Document:

Exhibit 10.9

 

SERVICES AGREEMENT

 

THIS CONSULTING
SERVICES AGREEMENT (this “Agreement”) is made this 26th day of
October, 2009, by and between OneBeacon Insurance Company (“OneBeacon”), a
Pennsylvania corporation, on behalf of itself and its affiliates and
subsidiaries, with a principal place of business at One Beacon Lane, Canton,
MA, 02021 and  Small Army, Inc.,             (“Consultant”), an S-corporation,
with an address at 20 Newbury St. Boston, MA 
02116.  If there is any conflict
between the terms of this Agreement and any Schedules, the terms and conditions
of such Schedules shall control.

 

1.             SCOPE OF SERVICE

 

Consultant
agrees to provide to OneBeacon the services (the “Services”) and deliverables
(the “Deliverables”) described in the attached Schedule A, Statement of Work.

 

2.             TERM

 

Subject to termination in
accordance with Section 11 below, this Agreement shall remain in full
force and effect for a period of three (3) year or until completion of the
Services, whichever is earlier or in accordance with Termination, Section 11.  This Agreement may be extended by mutual
written agreement of the parties.

 

3.             FEES, PAYMENT & EXPENSES

 

3.1           Fees -  In consideration of the Services to be performed by
Consultant, Consultant shall be entitled to compensation as described in the
attached Schedule A.  All other
compensation shall be paid to Consultant within 30 days after receipt of
Consultant’s properly documented invoice or, as applicable, OneBeacon’s
acceptance of any Deliverables as defined in Section 7.

 

3.2           Expenses -  Except as otherwise agreed to in this Agreement or the
Statement of Work, Consultant shall be responsible for all costs and expenses
incident to the performance of services.

 

4.             CONFIDENTIALITY

 

Each
party acknowledges that it may periodically disclose to the other party certain
information that the disclosing party regards as proprietary and confidential
(the “Confidential Information”). 
Accordingly, the receiving party will take commercially reasonable
measures to prevent unauthorized disclosure including, but not limited to,
employment of precautions for the protection of Confidential Information
received which are no less stringent than those employed by the receiving party
to protect its own proprietary information. “Confidential Information” shall
mean any information (a) concerning customers, trade secrets, methods,
processes, procedures or any financial or business information of OneBeacon, or
(b) which is identified as proprietary or confidential.

 

With respect to all such
Confidential Information to be kept confidential pursuant to this Section,
Consultant shall (a) not provide or make available the Confidential
Information to any person other than those employees who have a need to know in
connection with the performance of the services; (b) not reproduce the
Confidential Information except for use reasonably necessary to the performance
of this Agreement; (c) return or destroy all such Confidential
Information, and any copies thereof, upon the request of OneBeacon or
termination of this Agreement.

 

Confidential Information
shall not include (a) information that is or becomes a part of the public
domain through no act or omission of the receiving party; (b) was in the
receiving party’s lawful possession prior to the disclosure and had not been
subject to any limitation on disclosure; (c) was received from a third
party which the receiving party reasonably believed had no obligation of
secrecy with respect thereto; (d) was independently developed by the
receiving party without use of the information disclosed under this Agreement;
or (e) is required to be disclosed by a court or other governmental
authority after reasonable 

 

 

notice is given to the
other party, provided that no notice is required to be given by OneBeacon with
respect to disclosures to regulators.

 

5.             PRIVACY

 

Consultant has a
responsibility to protect the privacy of OneBeacon’s employees, policyholders,
customers, agents, and contractors, and all personally identifiable information
including, but not limited to, name, social security number, driver’s license
number, and financial account information (“PII”) shall be held in
confidence.  Consultant shall comply with
all state and federal laws and regulations, including the provisions of the
Gramm-Leach-Bliley Act (“GLB”), Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”), Office of Foreign Assets Control (OFAC), state data
breach laws, and all other applicable laws and regulations.

 

Consultant must have
adequate safeguards in place to comply with federal, state and local laws and
regulations.  If, in the opinion of
OneBeacon, Consultant’s security procedures are not compliant, or if OneBeacon
identifies procedures that may lead to the compromise or unauthorized access to
personal information, Consultant agrees to cooperate with OneBeacon to adopt
mutually acceptable security procedures within a specified timetable at no
charge to OneBeacon

 

Consultant agrees to
notify OneBeacon by sending an email to The Information Privacy and Security
Officer at privacyandsecurity@onebeacon.com within 24 hours after Consultant
becomes aware of a breach, or threatened breach, of PII or unauthorized access
to its, or a third party’s, computer systems and/or unencrypted personal data
with respect to the services provided under this Agreement.  Consultant shall set forth in detail the
nature of the security breach and the measures taken by Consultant to cure the
breach.  Consultant and OneBeacon will thereafter
jointly decide what action to take, which may include, but not be limited to,
notifying the appropriate state reporting agency.

 

6.             INTELLECTUAL PROPERTY RIGHTS

 

All Deliverables under
this Agreement shall be considered work(s) made for hire by Consultant for
OneBeacon and shall belong exclusively to OneBeacon and its designees.  If, by operation of law, any of the
Deliverables (including any related intellectual property rights) are not owned
in their entirety by OneBeacon automatically upon creation by Consultant, then
Consultant agrees to assign, and hereby assigns, to OneBeacon and its designees
the ownership of such Deliverables, including all related intellectual property
rights.  Deliverables include, but are
not limited to, software, specifications, documentation, enhancements,
prototypes, reports, and any other materials or documents produced in the
course of performing the services.

 

7.             WARRANTIES

 

The Services will be
performed by appropriately qualified and trained personnel with due care and
diligence and in accordance with all applicable professional standards for the
field of expertise. Any Deliverables under this Agreement shall be free from
defects in material, workmanship and design; shall conform to all applicable
specifications, drawings, samples and descriptions; shall be suitable for their
intended purposes; and, shall be free from all liens and encumbrances.

 

8.             COMPLIANCE WITH LAWS & STANDARDS OF
CONDUCT

 

Consultant shall comply
with all applicable federal and state laws and regulations governing the
Services and Deliverables.

 

9.             EXCUSE OF PERFORMANCE

 

Neither party shall be
liable for any failure to perform its obligations under this Agreement during
any period in which such failure to perform arises directly or indirectly out
of an act of nature, acts of the public enemy, embargoes, insurrection, riot,
or the intervention of any government authority (collectively, “Excusable Cause”),
provided that the party so delayed immediately notifies the other party of such
delay in writing and uses its best efforts to minimize the adverse effect of
such events.

 

2

 

10.           CONSULTANT INDEMNITIES

 

Indemnification - Consultant agrees to indemnify, defend
and hold OneBeacon harmless from any and all claims, actions, liabilities,
damages, costs and expenses, including reasonable attorneys’ fees and expenses,
arising out of (a) any third party claims of infringement of any patents,
copyrights, license, trademarks, service marks or any other intellectual
property right or (b) the acts and omissions of its employees, subcontractors,
and/or agents.  If Consultant reasonably
believes that a Deliverable constitutes infringement, Consultant shall, at
Consultant’s expense procure for OneBeacon the right to continue to use the
Deliverable or replace or modify the Deliverable so that it is not infringing.

 

Conditions of Indemnity - The indemnities contained in this Section 10
are conditioned upon (i) notice by OneBeacon to Consultant as soon as
practicable of any claim, and (ii) Consultant’s right to control the
defense of all such claims, related lawsuits or proceedings.

 

11.           TERMINATION

 

OneBeacon may terminate
all or any portion of this Agreement, with or without cause, at any time upon
written notice to Consultant.  Upon
receipt of notice of termination, Consultant shall immediately stop all
activities associated with this Agreement and forward to OneBeacon all finished
work or work in process in Consultant’s possession.  OneBeacon shall have no further obligation or
liability to Consultant other than for work performed and accepted by OneBeacon
through the date of termination, which is the date Consultant is deemed to have
received notice.

