Exhibit 10.32
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of the 23rd day of April, 2007 is
between Conseco, Inc. a Delaware corporation ("Company"), and Xxxxxx X. Xxxxxx
("Executive").
WHEREAS, the services of Executive and his managerial and professional
experience are of value to the Company; and
WHEREAS, the Company desires to have the benefit and advantage of the
services of Executive to assist the Company upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Executive and Executive
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Term. The effective date of this agreement (the "Agreement") shall
be the date set forth above (the "Effective Date"). Subject to the provisions
for termination as provided in Section 10 hereof, the term of Executive's
employment under this Agreement shall be the period beginning on April 30, 2007
(the "Commencement Date") and ending on May 31, 2010 (the "Term"). The Term
shall not be automatically renewed and shall end upon any earlier termination of
Executive's employment with the Company.
3. Duties. Effective upon the earlier of (i) May 10, 2007 or (ii) the
day after the Company files its Form 10-Q for the period ending March 31, 2007,
and for the remainder of the Term, Executive shall be engaged by the Company in
the capacity of Executive Vice President and Chief Financial Officer. Executive
shall report to the Chief Executive Officer of the Company.
4. Extent of Services. During the Term, subject to the direction and
control of the Chief Executive Officer of Conseco, Executive shall have the
power and authority commensurate with his executive status and necessary to
perform his duties hereunder. Executive shall devote his entire employable time,
attention and best efforts to the business of the Company and, during the Term,
shall not, without the consent of the Company, be actively engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage; provided, however, that this shall not be
construed as preventing Executive from serving on boards of professional,
community, civic, education, charitable and corporate organizations on which he
presently serves or may choose to serve or investing his assets in such form or
manner as will not require any services on the part of Executive in the
operation of the affairs of the companies in which such investments are made (to
the extent not in violation of the noncompete and non-solicitation provisions of
Section 9 hereof); provided, however, that corporate organizations shall be
limited to those mutually agreed upon by Executive and the Company.
5. Compensation. During the Term:
(a) As compensation for services hereunder rendered during
the Term hereof, Executive shall receive a base salary ("Base Salary")
of Four Hundred Fifty Thousand Dollars ($450,000) per year payable in
equal installments in accordance with the Company's payroll procedure
for its salaried executives. Salary payments and other payments under
this Agreement shall be subject to withholding of taxes and other
appropriate and customary amounts. Executive may receive increases in
his Base Salary from time to time, based upon his performance, subject
to approval of the Company.
(b) In addition to Base Salary, Executive will have an
opportunity to earn a bonus each year as determined by the Company,
with a target annual bonus equal to 100% of Executive's Base Salary
(the "Target Bonus") and a maximum annual bonus of 200% of Executive's
Base Salary with respect to any calendar year, with such bonus payable
at such time that other similar payments are made to other Company
executives but in no event later than March 15 of the year following
the year with respect to which such bonus was payable. For purposes of
clarification, annual executive bonuses are generally paid on or
before March 15 of the year following the year with respect to which
such bonuses are payable, if Executive remains employed with the
Company through such date or as otherwise payable under Section 11 of
this Agreement. Notwithstanding the above, the 2010 bonus will be paid
at the same time that similar payments are made to other Company
executives but in no event later than March 15, 2011 if Executive
remains employed through the end of the Term. The bonus for 2007 will
be prorated for the period of the year in which Executive is employed
by the Company and shall not be less than a pro rata portion of the
Target Bonus. The performance requirements for Target Bonuses will be
based on financial and other objective targets that the Board of
Directors of the Company ("Board") or the Human Resources and
Compensation Committee of the Board (the "Compensation Committee")
believes are reasonably attainable at the time that they are set.
(c) Executive shall be entitled to receive a grant of 40,000
shares of restricted stock, which shall vest in two equal installments
on the second and third anniversaries of the Commencement Date. The
restricted stock will be governed by the terms and conditions of the
award agreement between the Company and Executive.
(d) The Company agrees to make, as soon as reasonably
practicable after the Commencement Date, a contribution to Executive's
deferred compensation account in the amount of Two Hundred Fifty
Thousand Dollars ($250,000). That amount shall vest in full six months
after the Commencement Date.
(e) Subject to the approval of the Compensation Committee,
Executive shall be entitled to receive a non-qualified option to
purchase 80,000 shares of the Company's common stock (which shall vest
in two equal installments on the second and third anniversaries of the
date of grant and shall have a five-year term) and an award of 35,000
performance stock units (of which 21,000 shall be based on total
shareholder return for 2007-2009 compared to a group of peer companies
and 14,000 shall be based on return on equity), each of which shall
have such other terms and conditions as determined by the Compensation
Committee.
