EXHIBIT 10.8
AMENDED AND RESTATED
EMPLOYMENT CONTINUATION AGREEMENT
DATED NOVEMBER 30, 2001
METLIFE, INC.
AMENDED AND RESTATED EMPLOYMENT CONTINUATION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT between METLIFE, INC., a Delaware
corporation (the "Company"), and __________________ (the "Executive"), dated as
of this 30th day of November, 2001.
WITNESSETH:
WHEREAS, the Company or an Affiliate has employed the Executive in an
officer position and has determined that the Executive holds a critical position
with the Company or an Affiliate;
WHEREAS, the Company believes that, in the event it is confronted with
a situation that could result in a change in ownership or control of the
Company, continuity of management will be essential to its ability to evaluate
and respond to such situation in the best interests of its shareholders;
WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to the Executive's financial
and job security;
WHEREAS, the Company desires to assure itself or its Affiliate of the
Executives' services during the period in which it is confronting such a
situation, and to provide the Executive certain financial assurances to enable
the Executive to perform the responsibilities of the Executives' position
without undue distraction and to exercise judgment without bias due to personal
circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive
desire to enter into an agreement providing the Company and the Executive with
certain rights and obligations upon the occurrence of a Change of Control (as so
defined);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. Operation of Agreement. (a) Term. The initial term of this Agreement
shall commence on the date hereof and continue until the third anniversary of
the date hereof. Thereafter, this Agreement will automatically renew for
successive and consecutive additional three year periods following the end of
its initial term and any extended term, unless the Company or the Executive
gives the other party written notice at least 180 days prior to the date the
term hereof would otherwise renew that it or the Executive does not want the
term to be so extended; provided, however, that, the Company may not deliver a
notice of nonrenewal after a Change of Control (as defined in Section 2(a)
hereof). Notwithstanding anything to the contrary in this Agreement, the
term of this Agreement shall in all events expire (regardless of when the term
would otherwise have expired) on the third anniversary of a Change of Control.
(b) Effective Date. Notwithstanding the provisions of Section 1(a)
hereof, this Agreement shall govern the terms and conditions of the Executive's
employment and the benefits and compensation to be provided to the Executive
commencing on the date on which a Change of Control occurs (the "Effective
Date") and ending on the date the term of this Agreement otherwise expires. If
the Executive is not employed by the Company or an Affiliate on the Effective
Date, this Agreement shall be void and without effect and shall neither
constitute a contract of employment or a guarantee of employment for any period
of time or limit in any way the right of the Company or any Affiliate to change
the terms and conditions of the Executive's employment or terminate the
Executive's employment.
2. Definitions. (a) Change of Control. For the purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred if:
(i) any Person acquires "beneficial ownership" (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of securities of
the Company representing 25% or more of the combined Voting Power of
the Company's securities;
(ii) within any 24-month period, the persons who were
directors of the Company at the beginning of such period (the
"Incumbent Directors") shall cease to constitute at least a majority of
the Board of Directors of the Company (the "Board") or the board of
directors of any successor to the Company; provided, however, that any
director elected or nominated for election to the Board by a majority
of the Incumbent Directors then still in office shall be deemed to be
an Incumbent Director for purposes of this subclause 2(a)(ii);
(iii) the stockholders of the Company approve a merger,
consolidation, share exchange, division, sale or other disposition of
all or substantially all of the assets of the Company which is
consummated (a "Corporate Event"), and immediately following the
consummation of which the stockholders of the Company immediately prior
to such Corporate Event do not hold, directly or indirectly, a majority
of the Voting Power of (x) in the case of a merger or consolidation,
the surviving or resulting corporation, (y) in the case of a share
exchange, the acquiring corporation or (z) in the case of a division or
a sale or other disposition of assets, each surviving, resulting or
acquiring corporation which, immediately following the relevant
Corporate Event, holds more than 25% of the consolidated assets of the
Company immediately prior to such Corporate Event; or
(iv) any other event occurs which the Board declares to be a
Change of Control.