 

3

 

12.           INSURANCE REQUIREMENTS

 

Consultant agrees to
maintain insurance throughout any term of this Agreement at its sole cost from
insurance companies and in a form satisfactory to OneBeacon in accordance with
the limits of liability required by OneBeacon. 
If insurance is required by OneBeacon, certificates of insurance must be
furnished to OneBeacon upon execution of this Agreement, and any future change
or cancellation shall not be valid without 30 days prior written notice to
OneBeacon.  Consultant shall also furnish
OneBeacon, promptly upon receipt by Consultant, renewal notices regarding such
insurance policies.

 

13.           LIMITATION OF LIABILITY

 

IN NO EVENT SHALL EITHER PARTY BE
LIABLE UNDER ANY CLAIM, DEMAND OR ACTION (WHETHER ARISING IN CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT
LIMITED TO, LOSS OF PROFITS, LOSS OF USE, OR LOSS FROM BUSINESS DISRUPTION,
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

14.           GENERAL PROVISIONS

 

14.1         Entire Agreement; Validity; Amendments; Waiver; Survival. 
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter and supersedes all prior agreements, whether oral
or written.  The invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision. 
No amendment to this Agreement shall be binding on either party unless
such amendment is in writing and executed by authorized representatives of both
parties.  A waiver by either party of a
breach of any of the terms or provisions of this Agreement shall not operate or
be construed as a waiver of any subsequent breach. The provisions of Sections 4
(Confidentiality) 5 (Privacy) and 10 (Consultant Indemnities) shall survive the
termination or expiration of this Agreement regardless of the reason for such
termination.

 

14.2         Assignment - OneBeacon may assign its interests under this Agreement to a successor
in interest, provided that such successor in interest fulfills the obligations
under this Agreement.  In no event shall
Consultant subcontract, delegate or assign its rights and responsibilities
under this Agreement without OneBeacon’s written consent.

 

14.3         Notices -
Except as otherwise specified in this Agreement, all notices or other
communications under this Agreement shall be deemed to have been duly given
when made in writing and delivered in person, via a nationally recognized
overnight carrier or deposited in the United States mail as certified mail with
return receipt requested, postage prepaid, and addressed to the notice
recipient at the following address or such other address as specified in
writing by the parties:

 

	
  “OneBeacon”

  	
   

  	
  “Consultant”

  
	
   

  	
   

  	
   

  
	
  OneBeacon Insurance
  Company

  	
   

  	
  Small Army, Inc,

  
	
  One Beacon Lane

  	
   

  	
  20 Newbury St,

  
	
  Canton, MA 02021

  	
   

  	
  Boston, MA 02116

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
  Attn: Office Manager

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
  Copy to:

  
	
   

  	
   

  	
   

  
	
  OneBeacon Insurance
  Company

  	
   

  	
  Small Army, Inc.

  
	
  OneBeacon Lane

  	
   

  	
  20 Newbury St.

  
	
  Canton, MA 02021

  	
   

  	
  Boston, MA

  
	
  Attn: Corporate
  Contracts

  	
   

  	
  Attn: Jeff Freedman

  
				

 

4

 

14.4         Governing Law - This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, including all matters of
construction, validity, performance and enforcement.

 

14.5         Independent Contractor - The parties are independent contractors, and nothing
in this Agreement shall be deemed to cause this Agreement to create an agency,
partnership, or joint venture between the parties.  Consultant shall pay all wages, salaries, and
other amounts due its employees in connection with this Agreement and shall be
responsible for all reports and obligations, including withholding of  taxes. 
In the  event Consultant, as a result of
performing services under this Agreement, is deemed to have any right to any
benefits under any employee benefit plans or programs, Consultant hereby waives
any such rights to benefits.

 

14.6         Background Check - Prior to an assignment by Consultant of a contract
employee, Consultant shall, subject to applicable law, have an employment,
education, and criminal background check performed on the employee or
contractor.  Consultant will not assign
an employee or contractor if the criminal background check reveals that an
employee or contractor has, as an adult in the United States, been convicted of
a felony.

 

14.7         No Publicity -  Consultant agrees to submit to
OneBeacon all proposed advertising and other publicity matter relating to any
service provided by Consultant in which OneBeacon’s name is mentioned or
language used from which Consultant’s connection of OneBeacon can be
inferred.  Consultant agrees not to
publish or use such advertising or publicity matter without the prior written
consent of OneBeacon, which consent shall not be unreasonably withheld.

 

IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized
representatives, on the date and year first above-written.

 

	
  ONEBEACON INSURANCE COMPANY

  	
   

  	
  CONSULTANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Carmen Duarte

  	
   

  	
  /s/ Jeff Freedman

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Carmen Duarte

  	
   

  	
  Jeff Freedman

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
  CEO

  
	
  VP Corp. Communications

  	
   

  	
   

  
	
  Title

  	
   

  	
  October 26, 2009

  
	
   

  	
   

  	
   

  
	
  11.03.09

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  

 

5

 

Schedule
A

 

Statement
of Work

 

6Exhibit 10(b)

 

PROTECTIVE
LIFE CORPORATION

LONG-TERM
INCENTIVE PLAN

(As
Amended and Restated as of December 31, 2008)

 

1.             Purpose. 
The purpose of the Protective Life Corporation Long-Term Incentive Plan
is to further the long-term growth in profitability of Protective Life
Corporation by offering long-term incentives to those key executives, officers
and employees who will be largely responsible for such growth.

 

2.             Definitions.

 

“Award” shall mean any grant or award under the
Plan.

 

“Award
Period” shall
mean the period of calendar years fixed by the Committee with respect to all
Performance Share Awards with the same Date of Grant (but no more than five
years) commencing with each Date of Grant, except that the Award Period for a
recently hired employee may be for such lesser period as determined by the
Committee.

 

“Board” shall mean the Board of Directors of the
Company.

 

“Cause” shall mean (i) the willful failure
by the Participant to perform substantially the Participant’s duties as an
employee of the Company (other than due to physical or mental illness) after
reasonable notice to the Participant of such failure, (ii) the Participant’s
engaging in serious misconduct that is injurious to the Company or any
Subsidiary, (iii)  the Participant’s having been convicted of, or
entered a plea of nolo contendere to, a crime that
constitutes a felony, or (iv) the breach by the Participant of any written
covenant or agreement not to compete with the Company or any Subsidiary.

 

“Change
in Control”
shall mean, subject to the provisions of Code Section 409A, the occurrence
of one or more of the following: (i) any one person (or more than one
person acting as a group (as provided in Code Section 409A)) (such person
or group, an “Acquiring Person”) acquires ownership of the Company’s stock
that, together with stock previously held by the Acquiring Person, constitutes
more than 50% of the total fair market value or more than 50% of the total
voting power of the Company, or (ii) a majority of the members of the
Board is replaced during any 12-month period by directors whose appointment or
election was not endorsed by a majority of the members of the Board before the
date of the appointment or election, or (iii) an Acquiring Person acquires
(or has acquired during the 12-month period ending on the date of the most
recent acquisition by such Acquiring Person) assets from the Company that have
a total gross fair market value equal to or more than 80% of the total gross
fair market value of the Company’s assets immediately before such acquisition
or acquisitions.

