<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
AMENDMENT NO. 1
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 1-9250
CONSECO, INC.
<TABLE>
<S> <C>
INDIANA NO. 35-1468632
STATE OF INCORPORATION IRS EMPLOYER IDENTIFICATION NO.
11825 N. PENNSYLVANIA STREET
CARMEL, INDIANA 46032 (317) 817-6100
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES TELEPHONE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Stock, No Par Value New York Stock Exchange, Inc.
8 1/8% Senior Notes due 2003 New York Stock Exchange, Inc.
10 1/2% Senior Notes due 2004 New York Stock Exchange, Inc.
9.16% Trust Originated Preferred Securities New York Stock Exchange, Inc.
7% FELINE PRIDES New York Stock Exchange, Inc.
8.70% Trust Originated Preferred Securities New York Stock Exchange, Inc.
9% Trust Originated Preferred Securities New York Stock Exchange, Inc.
9.44% Trust Originated Preferred Securities New York Stock Exchange, Inc.
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, No Par Value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days: Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of common stock held by nonaffiliates (computed as
of April 11, 2000): $2,309,952,454
Shares of common stock outstanding as of April 11, 2000: 325,264,121
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
Explanatory Note: The purpose of this amendment is to include the
information required under Part III, Items 10-13, of the Annual Report on Form
10-K for Conseco, Inc. (the "Company" or "Conseco") for the period ended
December 31, 1999.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding Executive Officers was included in the Form 10-K
filed April 14, 2000, under a separate caption at the end of Part I.
The following information regarding each Director, includes, as of May 1,
2000, such person's age, positions with Conseco, principal occupation and
business experience for the last five years, and tenure as a Director of
Conseco:
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH CONSECO, PRINCIPAL TERM
NAME AND AGE SINCE OCCUPATION AND BUSINESS EXPERIENCE EXPIRING
------------ -------- ---------------------------------- --------
<S> <C> <C> <C>
Lawrence M. Coss, 61............ 1998 Private Investor. Founder, Chief Executive Officer 2000
and Director of Green Tree Financial Corporation
(now known as Conseco Finance Corp.) from 1975 to
1998.
Thomas M. Hagerty, 37........... 2000 Since 1999, Managing Director of Thomas H. Lee 2000
Partners, and since 1993, Managing Director of
Thomas H. Lee Company. Also a Director of Metris
Companies, Inc., ARC Holdings, Cott Corp., Freedom
Securities Corporation and Syratech Corp.
James D. Massey, 65............. 1994 Retired. Formerly, President and Deputy Chief 2000
Executive Officer of Merchants National Corp. and
Chairman, President and Chief Executive Officer of
Merchants National Bank (banking).
Dennis E. Murray, Sr., 60....... 1994 Since 1964, partner or principal of the Ohio law 2000
firm of Murray & Murray Co., L.P.A. and its
predecessor. Also a Certified Public Accountant.
David R. Decatur, M.D., 61...... 1995 Since 1967, a physician practicing in Indianapolis, 2002
Indiana. Since 1997, President and Medical Director
of Decatur Medical Center (family practice
medicine).
Donald F. Gongaware, 64......... 1985 Retired. From 1985 to 1998, Executive Vice 2002
President of Conseco.
John M. Mutz, 64................ 1997 Since 1999, investor and consultant. President of 2002
PSI Energy, Inc. (electric utility) from 1994 to
1999. From 1989 to 1993 President of Lilly
Endowment Inc. (charitable foundation). From 1980
to 1988, Lieutenant Governor of the State of
Indiana.
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
DIRECTOR POSITIONS WITH CONSECO, PRINCIPAL TERM
NAME AND AGE SINCE OCCUPATION AND BUSINESS EXPERIENCE EXPIRING
------------ -------- ---------------------------------- --------
<S> <C> <C> <C>
Robert S. Nickoloff, 71......... 1998 From 1993 to present, Chairman of KMN, Inc. 2002
(medical venture capital). From 1999 to present,
General Counsel of Venturi Group LLC (medical
venture capital). Also a Director of Integ
Incorporated. Former Director of Green Tree
Financial Corporation.
Ngaire E. Cuneo, 49............. 1994 Since 1992, Executive Vice President, Corporate 2001
Development of Conseco. Also a Director of Duke
Realty Investments, Inc.
David V. Harkins, 59............ 1999 Since April 28, 2000, Chairman of the Board and 2001
Chief Executive Officer of Conseco. Since 1999,
President of Thomas H. Lee Partners and since its
founding in 1974 has been affiliated with the
Thomas H. Lee Company, currently serving as Senior
Managing Director. Also a Director of Metris
Companies, Inc., Cott Corp., Fisher Scientific
International Inc., Freedom Securities Corporation,
Stanley Furniture Company, Inc. and Syratech Corp.
M. Phil Hathaway, 70............ 1984 Retired. Formerly, Treasurer of Cook Group, Inc. 2001
(medical equipment, property and casualty
insurance, and real estate development operations).
Also a Certified Public Accountant.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Conseco's Directors and executive officers, and each
person who is the beneficial owner of more than 10 percent of any class of
Conseco's outstanding equity securities, to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in ownership of Common Stock and other equity securities of Conseco. Specific
due dates for these reports have been established by the SEC, and Conseco is
required to disclose any failure by such persons to file such reports for fiscal
year 1999 by the prescribed dates. Directors, executive officers and greater
than ten percent beneficial owners are required by SEC regulations to furnish
Conseco with copies of all reports filed with the SEC pursuant to Section 16(a)
of the Exchange Act. To Conseco's knowledge, based solely on review of the
copies of reports furnished to Conseco and written representations that no other
reports were required, all filings required pursuant to Section 16(a) of the
Exchange Act applicable to Conseco's Directors, executive officers and greater
than 10 percent beneficial owners were made for the year ended December 31,
1999, except for Mr. Murray who filed two late reports covering a total of ten
transactions. Those transactions related to the issuance of an aggregate of
2,472 stock units (each unit representing one share of Common Stock) in lieu of
the cash payment of quarterly director fees.
3
<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of Stephen C. Hilbert, the
Chairman of the Board, President and Chief Executive Officer of Conseco during
1999, and the other four most highly compensated executive officers of Conseco
in 1999 (collectively, the "Named Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
------------------------------------------
NUMBER OF
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING ALL OTHER
NAME AND ------------------------------------ STOCK OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(1) AWARDS(2) (IN SHARES)(3) (4)
------------------ ---- ---------- ----------- -------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen C. Hilbert(5).............. 1999 $1,000,000 $ 7,895,391(6) $123,254 $1,192,369 2,047,443 $ 835,974
Chairman of the Board, 1998 1,000,000 13,500,000 130,714 1,275,891 2,571,897 754,568
President and Chief 1997 250,000 15,000,000 163,240 4,156,373 2,561,792 4,297
Executive Officer
Ngaire E. Cuneo.................... 1999 250,000 4,500,000 390,635 221,814 4,745
Executive Vice President, 1998 250,000 1,235,000 109,718 422,967 4,991
Corporate Development 1997 250,000 2,612,000 780,035 621,859 4,983
Rollin M. Dick(5).................. 1999 250,000 3,800,000 333,041 609,812 592,360
Executive Vice President 1998 250,000 3,816,000 302,094 741,635 554,510
and Chief Financial Officer 1997 250,000 3,816,000 1,108,184 853,452 20,669
Thomas J. Kilian(5)(7)............. 1999 250,000 2,000,000 185,023 5,447 3,570
Executive Vice President 1998 237,148 1,262,852 56,520 352,576 3,896
and Chief Operations Officer
Maxwell E. Bublitz(7).............. 1999 250,000 1,800,000 168,576 5,447 3,227
Senior Vice President, 1998 250,000 1,400,000 28,558 201,785 3,608
Investments
</TABLE>
- -------------------------
(1) Amounts for all years include imputed interest on a $1.9 million
interest-free loan made to Mr. Hilbert in 1988 ($106,590 in 1999, $107,413
in 1998 and $116,470 in 1997). The other Named Officers did not have other
annual compensation for 1999, 1998 or 1997 which is required to be listed
under SEC rules concerning executive officer and director compensation
disclosure.
(2) The amounts shown for 1999 in this column represent the value of units (each
unit represents one share of Common Stock) awarded for 1999 under the 1994
Stock and Incentive Plan (the "1994 Stock Plan") based on the market value
of the Common Stock at March 31, 2000, the date of award. The amounts shown
for 1998 in this column represent the value of stock units awarded for 1998
under the 1994 Stock Plan based on the market value of the Common Stock at
March 31, 1999, the date of award. The amounts shown for 1997 in this column
represent the value of stock units awarded for 1997 under the 1994 Stock
Plan based on the market value of the Common Stock at March 31, 1998, the
date of the award. Dividends are paid on the stock units. Units awarded to
Mr. Dick vested immediately pursuant to the terms of the 1994 Stock Plan.
The table below shows the aggregate holdings of stock units at March 31,
2000 as if outstanding on December 31, 1999, the aggregate value of such
stock units as of December 31, 1999 for each Named Officer and the number of
such stock units vested (although in each case the distribution of the
Common Stock represented by such units has been deferred at the election of
the Named Officer).
4
<PAGE> 5
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
UNITS IN VALUE AT
PARTICIPANT'S DECEMBER 31, VESTED
ACCOUNT 1999 UNITS
------------- ------------ -------
<S> <C> <C> <C>
Stephen C. Hilbert....................... 425,680 $7,502,610 0
Ngaire E. Cuneo.......................... 224,412 3,955,262 96,134
Rollin M. Dick........................... 306,397 5,400,247 306,397
Thomas J. Kilian......................... 20,168 355,461 0
Maxwell E. Bublitz....................... 19,070 336,109 0
</TABLE>
Mr. Hilbert's unvested stock units were forfeited upon termination of
his employment. Stock units previously awarded to Ms. Cuneo will vest in
the next three years conditioned upon continued employment with Conseco as
follows (none of the units awarded to Messrs. Kilian or Bublitz will vest
in the next three years):
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 2001 2002
------------ ------------ ------------
<S> <C> <C> <C>
Ngaire E. Cuneo....................... 47,782 23,638 13,814
</TABLE>
(3) No stock appreciation rights have been granted.
(4) For 1999, the amounts reported in this column represent amounts paid for the
Named Officers for (i) the value of premiums paid for split-dollar life
insurance; (ii) individual life insurance premiums; (iii) group life
insurance premiums; and (iv) the employer contribution under the ConsecoSave
Plan, a 401(k) savings plan. The table below shows such amounts for each
Named Officer. The amounts listed in the first column below represent the
estimated value of the portion of insurance premiums paid by Conseco
pursuant to split-dollar insurance agreements. Such premiums are expected to
be repaid to Conseco (without interest) from the death benefits paid
pursuant to the terms of the insurance policies. The estimated value is
calculated as if the 1999 premiums were advanced to the executive officers
without interest until the time the Company expects to recover the premiums.
<TABLE>
<CAPTION>
VALUE OF PREMIUMS
PAID FOR SPLIT- INDIVIDUAL GROUP LIFE
DOLLAR LIFE LIFE INSURANCE INSURANCE CONSECOSAVE PLAN
INSURANCE PREMIUMS PREMIUMS CONTRIBUTIONS
----------------- -------------- ---------- ----------------
<S> <C> <C> <C> <C>
Stephen C. Hilbert... $835,122 $ -- $ 852 $ --
Ngaire E. Cuneo...... -- 1,175 528 3,042
Rollin M. Dick....... 562,421 22,770 4,127 3,042
Thomas J. Kilian..... -- -- 528 3,042
Maxwell E. Bublitz... -- -- 366 2,861
</TABLE>
(5) The titles shown were those held throughout 1999. Mr. Kilian succeeded Mr.
Hilbert as President in February 2000. Mr. Hilbert and Mr. Dick resigned as
Directors and officers of Conseco on April 28, 2000.
(6) Mr. Hilbert agreed that his bonus, after reduction for cash to pay taxes,
relating to the last three quarters of 1999, was to be paid in shares of
Common Stock valued at the higher of $50 per share or market. Consequently,
his bonus for 1999 consisted of 108,221 shares of Common Stock (which are
reflected in the table at the values at the respective dates of issuance)
and $5,466,056 in cash.
(7) No compensation information is reported for years prior to the year in which
the Named Officer became an executive officer of the Company.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Conseco has an employment agreement with Ms. Cuneo for a term ending
December 31, 2001, with a minimum annual salary of $250,000, annual bonuses in
the discretion of the Compensation Committee or the Board of Directors, a
severance allowance upon termination of employment and certain insurance and
other fringe benefits. Conseco also has an employment agreement with Mr. Kilian
for a term ending December 31,
5
<PAGE> 6
2002, with a minimum annual salary of $250,000, annual bonuses in the discretion
of the Compensation Committee or Board of Directors (but not less than $750,000
for the years 1998 and 1999), a severance allowance upon termination of
employment and certain insurance and other fringe benefits. Conseco also has an
employment agreement with Mr. Bublitz for a term ending December 31, 2002, with
a minimum annual salary of $250,000, annual bonuses in the discretion of the
Compensation Committee or Board of Directors (but not less than $750,000 for the
years 1999 and 2000), a severance allowance upon termination of employment and
certain insurance and other fringe benefits.
