<PAGE>
As filed with the Securities and Exchange Commission on June 22, 1998.
REGISTRATION NO. 333-56611
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C> <C>
CONSECO, INC. INDIANA 35-1468632
CONSECO FINANCING TRUST V DELAWARE 35-6653357
CONSECO FINANCING TRUST VI DELAWARE 35-6653358
CONSECO FINANCING TRUST VII DELAWARE 35-6653359
(Exact name of the Registrants (State or other (I.R.S. Employer
as specified in their respective charters) jurisdiction Identification No.)
of incorporation or
organization)
</TABLE>
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6100
(Address, including zip code, and telephone number, including
area code, of each Registrant's principal executive offices)
---------------------
John J. Sabl, Esq.
Executive Vice President
and General Counsel
Conseco, Inc.
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6163
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each Registrant)
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
(Continued on next page)
================================================================================
<PAGE>
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained herein constitutes a combined Prospectus that also relates to
$450,000,000 unsold principal amount of the securities previously
registered pursuant to the Registration Statement on Form S-3 (File No.
333-27803).
<PAGE>
PROSPECTUS
$2,000,000,000
CONSECO, INC.
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES, COMMON STOCK, STOCK
PURCHASE CONTRACTS, STOCK PURCHASE UNITS AND WARRANTS
CONSECO FINANCING TRUST V
CONSECO FINANCING TRUST VI
CONSECO FINANCING TRUST VII
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY GUARANTEED
BY CONSECO, INC.
------------------------
Conseco, Inc., an Indiana corporation ("Conseco" or the "Company"), may
offer and sell from time to time, in one or more series, (i) its debt
securities, consisting of debentures, notes and/or other evidences of
indebtedness representing unsecured obligations of Conseco (the "Debt
Securities"), (ii) shares of its preferred stock, no par value per share
("Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares") as described herein, (iii) shares of its common stock, no
par value per share ("Common Stock"), (iv) Stock Purchase Contracts ("Stock
Purchase Contracts") to purchase shares of Common Stock, (v) Stock Purchase
Units, each representing ownership of a Stock Purchase Contract and Preferred
Securities (as defined herein) or debt obligations of third parties, including
U.S. Treasury securities, securing the holder's obligation to purchase Common
Stock under the Stock Purchase Contracts ("Stock Purchase Units") and (vi)
warrants to purchase Debt Securities, Preferred Stock, Common Stock or other
securities or rights ("Warrants").
Conseco Financing Trust V, Conseco Financing Trust VI and Conseco Financing
Trust VII (each, a "Conseco Trust"), statutory business trusts formed under the
laws of the State of Delaware, may offer, from time to time, preferred
securities, representing preferred undivided beneficial interests in the assets
of the respective Conseco Trusts ("Preferred Securities"). The payment of
periodic cash distributions ("Distributions") with respect to Preferred
Securities out of moneys held by each of the Conseco Trusts, and payments on
liquidation, redemption or otherwise with respect to such Preferred Securities,
will be guaranteed by the Company to the extent described herein (each, a "Trust
Guarantee"). See "Description of Preferred Securities" and "Description of Trust
Guarantees." The Company's obligations under the Trust Guarantees will rank
junior and subordinate in right of payment to all other liabilities of the
Company and pari passu with its obligations under the most senior preferred or
preference stock of the Company. See "Description of Trust Guarantees -- Status
of the Trust Guarantees." Subordinated Debt Securities (as defined herein) may
be issued and sold by the Company in one or more series to a Conseco Trust or a
trustee of such Conseco Trust in connection with the investment of the proceeds
from the offering of Preferred Securities and Common Securities (as defined
herein) of such Conseco Trust. The Subordinated Debt Securities purchased by a
Conseco Trust may be subsequently distributed pro rata to holders of Preferred
Securities and Common Securities in connection with the dissolution of such
Conseco Trust. The Debt Securities, Preferred Stock, Depositary Shares, Common
Stock, Stock Purchase Contracts, Stock Purchase Units, Warrants and Preferred
Securities are herein collectively referred to as the "Securities."
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in an accompanying
supplement to this Prospectus (the "Prospectus Supplement"), which will
describe, without limitation and where applicable, the following: (i) in the
case of Debt Securities, the specific designation, aggregate principal amount,
ranking as senior or subordinated Debt Securities, denomination, maturity,
premium, if any, interest rate (which may be fixed or variable), time and method
of calculating interest, if any, place or places where principal of, premium, if
any, and interest, if any, on such Debt Securities
<PAGE>
will be payable, the currencies or currency units in which principal of,
premium, if any, and interest, if any, on such Debt Securities will be payable,
any terms of redemption or conversion, any sinking fund provisions, the purchase
price, any listing on a securities exchange, any right of the Company to defer
payment of interest on the Debt Securities and the maximum length of such
deferral period and other special terms; (ii) in the case of Preferred Stock and
Depositary Shares, the specific designation, stated value and liquidation
preference per share and number of shares offered, the purchase price, dividend
rate (which may be fixed or variable), method of calculating payment of
dividends, place or places where dividends on such Preferred Stock will be
payable, any terms of redemption, dates on which dividends shall be payable and
dates from which dividends shall accrue, any listing on a securities exchange,
voting and other rights, including conversion or exchange rights, if any, and
other special terms, including whether interests in the Preferred Stock will be
represented by Depositary Shares and, if so, the fraction of a share of
Preferred Stock represented by each Depositary Share; (iii) in the case of
Common Stock, the number of shares offered, the initial offering price, market
price and dividend information; (iv) in the case of Stock Purchase Contracts,
the number of shares of Common Stock issuable thereunder, the purchase price of
the Common Stock, the date or dates on which the Common Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contracts or vice versa, and the terms of the offering and sale thereof, (v) in
the case of Stock Purchase Units, the specific terms of the Stock Purchase
Contracts and any Preferred Securities or debt obligations of third parties
securing the holder's obligation to purchase the Common Stock under the Stock
Purchase Contracts, and the terms of the offering and sale thereof; (vi) in the
case of Warrants, the specific designation, the number, purchase price, exercise
price and other terms thereof, any listing of the Warrants or the underlying
Securities on a securities exchange or any other terms in connection with the
offering, sale and exercise of the Warrants, as well as the terms on which and
the Securities for which such Warrants may be exercised; and (vii) in the case
of Preferred Securities, the specific designation, number of securities,
liquidation amount per security, the purchase price, any listing on a securities
exchange, distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, terms for any conversion or exchange into other securities,
any redemption, exchange or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities, the specific terms and provisions of the Guarantee and the terms
upon which the proceeds of the sale of the Preferred Securities shall be used to
purchase a specific series of Subordinated Debt Securities of the Company.
The offering price to the public of the Securities will be limited to U.S.
$2,000,000,000 in the aggregate (or its equivalent (based on the applicable
exchange rate at the time of issue), if Securities are offered for consideration
denominated in one or more foreign currencies or currency units as shall be
designated by the Company). The Debt Securities may be denominated in United
States dollars or, at the option of the Company if so specified in the
applicable Prospectus Supplement, in one or more foreign currencies or currency
units. The Debt Securities may be issued in registered form or bearer form, or
both. If so specified in the applicable Prospectus Supplement, Securities of one
or more classes or series may be issued in whole or in part in the form of one
or more temporary or permanent global securities.
The Common Stock is listed on the New York Stock Exchange under the trading
symbol "CNC".
The Securities may be sold to or through underwriters, through dealers or
agents or directly to purchasers. See "Plan of Distribution." The names of any
underwriters, dealers or agents involved in the sale of the Securities in
respect of which this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them will be set forth in a Prospectus
Supplement. See "Plan of Distribution" for possible indemnification arrangements
for dealers, underwriters and agents.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 22, 1998.
2
<PAGE>
State insurance holding company laws and regulations applicable to the
Company generally provide that no person may acquire control of the Company, and
thus indirect control of its insurance subsidiaries, unless such person has
provided certain required information to, and such acquisition is approved (or
not disapproved) by, the appropriate insurance regulatory authorities.
Generally, any person acquiring beneficial ownership of 10% or more of the
Common Stock would be presumed to have acquired such control, unless the
appropriate insurance regulatory authorities upon advance application determine
otherwise.
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED
INCORPORATED BY REFERENCE HEREIN. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN
THE REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THOSE SECURITIES TO WHICH IT RELATES, IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by Conseco with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the following regional offices of the Commission: New York Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of the prescribed rates. In addition, the Commission maintains a Web
site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants, including the Company,
that file electronically with the Commission. Copies of such reports, proxy
statements and other information can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company and the Conseco Trusts have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Statements contained herein or in any
Prospectus Supplement concerning the provisions of any document do not purport
to be complete and, in each instance, are qualified in all respects by reference
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. For further information with respect to
the Company, the Conseco Trusts and the Securities, reference is hereby made to
such Registration Statement, including the exhibits thereto and the documents
incorporated herein by reference, which can be examined at the Commission's
principal office, 450 Fifth Street, N.W., Washington, D.C. 20549, or copies of
which can be obtained from the Commission at such office upon payment of the
fees prescribed by the Commission.
No separate financial statements of the Conseco Trusts have been included
or incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the
3
<PAGE>
Preferred Securities because (i) all of the voting securities of the Conseco
Trusts will be owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, (ii) the Conseco Trusts have and will have no
independent operations but exist for the sole purpose of issuing securities
representing undivided beneficial interests in their assets and investing the
proceeds thereof in Subordinated Debt Securities issued by the Company, and
(iii) the Company's obligations described herein and in any accompanying
Prospectus Supplement, under the Declaration (as defined herein) (including the
obligation to pay expenses of the Conseco Trusts), the Subordinated Indenture
and any supplemental indentures thereto, the Subordinated Debt Securities issued
to the Conseco Trust and the Trust Guarantees taken together, constitute a full
and unconditional guarantee by the Company of payments due on the Preferred
Securities. See "Description of Preferred Securities of the Conseco Trusts" and
"Description of Trust Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by this reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997
including Part III thereof which is incorporated by reference from the Company's
proxy statement dated April 10, 1998 for its annual meeting of shareholders (the
"Company's Annual Report");
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
3. Current Reports on Form 8-K dated February 4, 1998, April 6, 1998, June
3, 1998 and June 4, 1998; and
4. The description of the Common Stock in its Registration Statements filed
pursuant to Section 12 of the Exchange Act, and any amendment or report filed
for the purpose of updating any such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference in this Prospectus or any Prospectus Supplement and to be part hereof
from the date of filing of such documents.
Any statement contained herein, or in a document incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus or
any Prospectus Supplement. To the extent that any proxy statement is
incorporated by reference herein, such incorporation shall not include any
information contained in such proxy statement that is not, pursuant to the
Commission's rules, deemed to be "filed" with the Commission or subject to the
liabilities of Section 18 of the Exchange Act.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Any such request should be directed to James W.
Rosensteele, Senior Vice President, Corporate Communications, Conseco, Inc.,
11825 N. Pennsylvania Street, Carmel, Indiana 46032 (telephone number: (317)
817-2893).
4
<PAGE>
THE COMPANY
The Company is a financial services holding company. The Company develops,
markets and administers supplemental health insurance, annuity, life insurance,
individual and group major medical insurance and other insurance products. Since
1982, the Company has acquired 19 insurance groups. The Company's operating
strategy is to grow the insurance business within its subsidiaries by focusing
its resources on the development and expansion of profitable products and strong
distribution channels. The Company has supplemented such growth by acquiring
companies that have profitable niche products and strong distribution systems.
Once an insurance company has been acquired, the Company's operating strategy
has been to consolidate and streamline management and administrative functions
where appropriate, to realize superior investment returns through active asset
management, to eliminate unprofitable products and distribution channels, and to
expand and develop the profitable distribution channels and products.
The Company was organized in 1979 as an Indiana corporation and commenced
operations in 1982. The Company's executive offices are located at 11825 N.
Pennsylvania Street, Carmel, Indiana 46032. Its telephone number is (317)
817-6100.
THE CONSECO TRUSTS
Each of the Conseco Trusts is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust (each a "Declaration")
executed by the Company as sponsor for such trust (the "Sponsor"), and the
Conseco Trustees (as defined herein) of such trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on May
23, 1997. Each Conseco Trust exists for the exclusive purposes of (i) issuing
and selling the Preferred Securities and common securities representing common
undivided beneficial interests in the assets of such Conseco Trust (the "Common
Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) using the gross proceeds from the sale of the Trust
Securities to acquire the Subordinated Debt Securities and (iii) engaging in
only those other activities necessary, appropriate, convenient or incidental
thereto. All of the Common Securities will be directly or indirectly owned by
the Company. The Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Preferred Securities, except that, if an event
of default under the Declaration has occurred and is continuing, the rights of
the holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the Preferred Securities. The Company will directly or
indirectly acquire Common Securities in an aggregate liquidation amount equal to
at least 3% of the total capital of each Conseco Trust.
Unless otherwise specified in the applicable Prospectus Supplement, each
Conseco Trust has a term of up to 55 years but may terminate earlier, as
provided in the Declaration. Each Conseco Trust's business and affairs will be
conducted by the trustees (the "Conseco Trustees") appointed by the Company as
the direct or indirect holder of all of the Common Securities. The holder of the
Common Securities will be entitled to appoint, remove or replace any of, or
increase or reduce the number of, the Conseco Trustees of each Conseco Trust.
The duties and obligations of the Conseco Trustees shall be governed by the
Declaration of such Conseco Trust. A majority of the Conseco Trustees (the
"Regular Trustees") of each Conseco Trust will be persons who are employees or
officers of or who are affiliated with the Company. One Conseco Trustee of each
Conseco Trust will be a financial institution that is not affiliated with the
Company and has a minimum amount of combined capital and surplus of not less
than $50,000,000, which shall act as property trustee and as indenture trustee
for the purposes of compliance with the provisions of Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), pursuant to the terms set forth in
the applicable Prospectus Supplement (the "Institutional Trustee"). In addition,
unless the Institutional Trustee maintains a principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, one
Conseco Trustee of each Conseco Trust will be an entity having a principal place
of business in, or a natural person resident of, the State of Delaware (the
"Delaware Trustee"). The Company will pay all fees and expenses related to the
Conseco Trust and the offering of the Trust Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
Institutional Trustee for each Conseco Trust shall be State Street Bank and
Trust Company. Unless otherwise specified in the applicable Prospectus
Supplement, the Delaware Trustee for each Conseco Trust shall be First Union
Trust Company, National Association, and its address in the State of Delaware is
One Rodney Square, 920 King Street, Wilmington, Delaware 19801. The principal
place of business of each Conseco Trust shall be c/o Conseco, Inc., 11825 N.
Pennsylvania Street, Carmel, Indiana 46032; telephone (317) 817-6100.
5
<PAGE>
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds received by the Company from the sale of the Securities offered
hereby are expected to be used for general corporate purposes. The proceeds from
the sale of Preferred Securities by the Conseco Trusts will be invested in the
Subordinated Debt Securities of the Company. Except as may otherwise be
described in the Prospectus Supplement relating to such Preferred Securities,
the Company expects to use the net proceeds from the sale of such Subordinated
Debt Securities to the Conseco Trusts for general corporate purposes. Any
specific allocation of the proceeds to a particular purpose that has been made
at the date of any Prospectus Supplement will be described therein.
RATIOS OF EARNINGS TO FIXED CHARGES, EARNINGS TO FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
AND EARNINGS TO FIXED CHARGES, PREFERRED STOCK DIVIDENDS
AND DISTRIBUTIONS ON COMPANY-OBLIGATED MANDATORILY
REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY TRUSTS
The following table sets forth the Company's ratios of earnings to fixed
charges, earnings to fixed charges and preferred stock dividends and earnings to
fixed charges, preferred stock dividends and distributions on Company-obligated
mandatorily redeemable preferred securities of subsidiary trusts for each of the
five years ended December 31, 1997 and for the three months ended March 31, 1997
and 1998.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------- -------------
1993 1994 1995 1996 1997 1997 1998
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
As reported............................ 2.19X 2.26X 1.57X 1.61X 2.04X 1.96X 2.28X
Excluding interest on annuities and
financial product policyholder
account balances(1)(2).............. 8.85X 4.55X 3.80X 4.55X 7.21X 7.36X 6.26X
Ratio of earnings to fixed charges and
preferred dividends:
As reported......................... 2.04X 1.95X 1.50X 1.50X 1.95X 1.74X 2.25X
Excluding interest on annuities and
financial product policyholder
account balances(1)(2)............ 6.00X 3.14X 3.06X 3.14X 5.77X 4.07X 5.93X
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts:
As reported......................... 2.04X 1.95X 1.50X 1.49X 1.82X 1.65X 2.01X
Excluding interest on annuities and
financial product policyholder
account balances(1)(2)............ 6.00X 3.14X 3.06X 3.06X 4.20X 3.28X 4.05X
- - ---------------
<FN>
(1) These ratios are included to assist the reader in analyzing the impact of
interest on annuities and financial products (which is not generally
required to be paid in cash in the period it is recognized). Such ratios are
not intended to, and do not, represent the following ratios prepared in
accordance with generally accepted accounting principles ("GAAP"): the ratio
of earnings to fixed charges; the ratio of earnings to fixed charges and
preferred dividends; or the ratio of earnings to fixed charges, preferred
dividends and distributions on Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts.
(2) Excludes interest credited to annuity and financial products of $408.5
million, $134.7 million, $585.4 million, $668.6 million and $806.7 million
for the years ended December 31, 1993, 1994, 1995, 1996 and 1997,
respectively, and $173.7 million and $188.4 million for the three months
ended March 31, 1997 and 1998, respectively.
