Exhibit 10.9
AGREEMENT
AGREEMENT ("Agreement"), dated as of May 3, 2006 between Conseco,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx
("Executive"), a citizen of the State of Illinois.
WHEREAS Executive and the Company have agreed that Executive will
resign from the Company as of August 31, 2006; and
WHEREAS the parties wish to document the terms and conditions
pertaining to the resignation;
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. Resignation. Executive hereby resigns, effective May 23,
2006, from his positions as President and Chief Executive Officer of the Company
and from his positions as a member of the Board of Directors of the Company (the
"Board") and all boards of directors of such affiliates, but shall remain an
employee of the Company until August 31, 2006 (the "Resignation Date"), at which
time he shall resign from any further employment by the Company. During the
period May 23, 2006 through August 31, 2006, Executive shall assist the Company
with regard to transition issues and make himself reasonably available during
regular business hours to consult on Company business matters. 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 in Sections
2(a), (b)(i), (ii) and (iii) 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"), except as expressly set forth in
Section 2(a).
(a) 2006 Payment. Executive (or, if deceased, his wife (if
living) or his estate, (if his wife is deceased)) shall be eligible to receive a
payment equal to his full annual base salary as of the date of this Agreement
payable 10 days after Executive (or his wife if Executive is deceased) executes
(and does not revoke) the Attached General Release.
(b) Benefits.
(i) Executive shall receive any and all benefits accrued
under any deferred compensation or qualified or non-qualified pension
plan in which he currently participates (other than any severance
plan) in accordance with, and subject to, the terms thereof; provided
that no such deferred compensation or non-qualified pension benefits
shall be paid prior to March 1, 2007 (the first date on which they
would not be subject to the tax imposed by Section 409A of the
Internal Revenue Code of 1986, as amended).
(ii) 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 Executive and his family were
participating on the Resignation Date until the earlier of (A) the
second anniversary of the Resignation Date, or (B) 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). Such coverage shall be determined as if
Executive had continued to be an active employee of the Company, and
the Company shall continue to pay the costs of such coverage under
such plans on the same basis as is applicable to active employees
covered thereunder; provided that, if participation in any one or more
of such plans is not possible under the terms thereof, the Company
shall provide substantially identical benefits or, at Executive's
election, reimburse Executive for his cost of obtaining comparable
coverage from a third-party insurer.
(iii) Executive shall be reimbursed for the reasonable legal
and professional fees, and for other professional fees incurred by him
with respect to the termination of his employment and for the
negotiation and documentation of this Agreement, not to exceed
$50,000.
(iv) All of Executive's equity awards will continue to vest
only through August 31, 2006. For the avoidance of doubt, on August
17, 2006, 100,000 of the initial 400,000 options, and 200,000 of the
initial 400,000 restricted stock grants will vest.
(v) 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 Against Competition
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
Amended and Restated Employment Agreement dated as of September 2, 2005 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
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provided in Section 2(b)(ii). 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 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
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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 and 20 of the
Employment Agreement are incorporated herein by this reference. This Agreement
shall inure to the benefit 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Conseco, Inc.
By /s/Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
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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 31st day of
August, 2006.
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Xxxxxxx X. Xxxxxx
A-1
