Exhibit 10.5
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT, dated as of the 27th day of May, 2003, is
between CONSECO, INC., a Delaware corporation ("Company"), and William J. Shea
("Executive").
WHEREAS Executive and Conseco, Inc., an Indiana corporation ("Old Conseco")
previously entered into an agreement dated September 10, 2001, which was
subsequently replaced by an Amended Employment Agreement dated June 1, 2002,
whereby Executive was employed in the capacity as the President, Chief Operating
Officer and acting Chief Financial Officer of Old Conseco; and
WHEREAS Executive was promoted as Old Conseco's Chief Executive Officer
effective as of November 19, 2002; and
WHEREAS Old Conseco filed a voluntary petition under the provisions of
Chapter 11 of Title 11 of the United States Code with the United States
Bankruptcy Court for the Northern District of Illinois on or about December 17,
2002; and
WHEREAS the retention of Executive as Chief Executive Officer and President
of the Company is vital to the success of the reorganization; and
WHEREAS the Company desires to employ Executive as its Chief Executive
Officer and President upon the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration 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 "Effective Date" as defined in the document commonly known as "Reorganizing
Debtors' Second Amended Joint Plan of Reorganization Pursuant to Chapter 11 of
the United States Bankruptcy Code", dated March 18, 2003, as amended, as filed
in the bankruptcy case of Old Conseco (the "Bankruptcy Plan") (the "Effective
Date"). If the Effective Date does not occur, this Agreement shall be null and
void and have no force or effect, and Executive shall have no rights hereunder
and shall have no claims against the Company relating to this Agreement or
arising out of or relating to the failure of the Agreement to become effective.
Subject to the provisions for termination as provided in Section 10 hereof and
to any extension to which the parties may hereafter agree, 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 and it
shall thereafter be automatically renewed for an indefinite number of one (1)
year periods unless either party sends written notice to the other party of its
intention not to renew at least ninety (90) days prior to expiration of said
term. If the election not to renew is made, Executive's employment hereunder
shall continue for the remaining original term ending on the third anniversary
of the Effective Date, or any extension periods thereafter if the original term
is
renewed, subject to the provisions for termination as provided in Section 10
hereof. Notwithstanding anything to the contrary, Executive shall have the right
to terminate his employment for any reason during a sixty (60) day period
beginning on each anniversary of the Effective Date. The original term ending on
the third anniversary of the Effective Date and any extension periods thereafter
are hereinafter collectively referred to as the "Term." 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 Chief Executive Officer and President. Executive shall report
solely and directly to the Board of Directors of the Company (the "Board"), it
being understood that, from time to time, as appropriate, Executive will consult
with and advise the Non-Executive Chairman of the Board with respect to matters
relating to the businesses and operations of the Company and its subsidiaries.
Executive shall be a member of the Board during the entire Term.
4. Extent of Services. During the Term, subject to the direction and
control of the Board, Executive shall have the power and authority commensurate
with his officer status and necessary to perform his duties hereunder. During
the Term, 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, 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; and provided
further that Executive may continue to serve on the board of Demoulas
Supermarkets, Inc. and, if elected, the Board of Directors of AIG Sun America
Funds beginning in 2004, provided that such service does not materially
interfere with the performance of his duties under this Agreement. For purposes
of this Agreement, full-time employment shall be the normal work week for
individuals in comparable officer positions with 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 One
Million Dollars ($1,000,000) per year payable in equal installments in
accordance with the Company's payroll procedure for its salaried
executives. Salary payments and other payments under this Agreement shall
be subject to withholding of taxes and other appropriate and customary
amounts. Executive and the Company shall review the Base Salary on or
before January 31 of each year during the Term hereof, and Executive may
receive increases in his Base Salary from time to time, based upon his
performance, subject to approval of the Compensation Committee of the
Board.
(b) In addition to Base Salary, Executive will have an opportunity to
earn a bonus each year as determined by the Compensation Committee or the
Board, with a target
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annual bonus equal to one times Executive's Base Salary (the "Target
Bonus") and a maximum annual bonus of two times his Base Salary with
respect to any calendar year. The Target Bonus will be based on financial
and other objective targets that the Compensation Committee or the Board
reasonably believes are reasonably attainable at the time that they are
set.
