Exhibit 10.31
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of the 7th day of March, 2005 is
between Conseco Services, LLC, an Indiana limited liability company ("Company"),
and Russell M. Bostick ("Executive").
WHEREAS, the services of Executive and his managerial and professional
experience are of value to the Company.
WHEREAS, the Company desires to continue to have the benefit and
advantage of the services of Executive for an extended period to assist the
Company and Conseco, Inc. ("Conseco") upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Employment. The Company hereby employs Executive and Executive
hereby accepts employment upon the terms and conditions hereinafter set forth.
2. Term. The effective date of this agreement (the "Agreement") shall
be the date set forth above (the "Effective Date"). Subject to the provisions
for termination as provided in Section 10 hereof, the term of Executive's
employment under this Agreement shall be the period beginning on the Effective
Date and ending on the third anniversary of the Effective Date. The term of
Executive's employment shall be automatically renewed for successive one-year
terms on March 7, 2008 and each succeeding March 7th unless either party elects
not to renew this Agreement by serving written notice of such election not to
renew on the other party at least 90 days prior to such March 7th. As used in
this Agreement, the "Term" is the period ending on March 6, 2008 or, if this
Agreement has been renewed, the one-year period relating to the last renewal.
The Term shall end upon the termination of Executive's employment with the
Company.
3. Duties. During the Term, Executive shall be engaged by the Company
in the capacity of Executive Vice President, Chief Information Officer, and
shall have responsibility for Information Technology on an enterprise-wide
basis. Executive shall report to the Chief Administrative Officer of Conseco (or
such other senior officer of Conseco designated by the President of Conseco).
4. Extent of Services. During the Term, subject to the direction and
control of the Chief Administrative Officer of Conseco (or such other senior
officer of Conseco designated by the President of Conseco), Executive shall have
the power and authority commensurate with his executive status and necessary to
perform his duties hereunder. Executive shall devote his entire employable time,
attention and best efforts to the business of the Company and, during the Term,
shall not, without the consent of the Company, be actively engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage; provided, however, that, subject to Section
9 hereof, this shall not be construed as
preventing Executive from serving on boards of professional, community, civic,
education, charitable and corporate organizations on which he presently serves
or may choose to serve or investing his assets in such form or manner as will
not require any services on the part of Executive in the operation of the
affairs of the companies in which such investments are made (to the extent not
in violation of the nonsolicitation provisions of Section 9 hereof); provided,
however, that corporate organizations shall be limited to those which Executive
presently serves, if any, as listed on Exhibit A and such others as mutually
agreed upon by Executive and the Company.
5. Compensation. During the Term:
(a) As compensation for services hereunder rendered during the Term
hereof, Executive shall receive a base salary ("Base Salary") of Three
Hundred Thousand Dollars ($300,000) 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 50% of Executive's Base Salary (the "Target
Bonus") and a maximum annual bonus of 100% of Executive's Base Salary
with respect to any calendar year, with such bonus payable at such
time that other similar payments are made to other Company executives.
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, Executive's 2007 bonus
(payable in 2008) 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 Bonus will be based on
financial and other objective targets that the Company reasonably
believes are reasonably attainable at the time that they are set.
(c) As soon as reasonably practicable, Executive will receive an
award of options to purchase 20,000 shares of common stock with an
exercise price equal to the fair market value on the date of the grant
and an award of 10,000 shares of restricted stock. One hundred percent
(100%) of the options will vest over a 4-year period beginning on the
date of the grant of the equity awards (the "Grant Date"), with
one-fourth vesting on each anniversary of the Grant Date. Fifty
percent (50%) of the restricted stock will vest on the second
anniversary of the Grant Date, with 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 senior
executives, if any, subject to the discretion of the board of
directors of Conseco, Inc. (the "Board").
