Exhibit 10.36
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of the 13th day of July, 2005 is
between Conseco Services, LLC, an Indiana limited liability company ("Company"),
and Xxxxxx X. Xxxxxxx ("Executive").
WHEREAS, the services of Executive and his managerial and professional
experience are of value to the Company.
WHEREAS, the Company desires to continue to have the benefit and advantage
of the services of Executive for an extended period to assist the Company and
Conseco, Inc. ("Conseco") 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 the Effective Date and
ending on the third anniversary of the Effective Date. The term of Executive's
employment shall be automatically renewed for successive one-year terms on July
13, 2008 and each succeeding July 13 unless either party elects not to renew
this Agreement by serving written notice of such election not to renew on the
other party at least 90 days prior to such July 13. As used in this Agreement,
the "Term" is the period ending on July 13, 2008 or, if this Agreement has been
renewed, the one-year period relating to the last renewal. The Term shall end
upon the termination of Executive's employment with the Company.
3. Duties. During the Term, Executive shall be engaged by the Company in
the capacity of Executive Vice President, Chief Operations Officer of Conseco
Insurance Group, and shall have responsibility for management of the day-to-day
operations of Conseco Insurance Group. Executive shall report to the President
of Conseco Insurance Group regarding the performance of his duties.
4. Extent of Services. During the Term, subject to the direction and
control of the President of Conseco Insurance Group and the President 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, subject to Section 9 hereof, 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 nonsolicitation provisions of
Section 9 hereof); provided, however, that corporate organizations shall be
limited to those which Executive presently serves, if any, as listed on Exhibit
A and such others as 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 Three
Hundred Twenty-Five Thousand Dollars ($325,000) per year payable in equal
installments in accordance with the Company's payroll procedure for its
salaried executives, provided, however, that Executive's Base Salary shall
increase to Four Hundred Thousand Dollars ($400,000) per year after
Executive acquires residential housing in the Indianapolis/Carmel area
which he utilizes as his primary residence (the "Relocation Effective
Date"). 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 50% of Executive's Base Salary (the "Target Bonus") and a
maximum annual bonus of 100% 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, provided, however, that
Executive's Target Bonus shall increase to 100% of Executive's Base Salary
with a maximum annual bonus of 200% of Executive's Base Salary after the
Relocation Effective Date. For purposes of clarification, annual executive
bonuses are generally paid in March 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, (i) Executive's 2005 bonus
(payable in 2006) will be calculated on a pro rata basis based on the
number of days in 2005 prior to the Relocation Effective Date and the
number of days from and after the Relocation Effective Date (taking into
account his Target Bonus percentage for each respective period in 2005) and
(ii) a pro-rata portion of the 2008 bonus (or a pro-rata portion of the
applicable bonus in any year this Agreement is not renewed) will be paid at
the same time that similar payments are made to other Company executives if
Executive remains employed through the end of the Term. The Target Bonuses
will be based on financial and other objective targets that the Company
believes are reasonably attainable at the time that they are set.
(c) As soon as reasonably practicable after the Relocation Effective
Date, Executive will receive an award of options to purchase 30,000 shares
of common stock with an exercise price equal to the fair market value on
the date of the grant and an award of 10,000 shares of restricted stock.
One hundred percent (100%) of the options will vest over a 4-year period
beginning on the date of the grant of the equity awards (the "Grant Date"),
with one-fourth vesting on each anniversary of the Grant Date. Fifty
percent (50%) of the restricted stock will vest on the second anniversary
of the Grant Date, with
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the other fifty percent (50%) vesting on the third anniversary of the Grant
Date. Executive shall also be eligible to participate in and receive future
grants under any stock option or equity-based program offered by Conseco to
executives of similar title and responsibility, if any, subject to the
discretion of the Board of Directors of Conseco (the "Board").
(d) Executive agrees to secure residential housing in the
Indianapolis/Carmel area, as soon as reasonably practicable after the
Effective Date, which he shall utilize as his primary residence. The
Company shall reimburse Executive for relocation expenses, with
reimbursement of (i) the first $60,000 to be paid in cash as soon as
reasonably practical after the Relocation Effective Date, (ii) up to
$35,000 based on a 7% commission on the sale of his current primary
residence to be paid in cash after Executive notifies the Company of such
sale and provides applicable documentation and (iii) up to $15,000 for
packing and transporting household possessions by a national van line to be
paid in cash after Executive provides applicable documentation of such
cost; provided, however, if Executive voluntarily resigns from employment
with the Company (other than With Reason) prior to the second anniversary
of the Relocation Effective Date, Executive shall repay the Company all
such relocation expenses reimbursed or otherwise paid by the Company.