Each of the employment agreements described above includes provisions
pursuant to which the employee may elect to receive, in the event of a
termination of the agreement in anticipation of or following a change in control
of Conseco (a "Control Termination"), a severance allowance equal to 60 months
of his or her monthly rate of salary, bonus and other benefits. Such severance
allowance is to be grossed-up to cover any applicable excise taxes. For such
purposes a Control Termination includes, among other things, a significant
change in the nature or scope of his or her duties, a reduction in his or her
total compensation or the employee giving a notice of termination to Conseco
during the six-month period commencing six months after the change in control.
In the event of a Control Termination, the employee also may elect to have
Conseco purchase all options to purchase Common Stock or successor securities
(in the case of Ms. Cuneo without deduction of the applicable exercise prices)
held by such person at a price per share equal to the greater of (i) the price
of the Common Stock at the time of the change of control (or in the case of a
change of control effected through a series of related transactions or in a
single transaction in which less than all outstanding shares of common stock are
acquired, the highest price paid to holders of Common Stock in any such
transaction) and (ii) the market price (based on a 20-trading day average) on
the day prior to the time the executive exercises this election (collectively,
the "Put Price").
As defined in the employment agreements for Ms. Cuneo and Messrs. Kilian
and Bublitz, "change in control" generally means a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Exchange Act as in effect on May 26,
1999; provided that, without limitation, a "change in control" shall be deemed
to have occurred if and when: (i) any person is or becomes a beneficial owner,
directly or indirectly, of securities of Conseco representing 25 percent or more
of the combined voting power of Conseco's then outstanding securities; (ii) in
connection with or as a result of a tender offer, merger, consolidation, sale of
assets or contest for election of directors, or any combination of the foregoing
transactions or events, individuals who were members of the Board of Directors
immediately prior to any such transaction or event shall not constitute a
majority of the Board of Directors or (iii) any reorganization, merger or
consolidation (or issuance of shares of Common Stock in connection therewith)
has occurred unless immediately after any such reorganization, merger or
consolidation, (A) more than 60% of the outstanding shares of common stock and
voting power of the outstanding securities of the surviving or resulting
corporation are then beneficially owned, directly or indirectly, by all of the
individuals or entities who beneficially owned the outstanding common stock and
voting securities of the Company immediately prior thereto in substantially the
same proportions relative to each other as their ownership immediately prior
thereto and (B) at least a majority of the members of the board of directors of
the surviving or resulting corporation were members of the Company's Board of
Directors at the time of the execution of the initial agreement or action of the
Board of Directors providing for such reorganization, merger or consolidation or
issuance of shares; provided, however, that no change in control shall be deemed
to have occurred under such employment agreements upon any person becoming, with
the approval of the Board of Directors of Conseco, the beneficial owner of 25
percent or more but less than 50 percent of the combined voting power of
Conseco's then outstanding securities entitled to vote with respect to the
election of Conseco's Board of Directors and such person's ownership is for
investment purposes.
See the discussion under the table headed Option Grants in 1999 concerning
change-in-control provisions related to stock options. The stock units disclosed
in footnote (2) to the Summary Compensation Table must be paid out following a
change in control. For stock units under the 1994 Stock Plan, the definition of
change in control is the same as that disclosed below for the options granted in
1999. For stock units awarded under the Company's deferred compensation program,
a change in control will be deemed to have occurred if: (i)any "person,"
including a "group" as determined in accordance with Section 13(d)(3) of the
Exchange Act, is or
6
<PAGE> 7
becomes the beneficial owner, directly or indirectly, of securities of Conseco
representing 30 percent or more of the combined voting power of Conseco's then
outstanding securities; (ii) as a result of, or in connection with, any tender
offer or exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of Conseco before the Transaction
shall cease to constitute a majority of the Board of Directors of Conseco or any
successor to Conseco; (iii) Conseco is merged or consolidated with another
corporation and, as a result of the merger or consolidation, less than 70
percent of the outstanding voting securities of the surviving or resulting
corporation shall then be owned, in the aggregate, by the former stockholders of
Conseco, other than (a) affiliates within the meaning of the Exchange Act or (b)
any party to the merger or consolidation; (iv) a tender offer or exchange offer
is made and consummated for the ownership of securities of Conseco representing
30 percent or more of the combined voting power of Conseco's then outstanding
voting securities; or (v) Conseco transfers substantially all of its assets to
another corporation which is not a wholly-owned subsidiary of Conseco.
STOCK OPTIONS
The following table sets forth certain information concerning the exercise
in 1999 of options to purchase Common Stock by the five Named Officers and the
unexercised options to purchase Common Stock held by such individuals at
December 31, 1999.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS (IN SHARES) AT IN-THE-MONEY OPTIONS AT
NUMBER OF DECEMBER 31, 1999(2) DECEMBER 31, 1999(3)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen C. Hilbert... 2,852,000 $45,654,000 5,681,132 1,508,000 $ -- $ 44,500
Ngaire E. Cuneo...... 308,000 4,950,000 1,016,640 258,000 -- 44,500
Rollin M. Dick....... 852,000 13,654,000 1,804,899 408,000 -- 44,500
Thomas J. Kilian..... 9,600 176,925 186,823 587,600 273,325 450,850
Maxwell E. Bublitz... 9,600 176,925 184,032 635,600 262,200 439,725
</TABLE>
- -------------------------
(1) The value realized equals the aggregate amount of the excess of the fair
market value on the date of exercise ($30.81) over the relevant exercise
prices, which in each case were equal to the market values on the dates the
options were originally granted. These stock option exercises occurred in
February 1999 as part of an option exercise reload program approved by the
Board of Directors. As a result of these exercises, the Company will be able
to realize a tax deduction of approximately $64 million. No cash was either
received or paid by the participants in the program. Participants paid for
the exercised options and a portion of the taxes associated with the
exercise by tendering 2,183,598 previously owned shares and by having
Conseco withhold 706,365 shares from the exercise proceeds to cover required
federal and state tax withholding. The net amount of Common Stock received
by the Named Officers as a result of such stock option exercises was as
follows: Mr. Hilbert, 804,557 shares; Ms. Cuneo, 86,186 shares; Mr. Dick,
242,188 shares; Mr. Kilian, 4,153 shares; and Mr. Bublitz, 4,153 shares.
(2) The average exercise price for the unexercised options listed below is as
follows: Mr. Hilbert, $37.59; Ms. Cuneo, $38.20; Mr. Dick, $37.58; Mr.
Kilian, $33.58; and Mr. Bublitz, $29.78.
(3) The value is calculated based on the aggregate amount of the excess of
$17.625 (the average of the high and low sale prices of the Common Stock as
reported by the New York Stock Exchange ("NYSE") for the last business day
of 1999) over the relevant exercise prices, excluding grants for which such
difference is equal to or less than zero.
7
<PAGE> 8
The following table sets forth certain information concerning options to
purchase Common Stock granted in 1999 to the five Named Officers.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO PER SHARE GRANT DATE
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRESENT
NAME GRANTED 1999 PRICE(1) DATE VALUE(2)
---- ----------- ------------ --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Stephen C. Hilbert................ 2,047,443(3) 26.5% $30.81 2/23/09 $14,055,491
Ngaire E. Cuneo................... 221,814(3) 2.9 30.81 2/23/09 1,522,731
Rollin M. Dick.................... 609,812(3) 7.9 30.81 2/23/09 4,186,298
Thomas J. Kilian.................. 5,447(3) .1 30.81 2/23/09 37,393
Maxwell E. Bublitz................ 5,447(3) .1 30.81 2/23/09 37,393
</TABLE>
- -------------------------
(1) Exercise price is the average of the high and low sales prices as reported
by the NYSE for the date of grant.
(2) Valued using a modified Black-Scholes option pricing model. The exercise
price of each option is equal to the fair market value of the underlying
Common Stock on the date of grant. The assumptions used in the model were:
expected volatility of 35 percent, risk free rate of return of 5.6 percent,
expected life of 4 years and a dividend rate of 2.2 percent. A discount of
25 percent was applied to the option value yielded by the model to reflect
the non-transferability and the possibility of forfeiture of employee
options. Conseco's use of this model does not constitute an acknowledgment
that the resulting values are accurate or reasonable. The actual gain
executives will realize on the options will depend on the future price of
Common Stock and cannot be accurately forecasted by application of an option
pricing model.
(3) The options reported are non-qualified stock options which are exercisable
in full beginning six months after the date of grant. The options were
granted as part of the Company's option exercise reload program.
The options granted to the Named Officers in 1999 were under the 1997
Non-qualified Stock Option Plan (the "1997 Plan"). All outstanding options under
the 1994 Stock Plan and the 1997 Plan immediately vest and become exercisable or
satisfiable upon the occurrence of a Change of Control. The Compensation
Committee, in its discretion, may determine that upon the occurrence of such a
transaction, each option outstanding shall terminate within a specified number
of days after notice to the holder thereof, and such holder shall receive, with
respect to each share of Common Stock subject to such option, cash in an amount
equal to the excess of: (i) the higher of (x) the Fair Market Value (as defined
in the 1994 Stock Plan and the 1997 Plan) of such shares of Common Stock
immediately prior to the occurrence of such transaction or (y) the value of the
consideration to be received in such transaction for one share of Common Stock;
over (ii) the price per share, if applicable, of Common Stock set forth in such
option. If the consideration offered to shareholders of Conseco in any
transaction described in this paragraph consists of anything other than cash,
the Compensation Committee shall determine the fair cash equivalent of the
portion of the consideration offered which is other than cash. These provisions
will not terminate any rights of a holder to further payments pursuant to any
agreement between Conseco and such holder following a Change of Control. A
"Change of Control" of Conseco is deemed to occur under the 1994 Stock Plan and
the 1997 Plan if: (i) any person, becomes the beneficial owner, directly or
indirectly, of securities of Conseco representing 25 percent or more of the
combined voting power of Conseco's outstanding securities then entitled to vote
for the election of directors; or (ii) as the result of a tender offer, merger,
consolidation, sale of assets, or contest for election of directors, or any
combination of the foregoing transactions or events, individuals who were
members of the Board of Directors of Conseco immediately prior to any such
transaction or event shall not constitute a majority of the Board of Directors
following such transaction or event. However, no Change of Control shall be
deemed to have occurred if and when either: (i) any such change is the result of
a transaction which
8
<PAGE> 9
constitutes a "Rule 13e-3 transaction" as such term is defined in Rule 13e-3
promulgated under the Exchange Act; or (ii) any such person becomes, with the
approval of the Board of Directors of Conseco, the beneficial owner of
securities of Conseco representing 25 percent or more but less than 50 percent
of the combined voting power of Conseco's then outstanding securities entitled
to vote with respect to the election of its Board of Directors and in connection
therewith represents, and at all times continues to represent, in a filing, as
amended, with the SEC on Schedule 13D or Schedule 13G (or any successor Schedule
thereto) that "such person has acquired such securities for investment and not
with the purpose nor with the effect of changing or influencing the control of
Conseco, nor in connection with or as a participant in any transaction having
such purpose or effect," or words of comparable meaning and import.
Ms. Cuneo and Messrs. Kilian and Bublitz have employment agreements with
Conseco (see Employment Contracts and Change-in-Control Agreements). In the
event of a Control Termination of any such employment agreement such Named
Officer may elect, within 60 days after such Control Termination, to receive a
lump sum payment from Conseco in return for surrender by such Named Officer of
all or any portion of the options then outstanding held by such Named Officer to
purchase shares of Common Stock or successor securities ("Unexercised Options").
Unexercised Options include all outstanding options whether or not then
exercisable. For each Unexercised Option to purchase one share of Common Stock,
Conseco must pay to such Named Officer an amount equal to the Put Price. The
employment agreement with Ms. Cuneo provides that, to compensate her for loss of
the potential future speculative value of the Unexercised Options, no deduction
may be made for the exercise price per share for each Unexercised Option from
the amount to be received by her. Amounts to be paid to Mr. Kilian or Mr.
Bublitz for Unexercised Options in the event of a Control Termination of his
employment agreement are to be reduced by the exercise price of his Unexercised
Options.
COMPENSATION OF DIRECTORS
Directors who are not also employees of Conseco are entitled to receive an
annual fee of $50,000, a fee of $500 for each Board or committee meeting they
attend, and an annual fee of $3,000 for serving as chairman of a Board
committee. Non-employee Directors are eligible to participate in and receive
annual awards of up to $30,000 under the 1994 Stock Plan. For 1999, 1,093 stock
units were awarded under the 1994 Stock Plan to each of Dr. Decatur and Messrs.