2
(b) Person. For purposes of the definition of Change of Control,
"Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act, as supplemented by Section 13(d)(3) of the Exchange Act, and shall
include any group (within the meaning of Rule 13d-5(b) under the Exchange Act);
provided, however, that "Person" shall not include (x) the Company or any
Affiliate, (y) the MetLife Policyholder Trust (or any person(s) who would
otherwise be described herein solely by reason of having the power to control
the voting of the shares held by that trust), or (z) any employee benefit plan
(including an employee stock ownership plan) sponsored by the Company or any
Affiliate.
(c) Voting Power. "Voting Power" shall mean such number of Voting
Securities as shall enable the holders thereof to cast all the votes which could
be cast in an annual election of directors of a company, and "Voting Securities"
shall mean all securities entitling the holders thereof to vote in an annual
election of directors of a company.
(d) Affiliate. An "Affiliate" shall mean any corporation, partnership,
limited liability company, trust or other entity which directly, or indirectly
through one or more intermediaries, controls, or is controlled by, the Company.
3. Employment Period. Subject to Section 6 hereof, the Company agrees
to continue the Executive in its employ or the employ of an Affiliate, and the
Executive agrees to remain in the employ of the Company or an Affiliate, for the
period (the "Employment Period") commencing on the Effective Date and ending on
the expiration of the term of this Agreement.
4. Business Time. During the Employment Period, the Executive agrees to
devote full attention during normal business hours to the business and affairs
of the Company and Affiliates and to use the Executive's best efforts to perform
faithfully and efficiently the responsibilities assigned to the Executive
hereunder, to the extent necessary to discharge such responsibilities, except
for (i) time spent in managing the Executive's personal, financial and legal
affairs and serving on corporate, civic or charitable boards or committees, in
each case only if and to the extent not substantially interfering with the
performance of such responsibilities, and (ii) periods of vacation and sick
leave to which the Executive is entitled. It is expressly understood and agreed
that the Executive's continuing to serve on any boards and committees on which
the Executive is serving or with which the Executive is otherwise associated
immediately preceding the Effective Date shall not be deemed to interfere with
the performance of the Executive's services to the Company or Affiliates.
5. Compensation and Location. (a) Base Salary. During the Employment
Period, the Executive shall receive a base salary at a monthly rate at least
equal to the monthly salary paid to the Executive by the Company and any
Affiliate immediately prior to the Effective Date. The base salary shall be
reviewed at least once each year after the Effective Date, and may be increased
(but not decreased) at any time and from time to time by action of the Board or
any committee thereof, or the Board of Directors of an Affiliate or any
committee thereof, or any individual having authority to take such
3
action in accordance with the regular practices of the Company or an Affiliate.
The Executive's base salary, as it may be increased from time to time, shall
hereafter be referred to as the "Base Salary". Neither the Base Salary nor any
increase in the Base Salary after the Effective Date shall serve to limit or
reduce any other obligation of the Company hereunder. During the Employment
Period, the Executive's Base Salary shall be paid no less frequently than
monthly, except as electively deferred by the Executive pursuant to any deferral
programs or arrangements that the Company or an Affiliate may make available to
the Executive.
(b) Total Incentive Compensation.
(i) During the Employment Period, in addition to the Base
Salary, the Executive shall be afforded the opportunity to (x) receive
an annual bonus in an amount which provides the Executive with at least
the same bonus opportunity as other executives of the Company and
Affiliates of a rank comparable to that of the Executive, and (y)
participate in all long-term incentive compensation programs for key
executives, including but not limited to those awards or grants made in
the form of cash, stock awards, restricted stock, stock options, and
other forms of long-term incentive compensation ("Long-Term
Compensation"), at a level that is at least commensurate with the level
made available from time to time to executives of the Company and
Affiliates of a rank comparable to that of the Executive.