Executive shall not be entitled to reimbursement of any amount set forth
above unless the Relocation Effective Date is on or before September 15,
2005.
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
(including, without limitation, any group life, medical, dental, accident
or disability insurance programs and any pension, profit sharing,
retirement, deferred compensation or savings program), 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).
7. Disability. 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 confirmed by competent
medical evidence) continues for at least six (6) consecutive months, the
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Company may terminate Executive's employment hereunder, in which case the
Company immediately shall pay Executive a cash payment equal to (i) his annual
Base Salary as provided in Section 5(a) hereof to the extent earned but unpaid
as of the date of termination, (ii) a pro-rata portion of the Target Bonus for
the year in which his disability occurs plus the Target Bonus for the preceding
year if his disability occurs after year-end but before such bonuses are paid
and (iii) the amounts payable pursuant to Section 5(d) hereof (to the extent not
already paid). However, any options or restricted stock held by Executive on the
date of termination shall vest only through the date of termination according to
the normal vesting schedule applicable to such options or restricted stock and
Executive shall not receive any accelerated or additional vesting of such stock
or options due to termination under this Section 7 on or after such date. No
payments or vesting under this paragraph 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 has been and 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, or (c) must be
disclosed to enable Executive properly to perform his duties under this
Agreement. Upon the termination of Executive's employment, Executive shall
return such 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 Competition and 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
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and for one year thereafter, 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, person or entity that derives a
non-incidental portion of its revenue from the business of selling or providing
annuity, life, accident or health insurance products or services; (ii) in any
manner compete with the Company or any of its affiliates with respect to lines
of business that the Company and its affiliates derive more than a
non-incidental portion of their revenue from or with respect to which the
Company and its affiliates have made a significant investment in; (iii) 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 (iv) solicit for employment or employ any individual
who was employed by the Company or any of its affiliates during the term of this
Agreement. Notwithstanding the preceding sentence, if the Company terminates
Executive for Just Cause (as defined in Section 10(b) of this Agreement), the
provisions of clauses (i) and (ii) of the preceding sentence will not apply.
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.
(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 non renewal of the
Agreement, (ii) upon the death of Executive, (iii) after disability of
Executive pursuant to Section 7 hereof or (iv) by Executive's termination
of employment With Reason.
(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) a material breach by Executive of this Agreement, (B) a material breach
of Executive's duty of loyalty to the Company or its affiliates, or (C)
willful malfeasance or fraud or dishonesty of a substantial nature in
performing 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;
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(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 or disability,
for whatever cause, for a period of more than ten (10) consecutive days,
without consent from the Company prior to the expiration of the ten (10)
day period; or (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 or Conseco, 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.
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 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 of the Company.
The term "Change in Control" shall mean the occurrence of any of the
following:
(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 Conseco or its Ultimate Parent entitled to
vote generally with respect to the election of the board of directors
of the Company or its 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 Conseco (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
of directors of Conseco; or
(iii) the consummation of a merger, consolidation or
reorganization with or into Conseco unless (x) the stockholders of
Conseco 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 Conseco (or its successor) or,
if applicable,
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the Ultimate Parent and (y) individual board members of Conseco
(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 Conseco (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 Conseco (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) his role or duties have been materially diminished by changes in
responsibilities or authority; (ii) Executive is required to report to
anyone other than the President of Conseco (or such other senior officer of
Conseco or Conseco Insurance Group designated by the President of Conseco);
(iii) Executive is required to relocate his primary office more than 25
miles from Carmel, Indiana, without Executive's consent, (iv) any reduction
in Executive's Base Salary or Target Bonus, 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 Conseco's
Board or outstanding securities entitled to vote with respect to Conseco's
Board fails to affirm and guarantee the Company's current and future
obligations under this Agreement.
(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 Section 11 of this Agreement and shall not affect the
determination of whether Executive's termination was for Just Cause.
