EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 31st day of March, 1998, between
CONSECO, INC., an Indiana corporation (hereinafter called the "Company"), and
Xxxxxx X. Xxxxxx (hereinafter called "Executive").
RECITALS
WHEREAS, Executive has been employed by the Company for a number of
years, and the services of Executive, his managerial and professional
experience, and his knowledge of the affairs of the Company are of great value
to the Company; and
WHEREAS, the Company deems it to be essential for it to have the
benefit and advantage of the services of the Executive for an extended period;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, 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 shall be March 31, 1998.
Subject to the provisions for termination as provided in Section 10 hereof, the
term of this Agreement shall be the period beginning March 31, 1998, and ending
December 31, 2002, (hereinafter called the "Basic Employment Period").
3. Duties. Executive is engaged by the Company in an executive capacity
as its chief operations officer. Executive shall report to the Chief Executive
Officer regarding the performance of his duties and shall be subject to the
direction and control of the Board of Directors of the Company (sometimes
referred to herein as the "Board") and the Chief Executive Officer. Executive's
position with the Company shall initially be Executive Vice President and Chief
Operations Officer and such other positions as may be determined from time to
time by the Board.
4. Extent of Services. Executive, subject to the direction and control
of the Chief Executive Officer and the Board, shall have the power and authority
commensurate with his executive status and necessary to perform his duties
hereunder. The Company agrees to provide to Executive such assistance and work
accommodations as are suitable to the character of his positions with the
Company and adequate for the performance of his duties. Executive shall devote
his entire employable time, attention and best efforts to the business of the
Company, and shall not, without the consent of the Company, during the term of
this Agreement be actively engaged in any other business activity, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage; but this shall not be construed as preventing Executive from
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. For purposes of this Agreement, full-time employment
shall be the normal work week for individuals in comparable executive positions
with the Company.
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5. Compensation.
(a) As compensation for services hereunder rendered during the term
hereof, Executive shall receive a base salary ("Base Salary") of Two
Hundred Fifty Thousand Dollars ($250,000) per year payable in equal
installments in accordance with the Company's payroll procedure for its
salaried employees. Salary and all other payments made pursuant to this
Agreement shall be subject to withholding of taxes. Executive may
receive increases in his Base Salary from time to time, based upon his
performance in his executive and management capacity. The amounts of
any such salary increases shall be approved by the Board or the
Compensation Committee of the Board upon the recommendation of the
Chief Executive Officer.
(b) In addition to Base Salary, Executive may receive such other
bonuses or incentive compensation as the Compensation Committee or the
Board may approve from time to time, upon the recommendation of the
Chief Executive Officer; provided, that Executive shall receive a cash
bonus of at least Seven Hundred Fifty Thousand Dollars ($750,000) for
each of the first two calendar years (i.e., 1998 and 1999) completed
under this Agreement.
6. Fringe Benefits.
(a) Executive shall be entitled to participate in such existing
employee benefit plans and insurance programs offered by the Company,
or which it may adopt form 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 employee benefit plans or programs, or employee fringe benefits, it
may adopt from time to time.
(b) During the term of this Agreement, the Company shall pay
Executive a monthly automobile allowance in the amount of Six Hundred
Dollars ($600), and the Company shall pay directly or shall reimburse
Executive for the cost of fuel that he incurs in using his automobile.
(c) Executive shall be entitled to four (4) weeks vacation with pay
each year during the term hereof.
(d) 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.
(e) The Company shall, upon periodic presentation of satisfactory
evidence and to a maximum of Ten Thousand Dollars ($10,000) per each
year of this Agreement, reimburse Executive for reasonable medical
expenses incurred by Executive and his dependents which are not
otherwise covered by health insurance provided to Executive under
Section 6(a).
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(f) During the term of this Agreement, the Company shall at its
expense maintain a term life insurance policy or policies on the life
of Executive in the face amount of Five Hundred Thousand Dollars
($500,000), payable to such beneficiaries as Executive may designate.
