exhibit1012.htm


    
Exhibit 10.12

      


      


      AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

      


      This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT, dated as of the 21st day of December, 2009, is between 40|86
Advisors, Inc., a Delaware corporation (the “Company”), and Eric R. Johnson
(“Executive”).

      


      WHEREAS,
the Company and Executive entered into an Amended and Restated Employment
Agreement dated October 6, 2006, which was amended on September 25, 2007 and
October 14, 2008, and they now desire to further amend and restate such
agreement.

      


      WHEREAS,
the continued services of Executive and his managerial and professional
experience are of value to the Company.

      


      WHEREAS, the Company desires to have
the benefit and advantage of the services of Executive 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 September 30, 2010 (the “Term").  The Term shall not be
automatically renewed and shall end upon any earlier termination of Executive’s
employment with the Company.

      


      3.           Duties.  During
the Term, Executive shall be engaged by the Company in the capacity of President
of the Company and a member of the board of directors of the Company, and he
shall be an Executive Vice President of Conseco, or he shall serve in such other
senior executive capacity as the Chief Executive Officer of Conseco shall
specify.  Executive shall report to the Chief Executive Officer of
Conseco or such other senior executive officer as the Chief Executive Officer of
Conseco may specify regarding the performance of his duties.

      


      4.           Extent of
Services.  During the Term, subject to the direction and
control of the Chief Executive Officer 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
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 non-solicitation provisions of Section 9 hereof); provided, however, that
corporate organizations shall be limited to those 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 Five Hundred Thousand Dollars
($500,000) 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 100% of
Executive's Base Salary (the “Target Bonus”) and a maximum annual bonus of 200%
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 but in no event later than March 15 of the year following the year
with respect to which such bonus was payable, unless the bonus amounts to be
paid cannot be confirmed and paid on or before March 15, in which event the
bonuses will be paid within 15 days after the bonus amounts have been confirmed
by the Company.  For purposes of clarification, annual executive
bonuses are payable on or before March 15 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 2010
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 performance requirements for Target Bonuses will be based
on financial and other objective targets that the Conseco Board of Directors
(the “Board”) or the Human Resources and Compensation Committee of the Board
(the “Compensation Committee”) believes are reasonably attainable at the time
that they are set.

      


      (c)           Executive
shall be eligible to participate in and receive future grants under any Conseco
stock or equity-based program offered to senior executives, subject to the
discretion of the Board or the Compensation Committee.

       

       

       

      
        
          
          

        

        
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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 in accordance
with the Company’s policies and procedures and Section 21 hereof; provided,
however, that any such reimbursement will be made no later than March 15 of the
year following the year in which the expense was incurred.  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); provided, however, that any such payment will be made no later than March
15 of the year following the year in which the income tax was
incurred.

      


      (d)           Executive
shall be permitted to make elective contributions to any Company-sponsored,
non-qualified deferred compensation plan in accordance with the terms of such
plan.

      


      7.           Disability.

      


      (a)           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 (any such incapacity, a “Disability”), his
Base Salary, bonus and other compensation provided herein shall continue while
he remains employed by the Company; provided, that if such Disability (as
determined in the Company’s reasonable judgment, exercised in good faith)
continues for at least three (3) consecutive months, the Company may
terminate Executive’s employment hereunder, in which case the Company within 10
business days 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 (“Unpaid Salary”), (ii) the bonus payable pursuant to
Section 5(b) for the fiscal year of the Company ending prior to the date of
termination (to the extent earned based on performance under the goals and
objectives of the applicable plan but not previously paid) (“Unpaid Bonus”) and
(iii) Executive’s then accrued but unused vacation (“Unpaid Vacation”) (the
Unpaid Salary, Unpaid Bonus and Unpaid Vacation referred to sometimes together
as the “Accrued Amounts”).  Additionally, in the event of a
termination of employment due to Disability, the Company shall pay to Executive
a pro-rata portion of the Target Bonus for the year in which the termination for
Disability 

       

       

      
        
          
          

        

        
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        occurred,
payable at the same time when the bonus payment for the year of termination
otherwise would have been paid pursuant to Section 5(b).  All options,
restricted stock and/or other awards held by Executive on the date of
termination for Disability shall vest only through the date of termination
according to the normal vesting schedule applicable to such options or
restricted stock and Executive shall be treated in accordance with the
applicable award agreements.

      

      


      (b)           No
payments or vesting under this Section 7 will be made if such Disability arose
primarily from (a) chronic use of intoxicants, drugs or narcotics (other than
drugs prescribed to Executive by a physician and used by Executive for their
intended purpose for which they had been prescribed) or (b) intentionally
self-inflicted injury or intentionally self-induced illness.