(c) The Company shall provide to Executive, and, as soon as
practicable after the Effective Date, the Company, Conseco Services, LLC,
CIHC, Incorporated and their successors and assigns shall guarantee payment
of a nonqualified supplemental retirement benefit (the "Supplemental
Retirement Benefit"). The Supplemental Retirement Benefit shall provide for
annual payments in an amount equal to Five Hundred Thousand Dollars
($500,000) per year commencing February 9, 2013, and continuing until the
later of the death of Executive or his spouse, Susan McConologue Shea,
payable in such periodic installments as Executive or, if Executive is
deceased, Susan McConologue Shea shall reasonably direct. The Supplemental
Retirement Benefit shall not be reduced, suspended, or otherwise affected
as a result of any termination of Executive's employment. The Company shall
provide Executive with evidence of the guaranty by Conseco Services, LLC
and CIHC, Incorporated.
(d) Executive is currently entitled to an immediate cash bonus of One
Million Dollars ($1,000,000) on the Effective Date under Old Conseco's
Senior Management Key Employee Retention Program (the "KERP Bonus"). The
KERP Bonus shall be paid in cash on the Effective Date pursuant to the
terms of the Senior Management Key Employee Retention Program.
(e) On the Effective Date, Executive shall receive an option (the
"Initial Option") to purchase one-half of one percent (0.5%) of the common
equity of the Company issued and outstanding immediately after the
consummation of the Bankruptcy Plan (determined without regard to any
options or restricted stock granted to employees of the Company as of the
Effective Date), with an exercise price at a plan value based on a Three
Billion Eight Hundred Million Dollar ($3.8 billion) valuation of the
Company. In addition, effective as of the Effective Date, Executive shall
receive a number of shares of restricted stock (the "Initial Restricted
Stock") equal to one-half of one percent (0.5%) of the common equity of the
Company issued and outstanding immediately after the consummation of the
Bankruptcy Plan (determined without regard to any options or restricted
stock granted to employees of the Company as of the Effective Date).
Subject to Sections 7 and 11 hereof, the Initial Option and the Initial
Restricted Stock shall be granted to Executive under, and governed by the
terms and conditions of the 2003 Long-Term Equity Incentive Plan; provided
that the options under the Initial Option shall vest and the restrictions
on the Initial Restricted Stock shall lapse in twenty-five percent (25%)
increments on the first four anniversaries of the Effective Date so long as
Executive has remained an employee through each such anniversary.
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(f) Subject to Executive providing the Board with reasonably
sufficient documentation of the previous approval by Old Conseco's board of
directors increasing Executive's base salary on and after November 19, 2002
in conjunction with Executive's promotion to Chief Executive Officer, on
the Effective Date the Company shall pay Executive a cash lump sum payment
equal to Two Hundred Fifty Thousand Dollars ($250,000) multiplied by a
fraction, the numerator of which is the number of days from November 19,
2002 through the Effective Date and the denominator of which is Three
Hundred Sixty Five (365).
6. Fringe Benefits. During the Term:
(a) Executive shall be entitled to participate in such existing
executive benefit plans and insurance programs offered by the Company, or
which it may adopt from time to time, for its executive management or
supervisory personnel generally, in accordance with the eligibility
requirements for participation therein. Nothing herein shall be construed
so as to prevent the Company from modifying or terminating any executive
benefit plans or programs, or executive fringe benefits, that it may adopt
from time to time.
(b) 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.
(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 at its expense maintain a term life insurance
policy or policies on the life of Executive with a face amount of One
Million Five Hundred Thousand Dollars ($1,500,000), payable to such
beneficiaries as Executive may designate. Executive may, at his expense,
purchase additional insurance at the time the Company purchases said policy
or policies. In the event Executive terminates employment for any reason,
Executive shall have the right, at his expense, to begin paying the
premiums required to continue such insurance coverage from and after the
date of his termination.
(f) The Company shall, upon periodic presentation of satisfactory
evidence and up to a maximum of Ten Thousand Dollars ($10,000) per year,
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).
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
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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 immediately shall, subject to Section 22 hereof, pay
Executive a cash lump sum 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) one and one-half (1.5) times his annual Base Salary, less
applicable taxes, for the most recent fiscal year then ended and (iii) all other
unpaid amounts to which Executive has become entitled under this Agreement. In
addition, the Initial Option shall fully vest and the restrictions on any
restricted stock issued pursuant to the Initial Restricted Stock shall fully
lapse as of the date of termination. No such payment of items (i) through (iii)
and no such accelerated vesting of the stock options and or lapsing of
restrictions on restricted stock shall be required if such disability arises
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 sickness. If Executive's
employment is terminated as a result of disability in accordance with the terms
of this paragraph and payment of amounts under (i), (ii) and (iii) above is made
or precluded pursuant to the preceding sentence, Executive shall not be entitled
to any additional amounts under Section 11 hereof.