Coss, Gongaware, Harkins, Hathaway, Massey, Murray, Mutz and Nickoloff for his
service as a Director. The Common Stock represented by the stock unit awards for
1999 had a market value of $12,330 on March 31, 2000 (the date of award). Such
stock unit awards vest (assuming the Director continues in office) upon the
earlier of: (i) the Director attaining the age of 60; (ii) the total and
permanent disability of the Director; (iii) the death of the Director; (iv) the
occurrence of a Change of Control (as defined in the second preceding
paragraph); or (v) the fifth anniversary of the end of the fiscal year for which
the award was made. The 1994 Stock Plan also provides for an annual grant to
each non-employee director of options to purchase 5,000 shares of Common Stock
on the date of the annual meeting of shareholders at a price equal to the market
price of Common Stock on the date of grant. Dr. Decatur and Messrs. Coss,
Gongaware, Hathaway, Massey, Murray, Mutz and Nickoloff each received such a
grant in 1999. The options vest 20 percent per year on each of the first five
anniversary dates of grant, subject to acceleration upon a Change of Control.
Mr. Harkins is serving as interim Chairman of the Board and Chief Executive
Officer without additional compensation and is entitled to reimbursement of
expenses incurred in such capacity.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The members of the Compensation Committee during 1999 were Messrs. Massey,
Murray and Hathaway. Mr. Massey served as the Chairman of the Compensation
Committee. Each of the members of the Compensation Committee is a participant in
the Stock Purchase Plans described below. See Certain Relationships and Related
Transactions.
9
<PAGE> 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as of April 29, 2000 regarding
ownership of Common Stock (excluding shares held by subsidiaries) and Series F
Common-Linked Convertible Preferred Stock of the Company ("Preferred Stock") by
the only persons known to own beneficially more than 5 percent thereof, by the
Directors individually, by the executive officers named in the Summary
Compensation Table in Item 11 individually, and by all current Directors and
executive officers of Conseco as a group. Where any footnote indicates that
shares included in the table are owned by, or jointly with, family members or by
an affiliate of such person, the Director or executive officer may be deemed to
exercise shared voting and investment power with respect to those shares, unless
otherwise indicated. See footnote (2) to the Summary Compensation Table and
Executive Compensation, Related Party Transactions and Other Information and
Compensation of Directors.
<TABLE>
<CAPTION>
SHARES OWNED AND
NATURE OF OWNERSHIP
------------------------
TITLE OF CLASS NAME AND ADDRESS(1) NUMBER PERCENT
-------------- ------------------- ----------- -------
<S> <C> <C> <C>
5-Percent Owners:
Preferred Stock Thomas H. Lee Equity Fund IV, L.P.(2)............... 2,617,631(2) 100%
75 State Street
Boston, MA 02109
Common Stock Thomas H. Lee Equity Fund IV, L.P................... 26,176,310(2)(3) 7.4%
75 State Street
Boston, MA 02109
Common Stock Oppenheimer Capital................................. 21,317,567(4) 6.5%
1345 Avenue of the Americas
New York, NY 10105
Common Stock Alex. Brown Investment Management................... 16,802,968(5) 5.1%
One South Street
Baltimore, MD 21202
Directors and Executive Officers:
Common Stock Maxwell E. Bublitz.................................. 810,458(6) *
Common Stock Lawrence M. Coss.................................... 7,330,123(7) 2.2%
Common Stock Ngaire E. Cuneo..................................... 3,006,535(8) *
Common Stock David R. Decatur, M.D. ............................. 563,214(9) *
Common Stock Rollin M. Dick...................................... 6,579,997(10) 2.0%
Common Stock Donald F. Gongaware................................. 3,344,800(11) 1.0%
Common Stock Thomas M. Hagerty................................... 23,315,020(12) 6.7%
Common Stock David V. Harkins.................................... 23,335,126(13) 6.7%
Common Stock M. Phil Hathaway.................................... 180,151(14) *
Common Stock Stephen C. Hilbert.................................. 18,968,252(15) 5.7%
Common Stock Thomas J. Kilian.................................... 952,720(16) *
Common Stock James D. Massey..................................... 579,261(17) *
Common Stock Dennis E. Murray, Sr................................ 4,013,710(18) 1.2%
Common Stock John M. Mutz........................................ 47,300(19) *
Common Stock Robert S. Nickoloff................................. 120,498(20) *
Common Stock Directors and executive officers as a group (17 46,162,550(21) 13.1%
persons)..........................................
</TABLE>
10
<PAGE> 11
- -------------------------
(1) Address given for 5-percent owners only.
(2) The shareholder listed, together with certain affiliates and other entities
and individuals (including Messrs. Hagerty and Harkins, jointly filed a
Schedule 13D on December 22, 1999 relating to the purchase of an aggregate
of 2,597,403 shares of Preferred Stock, each share of which is convertible
into 10 shares of Common Stock. The amount listed in the table reflects
additional shares of Preferred Stock which have been issued in payment of
dividends since the date of the Schedule 13D filing.
(3) Represents shares of Common Stock that may be acquired upon conversion of
Preferred Stock.
(4) According to a Schedule 13G dated February 11, 2000, filed with the SEC,
Oppenheimer Capital is an investment advisor registered under Section 203
of the Investment Advisors Act of 1940. The Schedule 13G indicates that it
was filed on behalf of Oppenheimer Capital, a Delaware general partnership
and/or certain investment advisory clients or discretionary accounts
relating to their collective beneficial ownership of Common Stock. The
Schedule 13G indicates that Oppenheimer Capital has the sole power to
dispose of the shares and to vote the shares under its written guidelines
established by its Management Board.
(5) According to a Schedule 13G filed with the SEC on February 18, 2000, Alex.
Brown Investment Management had (as of December 31, 1999) sole voting power
with respect to 5,372,702 of such shares and sole dispositive power with
respect to 16,781,772 of such shares.
(6) Includes 184,032 shares subject to options which are exercisable currently
or within 60 days of April 29, 2000, 76,000 shares held by a limited
partnership of which Mr. Bublitz is the general partner, 10,000 shares
subject to a currently exercisable warrant held by him and 14,556 shares
attributable to his account under the ConsecoSave Plan.
(7) Includes 2,238,659 shares subject to options which are exercisable
currently or within 60 days of April 29, 2000, 79,918 shares held by his
spouse, 14,663 shares held by minor children and 73,320 shares held by LVC
Investment Company, Inc.
(8) Includes 106,000 shares which are held by trusts for the benefit of Ms.
Cuneo's children, 1,024,640 shares subject to options which are exercisable
currently or within 60 days of April 29, 2000, 10,000 shares subject to a
currently exercisable warrant held by her and 960 shares attributable to
her account under the ConsecoSave Plan.
(9) Includes 14,000 shares subject to options which are exercisable currently
or within 60 days of April 29, 2000 and 710 shares held by a partnership of
which Dr. Decatur is a general partner.
(10) Includes 721,041 shares owned by Mr. Dick's wife, 545,923 shares (including
20,000 subject to a currently exercisable warrant) owned by a charitable
foundation as to which shares he shares voting and investment power,
2,485,040 shares owned by limited partnerships of which Mr. Dick is the
general partner, 1,812,899 shares subject to options which are exercisable
currently or within 60 days of April 29, 2000, 317,900 shares owned by
trusts as to which Mr. Dick's wife has sole voting and investment power and
1,576 shares attributable to Mr. Dick's account under the ConsecoSave Plan.
Mr. Dick expressly disclaims beneficial ownership of all shares owned by
his wife, the trusts as to which she has sole voting and investment power,
and the charitable foundation.
(11) Includes 75,600 shares (including 20,000 subject to a currently exercisable
warrant) owned by a charitable foundation as to which Mr. Gongaware shares
voting and investment power, 718,425 shares owned by charitable trusts as
to which he shares voting and investment power, 131,747 shares owned by
irrevocable trusts as to which Mr. Gongaware's wife has sole voting and
investment power, 3,000 shares subject to options held by Mr. Gongaware
which are exercisable within 60 days of April 29, 2000 and 1,442 shares
attributable to Mr. Gongaware's account under the ConsecoSave Plan. Mr.
Gongaware expressly disclaims beneficial ownership of all shares owned by
the trusts as to which his wife has sole voting and investment power and
the charitable foundation.
(12) The address for Mr. Hagerty is c/o Thomas H. Lee Company, 75 State Street,
Boston, MA 02109. Represents shares of Common Stock that may be acquired
upon conversion of the Preferred Stock. Of those shares of Common Stock,
20,554,246 shares are beneficially owned by the Thomas H. Lee Equity
11
<PAGE> 12
Fund IV, L.P., 704,131 shares are beneficially owned by Thomas H. Lee Foreign
Fund IV, L.P. and 1,996,297 shares are beneficially owned by Thomas H. Lee
Foreign Fund IV-B, L.P. Mr. Hagerty disclaims beneficial ownership of such
shares except to the extent of his pecuniary interest.
(13) The address for Mr. Harkins is c/o Thomas H. Lee Company, 75 State Street,
Boston, MA 02109. Represents shares of Common Stock that may be acquired
upon conversion of Preferred Stock. Of those shares of Common Stock, 8,102
shares are beneficially owned by the 1995 Harkins Gift Trust, 20,554,246
shares are beneficially owned by the Thomas H. Lee Equity Fund IV, L.P.,
704,131 shares are beneficially owned by Thomas H. Lee Foreign Fund IV,
L.P. and 1,996,297 shares are beneficially owned by Thomas H. Lee Foreign
Fund IV-B, L.P. Mr. Harkins disclaims beneficial ownership of such shares
except to the extent of his pecuniary interest.
(14) Includes 16,000 shares owned by Mr. Hathaway's wife and 54,000 shares
subject to options which are exercisable currently or within 60 days of
April 29, 2000.
(15) The address for Mr. Hilbert is c/o P.O. Box 90198, Indianapolis, IN
46290-0198. Includes 5,689,132 shares subject to options which are
exercisable currently or within 60 days of April 29, 2000, 3,732,183 shares
owned by trusts as to which he has voting and investment power, 60,000
shares owned by a trust as to which Mr. Hilbert's wife has sole voting and
investment power, 975,000 shares (including 20,000 subject to a currently
exercisable warrant) held by a charitable foundation as to which he shares
voting and investment power and 16 shares attributable to his account under
the ConsecoSave Plan. Mr. Hilbert expressly disclaims beneficial ownership
of all shares owned by the trust as to which his wife has sole voting and
investment power and the charitable foundation.
(16) Includes 186,823 shares subject to options which are exercisable currently
or within 60 days of April 29, 2000 and 3,434 shares attributable to Mr.
Kilian's account under the ConsecoSave Plan.
(17) Includes 54,000 shares subject to options which are exercisable currently
or within 60 days of April 29, 2000.
(18) Includes 796 shares owned by Mr. Murray's wife, 1,724,828 shares owned by a
limited partnership of which Mr. Murray is general partner, 631,408 shares
owned by retirement plans as to which Mr. Murray has sole voting and
investment power and 54,000 shares subject to options which were
exercisable currently or within 60 days of April 29, 2000. Mr. Murray
expressly disclaims beneficial ownership of the shares held by his wife.
(19) Includes 6,000 shares subject to options which are exercisable currently or
within 60 days of April 29, 2000 and 1,300 shares held by Mr. Mutz's wife.
Mr. Mutz expressly disclaims beneficial ownership of the shares held by his
wife.
(20) Includes 55,990 shares subject to options which are exercisable currently.
(21) Includes 23,395,472 shares of Common Stock which may be acquired upon
conversion of Preferred Stock and 4,603,637 shares subject to outstanding
stock options and warrants which are exercisable currently or within 60
days of April 29, 2000.
* Less than 1%.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Conseco has adopted stock purchase plans (the "Purchase Plans") to
encourage direct, long-term ownership of Conseco stock by Directors, executive
officers and certain senior officers. Purchases of Common Stock under the
Purchase Plans were financed by personal loans to the participants from banks.
Such loans are collateralized by the Common Stock purchased. Conseco guarantees
the loans, but has recourse to the participants if it incurs a loss under the
guarantee. In addition, Conseco has agreed to provide loans to the participants
for the interest payments under the bank loans. Approximately 170 Directors,
officers and key employees of Conseco and its subsidiaries participate in the
Purchase Plans and have purchased an aggregate of approximately 19.0 million
shares of Common Stock offered under the Purchase Plans. At March 31, 2000, the
bank loans guaranteed by Conseco exceeded the value of the Common Stock
collateralizing the loans by $358.4 million. As of March 31, 2000, the
outstanding principal balances of the interest-payment loans provided by Conseco
to the Directors and executive officers (or to trusts or limited partnerships
established by
12
<PAGE> 13
them) were as follows: Mr. Hilbert, $15,938,300; Ms. Cuneo, $4,044,975; Mr.