      


      8.           Disclosure of
Information.  Executive acknowledges that, in and as a result
of his employment with the Company, he has been and will be making use of,
acquiring and/or adding to confidential information of the Company and its
affiliates of a special and unique nature and value.  As a material
inducement to the Company to enter into this Agreement and to pay to Executive
the compensation stated in Section 5, as well as any additional benefits stated
herein, Executive covenants and agrees that he shall not, at any time while he
is employed by the Company or at any time thereafter, directly or indirectly,
divulge or disclose for any purpose whatsoever, any confidential information
(whether or not specifically labeled or identified as “confidential
information”), in any form or medium, that has been obtained by or disclosed to
him as a result of his employment with the Company and which the Company or any
of its affiliates has taken appropriate steps to safeguard, except to the extent
that such confidential information (a) becomes a matter of public record or
is published in a newspaper, magazine or other periodical available to the
general public, other than as a result of any act or omission of Executive, (b)
is required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, in which event Executive shall give
prompt notice of such requirement to the Company to enable the Company to seek
an appropriate protective order or confidential treatment, (c) must be disclosed
to enable Executive properly to perform his duties under this Agreement or (d)
was developed by Executive prior to his employment by the
Company.  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 

       

      
        
          
          

        

        
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        (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 Executive’s employment with the Company.  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.  During
the Term:

      


      (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)
material breach by Executive of this Agreement not cured within 15 days after
written notice to Executive by the Company, (B) a material breach of Executive’s
duty of loyalty to the Company or its affiliates not cured within 15 days after
written notice to Executive by the Company, 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;

       

       

      
        
          
          

        

        
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      (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 three (3)
consecutive days, without consent from the Company prior to the expiration of
the three (3) day period;

      


      (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; or

      


      (vi)  Any
intentional wrongful act or omission by Executive that results in the
restatement of Conseco’s financial statements due to a violation of the
Sarbanes-Oxley Act of 2002.

      


      No termination shall be deemed to be a
termination by the Company for Just Cause if the termination is as a result of
Executive refusing to act in a manner that would be a violation of applicable
law or where Executive acts (or refrains from taking action) in good faith in
accordance with directions of a member of the Board or higher ranking executive
but was unable to attain the desired results because such results were
inherently unreasonable or unattainable.

      


      (c)           The
Company may terminate Executive’s employment in a Control
Termination.  A "Control Termination" shall mean any termination by
the Company (or its successor) of Executive’s employment for any reason within
six months in anticipation of or within two years following a Change in
Control.

      


      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 Conseco 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 or the board of directors of Conseco’s 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; or

       

       

      
        
          
          

        

        
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      (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) any reduction in
Executive's Base Salary or Target Bonus without his consent, or (ii) there is a
"Change in Control" as defined in Section 10(c) and, following Executive's
written request made prior to the Change in Control, the ultimate parent entity
or entities directly or indirectly gaining control of a majority of the Board or
outstanding securities entitled to vote with respect to the Board fails to
affirm and guarantee the Company's current and future obligations under this
Agreement; provided that the events described in clauses (i) and (ii) above
shall constitute With Reason only if the Company fails to cure such event (if
capable of being cured) within 30 days after receipt from Executive of written
notice of the event which constitutes With Reason; provided, further, that With
Reason shall cease to exist for an event on the 60th day
following the later of its occurrence or Executive’s knowledge thereof, unless
Executive has given the Company written notice thereof prior to such
date.

       

       

      (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 this Agreement and
shall not affect the determination of whether Executive's termination was for
Just Cause or With Reason.

       

       

      
        	
                  11.  

              	
                Payments Following
      Termination.

              


      

      


      (a)           In
the event that Executive’s employment is terminated by the Company for Just
Cause or if Executive voluntarily resigns, then (i) the Company within 10
business days 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 (the “Termination Date”) and (ii) no bonus for the year of
termination will be earned or paid 

       

       

      
        
          
          

        

        
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        to
Executive.  All stock options, restricted stock and/or other awards
held by Executive on the Termination Date shall be treated in accordance with
the applicable award agreements.

      

      


      (b)           In
the event Executive’s employment is terminated by the death of Executive, then
the Company shall pay Executive’s estate within 30 days (i) the Accrued Amounts
and (ii) a pro-rata portion of the Target Bonus for the year in which his death
occurs.  All stock options, restricted stock and/or other awards held
by Executive on the Termination Date shall be treated in accordance with the
applicable award agreements.

      


      (c)           In
the event that Executive is terminated by the Company without Just Cause (and
other than a termination due to expiration of the Term, death, Disability or a
Control Termination) or by Executive With Reason, then the Company shall pay
Executive within 30 days of the Termination Date (i) the Accrued Amounts and
(ii) a cash lump sum equal to the sum of his annual Base Salary and Target
Bonus.  Additionally, following such a termination, Executive shall be
entitled to receive a bonus pursuant to Section 5(b) based on the Company’s
actual performance for the year in which Executive is terminated (prorated for
the partial year period ending on the Termination Date), payable at the same
time when such bonus amount normally would have been paid pursuant to Section
5(b).  All stock options, restricted stock and/or other awards held by
Executive on the Termination Date shall be treated in accordance with the
applicable award agreements.