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
subsidiaries 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 subsidiaries 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 subsidiaries 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 subsidiaries are of a
special and unusual character, with a unique value to the Company and its
subsidiaries, 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
subsidiaries 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
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additional benefits stated herein, and other good and valuable consideration,
Executive covenants and agrees that throughout the period Executive remains
employed hereunder 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 subsidiaries with respect to lines
of business that the Company and its subsidiaries derive more than a
non-incidental portion of their revenue from or with respect to which the
Company and its subsidiaries 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 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. 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 and Executive may terminate his employment for "good reason" pursuant
to Section 10(c) below. Executive's employment shall also terminate upon
(i) the death of Executive, (ii) termination by the Company after
disability of Executive pursuant to Section 7, (iii) non-renewal by the
Company or Executive in accordance with Section 2 or (iv) termination by
Executive for any reason during a sixty (60) day period beginning on any
anniversary of the Effective Date.
(b) (i) The Company may terminate Executive's employment at any time
for "just cause."
For purposes of this Agreement "just cause" shall mean:
(A) a material breach by Executive of this Agreement or willful
malfeasance or fraud or dishonesty of a substantial nature in
performing Executive's services on behalf of the Company, 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;
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(B) Executive's use of alcohol or drugs (other than drugs
prescribed to Executive by a physician and used by Executive for their
intended purpose for which they had been prescribed) which materially
and repeatedly interferes with the performance of his duties hereunder
or which results in material and tangible damage to the reputation of
the Company;
(C) Executive's conviction by a court of law, or admission that
he is guilty, of a felony or other crime involving moral turpitude; or
(D) Executive's unexcused absence from his employment duties
other than as a result of disability, for whatever cause, for a period
of more than 30 consecutive days, without prior consent from the
Company.
(ii) The Company may not terminate Executive's employment for "just
cause" unless:
(A) the Company provides Executive with at least thirty (30) days
advance written notice (the "Notice of Consideration") of its intent
to consider termination of Executive's employment for "just cause,"
including a description of the specific reasons which form the basis
for such consideration;
(B) for a period of not less than fifteen (15) days after the
date Notice of Consideration is provided, Executive shall have the
opportunity to appear before the Board, with or without legal
representation, at Executive's election, to present arguments and
evidence on his own behalf; and
(C) following the presentation to the Board as provided in (B)
above or Executive's failure to appear before the Board at a date and
time specified in the Notice of Consideration (which date shall not be
less than fifteen (15) days after the date the Notice of Consideration
is provided), Executive may be terminated for "just cause" only if the
Board, by the affirmative vote of all of its members (excluding
Executive), determines that the actions or inactions of Executive
specified in the Notice of Consideration occurred, that such actions
or inactions constitute "just cause," and that Executive's employment
should be terminated for "just cause."
No termination of employment shall be deemed a termination by the
Company for "just cause" unless the Company complies with the
requirements of this Section 10(b)(ii). 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.
