UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
-----------
Date of Report (Date of earliest event reported): June 4, 1998
CONSECO, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-9250 35-1468632
---------------- ----------- -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
11825 North Pennsylvania Street
Carmel, Indiana 46032
-------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(317) 817-6100
--------------------
(Registrant's telephone number, including area code)
Not Applicable
-------------------------------
(Former name or former address,
if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS.
On June 4, 1998, Conseco, Inc. ("Conseco") announced the pricing of
$550 million of unsecured 6.4 Percent MandatOry Par Put Remarketed Securities
("MOPPRS") due June 15, 2011. As part of the MOPPRS structure, Salomon Brothers
Inc purchased an option to remarket the securities as of the remarketing date
of June 15, 2001. After considering the price for the remarketing option,
Conseco will have an effective borrowing rate through the remarketing date of
5.57 percent. If the remarketing option is exercised in 2001, these securities
will bear interest at a rate determined by specified procedures for a 10 year
period.
Conseco also announced the pricing of $250 million of 6.8 percent
unsecured notes due June 15, 2005. The notes were priced at 99.756 percent of
par to yield approximately 6.844 percent.
Conseco intends to use the net proceeds from the sale of these notes
to repay outstanding commercial paper.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) -- (b) Not applicable.
(c) Exhibits.
4.22.3 6.8% Note due June 15, 2005 issued under the Senior
Indenture (one of several identical notes aggregating
$250 million).
4.22.4 6.4% MandatOry Par Put Remarketed Securities Note due
June 15, 2011 issued under the Senior Indenture (one of
several identical notes aggregating $550 million).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSECO, INC.
DATE: June 8, 1998 By: /s/ ROLLIN M. DICK
----------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
and Chief Financial Officer
<TABLE>
<CAPTION>
[Face of Note]
<S> <C> <C>
CUSIP NO. 20846NAB1 CONSECO, INC. PRINCIPAL AMOUNT: $ 200,000,000
REGISTERED NO. FX 1 SENIOR MEDIUM-TERM NOTE, SERIES A
</TABLE>
If this Note is a Book-Entry Note, the registered owner of
this Note (as indicated below) is The Depository Trust Company (the
"Depositary") or a nominee of the Depositary, and the following legend is
applicable: Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co., or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
The following summary of terms is subject to the information
set forth on the reverse hereof:
<TABLE>
<S> <C>
ORIGINAL ISSUE DATE: June 9, 1998 OPTIONAL REDEMPTION: [X] YES [ ] NO For all terms regarding
redemption, see Annex A attached hereto
INTEREST RATE: 6.8% INITIAL REDEMPTION DATE:
STATED MATURITY DATE: June 15, 2005 INITIAL REDEMPTION PERCENTAGE:
AUTHORIZED DENOMINATIONS ANNUAL PERCENTAGE
(If other than $1,000 and integral REDEMPTION REDUCTION:
multiples thereof):
REDEMPTION PRICE:
FORM: [X] BOOK-ENTRY
[ ] CERTIFICATED
PAYING AGENT (If other than the Senior Trustee):
REGULAR RECORD DATES: May 31 and November 30 OPTION TO ELECT REPAYMENT: [ ] YES [X] NO
INTEREST PAYMENT DATES: June 15 and December 15 of each year, OPTIONAL REPAYMENT DATE[S]:
commencing on December 15, 1998
OPTIONAL REPAYMENT PRICE[S]:
SINKING FUND: [ ] YES [X] NO
ORIGINAL ISSUE DISCOUNT: [ ] YES [X] NO SPECIFIED CURRENCY: United States dollars
AMORTIZING NOTE: [ ] YES [X] NO OTHER PROVISIONS:
EXCHANGE RATE AGENT:
DEPOSITARY: The Depository Trust Company ANNEX ATTACHED (and incorporated
by reference herein): [X] YES [ ] NO
</TABLE>
If this Note was issued with "original issue discount" for
purposes of Section 1273 of the Internal Revenue Code of 1986, as amended, the
following shall be completed:
<TABLE>
<S> <C>
ORIGINAL ISSUE DISCOUNT NOTE: [ ] Yes [X] No ISSUE PRICE (expressed
as a percentage of aggregate principal amount):
YIELD TO MATURITY: INITIAL PERIOD:
</TABLE>
<PAGE>
CONSECO, INC., a corporation duly organized and existing under
the laws of Indiana (herein called the "Company," which term includes any
successor corporation under the Senior Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum specified above on the Stated Maturity Date shown
above, and to pay interest thereon from and including the Original Issue Date
shown above or from and including the most recent Interest Payment Date (as
hereinafter defined) to which interest has been paid or duly provided for, as
the case may be.
Interest will be paid on the Interest Payment Date or Dates
specified above, at the rate per annum specified above, commencing with the
first such Interest Payment Date next succeeding the Original Issue Date shown
above (except as provided below) until the principal hereof is paid or duly made
available for payment. Interest payments will be made in an amount equal to the
amount accrued from and including the immediately preceding Interest Payment
Date in respect of which interest has been paid or duly made available for
payment (or from and including the date of issue, if no interest has been paid
or duly made available for payment) to but excluding the applicable Interest
Payment Date or the Stated Maturity Date or such prior date on which the
principal hereof becomes due and payable (the "Maturity Date"), as the case may
be. The interest so payable and punctually paid or duly provided for on any
Interest Payment Date will, as provided in such Senior Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the Regular Record Date specified above next
preceding such Interest Payment Date. The first payment of interest on any Note
originally issued between a Regular Record Date and the next Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date to the Holder on such next succeeding Regular Record Date.
Except as otherwise provided in the Senior Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date by virtue of their having been such Holder
and may either be paid to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Senior
Trustee, notice whereof is to be given to Holders of Notes not less than 10
calendar days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Senior Indenture.
Unless otherwise specified above, the Company will make
payments of principal of, and premium, if any, and interest, if any, on this
Note in the Specified Currency specified above. Any such amounts payable by the
Company in the Specified Currency will be converted by the Exchange Rate Agent
specified above into United States dollars for payments to Holders unless
otherwise specified above or the Holder of this Note elects, in the manner
hereinafter described, to receive such amounts in the Specified Currency.
If the Specified Currency is other than United States dollars,
any United States dollar amount to be received by the Holder of this Note will
be based on the highest bid quotation in The City of New York received by the
Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the
second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected
by the Exchange Rate Agent and approved by the Company for the purchase by the
quoting dealer of the Specified Currency for United States dollars for
settlement on such payment date in the aggregate amount of such Specified
Currency payable to all Holders of Notes, the Specified Currency for which is
other than United States Dollars, scheduled to receive United States dollar
payments and at which the applicable dealer commits to execute a contract. All
currency exchange costs will be borne by the Holder of this Note by deductions
from such payments. If three such bid quotations are not available, payments
will be made in the Specified Currency.
If the Specified Currency is other than United States dollars,
the Holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and /or interest, if any, in the
Specified Currency instead of in United States dollars, by submitting a written
request for such payment to the Senior Trustee at its corporate trust office in
The City of New York on or prior to the applicable Record Date or at least
fifteen calendar days prior to the Maturity Date, as the case may be. Such
written request may be mailed or hand delivered or sent by cable, telex or other
form of facsimile transmission. The Holder of this Note may elect to receive all
or a specified portion of all future payments in the Specified Currency and need
not file a separate election for each payment. Such election will remain in
effect until revoked by written notice to the Senior Trustee, but written notice
by any such revocation must be received by such Trustee on or prior to the
applicable Record Date or at least fifteen calendar days prior to the Maturity
Date, as the case may be. If this Note is to be held in the name of a broker or
nominee the Holder should contact such broker or nominee to determine whether
and how an election to receive payments in the Specified Currency may be made.
If this Note is a Book-Entry Note as specified above, while
this Note is represented by one or more Book-Entry Notes registered in the name
of the Depositary or its nominee, the Company will cause payments of principal
of, premium, if any, and interest on such Book-Entry Notes to be made to the
Depositary or its nominee, as the case may be, by wire transfer to the extent,
in the funds and in the manner required by agreements with, or regulations or
procedures prescribed from time to time by, the Depositary or its nominee, and
otherwise in accordance with such agreements, regulations and procedures. If
this Note is a Book-Entry Note as specified above, the following legend is
applicable except as specified on the reverse hereof: THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR.
