Document:

EX-10.18

 Exhibit 10.18 

 
 

 
  

					
		 		  	PRUDENTIAL PLC
		 		  	GROUP HUMAN RESOURCES
		 		  	12 ARTHUR STREET
	PERSONAL — ADDRESSEE ONLY	 		  	LONDON EC4R 9AQ
	 Michael I Falcon
 ***
	 		  	
	 		  	TEL 020 7220 7588
	 		  	FAX 020 7548 3880
	 		  	www.prudential.co.uk
	 		  	
		 		  	

 11 October 2018 

Dear Michael 
 YOUR PROPOSED PRUDENTIAL
APPOINTMENT & CONTRACT OF EMPLOYMENT 
 Following our recent discussions, I am delighted to formally offer you the role of Chairman and Chief
Executive Officer of the North American Business Unit. In this role, you will report to me as Group Chief Executive, Prudential plc. 
 This letter
summarises the Company’s offer to you. I have also included a contract for you to sign which is the standard contract used within Prudential plc for Executive Directors. 

I look forward to agreeing a mutually convenient start date with you. 

Remuneration and benefits 
 Base Salary 

Your base salary will be $800,000 per annum. Salaries are reviewed with effect from 1 January each year. 

Incentive Plans 
 You will be eligible to participate in
the following discretionary incentive plans: 
  

	(i)	 The Jackson Senior Management Bonus Pool, your share of which will be 10% of any pool generated annually.

 You will be eligible for a full year Jackson Senior Management Bonus Pool in 2019, provided that before 31 December
2019 you are not dismissed for Cause or you have not voluntarily resigned as Chairman and Chief Executive Officer of the North American Business Unit. 
  

	(ii)	 An annual incentive plan (“AlP”) based on Group performance measures. You will have a maximum AlP
opportunity of 100% of annual salary. 

 Again, you will be eligible for a full year AlP in 2019, provided that before
31 December 2019 you are not dismissed for Cause or you have not voluntarily resigned. 
 You will be required to defer 40% of the total
bonus awarded to you in any year (i.e. Bonus Pool and AlP) into Prudential shares (ADRs). These shares will vest three years after the date of the award, subject to malus and clawback provisions. Bonus awards are not pensionable. 

  
 Prudential plc, Laurence Pountney
Hill, London EC4R 0HH. · 
 Incorporated and registered in England and Wales. Registered Office as above. Registered number 1397169. 

Prudential plc is a holding company, subsidiaries of which are authorised and regulated, as applicable, by the Prudential Regulation Authority and the
Financial Conduct Authority. 

  

 

 
  

  

	(iii)	 Annual long term incentive awards with a value at award of 400% of salary will be made under the Prudential
Long Term Incentive Plan (“PLTIP”). 

 Should you join the Company part way through a financial year, your first
PLTIP award will be calculated on a pro-rated basis in respect of your time employed. Awards vest after three years, subject to the achievement of performance conditions. The net vested value of awards must be
held for two years after the end of the performance period, subject to malus and clawback provisions. 
 These arrangements are provided by the
Directors’ remuneration policy, which is reviewed every three years. The Directors’ remuneration policy is scheduled to be reviewed during 2019. 

Joining arrangements 
 I understand that in agreeing to
join Prudential, you may forfeit your 2018 JP Morgan bonus and your outstanding RSU and MIP awards. If this is the case, Prudential will compensate you for your loss by making replacement awards as follows: 

 

	(i)	 A replacement bonus will be paid to compensate you for the loss of your 2018 JP Morgan bonus. 60% of this bonus
will be paid in cash with 40% deferred into Prudential ADRs. These ADRs will vest three years after the date of award, subject to malus and clawback provisions. 

Sarbanes-Oxley requirements and UK proxy voting agencies’ expectations mean that we must ask for evidence before making replacement
awards. If you are able to provide written confirmation from your current employer of the value of your forfeited JP Morgan 2018 bonus based on performance achieved, we will compensate you for this value. If it is not possible to secure this
confirmation, we will compensate you using the average of your total JP Morgan bonuses for 2016 and 2017 and will ask you for bonus letters or similar evidence of these amounts. 

