Document:

Exhibit 10.13

 

MAC-GRAY CORPORATION

2008 DIRECTOR COMPENSATION
ARRANGEMENTS

 

The
following summarizes the compensation arrangements established between Mac-Gray
Corporation (the “Company”) and its directors to be effective as of July 1,
2008:

 

Directors
who are also employees of the Company do not receive compensation for their
services on the Board or any committee thereof. 
Each director who is not an employee of the Company receives:

 

·                  An
annual fee of $30,000, paid in quarterly installments, 50% of which is paid in
shares of common stock and the balance of which, at the discretion of the
director, is paid in cash, shares of common stock or any combination thereof;
and

·                  An
additional fee of $1,600 for each Board meeting attended in person and $500 per
meeting attended by teleconference.

 

Committee
members receive $1,600 per meeting of the Compensation Committee or the Audit
Committee, and $1,300 per meeting of the Governance and Nominating
Committee.  Committee members receive
$300 per meeting attended by teleconference. 
In addition, the Chairman of each of the Compensation Committee and the
Audit Committee is paid $8,000 per year, and the Chairman of the Governance and
Nominating Committee receives $5,500 per year.

 

Each
newly elected non-employee director receives an option to purchase 5,000 shares
of common stock on the fifth business day after his or her election to the
Board, and each non-employee director who is serving as a director on the fifth
business day after each annual meeting of stockholders automatically receives
an option to purchase 7,500 shares of common stock valued at $60,000.  All of such options granted to non-employee
directors are fully exercisable upon grant at an exercise price equal to the fair
market value of the common stock on the date of the grant and terminate upon
the tenth anniversary of the date of grant. 
All directors are reimbursed for significant travel expenses, if any,
incurred in attending meetings of the Board and its committees.Exhibit 10(a)

 

PROTECTIVE
LIFE CORPORATION

LONG-TERM
INCENTIVE PLAN

(As
Amended and Restated as of May 5, 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 the occurrence of any of the
following events:  (i) a transaction
or acquisition as identified in the Company’s Rights Agreement, as in effect
from time to time or as most recently in effect, (ii) the consummation of
any consolidation, merger or similar transaction or purchase of securities of
the Company pursuant to which (x) the members of the Board immediately
prior to such transaction do not, immediately after the transaction, constitute
a majority of the Board of Directors of the surviving entity or (y) the
stockholders of the Company immediately preceding the transaction do not,
immediately after the transaction, own at least 50% of the combined voting
power of the outstanding securities of the surviving entity, (iii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company,
including, without limitation, any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all of the assets of Protective Life Insurance Company, or (iv) any other
event or transaction that is declared by resolution of the Board to constitute
a Change in Control for purposes of the Plan.

 

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“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 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 Section 162(m) of
the Code 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 long-term disability as defined under the terms of the Company’s
qualified pension plan.

 

“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.

 

“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 

 

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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 Section 422 of the Code.

 

“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.

 

“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.

 

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“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.

 

“Section 162(m)”
shall mean Section 162(m) of the Code.

 

“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.

 

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 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.

 

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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.

 

(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 

 

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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 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 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 

 

91

 

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, payment of Performance Share Awards shall be made, as
promptly as possible, by the Company after the determination by the Committee
that payment has been earned. 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’s Employment terminates by reason of death or
Disability, payment of the Participant’s outstanding Performance Share Awards
shall be made as promptly as possible 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 Employment terminates by reason of
death or Disability shall be paid at the same percentage as an Award awarded in
the year immediately preceding the year of death or Disability.

 

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(d)  Retirement
Prior to Close of Award Period. 
Unless otherwise determined by the Committee, if, prior to the close of
an Award Period, a Participant’s Employment terminates 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 promptly as possible after
such retirement and such payment shall be computed in the same manner as in 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’s Employment terminates 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.  Payment, if any, of
Performance Share Awards to such Participant shall be made as promptly as
possible 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’s Employment terminates and there is
no payment due under Sections 6(c), (d), (e) or (h) 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.  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 Section 162(m)(4)(C) of
the Code, 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) if an
Executive Officer’s Employment terminates 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 promptly as possible after the end of the year in
which such termination occurs, 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 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.

 

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(h)  Payment Upon
Plan Termination.  Payment of all
Performance Share Awards outstanding at the date of termination of the Plan
shall be made as promptly as possible after such date and payment of each such
Award shall be computed in the same manner as in Section 6(c), using the
effective date of the termination of the Plan in place of the date of death or
the date of determination of Disability.

 

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 Section 422 of the Code.

 

(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.  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’s Employment terminates due to the Participant’s (i) death,
(ii) Disability, (iii) retirement on or after the

 

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Participant’s Normal
Retirement date, or (iv) 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 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 termination, regardless of whether then
exercisable, for a period of three years in the case of retirement pursuant to
clause (iii) or (iv) 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 termination of
Employment, 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.  In the event of a
Participant’s termination of Employment 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 or 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
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 Right shall become exercisable in three (3) equal
installments on each of the first three anniversaries of the date of grant.

 

95

 

(c)  Termination
of Employment.  Unless the Committee
shall otherwise determine at or after the date of grant, 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’s Employment terminates due
to the Participant’s (i) death, (ii) Disability, (iii) retirement
on or after the Participant’s Normal Retirement date, or (iv) 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 termination, regardless of whether then exercisable, for a period of three
years in the case of retirement pursuant to clause (iii) or (iv) 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 termination of Employment, 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.  In the event
of a Participant’s termination of Employment 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 of such
Stock Appreciation Right, 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 Secretary of the Company a
certificate, endorsed in blank, relating to the shares of Common Stock covered
by such Award.

 

(b)  Termination
of Employment. Unless the Committee otherwise determines at or after the
date of grant, 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 shall be determined under this Section 9(b).  If a Participant’s Employment terminates due
to the Participant’s (i) death, (ii) Disability, (iii) retirement
on or after the Participant’s Normal 

 

96

 

Retirement date, or (iv) 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.  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.  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.

 

(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 

 

97

 

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 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 

 

98

 

employment to another
location a material distance farther away from the Participant’s home, in each
case, without the Participant’s prior written consent.

 

(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.

 

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)  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.

 

(c)  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.

 

(d)  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 

 

99

 

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.

 

(e)  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.

 

(f)  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.

 

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

 

(h)  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.

 

(i)  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.

 

(j)  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
                              .”

 

100

 

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.

 

(k)  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 on the date the Plan is approved by shareholders.  No Awards may be granted under the Plan after
December 31, 2017.

 

(l)  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.

 

(m)  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.

 

(n)  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.

 

(o)  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 

 

101

 

such stock exchange
listing or registration or qualification of such Common Stock or other required
action under any 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(o) 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(o).

 

(p)  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.

 

IN WITNESS WHEREOF, the
Company has executed this document as of March 3, 2008.

 

	
   

  	
  PROTECTIVE LIFE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ John D. Johns

  
	
   

  	
   

  	
  John D. Johns

  
	
   

  	
   

  	
  Chairman of the Board,
  President

  
	
   

  	
   

  	
  and Chief Executive
  Officer

  

 

102

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