      


      (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 within
30 days of the Termination Date (i) the Accrued Amounts and (ii) a cash lump sum
equal to the sum of (A) his Target Bonus and (B) one and one-half times his
annual Base Salary.  Additionally, following such a termination,
Executive shall be entitled to receive (i) a bonus pursuant to Section 5(b)
based on the Company’s actual performance during the year in which Executive is
terminated (prorated for the partial year period ending on the Termination
Date).  All stock options, restricted stock and/or other awards held
by Executive upon the occurrence of the Change in Control shall be treated in
accordance with the applicable award agreements.

      


      (e)           Notwithstanding
anything to the contrary, payment of any 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
Termination Date.

      


      12.           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 

       

       

      
        
          
          

        

        
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        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 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.

      

      


      13.           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.

      


      14.           Arbitration of Disputes;
Injunctive Relief.

      


      (a)           Arbitration.  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.  All reasonable
costs and expenses (including fees and 

       

       

      
        
          
          

        

        
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disbursements
of counsel) incurred by Executive pursuant to this Section 14 shall be paid on
behalf of or reimbursed to Executive promptly by the Company; provided, however,
that in the event the Company prevails in such proceedings, Executive shall
immediately repay all such amounts to the Company.

      

      


      (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.

      


      15.           Notices.  Any
notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if sent by registered mail to his residence, in the
case of Executive, or to the business office of its Chief Executive Officer, in
the case of the Company.

      


      16.           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.

      


      17.           Entire
Agreement.  Other than any equity award agreements entered into
pursuant to the Conseco, Inc. Amended and Restated Long-Term Incentive Plan or
any subsequent 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, and upon
termination of Executive’s employment with the Company Executive will not be
entitled to receive any severance or other payments beyond those specified in
this Agreement.  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.

      


      18.           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.

      


      19.           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,


       

       

      
        
          
          

        

        
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      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
managing member 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.

      


      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.           Section
409A.  This Agreement is intended to comply with Section 409A
of the Code and will be interpreted accordingly.  References under
this Agreement to Executive’s termination of employment shall be deemed to refer
to the date upon which Executive has experienced a “separation from service”
within the meaning of Section 409A of the Code.  Notwithstanding
anything herein to the contrary, (i) if at the time of Executive’s separation
from service with the Company Executive is a “specified employee” as defined in
Section 409A of the Code (and any related regulations or announcements
thereunder) and the deferral of the commencement of any payments or benefits
otherwise payable hereunder or payable under any other compensatory arrangement
between Executive and the Company or any of its affiliates as a result of such
separation from service is necessary in order to prevent any accelerated or
additional tax under Section 409A of the Code, then the Company will defer the
commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to
Executive) until the date that is six months following Executive’s separation
from service (or the earliest date as is permitted under Section 409A of the
Code), at which point all payments deferred pursuant to this Section 21 shall be
paid to Executive in a lump sum and (ii) if any payments of money or other
benefits due to Executive hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or
other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner that
does not cause such an accelerated or additional tax.  To the extent
any reimbursements or in-kind benefits due to Executive under this Agreement
constitute “deferred compensation” under Section 409A of the 

       

       

      
        
          
          

        

        
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        Code, any
such reimbursements or in-kind benefits shall be paid to Executive in a manner
consistent with Treas. Reg. Section 1.409A-3(i)(l)(iv).  Additionally,
to the extent that Executive’s receipt of any in-kind benefits from the Company
or its affiliates must be delayed pursuant to this Section 21 due to his status
as a “specified employee,” Executive may elect to instead purchase and receive
such benefits during the period in which the provision of benefits would
otherwise be delayed by paying the Company (or its affiliates) for the fair
market value of such benefits (as determined by the Company in good faith)
during such period.  Any amounts paid by Executive pursuant to the
preceding sentence shall be reimbursed to Executive as described above on the
date that is six months following his separation from service.  Each
payment made under this Agreement shall be designated as a “separate payment”
within the meaning of Section 409A of the Code.  The Company shall
consult with Executive in good faith regarding the implementation of the
provisions of this Section 21, provided that neither the Company nor any of its
employees or representatives shall have any liability to Executive with respect
thereto.

      

      


      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.

      


      IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written, effective as of the Effective Date.

      


      


      COMPANY:

      40|86
ADVISORS, INC.

      


      


      /s/ Karl W. Kindig   
   

      Karl W.
Kindig

      Assistant
Secretary

      


      


      EXECUTIVE:

      


      


      /s/ Eric R.
Johnson       

      Eric R.
Johnson


      
        
          
             

            


          

           


        

        
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