</FN>
</TABLE>
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby, consisting of notes, debentures and
other evidences of indebtedness, are to be issued in one or more series
constituting either senior Debt Securities ("Senior Debt Securities") or
subordinated Debt Securities ("Subordinated Debt Securities"). Unless otherwise
specified in the applicable Prospectus Supplement, the Debt Securities will be
issued pursuant to indentures described below (as applicable, the "Senior
Indenture" or the "Subordinated Indenture", each, an "Indenture" and, together,
the "Indentures"), in each case between the Company and the trustee identified
therein (the "Trustee"), the forms of which have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. Except for the
subordination provisions of the Subordinated Indenture, for which there are no
counterparts in the Senior Indenture, the provisions of the Subordinated
Indenture are substantially identical in substance to the provisions of the
Senior Indenture that bear the same section numbers.
The statements herein relating to the Debt Securities and the following
summaries of certain general provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indentures (as they may be amended or supplemented
from time to time), including the definitions therein of certain terms
capitalized in this Prospectus. All article and section references appearing
herein are to articles and sections of the applicable Indenture and whenever
particular Sections or defined terms of the Indentures (as they may be amended
or supplemented from time to time) are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein by
reference.
GENERAL
The Debt Securities will be unsecured obligations of the Company. The
Indentures do not limit the aggregate amount of Debt Securities which may be
issued thereunder, nor do they limit the incurrence or issuance of other secured
or unsecured debt of the Company. The Debt Securities issued under the Senior
Indenture will be unsecured and will rank pari passu with all other unsecured
and unsubordinated obligations of the Company. The Debt Securities issued under
the Subordinated Indenture will be subordinate and junior in right of payment,
to the extent and in the manner set forth in the Subordinated Indenture, to all
Senior Indebtedness of the Company. See "-- Subordination under the Subordinated
Indenture."
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for a description of the specific series of Debt
Securities being offered thereby, including, but not limited to, the following:
(1) the title, designation and purchase price, of such Debt Securities,
including whether the Debt Securities are Senior Debt Securities or Subordinated
Debt Securities and whether such Debt Securities will be issued under the Senior
Indenture, the Subordinated Indenture or other indenture set forth in the
Prospectus Supplement; (2) any limit upon the aggregate principal amount of such
Debt Securities; (3) the date or dates on which the principal of and premium, if
any, on such Debt Securities will mature or the method of determining such date
or dates; (4) the rate or rates (which may be fixed or variable) at which such
Debt Securities will bear interest, if any, or the method of calculating such
rate or rates; (5) the date or dates from which interest, if any, will accrue or
the method by which such date or dates will be determined; (6) the date or dates
on which interest, if any, will be payable and the record date or dates
therefor; (7) the place or places where principal of, premium, if any, and
interest, if any, on such Debt Securities will be payable; (8) the right, if
any, of the Company to defer payment of interest on Debt Securities and the
maximum length of any such deferral period; (9) the period or periods within
which, the price or prices at which, the currency or currencies (including
currency unit or units) in which, and the terms and conditions upon which, such
Debt Securities may be redeemed, in whole or in part, at the option of the
Company; (10) the obligation, if any, of the Company to redeem or purchase such
Debt Securities pursuant to any sinking fund or analogous provisions or upon the
happening of a specified event and the period or periods within which, the price
or prices at which and the other terms and conditions upon which, such Debt
Securities shall be redeemed or purchased, in whole or in part, pursuant to such
obligations; (11) the denominations in which such Debt Securities are authorized
to be issued; (12) the currency or currency unit for which Debt Securities may
be purchased or in which Debt Securities may be denominated and/or the currency
or currencies (including currency unit or units) in which principal of, premium,
if any, and interest, if
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any, on such Debt Securities will be payable and whether the Company or the
holders of any such Debt Securities may elect to receive payments in respect of
such Debt Securities in a currency or currency unit other than that in which
such Debt Securities are stated to be payable; (13) if other than the principal
amount thereof, the portion of the principal amount of such Debt Securities
which will be payable upon declaration of the acceleration of the maturity
thereof or the method by which such portion shall be determined; (14) the person
to whom any interest on any such Debt Security shall be payable if other than
the person in whose name such Debt Security is registered on the applicable
record date; (15) any addition to, or modification or deletion of, any Event of
Default or any covenant of the Company specified in the Indenture with respect
to such Debt Securities; (16) the application, if any, of such means of
defeasance or covenant defeasance as may be specified for such Debt Securities;
(17) whether such Debt Securities are to be issued in whole or in part in the
form of one or more temporary or permanent global securities and, if so, the
identity of the depositary for such global security or securities; (18) any
Federal income tax considerations applicable to holders of the Debt Securities;
and (19) any other special terms pertaining to such Debt Securities. Unless
otherwise specified in the applicable Prospectus Supplement, the Debt Securities
will not be listed on any securities exchange. (Section 3.1.)
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully-registered form without coupons. Where Debt
Securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special Federal
income tax considerations, applicable to any such Debt Securities and to payment
on and transfer and exchange of such Debt Securities will be described in the
applicable Prospectus Supplement. Bearer Debt Securities will be transferable by
delivery. (Section 3.5.)
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain Federal income tax consequences and
special considerations applicable to any such Debt Securities, or to Debt
Securities issued at par that are treated as having been issued at a discount,
will be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, or by reference to
commodity prices, equity indices or other factors, the restrictions, elections,
certain Federal income tax considerations, specific terms and other information
with respect to such issue of Debt Securities and such foreign currency or
currency units or commodity prices, equity indices or other factors will be set
forth in the applicable Prospectus Supplement. In general, holders of such
series of Debt Securities may receive a principal amount on any principal
payment date, or a payment of premium, if any, on any premium interest payment
date or a payment of interest on any interest payment date, that is greater than
or less than the amount of principal, premium, if any, or interest otherwise
payable on such dates, depending on the value on such dates of the applicable
currency, commodity, equity index or other factor.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement, payments
in respect of the Debt Securities will be made in the designated currency at the
office or agency of the Company maintained for that purpose as the Company may
designate from time to time, except that, at the option of the Company, interest
payments, if any, on Debt Securities in registered form may be made (i) by
checks mailed to the holders of Debt Securities entitled thereto at their
registered addresses or (ii) by wire transfer to an account maintained by the
person entitled thereto as specified in the Register. (Sections 3.7(a) and 9.2.)
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
any installment of interest on Debt Securities in registered form will be made
to the person in whose name such Debt Security is registered at the close of
business on the regular record date for such interest. (Section 3.7(a).)
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Payment in respect of Debt Securities in bearer form will be made in the
currency and in the manner designated in the Prospectus Supplement, subject to
any applicable laws and regulations, at such paying agencies outside the United
States as the Company may appoint from time to time. The paying agents outside
the United States initially appointed by the Company for a series of Debt
Securities will be named in the Prospectus Supplement. The Company may at any
time designate additional paying agents or rescind the designation of any paying
agents, except that, if Debt Securities of a series are issuable as Registered
Securities, the Company will be required to maintain at least one paying agent
in each Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain a paying
agent in a Place of Payment outside the United States where Debt Securities of
such series and any coupons appertaining thereto may be presented and
surrendered for payment. (Section 9.2.)
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities in registered form will be transferable or exchangeable at the agency
of the Company maintained for such purpose as designated by the Company from
time to time. (Sections 3.5 and 9.2.) Debt Securities may be transferred or
exchanged without service charge, other than any tax or other governmental
charge imposed in connection therewith. (Section 3.5.)
GLOBAL DEBT SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities of a series may be issued in whole or in part in the form of one
or more fully registered global securities (a "Registered Global Security") that
will be deposited with a depository (the "Depository") or with a nominee for the
Depository identified in the applicable Prospectus Supplement. In such a case,
one or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding Debt Securities of the series to be represented by such
Registered Global Security or Securities. (Section 3.3.) Unless and until it is
exchanged in whole or in part for Debt Securities in definitive certificated
form, a Registered Global Security may not be registered for transfer or
exchange except as a whole by the Depository for such Registered Global Security
to a nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor Depository for such series or a nominee of such
successor Depository and except in the circumstances described in the applicable
Prospectus Supplement. (Section 3.5.)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the applicable Prospectus Supplement. Unless
otherwise specified in the applicable Prospectus Supplement, the Company expects
that the following provisions will apply to such depository arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to participants or persons that may hold interests through participants
(as such term is defined below). Upon the issuance of any Registered Global
Security, and the deposit of such Registered Global Security with or on behalf
of the Depository for such Registered Global Security, the Depository will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Registered Global
Security to the accounts of institutions ("participants") that have accounts
with the Depository or its nominee. The accounts to be credited will be
designated by the underwriters or agents engaging in the distribution of such
Debt Securities or by the Company, if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests by participants in
such Registered Global Security will be shown on, and the transfer of such
beneficial interests will be effected only through, records maintained by the
Depository for such Registered Global Security or by its nominee. Ownership of
beneficial interests in such Registered Global Security by persons that hold
through participants will be shown on, and the transfer of such beneficial
interests within such participants will be effected only through, records
maintained by such participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Registered Global Security.
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So long as the Depository for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global Security for all
purposes under the applicable Indenture. Unless otherwise specified in the
applicable Prospectus Supplement and except as specified below, owners of
beneficial interests in such Registered Global Security will not be entitled to
have Debt Securities of the series represented by such Registered Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in certificated form and
will not be considered the holders thereof for any purposes under the relevant
Indenture. (Section 3.8.) Accordingly, each person owning a beneficial interest
in such Registered Global Security must rely on the procedures of the Depository
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a holder
under the relevant Indenture. The Depository may grant proxies and otherwise
authorize participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a holder is entitled to
give or take under the relevant Indenture. The Company understands that, under
existing industry practices, if the Company requests any action of holders or if
any owner of a beneficial interest in such Registered Global Security desires to
give any notice or take any action which a holder is entitled to give or take
under the relevant Indenture, the Depository would authorize the participants to
give such notice or take such action, and such participants would authorize
beneficial owners owning through such participants to give such notice or take
such action or would otherwise act upon the instructions of beneficial owners
owning through them.
Unless otherwise specified in the applicable Prospectus Supplement,
payments with respect to principal, premium, if any, and interest, if any, on
Debt Securities represented by a Registered Global Security registered in the
name of a Depository or its nominee will be made to such Depository or its
nominee, as the case may be, as the registered owner of such Registered Global
Security.
The Company expects that the Depository for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Registered Global Security as shown on the records
of such Depository. The Company also expects that payments by participants to
owners of beneficial interests in such Registered Global Security held through
such participants will be governed by standing instructions and customary
practices, as is now the case with the securities held for the accounts of
customers registered in "street names," and will be the responsibility of such
participants. None of the Company, the respective Trustees or any agent of the
Company or the respective Trustees shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial interests of a Registered Global Security, or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
(Section 3.8.)
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depository for any Debt Securities represented by a Registered Global Security
is at any time unwilling or unable to continue as Depository or ceases to be a
clearing agency registered under the Exchange Act and a duly registered
successor Depository is not appointed by the Company within 90 days, the Company
will issue such Debt Securities in definitive certificated form in exchange for
such Registered Global Security. In addition, the Company may at any time and in
its sole discretion determine not to have any of the Debt Securities of a series
represented by one or more Registered Global Securities and, in such event, will
issue Debt Securities of such series in definitive certificated form in exchange
for all of the Registered Global Security or Securities representing such Debt
Securities. (Section 3.5.)
The Debt Securities of a series may also be issued in whole or in part in
the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a depository, or with a nominee for such depository,
identified in the applicable Prospectus Supplement. Any such Bearer Global
Security may be issued in temporary or permanent form. (Section 3.4.) The
specific terms and procedures, including the specific terms of the depository
arrangement, with respect to any portion of a series of Debt Securities to be
represented by one or more Bearer Global Securities will be described in the
applicable Prospectus Supplement.
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CONSOLIDATION, MERGER OR SALE BY THE COMPANY
Unless otherwise specified in the applicable Prospectus Supplement, the
Company shall not consolidate with or merge into any other corporation or sell
its assets substantially as an entirety, unless: (i) the corporation formed by
such consolidation or into which the Company is merged or the corporation which
acquires its assets is organized in the United States; (ii) the corporation
formed by such consolidation or into which the Company is merged or which
acquires the Company's assets substantially as an entirety expressly assumes all
of the obligations of the Company under each Indenture; (iii) immediately after
giving effect to such transaction, no Default or Event of Default shall have
happened and be continuing, and (iv) if, as a result of such transaction,
properties or assets of the Company would become subject to an encumbrance which
would not be permitted by the terms of any series of Debt Securities, the
Company or the successor corporation, as the case may be, shall take such steps
as are necessary to secure such Debt Securities equally and ratably with all
indebtedness secured thereunder. Upon any such consolidation, merger or sale,
the successor corporation formed by such consolidation, or into which the
Company is merged or to which such sale is made, shall succeed to, and be
substituted for the Company under each Indenture. (Section 7.1.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Each Indenture provides that, if an Event of Default specified therein
occurs with respect to the Debt Securities of any series and is continuing, the
Trustee for such series or the holders of 25% in aggregate principal amount of
all of the outstanding Debt Securities of that series, by written notice to the
Company (and to the Trustee for such series, if notice is given by such holders
of Debt Securities), may declare the principal of (or, if the Debt Securities of
that series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount specified in the Prospectus Supplement) and
accrued interest on all the Debt Securities of that series to be due and payable
(provided, with respect to any Debt Securities issued under the Subordinated
Indenture, that the payment of principal and interest on such Debt Securities
shall remain subordinated to the extent provided in Article 12 of the
Subordinated Indenture). (Section 5.2.)
Unless otherwise specified in the applicable Prospectus Supplement, Events
of Default with respect to Debt Securities of any series are defined in each
Indenture as being: (a) default for 30 days in payment of any interest on any
Debt Security of that series or any coupon appertaining thereto or any
additional amount payable with respect to Debt Securities of such series as
specified in the applicable Prospectus Supplement when due; (b) default in
payment of principal, or premium, if any, at maturity or on redemption or
otherwise, or in the making of a mandatory sinking fund payment of any Debt
Securities of that series when due; (c) default for 60 days after notice to the
Company by the Trustee for such series, or by the holders of 25% in aggregate
principal amount of the Debt Securities of such series then outstanding, in the
performance of any other agreement in the Debt Securities of that series, in the
Indenture or in any supplemental indenture or board resolution referred to
therein under which the Debt Securities of that series may have been issued; (d)
default resulting in acceleration of other indebtedness of the Company for
borrowed money where the aggregate principal amount so accelerated exceeds $25
million and such acceleration is not rescinded or annulled within 30 days after
the written notice thereof to the Company by the Trustee or to the Company and
the Trustee by the holders of 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, provided that such Event of Default
will be remedied, cured or waived if the default that resulted in the
acceleration of such other indebtedness is remedied, cured or waived; and (e)
certain events of bankruptcy, insolvency or reorganization of the Company.
(Section 5.1.) The definition of "Event of Default" in each Indenture
specifically excludes a default under a secured debt under which the obligee has
recourse (exclusive of recourse for ancillary matters such as environmental
indemnities, misapplication of funds, costs of enforcement, etc.) only to the
collateral pledged for repayment, and where the fair market value of such
collateral does not exceed two percent of Total Assets (as defined in the
Indenture) at the time of the default. Events of Default with respect to a
specified series of Debt Securities may be added to the Indenture and, if so
added, will be described in the applicable Prospectus Supplement. (Sections 3.1
and 5.1(7).)
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a Default with respect to the Debt Securities of any series, give
to the holders of the Debt Securities of that series notice of all Defaults
known to it unless such Default shall have been cured or waived; provided that
except in the case of
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a Default in payment on the Debt Securities of that series, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding such notice is in the interests of the
holders of the Debt Securities of that series. (Section 6.6.) "Default" means
any event which is, or after notice or passage of time or both, would be, an
Event of Default. (Section 1.1.)
Each Indenture provides that the holders of a majority in aggregate
principal amount of the Debt Securities of each series affected (with each such
series voting as a class) may, subject to certain limited conditions, direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee for such series, or exercising any trust or power conferred on such
Trustee. (Section 5.8.)
Each Indenture includes a covenant that the Company will file annually with
the Trustee a certificate as to the Company's compliance with all conditions and
covenants of such Indenture. (Section 9.5.)
The holders of a majority in aggregate principal amount of any series of
Debt Securities by notice to the Trustee for such series may waive, on behalf of
the holders of all Debt Securities of such series, any past Default or Event of
Default with respect to that series and its consequences except a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest, if any, on any Debt Security, and except in respect of an Event of
Default resulting from the breach of a covenant or provision of either Indenture
which, pursuant to the applicable Indenture, cannot be amended or modified
without the consent of the holders of each outstanding Debt Security of such
series affected. (Section 5.7.)