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(c) Executive may terminate his employment at any time with "good
reason"; provided, however, that Executive may not terminate his employment
during the one year period immediately following the Effective Date due to
"good reason" as a result of a violation of Section 10(c)(i), but Executive
may terminate his employment at any time following such one-year period for
"good reason" as a result of an event described in Sections 10(c)(i), even
where such "good reason" occurs during such one-year period. For purposes
of this Agreement, "good reason" shall mean the occurrence of any of the
following during the Term:
(i) any diminution in the nature or scope of Executive's
authority, duties, responsibilities from those Executive had as of the
date hereof; or
(ii) a failure to nominate, elect and maintain Executive as sole
President and Chief Executive Officer and as a member of the Board; or
(iii) the appointment of a Chairman of the Board (other than a
Chairman who is not an executive or an officer) without Executive's
consent; or
(iv) causing or permitting any person other than Executive to
present and recommend the business plan to the Board (it being
understood, however, that Executive shall consult with the
Non-Executive Chairman of the Board in connection with Executive's
development and presentation of the business plan); or
(v) causing or requiring Executive to report to anyone other than
the full Board (subject to Section 3 hereof); or
(vi) causing or permitting any officer of the Company or any
Subsidiary (other than the Company's internal auditors) to report to
the Board or the Non-Executive Chairman of the Board (it being
understood that the members of the Board (including the Non-Executive
Chairman) shall at all times have the right to require presentations
and reports or other information from any employee of the Company or
any Subsidiary); or
(vii) reducing the hiring or firing authority of Executive as in
effect as of the date hereof (it being understood, however, that
Executive shall consult and collaborate with the Board and the
Non-Executive Chairman of the Board prior to the hiring or firing of
any senior manager of the Company or any Subsidiary); or
(viii) requiring relocation without the consent of Executive; or
(ix) the reduction or elimination of compensation or benefits
provided for under this Agreement; or
(x) a Change in Control occurs and, following Executive's written
request made prior to the Change in Control, the ultimate parent
entity or entities directly or indirectly gaining control of a
majority of the Company's Board or outstanding securities entitled to
vote with respect to the Company's Board fails
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to affirm and guarantee the Company's current and future obligations
under this Agreement; or
(xi) any material breach of any provision of this Agreement by
the Company which is not remedied by the Company within thirty (30)
days after receipt of written notice from Executive specifying such
breach.
(d) The term "Control Termination" as used herein shall mean (A)
termination of Executive's employment by the Company for any reason other
than (x) death, (y) disability under Section 7, or (z) for "just cause," in
anticipation of or not later than two years following a "Change in Control"
of the Company (as defined below), or (B) termination of Executive's
employment by Executive following a "Change in Control" of the Company (as
defined below) upon the occurrence of any of the events specified in
Section 10(c) constituting "good reason" not later than two years following
a Change in Control.
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" (as defined below)) 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 representing 51% or more of the
combined voting power of the then outstanding securities of the Company
entitled to vote generally with respect to the election of the board of
directors of the Company; provided, however, that following a transaction
that results in an Ultimate Parent (as defined below), the references to
the Company in this clause (i) shall also be deemed to refer to such
Ultimate Parent; or
(ii) as a result of or in connection with a tender or exchange offer
or contest for election of directors, individual board members of the
Company (identified as of the date of commencement of such tender or
exchange offer, or the commencement of such election contest, as the case
may be) cease to constitute at least a majority of the board of directors
of the Company; or
(iii) the consummation of a merger, consolidation or reorganization
with or into the Company unless (x) the stockholders of the Company
immediately before such transaction beneficially own, directly or
indirectly, immediately following such transaction securities representing
51% or more of the combined voting power of the then outstanding securities
entitled to vote generally with respect to the election of the board of
directors of the Company (or its successor) or, if applicable, the Ultimate
Parent and (y) individual board members of the Company (identified as of
the date that a binding agreement providing for such transaction is signed)
constitute at least a majority of the board of directors of the Company (or
its successor) or, if applicable, the Ultimate Parent (a transaction to
which clauses (x) and (y) apply, a "Non-Control Transaction").
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For purposes of this Agreement, "Ultimate Parent" shall mean the parent
corporation (or if there is more than one parent corporation, the ultimate
parent corporation) that, following a transaction, directly or indirectly
beneficially owns a majority of the voting power of the outstanding
securities entitled to vote with respect to the election of the board of
directors of the Company (or its successor).
(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 the Board and from all other positions that
Executive may then hold with the Company and any of its subsidiaries;
provided that such deemed resignation shall not adversely affect
Executive's rights to compensation or benefits under this Agreement.
11. Payments Following Termination.
(a) In the event Executive's employment is terminated by the Company
for "just cause" as so defined or if Executive voluntarily resigns (other
than where such resignation (i) is for "good reason," (ii) is due to
nonrenewal of the Term or (iii) is a termination pursuant to Section
10(a)(iv) hereof), then, subject to Section 22 hereof, (A) the Company
immediately shall pay Executive a cash payment of his Base Salary as
provided in Section 5(a) hereof earned but unpaid as of the date of
termination plus the bonus payable pursuant to Section 5(d) hereof (to the
extent not already paid); (B) no restrictions that remain as to any shares
of restricted stock shall lapse after the date of termination, and
Executive shall forfeit any still-restricted shares to the Company; and (C)
no option previously awarded but not yet vested shall vest after the date
of termination, and all previously awarded, vested options shall terminate
unless exercised on or prior to the date of termination.