(ii) For each fiscal year that ends during the Employment
Period, the aggregate of the value of the annual bonus awarded or
granted to the Executive attributable to that fiscal year (the "Annual
Bonus") plus the value of the Long-Term Compensation ("Total Incentive
Compensation") awarded or granted to the Executive attributable to that
year, shall be no lower than the aggregate value of Total Incentive
Compensation awarded or granted to the Executive attributable to any of
the prior three (3) fiscal years.
(iii) If any fiscal year commences but does not end during the
Employment Period, the Executive shall be awarded or granted at least a
pro-rated Annual Bonus attributable to the portion of the fiscal year
occurring during the Employment Period, and such amount shall be no
lower than the same pro-rated portion of the any of the three (3) prior
Annual Bonuses awarded or granted to the Executive attributable to
complete fiscal years.
(iv) Each Annual Bonus shall be paid as soon as practicable
following the year for which the amount (or any prorated portion) is
awarded or granted, unless electively deferred by the Executive
pursuant to any deferral programs or arrangements that the Company may
make available to the Executive.
(v) For all purposes of determining the value of Total
Incentive Compensation or any of its components pursuant to this
Section 5(b), (w) all compensation awarded or granted to the Executive
(or, with reference to Section 5(b)(i), which the Executive has the
opportunity to receive) prior to the beginning
4
of the Employment Period shall be valued using the methods as were used
by the Company or Affiliate (as applicable) in valuing that
compensation for purposes of communicating that annual Total Incentive
Compensation to the Executive in writing; (x) all compensation awarded
or granted to the Executive (or, with reference to Section 5(b)(i),
which the Executive has the opportunity to receive) during the
Employment Period shall be valued using the same methods as were used
by the Company or Affiliate (as applicable) in valuing compensation for
purposes of communicating annual Total Incentive Compensation to the
Executive in writing for the final fiscal year that began prior to the
Employment Period and, should that communication fail to value a
particular form of compensation that must be valued for purposes of
this Section 5(b)(x), otherwise using such methods as were presented or
produced by the Board or the committee thereof charged with
responsibility for executive compensation in writing in valuing the
executive compensation programs of enterprises competitive to the
Company or any Affiliates for the final fiscal year that began prior to
the Employment Period; (y) with regard to fiscal years or portions
thereof during to the Employment Period, only to the extent those
awards or grants provided to the Executive within that fiscal year or
in the first quarter of the following fiscal year free of Company or
Affiliate discretion to reduce the amount or value of the award or
grant shall such awards or grants be attributable to fiscal years or
portions thereof; and (z) notwithstanding any other subclause of this
Section 5(b)(v), with regard to the Metropolitan Life Insurance Company
Long-Term Performance Compensation Plan, opportunities set shall be
considered to constitute awards or grants and such opportunities set
within four months after the end of the fiscal year shall be attributed
to the prior fiscal year.
(c) Benefit Plans. During the Employment Period, the Executive (and, to
the extent applicable, the Executive's dependents) shall be entitled to
participate in or be covered under all pension, retirement, deferred
compensation, savings, medical, dental, health, disability, group life,
accidental death and travel accident insurance plans and programs of the Company
or Affiliate, whichever is applicable, at the level made available from time to
time to other similarly situated officers.
(d) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies and procedures of the Company or
Affiliate, whichever is applicable, as in effect from time to time with respect
to expenses incurred by other similarly situated officers.
(e) Vacation and Fringe Benefits. During the Employment Period, the
Executive shall be entitled to paid vacation and fringe benefits at a level that
is commensurate with the paid vacation and fringe benefits available from time
to time to other similarly situated officers.
(f) Indemnification. During and after the Employment Period, the
Company (if the Executive is an officer or employee of the Company at the time
of the events giving rise to the need for indemnity) and/or each Affiliate of
which the Executive is an
5
officer or employee at the time of the events giving rise to the need for
indemnity, shall indemnify the Executive and hold the Executive harmless from
and against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorneys' fees, on the same terms and conditions applicable
from time to time with respect to the indemnification of its other senior
officers of comparable rank.