7. Disability. If Executive shall become physically or mentally
disabled during the term of this Agreement to the extent that his ability to
perform his duties and services hereunder is materially and adversely impaired,
his salary, bonus and other compensation provided herein shall continue while he
remains employed by the Company; provided, that if such disability (as confirmed
by competent medical evidence) continues for at least nine (9) consecutive
months, the Company may terminate Executive's employment hereunder in which case
the Company shall immediately pay Executive a lump sum payment equal to
one-quarter of the sum of his annual salary and bonus with respect to the most
recent fiscal year then ended and, provided further, that no such lump sum
payment shall be required if such disability arises primarily from: (a) chronic
depressive use of intoxicants, drugs or narcotics, or (b) intentionally
self-inflicted injury or intentionally self-induced sickness; or (c) a proven
unlawful act or enterprise on the part of Executive.
8. Disclosure of Information. Executive acknowledges that in and as a
result of his employment with the Company, he has been and will be making use
of, acquiring and/or adding to confidential information of the Company 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 during or following the term of his
employment, directly or indirectly, divulge or disclose for any purpose
whatsoever, any confidential information that has been obtained by or disclosed
to him as a result of his employment with the Company. Upon the termination of
this Agreement, Executive shall return all materials obtained from or belonging
to the Company which he may have in his possession or control. In the event of a
breach or threatened breach by Executive of the provisions of this Section, the
Company shall be entitled to an injunction restraining Executive from utilizing
or disclosing, in whole or in part, such material, or from rendering any service
to any person, firm, corporation, association, or other entity to which such
material might be useful, and/or any and all persons directly or indirectly
acting for or with Executive. 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.
9. Covenants Against Competition and Solicitation. Executive
acknowledges that the services he is to render to the Company are of a special
and unusual character, with a unique value to the Company, the loss of which
cannot adequately be compensated by damages or an action at law. In view of the
unique value to the Company 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 hereinabove set forth, and 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, and other good and valuable consideration, Executive covenants and
agrees that throughout the Basic Employment Period, Executive shall not,
directly or indirectly, anywhere in the United States of America (i) render any
services, as an agent, independent contractor, consultant or otherwise, or
become employed or compensated by, any other corporation,
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person or entity engaged in the business of selling or providing life or
accident and health insurance products or services; (ii) in any manner compete
with the Company or any of its subsidiaries; (iii) solicit or attempt to convert
to other insurance carriers providing these same or similar products or services
provided by the Company and its subsidiaries, any customers or policyholders of
the Company, or any of its subsidiaries; or (iv) solicit for employment or
employ any employee of the Company or any of its subsidiaries. The covenants of
Executive in this Section 9 shall be void and unenforceable in the event of a
Control Termination of this Agreement as defined in Section 10 below.
10. Termination.
(a) Either the Company or Executive may terminate this Agreement at
any time for any reason upon written notice to the other. This
Agreement shall also terminate upon (i) the death of Executive or (ii)
termination by the Company pursuant to Section 7.
(b) In the event this Agreement is terminated by the Company and
such termination is not pursuant to the last sentence of (a) above or
for "just cause" as defined in (e) below and does not constitute a
Control Termination as defined in (d) below, Executive shall be
entitled to receive his Base Salary, as determined pursuant to Section
5(a) hereof, for the remainder of the Basic Employment Period and all
other unpaid amounts previously accrued or awarded pursuant to any
other provision of this Agreement.
(c) In the event this Agreement is terminated by the death of
Executive, is terminated by the Company for "just cause" as defined in
(e) below, or is terminated by Executive and such termination does not
constitute a Control Termination as defined in (d) below, Executive
shall be entitled to receive his Base Salary as provided in Section
5(a) accrued but unpaid as of the date of termination, and all other
unpaid amounts previously accrued or awarded pursuant to any other
provision of this Agreement.
(d) The term "Control Termination" as used herein shall mean (a)
termination of this Agreement by the Company in anticipation of or
following a "change in control" of the Company (as defined below), or
(b) termination of this Agreement by Executive following "change in
control" of the Company (as defined below) upon the occurrence of any
of the following events:
(i) significant change in the nature or scope of
Executive's authorities or duties from those described in
Section 3, a reduction in his total compensation from that
provided in Section 5, or a breach by the Company of any other
provision of this Agreement; or
(ii) reasonable determination by Executive that, as a
result of a change in circumstances significantly affecting
his position, he is unable to exercise the authorities,
powers, functions or duties attached to his position and
contemplated by Section 3 of this Agreement, or
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(iii) the Company's principal executive offices are
moved outside the geographic area comprised of Xxxxxx County,
Indiana, and the seven contiguous counties or Executive is
required to work at a location other than the Company's
principal executive offices; or
(iv) the giving of notice of termination by Executive
during the 6-month period commencing six (6) months after the
change in control.
