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UnumProvident Replaces Chandler

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NU Online News Service, March 31, 2003, 5:13 p.m. EST – UnumProvident Corp., Chattanooga, Tenn., has fired J. Harold Chandler, the company’s chairman, president and chief executive officer.

The disability insurer has named Thomas Watjen, the company’s vice chairman and chief operating officer, to replace Chandler as president and CEO on an “interim basis.”

The company has also named two outside directors, C. William Pollard and Lawrence Pugh, to be co-chairmen.

A search committee led by an outside director will use an executive search firm to find a new, permanent CEO, UnumProvident says.

Pollard and Pugh put out a statement saying that the management change should help UnumProvident strengthen its financial position, improve the consistency of its performance and restore investor confidence.

“While the board appreciates the contributions of Harold Chandler to UnumProvident, it has concluded that it is necessary to make a management change at this time,” Pollard and Pugh say in the statement.

Chandler has been the head of UnumProvident and a predecessor company, Provident Companies Inc., since 1993.

Chandler, who came to Provident from what is now Bank of America Corp., Charlotte, N.C., helped negotiate a series of acquisitions that turned the company into the biggest U.S. disability insurer.

Chandler has come under fire from some consumer advocates and insurance regulators in recent years because of what they say is his company’s aggressive approach to fighting policyholder lawsuits.

Recently, the U.S. Securities and Exchange raised questions about the company’s methods for describing problems with low-rated securities in its financial statements. UnumProvident resolved the SEC’s concerns last week by restating some of its earnings.

The SEC did not impose any penalties on UnumProvident, and it has raised similar questions about the financial statements of several other large life insurers this year.

UnumProvident says it will be paying Chandler $8.5 million in severance pay, which is equal to three times his base salary and bonus.

Chandler will also get $8.5 million in pension benefits, the company says.