(g) Location. During the Employment Period, the Executive's services
shall be performed at the location where the Executive was employed immediately
preceding the Effective Date or at any other office or location not more than 50
miles from such pre-Effective Date, except for travel reasonably required in the
performance of the Executive's responsibilities.
6. Termination. (a) Death, Disability or Retirement. Subject to the
provisions of Section 1, Section 6(e), and Section 7 hereof, this Agreement
shall terminate automatically upon the Executive's death, termination due to
"Disability" (as defined below) or voluntary retirement under any of the
Company's (or Affiliate's, as applicable) retirement plans as in effect from
time to time. For purposes of this Agreement, "Disability" shall mean the
Executive's inability to perform the duties of the Executive's position, as
determined in accordance with the policies and procedures applicable with
respect to the Company's (or Affiliate's, as applicable) long-term disability
plan, as in effect immediately prior to the Effective Date; provided, however,
that the Executive's employment may not be terminated for Disability hereunder
unless the Executive has requested that the Executive be considered for, and has
qualified to receive, long-term disability benefits under such plan and that
such termination is consistent with law.
(b) Voluntary Termination. Notwithstanding anything in this Agreement
to the contrary, the Executive may voluntarily terminate employment during the
Employment Period for any reason (including early retirement under the terms of
any of the Company's (or Affiliate's, as applicable) retirement plans as in
effect from time to time), upon not less than 60 days' written notice to the
Company, provided that any termination by the Executive pursuant to Section 6(d)
hereof on account of Good Reason (as defined therein) or pursuant to Section
6(e) hereof during the Special Window Period shall not be treated as a voluntary
termination under this Section 6(b).
(c) Cause. The Company (or Affiliate, as applicable) may terminate the
Executive's employment for Cause. For purposes of this Agreement, "Cause" means
(i) the Executive's conviction or plea of nolo contendere to a felony; (ii) an
act of dishonesty or gross misconduct on the Executive's part which results or
is intended to result in material damage to the Company's business or
reputation; or (iii) repeated material violations by the Executive of the
Executive's obligations under Section 4 hereof, which violations are
demonstrably willful and deliberate on the Executive's part.
(d) Good Reason. After the Effective Date, the Executive may terminate
the Executive's employment at any time for Good Reason. For purposes of this
Agreement, "Good Reason" means the occurrence of any of the following, without
the express written consent of the Executive, after the Effective Date:
6
(i) any failure by the Company (or Affiliate, as applicable)
to comply with any of the provisions of Section 5 hereof, other than an
insubstantial or inadvertent failure remedied by the Company promptly
after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor or to cause an
Affiliate, as applicable, to comply with the terms of this Agreement as
contemplated by Section 12(b) hereof.
In no event shall the mere occurrence of a Change of Control, absent any further
impact on the Executive, be deemed to constitute Good Reason.
(e) Special Window Period. The Executive shall also have the right to
terminate employment at any time and for any reason during the 30-day period
commencing on the six month anniversary of the date on which a Change of Control
occurs (the "Special Window Period").
(f) Notice of Termination. Any termination during the Employment Period
by the Company (or Affiliate, as applicable) for Cause or by the Executive for
Good Reason shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 13(e) hereof. For purposes of this
Agreement, a "Notice of Termination" means a written notice given, (i) in the
case of a termination for Cause, within 10 business days of the Company's having
actual knowledge of the events giving rise to such termination, (ii) in the case
of a termination for Good Reason, within 120 days of the Executive's having
actual knowledge of the events giving rise to such termination, or (iii) in the
case of a Special Window Period, at any time during such Special Window Period.