Dick, $7,754,751; Mr. Coss, $739,502; Dr. Decatur, $2,009,190; Mr. Gongaware,
$3,294,887; Mr. Hathaway, $71,031; Mr. Massey, $1,441,175; Mr. Murray,
$8,837,829; Mr. Mutz, $146,427; Mr. Bublitz, $1,181,978; Mr. Kilian, $1,472,455;
James S. Adams (an executive officer), $1,510,327; Bruce A. Crittenden (an
executive officer), $369,940; and John J. Sabl (an executive officer), $458,401.
Such loans bear interest at the variable rate per annum equal to the lowest
interest rate per annum being paid by Conseco under its most senior borrowing
facility, and as of March 31, 2000, the interest rate on such loans was 6.19%.
As of March 31, 2000, the outstanding principal balances of the bank loans to
the Directors and executive officers (or to trusts or limited partnerships
established by them) which are guaranteed by Conseco were as follows: Mr.
Hilbert, $162,541,688; Ms. Cuneo, $41,087,459; Mr. Dick, $70,018,551; Mr. Coss,
$12,562,830; Dr. Decatur, $19,838,559; Mr. Gongaware, $24,871,750; Mr. Hathaway,
$1,039,239; Mr. Massey, $15,288,747; Mr. Murray, $99,670,606; Mr. Mutz,
$1,217,539; Mr. Bublitz, $13,666,130; Mr. Kilian, $19,654,918; Mr. Adams,
$19,977,609; Mr. Crittenden, $6,281,427; and Mr. Sabl, $3,657,029.
In February 1988, as a reward for extraordinary efforts in accomplishing
the acquisition of Western National Life Insurance Company in 1987, in
recognition of enhanced responsibilities as a result of such acquisition, and in
consideration of his agreeing to enter into a covenant not to compete with the
Company, the Company made a $1,900,000 interest-free loan to Mr. Hilbert. The
loan was evidenced by a secured promissory note. Such note was replaced with an
unsecured promissory note dated May 13, 1996 which does not bear interest prior
to maturity.
In connection with a Retention Agreement between Conseco Finance Corp. and
Mr. Crittenden, Conseco Finance Corp. made a $1,000,000 interest-free loan to
Mr. Crittenden in July 1998. In July 1999 such loan was converted to a loan
bearing interest at or the rate of 7% per annum, which is due and payable upon
the earlier of June 30, 2000 or the date of Mr. Crittenden's voluntary
termination of employment with Conseco Finance Corp. In 1997 Conseco Finance
Corp. (prior to its acquisition by Conseco) made loans to Mr. Crittenden and
certain other of its executive officers in connection with their purchase of
Conseco Finance Corp. common stock in the open market. The loan to Mr.
Crittenden is evidenced by a note which bears interest payable annually at the
rate of six percent. The outstanding principal balance of his note throughout
1999 was $201,693, and such note is due and payable upon the earlier of November
19, 2000 or 30 days after the date of his resignation or other termination of
employment with Conseco Finance Corp.
Under the noncompetition agreement between Mr. Coss and Conseco Finance
Corp., he was entitled to the use of office space and secretarial and security
services through February 2002. In November 1999, Mr. Coss and Conseco Finance
Corp. agreed to discontinue these services in exchange for payments of $19,000
in 1999 and $171,600 in each of 2000, 2001 and 2002.
On April 6, 2000, Conseco made a loan of $23 million to Mr. Hilbert,
secured by a pledge of one million shares of Common Stock and the assignment of
the rights to receive bonus, severance and other payments under his Employment
Agreement with the Company. Such loan was due on April 5, 2001 and bore interest
at an annual rate of 8.5%, payable quarterly. Such loan, together with accrued
interest, was repaid in full on April 28, 2000. This loan was approved by the
Board of Directors (with Mr. Hilbert abstaining). This loan reflected a variety
of circumstances, including (i) the depressed market price for the Common Stock
and margin calls resulting therefrom, (ii) the potential concerns that could be
created by sales of Common Stock from margin of Mr. Hilbert, especially prior to
the time the Company released its audited results for 1999 and (iii) the lack of
opportunity for Mr. Hilbert to obtain alternate financing on an expedited basis
to avoid such sales.
On April 28, 2000, Conseco and Mr. Hilbert entered into an agreement
pursuant to which Mr. Hilbert's employment was terminated. As contemplated by
the terms of the Employment Agreement between Conseco and Mr. Hilbert, Mr.
Hilbert received $49,382,165 (prior to required withholding for taxes), an
amount equal to (i) five times his salary and the Non-Discretionary Amount (as
defined in this Employment Agreement) for this year, less (ii) the amount due
under the loan described in the preceding paragraph. Mr. Hilbert also is
receiving the bonus of $3,375,000 payable under his Employment Agreement for the
first quarter of 2000.
13
<PAGE> 14
Conseco agreed to continue to treat Mr. Hilbert as though he were an
employee/participant for purposes of the Purchase Plans and all of his loans
relating to such plans remain outstanding.
Conseco also entered into a consulting agreement with Mr. Hilbert pursuant
to which Mr. Hilbert has agreed to provide consulting services up to an average
of 25 hours per month for a period of three years. Under the consulting
agreement, Mr. Hilbert is entitled to receive $1,000 per year, health and dental
insurance coverage for three years, continued security services at his home
through December 31, 2000 and use of Conseco's jet aircraft for up to 20 round
trips per year, subject to availability and the obligation to reimburse Conseco
for such use on the same basis as Conseco charges its executives for such use.
Mr. Hilbert also agreed not to compete with Conseco during the term of the
consulting agreement.
On April 27, 2000, Mr. Hilbert was granted options to purchase an aggregate
of 2,000,000 shares of Common Stock (1,000,000 each under the 1994 Stock Plan
and the 1997 Plan) at a price of $5.75 per share (the average of the high and
low sales prices on the NYSE on such date). The options expire April 26, 2003.
On April 28, 2000, Conseco and Mr. Dick entered into an agreement pursuant
to which Mr. Dick's employment was terminated. As contemplated by the terms of
the Employment Agreement between Conseco and Mr. Dick, Conseco agreed to pay Mr.
Dick his salary of $250,000 per year through December 31, 2001 and he is also
receiving the bonus of $187,500 payable under his Employment Agreement for the
first quarter of 2000. Conseco also agreed to continue to treat Mr. Dick as
though he were an employee/participant for purposes of the Purchase Plans and
all of his loans relating to such plans remain outstanding.
Conseco also entered into a consulting agreement with Mr. Dick pursuant to
which Mr. Dick has agreed to provide consulting services up to an average of 25
hours per month for a period of three years. Under the consulting agreement, Mr.
Dick is entitled to receive $1,000 per year, health and dental insurance
coverage for three years, and use of Conseco's jet aircraft for up to 10 round
trips per year, subject to availability and the obligation to reimburse Conseco
for such use on the same basis as Conseco charges its executives for such use.
Mr. Dick also agreed not to compete with Conseco during the term of the
consulting agreement.
On April 27, 2000, Mr. Dick was granted options to purchase an aggregate of
600,000 shares of Common Stock under the 1997 Plan at a price of $5.75 per
share. The options expire April 26, 2003.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Form 10-K/A, to be signed on its
behalf by the undersigned, thereunto duly authorized, this 1st day of May, 2000.
CONSECO, INC.
By: /s/ THOMAS J. KILIAN
------------------------------------
Thomas J. Kilian, President
15
<PAGE> 16
EXHIBIT INDEX
ANNUAL REPORT ON FORM 10-K
OF CONSECO, INC.
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
2.10 Agreement and Plan of Merger dated as of April 6, 1998, as
amended, among the Registrant, Marble Acquisition Corp. and
Green Tree Financial Corporation (composite conformed copy)
was included as Annex A to the Joint Proxy
Statement -- Prospectus of Conseco, Inc. contained within
the Registration Statement on Form S-4 (File No. 333-51123),
and is incorporated herein by this reference.
3.1 Amended and Restated Articles of Incorporation and Articles
of Amendment thereto of the Registrant were filed with the
Commission as Exhibit 3.1 to the Registrant's Registration
Statement on Form S-3 (No. 333-94683), and are incorporated
herein by this reference.
3.2 Amended and Restated By-Laws of the Registrant were filed
with the Commission as Exhibit 3.2 to the Registrant's
Registration Statement on Form S-3 (No. 333-94683), and are
incorporated herein by this reference.
4.8 Indenture dated as of February 18, 1993, between the
Registrant and Shawmut Bank Connecticut, National
Association (to which State Street Bank and Trust Company is
successor), as Trustee, for the 8 1/8 percent Senior Notes
due 2003, was filed with the Commission as Exhibit 4.8 to
the Registrant's Annual Report on Form 10-K for 1992, and is
incorporated herein by this reference.
4.12 Indenture dated as of September 29, 1994 between ALHC Merger
Corporation and LTCB Trust Company and First Supplemental
Indenture dated as of September 29, 1994 between American
Life Holding Company and the Trustee for the 11 1/4% Senior
Subordinated Notes due 2004 were filed with the Commission
as Exhibit 4.12 to the Registrant's Report on Form 8-K dated
September 29, 1994, and are incorporated herein by this
reference.
4.13 Indenture dated as of December 15, 1994, between CCP
Insurance, Inc., and LTCB Trust Company, as Trustee, for the
$200,000,000 aggregate principal amount of 10 1/2% Senior
Notes due 2004 was filed with the Commission as Exhibit 4.13
to the Registrant's Annual Report on Form 10-K for 1995, and
is incorporated herein by this reference.
4.13.1 First Supplemental Indenture between Conseco, Inc., as
Issuer, and LTCB Trust Company as Trustee, dated as of
August 31, 1995, was filed with the Commission as Exhibit
4.13.1 to the Registrant's Report on Form 10-Q for the
quarter ended September 30, 1995, and is incorporated herein
by this reference.
4.17.1 Subordinated Indenture, dated as of November 14, 1996,
between the Registrant and Fleet National Bank, as Trustee,
was filed with the Commission as Exhibit 4.17.1 to the
Registrant's Report on Form 8-K dated November 19, 1996, and
is incorporated herein by this reference.
4.17.2 First Supplemental Indenture, dated as of November 14, 1996,
between the Registrant and Fleet National Bank, as Trustee,
was filed with the Commission as Exhibit 4.17.2 to the
Registrant's Report on Form 8-K dated November 19, 1996, and
is incorporated herein by this reference.
4.17.3 9.16% Subordinated Deferrable Interest Debenture due 2006
was filed with the Commission as Exhibit 4.17.3 to the
Registrant's Report on Form 8-K dated November 19, 1996, and
is incorporated herein by this reference.
4.17.4 Second Supplemental Indenture, dated as of November 22,
1996, between Conseco, Inc. and Fleet National Bank, as
Trustee was filed with the Commission as Exhibit 4.17.1 to
the Registrant's Report on Form 8-K dated November 27, 1996,
and is incorporated herein by this reference.
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
4.17.5 8.70% Subordinated Deferrable Interest Debenture due 2026
was filed with the Commission as Exhibit 4.17.4 to the
Registrant's Report on Form 8-K dated November 27, 1996, and
is incorporated herein by this reference.
4.17.6 Third Supplemental Indenture, dated as of March 26, 1997
between the Registrant and Fleet National Bank, as Trustee,
was filed with the Commission as Exhibit 4.17.6 to the
Registrant's Report on Form 8-K dated April 1, 1997, and is
incorporated herein by this reference.
4.17.7 8.796% Subordinated Deferrable Interest Debenture due 2027
was filed with the Commission as Exhibit 4.17.7 to the
Registrant's Report on Form 8-K dated April 1, 1997, and is
incorporated herein by this reference.
4.18.1 Amended and Restated Declaration of Trust of Conseco
Financing Trust I, dated as of November 14, 1996, among
Conseco, Inc., as sponsor, the Trustees named therein and
the holders from time to time of undivided beneficial
interests in the assets of Conseco Financing Trust I was
filed with the Commission as Exhibit 4.18.1 to the
Registrant's Report on Form 8-K dated November 19, 1996, and
is incorporated herein by this reference.
4.18.2 Global Certificate for Preferred Security of Conseco
Financing Trust I was filed with the Commission as Exhibit
4.18.2 to the Registrant's Report on Form 8-K dated November
19, 1996, and is incorporated herein by this reference.
4.18.3 Preferred Securities Guarantee Agreement, dated as of
November 19, 1996, between the Registrant and Fleet National
Bank was filed with the Commission as Exhibit 4.18.3 to the
Registrant's Report on Form 8-K dated November 19, 1996, and
is incorporated herein by this reference.
4.19.1 Amended and Restated Declaration of Trust of Conseco
Financing Trust II, dated as of November 22, 1996, among
Conseco, Inc., as sponsor, the Trustees named therein and
the holders from time to time of undivided beneficial
interests in the assets of Conseco Financing Trust II was
filed with the Commission as Exhibit 4.19.1 to the
Registrant's Report on Form 8-K dated November 27, 1996, and
is incorporated herein by this reference.