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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) 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) Although Executive will be required to perform a substantial
portion of his duties in the Carmel, Indiana area, Executive
shall not be required to relocate to the Carmel, Indiana
area. If Executive decides to relocate to the Carmel, Indiana area
within the first 24 months of his employment, the Company shall
reimburse Executive for relocation expenses incurred in the first 24
months of his employment in accordance with the Company's relocation
policy; provided, however, if Executive voluntarily resigns from
employment with the Company prior to the second anniversary of his
employment, Executive shall repay the Company all such relocation
expenses reimbursed or otherwise paid by the Company (including any
amounts paid by the Company to "gross-up" such relocation expenses).
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 and (ii) a pro-rata portion of the Target Bonus
for the year in which his disability occurs plus the Target Bonus for the
preceding year if his disability occurs after year-end but before such bonuses
are paid. 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
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physician and used by Executive for their intended purpose for which they had
been prescribed) or (b) intentionally self-inflicted injury or intentionally
self-induced illness.
8. Disclosure of Information. Executive acknowledges that, in and as a
result of his employment with the Company, he has been and will be making use
of, acquiring and/or adding to confidential information of the Company and its
affiliates of a special and unique nature and value. As a material inducement to
the Company to enter into this Agreement and to pay to Executive the
compensation stated in Section 5, as well as any additional benefits stated
herein, Executive covenants and agrees that he shall not, at any time while he
is employed by the Company or at any time thereafter, directly or indirectly,
divulge or disclose for any purpose whatsoever, any confidential information
(whether or not specifically labeled or identified as "confidential
information"), in any form or medium, that has been obtained by or disclosed to
him as a result of his employment with the Company and which the Company or any
of its affiliates has taken appropriate steps to safeguard, except to the extent
that such confidential information (a) becomes a matter of public record or is
published in a newspaper, magazine or other periodical available to the general
public, other than as a result of any act or omission of Executive, (b) is
required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, in which event Executive shall give
prompt notice of such requirement to the Company to enable the Company to seek
an appropriate protective order or confidential treatment, or (c) must be
disclosed to enable Executive properly to perform his duties under this
Agreement. Upon the termination of Executive's employment, Executive shall
return such information (in whatever form) obtained from or belonging to the
Company or any of its affiliates which he may have in his possession or control.
9. Covenants Against 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 these same or similar
products or services provided by the Company and its affiliates, any customers
or policyholders of the Company or any of its affiliates or (ii) solicit for
employment or employ any individual who was employed by the Company or any of
its affiliates during the Term of this Agreement. 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
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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
nonrenewal of the agreement, (ii) upon the death of Executive, (iii)
after disability of Executive pursuant to Section 7 hereof or (iv) by
Executive's termination of employment With Reason.
(b) The Company may terminate Executive's employment at any time
for Just Cause. For purposes of this Agreement, "Just Cause" shall
mean: (i) (A) a material breach by Executive of this Agreement, (B) a
material breach of Executive's duty of loyalty to the Company or its
affiliates, or (C) willful malfeasance or fraud or dishonesty of a
substantial nature in performing Executive's services on behalf of the
Company or its affiliates, which in each case is willful and
deliberate on Executive's part and committed in bad faith or without
reasonable belief that such breach or action is in the best interests
of the Company or its affiliates; (ii) Executive's use of alcohol or
drugs (other than drugs prescribed to Executive by a physician and
used by Executive for their intended purposes for which they had been
prescribed) or other repeated conduct which materially and repeatedly
interferes with the performance of his duties hereunder, which
materially compromises the integrity or the reputation of the Company
or its affiliates, or which results in other substantial economic harm
to the Company or its affiliates; (iii) Executive's conviction by a
court of law, admission that he is guilty, or entry of a plea of nolo
contendere with regard to a felony or other crime involving moral
turpitude; (iv) Executive's unscheduled absence from his employment
duties other than as a result of illness or disability, for whatever
cause, for a period of more than ten (10) consecutive days, without
consent from the Company prior to the expiration of the ten (10) day
period; or (v) Executive's failure to take action or to abstain from
taking action, as directed in writing by a member of the board or a
higher ranking executive of the Company or Conseco, where such failure
continues after Executive has been given written notice of such
failure and at least five (5) business days thereafter to cure such
failure.