Any such Notice of Termination shall (i) indicate the specific termination
provision in this Agreement relied upon, (ii) set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and (iii) if the
termination date is other than the date of receipt of such notice, specify the
termination date of this Agreement (which date shall be not more than 15 days
after the giving of such notice and, in the case of a termination by the
Executive during the Special Window Period, during such Special Window Period).
The failure by the Executive to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing the Executive's rights hereunder.
(g) Date of Termination. For the purpose of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a Notice
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein, as the case may be, and (ii) in all
other cases, the actual date on which the Executive's employment terminates
during the Employment Period.
(h) Transfer of Employment. For purposes of this Agreement, in no event
shall the mere transfer of employment from the Company
7
or an Affiliate to the Company or an Affiliate, absent any further impact on the
Executive, be deemed to constitute a termination of employment or Good Reason,
notwithstanding any technical termination of employment in connection with such
a transfer.
7. Obligations of the Company upon Termination. (a) Death or
Disability. If the Executive's employment is terminated during the Employment
Period by reason of the Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the Date of Termination, and the Company shall pay to the Executive
(or the Executive's beneficiary or estate), at the times determined below, (i)
the Executive's full Base Salary through the Date of Termination (the "Earned
Salary"), (ii) any vested amounts or benefits owing to the Executive under or in
accordance with the terms and conditions of the Company's and Affiliates'
otherwise applicable employee benefit plans and programs and any accrued
vacation pay not yet paid by the Company or Affiliate (the "Accrued
Obligations"), and (iii) any other benefits payable due to the Executive's death
or Disability under the Company's and Affiliates' plans, policies or programs
(the "Additional Benefits"). Any Earned Salary shall be paid in cash in a single
lump sum as soon as practicable, but in no event more than 30 days (or at such
earlier date required by law), following the Date of Termination. Accrued
Obligations and Additional Benefits shall be paid in accordance with the terms
of the applicable plan, program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment Period,
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason or during the
Special Window Period), the Company shall pay the Executive (i) the Earned
Salary in cash in a single lump sum as soon as practicable, but in no event more
than 30 days, following the Date of Termination, and (ii) the Accrued
Obligations in accordance with the terms of the applicable plan, program or
arrangement.
(c) Termination by the Company or an Affiliate other than for Cause and
Termination by the Executive for Good Reason or in the Special Window Period.
The terms of this Section 7(c) shall apply if and only if (x) the Company or an
Affiliate terminates the Executive's employment other than for Cause during the
Employment Period, (y) the Executive terminates employment at any time during
the Employment Period for Good Reason, or (z) the Executive terminates
employment with or without Good Reason during the Special Window Period.
(i) Lump Sum Payments. The Company shall pay to the Executive,
at the times determined below, the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal to three
times the sum of
(1) the Executive's annual rate of Base Salary
as then in effect;
8
(2) the average of the annual bonuses awarded or
granted to the Executive under the Annual
Variable Incentive Plan (or any successor
plan thereto), and any other Annual Bonus,
for the each of the three fiscal years of
the Company (or, if less, the number of
prior fiscal years during which Executive
was an employee of the Company or an
Affiliate) ended immediately prior to the
Effective Date for which an annual bonus
amount had been determined by the Board (or
any committee thereof) prior to the
Effective Date. If the Executive was
employed by the Company or Affiliates (taken
as a whole) for only a portion of any fiscal
year included in the period for which the
average referred to in the immediately
preceding sentence is determined and the
bonus awarded or granted for such fiscal
year took into account such partial period
of employment, such bonus for such fiscal
year shall be annualized for purposes of
calculating such average; and
(3) if the Effective Date is on or prior to