 

“Change
in Control Price” shall mean the greater of (i) the price per share of Common Stock
immediately preceding any transaction resulting in a Change in Control or (ii) the
highest price per share of Common Stock offered in conjunction with any

 

1

 

transaction resulting in
a Change in Control (as determined in good faith by the Committee if any part
of the offered price is payable other than in cash), except that,
in the case of Incentive Stock Options and Stock Appreciation Rights relating
to Incentive Stock Options, such price shall be the Fair Market Value on the
date on which the cash out described in Section 10(a) occurs.

 

“Code” shall mean the Internal Revenue Code of
1986, as amended, and the regulations thereunder.

 

“Committee” shall mean the Compensation and
Management Succession Committee of the Board (or such other committee of the
Board as the Board shall designate from time to time) or any subcommittee
thereof comprised of two or more directors each of whom is an “outside director”
within the meaning of Code Section 162(m) and a “non-employee
director” within the meaning of Rule 16b-3, as promulgated under Section 16
of the Exchange Act.

 

“Common
Stock” shall
mean the common stock, par value $0.50 per share, of the Company.

 

“Company” shall mean Protective Life Corporation,
a Delaware corporation.

 

“Date
of Grant”
with respect to a Performance Share Award shall mean as of January 1 of
the year in which such Award is made.

 

“Disability” shall mean that the Participant (i) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of at least 12 months,
(ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of at least 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 (iii) has been determined to be
totally disabled by the Social Security Administration.

 

“Eligible
Employee”
shall mean any person (including any officer) employed by the Company or any
Subsidiary.

 

“Employment” shall mean continuous and regular
salaried employment with the Company or a subsidiary, which shall include
(unless the Committee shall otherwise determine) any period of vacation, any
approved leave of absence and any salary continuation or severance pay period
and, at the discretion of the Committee, may include service with any former
subsidiary of the Company.

 

“Exchange
Act” shall
mean the Securities Exchange Act of 1934, as amended, and the regulations
thereunder.

 

2

 

“Executive
Officer”
shall mean any person who is an officer of the Company within the meaning of Rule 16a-1(f) of
the Exchange Act.

 

“Fair
Market Value”  of the
Common Stock shall mean (i) with respect to Performance Shares, the
average of the daily closing prices for a share of the Common Stock for the
twenty trading days prior to the date of payment of Performance Shares for an
Award Period or an Interim Period, as the case may be, on the Composite Tape
for New York Stock Exchange — Listed Stocks, or, if the Common Stock is not
listed on such Exchange, on the principal United States securities exchange
registered under the Exchange Act on which the Common Stock is listed, or, if
the Common Stock is not listed on any such exchange, the average of the daily
closing bid quotations with respect to a share of the Common Stock for such
twenty trading days on the National Association of Securities Dealers, Inc.,
Automated Quotations System or any system then in use or (ii) with respect
to other Awards, on any date, the closing price of a share of Common Stock, as
reported for such day on a national exchange, or the mean between the closing
bid and asked prices for a share of Common Stock on such date, as reported on a
nationally recognized system of price quotation; provided
that, in the event that there are no Common Stock transactions
reported on such exchange or system on such date, Fair Market Value shall mean
the closing price on the immediately preceding date on which Common Stock
transactions were so reported.

 

“Incentive
Stock Option”
shall mean an Option which is intended to meet the requirements of Code Section 422.

 

“Interim
Period” shall
mean a period of calendar years chosen by the Committee commencing with any
Date of Grant, which period is less than the Award Period commencing on the
Date of Grant.

 

“Nonstatutory
Stock Option”
shall mean an Option which is not intended to be an Incentive Stock Option.

 

“Normal
Retirement”  shall
mean retirement at or after the earliest age at which the Participant may
retire and receive a retirement benefit without an actuarial reduction for
early commencement of benefits under any defined benefit pension plan
maintained by the Company or any of its Subsidiaries in which such Participant
participates.

 

“Option” shall mean the right to purchase the
number of shares of Common Stock specified by the Committee, at a price and for
the term fixed by the Committee in accordance with the Plan and subject to any
other limitations and restrictions imposed by the Plan or the Committee.

 

“Participant” shall mean an Eligible Employee who is
selected by the Committee to receive an Award under the Plan.

 

“Performance
Share” shall
mean the equivalent of one share of Common Stock granted under Section 6
which becomes vested and nonforfeitable upon the attainment, in whole or in
part, of performance objectives determined by the Committee.

 

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“Plan” shall mean the Protective Life
Corporation Long-Term Incentive Plan as set forth herein and as may be amended
from time to time.

 

“Restricted
Period” shall
mean the period during which a grant of Restricted Stock or Restricted Stock
Units is subject to forfeiture.

 

“Restricted
Stock” shall
mean any Award of Common Stock granted under Section 9 which becomes
vested and nonforfeitable, in whole or in part, upon the satisfaction of such
conditions as shall be determined by the Committee.

 

“Restricted
Stock Unit”
shall mean any Award of a contractual right granted under Section 9 to
receive Common Stock (or, at the discretion of the Committee, cash based on the
Fair Market Value of the Common Stock) which becomes vested and nonforfeitable,
in whole or in part, upon the satisfaction of such conditions as shall be
determined by the Committee.

 

“Specified
Employee”
shall mean, with respect to April 1 of each calendar year (beginning April 1,
2005) and for the 12-month period thereafter, any person who met the definition
of a “key employee” of the Company under Code Section 416(i) (without
regard to Code Section 416(i)(5)) at any time during the preceding
calendar year, all as provided in Code Section 409A.

 

“Stock
Appreciation Right” shall mean any Award of a contractual right granted under Section 8
to receive cash, Common Stock or a combination thereof.

 

“Subsidiary” shall mean any corporation of which the
Company possesses directly or indirectly fifty percent (50%) or more of the
total combined voting power of all classes of stock of such corporation and any
other business organization, regardless of form, in which the Company possesses
directly or indirectly fifty percent (50%) or more of the total combined equity
interests in such organization.

 

“Termination
of Employment”
shall mean a Participant’s “separation from service” with the Company and the
Subsidiaries and affiliates by which the Participant is employed, as defined in
Code Section 409A (other than a separation from service as a result of
death or Disability).

 

3.             Administration of the Plan.

 

The Plan shall be
administered by the Committee which, subject to the provisions of the Plan,
shall have the authority to select the Eligible Employees who are to
participate in the Plan, to determine the Awards to be made to each Eligible
Employee selected to participate in the Plan, and to determine the conditions
subject to which Awards will become payable under the Plan.

 

The Committee shall have
full power to administer and interpret the Plan and to adopt such rules and
regulations consistent with the terms of the Plan as the Committee

 

4

 

deems necessary or
advisable in order to carry out the provisions of the Plan.  Except as otherwise provided in the Plan, the
Committee’s interpretation and construction of the Plan and its determination
of any conditions applicable to Awards or the granting of Awards to specific
Participants shall be conclusive and binding on all Participants.

 

In connection with its
determination as to the payment of Performance Shares, the Committee has full
discretion to adjust performance criteria to recognize special or nonrecurring
situations or circumstances for the Company or any other corporation or entity
for any year.

 

The Committee may employ
such legal counsel, consultants and agents (including counsel or agents who are
employees of the Company or a Subsidiary) as it may deem desirable for the
administration of the Plan and may rely upon any opinion received from any such
counsel, consultant or agent and any computation received from any such
consultant or agent.  All expenses
incurred in the administration of the Plan, including, without limitation, for
the engagement of any counsel, consultant or agent, shall be paid by the
Company.  No member or former member of
the Board or the Committee shall be liable for any act, omission,
interpretation, construction or determination made in connection with the Plan
other than as a result of such individual’s willful misconduct.

 

The Plan shall be
unfunded.  Benefits under the Plan shall
be paid from the general assets of the Company.