No termination shall be deemed to be a termination by the Company
for Just Cause if the termination is as a result of Executive refusing
to act in a manner that would be a violation of applicable law or
where Executive acts (or refrains from taking action) in good faith in
accordance with directions of a member of the board or higher ranking
executive but was unable to attain the desired results because such
results were inherently unreasonable or unattainable.
(c) The Company may terminate Executive's employment in a Control
Termination. A "Control Termination" shall mean any termination by the
Company (or
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its successor) of Executive's employment for any reason within six
months in anticipation of or within two years following a Change in
Control of the Company.
The term "Change in Control" shall mean the occurrence of any of
the following:
(i) the acquisition (other than an acquisition in connection
with a "Non-Control Transaction") by any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) of "beneficial ownership" (as
such term is defined in Rule 13d-3 promulgated under the 1934 Act),
directly or indirectly, of securities of the Company or its
Ultimate Parent representing 51% or more of the combined voting
power of the then outstanding securities of Conseco or its Ultimate
Parent entitled to vote generally with respect to the election of
the board of directors of Conseco or its Ultimate Parent; or
(ii) as a result of or in connection with a tender or exchange
offer or contest for election of directors, individual board
members of Conseco (identified as of the date of commencement of
such tender or exchange offer, or the commencement of such election
contest, as the case may be) cease to constitute at least a
majority of the board of directors of Conseco; or
(iii) the consummation of a merger, consolidation or
reorganization with or into Conseco unless (x) the stockholders of
Conseco immediately before such transaction beneficially own,
directly or indirectly, immediately following such transaction
securities representing 51% or more of the combined voting power of
the then outstanding securities entitled to vote generally with
respect to the election of the board of directors of Conseco (or
its successor) or, if applicable, the Ultimate Parent and (y)
individual board members of Conseco (identified as of the date that
a binding agreement providing for such transaction is signed)
constitute at least a majority of the board of directors of Conseco
(or its successor) or, if applicable, the Ultimate Parent (a
transaction to which clauses (x) and (y) apply, a "Non-Control
Transaction").
For purposes of this Agreement, "Ultimate Parent" shall mean the
parent corporation (or if there is more than one parent corporation,
the ultimate parent corporation) that, following a transaction,
directly or indirectly beneficially owns a majority of the voting
power of the outstanding securities entitled to vote with respect to
the election of the board of directors of Conseco (or its successor).
(d) At Executive's option, he may terminate employment with the
Company "With Reason" provided one or more of the following conditions
are met: (i) his role or duties have been materially diminished by
changes in responsibilities or authority; (ii) Executive is required
to report to anyone other than the Chief Administrative Officer of
Conseco (or such other senior officer of Conseco designated by the
President of Conseco); (iv) any reduction in Executive's Base Salary
or Target Bonus, or (v) there is a "Change in Control" as defined in
Section 10(c) and, following Executive's written request made prior to
the Change in Control, the ultimate parent entity or entities directly
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or indirectly gaining control of a majority of Conseco's board of
directors or outstanding securities entitled to vote with respect to
Conseco's board of directors fails to affirm and guarantee the
Company's current and future obligations under this Agreement.
(e) Upon termination of Executive's employment with the Company for
any reason (whether voluntary or involuntary), Executive shall be
deemed to have voluntarily resigned from all positions that Executive
may then hold with the Company and any of its affiliates; provided
that such deemed resignation shall not adversely affect Executive's
rights to compensation or benefits under Section 11 of this Agreement
and shall not affect the determination of whether Executive's
termination was for Just Cause.