December 31, 2003, the average of the
long-term incentive compensation amounts
awarded or granted to the Executive with
respect to each of the last three
performance periods (or, if the Executive
participated in the long-term compensation
program in respect to a lesser number of
such performance periods, such lesser
number) ended prior to the Effective Date
for which the amount awarded or granted had
been determined by the Board (or any
committee thereof) prior to the Effective
Date; provided, however, that, the amount
determined under this subclause (3) shall be
reduced (but not below zero) by the
"Determined Value" (as defined below) of any
vested stock options, restricted stock or
similar equity-based award or grant relating
to the Company's common equity on the
earlier to occur of the Executive's Date of
Termination or the date on which a Change of
Control occurs. For purposes of this
Agreement, Determined Value shall mean the
excess of the "Equity Value" over the price,
if any, payable by the Executive in respect
of such stock option or other award and
Equity Value shall be determined to be (x)
in the case of a Change of Control occurring
by reason of a merger, recapitalization or
similar transaction or as a result of a
tender offer, the value received by the
Company's equity holders in such transaction
or the price paid in such tender offer (with
the value of any non-cash consideration to
be determined in good faith by the
Compensation Committee of the Board as
constituted immediately prior to the
Effective Date) and (y) in the case of any
other Change of Control or where the
9
date as of which such Determined Value is
measured is the Executive's Date of
Termination, the average of the high and low
reported sales prices of such equity on the
principal securities market on which such
equity is traded on the relevant date; and
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than 30
days (or at such earlier date required by law), following the Date of
Termination. Accrued Obligations shall be paid in accordance with the
terms of the applicable plan, program or arrangement.
(ii) Continuation of Benefits and Additional Pension Credit.
The Executive (and, to the extent applicable, the Executive's
dependents) shall be entitled, after the Date of Termination until the
third anniversary of the Date of Termination (the "End Date"), to
continue participation in all of the Company's (or Affiliate's, as
applicable) employee and executive plans providing medical, dental and
long-term disability benefits (collectively, the "Continuing Benefit
Plans"); provided, however, that the participation by the Executive
(and, to the extent applicable, the Executive's dependents) in any
Continuing Benefit Plan shall cease on the date, if any, prior to the
End Date on which the Executive becomes eligible for comparable
benefits under a similar plan, policy or program of a subsequent
employer ("Prior Date"). The Executive's participation in the
Continuing Benefit Plans will be on the same terms and conditions that
would have applied had the Executive continued to be employed by the
Company (or Affiliate, as applicable) through the End Date or the Prior
Date. To the extent any such benefits cannot be provided under the
terms of the applicable plan, policy or program, the Company shall
provide a comparable benefit under another plan or from the Company's
general assets. In addition, the Company (or Affiliate, as applicable)
shall grant the Executive service credit, for purposes of all pension
and defined benefit plans and arrangements of the Company and any
Affiliate in which the Executive participates, through the earlier of
(x) the third anniversary of the effective date of the Notice of
Termination, or (y) the sixty-fifth birthday of the Executive, such
that when the Executive's pension or defined benefit is determined such
credited service will be taken into account.
(d) Discharge of the Company's Obligations. Except as expressly
provided in the last sentence of this Section 7(d) hereof, the amounts payable
to the Executive pursuant to this Section 7 following termination of the
Executive's employment shall be in full and complete satisfaction of the
Executive's rights under this Agreement and any other claims the Executive may
have in respect of the Executive's employment by the Company or any of its
Affiliates. Such amounts shall constitute liquidated damages with respect to any
and all such rights and claims and, upon the Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to the
10
Executive in connection with this Agreement or otherwise in connection with the
Executive's employment with the Company and its Affiliates.
(e) Modification of Payments by the Company.