 

	(ii)	 We will replace any RSU and/ or MIP awards that you forfeit with Prudential awards of the same value. These
replacement awards will be released in line with the vesting timeframe attached to your original awards and will be subject to malus and clawback provisions. Where your current awards have performance conditions, Prudential conditions will be
attached to your replacement awards. 

 These replacement awards will be in the form of: 

 

	 	a.	 Prudential ADRs, calculated using the 5 days average closing share prices of Prudential and JP Morgan prior to
your start date with Prudential, and/ or; 

  

	 	b.	 Where necessary under the UK or Hong Kong Listing Rules, options to subscribe for Prudential ADRs at their
nominal value. The value of options allocated to you would take account of the consideration that you would have to pay on exercise. 

We will require confirmation from your current employer or share plan administrator of the RSU and/ or MSP awards which you forfeit. 

  
 2 

  

 

 
  

 If the JP Morgan awards you forfeit do not have performance conditions, we will use a bespoke
plan to make the replacement awards. In this case, the following terms will apply to the replacement awards: 
  

	 	•	 	 In the event of a change of control of Prudential plc resulting in your role being eliminated or reduced in
scope, these replacement awards would be become exercisable in full immediately. 

  

	 	•	 	 In the event that you leave Prudential plc within 12 months of the start of your Prudential plc employment, 50%
of the outstanding replacement awards will vest immediately, provided that you are not dismissed for Cause, do not voluntarily resign and provided that there has not been a significant risk failure in NABU under your leadership.

  

	 	•	 	 In the event that you leave Prudential plc between 13 and 24 months of the start of your Prudential plc
employment, 100% of the outstanding replacement awards will vest immediately, provided that you are not dismissed for Cause, do not voluntarily resign and provided that there has not been a significant risk failure in NABU under your leadership.

 We will compensate you for 50% of the costs of the legal fees you have incurred for the review of your Prudential plc contract of
employment, up to a value of $10,000. 
 Pension and Risk benefits 

You will be provided with pension benefits of 25% of salary. Part of this benefit will be delivered as a mandatory profit sharing contribution to the 401 (k)
Jackson Defined Contribution Retirement Plan, which is a requirement for all Jackson employees. The profit sharing contribution will be between 4% and 6% of pensionable pay (up to $18,500 for 2018, on a full year basis). The balance will be
delivered to you as a monthly pension supplement, subject to the normal deductions. 
 For the purposes of determining your monthly pension supplement
payments, it will be assumed that the full 6% profit sharing contribution is received. If the actual profit sharing contribution for the year is less than this, then you will receive a balancing payment in respect of the difference. 

You will also be eligible to make voluntary contributions to the 401(k) Jackson Defined Contribution Retirement Plan should you so wish. 

In addition, you will receive a death in service benefit equal to 2 times your basic salary. This may be subject to medical underwriting. 

Healthcare 
 You will be entitled to US private medical
and dental insurance for you and your family on the same basis as other US employees. HR colleagues in Jackson will provide detail of the US health plan and the options available to you. 

Holiday 
 You are entitled to paid time off for breaks
away from work in each calendar year (in addition to public holidays) as the proper performance of your duties permits. Under normal circumstances this is not expected to exceed six weeks in any year. 

  
 3 

  

 

 
  

 Travel 

As a member of the Board you are entitled to first class travel on Company business. If the policy changes for the Board, then any change in policy will apply
to yourself. 
 Since your role will involve travel to the United Kingdom in your capacity as a member of the Board, you will be required to apply for a
United Kingdom visa. The Company will bear the costs of this application. 
 Tuition benefit 

You will be eligible to receive a tuition benefit for your dependent children. This will be provided in line with the US policy in force at the time. 

Relocation Arrangements 
 To facilitate your move to the
United States we will: 
  

	 	•	 	 Provide reasonable support for shipping your personal effects from Hong Kong to the US; 

 

	 	•	 	 Support the preparation of any necessary Hong Kong tax returns; 

 

	 	•	 	 Meet the costs of one way business class flight tickets to the US for you and your dependant family members; and

  

	 	•	 	 Provide support for your move from New Jersey to Nashville under our US domestic relocation policy.