11. Payments Following Termination.
(a) In the event that Executive's employment is terminated by the
Company for Just Cause (as defined herein), upon non-renewal by the Company
or Executive, or Executive voluntarily resigns (other than With Reason),
then the Company immediately shall pay Executive a cash payment of his Base
Salary as provided in Section 5(a) hereof that was earned but unpaid as of
the date of termination. If Executive's employment ends upon non-renewal by
the Company or Executive, then Executive shall also be entitled to receive
the applicable bonus under Section 5(b) hereof at the same time that
similar payments are made to other Company executives if Executive remains
employed through the end of the Term. Any options or restricted stock held
by Executive on the date of termination for the reasons set forth in this
Section 11(a) shall vest only through the date of termination according to
the normal vesting schedule applicable to such options or
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restricted stock, and Executive shall not receive any accelerated or
additional vesting of such stock or options on or after such date.
(b) In the event Executive's employment is terminated by the death of
Executive, then the Company shall pay Executive's estate a cash lump sum of
the sum of (i) the remaining payments of Base Salary described in Section
5(a) that would have been payable to Executive through the date of death,
(ii) a pro-rata portion of the Target Bonus for the year in which his death
occurs plus the Target Bonus for the preceding year if his death occurs
after year-end but before such bonuses are paid and (iii) the amounts
payable pursuant to Section 5(d) hereof (to the extent not already paid).
Any options or restricted stock held by Executive on the date of
termination for the reasons set forth in this Section 11(b) shall vest only
through the date of termination according to the normal vesting schedule
applicable to such options or restricted stock, and Executive shall not
receive any accelerated or additional vesting of such stock or options on
or after such date.
(c) In the event that Executive is terminated by the Company without
Just Cause (and other than non-renewal, death, disability or a Control
Termination) or by Executive With Reason, then the Company shall pay
Executive (i) on a basis consistent with the timing of the Company's normal
payroll processing, the remaining payments of Base Salary described in
Section 5(a) that would have been payable to Executive through the date of
his termination of employment, (ii) his Base Salary (in the form of salary
continuation on a pro-rata basis with or without medical and dental
benefits, at the Executive's election and cost) for the 12-month period
following his termination of employment, (iii) a cash lump sum equal to a
pro-rata portion of the Target Bonus for the year in which the date of
termination occurs plus the Target Bonus for the preceding year if
termination occurs after year-end but before such bonuses are paid and (iv)
the amounts payable pursuant to Section 5(d) hereof (to the extent not
already paid). Any options or restricted stock held by Executive on the
date of termination for the reasons set forth in this Section 11(c) shall
vest only through the date of termination according to the normal vesting
schedule applicable to such options or restricted stock, and Executive
shall not receive any accelerated or additional vesting of such stock or
options on or after such date.
(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 (i) on a basis consistent with the timing of the Company's
normal payroll processing, the remaining payments of Base Salary described
in Section 5(a) that would have been payable to Executive through the date
of his termination of employment, (ii) his Base Salary and Target Bonus (in
the form of salary continuation on a pro-rata basis with or without medical
and dental benefits at the cost charged to active employees) for the
12-month period following his termination of employment, (iii) a cash lump
sum equal to a pro-rata portion of the Target Bonus for the year in which
the date of termination occurs plus the Target Bonus for the preceding year
if termination occurs after year-end but before such bonuses are paid and
(iv) the amounts payable pursuant to Section 5(d) hereof (to the extent not
already paid). To the extent that Executive is terminated in a
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Control Termination that occurs in anticipation of a Change in Control, any
options or restricted stock held by Executive shall fully vest, retroactive
to the date of termination, upon the occurrence of the Change in Control.
(e) Notwithstanding anything to the contrary, in the event that
Executive's employment terminates, the Company shall pay to Executive, in
accordance with its standard payroll practice, Executive's accrued
vacation.
(f) Notwithstanding anything to the contrary, payment of severance
under this Agreement is conditioned upon the execution by Executive of a
separation and release agreement in a form acceptable to the Company 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. Change in Control. In the event of a Change in Control, Executive will
be entitled to the full vesting of any options and restricted stock held by
Executive on the date of such Change in Control.
13. 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.
14. 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 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
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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.
15. Arbitration of Disputes; Injunctive Relief.
(a) 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. Each party shall pay its own costs and
expenses incurred in connection with the enforcement of this Agreement,
regardless of the final outcome.
(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. 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.
16. 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.
17. 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.
18. Entire Agreement. Other than any equity award agreements entered into
pursuant to an applicable long-term incentive plan, this instrument contains the
entire agreement of the
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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 Conseco, the
Company, and its affiliates. 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.
19. 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.
20. 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 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.
21. 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.
22. 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.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written, effective as of the Effective Date.
COMPANY:
CONSECO SERVICES, LLC
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