 

4.             Maximum Amount of Shares Available
for Awards.

 

(a)  Maximum
Number of Shares.  The maximum number
of shares of Common Stock that may be issued under the Plan shall be a total of
1,000,000 shares of Common Stock plus the number of shares of Common Stock
remaining available for issuance under the Plan as of May 5, 2008.  Whenever shares are received by the Company
in connection with the exercise of or payment for any Award granted under the
Plan, the number of shares actually issued shall be counted against the
foregoing limit.  Notwithstanding the
foregoing, but subject to the provisions of Section 4(c), in no event
shall (i) the number of shares of Performance Shares, Restricted Stock or
Restricted Stock Units awarded after May 5, 2008 exceed an aggregate of
750,000 Awards, and (ii) any Participant receive Awards in any calendar
year for more than an aggregate of 400,000 Performance Shares, Stock Options,
Stock Appreciation Rights, Restricted Stock and Restricted Stock Units.

 

(b)  Shares
Available for Issuance.  Shares of
Common Stock may be made available from the authorized but unissued shares of
the Company or from shares held in the Company’s treasury and not reserved for
another purpose.  If any Award is payable
solely in cash, no shares shall be deducted from the number of shares available
for issuance under Section 4(a) by reason of such Award except in the
case of the exercise of a Stock Appreciation Right granted in tandem with an
Option.  In addition, if any Award in
respect of shares is canceled or forfeited for any reason without delivery of
shares of Common Stock, the shares subject to such Award shall thereafter again
be available for award pursuant to the Plan.

 

5

 

(c)  Adjustment
for Corporate Transactions.  If there
is a change in the Common Stock as a result of a stock dividend, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, warrants or rights
offering to purchase Common Stock at a price substantially below fair market
value, or other similar event such that an adjustment is required to preserve,
or to prevent enlargement of, the benefits or potential benefits made available
under the Plan, then the Committee shall, in such manner as the Committee may
deem equitable, adjust any or all of (i) the number and kind of shares
which thereafter may be awarded or optioned and sold or made the subject of
Awards under the Plan, (ii) the number and kinds of shares subject to
outstanding Options and other Awards and (iii) the grant, exercise, base
or conversion price with respect to any of the foregoing; provided
that the number of shares subject to any Option or other Award shall always be
a whole number.  The Committee may also
make provisions for a cash payment to a Participant or a person who has an
outstanding Option or other Award.

 

5.             Participation. 
Participants in the Plan shall be selected by the Committee from those
Eligible Employees who, in the judgment of the Committee, have a substantial
opportunity to influence the long-term profitability of the Company.

 

6.             Performance Shares.

 

(a)  Performance
Share Awards.

 

(1)  After
appropriate approval of the Plan, and thereafter from time to time, the
Committee shall select Eligible Employees to receive Performance Share Awards
in any year as of the Date of Grant.  Any
Eligible Employee may be granted more than one Performance Share Award under
the Plan, but no Eligible Employee may earn, in the aggregate, more than 50% of
the Performance Shares which are the subject of the Plan.  An Award of Performance Shares hereunder
shall not be made unless such Award is in compliance with all applicable law.

 

(2)  No Participant
shall be entitled to receive any dividends or dividend equivalents on
Performance Shares; with respect to any Performance Shares, no Participant
shall have any voting or any other rights of a Company stockholder; and no
Participant shall have any interest in or right to receive any shares of Common
Stock prior to the time the Committee determines the form of payment of
Performance Shares pursuant to this Section 6.

 

(3)  Payment of a
Performance Share Award to any Participant shall be made in accordance with
this Section 6 and shall be subject to such conditions for payment as the
Committee may prescribe.  The Committee
may prescribe different conditions for different Participants.  Unless the Committee otherwise determines at
the time of grant of Performance Shares to an Executive Officer, the
performance objectives with respect to such Award shall be related to at least
one of the following criteria, which may be determined solely by reference to
the performance of the Company or a division or

 

6

 

subsidiary or based on
comparative performance relative to other companies: (i) total shareholder
return, (ii) stock price appreciation, (iii) income per share, (iv) return
on equity, assets or invested capital, (v) operating earnings, net income,
operating income or economic value added, (vi) sales, assets or revenues,
or growth in sales, assets or revenues, (vii) efficiency or expense
management (such as unit cost), or (viii) such other reasonable criteria
as the Committee may determine; provided that
to the extent the Committee determines that it is necessary to qualify
compensation under Code Section 162(m), the performance criteria shall be
based on one or more of the criteria listed in (i) through (vii) above.  The Committee may prescribe conditions such
that payment of an Award may be made with respect to a number of shares of
Common Stock that is greater than the number of Performance Shares awarded.  Except to the extent otherwise expressly
provided herein, the Committee may, at any time and from time to time, change
the performance objectives applicable with respect to any Performance Shares to
reflect such factors, including, without limitation, changes in a Participant’s
duties or responsibilities or changes in business objectives (e.g., from
corporate to subsidiary or division performance or vice versa), as the
Committee shall deem necessary or appropriate. 
In making any such adjustment, the Committee shall adjust the number of
Performance Shares or take other appropriate actions to prevent any enlargement
or diminution of the Participant’s rights related to service rendered and
performance attained prior to the effective date of such adjustment.

 

(4)      Each Performance Share Award shall be made
in writing and shall set forth the terms and conditions set by the Committee
for payment of such Award including, without limitation, the length of the
Award Period and whether there will be an Interim Period with respect to the
Award and, if so, the length of the Interim Period.

 

(b)  Payment of
Performance Share Awards.  Each
Participant who is granted a Performance Share Award shall be entitled to
payment of the Award as of the close of the Award Period applicable to such
Award, but only if and after the Committee has determined that the conditions
for payment of the Award set by the Committee have been satisfied.  At the time of grant of each Performance
Share Award, the Committee shall decide whether there will be an Interim Period.  If the Committee determines that there shall
be an Interim Period for the Award to any Participant, each such Participant
granted a Performance Share Award with an Interim Period shall be entitled to
partial payment on account thereof as of the close of the Interim Period, but
only if and after the Committee has determined that the conditions for partial
payment of the Award set by the Committee have been satisfied.  Performance Shares paid to a Participant for
an Interim Period may be retained by the Participant and shall not be repaid to
the Company, notwithstanding that based on the conditions set for payment at
the end of the Award Period such Participant would not have been entitled to
payment of some or any of the Award.  Any
Performance Shares paid to a Participant for the Interim Period during an Award
Period shall be deducted from the Performance Shares to which such Participant
is entitled at the end of the Award Period.

 

Unless otherwise directed
by the Committee, the Company shall make payment of Performance Share Awards as
soon as reasonably practicable after the Committee determines that payment has
been earned and in the calendar year after the calendar year

 

7

 

the applicable
performance period ends. Unless otherwise directed by the Committee, all
payments of Performance Share Awards to Participants shall be made partly in
shares of Common Stock and partly in cash, with the cash portion being
approximately equal to the amount of federal, state, and local taxes which the
Participant’s employer is required to withhold on account of such payment. The
Committee, in its discretion, may provide for payment of cash and distribution
of shares of Common Stock in such other proportions as the Committee deems
appropriate, except and provided that the Committee must pay in cash an amount
equal to the federal, state, and local taxes which the Participant’s employer
is required to withhold on account of such payment. There shall be deducted
from the cash portion of all Performance Share Award payments all taxes to be
withheld with respect to such Awards.

 

For payment of each Performance Share Award, the
number of shares of Common Stock to be distributed to the Participant shall
equal the Fair Market Value of the total Performance Shares determined by the
Committee to have been earned by the Participant less the portion of the Award
that was paid in cash, divided by the Fair Market Value of a Performance Share.