4.19.2 Global Certificate for Preferred Security of Conseco
Financing Trust II was filed with the Commission as Exhibit
4.19.2 to the Registrant's Report on Form 8-K dated November
27, 1996, and is incorporated herein by this reference.
4.19.3 Preferred Securities Guarantee Agreement, dated as of
November 27, 1996, between Conseco, Inc. and Fleet National
Bank was filed with the Commission as Exhibit 4.19.3 to the
Registrant's Report on Form 8-K dated November 27, 1996, and
is incorporated herein by this reference.
4.21.1 Amended and Restated Declaration of Trust of Conseco
Financing Trust III, dated as of March 26, 1997, among the
Registrant, as sponsor, the trustees named therein and the
holders from time to time of undivided beneficial interests
in the assets of Conseco Financing Trust III was filed with
the Commission as Exhibit 4.20.1 to the Registrant's Report
on Form 8-K dated April 1, 1997, and is incorporated herein
by this reference.
4.21.2 Global Certificate for Capital Security of Conseco Financing
Trust III was filed with the Commission as Exhibit 4.20.2 to
the Registrant's Report on Form 8-K dated April 1, 1997, and
is incorporated herein by this reference.
4.21.3 Capital Securities Guarantee Agreement, dated as of April 1,
1997 between the Registrant and Fleet National Bank was
filed with the Commission as Exhibit 4.20.3 to the
Registrant's Report on Form 8-K dated April 1, 1997, and is
incorporated herein by this reference.
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
4.22.1 Senior Indenture, dated November 13, 1997, by and between
the Registrant and Bank of New York as successor in interest
to LTCB Trust Company, as Trustee (the "Senior Indenture"),
was filed with the Commission as Exhibit 4.1 to
Post-Effective Amendment No. 1 to the Registrant's
Registration Statement on Form S-3, No. 333-27803, and is
incorporated herein by this reference.
4.22.2 6.4% Note due February 10, 2003 issued under the Senior
Indenture (one of several identical notes aggregating $250
million) was filed with the Commission as Exhibit 4.22.2 to
the Registrant's Annual Report on Form 10-K for 1997 and is
incorporated herein by this reference.
4.22.3 6.8% Note due June 15, 2005 issued under the Senior
Indenture (one of several identical notes aggregating $250
million) was filed with the Commission as Exhibit 4.22.3 to
the Registrant's Report on Form 8-K dated June 4, 1998, and
is incorporated herein by this reference.
4.22.4 6.4% Mandatory Par Put Remarketed Securities Note due June
15, 2011 issued under the Senior Indenture (one of several
identical notes aggregating $550 million) was filed with the
Commission as Exhibit 4.22.4 to the Registrant's Report on
Form 8-K dated June 4, 1998, and is incorporated herein by
this reference
4.22.5 7 7/8% Note due December 15, 2000 issued under the Senior
Indenture was filed with the Commission as Exhibit 4.22.5 to
the Registrant's Report on Form 8-K dated December 18, 1998,
and is incorporated herein by this reference.
4.23.1 Subordinated Indenture between the Registrant and The First
National Bank of Chicago, as Trustee, was filed with the
Commission as Exhibit 4.2 to the Registrant's Registration
Statement on Form S-3, No. 333-40423, and is incorporated
herein by this reference.
4.24.1 Amended and Restated Declaration of Trust of Conseco
Financing Trust IV was filed with the Commission as Exhibit
4.12 to the Registrant's Registration Statement on Form S-3,
No. 333-40423, and is incorporated herein by this reference.
4.24.2 Preferred Securities Guarantee of the Registrant for the
benefit of the holders of trust preferred securities of
Conseco Financing Trust IV was filed with the Commission as
Exhibit 4.13 to the Registrant's Registration Statement on
Form S-3, No. 333-40423, and is incorporated herein by
reference.
4.24.3 Purchase Contract Agreement between the Registrant and The
First National Bank of Chicago, as Purchase Contract Agent,
was filed with the Commission as Exhibit 4.20 to the
Registrant's Registration Statement on Form S-3, No.
333-40423, and is incorporated herein by reference.
4.24.4 Pledge Agreement among the Registrant, The Chase Manhattan
Bank, as Collateral Agent, and The First National Bank of
Chicago, as Purchase Contract Agent, was filed with the
Commission as Exhibit 4.21 to the Registrant's Registration
Statement on Form S-3, No. 333-40423, and is incorporated
herein by reference.
4.25 Indenture dated as of March 15, 1992 relating to
$287,500,000 of 10 1/4% Senior Subordinated Notes due June
1, 2002 of Green Tree was filed with the Commission as an
exhibit to Green Tree's Registration Statement on Form S-4
(File No. 33-42249), and is incorporated herein by this
reference.
4.26.1 Fourth Supplemental Indenture dated as of August 24, 1998,
between the Registrant and State Street Bank and Trust
Company, as Trustee, was filed with the Commission as
Exhibit 4.25.1 to the Registrant's Report on Form 8-K dated
August 24, 1998, and is incorporated herein by this
reference.
4.26.2 8.70% Subordinated Deferrable Interest Debenture due 2028
was filed with the Commission as Exhibit 4.25.2 to the
Registrant's Report on Form 8-K dated August 24, 1998, and
is incorporated herein by this reference.
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
4.26.3 Amended and Restated Declaration of Trust of Conseco
Financing Trust V, dated as of August 24, 1998, among
Conseco, Inc., as sponsor, the Trustees named therein and
the holders from time to time of undivided beneficial
interests in the assets of Conseco Financing Trust V was
filed with the Commission as Exhibit 4.25.3 to the
Registrant's Report on Form 8-K dated August 24, 1998, and
is incorporated herein by this reference.
4.26.4 Global Certificate for Preferred Securities of Conseco
Financing Trust V was filed with the Commission as Exhibit
4.25.4 to the Registrant's Report on Form 8-K dated August
24, 1998, and is incorporated herein by this reference.
4.26.5 Preferred Securities Guarantee Agreement, dated as of August
24, 1998, between Conseco, Inc. and State Street Bank and
Trust Company was filed with the Commission as Exhibit
4.25.5 to the Registrant's Report on Form 8-K dated August
24, 1998, and is incorporated herein by this reference.
4.27.1 Fifth Supplemental Indenture, dated as of October 14, 1998,
between Conseco, Inc. and State Street Bank and Trust
Company, as Trustee, was filed with the Commission as
Exhibit 4.26.1 to the Registrant's Report on Form 8-K dated
October 8, 1998, and is incorporated herein by this
reference.
4.27.2 9% Subordinated Deferrable Interest Debenture due 2028 was
filed with the Commission as Exhibit 4.26.2 to the
Registrant's Report on Form 8-K dated October 8, 1998, and
is incorporated herein by this reference.
4.27.3 Amended and Restated Declaration of Trust of Conseco
Financing Trust VI, dated as of October 14, 1998, among
Conseco, Inc., as sponsor, the Trustees named therein and
the holders from time to time of undivided beneficial
interests in the assets of Conseco Financing Trust VI was
filed with the Commission as Exhibit 4.26.3 to the
Registrant's Report on Form 8-K dated October 8, 1998, and
is incorporated herein by this reference.
4.27.4 Global certificate for Preferred Securities of Conseco
Financing Trust VI was filed with the Commission as Exhibit
4.26.4 to the Registrant's Report on Form 8-K dated October
8, 1998, and is incorporated herein by this reference.
4.27.5 Preferred Securities Guarantee Agreement, dated as of
October 14, 1998, between Conseco, Inc. and State Street
Bank and Trust Company was filed with the Commission as
Exhibit 4.26.5 to the Registrant's Report on Form 8-K dated
October 8, 1998, and is incorporated herein by this
reference.
4.28.1 Sixth Supplemental Indenture, dated as of August 31, 1999,
between the Registrant and State Street Bank and Trust
Company, as Trustee, was filed with the Commission as
Exhibit 4.27.1 to the Registrant's Report on Form 8-K dated
August 31, 1999, and is incorporated herein by this
reference.
4.28.2 9.44% Subordinated Deferrable Interest Debenture was filed
with the Commission as Exhibit 4.27.2 to the Registrant's
Report on Form 8-K dated August 31, 1999, and is
incorporated herein by this reference
4.28.3 Amended and Restated Declaration of Trust of Conseco
Financing Trust VII, dated as of August 31, 1999, among the
Registrant, as sponsor, the Trustees named therein and the
holders from time to time of undivided beneficial interests
in the assets of Conseco Financing Trust VII was filed with
the Commission as Exhibit 4.27.3 to the Registrant's Report
on Form 8-K dated August 31, 1999, and is incorporated
herein by this reference.
4.28.4 Global Certificates for Preferred Securities of Conseco
Financing Trust VII were filed with the Commission as
Exhibit 4.27.4 to the Registrant's Report on Form 8-K dated
August 31, 1999, and are incorporated herein by this
reference.
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
4.28.5 Preferred Securities Guarantee Agreement, dated as of August
31, 1999, between the Registrant and State Street Bank and
Trust Company was filed with the Commission as Exhibit
4.27.5 to the Registrant's Report on Form 8-K dated August
31, 1999, and is incorporated herein by this reference.
4.29.1 8.5% Note due October 15, 2002 (one of several notes with
identical terms aggregating $450 million) was filed with the
Commission as Exhibit 4.1 to the Registrant's Report on Form
8-K dated October 21, 1999, and is incorporated herein by
this reference.
4.29.2 9.0% Note due October 15, 2006 (one of several notes with
identical terms aggregating $550 million) was filed with the
Commission as Exhibit 4.2 to the Registrant's Report on Form
8-K dated October 21, 1999, and is incorporated herein by
this reference.
The Registrant agrees to furnish the Commission upon its
request a copy of any instrument defining the rights of
holders of long-term debt of the Company and its
consolidated subsidiaries.
*10.1.2 Employment Agreement, amended and restated as of April 6,
2000, between the Registrant and Stephen C. Hilbert.
10.1.3 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Rollin M. Dick was
filed with the Commission as Exhibit 10.1.3 to the
Registrant's Report Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
10.1.9 Unsecured Promissory Note of Stephen C. Hilbert dated May
13, 1996 was filed with the Commission as Exhibit 10.1.9 to
the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996, and is incorporated herein by this
reference.
10.1.10 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Ngaire E. Cuneo was
filed with the Commission as Exhibit 10.1.10 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
10.1.11 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and John J. Sabl was filed
with the Commission as Exhibit 10.1.11 to the Registrant's
Report on Form 10-K for the year ended December 31, 1999 and
is incorporated herein by this reference.
10.1.12 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Thomas J. Kilian was
filed with the Commission as Exhibit 10.1.12 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
10.1.13 Employment Agreement, dated February 9, 1996 between Green
Tree and Lawrence Coss and related Noncompetition agreement
dated February 9, 1996, as amended by the Amendment
Agreement dated April 6, 1998 were filed with the Commission
as an exhibit to Green Tree's Registration Statement on Form
S-3, and are incorporated herein by this reference.
10.1.14 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Maxwell E. Bublitz was
filed with the Commission as Exhibit 10.1.14 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
10.1.15 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and James S. Adams was
filed with the Commission as Exhibit 10.1.15 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
10.1.16 Description of incentive compensation and severance
arrangement with Edward M. Berube was filed with the
Commission as Exhibit 10.1.15 to the Registrant's Report on
Form 10-Q for the quarter ended September 30, 1999, and is
incorporated herein by this reference.
*10.1.17 Promissory Note of Stephen C. Hilbert dated April 6, 2000.
*10.1.18 Pledge Agreement between the Registrant and Stephen C.
Hilbert dated April 6, 2000.
*10.1.19 Collateral Assignment between the Registrant and Stephen C.
Hilbert dated April 6, 2000.
*10.1.20 Agreement, dated as of April 28, 2000, between the
Registrant and Stephen C. Hilbert.
*10.1.21 Consulting Agreement, dated as of April 28, 2000, between
the Registrant and Stephen C. Hilbert.
*10.1.22 Agreement, dated as of April 28, 2000, between the
Registrant and Rollin M. Dick.
*10.1.23 Consulting Agreement, dated as of April 28, 2000, between
the Registrant and Rollin M. Dick.
*10.1.24 Second Amendment Agreement, dated as of November 1, 1999,
between Conseco Finance Corp. and Lawrence M. Coss.
*10.1.25 Promissory Note of Bruce A. Crittenden, dated as of July 1,
1999.
*10.1.26 Promissory Note of Bruce A. Crittenden, dated as of November
20, 1997.
10.8 The Registrant's Stock Option Plan was filed with the
Commission as Exhibit B to its definitive Proxy Statement
dated December 10, 1983; Amendment No. 1 thereto was filed
with the Commission as Exhibit 10.8.1 to its Report on Form
10-Q for the quarter ended June 30, 1985; Amendment No. 2
thereto was filed with the Commission as Exhibit 10.8.2 to
its Registration Statement on Form S-1, No. 33-4367;
Amendment No. 3 thereto was filed with the Commission as
Exhibit 10.8.3 to the Registrant's Annual Report on Form
10-K for 1986; Amendment No. 4 thereto was filed with the
Commission as Exhibit 10.8 to the Registrant's Annual Report
on Form 10-K for 1987; Amendment No. 5 thereto was filed
with the Commission as Exhibit 10.8 to the Registrant's
Report on Form 10-Q for the quarter ended September 30,
1991; and are incorporated herein by this reference.