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(f) Executive shall be eligible to participate in and
receive future grants under any Company stock or equity-based program,
subject to the discretion of the Board or the Compensation Committee.
6. Fringe Benefits. During the Term:
(a) Executive shall be entitled to participate in such
existing executive benefit plans and insurance programs offered by the
Company, or which it may adopt from time to time, for its executive
management or supervisory personnel generally, in accordance with the
eligibility requirements for participation therein. Nothing herein
shall be construed so as to prevent the Company from modifying or
terminating any executive benefit plans or programs, or executive
fringe benefits, that it may adopt from time to time.
(b) Executive shall be entitled to four weeks of vacation
with pay each year.
(c) Executive may incur reasonable expenses for promoting
the Company's business, including expenses for entertainment, travel,
and similar items. The Company shall reimburse Executive for all such
reasonable expenses upon Executive's periodic presentation of an
itemized account of such expenditures. The Company agrees to pay
Executive an additional amount to cover the incremental additional
income taxes incurred by Executive, if any, with respect to payment or
reimbursement of any reasonable business expenses pursuant to this
subsection (c).
(d) Executive shall be entitled to reimbursement of
reasonable relocation expenses for moving his family to the Carmel,
Indiana area in accordance with the Company's current executive
relocation policy, provided that these expenses shall be capped at
$50,000. All expenses must be appropriately documented by Executive to
the Company. In the event that Executive's employment is terminated
for Just Cause or if he terminates his employment other than With
Reason prior to the first anniversary of the Commencement Date,
Executive agrees to repay such expenses to the Company.
(e) The Company shall reimburse Executive for, or provide at
its expense, up to three months of temporary housing in the Carmel,
Indiana area in an amount not to exceed $5,000 per month.
(f) Executive shall be permitted to make elective
contributions to any Company sponsored non-qualified deferred
compensation plan in accordance with the terms of such plan.
(g) Executive shall be entitled to a personal income tax
gross-up on any federal, state and local taxable income arising from
the benefits provided to him under Section 6(d) above.
7. Disability.
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(a) If Executive shall become physically or mentally
disabled during the Term to the extent that his ability to perform his
duties and services hereunder is materially and adversely impaired,
his Base Salary, bonus and other compensation provided herein shall
continue while he remains employed by the Company; provided, that if
such disability (as determined in the Board's reasonable judgment,
exercised in good faith) continues for at least three (3) consecutive
months, the Company may terminate Executive's employment hereunder, in
which case the Company within 10 business days shall pay Executive a
cash payment equal to (i) his Base Salary as provided in Section 5(a)
hereof to the extent earned but unpaid as of the date of termination
("Unpaid Salary"), (ii) the bonus payable pursuant to Section 5(b) for
the fiscal year of the Company ending prior to the date of termination
(to the extent earned based on performance under the goals and
objectives of the applicable plan but not previously paid) ("Unpaid
Bonus"), (iii) Executive's then accrued but unused vacation ("Unpaid
Vacation") (the Unpaid Salary, Unpaid Bonus and Unpaid Vacation
referred to sometimes together as the "Accrued Amounts"), and (iv) a
pro-rata portion of the Target Bonus for the year in which the
termination for disability occurs. All options, restricted stock
and/or other awards held by Executive on the date of termination for
disability shall be treated in accordance with the applicable award
agreements; provided, however, that if the date of termination occurs
on or before the second anniversary of the Commencement Date then all
unvested options, restricted stock and/or other awards shall vest upon
such termination.
(b) No payments or vesting under this Section 7 will be made
if such disability arose primarily from (a) chronic use of
intoxicants, drugs or narcotics (other than drugs prescribed to
Executive by a physician and used by Executive for their intended
purpose for which they had been prescribed) or (b) intentionally
self-inflicted injury or intentionally self-induced illness.
8. Disclosure of Information. Executive acknowledges that, in and as a
result of his employment with the Company, he will be making use of, acquiring
and/or adding to confidential information of the Company and its affiliates of a
special and unique nature and value. As a material inducement to the Company to
enter into this Agreement and to pay to Executive the compensation stated in
Section 5, as well as any additional benefits stated herein, Executive covenants
and agrees that he shall not, at any time while he is employed by the Company or
at any time thereafter, directly or indirectly, divulge or disclose for any
purpose whatsoever, any confidential information (whether or not specifically
labeled or identified as "confidential information"), in any form or medium,
that has been obtained by or disclosed to him as a result of his employment with
the Company and which the Company or any of its affiliates has taken appropriate
steps to safeguard, except to the extent that such confidential information (a)
becomes a matter of public record or is published in a newspaper, magazine or
other periodical available to the general public, other than as a result of any
act or omission of Executive, (b) is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or agency,
in which event Executive shall give prompt notice of such requirement to the
Company to enable the Company to seek an appropriate protective order or
confidential treatment, (c) must be disclosed to enable Executive properly to
perform his duties under this Agreement or (d) was developed by Executive prior
to his employment by the Company. Upon the termination of Executive's
employment, Executive shall return such
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information (in whatever form) obtained from or belonging to the Company or any
of its affiliates which he may have in his possession or control.