(b) In the event Executive's employment is terminated by the death of
Executive, then, subject to Section 22 hereof, the Company immediately
shall pay Executive's estate a cash lump sum payment equal to (i) one times
his annual Base Salary as provided in Section 5(a) hereof, less applicable
taxes, for the most recent fiscal year then ended, (ii) his Base Salary as
provided in Section 5(a) hereof earned but unpaid as of the date of
termination plus the bonus payable pursuant to Section 5(d) hereof (to the
extent not already paid) and (iii) and all other unpaid amounts to which
Executive has become entitled under this Agreement. In addition, the
Initial Option shall fully vest and the restrictions on the Initial
Restricted Stock shall fully lapse as of the date of termination.
(c) In the event Executive's employment is terminated (i) by the
Company without "just cause," (ii) by Executive with "good reason" or (iii)
by the Company due to non-renewal pursuant to Section 2 hereof, then,
subject to Section 22 hereof, (A) the Company will pay Executive an
immediate cash payment equal to Six Million Two Hundred Fifty Thousand
Dollars ($6,250,000) plus the bonus payable pursuant to Section 5(d) (to
the extent not already paid); (B) the Company immediately shall pay
Executive a cash payment equal to his Base Salary as provided in Section
5(a) hereof earned but unpaid as of the date of termination and all unpaid
amounts to which Executive has become entitled under this Agreement; (C)
any options to purchase shares pursuant to the Initial Option shall vest
and restrictions on the shares under the Initial Restricted Stock
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shall lapse in accordance with the second from last sentence of this
paragraph; (D) the Company shall pay Executive, at such time as annual
bonus payments are paid to senior executives of the Company, a cash payment
equal to a pro-rata portion of Executive's annual bonus (described in
Section 5(b) hereof) for the year in which Executive's termination occurs
determined by multiplying the greater of (i) the annual bonus to which
Executive would have been entitled had he remained employed by the Company
for the entirety of the calendar year (based on the actual results of the
Company) (and all prerequisites that Executive remain employed through the
date such bonuses are paid shall be deemed satisfied) and (ii) Five Hundred
Thousand Dollars ($500,000) by a fraction, the numerator of which is the
number of days Executive was employed by the Company in the calendar year
in which the date of termination occurs and the denominator of which is
three hundred sixty-five (365); and (E) Executive and his covered
dependents will continue to participate (at the Company's expense) in the
Company's health benefits for a period of twenty-four (24) months after the
date of termination. Executive and his covered dependents shall have the
option to continue health benefits after such twenty-four (24) month period
in accordance with Section 4980B of the Internal Revenue Code ("COBRA") by
paying directly to the Company an amount equal to the cost charged to
active employees for such benefits. In addition, (i) if such termination
occurs on or after the Effective Date and prior to the first anniversary of
the Effective Date, the Initial Option shall immediately vest, and the
restrictions that apply to the Initial Restricted Stock shall immediately
lapse, in each case as to a number of shares determined by multiplying the
total number of shares subject to each such award by a fraction, the
numerator of which is three hundred sixty-five (365) plus the number of
days on and following the Effective Date during which Executive was
employed by the Company and the denominator of which is one thousand four
hundred sixty (1,460); and (ii) if such termination occurs on or after the
first anniversary of the Effective Date, the Initial Option shall
immediately vest, and the restrictions that apply to the Initial Restricted
Stock shall immediately lapse, in each case to the extent that the Initial
Option would have vested and the restrictions that apply to the Initial
Restricted Stock would have lapsed on the next following anniversary of the
Effective Date if Executive had been employed by the Company continuously
from the Effective Date through such date. Notwithstanding the preceding
provisions of this paragraph, if the termination pursuant to this paragraph
is a "Control Termination," then the Initial Option shall fully vest and
restrictions on the Initial Restricted Stock shall fully lapse.