If this Note is a certificated Note as specified above,
payments of interest, if any, on this Note on any Interest Payment Date other
than at Stated Maturity Date will be made by check mailed to the address of the
Holder entitled thereto as such address appears in the Security Register of the
Company. Notwithstanding the foregoing, a Holder of $10,000,000 (or, if the
Specified Currency is other than United States dollars, the equivalent thereof
in such Specified Currency) or more in aggregate principal amount of
certificated Notes (whether having identical or different terms and provisions)
will be entitled to receive interest payments, if any, on any Interest Payment
Date other than at Stated Maturity by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the Trustee not less than 15 days prior to such Interest Payment Date.
If the Specified Currency specified above is other than United
States dollars, payments of the principal of, and premium, if any, and/or
interest, if any, on this Note which are to be made in United States dollars
will be made in the manner specified above with respect to Notes denominated in
United States dollars. If the Specified Currency specified above is other than
United States dollars, payments of interest, if any, on this Note which are to
be made in the Specified Currency on an Interest Payment Date other than the
Maturity Date will be made by check mailed to the address of the Holder of this
Note as it appears in the Security Register, subject to the right to receive
such interest payments by wire transfer of immediately available funds under the
circumstances described above. If the Specified Currency specified above is
other than United States dollars, payments of principal of, and premium, if any,
and/or interest, if any, on this Note which are to be made in the Specified
Currency on the Maturity Date will be made by wire transfer of immediately
available funds to an account with a bank designated at least fifteen calendar
days prior to the Maturity Date by the Holder of this Note, provided that such
bank has appropriate facilities therefor and that this Note is presented and
surrendered at the office or agency maintained by the Company for such purpose
in the Borough of Manhattan, The City of New York in time for the Senior Trustee
to make such payments in such funds in accordance with its normal procedures.
<PAGE>
The Company will pay any administrative costs imposed by banks
in connection with making payments by wire transfer, but not any tax, assessment
or governmental charge imposed upon the Holder of this Note. If this Note is a
certificated Note as specified above, payment of the principal, premium, if any,
due on the Maturity Date in respect of this Note will be made in immediately
available funds upon presentation and surrender of this Note at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH ON THE REVERSE HEREOF OR THE ATTACHED ANNEX, IF ANY, WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH
AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, or its successor as
Trustee, or its Authenticating Agent, by manual signature of an authorized
signatory, this Note will not be entitled to any benefit under the Senior
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
<TABLE>
<S> <C>
Dated: June 9, 1998
CONSECO, INC.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities
issued under the within-mentioned Senior Indenture.
By: /s/ Thomas J. Kilian
---------------------------------------------------------
Its: Executive Vice President and Chief Operations Officer
LTCB TRUST COMPANY,
as Trustee
By: /s/ Barbara Bevelaqua Attest: /s/ John J. Sabl
----------------------------------------- -------------------------------------------------------------
Authorized Officer Its: Executive Vice President, Secretary and General Counsel
</TABLE>
<PAGE>
[Reverse of Note]
CONSECO, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
SECTION 1. General. This Note is one of a series of Securities
of the Company issued under an Indenture, dated as of November 13, 1997, as
amended from time to time (the "Senior Indenture"), between the Company and LTCB
Trust Company, as trustee (the "Senior Trustee"), to which Senior Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Senior Trustee and the Holders of the Notes and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Note is one of the Securities designated on the face hereof. The Notes may bear
different dates, mature at different times, bear interest at different rates, be
subject to different redemption provisions, if any, may be subject to different
sinking funds, if any, and may otherwise vary, all as provided in the Senior
Indenture.
SECTION 2. Payments. Interest on this Note will be payable on
January 15 and December 15 of each year or on such other date(s) specified on
the face hereof (each, an "Interest Payment Date") and on the Maturity Date.
Unless otherwise specified in on the face hereof, interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date(s) or the Maturity Date falls on a day
that is not a Business Day, the required payment of principal, premium, if any,
and/or interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest will accrue on such payment for
the period from and after such Interest Payment Date or the Maturity Date, as
the case may be, to the date of such payment on the next succeeding Business
Day.
SECTION 3. Redemption. This Note will be redeemable at the
option of the Company prior to the Stated Maturity Date only if an Initial
Redemption Date is specified on the face hereof. If so specified, this Note will
be subject to redemption at the option of the Company on any date on and after
the Initial Redemption Date in whole or from time to time in part in increments
of $1,000 or the minimum denomination, if any, specified on the face hereof
(provided that any remaining principal amount hereof will be at least $1,000 or
such minimum denomination), at the Redemption Price specified on the face
hereof, together with unpaid interest accrued hereon to the date of redemption,
on written notice given to the Holder hereof not more than 60 nor less than 30
calendar days prior to the date of redemption and in accordance with the
provisions of the Senior Indenture. In the event of redemption of this Note in
part only, this Note will be cancelled and a new Note or Notes representing the
unredeemed portion hereof will be issued in the name of the Holder hereof.
SECTION 4. Repayment. This Note will be repayable by the
Company at the option of the Holder hereof prior to the Stated Maturity Date
only if one or more Optional Repayment Dates are specified on the face hereof.
If so specified, this Note will be subject to repayment at the option of the
Holder hereof on any Optional Repayment Date in whole or from time to time in
part in increments of $1,000 or such other minimum denomination specified on the
face hereof (provided that any remaining principal amount hereof will be at
least $1,000 or such other minimum denomination), at a repayment price equal to
100% of the unpaid principal amount, or such other repayment price specified on
the face hereof, to be repaid, together with unpaid interest accrued heron to
but excluding the date of repayment. For this Note to be repaid, it must be
received, together with the form thereon entitled "Option to Elect Repayment"
duly completed, by the Senior Trustee at its office maintained for such purpose
in the Borough of Manhattan, The City of New York, not more than 60 nor less
than 30 calendar days prior to the date of repayment. Exercise of such repayment
option by the Holder will be irrevocable.
Only the Depositary may exercise the repayment option if this Note is a
Book-Entry Note as specified on the face hereof. Accordingly, if the beneficial
owner hereof, if this is a Book-Entry Note, desires to have all or any portion
of the Book-Entry Note repaid they must instruct the participant through which
they own their interest to direct the Depositary to exercise the repayment
option on their behalf by delivering this Note and duly completed election form
to the Senior Trustee as aforesaid. In order to ensure that this Note and
election form are received by such Senior Trustee on a particular day, the
beneficial owner hereof must so instruct the participant through which they own
their interest before such participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, the beneficial owner hereof
should consult the participants through which they own their interest for the
respective deadlines for such participants. All instructions given to
participants from beneficial owners of Book-Entry Notes relating to the option
to elect repayment will be irrevocable. In addition, at the time such
instructions are given, the beneficial owner of this Note shall cause the
participant through which it owns its interest to transfer such beneficial
owner's interest in the Book-Entry Note, on the Depositary's records, to the
Senior Trustee.
SECTION 5. Sinking Fund. This Note is not subject to a sinking
fund unless otherwise specified on the face hereof.
SECTION 6. Discount Notes. If the Issue Price of this Note (as
specified on the face hereof) is less than 100% of the principal amount hereof
(i.e. par) by more than a percentage equal to the product of 0.25% and the
number of full years to the Stated Maturity Date (a "Discount Note"), the
difference between the Issue Price of this Note and par is referred to herein as
the "Discount." In the event of redemption, repayment or acceleration of
maturity of this Note, the amount payable to the Holder hereof will be equal to
the sum of (i) the Issue Price (increased by any accruals of Discount) and, in
the event of any redemption of this Note (if applicable), multiplied by the
Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (ii) any unpaid interest accrued hereon to the
date of such redemption, repayment or acceleration of maturity, as the case may
be (the "Amortized Face Amount").
