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EXHIBIT (c)(9)
TRANSACTION AGREEMENT
This Agreement is made this 28th day of February, 1997, by and between
Acordia, Inc., a Delaware company (the "Company") and ▇▇▇▇▇▇ ▇. Newborn Jr. (the
"Executive").
WHEREAS, the Company, in anticipation of a possible Change in Control
(as hereinafter defined) desires to provide the Executive additional
compensation and benefits to assure the Company of the services of Executive
prior to the Change in Control; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement dated June 1, 1994, (the "Employment Agreement"), which may be
modified by mutual consent; and
WHEREAS, the Company and Executive have mutually agreed to modify the
Employment Agreement as set forth herein;
NOW, THEREFORE, it is hereby agreed as follows:
1. Definitions and Construction.
1.1. Definitions.
"Beneficiary" shall mean the person designated in writing by
the Executive on Attachment 1 hereof as the recipient of benefits in the event
of the death of the Executive.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean a reasonable determination by the Chief
Executive Officer of the Company that Executive (i) failed to obey the
reasonable and lawful orders of the Company; (ii) acted with gross negligence in
the performance of his obligations or in a manner materially detrimental to the
Company and/or its subsidiaries; (iii) willfully breached or habitually
neglected his duty; (iv) has been convicted of a felony; (v) committed any act
involving dishonesty or fraud; or (vi) violated any of the provisions of Section
5 hereof.
"Change in Control" shall mean (i) a merger or consolidation
in which the Company is not the surviving entity; (ii) a change in majority of
the Board over a twenty-four (24) month period, not taking into account
directors nominated by a majority of the current directors; (iii) a complete
liquidation of the Company; or (iv) sale or disposition of all or a substantial
part of the Company's
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assets, such as disposition of the assets relating to the brokerage business of
the Company.
"Compensation Committee" shall mean the Compensation Committee
of the Board.
"Disability" shall have the meaning set forth in the Company's
long term Executive disability plan as in effect at the time of execution of
this Agreement.
"Salary" shall mean an annual base salary existing at the time
of execution of this Agreement ($120,010), plus increments thereon as of the
time of a Termination as a result of a Change in Control.
"Successor" shall mean any acquiror of a substantial portion
of the assets of the Company, and shall include an acquiror of the assets
relating to the brokerage business of the Company.
"Termination as a result of a Change in Control" shall occur
if upon or following a Change in Control or, with respect to (ii), if in
anticipation of a Change in Control,
(i) Anthem Insurance Companies, Inc., or one
of its affiliates ("Anthem"), or a Successor does not (x) assume both the
Employment Agreement and this Agreement and (y) offer Executive a position
comparable to his position at the time of execution of this Agreement; or
(ii) Executive's position with the Company is
not comparable to his position at the time of execution of this Agreement.
For purposes of this Agreement, a position shall not be comparable if (i)
Executive is assigned to any duties substantially inconsistent with his
position, duties or responsibilities with the Company immediately prior to the
Change in Control or his duties or responsibilities are substantially reduced as
compared with such duties and responsibilities immediately prior to the Change
in Control; (ii) Executive's Salary or target annual incentive or long term
incentive opportunities are materially reduced as compared to his Salary and
target annual incentives and long term incentive opportunities immediately prior
to the Change in Control; or (iii) Executive is assigned to duties or
responsibilities involving a residence relocation or business travel obligations
substantially greater than existing prior to the Change in Control. If Executive
accepts a position at Anthem, or a Successor, it shall be deemed to be
comparable for the purposes of this Agreement.
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An event shall be deemed to be in anticipation of a Change in Control if it
occurs after the execution of this Agreement and if a Change in Control in fact
occurs within 12 months following the event.
A voluntary termination by Executive or a termination for Cause shall not
constitute a Termination as a result of a Change in Control.
1.2. Terms not otherwise defined shall have the meaning set forth in
the Employment Agreement.
1.3. In the event of any inconsistency between this Agreement and the
Employment Agreement, this Agreement shall control.
1.4. No provision of this Agreement shall operate to reduce any amounts
or benefits payable under the Employment Agreement, standing alone or in
aggregate.
2. Term.
2.1. Term of this Agreement. This Agreement shall expire on the earlier
of (a) December 31, 1997 or (b) the date on which Acordia and Anthem Insurance
Companies Inc. publicly announce that the companies are no longer pursuing the
possible disposition of the brokerage business of Acordia, provided, however,
that if on or before December 31, 1997, the Board has approved the general terms
of a transaction that would be a Change in Control, this Agreement shall be
extended to the earlier of the closing of the Change in Control or December 31,
1998.
2.2 Term of the Employment Agreement. If the term of this Agreement is
extended past December 31, 1997, the term of the Employment Agreement shall be
extended to December 31, 1998.
3. Incentive Plans.
3.1. Annual Incentive Plan ("AIP") for 1997. Awards shall be determined
and paid under the AIP for the 1997 Plan Year based on the performance goals
established by the Compensation Committee. However, in the event of a Change in
Control prior to the payment of the 1997 Plan Year Award, such AIP Award payable
to Executive for the 1997 Plan Year shall be in an amount at least equal to the
full "target" level amount for the year, plus an additional amount of $50,000.
3.2. Long Term Incentive Plan ("LTI") for 1997. The performance goals
for award of LTI payments based on 1997 performance shall include a Change in
Control. In the event
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of a Change in Control prior to the award of the 1997 Plan Year LTI Award, such
1997 LTI Plan Year Award shall be of an amount at least equal to the "target"
level LTI for the 1997 Plan Year, and shall be fully vested and paid to the
Executive in accordance with Section 6.2.