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Company shall have
the right at any time and from time to time during the term of the series of
Debt Securities to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable Prospectus
Supplement (each, an "Extension Period"), subject to the terms, conditions and
covenants, if any, specified in such Prospectus Supplement, provided that such
Extension Period may not extend beyond the stated maturity of the Debt
Securities. Certain material United States Federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, at the
end of such Extension Period, the Company shall pay all interest then accrued
and unpaid together with interest thereon compounded semiannually at the rate
specified for the Debt Securities to the extent permitted by applicable law
("Compound Interest"); provided, that during any such Extension Period, (a) the
Company shall not declare or pay dividends on, make distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) purchases or acquisitions of capital
stock of the Company in connection with the satisfaction by the Company of its
obligations under any employee or agent benefit plans or the satisfaction by the
Company of its obligations pursuant to any contract or security outstanding on
the date of such event requiring the Company to purchase capital stock of the
Company, (ii) as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion of exchange provisions of such capital stock or the
security being conversed or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or repurchases
or redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan), (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank junior to the Debt Securities,
and (c) the Company shall not make any guarantee payments with respect to the
foregoing (other than payments pursuant to the Trust Guarantee or the Common
Guarantee (as defined herein)). Prior to the termination of any such Extension
Period, the Company may further defer payments of interest by extending the
interest payment period; provided, however, that, such Extension Period,
including all such previous and further extensions, may not extend beyond the
maturity of the Debt Securities. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the terms set forth in this section. No
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interest during an Extension Period, except at the end thereof, shall be due and
payable, but the Company may prepay at any time all or any portion of the
interest accrued during an Extension Period. The Company has no present
intention of exercising its right to defer payments of interest by extending the
interest payment period on the Debt Securities. If the Institutional Trustee
shall be the sole holder of the Debt Securities, the Company shall give the
Regular Trustees and the Institutional Trustee notice of its selection of such
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Preferred Securities are payable or (ii) the date the
Regular Trustees are required to give notice to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Preferred
Securities of the record or payment date of such distribution. The Regular
Trustees shall give notice of the Company's selection of such Extension Period
to the holders of the Preferred Securities. If the Institutional Trustee shall
not be the sole holder of the Debt Securities, the Company shall give the
holders of the Debt Securities notice of its selection of such Extension Period
ten Business Days prior to the earlier of (i) the Interest Payment Date or (ii)
the date upon which the Company is required to give notice to the New York Stock
Exchange (or other applicable self-regulatory organization) or to holders of the
Debt Securities of the record or payment date of such related interest payment.
MODIFICATION OF THE INDENTURES
Unless otherwise specified in the applicable Prospectus Supplement, each
Indenture contains provisions permitting the Company and the Trustee to enter
into one or more supplemental indentures without the consent of the holders of
any of the Debt Securities in order (i) to evidence the succession of another
corporation to the Company and the assumption of the covenants of the Company by
a successor to the Company; (ii) to add to the covenants of the Company or
surrender any right or power of the Company; (iii) to add additional Events of
Default with respect to any series of Debt Securities; (iv) to add or change any
provisions to such extent as necessary to permit or facilitate the issuance of
Debt Securities in bearer form; (v) to change or eliminate any provision
affecting only Debt Securities not yet issued; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt Securities; (viii) to
evidence and provide for successor Trustees; (ix) if allowed without penalty
under applicable laws and regulations, to permit payment in respect of Debt
Securities in bearer form in the United States; (x) to correct any defect or
supplement any inconsistent provisions or to make any other provisions with
respect to matters or questions arising under such Indenture, provided that such
action does not adversely affect the interests of any holder of Debt Securities
of any series; or (xi) to cure any ambiguity or correct any mistake. The
Subordinated Indenture also permits the Company and the Trustee thereunder to
enter into such supplemental indentures to modify the subordination provisions
contained in the Subordinated Debenture except in a manner adverse to any
outstanding Debt Securities. (Section 8.1.)
Unless otherwise specified in the applicable Prospectus Supplement, each
Indenture also contains provisions permitting the Company and the Trustee, with
the consent of the holders of a majority in aggregate principal amount of the
outstanding Debt Securities affected by such supplemental indenture (with the
Debt Securities of each series voting as a class), to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of such Indenture or any supplemental indenture or modifying the
rights of the holders of Debt Securities of such series, except that, without
the consent of the holder of each Debt Security so affected, no such
supplemental indenture may: (i) change the time for payment of principal or
premium, if any, or interest on any Debt Security; (ii) reduce the principal of,
or any installment of principal of, or premium, if any, or interest on any Debt
Security, or change the manner in which the amount of any of the foregoing is
determined; (iii) reduce the amount of premium, if any, payable upon the
redemption of any Debt Security; (iv) reduce the amount of principal payable
upon acceleration of the maturity of any Original Issue Discount or Index
Security; (v) change the currency or currency unit in which any Debt Security or
any premium or interest thereon is payable; (vi) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt Security;
(vii) reduce the percentage in principal amount of the outstanding Debt
Securities affected thereby the consent of whose holders is required for
modification or amendment of such Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults; (viii)
change the obligation of the Company to maintain an office or agency in the
places and for the purposes specified in such Indenture; (ix) modify the
provisions relating to
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the subordination of outstanding Debt Securities of any series in a manner
adverse to the holders thereof; or (x) modify the provisions relating to waiver
of certain defaults or any of the foregoing provisions. (Section 8.2.)
SUBORDINATION UNDER THE SUBORDINATED INDENTURE
The Subordinated Indenture provides that any Subordinated Debt Securities
issued thereunder are subordinated in right of payment to all Senior
Indebtedness to the extent provided in the Subordinated Indenture. (Section 12.1
of the Subordinated Indenture.) The Subordinated Indenture defines the term
"Senior Indebtedness" as: (i) all indebtedness of the Company, whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred or assumed, which is for money borrowed, or evidenced by a note or
similar instrument given in connection with the acquisition of any business,
properties or assets, including securities; (ii) any indebtedness of others of
the kinds described in the preceding clause (i) for the payment of which the
Company is responsible or liable as guarantor or otherwise; and (iii)
amendments, renewals, extensions and refundings of any such indebtedness. The
Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior Indebtedness or extension or
renewal of the Senior Indebtedness. Senior Indebtedness does not include (A) any
indebtedness of the Company to any of its subsidiaries, (B) indebtedness
incurred for the purchase of goods or materials or for services obtained in the
ordinary course of business and (C) any indebtedness which by its terms is
expressly made pari passu with or subordinated to the Subordinated Debt
Securities. (Section 12.2 of the Subordinated Indenture.)
If (i) the Company defaults in the payment of any principal, or premium, if
any, or interest on any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or declaration or
otherwise or (ii) an event of default occurs with respect to any Senior
Indebtedness permitting the holders thereof to accelerate the maturity thereof
and written notice of such event of default (requesting that payments on
Subordinated Debt Securities cease) is given to the Company by the holders of
Senior Indebtedness, then unless and until such default in payment or event of
default shall have been cured or waived or shall have ceased to exist, no direct
or indirect payment (in cash, property or securities, by set-off or otherwise)
shall be made or agreed to be made on account of the Subordinated Debt
Securities or interest thereon or in respect of any repayment, redemption,
retirement, purchase or other acquisition of Subordinated Debt Securities.
(Section 12.4 of the Subordinated Indenture.)
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding-up of the Company, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or (iv) any
other marshalling of the assets of the Company, all Senior Indebtedness
(including, without limitation, interest accruing after the commencement of any
such proceeding, assignment or marshalling of assets) shall first be paid in
full before any payment or distribution, whether in cash, securities or other
property, shall be made by the Company on account of Subordinated Debt
Securities. In any such event, any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions of the Subordinated Indenture with respect to the
indebtedness evidenced by Subordinated Debt Securities, to the payment of all
Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), which
would otherwise (but for the subordination provisions) be payable or deliverable
in respect of Subordinated Debt Securities (including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of
Subordinated Debt Securities) shall be paid or delivered directly to the holders
of Senior Indebtedness, or to their representative or trustee, in accordance
with the priorities then existing among such holders until all Senior
Indebtedness shall have been paid in full.
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(Section 12.3 of the Subordinated Indenture.) No present or future holder of any
Senior Indebtedness shall be prejudiced in the right to enforce subordination of
the indebtedness evidenced by Subordinated Debt Securities by any act or failure
to act on the part of the Company. (Section 12.9 of the Subordinated Indenture.)
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the holders of Subordinated Debt Securities
shall be subrogated to all the rights of any holders of Senior Indebtedness to
receive any further payments or distributions applicable to the Senior
Indebtedness until all Subordinated Debt Securities shall have been paid in
full, and such payments or distributions received by any holder of Subordinated
Debt Securities, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Company and its creditors other than the
holders of Senior Indebtedness, on the one hand, and the holders of Subordinated
Debt Securities, on the other, be deemed to be a payment by the Company on
account of Senior Indebtedness, and not on account of Subordinated Debt
Securities. (Section 12.7 of the Subordinated Indenture.)
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the applicable Prospectus Supplement relating to such Subordinated
Debt Securities.
DEFEASANCE AND COVENANT DEFEASANCE
If indicated in the applicable Prospectus Supplement, the Company may elect
either (i) to defease and be discharged from any and all obligations with
respect to the Debt Securities of or within any series (except as otherwise
provided in the relevant Indenture) ("defeasance") or (ii) to be released from
its obligations with respect to certain covenants applicable to the Debt
Securities of or within any series ("covenant defeasance"), upon the deposit
with the relevant Trustee (or other qualifying trustee), in trust for such
purpose, of money and/or Government Obligations which through the payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient, without reinvestment, to pay the principal of and any premium
or interest on such Debt Securities to Maturity or redemption, as the case may
be, and any mandatory sinking fund or analogous payments thereon. As a condition
to defeasance or covenant defeasance, the Company must deliver to the Trustee an
Opinion of Counsel to the effect that the Holders of such Debt Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to Federal income
tax on the same amounts and in the same manner and at the same times as would
have been the case if such defeasance or covenant defeasance had not occurred.
Such Opinion of Counsel, in the case of defeasance under clause (i) above, must
refer to and be based upon a ruling of the Internal Revenue Service or a change
in applicable Federal income tax law occurring after the date of the relevant
Indenture. (Article 4.) If indicated in the applicable Prospectus Supplement, in
addition to obligations of the United States or an agency or instrumentality
thereof, Government Obligations may include obligations of the government or an
agency or instrumentality of the government issuing the currency or currency
unit in which Debt Securities of such series are payable. (Section 3.1.)
In addition, with respect to the Subordinated Indenture, in order to be
discharged no event or condition shall exist that, pursuant to certain
provisions described under "-- Subordination under the Subordinated Indenture"
above, would prevent the Company from making payments of principal of (and
premium, if any) and interest on Subordinated Debt Securities at the date of the
irrevocable deposit referred to above. (Section 4.6(j) of the Subordinated
Indenture.)
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its defeasance option, payment of such Debt Securities
may not be accelerated because of a Default or an Event of Default. (Section
4.4.) If the Company exercises its covenant defeasance option, payment of such
Debt Securities may not be accelerated by reason of a Default or an Event of
Default with respect to the covenants to which such covenant defeasance
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is applicable. However, if such acceleration were to occur by reason of another
Event of Default, the realizable value at the acceleration date of the money and
Government Obligations in the defeasance trust could be less than the principal
and interest then due on such Debt Securities, in that the required deposit in
the defeasance trust is based upon scheduled cash flow rather than market value,
which will vary depending upon interest rates and other factors.
THE TRUSTEES
Unless otherwise specified in the applicable Prospectus Supplement, LTCB
Trust Company will be the Trustee under the Senior Indenture, and State Street
Bank and Trust Company will be the Trustee under the Subordinated Indenture. The
Company may also maintain banking and other commercial relationships with each
of the Trustees and their affiliates in the ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
At May 21, 1998 the authorized capital stock of the Company was
1,020,000,000 shares, consisting of:
(a) 20,000,000 shares of Preferred Stock, of which 1,889,400 shares of
Preferred Redeemable Increased Dividend Equity Securities, 7% PRIDES
("PRIDES"), were outstanding; and
(b) 1,000,000,000 shares of Common Stock, of which 187,126,301 shares were
outstanding.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. The Board of Directors of the Company is empowered, without approval of
the shareholders, to cause the Preferred Stock to be issued in one or more
series, with the numbers of shares of each series and the rights, preferences
and limitations of each series to be determined by it including, without
limitation, the dividend rights, conversion rights, redemption rights and
liquidation preferences, if any, of any wholly unissued series of Preferred
Stock (or of the entire class of Preferred Stock if none of such shares have
been issued), the number of shares constituting each such series and the terms
and conditions of the issue thereof. The descriptions set forth below do not
purport to be complete and are qualified in their entirety by reference to the
Amended and Restated Articles of Incorporation of the Company, as amended (the
"Articles of Incorporation").
The Prospectus Supplement relating to an offering of Common Stock will
describe terms relevant thereto, including the number of shares offered, the
initial offering price, market price and dividend information.
PREFERRED STOCK
The applicable Prospectus Supplement will describe the following terms of
any Preferred Stock in respect of which this Prospectus is being delivered (to
the extent applicable to such Preferred Stock): (i) the specific designation,
number of shares, seniority and purchase price; (ii) any liquidation preference
per share; (iii) any date of maturity; (iv) any redemption, repayment or sinking
fund provisions; (v) any dividend rate or rates and the dates on which any such
dividends will be payable (or the method by which such rates or dates will be
determined); (vi) any voting rights; (vii) if other than the currency of the
United States of America, the currency or currencies, including composite
currencies, in which such Preferred Stock is denominated and/or in which
payments will or may be payable; (viii) the method by which amounts in respect
of such Preferred Stock may be calculated and any commodities, currencies or
indices, or value, rate or price, relevant to such calculation; (ix) whether the
Preferred Stock is convertible or exchangeable and, if so, the securities or
rights into which such Preferred Stock is convertible or exchangeable (which may
include other Preferred Stock, Debt Securities, Common Stock or other securities
or rights of the Company (including rights to receive payment in cash or
securities based on the value, rate or price of one or more specified
commodities, currencies or indices) or a combination of the foregoing), and the
terms and conditions upon which such conversions or exchanges will be effected,
including the initial conversion or exchange prices or rates, the conversion or
exchange period and any other related provisions; (x) the place or places where
dividends and other payments on the Preferred Stock will be payable; and (xi)
any additional voting, dividend, liquidation, redemption and other rights,
preferences, privileges, limitations and restrictions.
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As described under "Description of Depositary Shares", the Company may, at
its option, elect to offer Depositary Shares evidenced by depositary receipts
("Depositary Receipts"), each representing an interest (to be specified in the
applicable Prospectus Supplement relating to the particular series of the
Preferred Stock) in a share of the particular series of the Preferred Stock
issued and deposited with a Preferred Stock Depositary (as defined herein).
All shares of Preferred Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will, when issued, be fully paid and
non-assessable.
COMMON STOCK
Dividends. Except as provided below, holders of Common Stock are entitled
to receive dividends and other distributions in cash, stock or property of the
Company, when, as and if declared by the Board of Directors out of assets or
funds of the Company legally available therefor and shall share equally on a per
share basis in all such dividends and other distributions (subject to the rights
of holders of Preferred Stock).
Voting Rights. At every meeting of shareholders, every holder of Common
Stock is entitled to one vote per share. Subject to any voting rights which may
be granted to holders of Preferred Stock any action submitted to shareholders is
approved if the number of votes cast in favor of such action exceeds the number
of votes against, except where other provision is made by law and subject to
applicable quorum requirements.
Liquidation Rights. In the event of any liquidation, dissolution or
winding-up of the business of the Company, whether voluntary or involuntary (any
such event, a "Liquidation"), the holders of Common Stock are entitled to share
equally in the assets available for distribution after payment of all
liabilities and provision for the liquidation preference of any shares of
Preferred Stock then outstanding.
Miscellaneous. The holders of Common Stock have no preemptive rights,
cumulative voting rights, subscription rights, or conversion rights and the
Common Stock is not subject to redemption.
The transfer agent and registrar with respect to the Common Stock and the
PRIDES is First Union National Bank.
All shares of Common Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will, when issued, be fully paid and
non-assessable. The Common Stock is traded on the New York Stock Exchange under
the symbol "CNC".
PRIDES
General. The PRIDES are shares of convertible preferred stock and rank
prior to the Common Stock as to payment of dividends and distribution of assets
upon liquidation. The shares of PRIDES mandatorily convert into shares of Common
Stock on February 1, 2000, (the "Mandatory Conversion Date"), and the Company
has the option to redeem the shares of PRIDES, in whole or in part, at any time
and from time to time on or after February 1, 1999 and prior to the Mandatory
Conversion Date pursuant to the terms described below and payable in shares of
Common Stock. In addition, the shares of PRIDES are convertible into shares of
Common Stock at the option of the holder at any time prior to the Mandatory
Conversion Date as set forth below.
Dividends. Holders of shares of PRIDES are entitled to receive annual
cumulative dividends at a rate per annum of 7% of the stated liquidation
preference (equivalent to $4.279 per each share of PRIDES) payable quarterly in
arrears on each February 1, May 1, August 1, and November 1.
Mandatory Conversion. On the Mandatory Conversion Date, unless previously
redeemed or converted, each outstanding share of PRIDES will mandatorily convert
into (i) four shares of Common Stock, subject to adjustment in certain events,
and (ii) the right to receive cash in an amount equal to all accrued and unpaid
dividends thereon (other than previously declared dividends payable to a holder
of record as of a prior date).
Optional Redemption. Shares of PRIDES are not redeemable prior to February
1, 1999. At any time and from time to time on or after February 1, 1999 and
ending immediately prior to the Mandatory Conversion Date, the Company may
redeem any or all of the outstanding shares of PRIDES. Upon any such
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redemption, each holder will receive, in exchange for each share of PRIDES, the
number of shares of Common Stock equal to the Call Price (which is the sum of
(i) $62.195, declining after February 1, 1999 to $61.125 until the Mandatory
Conversation Date and (ii) all accrued and unpaid dividends thereon (other than
previously declared dividends payable to a holder of record as of a prior date))
divided by the current market price on the applicable date of determination, but
in no event less than 3.42 shares of Common Stock, subject to adjustment. The
number of shares of Common Stock to be delivered in payment of the applicable
Call Price will be determined on the basis of the current market price of the
Common Stock prior to the announcement of the redemption.