Unless otherwise specified on the face hereof, for purposes of
determining the amount of Discount that has accrued as of any date on which a
redemption, repayment or acceleration of maturity occurs for this Note, such
Discount will be accrued using a constant yield method. The constant yield will
be calculated using a 30-day month, 360-day year convention, a compounding
period that, except for the Initial Period (as hereinafter defined), corresponds
to the shortest period between Interest Payment Dates for this Note (with
ratable accruals within a compounding period), a coupon rate equal to the
initial coupon rate applicable to this Note and an assumption that the maturity
of this Note will not be accelerated. If the period from the date of issue to
the initial Interest Payment Date for this Note (the "Initial Period") is
shorter than the compounding period for this Note, a proportionate amount of the
yield for an entire compounding period will be accrued. If the Initial Period is
longer than the compounding period, then such period will be divided into a
regular compounding period and a short period with the short period being
treated as provided in the preceding sentence.
SECTION 7. Amortizing Notes. If this Note is an Amortizing
Note as specified on the face hereof, unless otherwise specified on the face
hereof, interest on this Note will be computed on the basis of a 360-day year of
twelve 30-day months. Payments with respect to this Note if it is an Amortizing
Note will be applied first to interest due and payable hereon and then to the
reduction of the unpaid principal amount hereof. Further information concerning
additional terms and provisions of Amortizing Notes will be set forth on the
Annex attached hereto, which Annex will for all purposes have the same effect as
if set forth at this place.
<PAGE>
SECTION 8. Events of Default. If any Event of Default with
respect to Notes of this series will occur and be continuing, the principal of
the Notes of this series may be declared due and payable in the manner and with
the effect provided in the Senior Indenture; provided, however, that
notwithstanding anything herein to the contrary, if this Note is a Discount
Note, the amount so declared to be due and payable will be the Amortized Face
Amount of this Note as of the date of such declaration as specified under
Section 6.
SECTION 9. Modification or Waiver; Obligation of the Company
Absolute. The Senior Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Senior Indenture at any time by the Company
and the Senior Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities of each series to be
affected. The Senior Indenture also contains provisions permitting the Holders
of specified percentages in principal amount of the outstanding Securities of
each series, on behalf of the Holders of all Securities of such series, to
waive, with respect to the Securities of such series, compliance by the Company
with certain provisions of the Senior Indenture and certain past defaults under
the Senior Indenture and their consequences. Any such consent or waiver by the
Holder of this Note will be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Senior Indenture and no provision
of this Note or of the Senior Indenture will alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest on this Note at the times, places and rates,
herein prescribed.
SECTION 10. Discharge, Legal Defeasance and Covenant
Defeasance. The Senior Indenture contains provisions for defeasance at any time
of (a) the entire indebtedness of the Company on this Note and (b) certain
restrictive covenants and the related Events of Default upon compliance by the
Company with certain conditions specified therein, which provisions apply to
this Note.
SECTION 11. Authorized Denominations. Unless otherwise
specified on the face hereof, the Notes of this series are issuable only in
global or certificated registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. As provided in the Senior Indenture and
subject to certain limitations therein specified and to the limitations
described below, if applicable, Notes of this series are exchangeable for Notes
of this series of like aggregate principal amount and like Stated Maturity and
with like terms and conditions of a different authorized denomination, as
requested by the Holder surrendering the same.
SECTION 12. Registration of Transfer. As provided in the
Senior Indenture and subject to certain limitations therein specified and to the
limitations described below, if applicable, the transfer of this Note is
registerable in the Security Register upon surrender of this Note for
registration of transfer at the office or agency of the Company maintained for
that purpose duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar (which
will initially be the Senior Trustee at its principal corporate trust office
located in the Borough of Manhattan, The City of New York) duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series with like terms and conditions, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Note is a Book-Entry Note as specified on the face
hereof, this Note is exchangeable for certificated Notes only upon the terms and
conditions provided in the Senior Indenture. Except as provided in the Senior
Indenture, owners of beneficial interests in this Book-Entry Note will not be
entitled to receive physical delivery of Notes in certificated registered form
and will not be considered the Holders thereof for any purpose under the Senior
Indenture.
No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
SECTION 13. Owners. Prior to due presentment of this Note for
registration of transfer, the Company, the Senior Trustee and any agent of the
Company or the Senior Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be
overdue and notwithstanding any notation of ownership or other writing hereon,
and none of the Company, the Senior Trustee or any such agent will be affected
by notice to the contrary.
SECTION 14. Governing Law. The Senior Indenture and the Notes
will be governed by and construed in accordance with the laws of the State of
New York.
SECTION 15. Defined Terms. All terms used in this Note which
are defined in the Senior Indenture will have the meanings assigned to them in
the Senior Indenture unless otherwise defined herein; and all references in the
Senior Indenture to "Security" or "Securities" will be deemed to include the
Notes.
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects
to have the Company repay the principal amount of this Note or portion hereof
below designated at the applicable Optional Repayment Price indicated on the
face hereof, plus accrued and unpaid interest to but excluding the date of
repayment, if this Note is to be repaid pursuant to Section 4 of this Note. If a
portion of this Note is not being repaid, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):
<TABLE>
<S> <C>
Dated:____________________________________________
_______________________________________________________
Signature
Sign exactly as name appears on the front of this Note.
Indicate address where check is to be sent, if repaid
Principal amount to be repaid if amount to be repaid is less _______________________________________________________
than the entire principal amount of this Note (principal amount
remaining must be an authorized denomination) _______________________________________________________
$______________________________________________________________
(which will be an integral multiple of $1,000) SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER
Denomination or denominations of the Note or Notes to be _______________________________________________________
issued for the portion of this Note not being repaid
_______________________________________________________________
_______________________________________________________________
</TABLE>
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, will be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT Custodian
...........................................................
(Cust) (Minor)
Under Uniform Gifts to Minors Act
...........................................................
(State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
[ ]
- ---------------------------------------------------------------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- ---------------------------------------------------------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and appointing _______________________ attorney to
transfer said Note on the books of the Company, with full power of substitution in the premises.
</TABLE>
<TABLE>
<S> <C>
Dated: _______________________ _____________________________________________________________________________________
Signature
Sign exactly as name appears on the front of this Note [SIGNATURE
MUST BE GUARANTEED by a member of a recognized Medallion
Guarantee Program]
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE
OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
</TABLE>
<PAGE>
Annex A
This Note is one of the Notes designated as "6.8% Notes due
June 15, 2005", which Notes are limited to $250,000,000 aggregate principal
amount, subject to the terms of the Senior Indenture.
Covenants
- ---------
This Note contains the following covenants:
Limitations on Issuance or Disposition of Stock of Significant
Subsidiaries. The Company will not, nor will it permit any Significant
Subsidiary to, issue, sell or otherwise dispose of any shares of Capital Stock
(other than non-voting Preferred Stock) of any Significant Subsidiary, except
for (i) directors' qualifying shares; (ii) sales or other dispositions to the
Company or to one or more wholly owned Significant Subsidiaries; (iii) the sale
or other disposition of all or any part of the Capital Stock of any Significant
Subsidiary for consideration which is at least equal to the fair value of such
Capital Stock as determined by the Company's board of directors (acting in good
faith); or (iv) any issuance, sale, assignment, transfer or other disposition
made in compliance with an order of a court or regulatory authority of competent
jurisdiction, other than an order issued at the request of the Company or any
Significant Subsidiary.
Limitation on Liens. Except as provided below, neither the
Company nor any Significant Subsidiary may incur, issue, assume or guarantee any
Indebtedness secured by a Lien on any property or assets of the Company or any
Significant Subsidiary, or any shares of Capital Stock of any Significant
Subsidiary, without effectively providing that the Notes (together with, if the
Company shall so determine, any other Indebtedness which is not subordinated to
the Notes) shall be secured equally and ratably with (or prior to) such
Indebtedness, so long as such Indebtedness shall be so secured; provided,
however, that this covenant shall not apply to Indebtedness secured by (i) Liens
existing on June 4, 1998; (ii) Liens on property of, or on any shares of stock
of, any corporation existing at the time such corporation becomes a Significant
Subsidiary or merges into or consolidates with the Company or a Significant
Subsidiary; (iii) Liens on property or on shares of stock existing at the time
of acquisition thereof by the Company or any Significant Subsidiary; (iv) Liens
to secure the financing of the acquisition, construction or improvement of
property, or the acquisition of shares of stock by the Company or any
Significant Subsidiary, provided that such Liens are created not later than one
year after such acquisition or, in the case of property, no later than one year
after completion of construction or commencement of commercial operation,
whichever is later, are limited to the property acquired, constructed or
improved or the shares of stock acquired and do not secure indebtedness in
excess of the cost of such acquisition, construction or improvement; (v) Liens
in favor of the Company or any Subsidiary; (vi) Liens in favor of, or required
by, governmental authorities; and (vii) any extension, renewal or replacement as
a whole or in part of any Lien referred to in the foregoing clauses (i) to (vi)
inclusive; provided, however, that (a) such extension, renewal or replacement
Lien shall be limited to all or a part of the same property or shares of stock
that secured the Lien extended, renewed or replaced and (b) the Indebtedness
secured by such Lien at such time is not so increased.