(d) In the event that Executive's employment is terminated by
Executive for a reason other than "good reason" during a sixty (60) day
period beginning on any anniversary of the Effective Date, then, subject to
Section 22 hereof, (A) (i) if the termination occurs with respect to the
first anniversary of the Effective Date, the Company will pay Executive an
immediate cash payment equal to Two Million Eighty Three Thousand Three
Hundred Thirty Three Dollars ($2,083,333), (ii) if the termination occurs
with respect to the second anniversary of the Effective Date, the Company
will pay Executive an immediate cash payment equal to Four Million One
Hundred Sixty-Six Thousand Six Hundred Sixty-Six Dollars ($4,166,666); and
(iii) if the termination occurs with respect to the third anniversary of
the Effective Date or any anniversary of the Effective Date thereafter, the
Company will pay Executive an immediate cash payment equal to Six Million
Two Hundred Fifty Thousand Dollars ($6,250,000), (B) the
11
Company immediately shall pay Executive a cash payment equal to his Base
Salary as provided in Section 5(a) hereof earned but unpaid as of the date
of termination and all unpaid amounts to which Executive has become
entitled under this Agreement; and (C) any options to purchase shares
pursuant to the Initial Option shall vest through the date of termination
in accordance with Section 5(e) and the restrictions on the Initial
Restricted Stock shall lapse as of the date of termination in accordance
with Section 5(e).
12. Tax Indemnity Payments.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined that the aggregate payments or
distributions by the Company or its affiliated companies to or for the
benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of the Agreement or otherwise but
determined without regard to any additional payments required under this
Section 12 (a "Payment"), constitute "parachute payments" (as such term is
defined under Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") or any successor provision, and the regulations promulgated
thereunder (collectively, "Section 280G")) which exceed three times
Executive's "base amount" (as such term is defined under Section 280G) by
at least One Hundred Thousand Dollars ($100,000) and are therefore subject
to the excise tax imposed by Section 4999 of the Code or any successor
provision (collectively, "Section 4999") or any interest or penalties with
respect to such excise tax (the total excise tax, together with any
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, 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 12(c) hereof, all
determinations required to be made under this Section 12, 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
deemed to be 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 12, shall be paid by the Company to
Executive within five (5) days of the receipt of the Accounting Firm's
determination (it being understood, however, that the Gross Up Payment may,
if permitted by law, be paid directly to the applicable taxing
authorities). If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall furnish Executive
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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
Gross-Up Payments which will not have been made by the Company should have
been made by the Company ("Underpayment"), or that Gross-Up Payments will
have been made by the Company which should not have been made
("Overpayment"), consistent with the calculations required to be made
hereunder. In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the event
that the Company exhausts its remedies pursuant to Section 12(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. In the case of an Overpayment, Executive
shall, at the direction and expense of the Company, take such steps as are
reasonably necessary (including, if reasonable, the filing of returns and
claims for refund), and otherwise reasonably cooperate with the Company to
correct such Overpayment; provided, however, that (i) Executive shall not
in any event be obligated to return to the Company an amount greater than
the net after-tax portion of the Overpayment that he has retained or has
recovered as a refund from the applicable taxing authorities and (ii) this
provision shall be interpreted in a manner consistent with the intent of
Section 12(a) hereof to make Executive whole, on an after-tax basis, from
the application of Section 4999.
(c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require a payment by
the Company, or 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 12(c) shall not impair Executive's rights under
this Section 12 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:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) 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,
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(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) 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 12(c) hereof, 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 sue 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 sue 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 12(c) hereof, 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) hereof) 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 12(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.
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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 subsidiaries upon termination of his
employment (including, without limitation, under Old Conseco's Senior Management
Key Employee Retention Program). 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.
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 incorporation or by-laws of the
Company, (B) the terms of any indenture, contract, lease, mortgage, deed of
trust, note, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which
its property is subject, or (C) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company, or any regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company.
(b) Executive represents and warrants to the Company that: (i) this
Agreement has been duly executed and delivered by Executive and constitutes
a valid and binding obligation of Executive; and (ii) neither the execution
of this Agreement by Executive nor his employment by the Company on the
terms and conditions contained herein will conflict with, result in a
breach or violation of, or constitute a default under any agreement,
obligation, condition, covenant or instrument to which Executive is a party
or bound or to which his property is subject, or any statute, law, rule,
regulation, judgment, order or decree applicable to Executive of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over Executive or any of his property.
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
15
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 the 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.
(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. This instrument contains the entire agreement of the
parties and, effective as of the Effective Date, supersedes all prior agreements
between Executive and Old Conseco, including that certain employment agreement
between Executive and Old Conseco, dated September 10, 2001, as amended and
restated on June 1, 2002. The compensation and benefits to be paid under the
terms of this Agreement are in lieu of all other compensation or benefits to
which Executive is entitled from the Company and its affiliates. 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
16
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. No Third Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not intended to confer
third-party beneficiary rights upon any other person.