Conversion at the Option of the Holder. At any time prior to the Mandatory
Conversion Date, unless previously redeemed, each share of PRIDES is convertible
at the option of the holder thereof into 3.42 shares of Common Stock (the
"Optional Conversion Rate"), equivalent to the conversion price of $17.8728 per
share of Common Stock, subject to adjustment as described herein. The right of
holders to convert shares of PRIDES called for redemption will terminate
immediately prior to the close of business on the redemption date.
Voting Rights. The holders of shares of PRIDES have the right with the
holders of Common Stock to vote in the election of directors and upon each other
matter coming before any meeting of the holders of Common Stock on the basis of
4/5 of one vote for each share of PRIDES. On such matters, the holders of shares
of PRIDES and the holders of Common Stock vote together as one class except as
otherwise provided by law or the Articles of Incorporation. In addition, (i)
whenever dividends on the shares of PRIDES or any other series of Preferred
Stock with like voting rights are in arrears and unpaid for six quarterly
dividend periods, and in certain other circumstances, the holders of the shares
of PRIDES (voting separately as a class with the holders of all other series of
Preferred Stock with like voting rights that are exercisable) will be entitled
to vote, on the basis of one vote for each share of PRIDES, for the election of
two directors of the Company, such directors to be in addition to the number of
directors constituting the Board of Directors immediately prior to the accrual
of such right, and (ii) the holders of the shares of PRIDES may have voting
rights with respect to certain alterations of the Articles of Incorporation and
certain other matters, voting on the same basis or separately as a series.
Liquidation Preference and Ranking. The shares of PRIDES rank prior to the
Common Stock as to payment of dividends and distribution of assets upon
liquidation. The liquidation preference of each share of PRIDES is an amount
equal to the sum of (i) $61.125 per share and (ii) all accrued and unpaid
dividends thereon.
CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS OF CONSECO
Certain provisions of the Articles of Incorporation and the Bylaws of the
Company (the "Bylaws") may make it more difficult to effect a change in control
of the Company if the Board of Directors determines that such action would not
be in the best interests of the shareholders. It could be argued, contrary to
the belief of the Board of Directors, that such provisions are not in the best
interests of the shareholders to the extent that they will have the effect of
tending to discourage possible takeover bids, which might be at prices involving
a premium over then recent market quotations for the Common Stock. The most
important of those provisions are described below.
The Articles of Incorporation authorize the establishment of a classified
Board of Directors pursuant to the Bylaws. The Bylaws, in turn, provide that the
Directors serve staggered three-year terms, with the members of only one class
being elected in any year.
A classified Board of Directors may increase the difficulty of removing
incumbent directors, providing such directors with enhanced ability to retain
their positions. A classified Board of Directors may also make the acquisition
of control of the Company by a third party by means of a proxy contest more
difficult. In addition, the classification may make it more difficult to replace
a majority of directors for business reasons unrelated to a change in control.
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The Articles of Incorporation provide that holders of the Company's voting
stock shall not be entitled to vote on certain business transactions (defined to
include, among other things, certain mergers, consolidations, sales, leases,
transfers or other dispositions of a substantial part of the Company's assets)
with certain related persons (which includes persons beneficially owning more
than 10% of the Company's outstanding voting stock), nor may such business
combination transactions be effected, unless (i) the relevant business
combination shall have been approved by two-thirds of the continuing directors
or (ii) the aggregate amount of the cash and the fair value of any consideration
other than cash to be received by any holder of the Common Stock or Preferred
Stock in the business combination for each such share of Common Stock or
Preferred Stock shall be at least equal to the highest per share price paid by
the related person in order to acquire any shares of Common Stock or Preferred
Stock, as the case may be, beneficially owned by such related person.
As discussed above, Preferred Stock may be issued from time to time in one
or more series with such rights, preferences, limitations and restrictions as
may be determined by the Board of Directors. The issuance of Preferred Stock
could be used, under certain circumstances, as a method of delaying or
preventing a change of control of the Company and could have a detrimental
effect on the rights of holders of Common Stock, including loss of voting
control.
The provisions of the Articles of Incorporation regarding the classified
Board of Directors and certain business combination transactions may not be
amended without the affirmative approval of holders of not less than 80% of the
outstanding voting stock of the Company.
The Bylaws may be amended by majority vote of the Board of Directors.
CERTAIN PROVISIONS OF CORPORATE AND INSURANCE LAWS
In addition to the Articles of Incorporation and Bylaws, certain provisions
of Indiana law may delay, deter or prevent a merger, tender offer or other
takeover attempt of the Company.
Under the Indiana Business Corporation Law (the "IBCL"), a director may, in
considering the best interests of a corporation, consider the effects of any
action on shareholders, employees, suppliers and customers of the corporation,
on communities in which offices or other facilities of the corporation are
located, and any other factors the director considers pertinent.
The IBCL provides that no business combination (defined to include certain
mergers, sales of assets, sales of 5% or more of outstanding stock, loans,
recapitalizations or liquidations or dissolutions) involving a corporation and
an interested shareholder (defined to include any holder of 10% or more of such
corporation's voting stock) may be entered into unless (1) it has been approved
by the board of directors of the corporation or (2) (a) five years have expired
since the acquisition of shares of the corporation by the interested
shareholder, (b) all requirements of the corporation's articles of incorporation
relating to business combinations have been satisfied and (c) either (i) a
majority of shareholders of the corporation (excluding the interested
shareholder) approve the business combination or (ii) all shareholders are paid
fair value (as defined in the statute) for their stock. However, such law does
not restrict any offer to purchase all of a corporation's shares.
The IBCL also provides that when a target corporation (such as the
Company), incorporated in Indiana and having its principal place of business,
principal office or substantial assets in Indiana, has a certain threshold of
ownership by Indiana residents, any acquisition which, together with its
previous holdings, gives the acquiror at least 20% of the target's voting stock
triggers a shareholder approval mechanism. If the acquiror files a statutorily
required disclosure statement, the target's management has 50 days within which
to hold a special meeting of shareholders at which all disinterested
shareholders of the target (those not affiliated with the acquiror or any
officer or inside director of the target) consider and vote upon whether the
acquiror shall have voting rights with respect to the shares of the target held
by it. Without shareholder approval, the shares acquired by the acquiror have no
voting rights. If the acquiror fails to file the statutorily required disclosure
statement, the target can redeem the acquiror's shares at a price to be
determined according to
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procedures devised by the target. In order for these provisions of the IBCL not
to apply to a particular Indiana company, the company must affirmatively so
provide in its articles of incorporation or bylaws.
In addition, the insurance laws and regulations of the jurisdictions in
which the Company's insurance subsidiaries do business may impede or delay a
business combination involving the Company.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certain provisions of the Deposit
Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts summarizes the material terms of the Deposit Agreement and of the
Depositary Shares and Depositary Receipts and is qualified in its entirety by
reference to the form of Deposit Agreement and form of Depositary Receipts
relating to each series of the Preferred Stock, as well as the Articles of
Incorporation or any required amendment thereto describing the applicable series
of Preferred Stock.
GENERAL
The Company may, as its option, elect to have shares of Preferred Stock be
represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") to be entered into by the Company
and a bank or trust company selected by the Company (the "Preferred Stock
Depositary"). The Prospectus Supplement relating to a series of Depositary
Shares will set forth the name and address of the Preferred Stock Depositary.
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, proportionately, to all the rights, preferences and privileges
of the Preferred Stock represented thereby (including dividend, voting,
redemption, conversion, exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the fractional
interest in the number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions in respect of the series of Preferred Stock represented by
the Depositary Shares to the record holders of Depositary Receipts in
proportion, insofar as possible, to the number of Depositary Shares owned by
such holders. The Depositary, however, will distribute only such amount as can
be distributed without attributing to any Depositary Share a fraction of one
cent, and any balance not so distributed will be added to and treated as part of
the next sum received by the Depositary for distribution to record holders of
Depositary Receipts then outstanding.
In the event of a distribution other than in cash in respect of the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines (after consultation with the
Company) that it is not feasible to make such distribution, in which case the
Preferred Stock Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable for the purpose of effecting such
distribution, including a public or private sale, of such property, and
distribution of the net proceeds from such sale to such holders.
The amount so distributed to record holders of Depositary Receipts in any
of the foregoing cases will be reduced by any amount required to be withheld by
the Company or the Preferred Stock Depositary on account of taxes.
CONVERSION AND EXCHANGE
If any series of Preferred Stock underlying the Depositary Shares is
subject to provisions relating to its conversion or exchange, as set forth in
the applicable Prospectus Supplement relating thereto, each record
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holder of Depositary Receipts will have the right or obligation to convert or
exchange the Depositary Shares represented by such Depositary Receipts pursuant
to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If any series of Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Preferred Stock Depositary resulting from the redemption, in
whole or in part, of the Preferred Stock held by the Preferred Stock Depositary.
Whenever the Company redeems Preferred Stock from the Preferred Stock
Depositary, the Preferred Stock Depositary will redeem as of the same redemption
date a proportionate number of Depositary Shares representing the shares of
Preferred Stock that were redeemed. If less than all the Depositary Shares are
to be redeemed, the Depositary Shares to be redeemed will be selected by lot or
pro rata as may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of two
years from the date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice to
the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the Preferred
Stock Depositary as to the exercise of the voting rights pertaining to the
number of shares of Preferred Stock underlying such holder's Depositary Shares.
The Preferred Stock Depositary will endeavor, insofar as practicable, to vote
the number of shares of Preferred Stock underlying such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting any of the Preferred Stock
to the extent it does not receive specific written instructions from holders of
Depositary Receipts representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of, or
any election on the part of the Company to call for the redemption of, any
Preferred Stock, the Preferred Stock Depositary shall in each such instance fix
a record date (which shall be the same as the record date for the Preferred
Stock) for the determination of the holders of Depositary Receipts (x) that
shall be entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof or (y) that shall be entitled
to give instructions for the exercise of voting rights at any such meeting or to
receive notice of such meeting or of such redemption or conversion, subject to
the provisions of the Deposit Agreement.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of Depositary Receipts at the principal office of the
Preferred Stock Depositary, upon payment of any unpaid amount due the Preferred
Stock Depositary, and subject to the terms of the Deposit Agreement, the owner
of the Depositary Shares evidenced thereby is entitled to delivery of the number
of whole shares of Preferred Stock and all money and other property, if any,
represented by such Depositary Shares. Partial shares of Preferred Stock will
not be issued. If the Depositary Receipts delivered by the holder
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evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole shares of Preferred Stock to be
withdrawn, the Preferred Stock Depositary will deliver to such holder at the
same time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The Deposit Agreement will provide that the form of Depositary Receipt and
any provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Preferred Stock Depositary. However, any amendment
which imposes or increases any fees, taxes or other charges payable by the
holders of Depositary Receipts (other than taxes and other governmental charges,
fees and other expenses payable by such holders as stated under "Charges of
Preferred Stock Depositary"), or which otherwise prejudices any substantial
existing right of holders of Depositary Receipts, will not take effect as to
outstanding Depositary Receipts until the expiration of 90 days after notice of
such amendment has been mailed to the record holders of outstanding Depositary
Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred Stock
Depositary may likewise terminate the Deposit Agreement if at any time 45 days
shall have expired after the Preferred Stock Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its appointment. If any
Depositary Receipts remain outstanding after the date of termination, the
Preferred Stock Depositary thereafter will discontinue the transfer of
Depositary Receipts, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement except as
provided below and except that the Preferred Stock Depositary will continue (i)
to collect dividends on the Preferred Stock and any other distributions with
respect thereto and (ii) to deliver the Preferred Stock together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property, without liability for interest
thereon, in exchange for Depositary Receipts surrendered. At any time after the
expiration of two years from the date of termination, the Preferred Stock
Depositary may sell the Preferred Stock then held by it at public or private
sales, at such place or places and upon such terms as it deems proper, and may
thereafter hold the net proceeds of any such sale, together with any money and
other property then held by it, without liability for interest thereon, for the
pro rata benefit of the holders of Depositary Receipts which have not been
surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary
including charges in connection with the initial deposit of the Preferred Stock,
the initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which Preferred
Stock is entitled to vote, withdrawals of the Preferred Stock by the holders of
Depositary Receipts or redemption or conversion of the Preferred Stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be at
the expense of holders of Depositary Receipts or persons depositing Preferred
Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts, at its Corporate Office and its New York Office,
all reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to performing
its
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duties thereunder without negligence or bad faith. The obligations of the
Company under the Deposit Agreement are limited to performing its duties
thereunder in good faith. Neither the Company nor the Preferred Stock Depositary
is obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
The Company and the Preferred Stock Depositary are entitled to rely upon advice
of or information from counsel, accountants or other persons believed to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been appointed
or accepted such appointment within 45 days after the Preferred Stock Depositary
has delivered a notice of election to resign to the Company, the Preferred Stock
Depositary may terminate the Deposit Agreement. See "Amendment and Termination
of the Deposit Agreement" above.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants to purchase Debt Securities, Preferred
Stock, Common Stock or any combination thereof, and such Warrants may be issued
independently or together with any such Securities and may be attached to or
separate from such Securities. Each series of Warrants will be issued under a
separate warrant agreement (each a "Warrant Agreement") to be entered into
between the Company and a warrant agent ("Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Warrants of
each such series and will not assume any obligation or relationship of agency
for or with holders or beneficial owners of Warrants. The following sets forth
certain general terms and provisions of the Warrants offered hereby. Further
terms of the Warrants and the applicable Warrant Agreement will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued; (iv)
the currency or currencies, including composite currencies, in which the price
of such Warrants may be payable; (v) the designation and terms of the Securities
(other than Preferred Securities and Common Securities) purchasable upon
exercise of such Warrants; (vi) the price at which and the currency or
currencies, including composite currencies, in which the Securities (other than
Preferred Securities and Common Securities) purchasable upon exercise of such
Warrants may be purchased; (vii) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (viii)
whether such Warrants will be issued in registered form or bearer form; (ix) if
applicable, the minimum or maximum amount of such Warrants which may be
exercised at any one time; (x) if applicable, the designation and terms of the
Securities (other than Preferred Securities and Common Securities) with which
such Warrants are issued and the number of such Warrants issued with each such
Security; (xi) if applicable, the date on and after which such Warrants and the
related Securities (other than Preferred Securities and Common Securities) will
be separately transferable; (xii) information with respect to book-entry
procedures, if any; (xiii) if applicable, a discussion of certain United States
Federal income tax considerations; and (xiv) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
DESCRIPTION OF PREFERRED SECURITIES OF THE CONSECO TRUSTS
GENERAL
Each Conseco Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Conseco Trust authorizes the Regular
Trustees of such Conseco Trust to issue on behalf of such Conseco Trust one
series of Preferred Securities. Each Declaration will be qualified as an
indenture under the Trust Indenture Act. The Institutional Trustee, an
independent trustee, will act as indenture trustee for the Preferred Securities
for purposes of compliance with the provisions of the Trust Indenture Act. The
Preferred Securities will have such terms,
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including distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be
established by the Regular Trustees in accordance with the applicable
Declaration or as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act. Reference is made to any Prospectus
Supplement relating to the Preferred Securities of a Conseco Trust for specific
terms of the Preferred Securities, including, to the extent applicable, (i) the
distinctive designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such Conseco Trust, (iii) the annual distribution
rate (or method of determining such rate) for Preferred Securities issued by
such Conseco Trust and the date or dates upon which such distributions shall be
payable (provided, however, that distributions on such Preferred Securities
shall, subject to any deferral provisions, and any provisions for payment of
defaulted distributions, be payable on a quarterly basis to holders of such
Preferred Securities as of a record date in each quarter during which such
Preferred Securities are outstanding), (iv) any right of such Conseco Trust to
defer quarterly distributions on the Preferred Securities as a result of an
interest deferral right exercised by the Company on the Subordinated Debt
Securities held by such Conseco Trust; (v) whether distributions on Preferred
Securities shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of determining
the date or dates from which distributions on Preferred Securities shall be
cumulative, (vi) the amount or amounts which shall be paid out of the assets of
such Conseco Trust to the holders of Preferred Securities upon voluntary or
involuntary dissolution, winding-up or termination of such Conseco Trust, (vii)
the obligation or option, if any, of such Conseco Trust to purchase or redeem
Preferred Securities and the price or prices at which, the period or periods
within which and the terms and conditions upon which Preferred Securities shall
be purchased or redeemed, in whole or in part, pursuant to such obligation or
option with such redemption price to be specified in the applicable Prospectus
Supplement, (viii) the voting rights, if any, of Preferred Securities in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities as a condition to specified action or amendments to the Declaration,
(ix) the terms and conditions, if any, upon which Subordinated Debt Securities
held by such Conseco Trust may be distributed to holders of Preferred
Securities, and (x) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities consistent with the
Declaration or with applicable law. All Preferred Securities offered hereby will
be guaranteed by the Company to the extent set forth below under "Description of
Trust Guarantees." The Trust Guarantee issued to each Conseco Trust, when taken
together with the Company's back-up undertakings, consisting of its obligations
under each Declaration (including the obligation to pay expenses of each Conseco
Trust), the applicable Indenture and any applicable supplemental indentures
thereto and the Subordinated Debt Securities issued to any Conseco Trust will
provide a full and unconditional guarantee by the Company of amounts due on the
Preferred Securities issued by each Conseco Trust. The payment terms of the
Preferred Securities will be the same as the Subordinated Debt Securities issued
to the applicable Conseco Trust by the Company.