(i) Application of Section 7(e) Hereof. In the event that any
amount or benefit paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid
or distributed to the Executive by the Company or any Affiliate under
any other plan, agreement, or arrangement that would be taken into
account for purposes of determining if an "excess parachute payment" as
defined in Section 280G of the Internal Revenue Code of 1986, as
amended, has been made (collectively, the "Covered Payments"), would be
an "excess parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and would
thereby subject the Executive to the tax (the "Excise Tax") imposed
under Section 4999 of the Code (or any similar tax that may hereafter
be imposed), the Company shall pay to the Executive an additional
amount (the "Tax Reimbursement Payment") such that the net amount
retained by the Executive with respect to such Covered Payments, after
deduction of any Excise Tax on the Covered Payments and any Federal,
state and local (including foreign) income tax and Excise Tax on the
Tax Reimbursement Payment provided for by this Section 7(e), but before
deduction for any Federal, state or local (including foreign) income or
employment tax withholding on such Covered Payments, shall be equal to
the aggregate value of the Covered Payments.
(ii) Calculation of Benefits. Promptly after delivery of any
Notice of Termination, the Company shall notify the Executive of the
aggregate present value of all Covered Payments to which the Executive
would be entitled under this Agreement and any other plan, program or
arrangement as of the projected Date of Termination, together with the
projected maximum payments, determined as of such projected Date of
Termination that could be paid without the Executive being subject to
the Excise Tax.
(iii) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(A) such Covered Payments will be treated as "parachute
payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the
"base amount" (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise
Tax, unless, and except to the extent that, in the
good faith judgment of the Company's independent
certified public accountants appointed prior to the
Effective Date or tax counsel selected by such
Accountants (the "Accountants"), the Company has a
reasonable basis to conclude that any amount or
benefit paid or distributed to the Executive pursuant
to this Agreement, or any
11
amounts or benefits otherwise paid or distributed to
the Executive by the Company or any Affiliate under
any other plan, agreement, or arrangement (in whole
or in part), either do not constitute "parachute
payments" or represent reasonable compensation for
personal services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in
excess of the portion of the "base amount allocable
to such Covered Payments," or such "parachute
payments" are otherwise not subject to such Excise
Tax, and
(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the
Accountants in accordance with the principles of
Section 280G of the Code.
(iv) Adjustments in Respect of the Payment Cap. If the
Executive receives reduced payments and benefits under this Section
7(e) (or this Section 7(e) is determined not to be applicable to the
Executive because the Accountants conclude that Executive is not
subject to any Excise Tax) and it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding (a
"Final Determination") that, notwithstanding the good faith of the
Executive and the Company in applying the terms of this Agreement, the
aggregate "parachute payments" within the meaning of Section 280G of
the Code paid to the Executive or for the Executive's benefit are in an
amount that would result in the Executive being subject an Excise Tax,
then the Accountants shall determine whether the Executive should have
received the Tax Reimbursement Payment described in Section 7(e)(i). If
the Tax Reimbursement Payment would have been due, the Accountants
shall determine the amount of any interest and penalties that may be
imposed on the Executive by reason having failed to have timely paid
any Excise Tax (the "Penalty Amount"), and the amount of the Tax
Reimbursement Payment due, treating the Penalty Amount as a Covered
Payment. In the event a Tax Reimbursement Payment is due, the Company
shall promptly (but in no event later than ten (10) business days after
the Accountants have determined and informed the Company of the amounts
due hereunder) pay the Executive such Tax Reimbursement Payment (as
calculated in accordance with the immediately preceding sentence) and
the Penalty Amount. For greater clarity, if the Executive receives
increased payments and benefits under this Section 7(e)(i), then this
Section 7(e)(iv) shall not apply.
(f) Notwithstanding anything else in this Section 7 to the contrary,
nothing in this Section 7 shall be construed to release the Company from (or to
otherwise waive or modify) the Company's obligation to indemnify the Executive
pursuant to Section 5(f) hereof.
8. Non-exclusivity of Rights. Except as expressly provided herein,
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Company or any Affiliate and for which the Executive may
qualify, nor shall anything herein limit or otherwise prejudice such rights as
the Executive may have under any other agreements
12
with the Company or any Affiliate, including employment agreements or stock
option agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any
Affiliate at or subsequent to the Date of Termination shall be paid in
accordance with such plan or program.