 I understand that you hope to end the lease on your Hong Kong apartment prior to joining Prudential plc. If this is not possible, we
will pay any rent due between 1 January 2019 and the lease expiring on 31 July 2019, subject to Prudential plc having the opportunity to utilise the residence between these dates. 

The Company will pay any tax due on these relocation benefits. All payments are subject to your being employed by Prudential at the date of payment and not
under notice either given or received. The payments would also be repayable in full should you leave or give notice of your intention to leave within two years of any payments being made. 

Tax 
 You will be responsible for ensuring the appropriate
tax is paid on your earnings and benefits. The Company will meet the reasonable costs of obtaining professional advice and preparation of returns from an organisation acceptable to the Company. 

However, if you incur UK taxes as a result of discharging your Board duties in the UK, the Company will be responsible for these liabilities. 

  
 4 

  

 

 
  

 Notice period 

As outlined in Clause 2 of your contract of employment, your notice of termination, to the Company and from the Company, will be 12 months. 

Share ownership guidelines 
 You will be subject to
a share ownership guideline of 250% of salary. You are expected to meet this guideline within five years of your date of appointment to the role of Chairman and Chief Executive Officer of the North American Business Unit. 

Conclusion 
 This offer is subject to regulatory
approval, the satisfactory completion of background checks to meet regulatory requirements, and to an occupational health assessment. 
 Michael, I very
much hope that you will accept this offer by signing and returning a copy of this letter. A further copy is enclosed for your records. 
 I look forward to
working with you in your new role. 
 Yours sincerely 
 

 
 Mike Wells 
 Group Chief
Executive, Prudential plc 
 I am pleased to accept the role of Chairman and Chief Executive Officer of the North American Business Unit and accept the
terms and conditions detailed in this letter. 
  

			
	Signed	 	 

 Michael | Falcon 
  

			
	Dated	 	 

 Definitions 
 In this
letter: 
 “Board” means the board of directors of Prudential or a duly constituted committee of the board of directors of Prudential; 

“Prudential” means Prudential plc; 

  
 5EX-10.19

 Exhibit 10.19 

 

					
	 MICHAEL A. WELLS
 GROUP
CEO
	  		  	

		
	 PRIVATE & CONFIDENTIAL – ADDRESSEE ONLY
	  	PRUDENTIAL PLC
	 Michael Falcon
	  		  	1 ANGEL COURT
	 ***
	  		  	LONDON EC2R 7AG
			
		  		  	www.prudentialplc.com
		  	 5 April 2020
	  	

 Dear Michael 
 Further to our
recent discussion, I am writing to set out details of the planned revisions to your 2020 remuneration arrangements. 
 Prudential has a highly resilient
business model and remains well placed to continue to create value for shareholders, and support distribution partners and customers. However, the COVID-19 pandemic is an unprecedented challenge for the
communities we serve globally. Our stakeholders expect large companies and their executives to take responsible action to support their customers and the economy, and also to display leadership in remuneration matters during this difficult time.

 To this end, I would like to thank you for your understanding about the planned revisions to your 2020 remuneration arrangements described below. 

Salary 
 I am asking you to agree to a reduction in your
salary to $800,000 (i.e. the value of your salary as at 31 December 2019) with effect from 1 April 2020. You would not be asked to repay any part of the salary that you received in the first quarter of 2020. 

Incentives and benefits 
 Your 2020 Annual Incentive Plan
opportunity, Project Scott maximum award opportunity and 2020 long-term incentive award, will be based on your revised 1 April 2020 salary. Please see an Appendix which sets out your revised Project Scott Incentive maximum award opportunity.
Your salary related benefits (for instance, pension and life assurance) will be based on your revised salary with effect from 1 April 2020. 
 Details
of your long-term incentive award and its performance conditions will be provided to you once the award has been made as will the number of ADRs awarded to you under the Restricted Stock Plan, reflecting 40% of your Project Scott Incentive maximum
award opportunity. 
 Pension Benefits 
 As stated in my
letter of 11 March 2020, the alignment of executive pension contributions with those available to the workforce is an increasingly important area of focus for shareholders and has been kept under close review by the Remuneration Committee (the
“Committee”). It has since become apparent our published position of reducing pension benefits to 20% of salary by 2021 is an outlier in the UK market. Of the 33 companies other than Prudential to have published remuneration policies in
recent days, all but two align executives’ pension arrangements of the workforce. The planned reduction as set out in our published remuneration policy is likely to result in Prudential attracting negative external comment without further
action. In order to diminish any undue focus on our pension arrangements, executive pension benefits will be aligned to the current average workforce rate of 13% of salary from 14 May 2020. 