Each Declaration authorizes the Regular Trustees to issue on behalf of the
applicable Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be established by the Regular Trustees in accordance with the Declaration
or as shall otherwise be set forth therein. The terms of the Common Securities
issued by each Conseco Trust will be substantially identical to the terms of the
Preferred Securities issued by such Conseco Trust, and the Common Securities
will rank pari passu, and payments will be made thereon pro rata, with the
Preferred Securities except that, if an event of default under such Declaration
has occurred and is continuing, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Common Securities will also carry the right to
vote and to appoint, remove or replace any of the Conseco Trustees of such
Conseco Trust. All of the Common Securities of each Conseco Trust will be
directly or indirectly owned by the Company.
The financial statements of any Conseco Trust that issues Preferred
Securities will be reflected in the Company's consolidated financial statements
with the Preferred Securities shown as Company-obligated mandatorily-redeemable
preferred securities of a subsidiary trust under minority interest in
consolidated subsidiaries. In a footnote to the Company's audited financial
statements there will be included statements that the applicable Conseco Trust
is wholly-owned by the Company and that the sole asset of such Conseco
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Trust is the Subordinated Debt Securities (indicating the principal amount,
interest rate and maturity date thereof).
DESCRIPTION OF TRUST GUARANTEES
Set forth below is a summary of information concerning the Trust Guarantees
that will be executed and delivered by the Company for the benefit of the
holders, from time to time, of Preferred Securities. Each Trust Guarantee will
be qualified as an indenture under the Trust Indenture Act. Unless otherwise
specified in the applicable Prospectus Supplement, State Street Bank and Trust
Company will act as independent indenture trustee for Trust Indenture Act
purposes under each Trust Guarantee (the "Preferred Securities Guarantee
Trustee"). The terms of each Trust Guarantee will be those set forth in such
Trust Guarantee and those made part of such Trust Guarantee by the Trust
Indenture Act. The following summary does not purport to be complete and is
subject to and qualified in its entirety by reference to the provisions of the
form of Trust Guarantee, a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part, and the Trust
Indenture Act. Each Trust Guarantee will be held by the Preferred Securities
Guarantee Trustee for the benefit of the holders of the Preferred Securities of
the applicable Conseco Trust.
GENERAL
Unless otherwise specified in the applicable Prospectus Supplement,
pursuant to each Trust Guarantee, the Company will agree, to the extent set
forth therein, to pay in full to the holders of the Preferred Securities, the
Guarantee Payments (as defined below) (except to the extent paid by such Conseco
Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such Conseco Trust may have or assert. The following payments
or distributions with respect to the Preferred Securities (the "Guarantee
Payments"), to the extent not paid by such Conseco Trust, will be subject to the
Trust Guarantee (without duplication): (i) any accrued and unpaid distributions
that are required to be paid on such Preferred Securities, to the extent such
Conseco Trust shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid distributions to the date of redemption (the
"Redemption Price"), to the extent such Conseco Trust has funds available
therefor, with respect to any Preferred Securities called for redemption by such
Conseco Trust and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of such Conseco Trust (other than in connection with such
distribution of Subordinated Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities upon maturity or
redemption of the Subordinated Debt Securities) the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on such
Preferred Securities to the date of payment, to the extent such Conseco Trust
has funds available therefor or (b) the amount of assets of such Conseco Trust
remaining for distribution to holders of such Preferred Securities in
liquidation of such Conseco Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by causing the applicable
Conseco Trust to pay such amounts to such holders.
Each Trust Guarantee will not apply to any payment of distributions except
to the extent the applicable Conseco Trust shall have funds available therefor.
If the Company does not make interest or principal payments on the Subordinated
Debt Securities purchased by such Conseco Trust, such Conseco Trust will not pay
distributions on the Preferred Securities issued by such Conseco Trust and will
not have funds available therefore.
The Company has also agreed to guarantee the obligations of each Conseco
Trust with respect to the Common Securities (the "Common Guarantee") issued by
such Conseco Trust to the same extent as the Trust Guarantee, except that, if an
Event of Default under the Subordinated Indenture has occurred and is
continuing, holders of Preferred Securities under the Trust Guarantee shall have
priority over holders of the Common Securities under the Common Guarantee with
respect to distributions and payments on liquidation, redemption or otherwise.
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CERTAIN COVENANTS OF THE COMPANY
Unless otherwise specified in the applicable Prospectus Supplement, in each
Trust Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the applicable Conseco Trust remain outstanding, if there
shall have occurred any event of default under such Trust Guarantee or under the
Declaration of such Conseco Trust, then (a) the Company will not declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan); (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company which
rank junior to the Subordinated Debt Securities issued to the applicable Conseco
Trust and (c) the Company shall not make any guarantee payments with respect to
the foregoing (other than pursuant to a Trust Guarantee).
MODIFICATION OF THE TRUST GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent of such holders
will be required), each Trust Guarantee may be amended only with the prior
approval of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities of such Conseco Trust. The manner of obtaining
any such approval of holders of such Preferred Securities will be set forth in
accompanying Prospectus Supplement. All guarantees and agreements contained in a
Trust Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities of the applicable Conseco Trust then outstanding.
EVENTS OF DEFAULT
An event of default under a Trust Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder. The
holders of a majority in liquidation amount of the Preferred Securities to which
such Trust Guarantee relates have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred
Securities Guarantee Trustee in respect of such Trust Guarantee or to direct the
exercise of any trust or power conferred upon the Preferred Securities Guarantee
Trustee under such Trust Guarantee.
If the Preferred Securities Guarantee Trustee fails to enforce such Trust
Guarantee, any record holder of Preferred Securities to which such Trust
Guarantee relates may institute a legal proceeding directly against the Company
to enforce the Preferred Securities Guarantee Trustee's rights under such Trust
Guarantee without first instituting a legal proceeding against the applicable
Conseco Trust, the Preferred Securities Guarantee Trustee or any other person or
entity. Notwithstanding the foregoing, if the Company has failed to make a
Guarantee Payment under a Trust Guarantee, a record holder of Preferred
Securities to which such Trust Guarantee relates may directly institute a
proceeding against the Company for enforcement of such Trust Guarantee for such
payment to the record holder of the Preferred Securities to which such Trust
Guarantee relates of the principal of or interest on the applicable Subordinated
Debt Securities on or after the respective due dates specified in the
Subordinated Debt Securities, and the amount of the payment will be based on the
holder's pro rata share of the amount due and owing on all of the Preferred
Securities to which such Trust Guarantee relates. The Company has waived any
right or remedy to require that any action be brought first against the
applicable Conseco Trust or any other person or entity before proceeding
directly
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against the Company. The record holder in the case of the issuance of one or
more global Preferred Securities certificates will be The Depository Trust
Company acting at the direction of the beneficial owners of the Preferred
Securities.
The Company will be required to provide annually to the Preferred
Securities Guarantee Trustee a statement as to the performance by the Company of
certain of its obligations under each outstanding Trust Guarantee and as to any
default in such performance.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
The Preferred Securities Guarantee Trustee, prior to the occurrence of a
default to a Trust Guarantee, undertakes to perform only such duties as are
specifically set forth in such Trust Guarantee and, after default with respect
to such Trust Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, the Preferred Securities Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Trust Guarantee at
the request of any holder of Preferred Securities to which such Trust Guarantee
relates unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby.
TERMINATION
Each Trust Guarantee will terminate as to the Preferred Securities issued
by the applicable Conseco Trust upon full payment of the Redemption Price of all
Preferred Securities of such Conseco Trust, upon distribution of the
Subordinated Debt Securities held by such Conseco Trust to the holders of all of
the Preferred Securities of such Conseco Trust or upon full payment of the
amounts payable in accordance with the Declaration of such Conseco Trust upon
liquidation of such Conseco Trust. Each Trust Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities issued by the applicable Conseco Trust must restore
payment of any sums paid under such Preferred Securities or such Trust
Guarantee.
STATUS OF THE TRUST GUARANTEES
The Trust Guarantees will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, including the Subordinated Debt Securities, except
those liabilities of the Company made pari passu or subordinate by their terms,
(ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by the Company and with any guarantee now or hereafter entered
into by the Company in respect of any preferred or preference stock of any
affiliate of the Company and (iii) senior to the Common Stock. The terms of the
Preferred Securities provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Trust Guarantee relating thereto.
Each Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under such Trust Guarantee
without instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Trust Guarantees will be governed by and construed in accordance with
the law of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock, Preferred Stock or
Depositary Shares at a future date or dates. The consideration per share of
Common Stock, Preferred Stock or Depositary Shares may be fixed at the time the
Stock Purchase Contracts are issued or may be determined by reference to a
specific formula set forth in the Stock Purchase Contracts. The Stock
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Purchase Contracts may be issued separately or as a part of units ("Stock
Purchase Units") consisting of a Stock Purchase Contract and Debt Securities,
Preferred Securities or debt obligations of third parties, including U.S.
Treasury securities, securing the holders' obligations to purchase the Common
Stock, Preferred Stock or Depositary Shares under the Stock Purchase Contracts.
The Stock Purchase Contracts may require the Company to make periodic payments
to the holders of the Stock Purchase Units or vice versa, and such payments may
be unsecured or prefunded on some basis. The Stock Purchase Contracts may
require holders to secure their obligations thereunder in a specified manner.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the Prospectus
Supplement will not necessarily be complete, and reference will be made to the
Stock Purchase Contracts, and, if applicable, collateral arrangements and
depositary arrangements, relating to such Stock Purchase Contracts or Stock
Purchase Units.
PLAN OF DISTRIBUTION
The Company and/or any Conseco Trust may sell any of the Securities being
offered hereby in any one or more of the following ways from time to time: (i)
through agents; (ii) to or through underwriters; (iii) through dealers; or (iv)
directly to purchasers.
The Prospectus Supplement with respect to the Securities will set forth the
terms of the offering of the Securities, including the name or names of any
underwriters, dealers or agents; the purchase price of the Securities and the
proceeds to the Company and/or a Conseco Trust from such sale; any underwriting
discounts and commissions or agency fees and other items constituting
underwriters' or agents' compensation; any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchange on which such Securities may be listed. Any initial public
offering price, discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company and/or the applicable Conseco Trust to
such agent will be set forth, in the applicable Prospectus Supplement. Unless
otherwise indicated in such Prospectus Supplement, any such agent will be acting
on a reasonable best efforts basis for the period of its appointment. Any such
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold.
If Securities are sold by means of an underwritten offering, the Company
and/or the applicable Conseco Trust will execute an underwriting agreement with
an underwriter or underwriters at the time an agreement for such sale is
reached, and the names of the specific managing underwriter or underwriters, as
well as any other underwriters, and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement which will be
used by the underwriters to make resales of the Securities in respect of which
this Prospectus is delivered to the public. If underwriters are utilized in the
sale of the Securities in respect of which this Prospectus is delivered, the
Securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined by
the underwriter at the time of sale. Securities may be offered to the public
either through underwriting syndicates represented by managing underwriters or
directly by the managing underwriters. If any underwriter or underwriters are
utilized in the sale of the Securities, unless otherwise indicated in the
Prospectus Supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters with respect to a sale of Securities will be obligated to
purchase all such Securities of a series if any are purchased.
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If a dealer is utilized in the sales of the Securities in respect of which
this Prospectus is delivered, the Company and/or the applicable Conseco Trust
will sell such Securities to the dealer as principal. The dealer may then resell
such Securities to the public at varying prices to be determined by such dealer
at the time of resale. Any such dealer may be deemed to be an underwriter, as
such term is defined in the Securities Act, of the Securities so offered and
sold. The name of the dealer and the terms of the transaction will be set forth
in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company
and/or the applicable Conseco Trust and the sale thereof may be made by the
Company and/or the applicable Conseco Trust directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under relevant agreements
to indemnification or contribution by the Company and/or the applicable Conseco
Trust against certain liabilities, including liabilities under the Securities
Act.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, the Company and its subsidiaries in
the ordinary course of business.
Securities may also be offered and sold, if so indicated in the applicable
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company and/or the applicable Conseco Trust. Any
remarketing firm will be identified and the terms of its agreement, if any, with
its compensation will be described in the applicable Prospectus Supplement.
Remarketing firms may be deemed to be underwriters, as such term is defined in
the Securities Act, in connection with the Securities remarketed thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company and/or the applicable Conseco Trust to indemnification or
contribution by the Company and/or the applicable Conseco Trust against certain
civil liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for Conseco and
its subsidiaries in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company and/or
the applicable Conseco Trust may authorize agents, underwriters or dealers to
solicit offers by certain types of institutions to purchase Securities from the
Company and/or the applicable Conseco Trust at the public offering prices set
forth in the applicable Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on a specified date
or dates in the future. A commission indicated in the applicable Prospectus
Supplement will be paid to underwriters, dealers and agents soliciting purchases
of Securities pursuant to Contracts accepted by the Company and/or the
applicable Conseco Trust.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements, trend analyses and other information contained in this
Prospectus, any Prospectus Supplement or any document incorporated by reference
herein relative to markets for the products of the Company or Green Tree
Financial Corporation ("Green Tree") and trends in the Company's or Green Tree's
operations or financial results, as well as other statements including words
such as "anticipate," "believe," "plan," "estimate," "expect," "intend," and
other similar expressions, constitute forward-looking statements under the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors which may cause actual results to be materially different from those
contemplated by the forward-looking statements. Such factors include, among
other things: (1) general economic conditions and other factors, including
prevailing interest rate levels, short-term interest rate fluctuations, stock
market performance and health care inflation, which may affect the ability of
the Company to sell its products, the ability of Green Tree to make loans and
access capital resources, the market value of the Company's or Green Tree's
investments, the lapse rate and profitability of the Company's policies and the
level of defaults and prepayments of loans made by Green Tree; (2) the Company's
ability to achieve anticipated levels of operational efficiencies at recently
acquired companies, as well as through other cost-saving initiatives; (3)
customer response to new products, distribution channels and marketing
initiatives; (4) mortality, morbidity, usage of
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health care services and other factors which may affect the profitability of the
Company's insurance products; (5) changes in the Federal income tax laws and
regulations which may affect the relative tax advantages of some of the
Company's products; (6) increasing competition in the sale of insurance and
annuities and in the consumer finance business; (7) regulatory changes or
actions, including those relating to regulation of financial services affecting
(among other things) bank sales and underwriting of insurance products,
regulation of the sale, underwriting and pricing of insurance products, and
health care regulation affecting the Company's supplemental health insurance
products; (8) the availability and terms of future acquisitions; and (9) the
risk factors or uncertainties listed from time to time in any Prospectus
Supplement or any document incorporated by reference herein.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the legal
validity of Securities (other than the Preferred Securities) will be passed upon
for the Company by John J. Sabl, Executive Vice President, General Counsel and
Secretary of the Company. Mr. Sabl is a full-time employee of the Company and
owns 75,000 shares and holds options to purchase 450,000 shares of Common Stock.
Unless otherwise indicated in the applicable Prospectus Supplement, certain
matters of Delaware law relating to the validity of the Preferred Securities
will be passed upon for the Conseco Trusts by Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to the Conseco Trusts.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated by reference in this Prospectus, have been
audited by Coopers & Lybrand L.L.P., independent accountants, as set forth in
their reports thereon incorporated by reference herein, and are incorporated by
reference in reliance upon such reports, given upon the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements of Green Tree at December 31, 1997
and 1996, and for each of the three years in the period ended December 31, 1997,
included in the Current Report on Form 8-K dated June 3, 1998, which is
incorporated by reference in this Prospectus, have been audited by KPMG Peat
Marwick LLP, independent auditors, as set forth in their report thereon
incorporated by reference herein, and are incorporated by reference in reliance
upon such report, given upon authority of such firm as experts in accounting and
auditing.
30
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 590,000
New York Stock Exchange listing fee......................... 75,000
Legal fees and expenses..................................... 200,000
Accounting fees and expenses................................ 125,000
Printing and engraving expenses............................. 250,000
Trustee's fees and expenses................................. 50,000
Rating agencies' fees....................................... 600,000
Miscellaneous............................................... 110,000
----------
Total....................................................... $2,000,000
==========
</TABLE>
Except for the SEC registration fee, all of the foregoing are estimates.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Indiana Business Corporation Law grants authorization to Indiana
corporations to indemnify officers and directors for their conduct if such
conduct was in good faith and was in the corporation's best interests or, in the
case of directors, was not opposed to such best interests, and permits the
purchase of insurance in this regard. In addition, the shareholders of a
corporation may approve the inclusion of other or additional indemnification
provisions in the articles of incorporation and bylaws.
The Conseco Bylaws provides for the indemnification of any person made a
party to any action, suit or proceeding by reason of the fact that he or she is
a director, officer or employee of Conseco, if (a) such person is wholly
successful with respect to such action, suit or proceeding or (b) if such person
is determined to have acted in good faith, in what he or she reasonably believed
to be the best interests of Conseco or at least not opposed to its best
interests and, in addition, with respect to any criminal claim, is determined to
have had reasonable cause to believe that his or her conduct was lawful or had
no reasonable cause to believe that his or her conduct was unlawful. Such
indemnification shall be against the reasonable expenses, including attorneys'
fees, incurred by such person in connection with the defense of such action,
suit or proceeding and amounts paid in settlement. If such person was not wholly
successful, the determination of entitlement to indemnification shall be made by
one of the following methods, such method to be selected by the Board of
Directors: (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who are not and have not been parties to the claim; (b)
by the majority vote of a committee duly designated by the Board of Directors,
consisting solely of two or more directors who are not and have not been parties
to the claim; and (c) by special legal counsel.
