Exhibit 10.5
AMENDMENT NO. 1
TO
SECOND AMENDED AND RESTATED
EMPLOYMENT CONTINUATION AGREEMENT
This Amendment No. 1 (this "Amendment") to the Second Amended and Restated
Employment Continuation Agreement dated October 15, 2001 (the "Restated
Agreement") by and among ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, a Massachusetts
corporation (the "Company"), ▇▇▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc., a Delaware
corporation ("JHFS"), ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇ (the "Executive") and Manulife
Financial Corporation, a corporation organized under the laws of Canada
("Manulife"), is dated this 28th day of September, 2003.
WHEREAS, the Restated Agreement provides benefits and protection to the
Executive in the event of a Change in Control or Potential Change in Control (as
such terms are defined in the Restated Agreement);
WHEREAS, JHFS, Manulife and Jupiter Merger Corporation ("Merger Co.") have
entered into an Agreement and Plan of Merger dated as of the date hereof (the
"Merger Agreement") pursuant to which, and subject to the terms and conditions
of which, Merger Co. will merge with JHFS (the "Merger");
WHEREAS, the Company, JHFS, the Executive and Manulife are entering into
this Amendment in reliance upon the acknowledgment by the Company, JHFS, the
Executive and Manulife that the Merger and the other transactions contemplated
by the Merger Agreement will, upon consummation thereof at the Effective Time,
constitute a "Change of Control" under the Restated Agreement; and
WHEREAS, in connection with the Merger, the Company, JHFS and the
Executive desire to amend the Restated Agreement as set forth herein, and, for
certain purposes set forth below, Manulife desires to become a party to this
Amendment.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed among the Company, JHFS, the Executive and
Manulife as follows:
1. All capitalized, undefined terms used in this Amendment and not
otherwise defined herein shall have the meanings assigned thereto in the
Restated Agreement.
2. This Amendment shall become effective as of the date first set forth
above; provided, however, that if the Merger Agreement is terminated prior to
the Effective Time (as defined in the Merger Agreement), then this Amendment
shall automatically terminate and shall be of no further force or effect. Each
of the Company, JHFS, the Executive and Manulife acknowledges that the Merger
and the other transactions contemplated by the Merger Agreement will, upon
consummation thereof at the Effective Time, constitute a "Change of Control"
under the Restated Agreement.
3. Section 4 of the Restated Agreement is hereby amended by deleting
subsection (a) thereof in its entirety and substituting the following subsection
(a) therefor:
"(a) Titles, Positions and Duties. During the Employment
Period, the Executive's position (including status, offices and
titles), authority, duties and responsibilities shall be as set
forth below. The Executive's services shall be performed at the
location where the Executive was employed immediately preceding the
Effective Date. During the Employment Period, so long as the
Executive is employed by the Surviving Corporation (as defined in
the Agreement and Plan of Merger, dated September 28, 2003, by and
among Manulife, JHFS and Merger Co. (the "Merger Agreement")) or the
Company:
(i) the Executive shall hold the titles of (A) on and after
the Effective Date, Chairman and Chief Executive Officer of the
Surviving Corporation and Chairman and Chief Executive Officer of
the Company; (B) on and after the Effective Date, Chief Operating
Officer of Manulife; and (C) commencing on and after the first
anniversary of the Effective Date, President of Manulife; and
(ii) the Executive shall, on and after the Effective Date, (A)
be a member of any Executive Committee or Policy Committee (whether
a Board of Directors' committee or otherwise) of Manulife, the
Surviving Corporation or the Company; (B) be appointed, subject to
his consent, as a member of each committee of Manulife's Board of
Directors that permits membership by members of Manulife's
management and shall, subject to applicable law consistent with the
best practices of Manulife's Board of Directors relating to
committee appointments, and so long as he serves as a director of
Manulife, remain (subject to the foregoing limitations) on at least
one committee of the Manulife Board of Directors for so long as he
shall determine; (C) be a member of any committee (whether a Board
of Directors' committee or otherwise) of any of Manulife, the
Surviving Corporation or the Company having a function similar to
any Executive Committee or Policy Committee (whether a Board of
Directors' committee or otherwise) of any of Manulife, the Surviving
Corporation or the Company and (D) be the Integration Chair (as
defined in the Merger Agreement); and
(iii) the Executive shall hold, exercise and be assigned the
same responsibilities, duties and authority as those held and
exercised by, and assigned to, the Executive in his positions with
JHFS and the Company immediately prior to the Effective Date,
provided that (1) such responsibilities, duties and authority shall
include all of those relating to the North American operations of
Manulife (whether or not conducted through the Surviving
Corporation) and (2) the Executive shall not hold, exercise or be
assigned those responsibilities, duties and authority (x) directly
relating to Investment (which does not include ▇▇▇▇ ▇▇▇▇▇▇▇ Funds,
Annuities or other Wealth Management, but does include Guaranteed
and Stable Funding Products), Asia operations, Japan operations,
Reinsurance and Corporate Functions, except that the Executive shall
have such responsibility, duties and authority necessary to comply
with applicable state and federal laws (including with respect to
periodic reporting and other compliance under the U.S. federal
securities laws by the Company), and (y) that existed prior to the
Effective Date solely by virtue of JHFS being a public company
having equity securities registered under Section 12 of the
Securities Exchange Act of 1934; and
(iv) in his capacity as Chairman and Chief Executive Officer
of the Surviving Corporation, the Executive shall report solely to
the Board of Directors of the Surviving Corporation. In his capacity
as Chairman and Chief Executive Officer of the Company, the
Executive shall report solely to the Board of Directors of the
Company; and
(v) subject to clauses (iii)(1) and (2) above, the Executive
shall also hold, exercise and be assigned such responsibilities,
duties and authority as are customarily held and exercised by, and
assigned to, an individual serving as Chief Operating Officer of a
Canadian and U.S. public company, and upon the first anniversary of
the Effective Date, President and Chief Operating Officer of a
Canadian and U.S. public company, in each case comparable in size,
structure and nature to Manulife. In his capacity as Chief Operating
Officer, and from and after the first anniversary of the Effective
Date, President and Chief Operating Officer of Manulife, the
Executive shall report solely to the Chief Executive Officer and the
Board of Directors of Manulife."