21. Expenses of Executive. The Company agrees to reimburse Executive for
all reasonable attorneys' fees he incurred in connection with the preparation
and negotiation of this Agreement, up to Fifteen Thousand Dollars ($15,000).
22. Releases. In connection with any termination of Executive's employment,
Executive and the Company will enter into the General Release in substantially
the form attached hereto as Exhibit A. Notwithstanding anything to the contrary,
no compensation or benefits shall be provided under Sections 7 or 11 of this
Agreement unless Executive (or his estate or legal representative, as
applicable) enters into such General Release and does not revoke it during the
revocation period specified therein.
23. 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.
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written, effective as of the Effective Date.
COMPANY:
CONSECO, INC.
By:/s/Eugene M. Bullis
-------------------------------
Name: Eugene M. Bullis
Its: Executive Vice President and
Chief Financial Officer
EXECUTIVE:
/s/William J. Shea
----------------------------------
William J. Shea
The Conseco Creditors' Committee, as defined in the Bankruptcy Plan (the
"Committee"), acknowledges that it has no objection to this Agreement, it being
understood that the Committee, its members and professionals have no liability
or obligation hereunder, and that the Committee shall continue to have the right
to raise, appear and be heard on any issues in the bankruptcy case of Old
Conseco (including, without limitation, the right to object to the Bankruptcy
Plan), but hereby waives its right to object to or oppose this Agreement, it
being understood that the Committee's objection to the Bankruptcy Plan on any
grounds other than an objection to this Agreement shall not be deemed to be an
objection or opposition to this Agreement.
BANK OF AMERICA, N.A.
By:/s/Bridget Garavalia
------------------------------
Name: Bridget Garavalia
Its: Managing Director
By:/s/David Tepper
------------------------------
Name: David Tepper
Its: Co-Chair
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Exhibit A
GENERAL RELEASE
1. Release of Claims by Executive.
(a) In consideration of the of the payments and benefits to be
provided to William J. Shea ("Executive") pursuant to the employment agreement,
dated __________, 2003, to which Executive and Conseco, Inc. (the "Company"), a
Delaware corporation (the "Company"), are parties (the "Employment Agreement"),
the sufficiency of which is acknowledged hereby, Executive, with the intention
of binding himself and his heirs, executors, administrators and assigns, does
hereby release, remise, acquit and forever discharge the Company and each of its
subsidiaries and affiliates (the "Company Affiliated Group"), their present and
former officers, directors, executives, agents, attorneys and employees, and the
successors, predecessors and assigns of each of the foregoing (collectively, the
"Company Released Parties"), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money,
accounts, financial obligations, suits, expenses, attorneys' fees and
liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected, which Executive, individually or as a
member of a class, now has, owns or holds, or has at any time heretofore had,
owned or held, against any Company Released Party in any capacity, including,
without limitation, any and all claims (i) arising out of or in any way
connected with Executive's service to any member of the Company Affiliated Group
(or the predecessors thereof) in any capacity, or the termination of such
service in any such capacity, (ii) for severance or vacation benefits, unpaid
wages, salary or incentive payments, (iii) for breach of contract, wrongful
discharge, impairment of economic opportunity, defamation, intentional
infliction of emotional harm or other tort, (iv) for any violation of applicable
state and local labor and employment laws (including, without limitation, all
laws concerning unlawful and unfair labor and employment practices) and (v) for
employment discrimination under any applicable federal, state or local statute,
provision, order or regulation, and including, without limitation, any claim
under Title VII of the Civil Rights Act of 1964 ("Title VII"), the Civil Rights
Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act
("ADA"), the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Age Discrimination in Employment Act ("ADEA") and any similar or
analogous state statute, excepting only:
(A) the rights of Executive under the Employment Agreement;
(B) the rights of Executive (i) relating to any stock options and
restricted stock held by Executive as of the date hereof (collectively, the
"Equity Arrangements") and (ii) as a stockholder of the Company;
(C) the right of Executive to receive COBRA continuation coverage
in accordance with applicable law;
(D) rights to indemnification Executive may have under (i)
applicable corporate law, (ii) the by-laws or certificate of incorporation of
any Company Released Party,
(iii) any other agreement between Executive and a Company Released Party or (iv)
as an insured under any director's and officer's liability insurance policy now
or previously in force;
(E) claims for benefits under any health, disability, retirement,
life insurance or other, similar "employee benefit plan" (within the meaning of
Section 3(3) of ERISA) of the Company Affiliated Group (the "Company Benefit
Plans"); and
(F) claims for the reimbursement of unreimbursed business
expenses incurred prior to the date hereof pursuant to applicable Company
policy.