9. Covenants Against Solicitation. Executive acknowledges that the
services he is to render to the Company and its affiliates are of a special and
unusual character, with a unique value to the Company and its affiliates, the
loss of which cannot adequately be compensated by damages or an action at law.
In view of the unique value to the Company and its affiliates of the services of
Executive for which the Company has contracted hereunder, because of the
confidential information to be obtained by, or disclosed to, Executive as set
forth in Section 8 above, and as a material inducement to the Company to enter
into this Agreement and to pay to Executive the compensation stated in Section 5
hereof, as well as any additional benefits stated herein, and other good and
valuable consideration, Executive covenants and agrees that throughout the
period Executive remains employed or compensated hereunder and for one year
thereafter, Executive shall not, directly or indirectly, anywhere in the United
States of America (i) solicit or attempt to convert to other insurance carriers
or other corporations, persons or other entities providing these same or similar
products or services provided by the Company and its affiliates, any customers
or policyholders of the Company or any of its affiliates or (ii) solicit for
employment or employ any employee of the Company or any of its affiliates.
Should any particular covenant or provision of this Section 9 be held
unreasonable or contrary to public policy for any reason, including, without
limitation, the time period, geographical area, or scope of activity covered by
any restrictive covenant or provision, the Company and Executive acknowledge and
agree that such covenant or provision shall automatically be deemed modified
such that the contested covenant or provision shall have the closest effect
permitted by applicable law to the original form and shall be given effect and
enforced as so modified to whatever extent would be reasonable and enforceable
under applicable law.
10. Termination. During the Term:
(a) Either the Company or Executive may terminate his
employment at any time for any reason upon written notice to the
other. The Company may terminate Executive's employment for Just Cause
pursuant to Section 10(b) below or in a Control Termination pursuant
to Section 10(c) below. Executive's employment shall also terminate
(i) upon the death of Executive or, (ii) after disability of Executive
pursuant to Section 7 hereof.
(b) The Company may terminate Executive's employment at any
time for Just Cause. For purposes of this Agreement, "Just Cause"
shall mean:
(i) (A) material breach by Executive of this
Agreement not cured within 30 days after written notice to
Executive by the Company setting forth the alleged breach
and, where practicable in the Company's judgment, the
conduct required to cure the breach (B) a material breach of
Executive's duty of loyalty to the Company or its affiliates
not cured within 30 days after written notice to Executive
by the Company setting forth the alleged breach and, where
practicable in the Company's judgment, the conduct required
to cure the breach, or (C) willful malfeasance or fraud or
dishonesty of a substantial nature in performing
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Executive's services on behalf of the Company or its
affiliates, which in each case is willful and deliberate on
Executive's part and committed in bad faith or without
reasonable belief that such breach or action is in the best
interests of the Company or its affiliates;
(ii) Executive's use of alcohol or drugs (other
than drugs prescribed to Executive by a physician and used
by Executive for their intended purposes for which they had
been prescribed) or other repeated conduct which materially
and repeatedly interferes with the performance of his duties
hereunder, which materially compromises the integrity or the
reputation of the Company or its affiliates, or which
results in other substantial economic harm to the Company or
its affiliates;
(iii) Executive's conviction by a court of law,
admission that he is guilty, or entry of a plea of nolo
contendere with regard to a felony or other crime involving
moral turpitude;
(iv) Executive's unscheduled absence from his
employment duties other than as a result of illness, injury
or disability, for whatever cause, for a period of more than
three (3) consecutive days, without consent from the Company
prior to the expiration of the three (3) day period, which
consent shall not be unreasonably withheld;
(v) Executive's failure to take action or to
abstain from taking action, as directed in writing by a
member of the Board or a higher ranking executive of the
Company, where such failure continues after Executive has
been given written notice of such failure and at least five
(5) business days thereafter to cure such failure; or
(vi) Any intentional wrongful act or omission by
Executive that results in the restatement of the Company's
financial statements due to a violation of the
Xxxxxxxx-Xxxxx Act of 2002.
No termination shall be deemed to be a termination by the
Company for Just Cause if the termination is as a result of Executive
refusing to act in a manner that Executive believes in good faith
would be a violation of applicable law or where Executive acts (or
refrains from taking action) in good faith in accordance with
directions of a member of the Board or higher ranking executive but
was unable to attain the desired results because such results were
inherently unreasonable or unattainable.