11. Payments Following Termination.
(a) In the event that Executive's employment is terminated by the
Company for Just Cause (as defined herein), upon non-renewal by the
Company or Executive, upon expiration of the Term of this Agreement or
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 and (ii) a pro-rata portion of the Target
Bonus for the year in which his death occurs plus the Target Bonus for
the preceding year if his death occurs after year-end but before such
bonuses are paid. 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 (and other than non-renewal, death, disability or a
Control Termination) or by Executive With Reason, then the Company
shall pay Executive (i) on a basis consistent with the timing of the
Company's normal payroll processing, the remaining payments of Base
Salary described in Section 5(a) that would have been payable to
Executive through the date of his termination of employment, (ii) his
Base Salary (in the form of salary continuation on a pro-rata basis
with or without medical and dental benefits, at the Executive's
election and cost) for the 24-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. Salary continuation
pursuant to the preceding sentence will cease if Executive obtains
other employment (including self-employment) during such 24-month
period. Any options or
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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 24-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.
Salary continuation pursuant to the preceding sentence will cease if
Executive obtains other employment (including self-employment) during
such 24-month period. 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 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.
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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 State of
Indiana by three arbitrators, one of whom shall be appointed by the
Company, one by Executive, and the third of whom shall be appointed by
the first two arbitrators. If the first two arbitrators cannot agree
on the appointment of a third arbitrator, then the third arbitrator
shall be appointed by the Chief Judge of the United States District
Court for the Southern District of Indiana. The arbitration shall be
conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators,
which shall be as provided in this Section. Judgment upon the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Each party shall pay its own costs and expenses
incurred in connection with the enforcement of this Agreement,
regardless of the final outcome.
(b) Executive acknowledges that a breach or threatened breach by
Executive of Sections 8 or 9 of this Agreement will give rise to
irreparable injury to the Company and that money damages will not be
adequate relief for such injury. Notwithstanding paragraph (a) above,
the Company and Executive agree that the Company may seek and
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obtain injunctive relief, including, without limitation, temporary
restraining orders, preliminary injunctions and/or permanent
injunctions, in a court of proper jurisdiction to restrain or prohibit
a breach or threatened breach of Section 8 or 9 of this Agreement.
Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from
Executive.
16. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
his residence, in the case of Executive, or to the business office of its
General Counsel, in the case of the Company.
17. Waiver of Breach and Severability. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by either party. In the
event any provision of this Agreement is found to be invalid or unenforceable,
it may be severed from the Agreement, and the remaining provisions of the
Agreement shall continue to be binding and effective.
18. Entire Agreement. Other than any equity award agreements entered
into pursuant to an applicable long-term incentive plan, this instrument
contains the entire agreement of the parties and, as of the Effective Date,
supersedes all other obligations of the Company and its affiliates under other
agreements or otherwise. The compensation and benefits to be paid under the
terms of this Agreement are in lieu of all other compensation or benefits to
which Executive is entitled from Conseco, the Company, and its affiliates. This
Agreement may not be changed orally, but only by an instrument in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
19. Binding Agreement and Governing Law; Assignment Limited. This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their lawful successors in interest (including, without limitation,
Executive's estate, heirs and personal representatives) and, except for issues
or matters as to which federal law is applicable, shall be construed in
accordance with and governed by the laws of the State of Indiana. This Agreement
is personal to each of the parties hereto, and neither party may assign or
delegate any of its rights or obligations hereunder without the prior written
consent of the other.
20. Indemnification. If Executive was or is made a party or is
threatened to be made a party to or is otherwise involved (including involvement
as a witness) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
or she is or was an officer or employee of the Company or any of its affiliates,
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than permitted prior thereto), against all expense,
liability and loss (including attorneys' fees, judgments, fines, excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
Executive in connection therewith and such indemnification shall continue as to
Executive if he ceases to be an officer or employee and shall inure to the
benefit of Executive's heirs, executors and administrators; provided, however,
that the Company shall indemnify Executive in connection with a proceeding (or
part thereof) initiated by Executive only if such Proceeding (or part
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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, INC.
/s/James E. Hohmann
-------------------------------
James E. Hohmann
EVP, Chief Administrative Officer
COMPANY:
CONSECO SERVICES, LLC
/s/Daniel J. Murphy
-------------------------------
Daniel J. Murphy
President
EXECUTIVE:
/s/Russell M. Bostick
-------------------------------
Russell M. Bostick
12