 

(c)  Death or
Disability.  If, prior to the close
of an Award Period, a Participant has a Termination of Employment by reason of
death or incurs a Disability, payment of the Participant’s outstanding
Performance Share Awards shall be made as soon as reasonably practicable (and
within 90 days) after death or the date of the determination of Disability, and
the number of Performance Shares for each Award to be paid shall be computed by
(i) determining the number of Performance Shares that would have been paid
if the subject Award Period had ended on the December 31 immediately
preceding the date of death or the date of determination of Disability (based
on the conditions set by the Committee for payment of Performance Share Awards
for the subject Award Period); (ii) multiplying the number determined
pursuant to clause (i) by a fraction, the numerator of which is the number
of months during the subject Award Period that the Participant was an active
Eligible Employee, and the denominator of which is the number of months in the
Award Period; and (iii) reducing the resulting product by any Performance
Shares for which payment has been made with respect to any Interim Period
during such Award Period.  For purposes
of this Section 6(c), the Fair Market Value of the Common Stock shall be
based on the twenty trading days immediately preceding the date of death or the
date of the determination of Disability. 
Except as provided in Section 6(g), payments for Awards awarded in
the year in which the Participant has a Termination of Employment by reason of
death or incurs a Disability shall be paid at the same percentage as an Award
awarded in the year immediately preceding the year of death or Disability.

 

(d)  Retirement
Prior to Close of Award Period. 
Unless otherwise determined by the Committee and subject to the provisions
of the Plan (including Section 11(b)), if, prior to the close of an Award
Period, a Participant has a Termination of Employment by reason of retirement
on or after the Participant’s Normal Retirement date or prior to the
Participant’s Normal Retirement date if such retirement was at the request or
with the consent of the Participant’s employer, payment of the Participant’s
outstanding Performance Share Awards will be made as soon as reasonably
practicable (and within 90 days) after such retirement and such payment shall
be computed in the same manner as in

 

8

 

Section 6(c), using
the effective date of retirement in place of the date of death or the date of
determination of Disability.

 

(e)  Termination
Under Certain Circumstances.  If,
before the end of an Award Period, a Participant has a Termination of
Employment by reason of (i) the divestiture by the Company of one or more
of its business segments or a significant portion of the assets of a business
segment, or (ii) a significant reduction by the Company in its salaried
work force, the determination of whether such Participant shall receive payment
of the Participant’s outstanding Performance Share Awards shall be within the
exclusive discretion of the Committee. 
Subject to the provisions of the Plan (including Section 11(b)),
payment, if any, of Performance Share Awards to such Participant shall be made
as soon as reasonably practicable (and within 90 days) after one of the events
described in the preceding sentence of this Section 6(e) occurs and
the amount of such payment shall be computed in the same manner as in Section 6(c),
using the effective date that such event occurs in place of the date of death
or the date of determination of Disability.

 

(f)  Voluntary
Termination or Discharge.  If, before
the end of an Award Period, a Participant has a Termination of Employment and
there is no payment due under Sections 6(c), (d) or (e) or Section 10,
all of such Participant’s outstanding Performance Shares shall forthwith and
automatically be cancelled and all rights of the former holder of such
cancelled Performance Shares in respect to such cancelled Performance Shares
shall forthwith terminate, unless the Committee determines otherwise (and
subject to such terms and conditions as the Committee shall determine).

 

(g)  Interpretation.  Except as otherwise provided in this Section 6(g),
any Plan provision to the contrary notwithstanding, if any Award of Performance
Shares is intended, at the time of grant, to be “performance-based compensation”
within the meaning of Code Section 162(m)(4)(C), to the extent required to
so qualify any Award hereunder, (i) the Committee shall not be entitled to
exercise any discretion otherwise authorized under the Plan with respect to
such Award if the ability to exercise such discretion (as opposed to the
exercise of such discretion) would cause such Award to fail to qualify as
performance-based compensation and (ii) subject to Section 11(b), if
an Executive Officer has a Termination of 
Employment by reason of retirement on or after the Participant’s Normal
Retirement date or prior to the Participant’s Normal Retirement date if such
retirement was at the request of the Executive Officer’s employer, the payment,
if any, with respect to any Performance Shares awarded since the December 31
immediately preceding the date of Termination of Employment  shall be made as soon as reasonably
practicable after the end of the year in which such Termination of Employment
occurs (and in no event after the end of the following calendar year), and the
number of Performance Shares to be paid shall be equal to that percentage, if
any, of such Award that would have been earned if, based on the conditions set
by the Committee for payment of Awards for the subject Award Period, the
subject Award Period had ended as of December 31 of the year in which the
Termination of Employment occurred, times a fraction, the numerator of which is
the number of months during the subject Award Period that the Participant was
an active Eligible Employee, and the denominator of which is the number of
months in the Award Period.

 

9

 

7.             Stock Options.

 

(a)  Grant.  Subject to the provisions of the Plan, the
Committee shall have the authority to grant Options to an Eligible Employee and
to determine (i) the number of shares to be covered by each Option, (ii) the
exercise price therefor and (iii) the conditions and limitations
applicable to the exercise of the Option. 
The Committee shall have the authority to grant Incentive Stock Options
and Nonstatutory Stock Options; provided that
Incentive Stock Options may not be granted to any Participant who is not an
employee of the Company or one of its Subsidiaries at the time of grant.
Options shall not be exercisable after the expiration of ten years from the
date of grant.  In the case of Incentive
Stock Options, the terms and conditions of such grants shall be subject to and
comply with Code Section 422.

 

(b)  Option Price.  The Committee shall establish the exercise
price at the time each Option is granted, which price shall not be less than
100% of the Fair Market Value of the Common Stock at the date of grant.

 

(c)  Exercise.  Each Option may be exercised at such times
and subject to such terms and conditions as the Committee may specify in the
applicable Award or thereafter; provided, however,
that if the Committee does not establish a different exercise schedule at or
after the date of grant of an Option, such Option shall become exercisable in
three (3) equal installments on each of the first three anniversaries of
the date the Option is granted.  The
Committee may impose such conditions with respect to the exercise of Options as
it shall deem appropriate, including, without limitation, any conditions
relating to the application of federal or state securities laws.  No shares of Common Stock shall be delivered
pursuant to any exercise of an Option unless arrangements satisfactory to the Committee
have been made to assure full payment of the option price therefor.  Without limiting the generality of the
foregoing, payment of the option price may be made in cash or its equivalent
or, if and to the extent permitted by the Committee, by exchanging shares of
Common Stock owned by the optionee (which are not the subject of any pledge or
other security interest), or by a combination of the foregoing, provided that
the combined value of all cash and cash equivalents and the Fair Market Value
of any such Common Stock so tendered to the Company, valued as of the date of
such tender, is at least equal to such option price.  The Committee may permit a Participant to
elect to pay the exercise price upon the exercise of an Option by authorizing a
third party to sell shares of Common Stock (or a sufficient portion of the
shares) acquired upon the exercise of the Option and remit to the Company a
sufficient portion of the sale proceeds to pay the entire exercise price and
any tax withholding resulting from such exercise.