The term "change in control" shall mean a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the "Act")
as revised effective January 20, 1987; provided that, without limitation,
(x) such a change in control shall be deemed to have occurred if and
when either (A) except as provided in (y) below, any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes a
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated
under the Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities entitled to vote with respect to the
election of its Board of Directors or (B) as the result of a tender
offer, merger, consolidation, sale of assets, or contest for election
of directors, or any combination of the foregoing transactions or
events, individuals who were members of the Board of Directors of the
Company immediately prior to any such transaction or event shall not
constitute a majority of the Board of Directors following such
transaction or event, and
(y) no change of control shall be deemed to have occurred if and
when any such person becomes, with the approval of the Board of
Directors of the Company, the beneficial owner of securities of the
Company representing 25% or more but less than 50% of the combined
voting power of the Company's then outstanding securities entitled to
vote with respect to the election of its Board of Directors and in
connection therewith represents, and at all times continues to
represent, in a filing, as amended, with the Securities and Exchange
Commission on Schedule 13D or Schedule 13G (or any successor Schedule
thereto) that "such person has acquired such securities for investment
and not with the purpose nor with the effect of changing or influencing
the control of the Company, nor in connection with or as a participant
in any transaction having such purpose or effect", or words of
comparable meaning and import. The designation by any such person, with
the approval of the Board of Directors of the Company, of a single
individual to serve as a member of, or observer at meetings of, the
Company's Board of Directors, shall not be considered "changing or
influencing the control of the Company" within the meaning of the
immediately preceding clause (B), so long as such individual does not
constitute at any time more than one-third of the total number of
directors serving on such Board.
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(e) For purposes of this Agreement "just cause" shall mean and
include:
(i) Executive's breach of any provisions of this
Agreement, or his use of alcohol or drugs which interferes
with the performance of his duties hereunder or which
compromises the integrity and reputation of the Company, its
employees, and products;
(ii) Executive's conviction by a court of law, or
admission that he is guilty, or a felony or other crime
involving moral turpitude;
(iii) Executive's absence from his employment other
than as a result of Section 7 hereof, for whatever cause, for
a period of more than one (1) month, without prior written
consent from the Company;
(iv) Executive becomes incompetent or is reasonably
unable to undertake and discharge the duties and
responsibilities of his position; or
(v) Executive's gross negligence, willful malfeasance
or fraud or dishonesty in performing has services on behalf of
the Company pursuant to this Agreement.
11. Payments for Control Termination. In the event of a Control
Termination of this Agreement, the Company shall pay Executive and provide him
with the following:
(a) During the remainder of the Basic Employment Period, the Company
shall continue to pay Executive his Base Salary at the same rate as
payable immediately prior to the date of termination plus the estimated
amount of any bonuses to which he would have been entitled had he
remained in the employ of the Company and a change in control of the
Company had not occurred.
(b) During the remainder of the Basic Employment Period, Executive
shall continue to be treated as an employee under the provisions of all
incentive compensation arrangements applicable to the Company's
executive employees. In addition, Executive shall continue to be
entitled to all benefits and service credits for benefits under
medical, insurance and other employee benefit plans, programs and
arrangements of the Company as if he were still employed under this
Agreement and a change in control of the Company had not occurred.
(c) If, despite the provisions of paragraph (b) above, benefits
under any employee benefit plan shall not be payable or provided under
any such plan to Executive, or his dependents, beneficiaries and
estate, because he is no longer an employee of the Company, the Company
itself shall, to the extent necessary, pay or provide for payment of
such benefits and service credits for such benefits to Executive, his
dependents, beneficiaries and estate.