The restrictions in the immediately preceding paragraph do not
apply if, immediately after the incurrence, issuance, assumption or guarantee of
any Indebtedness secured by a Lien, the aggregate principal amount of such
secured Indebtedness, (other then Indebtedness secured by Liens described in
clauses (i) to (vii), inclusive, of the immediately preceding paragraph) at that
time would not exceed 10% of Consolidated Capitalization.
"Capital Lease Obligations" of a Person means any obligation
that is required to be classified and accounted for as a capital lease on the
face of a balance sheet of such Person prepared in accordance with generally
accepted accounting principles; the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with generally accepted
accounting principles; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interest
in (however designated) corporate stock, including any Preferred Stock.
"Consolidated Capitalization" means the sum of the Company's
consolidated shareholders' equity, redeemable preferred stock and preferred
securities in any trust, partnership or other entity of which more than 50% of
the voting equity is owned directly or indirectly by the Company, including,
without limitation, the trust securities issued by Conseco Financing Trust I,
Conseco Financing Trust II, Conseco Financing Trust III and Conseco Financing
Trust IV.
"Indebtedness" means (i) any liability of any Person (1) for
borrowed money, or under any reimbursement obligation relating to a letter of
credit (other than letters of credit obtained in the ordinary course of
business), or (2)
- 1 -
<PAGE>
evidenced by a bond, note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any businesses,
properties or assets of any kind or with services incurred in connection with
capital expenditures (other than accounts payable or other indebtedness to trade
creditors arising in the ordinary course of business), or (3) for the payment of
money relating to a Capital Lease Obligation; (ii) any liability of others
described in the preceding clause (i) that the Person has guaranteed or that is
otherwise its legal liability; and (iii) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
types referred to in clauses (i) and (ii) above.
"Lien" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock or limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Significant Subsidiary" means any Subsidiary with net
earnings which constituted at least 20% of the Company's consolidated total net
earnings, all as determined as of the date of the Company's most recently
prepared quarterly financial statements for the 12-month period then ended.
"Stated Maturity," when used with respect to any security or
any installment of interest on any security, means the date specified in such
security as the fixed date on which the principal of such security or such
installment of interest, respectively, is finally due and payable, except as
otherwise provided in the case of Capital Lease Obligations.
"Subsidiary" means a corporation of which a majority of the
Capital Stock having voting power under ordinary circumstances to elect a
majority of the board of directors is owned directly or indirectly by the
Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
Redemption
- ----------
This Note will be redeemable as a whole or in part at the
option of the Company at any time, at a redemption price equal to the sum of (a)
the greater of (i) 100% of the principal amount hereof and (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
hereon from the redemption date to the Maturity Date, computed by discounting
such payments, in each case, to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate, plus 25 basis points, plus (b) accrued and unpaid interest on the
principal amount hereof to the date of redemption.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of this Note. "Independent Investment Banker"
means one of the Reference Treasury Dealers appointed by the Senior Trustee
after consultation with the Company.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, the average of
the Reference Treasury Dealer Quotations actually obtained by the Senior Trustee
for such redemption date.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Senior Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Senior Trustee by
- 2 -
<PAGE>
such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third
Business Day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, BancAmerica Robertson Stephens, Deutsche
Bank Securities Inc. and Salomon Brothers Inc and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company may substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but
no more than 60 days before the redemption date to each holder of Notes to be
redeemed. If, at the time notice of redemption is given, the redemption moneys
are not held by the Senior Trustee, the redemption may be made subject to their
receipt on or before the date fixed for redemption and such notice shall be of
no effect unless such moneys are so received.
Upon payment of the redemption price, on and after the
redemption date interest will cease to accrue on this Note or portions hereof
called for redemption.
- 3 -
<TABLE>
<CAPTION>
[Face of Note]
<S> <C> <C>
CUSIP NO. 20846NAA3 CONSECO, INC. PRINCIPAL AMOUNT: $ 200,000,000
REGISTERED NO. FX 3 SENIOR MEDIUM-TERM NOTE, SERIES A
</TABLE>
If this Note is a Book-Entry Note, the registered owner of
this Note (as indicated below) is The Depository Trust Company (the
"Depositary") or a nominee of the Depositary, and the following legend is
applicable: Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co., or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
The following summary of terms is subject to the information
set forth on the reverse hereof:
<TABLE>
<S> <C>
ORIGINAL ISSUE DATE: June 9, 1998 OPTIONAL REDEMPTION: [X] YES [ ] NO For all terms regarding
redemption, see Annex A attached hereto
INTEREST RATE TO REMARKETING DATE: 6.4% INITIAL REDEMPTION DATE:
STATED MATURITY DATE: June 15, 2011 INITIAL REDEMPTION PERCENTAGE:
REMARKETING DATE: June 15, 2001 ANNUAL PERCENTAGE
REDEMPTION REDUCTION:
INTEREST RATE TO MATURITY: To be determined as provided herein and
set forth in the records of the Trustee REDEMPTION PRICE:
AUTHORIZED DENOMINATIONS
(If other than $1,000 and integral
multiples thereof):
FORM: [X] BOOK-ENTRY
[ ] CERTIFICATED
PAYING AGENT (If other than the Senior Trustee):
REGULAR RECORD DATES: May 31 and November 30 OPTION TO ELECT REPAYMENT: [X] YES [ ] NO For all terms
regarding repayment, see
Annex A attached hereto
INTEREST PAYMENT DATES: June 15 and December 15 of each year, OPTIONAL REPAYMENT DATE[S]:
commencing December 15, 1998
OPTIONAL REPAYMENT PRICE[S]:
SINKING FUND: [ ] YES [X] NO
ORIGINAL ISSUE DISCOUNT: [ ] YES [X] NO SPECIFIED CURRENCY: United States dollars
AMORTIZING NOTE: [ ] YES [X] NO OTHER PROVISIONS:
EXCHANGE RATE AGENT:
DEPOSITARY: The Depository Trust Company ANNEX ATTACHED (and incorporated
by reference herein): [X] YES [ ] NO
</TABLE>
If this Note was issued with "original issue discount" for
purposes of Section 1273 of the Internal Revenue Code of 1986, as amended, the
following shall be completed:
<TABLE>
<S> <C>
ORIGINAL ISSUE DISCOUNT NOTE: [ ] Yes [X] No ISSUE PRICE (expressed
as a percentage of aggregate principal amount):
YIELD TO MATURITY: INITIAL PERIOD:
</TABLE>
<PAGE>
CONSECO, INC., a corporation duly organized and existing under
the laws of Indiana (herein called the "Company," which term includes any
successor corporation under the Senior Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to CEDE & CO. or registered
assigns, the principal sum specified above on the Stated Maturity Date shown
above, and to pay interest thereon from and including the Original Issue Date
shown above or from and including the most recent Interest Payment Date (as
hereinafter defined) to which interest has been paid or duly provided for, as
the case may be.
Interest will be paid on the Interest Payment Date or Dates
specified above, at the rate per annum specified above, commencing with the
first such Interest Payment Date next succeeding the Original Issue Date shown
above (except as provided below) until the principal hereof is paid or duly made
available for payment. Interest payments will be made in an amount equal to the
amount accrued from and including the immediately preceding Interest Payment
Date in respect of which interest has been paid or duly made available for
payment (or from and including the date of issue, if no interest has been paid
or duly made available for payment) to but excluding the applicable Interest
Payment Date or the Stated Maturity Date or such prior date on which the
principal hereof becomes due and payable (the "Maturity Date"), as the case may
be. The interest so payable and punctually paid or duly provided for on any
Interest Payment Date will, as provided in such Senior Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the Regular Record Date specified above next
preceding such Interest Payment Date. The first payment of interest on any Note
originally issued between a Regular Record Date and the next Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date to the Holder on such next succeeding Regular Record Date.