 

(d)  Termination
of Employment and Disability.  Unless
the Committee shall otherwise determine at or after the date of grant (and
subject to such terms and conditions as the Committee may determine), an Option
shall be exercisable following the termination of a Participant’s Employment
only to the extent provided in this Section 7(d).  If a Participant incurs a Disability or the
Participant’s Employment terminates due to the Participant’s (i) death, (ii) retirement
on or after the Participant’s Normal Retirement date, or (iii) retirement
prior to the Participant’s Normal Retirement date if such retirement was at the
request or with the consent of the Participant’s employer, the Participant (or,
in the

 

10

 

event of the Participant’s
death or Disability during Employment or during the period during which an
Option is exercisable under this sentence, the Participant’s beneficiary or
legal representative) may exercise any Option held by the Participant at the
time of such Disability or Employment termination, regardless of whether then
exercisable, for a period of three years in the case of retirement pursuant to
clause (ii) or (iii) and one year in the case of death or Disability
(or such greater or lesser period as the Committee shall determine at or after
the date of grant), but in no event after the date the Option otherwise
expires.  If a Participant’s Employment
is terminated for Cause (or if, after the Participant’s Employment terminates,
the Committee determines that the Participant’s Employment could have been
terminated for Cause had the Participant still been employed or has otherwise
engaged in conduct that is detrimental to the interests of the Company, as
determined by the Committee in its sole discretion), all Options held by the
Participant shall immediately terminate, regardless of whether then
exercisable.  If a Participant’s
Employment terminates for any reason not described in the preceding two
sentences, the Participant (or, in the event of the Participant’s death or Disability
during the period during which an Option is exercisable under this sentence,
the Participant’s beneficiary or legal representative) may exercise any Option
which was exercisable at the time of such termination for 90 days (or such
greater or lesser number of Options or such greater or lesser period as the
Committee shall specify at or after the date of grant, and subject to such
terms and conditions as the Committee may determine) following the date of such
termination, but in no event after the date the Option otherwise expires.

 

8.             Stock Appreciation Rights.

 

(a)  Grant of
Stock Appreciation Rights.  Subject
to the provisions of the Plan, the Committee may grant Stock Appreciation
Rights in tandem with an Option, in addition to an Option, or freestanding and
unrelated to an Option.   Stock
Appreciation Rights granted in tandem with or in addition to an Option may be
granted either at the same time the Option is granted or at a later time.  Stock Appreciation Rights shall not be
exercisable after the expiration of ten years from the date of grant and shall
have a base price determined in the same manner as, and subject to the same
conditions as apply with respect to, a Nonstatutory Stock Option under Section 7(b).

 

(b)  Exercise of
Stock Appreciation Rights.  A Stock
Appreciation Right shall entitle the Participant to receive from the Company an
amount equal to the excess of the Fair Market Value of a share of Common Stock
on the date of exercise of the Stock Appreciation Right over the base price
thereof.  The Committee shall determine
the time or times at which or the event or events (including, without
limitation, a Change in Control) upon which a Stock Appreciation Right may be
exercised in whole or in part, the method of exercise and whether such Stock
Appreciation Right shall be settled in cash, shares of Common Stock or a
combination of cash and shares of Common Stock; provided,
however, that unless otherwise specified by the Committee at or
after the date of grant, a Stock Appreciation Right granted in tandem with an
Option shall be exercisable only at the same time or times as the related
Option is exercisable.  Unless the
Committee shall establish a different exercise schedule at or after the date of
grant, each Stock Appreciation

 

11

 

Right shall become
exercisable in three (3) equal installments on each of the first three
anniversaries of the date of grant.

 

(c)  Termination
of Employment and Disability.  Unless
the Committee shall otherwise determine at or after the date of grant (and
subject to such terms and conditions as the Committee may determine), a Stock
Appreciation Right shall be exercisable following the termination of a
Participant’s Employment only to the extent provided in this Section 8(c).  If a Participant incurs a Disability or the
Participant’s Employment terminates due to the Participant’s (i) death, (ii) retirement
on or after the Participant’s Normal Retirement date, or (iii) retirement
prior to the Participant’s Normal Retirement date if such retirement was at the
request or with the consent of the Participant’s employer, the Participant (or,
in the event of the Participant’s death or Disability during Employment or
during the period during which a Stock Appreciation Right is exercisable under
this sentence, the Participant’s beneficiary or legal representative) may
exercise any Stock Appreciation Right held by the Participant at the time of
such Disability or Employment termination, regardless of whether then
exercisable, for a period of three years in the case of retirement pursuant to
clause (ii) or (iii) and one year in the case of death or Disability
(or such greater or lesser period as the Committee shall determine at or after
the date of grant), but in no event after the date the Stock Appreciation Right
otherwise expires.  If a Participant’s
Employment is terminated for Cause (or if, after the Participant’s Employment
terminates, the Committee determines that the Participant’s Employment could
have been terminated for Cause had the Participant still been employed or has
otherwise engaged in conduct that is detrimental to the interests of the
Company, as determined by the Committee in its sole discretion), all Stock
Appreciation Rights held by the Participant shall immediately terminate,
regardless of whether then exercisable. 
If a Participant’s Employment terminates for any reason not described in
the preceding two sentences, the Participant (or, in the event of the
Participant’s death or Disability during the period during which a Stock
Appreciation Right is exercisable under this sentence, the Participant’s
beneficiary or legal representative) may exercise any Stock Appreciation Right
which was exercisable at the time of such termination for 90 days (or such
greater or lesser number of Stock Appreciation Rights or such greater or lesser
period as the Committee shall specify at or after the date of grant, and
subject to such terms and conditions as the Committee may determine) following
the date of such termination, but in no event after the date the Stock Appreciation
Right otherwise expires.

 

9.             Restricted Stock and Restricted
Stock Units.

 

(a)  Grant of
Restricted Stock or Restricted Stock Units. 
Subject to the provisions of the Plan, the Committee may grant Awards of
Restricted Stock or Restricted Stock Units to Participants at such times and in
such amounts, and subject to such other terms and conditions not inconsistent
with the Plan, as it shall determine. 
Each grant of Restricted Stock or Restricted Stock Units shall be
evidenced by an Award Agreement.  Unless
the Committee provides otherwise at or after the date of grant, stock
certificates evidencing any shares of Restricted Stock so granted shall be held
in the custody of the Secretary of the Company until the Restricted Period
lapses, and, as a condition to the grant of any Award of shares of Restricted
Stock, the Participant shall have delivered to the

 

12

 

Secretary of the Company
a certificate, endorsed in blank, relating to the shares of Common Stock
covered by such Award.

 

(b)  Termination
of Employment and Disability. Unless the Committee otherwise determines at
or after the date of grant (and subject to such terms and conditions as the
Committee may determine), the rights of a Participant with respect to an award
of Restricted Stock or Restricted Stock Units outstanding at the time of the
Participant’s Termination of Employment or Disability shall be determined under
this Section 9(b).  If a Participant
incurs a Disability or has a Termination of Employment due to the Participant’s
(i) death, (ii) retirement on or after the Participant’s Normal
Retirement date, or (iii) retirement prior to the Participant’s Normal
Retirement date if such retirement was at the request or with the consent of
the Participant’s employer, any restrictions on an Award of Restricted Stock or
Restricted Stock Units shall lapse. 
Unless the Committee otherwise determines, any portion of any Restricted
Stock or Restricted Stock Unit Award as to which the Restricted Period has not
lapsed at the date of a Participant’s Termination of Employment for any reason
not described in the preceding sentence shall be forfeited as of such date.

 

(c)  Delivery of
Shares.  Subject to the provisions of
the Plan (including Section 11(b)), upon the expiration or termination of
the Restricted Period and the satisfaction (as determined by the Committee) of
any other conditions determined by the Committee, the restrictions applicable
to the Restricted Stock or Restricted Stock Units shall lapse and a stock
certificate for the number of shares of Common Stock with respect to which the
restrictions have lapsed shall be delivered, free of all such restrictions,
except any that may be imposed by law, to the Participant or the Participant’s
beneficiary or estate, as the case may be. 
No payment will be required to be made by the Participant upon the
delivery of such shares of Common Stock, except as otherwise provided in Section 11(a).  Payment for Restricted Stock shall be made by
the Company in shares of Common Stock. 
Payment for Restricted Stock Units shall be made by the Company in
shares of Common Stock, cash or in any combination thereof, as determined by
the Committee.