  
 Prudential plc, 1 Angel Court, London,
EC2R 7AG. 
 Incorporated and registered in England and Wales. Registered Office as above. Registered number 1397169. 

Prudential plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Hong Kong Insurance Authority and other
regulatory authorities. 

  

 Looking forward, I believe Prudential is well placed to support our customers and wider communities through
this difficult time. I would like to personally thank you for your leadership as we navigate these challenges together. 
 I would be grateful if you
could sign and return the attached confirmation to Hannah Perera by 7 April 2020 to acknowledge that you have received and read this letter, and to confirm your acceptance of these changes. 

Yours sincerely, 
  
 

 
 Mike Wells 
 Group Chief
Executive 

  

 I confirm that I accept the amendments to my remuneration arrangements, including a revision to my salary,
set out in the letter from Mike Wells dated 5 April 2020. 
  

	
	Signed:
	
	  

	Michael Falcon
	
	Date:
	
	  

  

 APPENDIX 

PRIVATE & CONFIDENTIAL – ADDRESSEE ONLY 

Michael Falcon 
 *** 

4 April
2020                                 

Dear Michael 
 RE: Project Scott Incentive Awards 

I am pleased to confirm your opportunity to earn additional incentive awards in connection with Project Scott. This letter explains your new award. 

Your engagement and delivery in the execution of Project Scott are critical to its success. The Prudential plc Remuneration Committee (the
“Committee”) recognizes that your commitment to Project Scott comes at a time when you are asked to also achieve stretching one and three-year plans. Your Project Scott Incentive Awards are designed to reward you for your
contribution in delivering Project Scott at pace while continuing to work hard towards these other plans. 
 Maximum Award Opportunity. Your Maximum
Award Opportunity is $7,830,375. 
 This amount is equal to 1.5 times your 2020 salary, plus 1.5 times the target value of your share of the 2020 Jackson
bonus pool. Your Maximum Award Opportunity does not include your awards under The Prudential Annual Incentive Plan (the “AIP”). 
 Award
Components. Your Project Scott Incentive Award has two components: 
  

	 	•	 	 RSP Award: 40% of your Maximum Award Opportunity is a “conditional award” of Prudential plc ADRs
under the Prudential Restricted Stock Plan 2015 (the “RSP”). 

  

	 	•	 	 Cash Award: 60% of your Maximum Award Opportunity is an underpin to your regular Jackson bonus.

 Summary of Your RSP Award. During April of 2020, you will receive an RSP Award certificate that formally grants you a
“conditional award” with the following terms and conditions: 
  

	 	•	 	 Your RSP Award will grant you the conditional right to receive a number of Prudential plc ADRs determined by
dividing 40% of your Maximum Award Opportunity by the ADR market price at the relevant time, as determined by the Committee. 

  

	 	•	 	 Your RSP Award will have a three-year vesting period, ending on the third anniversary of its grant date (your
“Vesting Date”). Your RSP Award is not subject to performance conditions. 

  

	 	•	 	 You will forfeit your RSP Award if your employment ends before your Vesting Date, unless for a “Permitted
Reason” (e.g., retirement, ill health, injury, disability, redundancy). 

  

	 	•	 	 The Committee has determined that if your employment ends for a “Permitted Reason,” your full RSP Award
will vest and be released within 30 days of the original Vesting Date, subject to the RSP’s malus and other rules. Your RSP Award may vest early only upon your death or if there is a change of control or liquidation of the Company, as defined
and provided in the RSP. 

  

	 	•	 	 Your RSP Award will earn “dividend equivalents” between its grant date and its release. When your RSP
Award is released, the number of ADRs over which it is granted will be increased to reflect dividends that would have been paid during that period. 

  

	 	•	 	 Your RSP Award is subject to the RSP’s malus, clawback, and other rules. The release of your RSP Award may
be delayed pending a malus investigation to the extent permitted by Internal Revenue Code Section 409A. Your RSP Award will remain subject to clawback until the fifth anniversary of its grant date. 