Except as otherwise provided in the Senior Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date by virtue of their having been such Holder
and may either be paid to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Senior
Trustee, notice whereof is to be given to Holders of Notes not less than 10
calendar days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Senior Indenture.
Unless otherwise specified above, the Company will make
payments of principal of, and premium, if any, and interest, if any, on this
Note in the Specified Currency specified above. Any such amounts payable by the
Company in the Specified Currency will be converted by the Exchange Rate Agent
specified above into United States dollars for payments to Holders unless
otherwise specified above or the Holder of this Note elects, in the manner
hereinafter described, to receive such amounts in the Specified Currency.
If the Specified Currency is other than United States dollars,
any United States dollar amount to be received by the Holder of this Note will
be based on the highest bid quotation in The City of New York received by the
Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the
second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected
by the Exchange Rate Agent and approved by the Company for the purchase by the
quoting dealer of the Specified Currency for United States dollars for
settlement on such payment date in the aggregate amount of such Specified
Currency payable to all Holders of Notes, the Specified Currency for which is
other than United States Dollars, scheduled to receive United States dollar
payments and at which the applicable dealer commits to execute a contract. All
currency exchange costs will be borne by the Holder of this Note by deductions
from such payments. If three such bid quotations are not available, payments
will be made in the Specified Currency.
If the Specified Currency is other than United States dollars,
the Holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and /or interest, if any, in the
Specified Currency instead of in United States dollars, by submitting a written
request for such payment to the Senior Trustee at its corporate trust office in
The City of New York on or prior to the applicable Record Date or at least
fifteen calendar days prior to the Maturity Date, as the case may be. Such
written request may be mailed or hand delivered or sent by cable, telex or other
form of facsimile transmission. The Holder of this Note may elect to receive all
or a specified portion of all future payments in the Specified Currency and need
not file a separate election for each payment. Such election will remain in
effect until revoked by written notice to the Senior Trustee, but written notice
by any such revocation must be received by such Trustee on or prior to the
applicable Record Date or at least fifteen calendar days prior to the Maturity
Date, as the case may be. If this Note is to be held in the name of a broker or
nominee the Holder should contact such broker or nominee to determine whether
and how an election to receive payments in the Specified Currency may be made.
If this Note is a Book-Entry Note as specified above, while
this Note is represented by one or more Book-Entry Notes registered in the name
of the Depositary or its nominee, the Company will cause payments of principal
of, premium, if any, and interest on such Book-Entry Notes to be made to the
Depositary or its nominee, as the case may be, by wire transfer to the extent,
in the funds and in the manner required by agreements with, or regulations or
procedures prescribed from time to time by, the Depositary or its nominee, and
otherwise in accordance with such agreements, regulations and procedures. If
this Note is a Book-Entry Note as specified above, the following legend is
applicable except as specified on the reverse hereof: THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR.
If this Note is a certificated Note as specified above,
payments of interest, if any, on this Note on any Interest Payment Date other
than at Stated Maturity Date will be made by check mailed to the address of the
Holder entitled thereto as such address appears in the Security Register of the
Company. Notwithstanding the foregoing, a Holder of $10,000,000 (or, if the
Specified Currency is other than United States dollars, the equivalent thereof
in such Specified Currency) or more in aggregate principal amount of
certificated Notes (whether having identical or different terms and provisions)
will be entitled to receive interest payments, if any, on any Interest Payment
Date other than at Stated Maturity by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the Trustee not less than 15 days prior to such Interest Payment Date.
If the Specified Currency specified above is other than United
States dollars, payments of the principal of, and premium, if any, and/or
interest, if any, on this Note which are to be made in United States dollars
will be made in the manner specified above with respect to Notes denominated in
United States dollars. If the Specified Currency specified above is other than
United States dollars, payments of interest, if any, on this Note which are to
be made in the Specified Currency on an Interest Payment Date other than the
Maturity Date will be made by check mailed to the address of the Holder of this
Note as it appears in the Security Register, subject to the right to receive
such interest payments by wire transfer of immediately available funds under the
circumstances described above. If the Specified Currency specified above is
other than United States dollars, payments of principal of, and premium, if any,
and/or interest, if any, on this Note which are to be made in the Specified
Currency on the Maturity Date will be made by wire transfer of immediately
available funds to an account with a bank designated at least fifteen calendar
days prior to the Maturity Date by the Holder of this Note, provided that such
bank has appropriate facilities therefor and that this Note is presented and
surrendered at the office or agency maintained by the Company for such purpose
in the Borough of Manhattan, The City of New York in time for the Senior Trustee
to make such payments in such funds in accordance with its normal procedures.
<PAGE>
The Company will pay any administrative costs imposed by banks
in connection with making payments by wire transfer, but not any tax, assessment
or governmental charge imposed upon the Holder of this Note. If this Note is a
certificated Note as specified above, payment of the principal, premium, if any,
due on the Maturity Date in respect of this Note will be made in immediately
available funds upon presentation and surrender of this Note at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH ON THE REVERSE HEREOF OR THE ATTACHED ANNEX, IF ANY, WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH
AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, or its successor as
Trustee, or its Authenticating Agent, by manual signature of an authorized
signatory, this Note will not be entitled to any benefit under the Senior
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
<TABLE>
<S> <C>
Dated: June 9, 1998
CONSECO, INC.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities
issued under the within-mentioned Senior Indenture.
By: /s/ Thomas J. Kilian
---------------------------------------------------------
Its: Executive Vice President and Chief Operations Officer
LTCB TRUST COMPANY,
as Trustee
By: /s/ Barbara Bevelaqua Attest: /s/ John J. Sabl
----------------------------------------------------- -----------------------------------------------------
Authorized Officer Its: Executive Vice President, Secretary and General Counsel
</TABLE>
<PAGE>
[Reverse of Note]
CONSECO, INC.
SENIOR MEDIUM-TERM NOTE, SERIES A
SECTION 1. General. This Note is one of a series of Securities
of the Company issued under an Indenture, dated as of November 13, 1997, as
amended from time to time (the "Senior Indenture"), between the Company and LTCB
Trust Company, as trustee (the "Senior Trustee"), to which Senior Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Senior Trustee and the Holders of the Notes and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Note is one of the Securities designated on the face hereof. The Notes may bear
different dates, mature at different times, bear interest at different rates, be
subject to different redemption provisions, if any, may be subject to different
sinking funds, if any, and may otherwise vary, all as provided in the Senior
Indenture.
SECTION 2. Payments. Interest on this Note will be payable on
January 15 and July 15 of each year or on such other date(s) specified on the
face hereof (each, an "Interest Payment Date") and on the Maturity Date. Unless
otherwise specified in on the face hereof, interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date(s) or the Maturity Date falls on a day
that is not a Business Day, the required payment of principal, premium, if any,
and/or interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest will accrue on such payment for
the period from and after such Interest Payment Date or the Maturity Date, as
the case may be, to the date of such payment on the next succeeding Business
Day.
SECTION 3. Redemption. This Note will be redeemable at the
option of the Company prior to the Stated Maturity Date only if an Initial
Redemption Date is specified on the face hereof. If so specified, this Note will
be subject to redemption at the option of the Company on any date on and after
the Initial Redemption Date in whole or from time to time in part in increments
of $1,000 or the minimum denomination, if any, specified on the face hereof
(provided that any remaining principal amount hereof will be at least $1,000 or
such minimum denomination), at the Redemption Price specified on the face
hereof, together with unpaid interest accrued hereon to the date of redemption,
on written notice given to the Holder hereof not more than 60 nor less than 30
calendar days prior to the date of redemption and in accordance with the
provisions of the Senior Indenture. In the event of redemption of this Note in
part only, this Note will be cancelled and a new Note or Notes representing the
unredeemed portion hereof will be issued in the name of the Holder hereof.
SECTION 4. Repayment. This Note will be repayable by the
Company at the option of the Holder hereof prior to the Stated Maturity Date
only if one or more Optional Repayment Dates are specified on the face hereof.