 

(d)  Restricted
Period; Restrictions on Transferability during Restricted Period.  Unless otherwise determined by the Committee
at or after the date of grant, the Restricted Period applicable to any Award of
Restricted Stock or Restricted Stock Units shall lapse, and the shares of
Common Stock related to such Award shall become freely transferable, as to an
equal amount of shares of Restricted Stock or Restricted Stock Units on each of
the first five (5) anniversaries of the date of grant.  Restricted Stock or Restricted Stock Units
may not be sold, assigned, pledged or otherwise encumbered, except as herein
provided, during the Restricted Period. 
Any certificates issued in respect of Restricted Stock shall be
registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Company.  Subject to the provisions of the Plan
(including Section 11(b)), at the expiration of the Restricted Period with
respect to any award of Restricted Stock, unless otherwise forfeited, the
Company shall deliver such certificates to the Participant or to the
Participant’s legal representative.  At
or after the date of grant, the Committee may accelerate the vesting of any
Award of Restricted Stock or Restricted Stock Units or waive any conditions to
the vesting of any such Award.

 

13

 

(e)  Rights as a
Stockholder; Dividend Equivalents. 
Unless otherwise determined by the Committee at or after the date of
grant, Participants granted shares of Restricted Stock shall be entitled to
receive, either currently or at a future date, as specified by the Committee,
all dividends and other distributions paid with respect to such shares,
provided that if any such dividends or distributions are paid in shares of
Common Stock or other property (other than cash), such shares and other
property shall be subject to the same forfeiture restrictions and restrictions
on transferability as apply to the shares of Restricted Stock with respect to
which they were paid.  The Committee will
determine whether and to what extent to credit to the account of, or to pay
currently to, each recipient of Restricted Stock Units, an amount equal to any
dividends paid by the Company during the Restricted Period with respect to the
corresponding number of shares of Common Stock (“Dividend Equivalents”).  To the extent provided by the Committee at or
after the date of grant, any Dividend Equivalents with respect to cash
dividends on the Common Stock credited to a Participant’s account shall be
deemed to have been invested in shares of Common Stock on the record date
established for the related dividend and, accordingly, a number of additional
Restricted Stock Units shall be credited to such Participant’s account equal to
the greatest whole number which may be obtained by dividing (x) the value
of such Dividend Equivalent on the record date by (y) the Fair Market
Value of a share of Common Stock on such date.

 

10.          Change in Control.

 

(a)  Accelerated
Vesting and Payment.  Subject to the
provisions of Section 10(b), in the event of a Change in Control, each
Option and Stock Appreciation Right shall promptly be canceled in exchange for
a payment in shares of Common Stock or in cash (at the discretion of the
Committee) of an amount equal to the excess of the Fair Market Value of a share
of Common Stock over the exercise price for such Option or the base price for
such Stock Appreciation Right, whichever is applicable; and the Restricted
Period applicable to all shares of Restricted Stock or Restricted Stock Units
shall expire and all such shares shall become nonforfeitable and immediately
transferable.

 

(b)  Alternative
Awards.  Notwithstanding the
provisions of Section 10(a), no cancellation, acceleration of
exercisability, vesting, issuance of shares, cash settlement or other payment
shall occur with respect to any Award or any class of Awards if the Committee
reasonably determines in good faith prior to the occurrence of a Change in
Control that such Award or class of Awards shall be honored or assumed, or new
rights substituted therefor (such honored, assumed or substituted award
hereinafter called an “Alternative Award”) by a Participant’s employer (or the
parent or a subsidiary of such employer) immediately following the Change in
Control, provided that any such Alternative Award must:

 

(i)  be based on
stock which is traded on an established securities market, or which will be so
traded within 60 days following the Change in Control;

 

(ii)  provide such
Participant (or each Participant in a class of Participants) with rights and
entitlements substantially equivalent to or better than the 

 

14

 

rights and entitlements
applicable under such Award, including, but not limited to, an identical or
better exercise or vesting schedule and identical or better timing and methods
of payment;

 

(iii)  have
substantially equivalent economic value to such Award (determined by the
Committee as constituted immediately prior to the Change in Control, in its
sole discretion, promptly after the Change in Control); and

 

(iv)  have terms and
conditions which provide that if the Participant’s employment is involuntarily
terminated or constructively terminated (other than for Cause) upon or
following such Change in Control, any conditions on a Participant’s rights
under, or any restrictions on transfer or exercisability applicable to, each
such Alternative Award shall be waived or shall lapse, as the case may be.

 

For this purpose, a
constructive termination shall mean a termination of employment by a
Participant following a material reduction in the Participant’s compensation, a
material reduction in the Participant’s responsibilities or the relocation of
the Participant’s principal place of employment to another location a material
distance farther away from the Participant’s home, in each case, without the
Participant’s prior written consent.

 

Notwithstanding the
foregoing provisions of this Section 10(b), any Restricted Stock Units
that are deferred compensation subject to Code Section 409A shall not be
subject to the provisions of this Section 10(b) and, upon a Change in
Control, the Restricted Period of each such Restricted Stock Unit Award shall
expire, all such Restricted Stock Units shall become nonforfeitable, and
payment of such Restricted Stock Units shall be made within thirty (30) days
after the Change in Control.

 

(c)  In the event of
a Change in Control, each Participant shall be deemed to have earned
Performance Shares with respect to each of the Participant’s Performance Share
Awards outstanding at the date of such Change in Control.  The number of Performance Shares so earned
for each Award shall be computed by determining the number of Performance
Shares that would have been paid if the subject Award Period had ended on the December 31
immediately preceding the Change in Control (based on the conditions set by the
Committee for payment of Performance Share Awards for the subject Award
Period), provided that in no event shall the number of Performance Shares
earned be less than the aggregate number of Performance Shares at the target
performance level (as identified in the applicable Award letter) with respect
to such Award.  Performance Share Awards
granted in the year of the Change in Control shall be earned at the same percentage
as Awards granted in the year preceding the year of the Change in Control.  Each Performance Share so earned shall, in
the discretion of the Committee, either (1) be paid in shares of Common
Stock or (2) be canceled in exchange for an immediate payment in cash of
an amount based upon the Change in Control Price.

 

15

 

11.          General Provisions.

 

(a)  Withholding.  The Company shall have the right to deduct
from all amounts paid to a Participant in cash (whether under the Plan or
otherwise) any taxes required by law to be withheld in respect of Awards under
the Plan.  In the case of any Award
satisfied in the form of Common Stock, no shares shall be issued unless and
until arrangements satisfactory to the Committee shall have been made to satisfy
any withholding tax obligations applicable with respect to such Award.  Without limiting the generality of the
foregoing and subject to such terms and conditions as the Committee may impose,
the Company shall have the right to retain, or the Committee may, subject to
such terms and conditions as it may establish from time to time, permit
Participants to elect to tender, Common Stock (including Common Stock issuable
pursuant to an Award) to satisfy, in whole or in part, the amount required to
be withheld.

 

(b)  Delay
of Distributions—Certain Key Employees. 
Any Plan provision to the contrary notwithstanding and subject to Code Section 409A,
to the extent required by Code Section 409A, payments to be made to a
Specified Employee upon a Termination of Employment may not be made before the
date that is six months after the date of the Termination of Employment (or, if
earlier, the date of death of the Specified Employee).

 

(c)  Awards.  Each Award hereunder shall be evidenced in
writing.  The written agreement shall be
delivered to the Participant and shall incorporate the terms of the Plan by
reference and specify the terms and conditions thereof and any rules applicable
thereto.