9. No Offset; Deferrals. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be diminished or otherwise affected by any circumstances,
including, but not limited to, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others whether
by reason of the subsequent employment of the Executive or otherwise. For
purposes of this Agreement, except for Section 7(e), the value of an amount or
property awarded, granted, or paid to the Executive shall be determined
notwithstanding any elective deferrals of payment.
10. Legal Fees and Expenses. If the Executive asserts any claim in any
contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, but not limited to, the Executive's reasonable attorney's
fees, on a quarterly basis, upon presentation of proof of such expenses in a
form acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury ▇▇▇▇ rate as in effect from time to time, compounded annually,
if the Executive shall not prevail, in whole or in part, as to at least one
material issue as to the validity, enforceability or interpretation of any
provision of this Agreement.
11. Surviving Agreements. The Agreement to Protect Corporate Property
previously executed by the Executive, any written stock option agreement into
which the Executive entered with the Company, and any Compensation Protection
Agreement into which the Executive entered with the Company are incorporated
herein and made a part hereof. The Executive and the Company hereby reaffirm
their respective commitments under the agreements to which reference is made in
this Section 11, and again agree to be bound by each of the covenants contained
therein for the benefit of the Company and Affiliates in consideration of the
benefits made available to the Executive hereby.
12. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors. The Company shall cause each Affiliate, as
applicable, to comply with the terms of this Agreement. The Company shall
require any successor to all or substantially all of the business and/or assets
of the Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, expressly to assume and agree to perform
this Agreement in the same manner and to the same
13
extent as the Company would have been required to perform if no such succession
had taken place.
13. Miscellaneous. (a) Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, applied
without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section 11(c) hereof,
any dispute or controversy arising under or in connection with this Agreement
shall be resolved by binding arbitration. The arbitration shall be held in New
York City and except to the extent inconsistent with this Agreement, shall be
conducted in accordance with the Expedited Employment Arbitration Rules of the
American Arbitration Association in effect at the time of the arbitration (or
such other rules as the parties may agree to in writing), and otherwise in
accordance with principles which would be applied by a court of law or equity;
provided for greater clarity, however, that in no event shall the arbitrator(s)
be bound to follow the rules of evidence, discovery, or procedure that would
applied by a court of law or equity. The arbitrator shall be acceptable to both
the Company and the Executive. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be heard by a panel of three arbitrators, one
appointed by each of the parties and the third appointed by the other two
arbitrators.
(c) Amendments. This Agreement may not be amended or modified other
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters referred to herein, and
completely supersedes and replaces any prior Employment Continuation Agreement
(including any such amended and restated agreement) between the Executive and
the Company and/or an Affiliate. No other agreement relating to the terms of the
Executive's employment by the Company, oral or otherwise, shall be binding
between the parties unless it is in writing and signed by the party against whom
enforcement is sought. There are no promises, representations, inducements or
statements between the parties other than those that are expressly contained
herein. The Executive acknowledges entering into this Agreement of the
Executive's own free will and accord, and with no duress, that the Executive has
read this Agreement and understands it and its legal consequences.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the home address of the Executive noted
on the records of the Company
14
If to the Company: MetLife, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
(h) Waiver. Waiver by any party hereto of any breach or default by the
other party of any of the terms of this Agreement shall not operate as a waiver
of any other breach or default, whether similar to or different from the breach
or default waived. No waiver of any provision of this Agreement shall be implied
from any course of dealing between the parties hereto or from any failure by
either party hereto to assert its or the Executive's rights hereunder on any
occasion or series of occasions.
(i) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
(THIS SPACE INTENTIONALLY LEFT BLANK)
15
(j) Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and the Company has caused this Agreement to be executed in its name on its
behalf.
METLIFE, INC.
By:
-----------------------------
Title:
--------------------------
WITNESSED:
--------------------------
EXECUTIVE:
-------------------------
WITNESSED:
-------------------------
16