(c) The Company may terminate Executive's employment in a
Control Termination. A "Control Termination" shall mean any
termination by the Company (or its successor) of Executive's
employment for any reason within six months in anticipation of or
within two years following a Change in Control.
The term "Change in Control" shall mean the occurrence of
any of the following:
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(i) the acquisition (other than an acquisition in
connection with a "Non-Control Transaction") by any "person"
(as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934
Act")) of "beneficial ownership" (as such term is defined in
Rule 13d-3 promulgated under the 1934 Act), directly or
indirectly, of securities of the Company or its Ultimate
Parent representing 51% or more of the combined voting power
of the then outstanding securities of the Company or its
Ultimate Parent entitled to vote generally with respect to
the election of the Board or the board of directors of the
Company's Ultimate Parent; or
(ii) as a result of or in connection with a tender
or exchange offer or contest for election of directors,
individual board members of the Company (identified as of
the date of commencement of such tender or exchange offer,
or the commencement of such election contest, as the case
may be) cease to constitute at least a majority of the
Board; or
(iii) the consummation of a merger, consolidation
or reorganization with or into the Company unless (x) the
stockholders of Company immediately before such transaction
beneficially own, directly or indirectly, immediately
following such transaction securities representing 51% or
more of the combined voting power of the then outstanding
securities entitled to vote generally with respect to the
election of the board of directors of the Company (or its
successor) or, if applicable, the Ultimate Parent and (y)
individual board members of the Company (identified as of
the date that a binding agreement providing for such
transaction is signed) constitute at least a majority of the
board of directors of the Company (or its successor) or, if
applicable, the Ultimate Parent (a transaction to which
clauses (x) and (y) apply, a "Non-Control Transaction").
For purposes of this Agreement, "Ultimate Parent" shall mean the
parent corporation (or if there is more than one parent corporation,
the ultimate parent corporation) that, following a transaction,
directly or indirectly beneficially owns a majority of the voting
power of the outstanding securities entitled to vote with respect to
the election of the board of directors of the Company (or its
successor).
(d) At Executive's option, he may terminate employment with
the Company "With Reason" provided one or more of the following
conditions are met: (i) any material diminution in the nature or scope
of Executive's authority, duties or responsibilities (other than as a
result of a going private transaction); (ii) any reduction in
Executive's Base Salary or Target Bonus without his consent; (iii)
Executive is required to locate more than 50 miles from the Company's
offices in Carmel, Indiana or Chicago, Illinois, without Executive's
consent; (iv) Executive is required to report to anyone other than the
Chief Executive Officer; or (v) there is a "Change in Control" as
defined in Section 10(c) and, following Executive's written request
made prior to the Change in Control, the ultimate parent entity or
entities directly or indirectly gaining control of a majority of the
Board or outstanding securities entitled to vote with respect to the
Board fails to affirm and guarantee the Company's current and future
obligations under this Agreement.
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(e) Upon termination of Executive's employment with the
Company for any reason (whether voluntary or involuntary), Executive
shall be deemed to have voluntarily resigned from all positions that
Executive may then hold with the Company and any of its affiliates;
provided that such deemed resignation shall not adversely affect
Executive's rights to compensation or benefits under this Agreement
and shall not affect the determination of whether Executive's
termination was for Just Cause or With Reason.
11. Payments Following Termination.
(a) In the event that Executive's employment is terminated
by the Company for Just Cause or if Executive voluntarily resigns,
then the Company within five business days shall pay Executive a cash
payment equal to his Accrued Amounts. No bonus for the year of
termination will be earned or paid to Executive. All stock options,
restricted stock and/or other awards held by Executive on the date of
termination shall be treated in accordance with the applicable award
agreements.
(b) In the event Executive's employment is terminated by the
death of Executive, then the Company shall pay Executive's estate
within 30 days (i) the Accrued Amounts and (ii) a pro-rata portion of
the Target Bonus for the year in which his death occurs. All stock
options, restricted stock and/or other awards held by Executive on the
date of termination shall be treated in accordance with the applicable
award agreements; provided, however, that if the date of Executive's
death occurs on or before the second anniversary of the Commencement
Date then all unvested options, restricted stock and/or other awards
shall vest upon such date.
(c) In the event that Executive is terminated by the Company
without Just Cause (and other than a termination due to expiration of
the Term, death, disability or a Control Termination) or by Executive
With Reason, then the Company shall pay Executive within 10 business
days (i) the Accrued Amounts, (ii) a pro-rata portion of the Target
Bonus for the year in which his termination occurs and (iii) a cash
payment equal to the sum of Executive's Base Salary and Target Bonus.