10.8.3 The Registrant's Cash Bonus Plan was filed with the
Commission as Exhibit 10.8.3 to the Registrant's Report on
Form 10-Q for the quarter ended March 31, 1989, and is
incorporated herein by this reference.
10.8.4 Amended and Restated Conseco Stock Bonus and Deferred
Compensation Program was filed with the Commission as
Exhibit 10.8.4 to the Registrant's Annual Report on Form
10-K for 1992, and is incorporated herein by this reference.
10.8.6 Conseco Performance-Based Compensation Plan for Executive
Officers was filed with the Commission as Exhibit 10.8.15 to
the Registrant's Report on Form 10-Q for the quarter ended
March 31, 1998, and is incorporated herein by this
reference.
10.8.7 Conseco, Inc. Amended and Restated Deferred Compensation
Plan was filed with the Commission as Exhibit A to the
Registrant's definitive Proxy Statement dated April 26,
1995, and is incorporated herein by this reference.
10.8.8 Amendment to the Amended and Restated Conseco Stock Bonus
and Deferred Compensation Program was filed with the
Commission as Exhibit 10.8.8 to the Registrant's Annual
Report on Form 10-K for 1994, and is incorporated herein by
this reference.
10.8.9 Conseco 1994 Stock and Incentive Plan was filed as Exhibit A
to the Registrant's definitive Proxy Statement dated April
29, 1994 and is incorporated herein by this reference.
10.8.10 Amendment Number 2 to the Amended and Restated Conseco Stock
Bonus and Deferred Compensation Program was filed with the
Commission as Exhibit 10.8.10 to the Registrant's Annual
Report on Form 10-K for 1995 and is incorporated herein by
reference.
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
10.8.11 Amended and Restated Director, Officer and Key Employee
Stock Purchase Plan of Conseco was filed with the Commission
as Exhibit 10.8.11 to the Registrant's Report on Form 10-Q
for the quarter ended September 30, 1999, and is
incorporated herein by this reference.
10.8.12 Guaranty dated as of August 21, 1998 regarding Director,
Officer and Key Employee Stock Purchase Plan was filed with
the Commission as Exhibit 10.8.12 to the Registrant's Report
on Form 10-Q for the quarter ended March 31, 1999, and is
incorporated herein by this reference.
10.8.13 Form of Promissory Note payable to the Registrant relating
to the Registrant's Director, Officer and Key Employee Stock
Purchase Plan was filed with the Commission as Exhibit
10.8.13 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998, and is incorporated herein
by reference.
10.8.14 Conseco, Inc. Amended and Restated 1997 Non-qualified Stock
Option Plan was filed with the Commission as Exhibit 10.8.14
to the Registrant's Annual Report on Form 10-K for 1997, and
is incorporated herein by this reference.
10.8.15 Green Tree Financial Corporation 1987 Stock Option Plan was
filed with the Commission as an exhibit to Green Tree's
Registration Statement on Form S-4 (File No. 33-42249) and
is incorporated herein by this reference.
10.8.16 Green Tree Financial Corporation Key Executive Stock Bonus
Plan was filed with the Commission as an exhibit to Green
Tree's Registration Statement on Form S-4 (File No.
33-42249) and is incorporated herein by this reference.
10.8.17 Green Tree Financial Corporation Restated 1992 Supplemental
Stock Option Plan was filed with the Commission as Exhibit
10.8.17 to the Registrant's Report on Form 10-Q for the
quarter ended June 30, 1992, and is incorporated herein by
this reference.
10.8.18 Green Tree Financial Corporation Chief Executive Cash Bonus
and Stock Option Plan and related Stock Option Agreement
dated February 9, 1996 were filed with the Commission as an
exhibit to Green Tree's Report on Form 10-Q for the quarter
ended June 30, 1996, and are incorporated herein by this
reference.
10.8.19 Green Tree Financial Corporation 1996 restated Supplemental
Pension Plan dated May 15, 1996 was filed with the
Commission as an exhibit to Green Tree's Annual Report on
Form 10-K for 1997, and is incorporated herein by this
reference.
10.8.20 Retention Agreement dated as of July 1, 1998 between Green
Tree Financial Corporation and Bruce A. Crittenden was filed
with the Commission as Exhibit 10.8.20 to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1998 and is incorporated herein by this reference.
10.8.21 Amended and Restated 1999 Director and Executive Officer
Stock Purchase Plan of Conseco was filed with the Commission
as Exhibit 10.8.21 to the Registrant's Report on Form 10-Q
for the quarter ended September 30, 1999 and is incorporated
herein by this reference.
10.8.22 Guaranty regarding 1999 Director and Executive Officer Stock
Purchase Plan was filed with the Commission as Exhibit
10.8.22 to the Registrant's Report on Form 10-Q for the
quarter ended September 30, 1999 and is incorporated herein
by this reference.
10.8.23 Form of Borrower Pledge Agreement dated as of September 15,
1999 with The Chase Manhattan Bank relating to the 1999
Director and Executive Officer Stock Purchase Plan was filed
with the Commission as Exhibit 10.8.23 to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1999
and is incorporated herein by this reference.
10.8.24 Form of note payable to the Registrant relating to the 1999
Director and Executive Officer Stock Purchase Plan was filed
with the Commission as Exhibit 10.8.24 to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1999
and is incorporated herein by this reference.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
10.38 Split-Dollar Agreement dated December 18, 1998 among the
Registrant, Rollin M. Dick and Lawrence E. Dick, Trustee was
filed with the Commission as Exhibit 10.38 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 and is incorporated herein by this
reference.
10.39 Split-Dollar Agreement dated December 18, 1998 among the
Registrant, Stephen C. Hilbert and Rollin M. Dick, Trustee
was filed with the Commission as Exhibit 10.39 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 and is incorporated herein by this
reference.
10.40 Split-Dollar Agreement dated December 18, 1998 among the
Registrant, Stephen C. Hilbert and Rollin M. Dick, Trustee
was filed with the Commission as Exhibit 10.40 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 and is incorporated herein by this
reference.
10.41 Split-Dollar Agreement among the Registrant, Stephen C.
Hilbert and Rollin M. Dick, Trustee was filed with the
Commission as Exhibit 10.41 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998 and
is incorporated herein by this reference.
10.42 Split-Dollar Agreement among the Registrant, Stephen C.
Hilbert and Rollin M. Dick, Trustee was filed with the
Commission as Exhibit 10.42 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998 and
is incorporated herein by this reference.
10.43 Amended and Restated Securities Purchase Agreement dated as
of December 15, 1999 between the Registrant and the
purchasers named therein was filed with the Commission as
Exhibit 10.43 to the Registrant's Report on Form 8-K dated
December 15, 1999, as is incorporated herein by this
reference.
12.1 Computation of Ratio of Earnings to Fixed Charges, Preferred
Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts was
filed with the Commission as Exhibit 12.1 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
21 List of Subsidiaries was filed with the Commission as
Exhibit 21 to the Registrant's Report on Form 10-K for the
year ended December 31, 1999 and is incorporated herein by
this reference.
23.1 Consent of PricewaterhouseCoopers LLP with respect to the
financial statements of Conseco, Inc. was filed with the
Commission as Exhibit 23.1 to the Registrant's Report on
Form 10-K for the year ended December 31, 1999 and is
incorporated herein by this reference.
23.2 Consent of KPMG LLP with respect to the financial statements
of Conseco Finance Corp. was filed with the Commission as
Exhibit 23.2 to the Registrant's Report on Form 10-K for the
year ended December 31, 1999 and is incorporated herein by
this reference.
27 Financial data schedule for Conseco, Inc. dated December 31,
1998 was filed with the Commission as Exhibit 27 to the
Registrant's Report on Form 10-K for the year ended December
31, 1999 and is incorporated herein by this reference.
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
99.1 Report of KPMG LLP with respect to historical financial
statements of Conseco Finance Corp. was filed with the
Commission as Exhibit 99.1 to the Registrant's Report on
Form 10-K for the year ended December 31, 1999 and is
incorporated herein by this reference.
</TABLE>
- -------------------------
* Filed herewith
COMPENSATION PLANS AND ARRANGEMENTS
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
*10.1.2 Employment Agreement, amended and restated as of April 6,
2000, between the Registrant and Stephen C. Hilbert.
10.1.3 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Rollin M. Dick.
10.1.9 Unsecured Promissory Note of Stephen C. Hilbert.
10.1.10 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and Ngaire E. Cuneo.
10.1.11 Employment Agreement, amended and restated as of December
15, 1999, between the Registrant and John J. Sabl.
10.1.12 Employment Agreement, amended and restated as of December
15, 1999 between the Registrant and Thomas J. Kilian.
10.1.13 Employment Agreement, dated February 9, 1996 between Green
Tree and Lawrence Coss and related Noncompetition Agreement
dated February 9, 1996, as amended by Amendment Agreement
dated April 6, 1998.
10.1.14 Employment Agreement, amended and restated as of December
15, 1999 between the Registrant and Maxwell E. Bublitz.
10.1.15 Employment Agreement, amended and restated as of December
15, 1999 between the Registrant and James S. Adams.
10.1.16 Description of incentive compensation and severance
arrangement with Edward M. Berube.
*10.1.17 Promissory Note of Stephen C. Hilbert dated April 6, 2000.
*10.1.18 Pledge Agreement between the Registrant and Stephen C.
Hilbert dated April 6, 2000.
*10.1.19 Collateral Assignment between the Registrant and Stephen C.
Hilbert dated April 6, 2000.
*10.1.20 Agreement, dated as of April 28, 2000, between the
Registrant and Stephen C. Hilbert.
*10.1.21 Consulting Agreement, dated as of April 28, 2000, between
the Registrant and Stephen C. Hilbert.
*10.1.22 Agreement, dated as of April 28, 2000, between the
Registrant and Rollin M. Dick.
*10.1.23 Consulting Agreement, dated as of April 28, 2000, between
the Registrant and Rollin M. Dick.
*10.1.24 Second Amendment Agreement, dated as of November 1, 1999,
between Conseco Finance Corp. and Lawrence M. Coss.
*10.1.25 Promissory Note of Bruce A. Crittenden, dated as of July 1,
1999.
*10.1.26 Promissory Note of Bruce A. Crittenden, dated as of November
20, 1997.
10.8 The Registrant's Stock Option Plan; Amendment No. 1 thereto;
Amendment No. 2 thereto; Amendment No. 3 thereto; Amendment
No. 4 thereto; and Amendment No. 5 thereto.
10.8.3 The Registrant's Cash Bonus Plan.
10.8.4 Amended and Restated Conseco Stock Bonus and Deferred
Compensation Program.
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
- ------- --------
<C> <S>
10.8.6 Conseco Performance -- Based Compensation Plan for Executive
officers.
10.8.7 Conseco, Inc. Amended and Restated Deferred Compensation
Plan.
10.8.8 Amendment to the Amended and Restated Conseco Stock Bonus
and Deferred Compensation Program.
10.8.9 Conseco 1994 Stock and Incentive Plan.
10.8.10 Amendment No. 2 to the Amended and Restated Stock Bonus and
Deferred Compensation Program.
10.8.11 Amended and Restated Director, Officer and Key Employee
Stock Purchase Plan.
10.8.12 Guaranty dated as of August 21, 1998 regarding Director,
Officer and Key Employee Stock Purchase Plan.
10.8.13 Form of Promissory Note Payable to the Registrant relating
to the Registrant's Director, Officer and Key Employee Stock
Purchase Plan.
10.8.14 Conseco, Inc. Amended and Restated 1997 Non-qualified Stock
Option Plan.
10.8.15 Green Tree Financial Corporation 1987 Stock Option Plan.
10.8.16 Green Tree Financial Corporation Key Executive Stock Bonus
Plan.
10.8.17 Green Tree Financial Corporation Restated 1992 Supplemental
Stock Option Plan.
10.8.18 Green Tree Financial Corporation Chief Executive Cash Bonus
and Stock Option Plan and related Stock Option Agreement.
10.8.19 Green Tree Financial Corporation 1996 restated Supplemental
Pension Plan dated May 15, 1996.
10.8.20 Retention Agreement dated as of July 1, 1998 between Green
Tree Financial Corporation and Bruce A. Crittenden.
10.8.21 Amended and Restated 1999 Director and Executive Officer
Stock Purchase Plan of Conseco.
10.8.22 Guaranty regarding 1999 Director and Executive Officer Stock
Purchase Plan.