(b) Executive acknowledges and agrees that the release of claims set
forth in this Section 1 is not to be construed in any way as an admission of any
liability whatsoever by any Company Released Party, any such liability being
expressly denied.
(c) The release of claims set forth in this Section 1 applies to any
relief no matter how called, including, without limitation, wages, back pay,
front pay, compensatory damages, liquidated damages, punitive damages, damages
for pain or suffering, costs, and attorney's fees and expenses.
(d) Executive specifically acknowledges that his acceptance of the
terms of the release of claims set forth in this Section 1 is, among other
things, a specific waiver of his rights, claims and causes of action under Title
VII, ADEA, ADA and any state or local law or regulation in respect of
discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything contained herein purport, to be a waiver of any right
or claim or cause of action which by law Executive is not permitted to waive.
(e) Executive shall have a period of 21 days to consider whether to
execute this General Release. If Executive accepts the terms hereof and executes
this General Release, he may thereafter, for a period of 7 days following (and
not including) the date of execution, revoke this General Release. If no such
revocation occurs, this General Release shall become irrevocable in its
entirety, and binding and enforceable against Executive, on the day next
following the day on which the foregoing seven-day period has elapsed. Any
revocation of this General Release shall be deemed for all purposes a revocation
of this General Release in its entirety.
(f) Executive acknowledges and agrees that he has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.
2. Effect of Unenforceability of Release. In addition to any other
remedy available to the Company hereunder, in the event that, as a result of a
challenge brought by an Employee Released Party (as defined below), the release
of claims set forth in Section 1 becomes null and void or is otherwise
determined not to be enforceable, then the Company's obligation to make any
additional payments or to provide any additional benefits under the Employment
Agreement shall immediately cease to be of any force and effect, and Executive
shall promptly return to the Company any payments or benefits the provision of
which by the Company was conditioned on the enforceability of this General
Release.
21
3. Release of Claims by the Company.
(a) The Company, with the intention of binding itself and its
predecessors and successors, does hereby release, remise, acquit and forever
discharge Executive and his heirs, estate, executors, administrators and assigns
(collectively, the "Employee Released Parties"), of and from any and all claims,
actions, causes of action, complaints, charges, demands, rights, damages, debts,
sums of money, accounts, financial obligations, suits, expenses, attorneys' fees
and liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected, which the Company, individually or as a
member of a class, now has, owns or holds, or has at any time heretofore had,
owned or held, against any Employee Released Party, excepting only:
(A) rights of the Company under this General Release, the
Employment Agreement, the Equity Arrangements and the Company Benefit Plans; and
(B) rights of the Company arising by reason of Executive having
committed a crime or an act or omission to act which constitutes willful
misconduct or gross negligence.
(b) The Company acknowledges and agrees that the release of claims set
forth in this Section 3 is not to be construed in any way as an admission of any
liability whatsoever by any Employee Released Party, any such liability being
expressly denied.
(c) The release of claims set forth in this Section 3 applies to any
relief no matter how called, including, without limitation, compensatory
damages, liquidated damages, punitive damages, damages for pain or suffering,
costs, and attorney's fees and expenses.
(d) Nothing herein shall be deemed, nor does anything contained herein
purport, to be a waiver of any right or claim or cause of action which by law
the Company is not permitted to waive.
(e) The Company acknowledges and agrees that it has not, with respect
to any transaction or state of facts existing prior to the date hereof, filed
any complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.
4. Counterparts. This General Release 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.
5. Successors. This General Release shall be binding upon any and all
successors and assigns of Executive and the Company.
6. Governing Law. Except for issues or matters as to which federal law
is applicable, this General Release shall be construed in accordance with and
governed by the laws of the State of Indiana.
22
IN WITNESS WHEREOF, this General Release has been signed by or on behalf of each
of the Parties, all as of _______________.
CONSECO, INC.
- ---------------------------- ----------------------------------
William J. Shea By:
Its:
Dated: Dated:
---------------------- ----------------------------
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