Executive and his family shall be entitled to continued participation
in all medical, health and life insurance plans at the same benefit
level at which he and his family were participating on the date of
termination ("Welfare Benefits") until the earliest of (A) 12 months
after the date of termination; (B) the date upon which Executive
attains 65 years of age; or (C) the date or dates Executive receives
substantially similar coverage and benefits under the plans and
programs of a subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage, or benefit-by-benefit, basis).
All stock options, restricted stock and/or other awards held by
Executive on the date of termination shall be treated in accordance
with the applicable award agreements; provided, however, that if the
date of termination occurs on or before the second anniversary of the
Commencement Date then all unvested options, restricted stock and/or
other awards shall vest upon such termination. The contribution to be
made pursuant to Section 5(d) shall vest upon a termination pursuant
to this Section 11(c).
(d) In the event that Executive is terminated by the Company
(or its successor) in a Control Termination as so defined, then the
Company shall pay Executive
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within 30 days (i) the Accrued Amounts, (ii) Executive's Target Bonus
(prorated for the partial year period ending on the date of his
termination of employment and (iii) a payment equal to one and
one-half times the sum of his Base Salary and Target Bonus. Executive
and his family shall be entitled to continued participation in all
Welfare Benefits until the earliest of (A) 18 months after the date of
termination; (B) the date upon which Executive attains 65 years of
age; or (C) the date or dates Executive receives substantially similar
coverage and benefits under the plans of a subsequent employer (such
coverage and benefits to be determined on a coverage-by-coverage, or
benefit-by benefit, basis). All stock options, restricted stock and/or
other awards held by Executive shall be treated in accordance with the
applicable award agreements; provided, however that (x) the awards
contemplated by Sections 5 (c), (d) and (e) shall vest upon a
qualifying termination and (y) if the date of termination occurs on or
before the second anniversary of the Commencement Date, then all other
invested options, restricted stock and/or other awards shall vest upon
such termination.
(e) Notwithstanding anything to the contrary, the Company
may delay or modify any payment due to Executive hereunder to the
minimum extent necessary to avoid the imposition of a 20% penalty tax
and interest relating to a failure to comply with Section 409A of the
Internal Revenue Code of 1986, as amended from time to time.
(f) Notwithstanding anything to the contrary, payment of any
severance under this Agreement is conditioned upon the execution by
Executive of a separation and release agreement substantially in the
form attached hereto as Exhibit A (with such changes as may be
acceptable to the Company and appropriate to reflect changes in the
law or practice after the date of this Agreement) and the observation
of such waiting or revocation periods, if any, before and after
execution of the agreement by Executive as are required by law, such
as, for example, the waiting or revocation periods required for a
waiver and release to be effective with respect to claims under the
Age Discrimination in Employment Act, provided that the Company
delivers to Executive such agreement within seven days of the date of
his termination.
12. Character of Termination Payments. The amounts payable to
Executive upon any termination of his employment shall be considered severance
pay in consideration of past services rendered on behalf of the Company and his
continued service from the date hereof to the date he becomes entitled to such
payments and shall be the sole amount of severance pay to which Executive is
entitled from the Company and its affiliates upon termination of his employment
during the Term. Executive shall have no duty to mitigate his damages by seeking
other employment and, should Executive actually receive compensation from any
such other employment, the payments required hereunder shall not be reduced or
offset by any such other compensation.
13. Representations of the Parties.
(a) The Company represents and warrants to Executive that
(i) this Agreement has been duly authorized, executed and delivered by
the Company and constitutes valid and binding obligations of the
Company; and (ii) the employment of Executive on the
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terms and conditions contained in this Agreement will not conflict
with, result in a breach or violation of, constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to:
(A) the certificate of formation, (B) the terms of any indenture,
contract, lease, mortgage, deed of trust, note, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is
subject, or (C) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company, or any regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company.
(b) Executive represents and warrants to the Company that:
(i) this Agreement has been duly executed and delivered by Executive
and constitutes a valid and binding obligation of Executive; and (ii)
neither the execution of this Agreement by Executive nor his
employment by the Company on the terms and conditions contained herein
will conflict with, result in a breach or violation of, or constitute
a default under any agreement, obligation, condition, covenant or
instrument to which Executive is a party or bound or to which his
property is subject, or any statute, law, rule, regulation, judgment,
order or decree applicable to Executive of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over Executive or any of his property.