The above discussion of Conseco's Bylaws and the Indiana Business
Corporation Law is not intended to be exhaustive and is qualified in its
entirety by such Bylaws and the Indiana Business Corporation Law.
The Declaration of Trust for each of Conseco Financing Trust V, Conseco
Financing Trust VI and Conseco Financing Trust VII (the "Trusts") provides that
no Institutional Trustee or any of its Affiliates, Delaware Trustee or any of
its Affiliates, or any officer, director, shareholder, member, partner,
employee, representative, custodian, nominee or agent of the Institutional
Trustee or the Delaware Trustee (each a "Fiduciary Indemnified Person"), and no
Regular Trustee, Affiliate of any Regular Trustee, or any officer, director,
shareholder, member, partner, employee, representative or agent of any Regular
Trustee or any Affiliate thereof, or any employee or agent of any of the Trusts
or any of their Affiliates (each a "Company Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any of such Trusts
or any officer, director, shareholder, partner, member, representative, employee
or agent of any such Trust or its Affiliates or to any holder of Preferred
Securities for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Fiduciary Indemnified Person or Company
Indemnified Person in good faith on behalf of any of such Trusts and in a manner
such Fiduciary Indemnified Person or Company Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Fiduciary
Indemnified Person or Company Indemnified Person by such Declaration or by law,
except
II-1
<PAGE>
that a Fiduciary Indemnified Person or Company Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Fiduciary
Indemnified Person's or Company Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
The Declaration of Trust for each of such Trusts also provides that to the
full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of any such Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of any such Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. Each of the Declaration of Trusts also provides that to
the full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of any
such trust to procure a judgment in its favor by reason of the fact that such
person is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of any such trust and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Company Indemnified Person shall have been adjudged to be liable to
any such trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper. The Declaration of Trust for each such Trust further provides
that expenses (including attorneys' fees) incurred by a Company Indemnified
Person in defending a civil, criminal, administrative or investigative action,
suit or proceeding referred to in the immediately preceding two sentences shall
be paid by the Company in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Company as authorized
in any such Declaration.
The Declaration of Trust for each Trust also provides that the Company
shall indemnify each Fiduciary Indemnified Person against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts under
any such Trust, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties thereunder.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
1.1 Form of Purchase Agreement -- Debt Securities is
incorporated herein by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of the Registrant (No.
33-53095)
1.2 Form of Purchase Agreement -- Equity is incorporated herein
by reference to Exhibit 1.2 to the Registration Statement
on Form S-3 of the Registrant (No. 33-53095)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
3.1 Amended and Restated Articles of Incorporation of Conseco,
Inc. were filed with the Commission as Exhibit 3.1 to
Conseco's Annual Report on Form 10-K for the year ended
December 31, 1997, and are incorporated herein by this
reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. were filed
with the Commission as Exhibit 3.2 to its Annual Report on
Form 10-K for the year ended December 31, 1997, and are
incorporated herein by this reference.
4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and LTCB Trust Company, as Trustee,
pursuant to which the Senior Debt Securities are to be
issued*
4.2 Subordinated Indenture, dated as of November 14, 1996
between Conseco, Inc. and Fleet National Bank, as Trustee,
pursuant to which the Subordinated Debentures are to be
issued is incorporated herein by reference to Exhibit
4.17.1 to Conseco's Current Report on Form 8-K dated
November 19, 1996.
4.3 Form of Deposit Agreement is incorporated herein by
reference to Exhibit 4.3 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
4.4 Certificate of Trust of Conseco Financing Trust V*
4.5 Declaration of Trust of Conseco Financing Trust V*
4.6 Certificate of Trust of Conseco Financing Trust VI*
4.7 Declaration of Trust of Conseco Financing Trust VI*
4.8 Certificate of Trust of Conseco Financing Trust VII*
4.9 Declaration of Trust of Conseco Financing Trust VII*
4.10 Form of Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit 4.10 to Amendment No.
2 to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
4.11 Form of Preferred Securities Guarantee Agreement by
Conseco, Inc. is incorporated by reference to Exhibit 4.11
to Amendment No. 2 to the Registration Statement on Form
S-3 of Conseco (No. 333-14991)
4.12 Form of Debt Security
The form or forms of such Debt Securities with respect to
each particular offering will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.13 Form of Preferred Stock
Any amendment to the Company's Articles of Incorporation
authorizing the creation of any series of Preferred Stock
or Depositary Shares representing such shares of Preferred
Stock and setting forth the rights, preferences and
designations thereof will be filed as an exhibit
subsequently included or incorporated by reference herein.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
4.14 Form of Warrant Agreement is incorporated herein by
reference to Exhibit 4.4 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095).
4.15 Form of Preferred Security is incorporated by reference to
Exhibit 4.15 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.16 Form of Supplemental Indenture is incorporated by reference
to Exhibit 4.16 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.17 Form of % Subordinated Deferrable Interest Debenture is
incorporated by reference to Exhibit 4.17 to Amendment No.
1 to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
5.1 Opinion of John J. Sabl
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts (previously filed)
23.1 Consent of John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of Coopers & Lybrand L.L.P. with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG Peat Marwick LLP with respect to the
financial statements of Green Tree Financial Corporation
24.1 Powers of Attorney from Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Ngaire E. Cuneo, David R. Decatur, M. Phil
Hathaway, Donald F. Gongaware, James D. Massey, Dennis E.
Murray, Sr. and John M. Mutz were included on the signature
page of the initial filing of this Registration Statement.
25.1 Statement of Eligibility on Form T-1 under
the Trust Indenture Act of 1939, as amended, of LTCB Trust
Company, as Trustee under the Senior Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of State Street Bank and
Trust Company, as Trustee under the Subordinated
Indenture
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of _____________________
_________, as Trustee under the Declaration of Trust of
Conseco Financing Trust V, the Declaration of Trust of
Conseco Financing Trust VI and the Declaration of Trust of
Conseco Financing Trust VII**
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of ____________________
_________, as Trustee of the Preferred Securities
Guarantees for the benefit of the holders of Preferred
Securities of Conseco Financing Trust V, Conseco Financing
Trust VI and Conseco Financing Trust VII**
</TABLE>
* Incorporated herein by reference to the corresponding exhibit to the
Registration Statement on Form S-3 of Conseco (No. 333-27803).
** To be filed by amendment.
II-4
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; Provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) above do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned Registrants hereby undertake: (1) to use its
best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number of
copies of a prospectus which at that time meets the requirements of
Section 10(a) of the Act, and relating to the securities offered at
competitive bidding, as contained in the Registration Statement,
together with any supplements thereto, and (2) to file an amendment to
the Registration Statement reflecting the results of bidding, the
terms of the reoffering and related matters to the extent required by
the applicable form, not later than the first use, authorized by the
issuer after the opening of bids, of a prospectus relating to the
securities offered at competitive bidding, unless no further public
offering of such securities by the issuer and no reoffering of such
securities by the purchasers is proposed to be made.
II-5
<PAGE>
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, each of the Registrants has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrants will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(e) The undersigned Registrants hereby undertake that (1) for purposes of
determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(f) The undersigned Registrants hereby undertake to file, if necessary, an
application for the purpose of determining the eligibility of the
Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939, as amended, in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission under
Section 305(b)(2) of such Act.
(g) The undersigned Registrants hereby undertake to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X
are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference
in the prospectus to provide such interim financial information.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on June 22, 1998.
CONSECO, INC.
By:
------------------------------------
Stephen C. Hilbert,
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director, Chairman of the Board, June 22, 1998
- - --------------------------------------------- President and Chief Executive
Stephen C. Hilbert Officer (Principal Executive Officer
of Conseco, Inc.)
* Director, Executive Vice President June 22, 1998
- - --------------------------------------------- and Chief Financial Officer
Rollin M. Dick (Principal Financial Officer of
Conseco, Inc.)
* Senior Vice President, Chief June 22, 1998
- - --------------------------------------------- Accounting Officer and Treasurer
James S. Adams (Principal Accounting Officer of
Conseco, Inc.)
* Director June 22, 1998
- - ---------------------------------------------
Ngaire E. Cuneo
* Director June 22, 1998
- - ---------------------------------------------
David R. Decatur
* Director June 22, 1998
- - ---------------------------------------------
M. Phil Hathaway
* Director June 22, 1998
- - ---------------------------------------------
Donald F. Gongaware
* Director June 22, 1998
- - ---------------------------------------------
James D. Massey
* Director June 22, 1998
- - ---------------------------------------------
Dennis E. Murray, Sr.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director June 22, 1998
- - ---------------------------------------------
John M. Mutz
* By: /S/ KARL W. KINDIG
----------------------------
Karl W. Kindig,
Attorney-in-Fact
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust V certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on June 22, 1998.
CONSECO FINANCING TRUST V
By:
*
------------------------------------
Stephen C. Hilbert, as Trustee
By:
*
------------------------------------
Rollin M. Dick, as Trustee
* By: /S/ KARL W. KINDIG
----------------------------
Karl W. Kindig,
Attorney-in-Fact
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VI certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on June 22, 1998.
CONSECO FINANCING TRUST VI
By:
*
------------------------------------
Stephen C. Hilbert, as Trustee
By:
*
------------------------------------
Rollin M. Dick, as Trustee
* By: /S/ KARL W. KINDIG
----------------------------
Karl W. Kindig,
Attorney-in-Fact
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VII certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Carmel, State of Indiana,
on June 22, 1998.
CONSECO FINANCING TRUST VII
By:
*
------------------------------------
Stephen C. Hilbert, as Trustee
By:
*
------------------------------------
Rollin M. Dick, as Trustee
* By: /S/ KARL W. KINDIG
----------------------------
Karl W. Kindig,
Attorney-in-Fact
II-11
<PAGE>
EXHIBIT INDEX
TO REGISTRATION STATEMENT
ON FORM S-3
CONSECO, INC.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- - -------------- ----------------------
<C> <S>
1.1 Form of Purchase Agreement -- Debt Securities is
incorporated herein by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of the Registrant (No.
33-53095)
1.2 Form of Purchase Agreement -- Equity is incorporated herein
by reference to Exhibit 1.2 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
3.1 Amended and Restated Articles of Incorporation of Conseco, Inc.
were filed with the Commission as Exhibit 3.1 to Conseco's
Annual Report on Form 10-K for the year ended December 31,
1997, and are incorporated herein by this reference.
3.2 Amended and Restated Bylaws of Conseco, Inc. were filed with
were filed with the Commission as Exhibit 3.2 to its Annual
Report on Form 10-K for the year ended December 31, 1997, and
are incorporated herein by this reference.
4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and LTCB Trust Company, as Trustee,
pursuant to which the Senior Debt Securities are to be
issued*
4.2 Subordinated Indenture, dated as of November 14, 1996
between Conseco, Inc. and Fleet National Bank, as Trustee,
pursuant to which the Subordinated Debentures are to be
issued is incorporated herein by reference to Exhibit 4.17.1
to Conseco's Current Report on Form 8-K dated November 19,
1996.
4.3 Form of Deposit Agreement is incorporated herein by
reference to Exhibit 4.3 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095)
4.4 Certificate of Trust of Conseco Financing Trust V*
4.5 Declaration of Trust of Conseco Financing Trust V*
4.6 Certificate of Trust of Conseco Financing Trust VI*
4.7 Declaration of Trust of Conseco Financing Trust VI*
4.8 Certificate of Trust of Conseco Financing Trust VII*
4.9 Declaration of Trust of Conseco Financing Trust VII*
4.10 Form of Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit 4.10 to Amendment No. 2
to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
4.11 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc. is incorporated by reference to Exhibit 4.11 to
Amendment No. 2 to the Registration Statement on Form S-3 of
Conseco (No. 333-14991)
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- - -------------- ----------------------
<C> <S>
4.12 Form of Debt Security
The form or forms of such Debt Securities with respect to
each particular offering will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.13 Form of Preferred Stock
Any amendment to the Company's Articles of Incorporation
authorizing the creation of any series of Preferred Stock or
Depositary Shares representing such shares of Preferred
Stock and setting forth the rights, preferences and
designations thereof will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.14 Form of Warrant Agreement is incorporated herein by
reference to Exhibit 4.4 to the Registration Statement on
Form S-3 of the Registrant (No. 33-53095).
4.15 Form of Preferred Security is incorporated by reference to
Exhibit 4.15 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.16 Form of Supplemental Indenture is incorporated by reference
to Exhibit 4.16 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991)
4.19 Form of % Subordinated Deferrable Interest Debenture is
incorporated by reference to Exhibit 4.17 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991)
5.1 Opinion of John J. Sabl
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts (previously filed)
23.1 Consent of John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of Coopers & Lybrand L.L.P. with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG Peat Marwick LLP with respect to financial
statements of Green Tree Financial Corporation.
Exhibit 5.2 hereto)
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of LTCB Trust Company, as
Trustee under the Senior Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of State Street Bank and
Trust Company, as Trustee under the Subordinated Indenture
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of
, as Trustee under the
Declaration of Trust of Conseco Financing Trust V, the
Declaration of Trust of Conseco Financing Trust VI and the
Declaration of Trust of Conseco Financing Trust VII**
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of
, as Trustee of the
Preferred Securities Guarantees for the benefit of the
holders of Preferred Securities of Conseco Financing Trust V,
Conseco Financing Trust VI and Conseco Financing Trust VII**
</TABLE>
* Incorporated herein by reference to the corresponding exhibit to the
Registration Statement on Form S-3 of Conseco (No. 333-27803).
** To be filed by amendment.
II-13
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Conseco, Inc. on Form S-3 (File No. 333-56611), of our reports dated March
23, 1998 on our audits of the consolidated financial statements and financial
statement schedules of Conseco, Inc. and subsidiaries as of December 31, 1997
and 1996, and for the years ended December 31, 1997, 1996 and 1995, included in
the Annual Report on Form 10-K. We also consent to the reference to our firm
under the caption "Experts."
/S/ COOPERS & LYBRAND L.L.P.
---------------------------
COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
June 19, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Green Tree Financial Corporation:
We consent to the incorporation by reference in the Registration Statement
(No. 333-56611) on Form S-3 of Conseco, Inc. of our report dated January 27,
1998, except as to Note O which is as of February 13, 1998, with respect to the
consolidated balance sheets of Green Tree Financial Corporation and subsidiaries
as of December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1997, which report appears in the Form 8-K
of Conseco, Inc. dated June 3, 1998 and to the reference to our firm under the
heading "EXPERTS" in the Registration Statement. Our report refers to the
Company's adoption of the Financial Accounting Standards Board's Statement No.
125 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," in 1997.
/S/ KPMG PEAT MARWICK LLP
---------------------------
KPMG PEAT MARWICK LLP
Minneapolis, Minnesota
June 19, 1998
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- - ------------------------------------------------------------------------------
LTCB TRUST COMPANY
- - ------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
New York State 13-3191890
- - ------------------------------------------------------------------------------
(Jurisdiction of incorporation or (I.R.S. Employer Identification
organization if not a U.S. national bank Number)
165 Broadway New York, N.Y. 10006
- - ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
LTCB Trust Company 165 Broadway New York, N.Y. 10006
Corporate Trust Administration 47th Floor
Attn: Barbara Bevelaqua, Vice President (212) 335-4901
Lisa Karisen, Assistant Vice President (212) 335-4899
- - ------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
- - ------------------------------------------------------------------------------
CONSECO, INC.
- - ------------------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
INDIANA 35-146632
- - ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
11825 N. Pennsylvania Street
Carmel, Indiana 46032
- - ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Senior Debt Securities
- - ------------------------------------------------------------------------------
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
a) Name and address of each examining or supervising authority to which it is
subject:
Superintendent of Banks Federal Reserve Bank of New York (District 2)
State of New York 33 Liberty Street
Albany, New York New York, N.Y. 10045
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429
b) Whether it is authorized to exercise corporate trust powers:
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR
If the obligor is an affiliate of the trustee, describe each affiliation:
The obligor is not an affiliate of the trustee.
ITEM 16. LIST OF EXHIBITS
Exhibit I
A copy of the authorization certificate of LTCB Trust Company as well
as supplemental and related documents now in effect, which contain the
authority to commence business and a grant of powers to said LTCB Trust
Company to exercise corporate trust powers.**
Exhibit II
A copy of the existing By-Laws of LTCB Trust Company.
Exhibit III
The consent of the trustee as required by Section 321(b) of the Act.
Exhibit IV
A copy of the latest published report of condition of the trust issued
as at March 31, 1998
** Exhibit I is herein incorporated by reference to the Exhibit bearing the
identical number in Item 16 of the Form T-1 of LTCB Trust Company, filed as
Exhibit 21.5 to the Registration Statement on Form S-1 of ALHC Merger
Corporation, filed with the Securities and Exchange Commission on September 12,
1994 (Registration No. 33-81858).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, LTCB Trust Company, a corporation organized and existing under the laws
of the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York, and State of New York, on the 22nd day of June 1998.
LTCB Trust Company
By: Barbara Bevelaqua
-------------------------
Barbara Bevelaqua
Vice President
<PAGE>
EXHIBIT II
BY-LAWS
OF
LTCB TRUST COMPANY
AS ADOPTED BY INCORPORATORS
ON OCTOBER 7, 1983,
AND SINCE AMENDED THROUGH AND
INCLUDING APRIL 25, 1997
ARTICLE 1.