 

	 	•	 	 Your RSP Award will be subject to the terms of its award certificate and the rules of the RSP, which take
precedence, with one exception, in the case of any inconsistency with this summary. In particular, your RSP Award is a “Section 409A Award” and subject to Rule 5 and the other applicable rules of Schedule 1 to the RSP. The exception
is that this summary governs as regards the timing of vesting if employment ends for a “Permitted Reason”. 

 Summary of Your
Cash Award. Your Cash Award will be equal to the greater of: 
  

	 	(1)	 your regular Jackson 2020 bonus determined in the usual way; or 

 

	 	(2)	 up to 60% of your Maximum Award Opportunity. 

In the event that the value of your Project Scott Incentive Cash Award is greater than the value of your 2020 Jackson bonus, you will receive
the Project Scott Incentive Cash Award instead of your 2020 Jackson bonus. 
  

	 	•	 	 In early 2021, the Committee, in its sole and absolute discretion, will determine the amount of your Cash Award
based on its assessment of performance toward the conditions below: 

  

	 	(1)	 The extent to which successful corporate action has been accomplished in connection with Project Scott, as
determined by the Prudential plc Board. 

  

	 	(2)	 The extent to which Project Scott has been executed within the applicable risk frameworks and appetites.

  

	 	(3)	 The extent to which your contribution and behaviors to Project Scott have been consistent with those expected.

  

	 	•	 	 The Committee may revise these performance conditions should the objectives of Project Scott change to the extent
that the original conditions are no longer appropriate. Revised conditions will be no more or less stretching than those originally applied. 

  

	 	•	 	 You will be paid your Cash Award only if you are employed with a member of the Prudential Group on the bonus
payment date. Your Cash Award is ineligible for “good leaver” treatment. 

  

	 	•	 	 60% of your Cash Award will be paid between January 1, 2021 and March 15, 2021. The remaining 40% of
your Cash Award will be deferred as a conditional award under the Deferred AIP. 

 As I know you will appreciate, I cannot stress enough
the importance of maintaining the confidentiality of this letter and Project Scott. 
 I sincerely thank you for your commitment to our success and your
continued extraordinary commitment during this pivotal time. Please indicate your agreement to the terms of this letter by signing below and returning it to Hannah Perera at your earliest convenience and in any case by 7 April. 

Yours sincerely, 
  
 

 
 Mike Wells 
 Group Chief
Executive 

  

 Duplicate copy to be signed by employee 

I have read and agree to be bound by the terms of this letter. I understand that the RSP Award to be granted to me in accordance with the terms of this letter
will be made on the express condition that I hereby agree that: 
  

	 	1)	 I have and will have no rights to acquire, receive or make any claim in respect of, the ADRs (or any interest
in the ADRs) subject to my RSP Award before the Vesting Date of the RSP Award (whether or not I cease employment with the Prudential group for any reason), unless there is a change of control or liquidation of the Company that causes my RSP Award to
become a Vested Award under Rule 11 of the RSP or if I die; 

  

	 	2)	 I waive all and any rights, expectations and entitlements in respect of the RSP Award and to the ADRs subject
to my RSP Award, insofar as such rights, expectations or entitlements relate to a claim that my RSP Award should vest before the Vesting Date on the date that I cease to be an employee of the Prudential group, but this does not affect my rights if
there is a change of control or liquidation of the Company that causes my RSP Award to become a Vested Award under Rule 11 of the RSP; 

  

	 	3)	 The terms of any award certificate in respect of my RSP Award will be subject to the terms set out in the RSP
and this letter, including prohibitions on the assignment, transfer, or charge of my RSP Award; and 

  

	 	4)	 I agree to maintain the confidentiality of this letter and Project Scott. I agree that I will not disclose
information regarding Project Scott except to the extent necessary for me to perform my duties with respect to it, and then only to Group employees, advisors, and counterparties to the extent they have a direct need to know that information so that
they can perform their duties with respect to Project Scott. I agree to inform each person to whom I disclose such information of the importance of maintaining its confidentiality, and to take other actions that are appropriate to protect such
information. 

  

	
	  
 Signature

	
	  
 Date

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