14. Arbitration of Disputes; Injunctive Relief.
(a) Arbitration. Except as provided in subsection (b) below,
any controversy or claim arising out of or relating to this Agreement
or the breach thereof shall be settled by binding arbitration in the
City of Indianapolis, Indiana, in accordance with the laws of the
State of Indiana by three arbitrators, one of whom shall be appointed
by the Company, one by Executive, and the third of whom shall be
appointed by the first two arbitrators. If the first two arbitrators
cannot agree on the appointment of a third arbitrator, then the third
arbitrator shall be appointed by the Chief Judge of the United States
District Court for the Southern District of Indiana. The arbitration
shall be conducted in accordance with the rules of the American
Arbitration Association, except with respect to the selection of
arbitrators, which shall be as provided in this Section. Judgment upon
the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. All reasonable costs and expenses
(including fees and disbursements of counsel) incurred by Executive
pursuant to this Section 14 shall be paid on behalf of or reimbursed
to Executive promptly by the Company; provided, however, that in the
event the Company prevails in such proceedings, Executive shall
immediately repay all such amounts to the Company.
(b) Executive acknowledges that a breach or threatened
breach by Executive of Sections 8 or 9 of this Agreement will give
rise to irreparable injury to the Company and that money damages will
not be adequate relief for such injury. Notwithstanding paragraph (a)
above, the Company and Executive agree that the Company may seek and
obtain injunctive relief, including, without limitation, temporary
restraining orders, preliminary injunctions and/or permanent
injunctions, in a court of proper jurisdiction to restrain or prohibit
a breach or threatened breach of Section 8 or 9 of this Agreement.
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Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from
Executive.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
his residence, in the case of Executive, or to the business office of its
General Counsel, in the case of the Company.
16. Waiver of Breach and Severability. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by either party. In the
event any provision of this Agreement is found to be invalid or unenforceable,
it may be severed from the Agreement, and the remaining provisions of the
Agreement shall continue to be binding and effective.
17. Entire Agreement. Other than any equity award agreements entered
into pursuant to the Conseco, Inc. 2003 Amended and Restated Long-Term Incentive
Plan or any subsequent incentive plan, this instrument contains the entire
agreement of the parties and, as of the Effective Date, supersedes all other
obligations of the Company and its affiliates under other agreements or
otherwise. The compensation and benefits to be paid under the terms of this
Agreement are in lieu of all other compensation or benefits to which Executive
is entitled from the Company and its affiliates, and upon termination of
Executive's employment with the Company Executive will not be entitled to
receive any severance or other payments beyond those specified in this
Agreement. This Agreement may not be changed orally, but only by an instrument
in writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
18. Binding Agreement and Governing Law; Assignment Limited. This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their lawful successors in interest (including, without limitation,
Executive's estate, heirs and personal representatives) and, except for issues
or matters as to which federal law is applicable, shall be construed in
accordance with and governed by the laws of the State of Indiana. This Agreement
is personal to each of the parties hereto, and neither party may assign or
delegate any of its rights or obligations hereunder without the prior written
consent of the other.
19. Indemnification. If Executive was or is made a party or is
threatened to be made a party to or is otherwise involved (including involvement
as a witness) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
or she is or was an officer or employee of the Company or any of its affiliates,
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including attorneys' fees, judgments, fines, excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
Executive in connection therewith and such indemnification shall continue as to
Executive if he ceases to be an officer or employee and shall inure to the
benefit of Executive's heirs, executors and administrators; provided, however,
that the Company shall indemnify Executive in connection with a proceeding (or
part
11
thereof) initiated by Executive only if such Proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The right to
indemnification conferred in this paragraph shall include the obligation of the
Company to pay the expenses incurred in defending any such proceeding in advance
of its final disposition (an "Advance of Expenses"); provided, however, that, if
and to the extent that the Delaware General Corporation Law requires, an Advance
of Expenses incurred by Executive in his capacity as an officer or employee
shall be made only upon delivery to the Company of an undertaking, by or on
behalf of Executive, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that Executive is not entitled to be indemnified for such expenses under
this paragraph or otherwise.
20. No Third Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not intended to confer
third-party beneficiary rights upon any other person.
21. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written, effective as of the Effective Date.
COMPANY:
CONSECO, INC.
By:/s/ C. Xxxxx Xxxxxx
------------------------------
Name: C. Xxxxx Xxxxxx
----------------------------
Title: Chief Executive Officer
---------------------------
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
13
Exhibit "A"
AGREEMENT
AGREEMENT ("Agreement"), dated as of ______ ___, 20__ between Conseco,
Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx
("Executive").
WHEREAS Executive and the Company have agreed that Executive's
employment with the Company will terminate; and
WHEREAS the parties wish to document the terms and conditions
pertaining to such termination;
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and other good and valuable consideration, the receipt of
which are hereby acknowledged, the Company and Executive hereby agree as
follows:
Section 1. Termination of Employment. The employment by the Company of
Executive shall terminate, effective _______ __, 20__, and Executive shall
resign from his position as Executive Vice President and Chief Financial Officer
of the Company and from his positions as an officer and/or director of the
Company and its subsidiary and affiliates (the "Termination Date"). Executive
hereby agrees to execute and deliver any and all further documentation
reasonably requested by the Company in order to evidence and effect such
resignation.