If so specified, this Note will be subject to repayment at the option of the
Holder hereof on any Optional Repayment Date in whole or from time to time in
part in increments of $1,000 or such other minimum denomination specified on the
face hereof (provided that any remaining principal amount hereof will be at
least $1,000 or such other minimum denomination), at a repayment price equal to
100% of the unpaid principal amount, or such other repayment price specified on
the face hereof, to be repaid, together with unpaid interest accrued heron to
but excluding the date of repayment. For this Note to be repaid, it must be
received, together with the form thereon entitled "Option to Elect Repayment"
duly completed, by the Senior Trustee at its office maintained for such purpose
in the Borough of Manhattan, The City of New York, not more than 60 nor less
than 30 calendar days prior to the date of repayment. Exercise of such repayment
option by the Holder will be irrevocable.
Only the Depositary may exercise the repayment option if this Note is a
Book-Entry Note as specified on the face hereof. Accordingly, if the beneficial
owner hereof, if this is a Book-Entry Note, desires to have all or any portion
of the Book-Entry Note repaid they must instruct the participant through which
they own their interest to direct the Depositary to exercise the repayment
option on their behalf by delivering this Note and duly completed election form
to the Senior Trustee as aforesaid. In order to ensure that this Note and
election form are received by such Senior Trustee on a particular day, the
beneficial owner hereof must so instruct the participant through which they own
their interest before such participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, the beneficial owner hereof
should consult the participants through which they own their interest for the
respective deadlines for such participants. All instructions given to
participants from beneficial owners of Book-Entry Notes relating to the option
to elect repayment will be irrevocable. In addition, at the time such
instructions are given, the beneficial owner of this Note shall cause the
participant through which it owns its interest to transfer such beneficial
owner's interest in the Book-Entry Note, on the Depositary's records, to the
Senior Trustee.
SECTION 5. Sinking Fund. This Note is not subject to a sinking
fund unless otherwise specified on the face hereof.
SECTION 6. Discount Notes. If the Issue Price of this Note (as
specified on the face hereof) is less than 100% of the principal amount hereof
(i.e. par) by more than a percentage equal to the product of 0.25% and the
number of full years to the Stated Maturity Date (a "Discount Note"), the
difference between the Issue Price of this Note and par is referred to herein as
the "Discount." In the event of redemption, repayment or acceleration of
maturity of this Note, the amount payable to the Holder hereof will be equal to
the sum of (i) the Issue Price (increased by any accruals of Discount) and, in
the event of any redemption of this Note (if applicable), multiplied by the
Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (ii) any unpaid interest accrued hereon to the
date of such redemption, repayment or acceleration of maturity, as the case may
be (the "Amortized Face Amount").
Unless otherwise specified on the face hereof, for purposes of
determining the amount of Discount that has accrued as of any date on which a
redemption, repayment or acceleration of maturity occurs for this Note, such
Discount will be accrued using a constant yield method. The constant yield will
be calculated using a 30-day month, 360-day year convention, a compounding
period that, except for the Initial Period (as hereinafter defined), corresponds
to the shortest period between Interest Payment Dates for this Note (with
ratable accruals within a compounding period), a coupon rate equal to the
initial coupon rate applicable to this Note and an assumption that the maturity
of this Note will not be accelerated. If the period from the date of issue to
the initial Interest Payment Date for this Note (the "Initial Period") is
shorter than the compounding period for this Note, a proportionate amount of the
yield for an entire compounding period will be accrued. If the Initial Period is
longer than the compounding period, then such period will be divided into a
regular compounding period and a short period with the short period being
treated as provided in the preceding sentence.
SECTION 7. Amortizing Notes. If this Note is an Amortizing
Note as specified on the face hereof, unless otherwise specified on the face
hereof, interest on this Note will be computed on the basis of a 360-day year of
twelve 30-day months. Payments with respect to this Note if it is an Amortizing
Note will be applied first to interest due and payable hereon and then to the
reduction of the unpaid principal amount hereof. Further information concerning
additional terms and provisions of Amortizing Notes will be set forth on the
Annex attached hereto, which Annex will for all purposes have the same effect as
if set forth at this place.
<PAGE>
SECTION 8. Events of Default. If any Event of Default with
respect to Notes of this series will occur and be continuing, the principal of
the Notes of this series may be declared due and payable in the manner and with
the effect provided in the Senior Indenture; provided, however, that
notwithstanding anything herein to the contrary, if this Note is a Discount
Note, the amount so declared to be due and payable will be the Amortized Face
Amount of this Note as of the date of such declaration as specified under
Section 6.
SECTION 9. Modification or Waiver; Obligation of the Company
Absolute. The Senior Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Senior Indenture at any time by the Company
and the Senior Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities of each series to be
affected. The Senior Indenture also contains provisions permitting the Holders
of specified percentages in principal amount of the outstanding Securities of
each series, on behalf of the Holders of all Securities of such series, to
waive, with respect to the Securities of such series, compliance by the Company
with certain provisions of the Senior Indenture and certain past defaults under
the Senior Indenture and their consequences. Any such consent or waiver by the
Holder of this Note will be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Senior Indenture and no provision
of this Note or of the Senior Indenture will alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest on this Note at the times, places and rates,
herein prescribed.
SECTION 10. Discharge, Legal Defeasance and Covenant
Defeasance. The Senior Indenture contains provisions for defeasance at any time
of (a) the entire indebtedness of the Company on this Note and (b) certain
restrictive covenants and the related Events of Default upon compliance by the
Company with certain conditions specified therein, which provisions apply to
this Note.
SECTION 11. Authorized Denominations. Unless otherwise
specified on the face hereof, the Notes of this series are issuable only in
global or certificated registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. As provided in the Senior Indenture and
subject to certain limitations therein specified and to the limitations
described below, if applicable, Notes of this series are exchangeable for Notes
of this series of like aggregate principal amount and like Stated Maturity and
with like terms and conditions of a different authorized denomination, as
requested by the Holder surrendering the same.
SECTION 12. Registration of Transfer. As provided in the
Senior Indenture and subject to certain limitations therein specified and to the
limitations described below, if applicable, the transfer of this Note is
registerable in the Security Register upon surrender of this Note for
registration of transfer at the office or agency of the Company maintained for
that purpose duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar (which
will initially be the Senior Trustee at its principal corporate trust office
located in the Borough of Manhattan, The City of New York) duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series with like terms and conditions, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Note is a Book-Entry Note as specified on the face
hereof, this Note is exchangeable for certificated Notes only upon the terms and
conditions provided in the Senior Indenture. Except as provided in the Senior
Indenture, owners of beneficial interests in this Book-Entry Note will not be
entitled to receive physical delivery of Notes in certificated registered form
and will not be considered the Holders thereof for any purpose under the Senior
Indenture.
No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
SECTION 13. Owners. Prior to due presentment of this Note for
registration of transfer, the Company, the Senior Trustee and any agent of the
Company or the Senior Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be
overdue and notwithstanding any notation of ownership or other writing hereon,
and none of the Company, the Senior Trustee or any such agent will be affected
by notice to the contrary.
SECTION 14. Governing Law. The Senior Indenture and the Notes
will be governed by and construed in accordance with the laws of the State of
New York.
SECTION 15. Defined Terms. All terms used in this Note which
are defined in the Senior Indenture will have the meanings assigned to them in
the Senior Indenture unless otherwise defined herein; and all references in the
Senior Indenture to "Security" or "Securities" will be deemed to include the
Notes.
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects
to have the Company repay the principal amount of this Note or portion hereof
below designated at the applicable Optional Repayment Price indicated on the
face hereof, plus accrued and unpaid interest to but excluding the date of
repayment, if this Note is to be repaid pursuant to Section 4 of this Note. If a
portion of this Note is not being repaid, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):
<TABLE>
<S> <C>
Dated:____________________________________________
_________________________________________________________
Signature
Sign exactly as name appears on the front of this Note.
Indicate address where check is to be sent, if repaid:
Principal amount to be repaid if amount to be repaid is less than __________________________________________________________
the entire principal amount of this Note (principal
amount remaining must be an authorized denomination) __________________________________________________________
$_______________________________________________________
(which will be an integral multiple of $1,000)
Denomination or denominations of the Note or Notes to be SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER
issued for the portion of this Note not being repaid
__________________________________________________________
________________________________________________________
________________________________________________________
</TABLE>
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, will be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT Custodian
...........................................................