3.3. Prior Stock Awards. All Company 1992 Stock Compensation Plan
awards will fully vest in the event of a Change in Control.
4. Benefits.
4.1. Retirement Programs. Service under the Company's Cash
Balance Pension Plan, 401(k) Plan, and the Supplemental Executive Retirement
Plan shall cease as of the date of a Termination as a result of a Change in
Control.
4.2. Health, Dental and Other. In the event of a Termination as a
result of a Change in Control, the Company shall provide continued coverage to
Executive and his or her dependents under the Company's welfare plans for the
period for which severance is paid under the Employment Agreement or this
Agreement at an after tax cost to the Executive no greater than that incurred by
similarly situated employees of Anthem Insurance Companies Inc. during that same
period. Such coverage shall be provided either through the plans or by
reimbursing the Executive for the cost of COBRA coverage. Executive shall have
rights to elect COBRA coverage without any offset for periods of extended
coverage under this Agreement or the Employment Agreement upon expiration of the
severance period.
5. Restrictions on Executive. The provisions of the Employment Agreement
relating to Non-Disclosure, Return of Property and Competition (Sections 12, 13,
and 14) shall continue in full force and effect, and, if Executive is employed
by ▇▇▇▇▇▇, ▇▇▇ terms "Company" and "Assigned Subsidiary" in those provisions
shall refer to Anthem, as applicable.
6. Timing of Payments.
6.1. Severance. Subject to Section 7 hereof, severance payments shall
begin upon the date of Termination as a result of a Change in Control and shall
continue to be paid on the same basis as Salary is paid, until paid in full
(without regard to any Disability of Executive), or, in the event of the
Executive's death, any balance remaining due shall be paid in a lump sum, within
30 days of the death, to the Executive's Beneficiary in lieu of any other
severance.
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6.2. Other. Subject to Section 7 hereof, all other payments shall be
made in accordance with Executive's deferral election, or, if no election
exists, in cash within 30 days of the date of Termination as a result of a
Change in Control.
7. Conditions. Payments made pursuant to this Agreement in connection with
termination of employment shall be made only upon execution of a written release
in a form acceptable to the Company.
8. Anthem Guarantee. In the event the Successor to the Company does not assume
the obligations under this Agreement and the Employment Agreement, Anthem
Insurance Companies Inc. shall guarantee the obligations of the Company under
both agreements. In the event the Successor does assume such agreements, but
does not fulfill its obligations under Section 4, Anthem Insurance Companies
shall provide comparable benefits under its plans or programs.
9. Miscellaneous.
9.1. Assignment. The Company, in its sole discretion, may assign its
rights and duties under this Agreement, but Executive may not. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of (a)
the Company and its Successors and assigns and any purchaser of the Company or
all or a substantial part of the Company's assets, such as the assets relating
to the brokerage business of the Company, and (b) Executive, and his designees
and his estate.
9.2. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana.
9.3. Severability. If any provision of this Agreement shall be
determined to be invalid, illegal or unenforceable in whole or in part, neither
the validity of the remaining part of such provision nor the validity of any
other provision of this Agreement shall in any way be affected. Should any
particular non-disclosure or non-competition covenant, provision or clause of
this Agreement be held unreasonable or unenforceable for any reason, including
without limitation, the time period, geographic area and/or scope of activity
covered by such covenant, provision or clause, the Company and Executive
acknowledge and agree that such covenant, provision or clause shall be given
effect and enforced to whatever extent would be reasonable and enforceable under
applicable law.
9.4. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions of this
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Agreement shall not be deemed a waiver of such term, covenant or condition, nor
shall any waiver or relinquishment of any right or power under this Agreement at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
9.5. Modifications. This Agreement may be modified or amended only by
an instrument in writing signed by all parties affected by the modification or
amendment.
9.6. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
9.7. Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any of its provisions.
9.8 Remedies. Executive acknowledges that a remedy at law for any
breach or threatened breach of the provisions of this Agreement would be
inadequate and therefore agrees that the Company shall be entitled to injunctive
relief, both preliminary and permanent, in addition to any other available
rights and remedies in case of any such breach or threatened breach; provided,
however, that nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available for any such breach or
threatened breach. Executive further acknowledges and agrees that in the event
of a breach by Executive of any provision of this Agreement, the Company shall
be entitled, in addition to all other remedies to which the Company may be
entitled under this Agreement, to recover from Executive all reasonable attorney
fees incurred by the Company in enforcing this Agreement. The Company
acknowledges and agrees that in the event the Executive is the prevailing party
in an action by the Company to enforce this Agreement, the Executive shall be
entitled to recover from the Company all reasonable attorneys' fees incurred by
the Executive in defending the action.
9.9 Mitigation. Executive shall have no duty to mitigate nor shall the
obligations of the Company under this Agreement be reduced by any other
compensation earned by Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
EXECUTIVE ACORDIA, INC.
Name: ▇▇▇▇▇▇ ▇. Newborn Jr.
By:_________________________________
Signed:_____________________________
Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
ANTHEM INSURANCE COMPANIES, INC.
By:_________________________________
Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
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ATTACHMENT I
Beneficiary Designation: I hereby designate the beneficiary on file with the
Company's retirement plan as my Beneficiary for purposes of this Agreement. If I
have not designated a beneficiary under the Acordia Deferred Compensation
Program, I hereby designate ________________________ as my Beneficiary.
Signed:__________________________________
Executive
Date:____________________________________
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