10.8.23 Form of Borrower Pledge Agreement dated as of September 15,
1999 with The Chase Manhattan Bank relating to the 1999
Director and Executive Officer Stock Purchase Plan.
10.8.24 Form of note payable to the Registrant relating to the 1999
Director and Executive Officer Stock Purchase Plan.
</TABLE>
<PAGE> 1
Exhibit 10.1.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 1998, as amended and restated
as of May 26, 1999, and as further amended and restated as of December 15, 1999
and April 6, 2000, between CONSECO, INC. (hereinafter called the "Company"), and
STEPHEN C. HILBERT (hereinafter called "Executive").
RECITALS
WHEREAS, the Company and Executive were parties to an Employment Agreement
dated January 1, 1987, as amended by Amendment No. 1 dated February 28, 1988 (as
amended, the "Prior Employment Agreement"); and
WHEREAS, the Prior Employment Agreement was replaced by a new employment
agreement dated as of January 1, 1998 and subsequently amended as of May 14,
1999 and as amended and restated as of May 26, 1999 and December 15, 1999 (as so
amended, the "Existing Employment Agreement") and the Company and Executive
desire to make certain modifications to the Existing Employment Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree that the Existing Employment Agreement be
amended and restated in its entirety to be as follows:
1. Employment. The Company hereby employs Executive, and Executive hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. Term. This Agreement shall be deemed to have become effective (and the
Prior Employment Agreement terminated) as of January 1, 1998. On May 14, 1998
(the "Approval Date") the Company's shareholders approved the performance-based
compensation provisions hereof (i.e., Section 5(b)) as then in effect. Subject
to provisions for termination as provided in Section 9 hereof, the term of this
Agreement shall be five (5) years from and after January 1, 1998, and it shall
be automatically renewed for successive five (5) year periods on January 1 of
each year thereafter, unless either party elects not to renew this Agreement by
serving written notice of such intention not to renew on the other party at
least one hundred eighty (180) days prior to January 1 of each year. If such an
election is made, this Agreement shall be in full force and effect for the
remaining portion of the then current five (5) year period, subject to the
provisions for termination as provided in Section 9 hereof. The term Basic
Employment Period as used in this Agreement shall mean the five (5) year period
commencing with the most recent annual renewal pursuant to this section.
3. Duties. Executive is engaged by the Company in an executive capacity as
its chief executive officer. Executive's position with the Company shall be
Chairman of the Board of Directors and Chief Executive Officer, and such other
positions (not inconsistent with the aforementioned responsibilities) as may be
determined from time to time by the Board of Directors of the Company.
<PAGE> 2
4. Extent of Services. Executive, subject to the direction and control of
the Board of Directors of the Company, shall have the power and authority
commensurate with his executive status and necessary to perform his duties
hereunder. The Company agrees to provide to Executive such assistance and work
accommodations as are suitable to the character of his positions with the
Company and adequate for the performance of his duties. Executive shall devote
substantially all of his employable time, attention and best efforts to the
business of the Company, and shall not, without the consent of the Company,
during the term of this Agreement be actively engaged in any other business
activity, whether or not such business activity is pursued for gain, profit or
other pecuniary advantage; but this shall not be construed as preventing
Executive from investing his assets in such form or manner as will not require
any material services on the part of Executive in the operation of the affairs
of the companies in which such investments are made. For purposes of this
Agreement, full-time employment shall be the normal work week for individuals in
senior executive positions with the Company.
5. Compensation.
(a) As compensation for services hereunder rendered during the term
hereof, Executive shall receive a base salary of One Million Dollars
($1,000,000) per year payable in equal installments in accordance with the
Company's payroll procedure for its salaried employees (but in no event
less than twice a month), it being understood that for 1998 a lump sum
payment shall be made promptly after the approval of this Agreement by the
shareholders of the Company to cause the salary payments to Executive in
1998 to such date in 1998 to at least equal the pro rata portion (based on
the number of days in 1998 then elapsed through the end of the most recent
pay period then ended) of One Million Dollars ($1,000,000). Salary payments
shall be subject to withholding of taxes and other appropriate and
customary amounts. In addition to the base salary above, Executive may
receive additional annual salary increases based upon his performance in
his executive and management capacity. The amounts of such salary increases
shall be determined by the Board of Directors of the Company or the
Compensation Committee thereof (the "Compensation Committee").
(b) In addition to base salary, Executive shall be entitled to receive
annually a bonus to be calculated and paid for each fiscal year as follows:
(i) First, the maximum potential bonus to Executive for such year
(the "Maximum Bonus") shall be computed. The Maximum Bonus for a
fiscal year shall be equal to three percent (3%) of the annual Net
Profits (as defined below) for such fiscal year of the Company. The
bonus shall be calculated from the books and records of the Company
which shall be kept in accordance with generally accepted accounting
principles applied by the Company in the preparation of its financial
statements. The Maximum Bonus for a fiscal year shall be payable,
without reference to any other tests, to the extent it does not exceed
the Non-Discretionary Amount (as determined pursuant to clause (v)
below, the "Non-Discretionary Amount") applicable to such year. "Net
Profits" shall mean the Company's Income from Continuing Operations
(as defined below), as adjusted to add back, in each case to the
extent such items were deducted in
2
<PAGE> 3
the computation of Income from Continuing Operations, (x) income taxes
and (y) bonuses to Executive and the Company's Executive Vice
Presidents. "Income from Continuing Operations" shall mean the
Company's income from continuing operations, which shall exclude for
this computation the effect (in each case net of applicable tax) of
(i) extraordinary items, (ii) discontinued operations and (iii) the
cumulative effects of changes in accounting principles.
(ii) If the Maximum Bonus exceeds the Non-Discretionary Amount
for such fiscal year a separate calculation shall be made to determine
what portion, if any, of the Maximum Bonus in excess of the
Non-Discretionary Amount could be paid and still permit the Company's
ROE (as determined pursuant to clause (iii) below, the "ROE") for such
fiscal year to be at least 15% for such fiscal year (such amount
exceeding the Maximum Bonus and meeting such 15% ROE test for such
fiscal year being referred to as the "Additional Potential Bonus").
The Additional Potential Bonus for a fiscal year would then be payable
to Executive for such fiscal year subject to the discretion of the
Compensation Committee to reduce or eliminate (in whole or in part)
the payment of the Additional Potential Bonus for such year in its
discretion.
(iii) The ROE for a fiscal year shall be determined by dividing
(x) the Company's Income from Continuing Operations for such fiscal
year, reduced by any dividends paid with respect to such fiscal year
on the Company's preferred stock (it being understood that any amounts
paid to induce the conversion of preferred stock are not to be
considered dividends on preferred stock) by (y) the arithmetic average
of the Company's Average Common Equity (as defined below) for the four
quarters of such fiscal year. The "Average Common Equity" of the
Company for a quarter shall mean the arithmetic average of the common
shareholders equity of the Company shown on its financial statements
(adjusted to exclude unrealized appreciation or depreciation of fixed
maturity securities net of any applicable deferred income taxes, as so
adjusted "Common Shareholders Equity") as of the end of such fiscal
quarter (as adjusted as provided below, the "Quarter End Equity") and
the end of the preceding quarter (the "Quarter Start Equity");
provided, that if one or more Significant Transactions (as defined
below) has occurred during the fiscal quarter as to which Average
Common Equity is being determined, then the impact of each such
Significant Transaction on the Quarter End Equity shall be reduced by
a fraction, the numerator of which shall be the number of days in such
quarter elapsed before said Significant Transaction occurred (it being
understood that with respect to a Significant Transaction which
includes a series of transactions which closed or were otherwise
consummated over a period of time the Company shall select a
reasonable midpoint for purposes of this calculation) and the
denominator of which shall be the total number of days in such
quarter, and the Quarter End Equity shall be computed taking into
account such reductions. "Significant Transaction" with respect to a
quarter shall mean any event (such as a share issuance, share
repurchase, conversion, acquisition, disposition, merger,
consolidation or change in accounting principles) the effect of which
event, or series of related events, is to cause the Quarter End Equity
to change by at least 10% of the Quarter Start Equity from what it
would otherwise have been absent such event or series of related
events.
3
<PAGE> 4
(iv) The Company agrees to give notice to the Compensation
Committee as promptly as practicable after the end of each fiscal year
of the respective amounts of Maximum Bonus, Additional Potential Bonus
and, if it has been adjusted with respect to such fiscal year,
Non-Discretionary Amount for such fiscal year. The Compensation
Committee shall then have fifteen (15) days from the date such notice
is sent by the Company to determine the extent, if any, to which the
Additional Potential Bonus with respect to such fiscal year shall have
been reduced or eliminated. The Company shall give notice to Executive
not later than five (5) days after the expiration of such 15-day
period of the Incremental Bonus to be paid for such fiscal year.
(v) The Non-Discretionary Amount for each of 1998 and 1999 shall
be $13.5 million. The Non-Discretionary Amount shall be adjusted for
2000 and the last year of each consecutive three-year period that
follows (each an "Adjustment Year"), as described in the following
sentence. For an Adjustment Year the Non-Discretionary Amount shall be
adjusted to be the lesser of (i) one-half of the average of the
Maximum Bonus for the two fiscal years immediately preceding such
Adjustment year and (ii) the arithmetic average of the
Non-Discretionary Amount and the Additional Potential Bonus, in each
case regardless of the amount of bonus actually paid, for such two
fiscal years. The Non-Discretionary Amount as so adjusted shall remain
the same with respect to the two fiscal years following such
Adjustment Year.
(vi) The cumulative accrued amount of the bonus shall be
calculated as of the end of each of the first three quarters of the
Company's fiscal year based on the year-to-date Net Profits, and such
accrued bonus, minus accrued bonus payments made for previous quarters
of the same fiscal year, shall be paid to Executive as soon as
practicable, but in no event more than forty-five (45) days after the
end of the quarter; provided, that the cumulative maximum bonus
payable with respect to the (i) first quarter may not exceed 25% of
the Non-Discretionary Amount, (ii) first two quarters shall not exceed
50% of the Non-Discretionary Amount and (iii) first three quarters
shall not exceed 75% of the Non-Discretionary Amount for such fiscal
year. The aggregate bonus for the fiscal year, minus the quarterly
accrued payments made for the year, shall be paid to Executive soon as
practicable, but in no event more than ninety (90) days, after the
fiscal year end. If the quarterly payments for the first three
quarters of any fiscal year exceed the aggregate bonus payable for the
entire year, the amount of such excess shall be repaid to the Company
by Executive.
(vii) A bonus payment of $3,375,000 with respect to the first
quarter of 1999 has been made in cash. With respect to the remainder
of 1999 the bonus (the "Remaining Bonus") shall not exceed the lesser
of (x) the remainder of the Non-Discretionary Amount (i.e.,
$10,125,000) for 1999 and (y) the difference between the Maximum Bonus
for all of 1999 and $3,375,000. At the time all or any part of the
Remaining Bonus is being determined, if the Market Price of the
Company's common stock is less than $50 per share, the payment that
would otherwise be made shall be reduced by multiplying such amount by
a fraction the numerator of which shall be such Market
4
<PAGE> 5
Price and the denominator of which shall be $50. A portion of the
resulting payment of the Remaining Bonus (whether or not reduced
pursuant to the preceding sentence) shall be paid in cash to provide
for the payment of Executive's estimated Federal, state and local
income, unemployment, social security, Medicare and similar income or
payroll taxes at maximum rates (such tax estimate to be made by
Executive subject to the approval of the Company, which approval will
not be unreasonably withheld). The remaining part of such resulting
payment shall be satisfied by the issuance to Executive of a number of
shares of the Company's common stock determined by dividing such
remaining part by the Market Price of such common stock. The "Market
Price" of the common stock for purposes of this clause (vii) shall be
the average of the high and low trading price of the common stock on
the New York Stock Exchange Composite Tape on the day of computation
or if no such trading has occurred on such day on the last preceding
day on which such trading has occurred. If Executive subsequently is
required to return any portion of the bonus payable pursuant to the
last sentence of clause (vi) of this Section 5(b) Executive shall
return cash and stock to the Company on a last-paid, first-returned
basis. This clause (vii) shall apply to Executive's bonus only for
1999. Notwithstanding that Executive's bonus for 1999 may be reduced
below the Non-Discretionary Amount as provided in this clause (vii)
based upon the Market Price of the common stock, Executive shall, for
purposes of Sections 9(b) 9(c), 10(a) and 11 be treated as having
earned the Non-Discretionary Amount for 1999 to the extent it would
have paid if such reduction had not occurred.
6. Fringe Benefits.
(a) Executive shall be entitled to participate in such existing
employee benefit plans and insurance programs offered by the Company, or
which it may adopt from time to time for its executive management or
supervisory personnel generally, at such time as Executive shall have
fulfilled the eligibility requirements for participation therein. Nothing
herein shall be construed so as to prevent the Company from modifying or
terminating any employee benefit plans or programs, or employee fringe
benefits, it may adopt from time to time.