(Cust) (Minor)
Under Uniform Gifts to Minors Act
...........................................................
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
[ ]
- -------------------------------------------------------------------------------------------------------------------
PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- -------------------------------------------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _______________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
Dated: _______________________ _______________________________________________________________________
Signature
Sign exactly as name appears on the front of this Note [SIGNATURE
MUST BE GUARANTEED by a member of a recognized Medallion
Guarantee Program]
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE
OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
</TABLE>
<PAGE>
Annex A
This Note is one of the Notes designated "6.4% MandatOry Par
Put Remarketed Securities(SM) ("MOPPRS(SM)") due June 15, 2011" (the "MOPPRS"),
which MOPPRS are limited to $550,000,000 aggregate principal amount, subject to
the terms of the Senior Indenture.
Covenants
- ---------
This Note contains the following covenants:
Limitations on Issuance or Disposition of Stock of Significant
Subsidiaries. The Company will not, nor will it permit any Significant
Subsidiary to, issue, sell or otherwise dispose of any shares of Capital Stock
(other than non-voting Preferred Stock) of any Significant Subsidiary, except
for (i) directors' qualifying shares; (ii) sales or other dispositions to the
Company or to one or more wholly owned Significant Subsidiaries; (iii) the sale
or other disposition of all or any part of the Capital Stock of any Significant
Subsidiary for consideration which is at least equal to the fair value of such
Capital Stock as determined by the Company's board of directors (acting in good
faith); or (iv) any issuance, sale, assignment, transfer or other disposition
made in compliance with an order of a court or regulatory authority of competent
jurisdiction, other than an order issued at the request of the Company or any
Significant Subsidiary.
Limitation on Liens. Except as provided below, neither the
Company nor any Significant Subsidiary may incur, issue, assume or guarantee any
Indebtedness secured by a Lien on any property or assets of the Company or any
Significant Subsidiary, or any shares of Capital Stock of any Significant
Subsidiary, without effectively providing that this Note (together with, if the
Company shall so determine, any other Indebtedness which is not subordinated to
this Note) shall be secured equally and ratably with (or prior to) such
Indebtedness, so long as such Indebtedness shall be so secured; provided,
however, that this covenant shall not apply to Indebtedness secured by (i) Liens
existing on June 4, 1998; (ii) Liens on property of, or on any shares of stock
of, any corporation existing at the time such corporation becomes a Significant
Subsidiary or merges into or consolidates with the Company or a Significant
Subsidiary; (iii) Liens on property or on shares of stock existing at the time
of acquisition thereof by the Company or any Significant Subsidiary; (iv) Liens
to secure the financing of the acquisition, construction or improvement of
property, or the acquisition of shares of stock by the Company or any
Significant Subsidiary, provided that such Liens are created not later than one
year after such acquisition or, in the case of property, no later than one year
after completion of construction or commencement of commercial operation,
whichever is later, are limited to the property acquired, constructed or
improved or the shares of stock acquired and do not secure indebtedness in
excess of the cost of such acquisition, construction or improvement; (v) Liens
in favor of the Company or any Subsidiary; (vi) Liens in favor of, or required
by, governmental authorities; and (vii) any extension, renewal or replacement as
a whole or in part of any Lien referred to in the foregoing clauses (i) to (vi)
inclusive; provided, however, that (a) such extension, renewal or replacement
Lien shall be limited to all or a part of the same property or shares of stock
that secured the Lien extended, renewed or replaced and (b) the Indebtedness
secured by such Lien at such time is not so increased.
The restrictions in the immediately preceding paragraph do not
apply if, immediately after the incurrence, issuance, assumption or guarantee of
any Indebtedness secured by a Lien, the aggregate principal amount of such
secured Indebtedness, (other then Indebtedness secured by Liens described in
clauses (i) to (vii), inclusive, of the immediately preceding paragraph) at that
time would not exceed 10% of Consolidated Capitalization.
"Capital Lease Obligations" of a Person means any obligation
that is required to be classified and accounted for as a capital lease on the
face of a balance sheet of such Person prepared in accordance with generally
accepted accounting principles; the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with generally accepted
accounting principles; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interest
in (however designated) corporate stock, including any Preferred Stock.
"Consolidated Capitalization" means the sum of the Company's
consolidated shareholders' equity, redeemable preferred stock and preferred
securities in any trust, partnership or other entity of which more than 50% of
the voting equity is owned directly or indirectly by the Company, including,
without limitation, the trust securities issued by Conseco Financing Trust I,
Conseco Financing Trust II, Conseco Financing Trust III and Conseco Financing
Trust IV.
"Indebtedness" means (i) any liability of any Person (1) for
borrowed money, or under any reimbursement obligation relating to a letter of
credit (other than letters of credit obtained in the ordinary course of
business), or (2)
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<PAGE>
evidenced by a bond, note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any businesses,
properties or assets of any kind or with services incurred in connection with
capital expenditures (other than accounts payable or other indebtedness to trade
creditors arising in the ordinary course of business), or (3) for the payment of
money relating to a Capital Lease Obligation; (ii) any liability of others
described in the preceding clause (i) that the Person has guaranteed or that is
otherwise its legal liability; and (iii) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of
types referred to in clauses (i) and (ii) above.
"Lien" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock or limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Significant Subsidiary" means any Subsidiary with net
earnings which constituted at least 20% of the Company's consolidated total net
earnings, as determined as of the date of the Company's most recently prepared
quarterly financial statements for the 12-month period then ended.
"Stated Maturity," when used with respect to any security or
any installment of interest on any security, means the date specified in such
security as the fixed date on which the principal of such security or such
installment of interest, respectively, is finally due and payable, except as
otherwise provided in the case of Capital Lease Obligations.
"Subsidiary" means a corporation of which a majority of the
Capital Stock having voting power under ordinary circumstances to elect a
majority of the board of directors is owned directly or indirectly by the
Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
Remarketing
- -----------
Mandatory Tender. Provided that Salomon Brothers Inc, as the
Remarketing Dealer (the "Remarketing Dealer"), gives notice to the Company and
the Senior Trustee on a Business Day not more than 15 nor less than 5 Business
Days prior to the Remarketing Date of its intention to purchase the MOPPRS for
remarketing (the "Notification Date"), the MOPPRS will be automatically
tendered, or deemed tendered, to the Remarketing Dealer for purchase on the
Remarketing Date, except as described under "Repurchase" below. The purchase
price for the MOPPRS to be paid by the Remarketing Dealer will equal 100% of the
principal amount thereof.
Determination of Interest Rate to Maturity. (a) Subject to the
Remarketing Dealer's election to remarket the MOPPRS as provided above and the
Remarketing Agreement, dated as of June 4, 1998 (the "Remarketing Agreement"),
between the Remarketing Dealer and the Company, the Interest Rate to Maturity
shall be determined by the Remarketing Dealer by 3:30 p.m., New York City time,
on the third Business Day immediately preceding the Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to 5.587% (the "Base Rate") plus the
Applicable Spread which will be based on the Dollar Price of the MOPPRS.
The "Applicable Spread" will be the lowest bid indication,
expressed as a spread (in the form of a percentage or in basis points) above the
Base Rate, obtained by the Remarketing Dealer on the Determination Date from the
bids quoted by five Reference Corporate Dealers for the full aggregate principal
amount of the MOPPRS at the Dollar Price, but assuming (i) an issue date equal
to the Remarketing Date, with settlement on such date without accrued interest,
(ii) a maturity date equal to the Stated Maturity Date of the MOPPRS, and (iii)
a stated annual interest rate, payable semiannually on each Interest Payment
Date, equal to the Base Rate plus the spread bid by the applicable Reference
Corporate Dealer. If fewer than five Reference Corporate Dealers bid as
described above, then the Applicable Spread shall be the lowest of such bid
indications obtained as described above. The Interest Rate to Maturity announced
by the Remarketing Dealer, absent manifest error, shall be binding and
conclusive upon the Beneficial Owners and Holders of the MOPPRS, the Company and
the Senior Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present
value determined by the Remarketing Dealer, as of the Remarketing Date, of the
Remaining Scheduled Payments discounted to the Remarketing Date, on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months), at the
Remarketing Treasury Rate.