 

(d)  Cancellation
of Performance Shares.  The Committee
may cancel Performance Shares granted to a Participant, provided the
Participant has consented thereto in writing. In the event of any such
cancellation, all rights of the former holder of such cancelled Performance
Shares in respect to such cancelled Performance Shares shall immediately
terminate.

 

(e)  No
Assignment of Interest.  Unless the
Committee shall permit (on such terms and conditions as it shall establish) an
Award to be transferred to a member of the Participant’s immediate family or to
a trust or similar arrangement for the benefit of such immediate family members
(collectively, the “Permitted Transferees”), an Award or interest of any
Participant in the Plan shall not be assignable, either by voluntary assignment
or by operation of law, and any assignment of such interest, whether voluntary
or by operation of law, shall render the Award void, except that cash or shares
of Common Stock payable under the Plan shall be transferable by testamentary
will or by the laws of descent and distribution.  All shares of Common Stock paid pursuant to
the Plan are to be taken subject to an investment representation by the
Participant or other recipient that any such shares are acquired for investment
and not with a view to distribution and that such shares shall not be
transferred or sold until registered in compliance with the Securities Act of
1933 or unless an exemption therefrom is available in the opinion of the
General Counsel for the Company.  All
rights with respect to Awards granted to a Participant under the Plan shall be
exercisable during the Participant’s lifetime only by such Participant, or, if
applicable, the Permitted Transferees.

 

16

 

(f)  Designation
of Beneficiary.  Each Participant may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to receive any payments which may be made
following the Participant’s death.  Such
designation may be changed or canceled at any time without the consent of any
such beneficiary.  Any such designation,
change or cancellation must be made in a form or manner approved by the
Committee and shall not be effective until received by the Committee.  If no beneficiary has been named, or the
designated beneficiary or beneficiaries shall have predeceased the Participant,
the beneficiary shall be the Participant’s spouse or, if no spouse survives the
Participant, the Participant’s estate. 
If a Participant designates more than one beneficiary, the rights of
such beneficiaries shall be payable in equal shares, unless the Participant has
designated otherwise.

 

(g)  Employment
Rights.  An Award made under the Plan
shall not confer any right on the Participant to continue in the employ of the
Company or any subsidiary or limit in any way the right of the Participant’s
employer to terminate his or her employment at any time.

 

(h)  Expenses.  The expenses of administering the Plan shall
be borne by the Company.

 

(i)  No Rights to
Awards, No Shareholder Rights.  No
Participant or Eligible Employee shall have any claim to be granted any Award
under the Plan, and there is no obligation of uniformity of treatment of
Participants and Eligible Employees. 
Subject to the provisions of the Plan and the applicable Award, no person
shall have any rights as a shareholder with respect to any shares of Common
Stock to be issued under the Plan prior to the issuance thereof.

 

(j)  Construction
of the Plan.  The validity,
construction, interpretation, administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined solely in
accordance with the laws of the State of Delaware.

 

(k)  Legend.  To the extent any stock certificate is issued
to a Participant in respect of shares of Restricted Stock awarded under the
Plan prior to the expiration of the applicable Restricted Period, such
certificate shall be registered in the name of the Participant and shall bear
the following (or similar) legend:

 

“The shares of stock
represented by this certificate are subject to the terms and conditions
contained in the Protective Life Corporation Long-Term Incentive Plan and the
Award Agreement, dated as of                           ,
between the Company and the Participant, and may not be sold, pledged,
transferred, assigned, hypothecated or otherwise encumbered in any manner
(except as provided in the Plan or in such Award Agreement) until                               .”

 

Upon the lapse of the
Restricted Period with respect to any such shares of Restricted Stock, the
Company shall issue or have issued new share certificates without the legend
described herein in exchange for those previously issued.

 

17

 

(l)  Effective
Date.  The Plan is a continuation of
the Company’s 1997 Long-Term Incentive Compensation Plan and its Long-Term
Incentive Plan as in effect prior to the date hereof.  The Plan, as amended and restated herein,
shall be effective as of December 31, 2008.  No Awards may be granted under the Plan after
December 31, 2017.

 

(m)  Amendment of
Plan.  The Board may amend, suspend
or terminate the Plan or any portion thereof at any time, provided that no
amendment shall be made without shareholder approval if such amendment would

 

(i)  increase the
number of shares of Common Stock subject to the Plan, except pursuant to Section 4(c);

 

(ii)  change the
exercise price at which Options may be granted, or the base price at which
Stock Appreciation Rights may be granted;

 

(iii)                               change the definition of Performance Share; or

 

(iv)  remove the administration
of the Plan from the Committee.

 

Without the written
consent of an affected Participant, no termination, suspension or modification
of the Plan shall adversely affect any right of such Participant under the
terms of an Award granted before the date of such termination, suspension or
modification.

 

(n)  Amendment,
Cancellation and Buyout of Awards. 
The Committee shall have the authority to amend any Award to include any
provision which, at the time of such amendment, is authorized under the terms
of the Plan; provided, however, that (i) no
outstanding Award may be revoked or altered in a manner unfavorable to the
Participant without the written consent of the Participant, (ii) no
outstanding Option may be altered in a manner that reduces the exercise price
(except as provided in Section 4(c)), and (iii) no outstanding Stock
Appreciation Right may be altered in a manner that reduces the base price
(except as provided in Section 4(c)). 
The Committee may not (i) provide for the cancellation of an Option
or Stock Appreciation Right and the replacement of such Award with another
Award, or (ii) provide for the buyout or purchase of an outstanding Option
or Stock Appreciation Right with an exercise price or base price that is then
greater than the Fair Market Value of a share of Common Stock.

 

(o)  Application
of Proceeds.  The proceeds received
by the Company from the sale of its shares under the Plan will be used for
general corporate purposes.

 

(p)  Compliance
with Legal and Exchange Requirements. 
The Plan, the grant and exercise of Awards hereunder, and the other
obligations of the Company under the Plan, shall be subject to all applicable
federal and state laws, rules, and regulations, and to such approvals by any
regulatory or governmental agency as may be required.  The Company, in its discretion, may (i) postpone
the exercise of Awards, the issuance or delivery of Common Stock under any
Award or any other action under the Plan to permit the Company, with reasonable
diligence, to complete such stock exchange listing or registration or
qualification of such Common Stock or other required action under any

 

18

 

federal or state law,
rule, or regulation, (ii) require any Participant to make such representations
and furnish such information as it may consider appropriate in connection with
the issuance or delivery of Common Stock in compliance with applicable laws,
rules, and regulations, and (iii) pay the Participant, in lieu of shares
of Common Stock, cash in an amount based upon the Fair Market Value of a share
of Common Stock as of the date shares of Common Stock would otherwise be
issuable with respect to an Award.  The
Company shall not be obligated to recognize the exercise of any Award or to
otherwise sell or issue Common Stock in violation of any such laws, rules, and
regulations.  Any postponement of the
exercise or settlement of any Award under this Section 11(p) shall
not extend the term of such Award, and the Company, its officers and employees,
the Board and the Committee shall have no obligation or liability to a
Participant with respect to any Award (or Common Stock issuable thereunder)
because of any actions taken pursuant to the provisions of this Section 11(p).

 

(q)  Gender and
Number.  Except when otherwise
indicated by the context, words in the masculine gender used in the Plan shall
include the feminine gender, the singular shall include the plural, and the
plural shall include the singular.

 

[This document is executed on the following page.]

 

19

 

IN WITNESS WHEREOF, the
Company has executed this document as of December 31, 2008.

 

	
   

  	
  PROTECTIVE LIFE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ John D. Johns

  
	
   

  	
   

  	
  John D. Johns

  
	
   

  	
   

  	
  Chairman of the
  Board, President and Chief Executive Officer

  

 

20

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