(d) If, despite the provisions of paragraph (b) above, benefits or
the right to accrue further benefits under any stock option or other
incentive compensation arrangement
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shall not be provided under any such arrangement to Executive, or his
dependents, beneficiaries and estate, because he is no longer an
employee of the Company, the Company shall, to the extent necessary,
pay or provide for payment of such benefits to Executive, his
dependents, beneficiaries and estate.
12. Severance Allowance. In the event of a Control Termination of
this Agreement, Executive may elect, within 60 days after such Control
Termination, to be paid a lump sum severance allowance, in lieu of the
termination payments provided for in Section 11 above, in an amount which is
equal to the sum of the amounts determined in accordance with the following
clauses (a) and (b):
(a) an amount equivalent to salary payments for 60 calendar months
at the rate of Base Salary which he would have been entitled to receive
in accordance with Section 5(a); and
(b) an amount equivalent to 60 calendar months of bonus at the
greater of (i) the monthly rate of the bonus payment for the annual
bonus period immediately prior to this termination date, or (ii) the
monthly rate of the estimated amount of the bonus for the annual bonus
period which includes his termination date.
In the event that Executive makes an election pursuant to this Section
to receive a lump sum severance allowance of the amount described in clauses (a)
and (b), then, in addition to such amount, he shall receive (i) in addition to
the benefits provided under any deferred compensation, retirement or pension
benefit plan maintained by the Company, the benefits he would have accrued under
such benefit plan if he had remained in the employ of the Company and such plan
had remained in effect for 60 calendar months after his termination, which
benefits will be paid concurrently with, and in addition to, the benefits
provided under such benefit plan, and (ii) the employee benefits (including, but
not limited to, coverage under any medical insurance and life insurance
arrangements or programs) to which he would have been entitled under all
employee benefit plans, programs or arrangements maintained by the Company if he
had remained in the employ of the Company and such plans, programs or
arrangements had remained in effect for 60 calendar months after his
termination; or the value of the amounts described in clauses (i) and (ii) next
preceding. The amount of the payments described in the preceding sentence shall
be determined and such payments shall be distributed as soon as it is reasonably
possible.
13. Tax Indemnity Payments. (a) Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment
or distribution by the Company or its affiliated companies to or for the benefit
of Executive paid or payable or distributed or distributable pursuant to the
terms of the Agreement (but determined without regard to any additional payments
required under this Section 13, a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (as amended the
"Code"), or any successor provision (collectively, "Section 4999"), or any
interest or penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including,
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without limitation, any Federal, state or local income and employment taxes and
Excise Tax (and any interest and penalties imposed with respect to any such
taxes) imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 13(c), all determinations
required to be made under this Section 13, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
public accounting firm (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive within fifteen (15)
business days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 13, shall be paid by the Company to Executive within five (5) days of
the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion that failure to report the Excise Tax on
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 at the time of the initial
determination by the Accounting Firm hereunder, it is possible that adjustments
may be determined at any time of Gross-Up Payments which should have been made
by the Company ("Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to
Section 13(c) and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require a change in the
amount of the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable after Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid; provided that the failure to
give any notice pursuant to this Section 13(c) shall not impair Executive's
rights under this Section 13 except to the extent the Company is materially
prejudiced thereby. Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which Executive gives such notice to
the Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall:
(1) give the Company any information reasonably requested by
the Company relating to such claim,
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(2) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order
effectively to contest such claim, and
(4) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax or income, employment or
other tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 13(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct Executive to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided further, that if the Company
directs Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to Executive on an interest-free basis and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income, employment or other tax (including interest or penalties
with respect to any such taxes) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 13(c), Executive becomes entitled to receive, and
receives, any refund with respect to such claim, Executive shall (subject to the
Company's complying with the requirements of Section 12(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 13(c), a determination is
made that Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
14. Payment for Options and Stock. In the event of a Control
Termination of this Agreement, Executive may also elect, within sixty (60) days
after such Control Termination, to receive a lump sum payment form the Company
in return for surrender by the Executive of all or any
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portion of the options then outstanding held by the Executive to purchase shares
of common stock of the Company ("Unexercised Options"), all or any portion of
the units or rights credited to Executive in any deferred compensation plan
payable in Common Stock ("Deferred Compensation Units") and all or any portion
of the common stock of the Company then owned by Executive (the "Owned Stock").