Stockholders
Section 1. Place of Meetings of Stockholders. Meetings of stockholders shall be
held at the office of The Long-Term Credit Bank of Japan, Limited in the City of
New York, State of New York, provided, however, that the Board of Directors in
its discretion may fix any other location in the City of New York.
Section 2. Annual Meetings of Stockholders. A meeting of stockholders shall be
held annually for the election of Directors and the transaction of other
business at such time within the first three calendar months of each year as may
from time to time be designated by the Board of Directors.
Section 3. Special Meetings of Stockholders. Special meetings of the
stockholders may be called by the Board of Directors, the President, an
Executive Vice President or the Secretary upon the written request of a majority
of the Board of Directors or upon the written request of the holders of not less
than 50 per cent of all outstanding shares entitled to vote on the action
proposed to be taken. Such call and written request shall state the purpose or
purposes of the proposed meeting.
Section 4. Notice of Meetings of Stockholders. Written notice of every meeting
of stockholders shall be signed by the President, an Executive Vice President or
the Secretary and state the place, date and hour of the meeting and unless it is
the annual meeting indicate that it is being issued by or at the direction of
the person or persons calling the meeting and state the purpose or purposes for
which the meeting is called.
A copy of the notice of any meeting shall be given, personally or
by mail at least 15 business days before the date of the meeting, to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed given when deposited in the United States mail, with postage thereon
prepaid, directed to the stockholder at his address as it appears on the record
of stockholders, or at any other address upon his written request for mailing
filed with the Secretary.
Section 5. Quorum of Stockholders. The holders of a majority of the shares
entitled to vote thereat shall constitute a quorum at a meeting of stockholders
for the transaction of any business. When a quorum is once present to organize a
meeting, it is not broken by the subsequent withdrawal of any stockholders.
Section 6. Adjourned Meeting. The stockholders present at a meeting of
stockholders may adjourn the meeting despite the absence of a quorum. When a
meeting is adjourned to another time or place, it shall not be necessary to give
any notice of the adjourned meeting if the time and place to which the meeting
is adjourned are announced at the meeting at which the adjournment is taken, and
at the adjourned meeting any business may be transacted that might have been
transacted on the original date of the meeting.
Section 7. Presiding Officer. The Chairman shall preside at all meetings of
stockholders, except that in his absence or disability, the President or an
Executive Vice President shall preside in his place.
Section 8. Proxies. Every stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy. Every proxy must be signed by
the stockholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the stockholder
executing it, except in those cases where an irrevocable proxy is provided by
law. No Director, officer, or employee of the Trust Company shall act as proxy.
Section 9. Inspectors at Stockholders' Meetings. The Board of Directors, in
advance of any stockholders' meeting, may appoint one or more inspectors to act
at the meeting or any adjournment thereof. If inspectors are not so appointed,
the person presiding at a stockholders' meeting, may, and on the request of any
stockholder entitled to vote thereat shall, appoint inspectors. In case any
person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors shall determine the number of shares
<PAGE>
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the results, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting or any stockholder entitled to vote thereat,
the inspectors shall make a report in writing of any challenge, question or
matter determined by them and execute a certificate of any fact found by them.
Any report or certificate made by them shall be prima facie evidence of the
facts stated and of the vote as certified by them. No Director, officer or
employee of the Trust Company shall act as inspector.
Section 10. Qualification of Voters. Every stockholder of record shall be
entitled at every meeting of stockholders to one vote for every share standing
in his name on the record of stockholders.
Section 11. Vote of Stockholders. Directors shall, except as otherwise required
by law, be elected by a plurality of the votes cast at a meeting of stockholders
by the holders of shares entitled to vote in the election. Any other corporate
action by vote of the stockholders shall, except as otherwise required by law,
be authorized by a majority of the votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon.
Section 12. Written Consent of Stockholders Without a Meeting. Any stockholder
action required or permitted to be taken by vote may be taken on written consent
in substitution for and as the equivalent of any meeting of stockholders herein
provided for. Any such consent shall set forth the action so taken, and be
signed by the holders of all outstanding shares entitled to vote thereon.
ARTICLE 2.
Directors
Section 1. Board of Directors. The affairs of the Trust Company shall be
managed by its Board of Directors.
Section 2. Qualifications of Directors. Each Director shall be at least 18 years
of age, and shall fulfill the other statutory requirements for serving as such
Director. Subject to applicable law, at least one-half of the Directors shall be
officers of the majority stockholder (if any) of the Trust Company; and, if
necessary to enable such officers to serve as Directors, application shall be
made to the New York Superintendent of Banks to exercise his discretion to
permit as Directors of the Trust Company not more than one-half of the total
number thereof to serve as such, although such Directors are not citizens of the
United States or citizens or residents of this state or a contiguous state.
Section 3. Number of Directors. The Board of Directors shall be composed of not
less than seven nor more than thirty members. The number of the Directors shall
be fixed at any time within the maximum and minimum limits by the Board of
Directors.
Section 4. Election and Term of Directors. At each annual meeting of
stockholders, the stockholders shall elect Directors to hold office until the
next annual meeting. Each Director shall hold office until the expiration of the
term for which he is elected, and until his successor has been elected and
qualified.
Section 5. Vacancies and Newly Created Directorships. All vacancies in the
office of Director, including newly created directorships resulting from an
increase in the number of Directors, shall be filled by election by the
stockholders except as hereinafter provided. Vacancies not exceeding one-third
of the entire Board may be filled by affirmative vote of the majority of the
Directors then in office, and the Directors so elected shall hold office for the
balance of the unexpired term; or when the number of Directors required is nine
or more, two vacancies may, with the consent of the New York Superintendent of
Banks, be left unfilled until the next annual election, and when the number of
Directors required is more than five and less than nine, one vacancy may, with
the Superintendent's consent, be left unfilled until the next annual election.
Every vacancy, including newly created but unfilled directorships resulting from
an increase in the number of Directors, in the office of Director and each
reduction in the number of Directors shall be reported to the Superintendent
within ten days after such vacancy occurs or such reduction is effected. Each
election by the Board to fill any such vacancy shall be likewise reported
together with the name, address and occupation of the person so elected.
Section 6. Removal of Directors. Any or all of the Directors may be removed
for cause by vote of the stockholders or Directors, or with or without cause by
a vote of the stockholders.
Section 7. Quorum of Directors. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business or of any specified
item of business.
Section 8. Action by the Board. The vote of the majority of the Directors
present at a meeting of the Board of Directors at the time of the vote, if a
quorum is present at such time, shall, except as otherwise provided by law, be
the act of the Board of Directors.
<PAGE>
Section 9. Place and Time of Meetings of the Board; Notice; Adjournment. The
first meeting of each newly elected Board of Directors shall be held immediately
following the annual meeting of stockholders and at the place thereof. The Board
of Directors shall hold a regular meeting at the office of The Long-Term Credit
Bank of Japan, Limited in the City of New York, State of New York without notice
on the third Friday of each month at 2:00 p.m. Should the day appointed for a
regular meeting not be a business day, the meeting shall be held at the same
time on the next business day.
The Board of Directors in its discretion may fix any other location
or any other time for the holding of regular meetings upon notice to the
Directors. Special meetings of the Board may be called by the President, an
Executive Vice President or the Secretary upon the request of at least two
Directors. Notice of a special meeting shall be given to each Director. The
notice shall state the place, date and hour of the meeting and indicate that it
is being issued by or at the direction of the person or persons calling the
meeting. The notice shall be given personally (including by telephone) or by
mail not less than 3 business days before the date of meeting, to each Director.
If mailed, such notice shall be deemed given when deposited in the United States
mail, with postage thereon prepaid, directed to the Director at his address, or
at any other address upon his written request for mailing filed with the
Secretary. The notice need not specify the purpose of any special meeting of the
Board.
A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of any
adjournment of a meeting of the Board to another time and place shall be given
to the Directors who were not present at the time of the adjournment and, unless
such time and place are announced at the meeting, to the other Directors.
Section 10. Presiding Officer. The Chairman shall preside at all meetings of the
Board of Directors, except that in his absence or disability, the President or
an Executive Vice President shall preside in his place. The Chairman shall be
elected as such by said Board at its Annual Meeting. He shall serve as Chairman
until the next Annual Meeting of said Board and until his successor is elected
and qualified, but he shall not be an officer of the Trust Company and shall
have only such powers and duties, in addition to those of a Director, as are
specifically set forth in these By-Laws. He shall be an ex officio member of all
Committees of the Board, except the Examining and Audit Committee.
Section 11. Compensation of Directors. Such compensation shall be paid to
Directors for attendance at meetings of the Board of Directors and of any
Committee of said Board, and such additional annual compensation shall be paid
to Directors regardless of attendance, as shall be determined by the Board of
Directors by resolution from time to time.
Section 12. Attendance at Meetings. Any one or more Directors may participate in
a meeting of the Board of Directors or any Committee of said Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
Section 13. Committees of the Board. The Board of Directors shall appoint a
Committee of at least three of its members to examine fully once in each
calendar year the books, papers and affairs of the Trust Company and such other
matters as may be required byss.122 of the Banking Law of the State of New York.
The Committee may employ such assistance in making such examinations as the
Committee may deem necessary.
A report in writing of any examination so made, sworn to by the
Directors making the same, shall be presented to the Board of Directors at their
next regular meeting after the completion of such examination and placed on file
in the Trust Company and a duplicate thereof filed in the Office of the New York
Superintendent of Banks. Such report shall contain the matters required
underss.123 of the Banking Law of the State of New York.
The Board of Directors may appoint from time to time other
Committees of one or more Directors for such purposes and with such powers as
the Board may determine.
The President shall have the power to designate another Director to
serve on any standing Committee during the absence or inability to serve of any
member thereof.
ARTICLE 3.
Officers
Section 1. Number. The officers of the Trust Company, each of whom shall be
elected or appointed by the Board of Directors, shall be a President, one or
more Vice Presidents, one or more Assistant Vice Presidents, a Secretary, a
Treasurer, and such other officer or officers, if any, as the Board of Directors
may deem appropriate or desirable, including, at the option of the Board of
Directors, one or more Executive Vice Presidents and/or one or more Senior Vice
Presidents. Each reference to Vice Presidents elsewhere in these By-Laws,
including without limitation the extent of and limitations on the powers and
duties of Vice Presidents, shall also pertain and be fully applicable to any
<PAGE>
person holding the office of Senior Vice President. Any two or more offices may
be held by the same person, except the offices of President and Secretary.
Section 2. Election, Term of Office and General Duties. The officers to be
elected or appointed by the Board of Directors shall be elected or appointed
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the stockholders.
Each officer shall hold office until the first meeting of the Board
of Directors following the next annual meeting of stockholders, and until his
successor has been elected or appointed and qualified.
Participation in major policymaking functions of the Trust Company
by officers, when acting in their capacity as such, shall be limited to the
President and the Executive Vice Presidents.
Section 3. Removal. Any officers elected or appointed by the Board of Directors
may be removed by the Board of Directors with or without cause, but such removal
without cause shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 4. Vacancies. A vacancy in any office because of resignation, removal or
otherwise, may be filled by the Board of Directors, or, under its authority, by
the President or an Executive Vice President, for the unexpired portion of the
term.
Section 5. President. The President shall have general supervision of the
policies and operations of the Trust Company and shall also be the chief
executive officer of the Trust Company. He shall be an ex officio member of all
Committees of the Board, except the Examining and Audit Committee. He shall have
the powers and shall perform the duties pertaining generally to the office of
the President, and shall have the powers and duties conferred or imposed upon
the President by law, by these By-Laws, or by the Board of Directors.
Section 6. Absence or Disability. In the absence or disability of the President,
the Executive Vice Presidents, in the order of seniority of their elections as
such, shall act in his place and assume his duties.
Section 7. Executive Vice Presidents, Vice Presidents and Other Officers. Each
Executive Vice President, each Vice President, each Assistant Vice President,
and each other officer deemed appropriate or desirable by the Board of
Directors, shall have such powers and duties as may be assigned by the Board of
Directors from time to time; and, under authority of the Board of Directors, the
President or an Executive Vice President shall have authority to appoint and
dismiss employees and to prescribe their duties and, to the extent not
inconsistent with these By-Laws, the duties of officers.
Section 8. Secretary. The Secretary shall: (1) keep the minutes of the
proceedings of the stockholders, Board of Directors, and Examining and Audit
Committee and other committees, if any, in one or more books provided for that
purpose; (2) see that all notices are duly given in accordance with the
provisions of these By-Laws; (3) be custodian of the corporate records and of
the seal of the Trust Company; (4) file each written request by a stockholder or
Director that notices to him be mailed to some address other than his address as
it appears on the records of the Trust Company; (5) sign with the President or
an Executive Vice President, certificates representing shares of the Trust
Company; (6) have general charge of the record of stockholders of the Trust
Company; and (7) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or the Board of Directors.
Section 9. Treasurer. The Treasurer shall: (1) have charge and custody of and be
responsible for all funds and securities of the Trust Company, receive and give
receipts for moneys due and payable to the Trust Company from any source
whatsoever, and deposit all such moneys in the name of the Trust Company in
banks, trust companies, or other depositaries; (2) have charge and custody of
and be responsible for the keeping of correct and complete books and records of
account of the Trust Company; (3) have the duty, unless specifically assigned to
another officer by the Board of Directors, to prepare and submit to the Board of
Directors the monthly report required by ss.121 of the Banking Law of the State
of New York; and (4) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the President or the Board of Directors.
Section 10. Fiduciary Instruments and Documents. All instruments in behalf of
the Trust Company as trustee, depositary, agent or in any other fiduciary
capacity, including agreements, indentures, mortgages, deeds, conveyances,
satisfactions, discharges, releases, contracts, assignments, participation
certificates of interest in mortgages, transfers, powers of attorney, proxies,
petitions, proofs of claim, assignments and transfers of any shares of stock,
bonds or other securities, and all other documents and writings in connection
with any fiduciary capacity, may be executed by the President, an Executive Vice
President, any Vice President or any Assistant Vice President; or any other
officer, if thereunto authorized by the President or an Executive Vice
President; or any other person thereunto authorized by the Board of Directors,
the President or an Executive Vice President. Any officer or person authorized
to execute any such instrument, document or writing is also authorized to affix
the seal of the Trust Company thereto and to cause the same to be attested by
the Secretary or the Treasurer. This is in addition to and not in substitution
<PAGE>
for the manner of execution of any instruments elsewhere provided for in these
By-Laws.
Section 11. Contracts and Instruments. All contracts, checks, drafts, and other
commitments and instruments of the Trust Company, all guaranties of signatures
on assignments of stocks and other documents and all assignments or other papers
necessary or proper for the sale, assignment or transfer of stocks, registered
bonds or other securities or any other personal property or rights therein
standing in the name of and owned by the Trust Company in its own right, or held
by it as security, shall be executed by one of the following officers: the
President, an Executive Vice President, any Vice President, any Assistant Vice
President, or another officer or person authorized by the Board of Directors,
the President or an Executive Vice President to sign on behalf of the Trust
Company.
Section 12. Powers of Attorney. All powers of attorney and all authorizations to
representatives or agents of the Trust Company shall be executed by the
President, an Executive Vice President, or a Vice President who is thereunto
designated by the President or an Executive Vice President. Any such power of
attorney or authorization may, however, be executed by another officer or
officers, or person or persons, who may be specifically authorized to execute
the same by the Board of Directors, the President or an Executive Vice
President.
Section 13. Bonding of Officers and Employees; Other Insurance. Each officer and
employee handling moneys, funds, property or valuables, if so required by the
Board of Directors, shall give a bond with security to be approved by the Board,
conditioned for the honest discharge of his duties as such officer or employee.
Such bonds may be in individual, schedule or blanket form and the premiums
therefor shall be paid by the Trust Company. The purchase of and payment for
such bonds shall be in addition to, and not exclusive of, such other insurance
coverage of whatever nature as the Trust Company shall or may obtain for the
proper conduct and protection of its business, property, operations and
personnel.
Section 14. Compensation of Officers. The Board of Directors shall from time to
time fix the compensation, if any, of the President and Executive Vice
Presidents; and those officers shall fix the compensation of the other officers
and the employees of the Trust Company.
ARTICLE 4.
Certificates Representing Shares; Record of Stockholders;
Transfer of Shares
Section 1. Certificates Representing Shares. The shares of the Trust Company
shall be represented by certificates which shall be in such form as shall be
determined by the Board of Directors, subject to applicable law. All such
certificates shall be consecutively numbered. Such certificates shall be signed
by the President or an Executive Vice President and by the Secretary, and may be
sealed with the seal of the Trust Company or a facsimile thereof. In case any
officer who has signed shall have ceased to be such officer before such
certificate is issued, it may be issued by the Trust Company with the same
effect as if he were such officer at the date of issue. Each certificate shall
state upon the face thereof: (1) that the Trust Company is formed under the laws
of New York; (2) the name of the person or persons to whom issued; (3) the
number and class of shares; and (4) the par value of each share represented by
such certificate.
Section 2. Record of Stockholders. The Trust Company shall keep at its office a
record containing the names and addresses of all stockholders, the number and
class of shares held by each, and the dates when they respectively became the
owners of record thereof. The Trust Company shall be protected in treating the
persons in whose names shares stand on the record of stockholders as the owners
thereof for all purposes.
Section 3. Transfer of Shares. Upon surrender to the Trust Company of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, such shares shall be
transferred on the record of the stockholders of the Trust Company, but only by
action of the President or an Executive Vice President.