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<PAGE>
"Reference Corporate Dealers" means leading dealers of
publicly traded debt securities of the Company in The City of New York (which
may include the Remarketing Dealer or one of its affiliates) selected by the
Remarketing Dealer after consultation with the Company.
"Remarketing Treasury Rate" means, with respect to the
Remarketing Date, the rate per annum equal to the semi-annual equivalent yield
to maturity or interpolated (on a day count basis) yield to maturity of the
Remarketing Comparable Treasury Issues, assuming a price for the Remarketing
Comparable Treasury Issues (expressed as a percentage of its principal amount),
equal to the Remarketing Comparable Treasury Price for the Remarketing Date.
"Remarketing Comparable Treasury Issues" means the United
States Treasury security or securities selected by the Remarketing Dealer as
having an actual or interpolated maturity or maturities comparable to the
remaining term of the MOPPRS being remarketed.
"Remarketing Comparable Treasury Price" means, with respect to
the Remarketing Date, (a) the offer prices for the Remarketing Comparable
Treasury Issues (expressed in each case as a percentage of its principal amount)
on the Determination Date, as set forth on "Telerate Page 500" (or such other
page as may replace Telerate Page 500), or (b) if such page (or any successor
page) is not displayed or does not contain such offer prices on such Business
Day, (i) the average of the Remarketing Reference Treasury Dealer Quotations for
such Remarketing Date, after excluding the highest and lowest of such
Remarketing Reference Treasury Dealer Quotations, or (ii) if the Remarketing
Dealer obtains fewer than four such Remarketing Reference Treasury Dealer
Quotations, the average of all such Remarketing Reference Treasury Dealer
Quotations. "Telerate Page 500" means the display designated as "Telerate Page
500" on Dow Jones Markets Limited (or such other page as may replace Telerate
Page 500 on such service) or such other service displaying the offer prices
specified in (a) above as may replace Dow Jones Markets Limited.
"Remarketing Reference Treasury Dealer Quotations" means, with
respect to each Remarketing Reference Treasury Dealer and the Remarketing Date,
the offer prices for the Remarketing Comparable Treasury Issues (expressed in
each case as a percentage of its principal amount) quoted to the Remarketing
Dealer by such Remarketing Reference Treasury Dealer by 3:30 p.m., New York City
time, on the Determination Date.
"Remarketing Reference Treasury Dealer" means each of Credit
Suisse First Boston Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc (or their respective affiliates which are primary U.S. Government
securities dealers) and their respective successors; provided, however, that if
any of the foregoing or their affiliates shall cease to be a primary U.S.
Government securities dealer in The City of New York (a "Primary Treasury
Dealer"), the Remarketing Dealer shall substitute therefor another Primary
Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the
MOPPRS, the remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate only, that would be due after the
Remarketing Date to and including the Stated Maturity Date, as determined by the
Remarketing Dealer; provided, however, that if the Remarketing Date is not an
Interest Payment Date, the amount of the next succeeding scheduled interest
payment thereon, calculated at the Base Rate only, will be reduced by the amount
of interest accrued hereon, calculated at the Base Rate only, to the Remarketing
Date.
(b) Provided the Remarketing Dealer has previously notified
the Company and the Senior Trustee on the Notification Date of its intention to
purchase all tendered MOPPRS on the Remarketing Date, the Remarketing Dealer
will notify the Company, the Senior Trustee and DTC by telephone, confirmed in
writing, by 4:00 p.m., New York City time, on the Determination Date, of the
Interest Rate to Maturity effective from and including the Remarketing Date.
Repurchase
- ----------
In the event that (i) the Remarketing Dealer for any reason
does not notify the Company of the Interest Rate to Maturity by 4:00 p.m., New
York City time, on the Determination Date, or (ii) prior to the Remarketing
Date, the Remarketing Dealer has resigned and no successor has been appointed on
or before the Determination Date, or (iii) since the Notification Date, the
Remarketing Dealer terminates the Remarketing Agreement due to the occurrence of
a material adverse change in the condition of the Company and its subsidiaries,
considered as one enterprise, or an Event of Default, or any event which, with
the giving of notice of passage of time, or both, would constitute an Event of
Default, with respect to the MOPPRS, or any other event constituting a
termination event under the Remarketing Agreement, or (iv) the Remarketing
Dealer elects not to remarket this Note, or (v) the Remarketing Dealer for any
reason does not purchase all tendered MOPPRS on the Remarketing Date, the
Company will repurchase the MOPPRS as a whole on the Remarketing Date at a price
equal to 100% of the principal amount of the MOPPRS plus all accrued and unpaid
interest, if any, on the MOPPRS to the Remarketing Date. In any such case,
payment will be made by the Company to the DTC participant of
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<PAGE>
each tendering beneficial owner of MOPPRS, by book-entry through DTC by the
close of business on the Remarketing Date against delivery through DTC of such
beneficial owner's tendered MOPPRS.
Redemption
- ----------
The MOPPRS will be subject to redemption at the option of the
Company from the Remarketing Dealer on the Remarketing Date, in whole but not in
part, at the Optional Redemption Price. To exercise its option to redeem the
MOPPRS, the Company must notify the Remarketing Dealer and the Senior Trustee
not later than the Business Day immediately preceding the Determination Date.
The Company's election will be irrevocable. The "Optional Redemption Price"
shall be the greater of (i) 100% of the principal amount of the MOPPRS and (ii)
the Dollar Price, plus in either case accrued and unpaid interest from the
Remarketing Date on the principal amount being redeemed to the date of
redemption. If the Company elects to redeem the MOPPRS, it shall pay the
redemption price therefor in same-day funds by wire transfer to an account
designated by the Remarketing Dealer on the Remarketing Date.
If this Note remains outstanding after the Remarketing Date,
this Note will be subject to redemption at the option of the Company, in whole
or in part, at any time after such Remarketing Date, at a redemption price equal
to the sum of (a) the greater of (i) 100% of the principal amount hereof and
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest hereon from the redemption date to the maturity date,
computed by discounting such payments, in each case, to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Redemption Treasury Rate, plus 25 basis points, plus (b) accrued and unpaid
interest on the principal amount hereof to the date of redemption.
"Redemption Treasury Rate" means, with respect to any
redemption date, the rate per annum equal to the semiannual equivalent yield to
maturity of the Redemption Comparable Treasury Issue, assuming a price for the
Redemption Comparable Treasury Issue (expressed as a percentage of its principal
amount), equal to the Redemption Comparable Treasury Price for such redemption
date.
"Redemption Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of this Note that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining terms of this Note. "Independent Investment Banker" means one of the
Redemption Reference Treasury Dealers appointed by the Senior Trustee after
consultation with the Company.
"Redemption Comparable Treasury Price" means, with respect to
any redemption date, (a) the average of the bid and asked prices for the
Redemption Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third Business Day preceding such redemption date,
as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, the average of the Redemption Reference Treasury Dealer Quotations
actually obtained by the Senior Trustee for such redemption date.
"Redemption Reference Treasury Dealer Quotations" means, with
respect to each Redemption Reference Treasury Dealer and any redemption date,
the average, as determined by the Senior Trustee, of the bid and asked prices
for the Redemption Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Senior Trustee by
such Redemption Reference Treasury Dealer at 5:00 p.m. (New York City time) on
the third Business Day preceding such redemption date.
"Redemption Reference Treasury Dealer" means each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, NationsBanc Montgomery Securities
LLC, Chase Securities Inc., Goldman, Sachs & Co. and SBC Warburg Dillon Read
Inc. and their respective successors; provided, however, that if any of the
foregoing shall cease to be a Primary Treasury Dealer, the Company may
substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but
no more than 60 days before the redemption date to each holder of MOPPRS to be
redeemed. If, at the time notice of redemption is given, the redemption moneys
are not held by the SeniorTrustee, the redemption may be made subject to their
receipt on or before the date fixed for redemption and such notice shall be of
no effect unless such moneys are so received.
Upon payment of the redemption price, on and after the
redemption date interest will cease to accrue on this Note or portions hereof
called for redemption.
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