4. Section 6(d) of the Restated Agreement is hereby amended by deleting
subsection (i) thereof in its entirety and substituting the following subsection
(i) therefor:
"(i) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive's
position, authority or responsibilities, as contemplated by Section
4 of this Agreement, or any other material adverse change or
significant reduction in position, titles, reporting lines,
authority or responsibilities, other than any such assignment
inconsistent with the foregoing that is inadvertent and cured by the
Company or
JHFS, as applicable, within ten (10) business days after receipt by
the Board of Directors of the Company or the Board of Directors of
JHFS, as applicable, of written notice thereof given by the
Executive;"
5. Section 6(d) of the Restated Agreement is further amended by deleting
subsection (ii) thereof in its entirety and substituting the following
subsection (ii) therefor:
"(ii) any failure by the Company or JHFS to comply with any of
the provisions of Section 5 (other than Section 5(c)) of this
Agreement, other than an insubstantial or inadvertent failure that
is cured by the Company or JHFS, as applicable, within ten (10)
business days after receipt by the Board of Directors of the Company
or the Board of Directors of JHFS, as applicable, of written notice
thereof given by the Executive;"
6. Section 6(d) of the Restated Agreement is further amended by adding the
following subsection (v) immediately following subsection (iv):
"(v) in the event that in the good faith reasonable judgment
of the Executive, Manulife is in breach of any of its obligations
set forth in (A) Section 6.13 (Integration Team) or (B) Section 6.14
(Parent Officers and Directors) of the Merger Agreement, in each
case as such Sections are read without any "applicable Laws",
"fiduciary duties" or "best practices" (or, in each case, words of
similar effect) qualifications."
7. Section 6(d) of the Restated Agreement is further amended by deleting
the last paragraph thereof and substituting therefor the following:
"Notwithstanding anything herein to the contrary, termination of
employment by the Executive for any reason at any time during the
one hundred and eighty (180) day period commencing on the first
anniversary date of the Effective Time of the Merger (as such terms
are defined in the Merger Agreement) shall be deemed to constitute
Good Reason."
8. By executing this Amendment, Manulife hereby expressly assumes and
agrees to perform the Restated Agreement, as amended by this Amendment, in
accordance with Section 13 thereof; provided, however, that the Executive hereby
acknowledges and agrees that in no event shall anything in this Amendment (or
the Restated Agreement) be construed or applied to entitle the Executive to
receive payments or benefits under the Restated Agreement that are duplicative
of any payments or benefits provided to the Executive by any of the Company,
JHFS or Manulife under any other agreement or plan that provides for payments or
benefits upon a change of control. Manulife further acknowledges and agrees to
be bound by (1) the methodologies for determining the amounts payable to the
Executive pursuant to the provisions of Sections 7(c), 7(d) and 7(f) of the
Restated Agreement and (2) the amounts that would be
payable to the Executive if the Executive were entitled to receive the payments
and benefits set forth in such Sections as of the Closing Date (as such term is
defined in the Merger Agreement), in each case as such methodologies and amounts
are set forth on Schedule A attached hereto. Manulife acknowledges that, in
accordance with the Restated Agreement, the Company shall designate in writing
primary and alternate Accountants to Manulife on or prior to the Closing Date.
9. Except as amended by this Amendment, all other terms of the Restated
Agreement shall remain in full force and effect; provided, that, until the
earlier to occur of (i) the date that this Amendment terminates and is of no
further force and effect pursuant to Section 2 of this Amendment and (ii) the
Effective Time of the Merger, the Company, JHFS and the Executive each hereby
agrees and acknowledges that the Restated Agreement (as amended by this
Amendment) shall not be amended without the prior written consent of Manulife.
10. Subject to Section 9 of this Amendment, this Amendment shall be subject to
the "Miscellaneous" provisions contained in Section 14 of the Restated
Agreement, which are incorporated by reference herein, provided that any notice
or other communication under the Restated Agreement or this Amendment to be
delivered to Manulife shall be provided to the following address in accordance
with Section 14(e) of the Restated Agreement: Manulife Financial Corporation,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, attention: General Counsel.
This Amendment may be executed in or more counterparts and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and the Company, JHFS and Manulife have caused this Amendment to be executed in
their respective names and on their behalf, all as of the day and year first
above written.
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY
By:_________________________________
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
By:_________________________________
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
EXECUTIVE:
____________________________________
▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
MANULIFE FINANCIAL CORPORATION
By:_________________________________
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
Signature Page to Amendment to Employment Continuation Agreement