ARTICLE 5.
Fiscal Year
The fiscal year of the Trust Company shall be determined by resolution of the
Board of Directors.
ARTICLE 6.
Dividends
The Board of Directors may from time to time declare, and the Trust Company may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by applicable law, including without limitation ss.ss.110
and 112 of the Banking Law of the State of New York, or comparable provisions of
law hereafter in effect.
<PAGE>
ARTICLE 7.
Corporate Seal
Section 1. Impression. The following is an impression of the seal adopted by
the Board of Directors of the Trust Company:
<PAGE>
Section 2. Officers' Authority. All of the officers of the Trust Company shall
have authority to affix the corporate seal to documents.
ARTICLE 8.
Miscellaneous Provisions
Section 1. Records. The Organization Certificate, the By-Laws and the
proceedings of all meetings of the stockholders, the Board of Directors, and any
Committee of the Board, shall be recorded in appropriate minute books. The
minutes of each such meeting shall be signed by the Secretary or other officer
appointed to act as Secretary of the meeting.
Section 2. Business Hours. The business hours of the Trust Company's office
shall be from 9 a.m. to 3 p.m. daily except Saturdays, Sundays, and days or
parts of days recognized as legal holidays by the laws of this State on which
the Federal Reserve Bank of New York is not open for the conduct of its normal
business.
Section 3. Indemnification. Directors, officers and agents of the Trust Company
shall be entitled to indemnification from the Trust Company, for the defense of
any civil or criminal action or proceeding, or appeal therein, brought against
them by reason of their being, or having been, such Directors, officers or
agents, to the fullest extent consistent with applicable law, including without
limitation Title 7 of Article 15 of the Banking Law of the State of New York, or
comparable provisions of law hereafter in effect.
The Trust Company shall not be required to provide any such
indemnification to any Director, officer or agent in any such action or
proceeding, or appeal therein, arising out of services rendered by any such
person to any person, firm or association, or any corporation other than the
Trust Company, unless such services were rendered by such Director, officer or
agent at the specific written request of the Trust Company made by the Trust
Company in the manner provided by the Board of Directors.
Expenses incurred in defending a civil or criminal action or
proceeding may be paid by the Trust Company in advance of the final disposition
of such action or proceeding if authorized as provided by applicable law or
allowed by order of a court of competent jurisdiction. All such expenses so
advanced by the Trust Company shall be repaid in case the person receiving such
advancement or allowance is ultimately found not to be entitled to
indemnification or, where indemnification is granted, to the extent the expenses
so advanced by the Trust Company or allowed by the court exceed the
indemnification to which he is entitled.
The rights of indemnification provided for in this Section 3 shall
inure to the benefit of the heirs, executors, administrators and assigns of each
person indemnified and shall not, except as required by applicable law, be
deemed exclusive of any contractual or other legal rights to which he or they
may be entitled.
The Trust Company may, but need not, purchase insurance for the
purpose of indemnifying its Directors, officers or agents, for the purpose of
indemnifying itself for any obligation which it incurs as a result of its
indemnification of Directors, officers or agents, or for both purposes. Such
insurance may, but need not, be for the benefit of all Directors, officers or
agents.
A person is an "agent" under, and any action taken by him is
subject to the provisions of, this Section 3, only when the person is neither a
Director, officer nor employee of the Trust Company but his action has been
taken in good faith on behalf of the Trust Company pursuant to, and within the
scope of, actual authority duly conferred on him by the Trust Company.
ARTICLE 9.
Emergencies
Section 1. Emergencies. In the event of an emergency declared by the President
of the United States or the person performing his functions, the officers and
employees of the Trust Company will continue to conduct the affairs of the Trust
Company under such guidance from the Directors as may be available, except as to
matters which by statute require specific approval of the Board of Directors and
subject to conformance with any governmental directives during the emergency.
Section 2. Offices. The business of the Trust Company shall be conducted at its
office located at 165 Broadway, New York, New York, 10006 and any other legally
authorized location which may be leased or acquired by the Trust Company to
carry on its business. During an emergency resulting in any authorized place of
business of the Trust Company being unable to function, the business ordinarily
conducted at such location shall be relocated elsewhere in such suitable
<PAGE>
quarters, in addition to or in lieu of the locations heretofore mentioned, as
may be designated by the Board of Directors or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board of Directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of the Trust Company. Any temporarily relocated place of business of
the Trust Company shall be returned to its legally authorized location as soon
as practicable and such temporary place of business shall then be discontinued.
ARTICLE 10.
Inspection and Amendments
Section 1. Inspection. A copy of the By-Laws, with all amendments to date shall,
at all times, be kept at the principal office of the Trust Company and shall be
open for inspection by all stockholders during business hours.
Section 2. Amendments. Except as may otherwise be required by law, these By-Laws
may be changed or amended (1) by a vote of a majority of the Directors for the
time being, at any regular or special meeting of the Board, or (2) by vote of
the stockholders at any meeting of the stockholders.
* * *
Certified a true copy
this 1st day of May, 1997.
/s/ Sam Angione
-------------------------
Sam Angione
Executive Vice President and
Secretary
<PAGE>
EXHIBIT III
AUTHORIZATION AND CONSENT OF LTCB TRUST COMPANY
REQUIRED BY SECTION 321(b) OF THE ACT
LTCB Trust Company hereby authorizes and consents that any reports,
records, or other available information in the possession of the Board
of Governors of the Federal Reserve System, the New York Federal Reserve
Board, the New York State Banking Department and the Federal Deposit
Insurance Corporation be furnished by such authorities to the Securities
and Exchange Commission (SEC) upon request therefore, in connection with
the SEC's acting upon form T-1 and Exhibits filed with it by LTCB Trust
Company to establish its eligibility and qualification under the Trust
Indenture Act of 1939 (as amended by the Trust Indenture Reform Act of
1990) to be designated as trustee under the indenture to be executed in
connection with the issuance by Conseco, Inc. of its Senior Medium Term
Notes, Series A
6/22/98 /s/ Barbara Bevelaqua
----------------- ---------------------
Dated Barbara Bevelaqua
Vice President
<PAGE>
EXHIBIT IV
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1998 - March 31, 1998
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE
BASIS IN THOUSANDS OF DOLLARS.
SCHEDULE RI-INCOME STATEMENT
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Interest Income:
a. Interest and fee income on loans:
(1) In domestic offices: RIAD
----
(a) Loans secured by real estate 4011 2,572 1.a.1.a
(b) Loans to depository institutions 4019 0 1.a.1.b
(c) Loans to finance agricultural production and other loans to farmers 4024 0 1.a.1.c
(d) Commercial and industrial loans 4012 11,374 1.a.1.d
(e) Acceptances of other banks 4028 0 1.a.1.e
(f) Loans to individuals for household, family, and other personal expenditures:
(1) Credit cards and related plans 4054 0 1.a.1.f.1
(2) Other 4055 0 1.a.1.f.2
(g) Loans to foreign governments and official institutions 4056 0 1.a.1.g
(h) Obligations (other than securities and leases) of states and political subdivisions
in the U.S.:
(1) Taxable obligations 4503 0 1.a.1.h.1
(2) Tax-exempt obligations 4504 0 1.a.1.h.2
(i) All other loans in domestic offices 4058 179 1.a.1.1
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4059 28 1.a.2
b. Income from lease financing receivables:
(1) Taxable leases 4505 289 1.b.1
(2) Tax-exempt leases 4307 0 1.b.2
Interest income on balances due from depository institutions: (1)
(1) In domestic offices 4105 1 1.c.1
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs 4106 0 1.c.2
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations 4027 1,596 1.d.1
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities 4506 0 1.d.2.a
(b) Tax-exempt securities 4507 19 1.d.2.b
(3) Other domestic debt securities 3657 128 1.d.3
(4) Foreign debt securities 3858 0 1.d.4
(5) Equity securities (including investments in mutual funds) 3859 108 1.d.5
e. Interest income from trading assets 4069 0 1.e
</TABLE>
- - --------------
(1) Includes interest income on time certificates of deposits not held for
trading.
<PAGE>
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Interest Income (continued)
f. Interest income on federal funds sold and securities purchased under RIAD Year-to-Date
agreements to resell 4020 615 1.f
g. Total interest income (sum of items 1.a through 1.f) 4107 16,909 1.g
2. Interest expense:
a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts, and
telephone and preauthorized transfer accounts) 4508 0 2.a.1.a
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) 4509 0 2.a.1.b.1
(2) Other savings deposits 4511 0 2.a.1.b.2
(3) Time deposits of $100,000 or more A517 6,164 2.a.1.b.3
(4) Time deposits of less than $100,000 A518 3 2.a.1.b.4
(2) Interest on deposits in foreign offices, Edge and agreement
subsidiaries, and IBFs 4172 531 2.a.2
b. Expenses of federal funds purchased
and securities sold under
agreements to repurchase 4180 9 2.b
c. Interest on demand notes issued to the U.S. Treasury, trading
liabilities, and on other borrowed money 4185 2,681 2.c
d. Not applicable
e. Interest on subordinated notes and debentures 4200 867 2.e
f. Total interest expense (sum of items 2.a through 2.e) 4073 10,255 RIAD 2.f
3. Net interest income (item 1.g minus 2.f) 4074 6,654 3.
4. Provisions:
a. Provision for credit losses 4230 (1,000) 4.a
b. Provision for allocated transfer risk 4243 0 4.b
Noninterest income: RIAD
a. Income from fiduciary activities 4070 824 5.a
b. Service charges on deposit accounts in domestic offices 4080 0 5.b
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) A220 0 5.c
d. - e. Not applicable
f. Other noninterest income:
(1) Other fee income 5407 1,160 5.f.1
(2) All other noninterest income* 5408 0 RIAD 5.f.2
g. Total noninterest income (sum of items 5.a through 5.f) 4079 1,984 5.g
6. a. Realized gains (losses) on held-to-maturity securities 3521 0 6.a
b. Realized gains (losses) on available-for-sale securities 3196 76 6.b
7. Noninterest expense: RIAD
a. Salaries and employee benefits 4135 1,312 7.a
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) 4217 901 7.b
c. Other noninterest expense* 4092 1,669 RIAD 7.c
d. Total noninterest expense (sum of items 7.a through 7.c) 4093 3,882 7.d
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) 4301 5,832 8.
9. Applicable income taxes (on item 8) 4302 3,348 9.
10. Income (loss) before extraordinary items and other adjustments (item 8 minus 9) 4300 2,484 10.
11. Extraordinary items and other adjustments, net of income taxes* 4320 0 11
12. Net income (loss) (sum of items 10 and 11) 4340 2,484 12.
</TABLE>
- - ------------------------
* Describe on Schedule RI-E - Explanations.
<PAGE>
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEMORANDA
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after RIAD Year-to Date
August 7, 1986, that is not deductible for federal income tax purposes 4513 0 M.1
2. Income from the sale and servicing of mutual funds and annuities in domestic offices
(included in Schedule RI, item 8) 8431 0 M.2
3. - 4. Not applicable
5. Number of full-time equivalent employees on payroll at end of current period (round to Number
nearest whole number) 4150 45 M.5
6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push CCYY/MM/DD
accounting this calendar year, report the date of the bank's acquisition 9106 M.7
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c):
a. Interest rate exposures 8757 0 M.8.a
b. Foreign exchange exposures 8758 0 M.8.b
c. Equity security and index exposures 8759 0 M.8.c
d. Commodity and other exposures 8760 0 M.8.d
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income 8761 0 M.9.a
b. Net (increase) decrease to interest expense 8762 (1,326) M.9.b
c. Other (noninterest) allocations 8763 0 M.9.c
10. Credit losses on off-balance sheet derivatives (see instructions) A251 0 M.10
11. Does the reporting bank have a Subchapter S election in effect for Yes/No
federal income tax purposes for the current tax year? A530 NO M.11
-- Deferred portion of total applicable income taxes included in Schedule RI,
items 9 and 11 (to be reported with the December Report of Income) 4772 N/A M.12
</TABLE>
- - ------------
(1) For example, a bank acquired on June 1, 1997, would report 1997/06/01
* Describe on Schedule RI-E - Explanations.
<PAGE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC - BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
a. Noninterest-bearing balances and currency and coin (1) 0081 20,668 1.a
b. Interest-bearing balances (2) 0071 150 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 1,005 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 110,874 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 137,000 3
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule RC-C) 2122 632,900 4.a
b. LESS: Allowance for loan and lease losses 3123 17,013 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases, net of unearned income, RCFD
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 615,887 4.d
5. Trading assets (from Schedule RC-D) 3545 0 5.
6. Premises and fixed assets (including capitalized leases) 2145 1,468 6.
7. Other real estate owned (from Schedule RC-M) 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 0 9.
10. Intangible assets (from Schedule RC-M) 2143 0 10.
11. Other assets (from Schedule RC-F) 2160 17,926 11.
12. Total assets (sum of items 1 through 11) 2170 904,978 12.
</TABLE>
- - -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
SCHEDULE RC - CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E. RCON
part I) RCON 2200 501,859 13.a
(1) Noninterest-bearing (1) 6831 15,749 13.a.1
(2) Interest-bearing 6836 486,110 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E. RCFN
part II) RCFN 2200 997 13.b
(1) Noninterest-bearing 6631 0 13.b1
(2) Interest-bearing 6636 997 RCFD 13.b2
14. Federal funds purchased and securities sold under agreements to repurchase 2800 4,000 14
RCON
15. a. Demand notes issued to the U.S. Treasury 2840 0 15.a
RCFD
b. Trading liabilities (from Schedule RC-D) 3548 0 15.b
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332 12,000 16.a
b. With a remaining maturity of more than one year through three years A547 0 16.b
c. With a remaining maturity of more than three years A548 120,165 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920 0 18
19. Subordinated notes and debentures(2) 3200 50,000 19
20. Other liabilities (from Schedule RC-G) 2930 77,909 20
21. Total liabilities (sum of items 13 through 20) 2948 766,930 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838 0 23
24. Common Stock 3230 52,250 24
25. Surplus (exclude all surplus related to preferred stock) 3839 52,750 25
26. a. Undivided profits and capital reserves 3632 32,485 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434 563 26.b
27. Cumulative foreign currency translation adjustments 3284 0 27
28. Total equity capital (sum of items 23 through 27) 3210 138,048 28
29. Total liabilities and equity capital (sum of items 21 and 28) 3300 904,978 29
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external RCFD NUMBER
auditors as of any date during 1997 6274 1 M.1
</TABLE>
1= Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3= Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4= Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5= Review of the bank's financial statements by external auditors
6= Compilation of the bank's financial statements by external auditors
7= Other audit procedures (excluding tax preparation work)
8= No external audit work
- - --------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE>
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
- --------------------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
- --------------------------------------------------------------------------------
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
- --------------------------------------------------------------------------------
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
- --------------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
CONSECO, INC.
- --------------------------------------------------------------------------------
(Exact name of obligor as specified in its charter)
Indiana 35-1468632
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11825 N. Pennsylvania Street, Carmel, Indiana 46032
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Subordinated Debt Securities
- --------------------------------------------------------------------------------
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
2. A copy of the certificate of authority of the trustee to
commence business, if not contained in the articles of
association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the
documents specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
<PAGE>
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
5. A copy of each indenture referred to in Item 4. if the obligor
is in default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter of
the obligor, the trustee has relied upon the information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 22nd of June, 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan Keller
------------------------------
Susan Keller
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Conseco,
Inc. of its Subordinated Debt Securities we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Susan Keller
------------------------------
Susan Keller
Vice President
Dated: June 22, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business December 31, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
-------
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................................ $ 2,220,829
Interest-bearing balances.......................................................... 10,076,045
Securities.............................................................................. 10,373,821
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary................................................ 5,124,310
Loans and lease financing receivables:
Loans and leases, net of unearned income................. 6,270,348
Allowance for loan and lease losses...................... 82,820
Allocated transfer risk reserve.......................... 0
Loans and leases, net of unearned income and allowances............................ 6,187,528
Assets held in trading accounts......................................................... 1,241,555
Premises and fixed assets............................................................... 410,029
Other real estate owned................................................................. 100
Investments in unconsolidated subsidiaries.............................................. 38,831
CustomersAEliability to this bank on acceptances outstanding............................ 44,962
Intangible assets....................................................................... 224,049
Other assets............................................................................ 1,507,650
-----------
Total assets............................................................................ $37,449,709
===========
LIABILITIES
Deposits:
In domestic offices................................................................ $10,115,205
Noninterest-bearing.................................... 7,739,136
Interest-bearing....................................... 2,376,069
In foreign offices and Edge subsidiary............................................. 14,791,134
Noninterest-bearing.................................... 71,889
Interest-bearing....................................... 14,719,245
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary................................................ 7,603,920
Demand notes issued to the U.S. Treasury and Trading Liabilities........................ 194,059
Trading liabilities..................................................................... 1,036,905
Other borrowed money.................................................................... 459,252
Subordinated notes and debentures....................................................... 0
BankAEs liability on acceptances executed and outstanding................................ 44,962
Other liabilities....................................................................... 972,782
-----------
Total liabilities....................................................................... 35,218,219
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus........................................... 0
Common stock............................................................................ 29,931
Surplus................................................................................. 444,620
Undivided profits and capital reserves/Net unrealized holding gains (losses)............ 1,763,076
Cumulative foreign currency translation adjustments..................................... (6,137)
-----------
Total equity capital.................................................................... 2,231,490
-----------
Total liabilities and equity capital.................................................... $37,449,709
===========
4
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<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
