or such
Subsidiary provides you with a plan or plans that provide substantially comparable benefits; (iv) a
Change of Ownership; or (v) any purported termination by the Company or a Subsidiary thereof of
your employment for Cause that is not effected in compliance with the definition of “Cause” above.

     “Occupational Disability” means an illness, injury, accident or condition of either a physical
or psychological nature as a result of which you are unable to perform substantially the duties and
responsibilities of your position for 180 days during a period of 365 consecutive calendar days.

     You will be deemed to have a “Disability” if you (i) are unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, or (ii) are, by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering employees of the
Company or a Subsidiary thereof.

     The number of shares of the Stock to which the Units related shall automatically be
proportionately adjusted for any 

 

 

Donald A. Sherman

December 22, 2008

Page 4

increase or decrease in the number of issued shares of the Stock
resulting from a subdivision or consolidation of shares of the Stock or the payment of a stock
dividend (including but not limited to a stock split effected in the form of a stock dividend) or
any other increase or decrease in the number of such shares effected without receipt of
consideration by the Company. In addition, in the event that the Committee shall determine that any
reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, or other
similar corporate transaction or event not covered by the preceding sentence, affects the Stock or
the value thereof such that an adjustment is appropriate in order to prevent dilution or
enlargement of your rights under the Units, then the Committee shall make such equitable changes or
adjustments as it deems appropriate.

     On each date on which you receive shares of the Stock in respect of Units, unless you have
specifically elected otherwise in writing prior thereto, the Company will withhold such number of
such shares as shall satisfy your obligations for the payment of the related withholding taxes and
other tax obligations, subject to the limitation set forth in the last sentence of Section 9(c) of
the Plan. In order to determine the number of shares to be withheld for such purpose, the value of
a share of the Stock shall be equal to the closing price of a share of the Stock as reported by the
New York Stock Exchange on such date.

     In the event it shall be determined by the Company’s independent auditors that any payment or
distribution made, or benefit provided (including, without limitation, the acceleration of any
payment, distribution or benefit and the acceleration of vesting of any of the Units), by the
Company or a Subsidiary thereof to or for your benefit (whether paid or payable or distributed or
distributable pursuant to the terms hereof or otherwise, but determined without regard to any
additional payments required pursuant hereto) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any
similar excise tax), or any interest or penalties are incurred by you with respect to such excise
tax (such excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then you shall be entitled to receive an additional payment
(a “Gross-Up Payment”), to be made no later than the end of the calendar year in which you make
payment of the Excise Tax (notice of which payment shall be provided by you to the Company), in an
amount such that after

 

 

Donald A. Sherman

December 22, 2008

Page 5

payment by you of all taxes (including any Excise Tax, income tax or payroll
tax) imposed upon the Gross-Up Payment and any interest or penalties imposed with respect to such
taxes, you retain from the Gross-Up Payment an amount equal to the Excise Tax imposed upon the
Payments.

     The Units are subject to the terms and conditions of the Plan and may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of prior to the time, if any, that you
become entitled to receive shares of the Stock as provided herein other than by will or the laws of
descent and distribution.

     It is intended that the Units and this letter will comply with Section 409A of the Code and
any regulations and guidelines issued thereunder, to the extent subject thereto, and this letter
shall be interpreted on a basis consistent with such intent. Notwithstanding any provision to the
contrary herein, if you are, on the date of your “separation from service”, a “specified employee”
within the meaning of that term under Treas. Reg. § 1.409A-1(i), then with regard to any
distribution of Stock provided for in clauses (b) or (d) of the third paragraph of this letter,
such distribution shall not be made prior to the earlier of (i) the expiration of the six (6)-month
period measured from the date of your “separation from service” or (ii) the date of your death (the
“Delay Period”). Upon the expiration of the Delay Period, all distributions delayed pursuant to
this paragraph shall be made to you in a single lump sum. The Company shall not have any
obligation to indemnify or otherwise protect you from any obligation to pay any taxes pursuant to
Section 409A of the Code.