Section 2. Payments. In consideration for Executive entering into this
Agreement, specifically including the General Release, the Company agrees that,
upon Executive's resignation, the Company shall provide Executive with the
following payments and benefits. Amounts and benefits described herein are
expressly conditioned on Executive's resigning pursuant to this Agreement and
execution, on or after the Resignation Date, (and nonrevocation of) a General
Release substantially in the form attached hereto as Exhibit A (the "Attached
General Release"). [describe benefits]
(i) Executive shall be paid any (A) base salary (at the rate
of salary in effect immediately prior to the Resignation Date) to the
extent earned but unpaid as of the Resignation Date, (B) accrued but
unused vacation days and (C) reasonable business and fringe benefit
expenses incurred by him prior to the Resignation Date in accordance
with Company policy in effect on the Resignation Date which have not
yet been reimbursed (together with an additional amount to cover the
incremental additional income taxes incurred by Executive, if any,
with respect to payment or reimbursement of any such reasonable
business expenses). Such payment shall be made in accordance with the
Company's standard payroll and expense reimbursement practices.
Section 3. Disclosure of Information; Covenants and Solicitation.
Executive acknowledges and agrees that he shall continue to be bound by the
restrictive covenants set forth in Sections 8 and 9 of that certain Employment
Agreement dated as of _________ _, 2007 by and between the Company and Executive
(the "Employment Agreement") as if such covenants were set forth in this
Agreement.
Section 4. Setoff; No Mitigation. No payments or benefits payable to
or with respect to Executive pursuant to this Agreement shall be reduced by any
amount Executive may earn or receive from employment with another employer or
from any other source, except as expressly provided herein. Executive shall have
no duty to mitigate his damages by seeking other employment.
Section 5. Mutual Non-disparagement. Executive agrees to act in a
professional manner and not make any disparaging or negative statements
regarding the Company, its subsidiaries, affiliates, divisions or parent
companies or their officers, directors or executives, including any such
statements about the prospects of the Company, its affiliates, subsidiaries or
divisions. The Company agrees not to make any disparaging or negative statements
regarding Executive.
Section 6. Announcements. The Company will consult with Executive
prior to issuing internal and external announcements regarding Executive's
resignation from the Company.
Section 7. General Release. As a material inducement to the Company to
enter into the Resignation Agreement, Executive hereby irrevocably and
unconditionally releases, acquits and forever discharges the Company, its
successors, assigns, agents, directors, officers, executives, representatives,
subsidiaries, divisions, parent corporations and affiliates, and all other
persons acting by, through or in concert with any of them (collectively, the
"Releasees") from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, actions, damages, expenses (including
attorneys' fees and costs actually incurred), or any rights of any and every
kind or nature, accrued or unaccrued, known or unknown, which Executive has or
claims to have arising out of facts and circumstances which have occurred or
existed prior to, or which are occurring and do exist as of, the date of
Executive's execution of this Agreement against each or any of the Releasees.
This General Release pertains to but is in no way limited to all matters
relating to or arising out of Executive's employment and the cessation of his
employment by the Company and all claims for severance benefits or other
payments which are not express obligations of the Company under this Agreement,
or otherwise. This General Release further pertains to, but is in no way limited
to, rights and claims under the Age Discrimination in Employment Act of 1967,
Title VII of the Civil Rights Act, as amended, the Americans With Disabilities
Act, the Family Medical Leave Act, and all other federal, state, local or
municipal fair employment and discrimination laws, and all claims under common
law, whether based in tort or contract, law or equity.
Notwithstanding anything herein to the contrary, this General Release does not
apply to: (i) claims that arise after the execution of this Agreement; (ii) the
Executive's rights under any tax-qualified pension or claims for accrued vested
benefits under any other employee benefit plan, policy or arrangements
maintained by the Company or under COBRA; (iii) worker's
2
compensation claims and any other claims that cannot be waived by law; (iv) the
Executive's rights to enforce this Agreement; or (v) the Executive's rights as a
stockholder.
This General Release is not intended to and does not interfere with the Equal
Employment Opportunity Commission's right to enforce anti-discrimination laws or
to seek relief that will benefit the public and any victim of unlawful
employment practices who have not waived their claims. Therefore, by signing
this General Release, Executive waives any right to personally recover against
the Company, but Executive is not prevented from filing a charge with, or
testifying, assisting, or participating in any proceeding brought by the EEOC,
concerning an alleged discriminatory practice of the Company.
