Exhibit 10.11
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of the 15th day of July, 2004, is
between Conseco Services, LLC, an Indiana limited liability company ("Company"),
and John R. Kline ("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 not be automatically renewed. The term ending on the third
anniversary of the Effective Date is hereinafter 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 Senior Vice President and Chief Accounting Officer of Conseco.
Executive shall report to the Chief Financial Officer of Conseco regarding the
performance of his duties.
4. Extent of Services. During the Term, subject to the direction and
control of the Chief Financial Officer of Conseco and the board of directors of
Conseco (the "Board"), 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 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 Two
Hundred Seventy-Five Thousand Dollars ($275,000) per year payable in equal
installments in accordance with the Company's payroll procedure for its
salaried executives. Salary payments and other payments under this
Agreement shall be subject to withholding of taxes and other appropriate
and customary amounts. Executive may receive increases in his Base Salary
from time to time, based upon his performance, subject to approval of the
Company.
(b) In addition to Base Salary, Executive will have an opportunity to
earn a bonus each year as determined by the Company, with a target annual
bonus equal to 75% of Executive's Base Salary (the "Target Bonus") and a
maximum annual bonus of 150% 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. 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, a pro-rata portion of the 2006 bonus 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 for 2004
and thereafter will be based on financial and other objective targets that
the Company reasonably believes are reasonably attainable at the time that
they are set, with the 2004 targets being based on 2004 agreed-upon budgets
and incentive terms.
(c) As previously approved by the Board, Executive received an award
of options to purchase 100,000 shares of common stock and an award of
50,000 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 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.
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.
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(b) Executive shall be entitled to four weeks of vacation with pay
each year.
(c) Executive may incur reasonable expenses for promoting the
Company's business, including expenses for entertainment, travel, and
similar items. The Company shall reimburse Executive for all such
reasonable expenses upon Executive's periodic presentation of an itemized
account of such expenditures. The Company agrees to pay Executive an
additional amount to cover the incremental additional income taxes incurred
by Executive, if any, with respect to payment or reimbursement of any
reasonable business expenses pursuant to this subsection (c).
(d) In lieu of any insurance on the life of Executive offered by the
Company pursuant to Section 6(a) hereof, the Company shall at its expense
maintain a term life insurance policy or policies on the life of Executive
with a face amount of 100% of Executive's Base Salary, 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.
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 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 plus (ii) a pro-rata portion of the Target Bonus for the
year in which the disability occurs plus the Target Bonus for the preceding year
if his disability occurs after year-end but before such bonuses are 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
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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 Solicitation. Executive acknowledges that the services
he is to render to the Company and its affiliates are of a special and unusual
character, with a unique value to the Company and its affiliates, the loss of
which cannot adequately be compensated by damages or an action at law. In view
of the unique value to the Company and its affiliates of the services of
Executive for which the Company has contracted hereunder, because of the
confidential information to be obtained by, or disclosed to, Executive as set
forth in Section 8 above, and as a material inducement to the Company to enter
into this Agreement and to pay to Executive the compensation stated in Section 5
hereof, as well as any additional benefits stated herein, and other good and
valuable consideration, Executive covenants and agrees that throughout the
period Executive remains employed or compensated hereunder and for one year
thereafter, Executive shall not, directly or indirectly, anywhere in the United
States of America (i) solicit or attempt to convert to other insurance carriers
or other corporations, persons or other entities providing the same or similar
products or services provided by the Company and its affiliates, any customers
or policyholders of the Company or any of its affiliates or (ii) solicit for
employment or employ any employee of the Company or any of its affiliates.
Should any particular covenant or provision of this Section 9 be held
unreasonable or contrary to public policy for any reason, including, without
limitation, the time period, geographical area, or scope of activity covered by
any restrictive covenant or provision, the Company and Executive acknowledge and
agree that such covenant or provision shall automatically be deemed modified
such that the contested covenant or provision shall have the closest effect
permitted by applicable law to the original form and shall be given effect and
enforced as so modified to whatever extent would be reasonable and enforceable
under applicable law.
10. Termination.
(a) Either the Company or Executive may terminate his employment at
any time for any reason upon written notice to the other. The Company may
terminate Executive's employment for Just Cause pursuant to Section 10(b)
below or in a Control Termination pursuant to Section 10(c) below.
Executive's employment shall also terminate (i) upon the death of Executive
or (ii) after disability of Executive pursuant to Section 7 hereof.
(b) The Company may terminate Executive's employment at any time for
Just Cause. For purposes of this Agreement, "Just Cause" shall mean: (i)
(A) a material
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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
breach or action described in (A), (B) or (C) is willful and deliberate on
Executive's part and committed in bad faith or without reasonable belief
that such breach or action is in the best interests of the Company or its
affiliates; (ii) Executive's use of alcohol or drugs (other than drugs
prescribed to Executive by a physician and used by Executive for their
intended purposes for which they had been prescribed) or other repeated
conduct which materially and repeatedly interferes with the performance of
his duties hereunder, which materially compromises the integrity or the
reputation of the Company or its affiliates, or which results in other
substantial economic harm to the Company or its affiliates; (iii)
Executive's conviction by a court of law, admission that he is guilty, or
entry of a plea of nolo contendere with regard to a felony or other crime
involving moral turpitude; (iv) Executive's unscheduled absence from his
employment duties other than as a result of illness 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 a violation (in
Executive's reasoned judgment) of an applicable accounting standard 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 the Company 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
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(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").
For purposes of this Agreement, "Ultimate Parent" shall mean the parent
corporation (or if there is more than one parent corporation, the ultimate
parent corporation) that, following a transaction, directly or indirectly
beneficially owns a majority of the voting power of the outstanding securities
entitled to vote with respect to the election of the board of directors of the
Company (or its successor).
(d) 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 Executive's employment is terminated by the Company
for Just Cause as so defined, or if Executive voluntarily resigns, 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. 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 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
plus (ii) a pro-rata portion of the Target
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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. 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 on or after such date.
(c) In the event that Executive is terminated by the Company without
Just Cause, 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
Executive's election and cost) for the 12-month period following his
termination of employment and (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. 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 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 and (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. To the extent that Executive is terminated in a 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
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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 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
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State of Indiana by three arbitrators, one of whom shall be appointed by
the Company, one by Executive, and the third of whom shall be appointed by
the first two arbitrators. If the first two arbitrators cannot agree on the
appointment of a third arbitrator, then the third arbitrator shall be
appointed by the Chief Judge of the United States District Court for the
Southern District of Indiana. The arbitration shall be conducted in
accordance with the rules of the American Arbitration Association, except
with respect to the selection of arbitrators, which shall be as provided in
this Section. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. In any action to enforce
this Agreement, attorney's fees incurred by Executive will be paid by the
Company if the Executive is the prevailing party. The Company shall pay its
own costs and expenses incurred in connection with the enforcement of this
Agreement and shall pay the cost of arbitration, 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 the Conseco, Inc. 2003 Long-Term Equity Incentive Plan, this
instrument contains the entire agreement of the parties and, as of the Effective
Date, supersedes all other obligations of the Company and its affiliates under
other agreements or otherwise, including, without limitation, severance provided
under the Senior Officer Key Employee Retention Program approved by the
Bankruptcy Court. 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)
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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.
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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
By:/s/Eugene M. Bullis
------------------------------------
Name: Eugene M. Bullis
Its: Executive Vice President
CONSECO, INC.
By:/s/Eugene M. Bullis
------------------------------------
Name: Eugene M. Bullis
Its: Executive Vice President
EXECUTIVE:
/s/John R. Kline
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John R. Kline