     Please confirm your consent to and acceptance of the amended and restated terms and conditions
of the Units set forth above, which shall supersede the provisions of the Prior Award Agreement in
its entirety, by signing and dating both counterparts

 

 

Donald A. Sherman

December 22, 2008

Page 6

of this letter and returning one to me. The other counterpart may be retained for your files.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ CHAD W. COULTER
 	 
	 	Chad W. Coulter 	 
	 	Senior Vice President, Secretary and

General Counsel 	 
	 

	 	 	 	 	 	 	 
	Agreed to and accepted:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ DONALD A. SHERMAN

	 	 
	Date: December 22, 2008
	 	 
	Donald A. Shermanexv10w5

Exhibit 10.5

December 19, 2008

[Name]

Safety National Casualty Corporation

1832 Schuetz Road

St. Louis, Missouri 63146

Re: Amendment of Stock Option Award Agreement

Dear [Name]:

     This will confirm that, pursuant to action taken by the Compensation Committee (the
“Committee”) of the Board of Directors of Delphi Financial Group, Inc. (“Delphi”), the Stock Option
Award Agreement dated February 21, 2008 (the “Award Agreement”), pursuant to which you were granted
options to purchase up to 225,000 shares of Delphi’s Class A Common Stock pursuant to Delphi’s 2003
Employee Long-Term Incentive and Share Award Plan (the “Plan”), has been amended as provided
herein. Capitalized terms used but not defined herein shall have the respective meanings set forth
in the Award Agreement.

     Specifically, subparagraphs (a) and (b) of the second paragraph of the Award Agreement, which
relate to the conditions to the Options becoming exercisable, have been deleted in their entirety
and replaced with the following:

     “(a) If SIG’s aggregate Pre-Tax Operating Income (as such term is defined in Exhibit A hereto)
for the period consisting of Delphi’s 2008, 2009 and 2010 fiscal years is at least $460,657,000,
135,000 Options shall become exercisable. Alternatively, if SIG’s aggregate Pre-Tax Operating
Income for such period does not reach $460,657,000, but is greater than $427,648,000, a reduced
number of the Options shall become exercisable, such number to be determined by interpolating
between zero and 135,000 in relation to the point at which the Pre-Tax Operating Income amount
falls in the range between $427,648,000 and $460,657,000 and rounding the number obtained to the
nearest whole number. For example, if SIG’s aggregate Pre-Tax Operating Income for such period
were exactly $444,152,150, 67,500 Options would become exercisable.

 

 

[Name]

December 19, 2008

Page 2

     (b) If SIG’s aggregate Pre-Tax Operating Income for the period consisting of Delphi’s 2008,
2009, 2010, 2011 and 2012 fiscal years is at least $880,732,000, 225,000 Options, less the number
of Options, if any, as shall previously have become exercisable pursuant to the preceding clause
(a) (the “Previously Vested Options”), shall become exercisable. Alternatively, if SIG’s aggregate
Pre-Tax Operating Income for such period does not reach $880,732,000, but is greater than
$784,745,000, a reduced number of the Options shall become exercisable, such number to be
determined by interpolating between zero and 225,000 in relation to the point at which the Pre-Tax
Operating Income amount falls in the range between $784,745,000 and $880,732,000, rounding the
number obtained to the nearest whole number, and subtracting from such number the number of the
Previously Vested Options, if any. For example, if SIG’s aggregate Pre-Tax Operating Income for
such period was $832,738,500, and the number of the Previously Vested Options was 50,000, 62,500
Options would become exercisable. If, in such example, there were no Previously Vested Options,
112,500 Options would become exercisable.”

     In addition, the fourth and fifth sentences of the first paragraph of the “General” section of
Exhibit A to the Award Agreement are hereby deleted in their entirety and replaced with the
following:

“The items referenced in the preceding sentence shall be referred to collectively herein as
“Excluded Items.” The determination of Pre-Tax Operating Income for each year will be made
by Delphi annually within 65 days of the end of such year.”

     Finally, it is hereby confirmed that the term “Options,” as utilized in Section 5.4 of the
Employment Agreement, shall refer to the Options which are the subject of the Award Agreement.

     Except as provided above, the Award Agreement shall remain in full force and effect according
to its terms.

 

 

[Name]

December 19, 2008

Page 3

     If you are in agreement with and accept the terms and conditions of this Amendment, please
confirm such agreement and acceptance by executing and dating both counterparts of this Amendment and returning one fully executed counterpart to me. The other counterpart should be
retained for your files.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ CHAD W. COULTER
 	 
	 	Chad W. Coulter 	 
	 	Senior Vice President, Secretary

and General Counsel 	 
	 

Agreed to and accepted:

	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	Date:
	 	 	 	 
	 

	 	 	 	 	 	 
	 	 
	[Name]

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