Section 8. Indemnification; D&O Coverage. The Company shall continue
to indemnify Executive (including, without limitation, the Company's obligations
under a certain indemnification agreement, if any, currently in effect between
the Executive and the Company) and provide directors' and officers' liability
insurance coverage (including, where required, legal defense) for actions prior
to Executive's Resignation Date to the same extent it indemnifies and provides
liability insurance coverage to then-current officers and directors of the
Company.
Section 9. Binding Effect; Revocation; Modification. The parties
understand and agree that this Agreement is final and binding and constitutes
the complete and exclusive statement of the terms and conditions relating to
Executive's resignation; that, except as otherwise specifically provided herein,
this Agreement supersedes all prior agreements and understandings (oral or
written) between Executive and the Releasees relating to Executive's employment,
Resignation Date, or otherwise, including but not limited to the Employment
Agreement; that no representations or commitments were made by the parties to
induce this Agreement other than as expressly set forth herein; that the
consideration provided to Executive in exchange for the General Release exceeds
that to which he is otherwise entitled to, and that this Agreement is fully
understood by the parties. Notwithstanding the foregoing, Executive's equity
award agreements are not superseded by this Agreement. Executive further
represents that Executive has had the opportunity and time to consult with legal
counsel and other personal or financial advisors of his own choosing concerning
the provisions of the General Release and that Executive has been given
twenty-one (21) days within which to execute the General Release and seven (7)
days following that execution to revoke the General Release. To be effective,
any such revocation must be in writing and actually delivered no later than the
close of business on the 7th day following Executive's execution of the General
Release to the office of the Company's General Counsel. No obligation upon the
Company set forth herein shall be effective, and no payment or other benefit
shall be required to be made or provided to Executive hereunder, any earlier
than the 8th day following Executive's execution of the General Release. This
Agreement may not be modified or supplemented except by a subsequent written
agreement signed by the party against whom enforcement of the modification is
sought.
Section 10. Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state and local taxes as may be
required to be withheld pursuant to applicable laws or regulations.
Section 11. Miscellaneous. Sections 15, 16, 17, 19, 20 and 21 of the
Employment Agreement are incorporated herein by this reference. This Agreement
shall inure to the benefit
3
of the Releasees (as defined in Exhibit A) and to their heirs, administrators,
representatives, executors, successors and assigns.
Section 12. Counterparts. This Agreement may be executed by either of
the parties hereto in counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Conseco, Inc.
By
----------------------------
Name:
-------------------------
Title:
------------------------
------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT A
GENERAL RELEASE
As a material inducement to the Company to enter into the Agreement and for and
in consideration of the payments and other benefits provided therein, Executive
hereby irrevocably and unconditionally releases, acquits and forever discharges
the Company, its successors, assigns, agents, directors, officers, executives,
representatives, subsidiaries, divisions, parent corporations and affiliates,
and all other persons acting by, through or in concert with any of them
(collectively, the "Releasees") from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, actions, damages, expenses
(including attorneys' fees and costs actually incurred), or any rights of any
and every kind or nature, accrued or unaccrued, known or unknown, which
Executive has or claims to have arising out of facts and circumstances which
have occurred or existed prior to, or which are occurring and do exist as of,
the date of Executive's execution of this Agreement against each or any of the
Releasees. This release ("Release") pertains to but is in no way limited to all
matters relating to or arising out of Executive's employment and the cessation
of his employment by the Company and all claims for severance benefits or other
payments which are not express obligations of the Company under this Agreement,
or otherwise. This Release further pertains to, but is in no way limited to,
rights and claims under the Age Discrimination in Employment Act of 1967, Title
VII of the Civil Rights Act, as amended, the Americans With Disabilities Act,
the Family Medical Leave Act, and all other federal, state, local or municipal
fair employment and discrimination laws, and all claims under common law,
whether based in tort or contract, law or equity.
Notwithstanding anything herein to the contrary, this Release does not apply to:
(i) claims that arise after the execution of the General Release; (ii) the
Executive's rights under any tax-qualified pension or claims for accrued vested
benefits under any other employee benefit plan, policy or arrangements
maintained by the Company or under COBRA; (iii) worker's compensation claims and
any other claims that cannot be waived by law; (iv) the Executive's rights to
enforce this Agreement; or (v) the Executive's rights as a stockholder.
This Release is not intended to and does not interfere with the Equal Employment
Opportunity Commission's right to enforce anti-discrimination laws or to seek
relief that will benefit the public and any victim of unlawful employment
practices who have not waived their claims. Therefore, by signing this Release,
Executive waives any right to personally recover against the Company, but
Executive is not prevented from filing a charge with, or testifying, assisting,
or participating in any proceeding brought by the EEOC, concerning an alleged
discriminatory practice of the Company.
IN WITNESS WHEREOF, I have executed this General Release this ____ day of
______, 20__.
---------------------------
Xxxxxx X. Xxxxxx