For purposes of this provision, Unexercised Options shall include all
outstanding options whether or not they are exercisable at the time of the
election by Executive hereunder. For each Unexercised Option to purchase one
share of common stock, the Company shall pay to Executive an amount equal to the
highest per share fair market value of the common stock on any day during the
period beginning six (6) months prior to the date of Executive's election
pursuant to this Section, less the applicable exercise price per share with
respect to such Unexercised Option. For each share of Owned Stock or Deferred
Compensation Unit, the Company shall pay to Executive the highest fair market
value per share of the common stock on any date during the period beginning six
(6) months prior to the date of Executive's election pursuant to this Section.
The payment due from the Company pursuant to this Section shall be made to
Executive within ten (10) days after the date of his election hereunder, against
execution and delivery by Executive to the Company of an appropriate agreement
confirming his surrender of the Unexercised Options and Deferred Compensation
Units and the certificates duly endorsed by Executive for the Owned Stock.
15. Character of Termination Payments. The amounts payable to Executive
upon any termination of this Agreement 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. 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.
16. Right of First Refusal to Purchase Stock. Executive agrees that the
Company shall have throughout the Basic Employment Period the right of first
refusal to purchase all or any portion of the shares of the Company's common
stock owned by him (the "Shares") at the following price:
(a) in the event of a bona fide offer for the Shares, or any part
thereof, received by Executive from any other person (a "Third Party
Offer"), the price to be paid by the Company shall be the price set
forth in such Third Party Offer; and
(b) in the event Executive desires to sell the Shares, or any part
thereof, in the public securities market, the price to be paid by the
Company shall be the last sale price quoted on the New York Stock
Exchange (or any other exchange or national market system upon which
price quotations for the Company's common stock are regularly
available) for the Company's common stock on the last business day
preceding the date on which Executive notifies the Company of such
desire.
In the event Executive shall receive a Third Party Offer which he
desires to accept, he shall deliver to the Company a written notification of the
terms thereof and the Company shall have a period of 48 hours after such
delivery in which to notify Executive of its desire to exercise its right of
first refusal hereunder.
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In the event Executive desires to sell any portion of the Shares in the
public market he shall deliver to the Company a written notification of the
amount of Shares he desires to sell, and the Company shall have a period of 24
hours after such delivery to notify Executive of its desire to exercise its
right of first refusal hereunder with respect to such amount of Shares.
Upon each exercise by the Company of its right of first refusal
hereunder, it shall make payment to Executive for the Shares in accordance with
standard practice in the securities brokerage industry. After each failure by
the Company to exercise its right of first refusal hereunder, Executive may
proceed to complete the sale of Shares pursuant to the Third Party Offer or in
the open market in accordance with his notification to the Company, but his
failure to complete such sale within two weeks after his notification to the
Company shall reinstate the Company's right of first refusal with respect
thereto and require a new notification to the Company.
17. Arbitration of All Disputes. Any controversy or claim arising out
of or relating to this Agreement or the breach thereof, shall be settled by
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. In the
event that it shall be necessary or desirable for Executive to retain legal
counsel and/or incur other costs and expenses in connection with the enforcement
of any and all of his rights under this Agreement, the Company shall pay (or
Executive shall be entitled to recover from he Company, as the case may be) his
reasonable attorneys' fees and costs and expenses in connection with the
enforcement of any arbitration award in court, regardless of the final outcome,
unless the arbitrators shall determine that under the circumstances recovery by
Executive of all or a part of any such fees and costs and expenses would be
unjust.
18. 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 Chief
Executive Officer, in the case of the Company.
19. 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.
20. Entire Agreement. This instrument contains the entire agreement of
the parties and supersedes all prior agreements between them. 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.
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21. 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 and 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 nor
delegate any of its rights or obligations hereunder without the prior written
consent of the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSECO, INC.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------
Xxxxxxx X. Xxxxxxx
Chairman of the Board
"Company"
/s/ XXXXXX X. XXXXXX
-----------------------
Xxxxxx X. Xxxxxx
"Executive"
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