(b) During the term of this Agreement, the Company shall pay Executive
a monthly automobile allowance in the amount of Six Hundred Dollars
($600.00) and shall pay directly or shall reimburse Executive for the cost
of fuel he incurs in using his automobile.
(c) Executive shall be entitled to four (4) weeks vacation with pay,
for each year during the term hereof.
(d) Executive may incur reasonable expenses for promoting the
Company's business, including expenses for entertainment, travel, and
similar items. The Company shall reimburse Executive for all such
reasonable expenses upon Executive's periodic presentation of an itemized
account of such expenditures.
(e) The Company shall, upon periodic presentation of satisfactory
evidence and to a maximum of Ten Thousand Dollars ($10,000) per year of
this Agreement, reimburse
5
<PAGE> 6
Executive for reasonable medical expenses incurred by Executive and his
dependents which are not otherwise covered by health insurance provided to
Executive under Section 6(a).
(f) During the term of this Agreement, the Company shall at its
expense maintain a term life insurance policy or policies on the life of
Executive in the face amount of One Million Dollars ($1,000,000), payable
to such beneficiaries as Executive may designate.
7. Disability. If Executive shall become physically or mentally disabled
during the term of this Agreement to the extent that his ability to perform his
duties and services hereunder is materially and adversely impaired, his salary,
bonus and other compensation provided herein shall continue while he remains
employed by the Company; provided, that if such disability (as confirmed by
competent medical evidence) continues for at least twelve (12) consecutive
calendar months, the Company may terminate Executive's employment hereunder in
which case the Company shall immediately pay Executive a lump sum payment equal
to the sum of his salary and bonus as provided herein with respect to the most
recent fiscal year then ended and, provided, further that no such lump sum
payment shall be required if such disability arises primarily from: (a) chronic
depressive use of intoxicants, drugs or narcotics, or (b) intentional
self-inflicting injury or intentionally self-induced sickness; or (c) a proven
unlawful act or enterprise on the part of Executive.
8. Disclosure of Information. Executive acknowledges that in and as a
result of his employment hereunder, he will be making use of, acquiring and/or
adding to confidential information of the Company of a special and unique nature
and value. As a material inducement to the Company to enter into this Agreement
and to pay to Executive the compensation stated in Section 5, as well as any
additional benefits stated herein, Executive covenants and agrees that he shall
not, at any time during or following the term of his employment, directly or
indirectly, divulge or disclose for any purpose whatsoever, any confidential
information that has been obtained by or disclosed to him as a result of his
employment by the Company, except to the extent that such confidential
information (a) becomes a matter of public record or is published in a
newspaper, magazine or other periodical available to the general public, other
than as a result of any act or omission of Executive, (b) is required to be
disclosed by any law, regulation or order of any court or regulatory commission,
department or agency, provided that Executive gives prompt notice of such
requirement to the Company to enable the Company to seek an appropriate
protective order or confidential treatment, or (c) is necessary to perform
properly Executive=s duties under this Agreement. Upon the termination of this
Agreement, Executive shall return all materials obtained from or belonging to
the Company which Executive may have in his possession or control.
9. Termination.
(a) Either the Company or Executive may terminate this Agreement at
any time for any reason upon written notice to the other. This Agreement
shall also terminate upon (i) the death of Executive and (ii) termination
by the Company pursuant to Section 7.
(b) In the event this Agreement is terminated by the Company pursuant
to the first sentence of Section 9(a) and such termination does not
constitute a Control Termination as
6
<PAGE> 7
defined in (d) below, Executive shall be entitled to receive not later than
ten (10) days after termination of Executive's employment (i) a severance
distribution consisting of (A) the assignment, without any warranty (except
as to good title) or recourse, by the Company to the Executive or his
designee of all of its interest in (1) the Promissory Note made by
Executive to the order of Company dated April 6, 2000 (the "Note"), (2) all
indebtedness (unpaid principal, interest and expenses) evidenced by the
Note at the time (the "Debt"), and (3) all documents executed to secure
repayment of the Note (the "Collateral Documents") (and all rights
thereunder) or, if the Debt exceeds the Nominal Section 9 Severance (as
defined below) an undivided fractional interest (determined as described
below), on a "last out" participation basis in (1) the Note, (2) the Debt,
and (3) Collateral Documents, and (B) a cash payment by the Company to the
Executive equal to the positive difference, if any, of (x) an amount equal
to five (5) times the sum of Executive's base salary, as determined
pursuant to Section 5(a) hereof for the fiscal year in which such
termination occurs, and the Non-Discretionary Amount as defined in Section
5(a)(iv) applicable for such fiscal year (regardless of whether the
Company's results for such fiscal year would have resulted in a bonus being
paid to Executive) (the "Nominal Section 9 Severance") minus (y) the amount
of the Debt assigned to Executive and (ii) all other unpaid amounts
previously accrued or awarded pursuant to any other provision of this
Agreement. For purposes of determining the "undivided fractional interest"
in sub-section (i)(A) above the numerator will be the dollar amount of the
Nominal Section 9 Severance and the denominator will be the dollar amount
of the Debt.
(c) In the event this Agreement is terminated upon the death of
Executive, or is terminated by Executive and such termination does not
constitute a Control Termination as defined in (d) below, Executive shall
be entitled to receive his base salary as provided in Section 5(a) accrued
but unpaid (i) as of the date of termination, (ii) a pro rata share of the
bonus provided for in Section 5(b) based on the number of months during
which he performed duties hereunder in the calendar year of his death, and
(iii) all other unpaid amounts previously accrued or awarded pursuant to
any other provision of this Agreement.
(d) The term "Control Termination" as used herein shall mean (1)
termination of this Agreement by the Company in anticipation of or not
later than two years following a "change in control" of the Company (as
defined below), or (2) termination of this Agreement by Executive following
a "change in control" of the Company (as defined below) upon the occurrence
of any of the following events:
(i) a significant change in the nature or scope of Executive's
authorities or duties from those in existence immediately prior to the
change in control, a reduction in total compensation from that in
existence immediately prior to the change in control, or a breach by
the Company of any other provision of this Agreement; or
(ii) the reasonable determination by Executive that, as a result
of a change in circumstances significantly affecting his position, he
is unable to exercise Executive's authorities, powers, functions or
duties in existence immediately prior to the change in control; or
7
<PAGE> 8
(iii) the Company's principal executive offices are moved outside
the geographic area comprised of Marion County, Indiana, and the seven
contiguous counties; or
(iv) the giving of notice of termination by Executive to the
Company during the 6-month period commencing six (6) months after the
change in control.
The term "change in control" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"1934 Act" if such Item 6(e) were applicable to the Company as such Item is in
effect on May 26, 1999; provided that, without limitation, such a change in
control shall be deemed to have occurred if and when (A) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the 1934 Act) is or becomes a
beneficial owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities or (B) in connection with or as a result of a tender
offer, merger, consolidation, sale of assets or contest for election of
directors, or any combination of the foregoing transactions or events,
individuals who, as of the date hereof, constitute the Board of Directors of the
Company (the "Incumbent Board") cease to constitute at least a majority of such
Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board, shall
be deemed to have been a member of the Incumbent Board; and provided further,
that no individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors shall be deemed to have been a member of the
Incumbent Board, or (C) any reorganization, merger or consolidation or the
issuance of shares of common stock of the Company in connection therewith unless
immediately after any such reorganization, merger or consolidation (i) more than
60% of the then outstanding shares of common stock of the corporation surviving
or resulting from such reorganization, merger or consolidation and more than 60%
of the combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors are then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively, of the
outstanding shares of common stock of the Company and the outstanding voting
securities of the Company immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to each other
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the outstanding shares of common stock of the Company and the
outstanding voting securities of the Company, as the case may be, and (ii) at
least a majority of the members of the board of directors of the corporation
surviving or resulting from such reorganization, merger or consolidation were
members of the Board of Directors of the Company at the time of the execution of
the initial agreement or action of the Board of Directors providing for such
reorganization, merger or consolidation or issuance of shares of common stock of
the Company. Upon the occurrence of a change in control, the Company shall
promptly notify Executive in writing of the occurrence of such event (such
notice, the "Change in Control Notice"). If the Change in Control Notice is not
given within 10 days after the occurrence
8
<PAGE> 9
of a change in control the period specified in clause (d)(A) of this Section 9
shall be extended until the second anniversary of the date such Change in
Control Notice is given.
10. Payments for Control Termination. In the event of a Control Termination
of this Agreement, the Company shall pay Executive and provide him with the
following:
(a) During the remainder of the Basic Employment Period, the Company
shall continue to pay Executive his salary on a monthly basis at the same
rate as payable immediately prior to the date of termination plus the
estimated amount of any bonuses to which he would have been entitled had he
remained in the employ of the Company and a change in control of the
Company had not occurred, which estimate shall be reasonable and made by
the Company in good faith (the "Section 10 Termination Payments").
Notwithstanding the foregoing, if Executive does not make the Election
provided for in Section 11 the Company may assign to the Executive or his
designee, without any warranty (except as to good title) or recourse, all
of its interest in (1) the Note, (2) the Debt, and (3) the Collateral
Documents or, if the then existing Debt exceeds the amount of the Section
10 Termination Payments, an undivided fractional interest (determined as
described below), on a "last out" participation basis, in (1) the Note, (2)
the Debt, and (3) the Collateral Documents; in which case the amount of the
Debt assigned to Executive or the undivided fractional interest in the Debt
assigned shall serve as a credit against any such Section 10 Termination
Payments otherwise payable. For purposes of determining the "undivided
fractional interest" above the numerator will be the dollar amount of the
Section 10 Termination Payments and the denominator will be the dollar
amount of the Debt.
(b) During the remainder of the Basic Employment Period, Executive
shall continue to be treated as an employee under the provisions of all
incentive compensation arrangements applicable to the Company's executive
employees. In addition, Executive shall continue to be entitled to all
benefits and service credit for benefits under medical, insurance and other
employee benefit plans, programs and arrangements of the Company as if he
were still employed under this Agreement and a change in control of the
Company had not occurred.
(c) If, despite the provisions of paragraph (b) above, benefits under
any employee benefit plan shall not be payable or provided under any such
plan to Executive, or Executive's dependents, beneficiaries and estate,
because he is no longer an employee of the Company, the Company itself
shall, to the extent necessary to provide the full value of such benefits
and service credits to Executive, Executive's dependents, beneficiaries and
estate, pay or provide for payment of such benefits and service credit for
such benefits to Executive, his dependents, beneficiaries and estate.
(d) If, despite the provisions of paragraph (b) above, benefits or the
right to accrue further benefits under any stock option or other long-term
incentive compensation arrangement shall not be provided under any such
arrangement to Executive, or his dependents, beneficiaries and estate,
because he is no longer an employee of the Company, the Company shall, to
the extent necessary, pay or provide for payment of such benefits to
Executive, his dependents, beneficiaries and estate.
9
<PAGE> 10
11. Severance Allowance. In the event of a Control Termination of this
Agreement, Executive may elect (the "Election"), within 60 days after such
Control Termination, to receive a distribution as a severance allowance, in
lieu of the termination payments provided for in Section 10 above,
consisting of:
(a) the assignment, without any warranty (except as to good title) or
recourse, by the Company to the Executive or his designee of all of its
interest in (1) the Note, (2) the Debt, and (3) the Collateral Documents
or, if the then existing Debt exceeds the Nominal Section 11 Severance (as
defined below), an undivided fractional interest (determined as described
below), on a "last out" participation basis, in (1) the Note, (2) the Debt,
and (3) the Collateral Documents; and
(b) A lump sum payment equal to the positive difference, if any, of
(A) the sum of (x) an amount equal to the aggregate of the salary payments
for 60 calendar months at the rate which Executive would have been entitled
to receive in accordance with Section 5(a) plus a pro rata share of the
estimated amount of any bonus which would have been payable for the bonus
period which includes the termination date, and (y) an amount equal to five
times the greater of (aa) the highest annual bonus payable under Section
5(b) hereof for the last three (3) fiscal years of the Company ended prior
to such Control Termination, or (bb) the estimated amount of the annual
bonus payable under Section 5(b) hereof for the fiscal year of the Company
which includes the date of such Control Termination (with such sum of (x)
and (y) being referred to as the "Nominal Section 11 Severance") minus (B)
the amount of the Debt assigned to Executive.
For purposes of determining the "undivided fractional interest" in
sub-section (a) above the numerator will be the dollar amount of the
Nominal Section 11 Severance and the denominator will be the dollar amount
of the Debt.
In the event that Executive makes an election pursuant to this Section to
receive a lump sum severance allowance of the amount described in clauses (a)
and (b), then, in addition to such amount, he shall receive (i) in addition to
the benefits provided under any retirement or pension benefit plan maintained by
the Company, the benefits he would have accrued under such benefit plan if he
had remained in the employ of the Company and such plan had remained in effect
for 60 calendar months after his termination, which benefits will be paid
concurrently with, and in addition to, the benefits provided under such benefit
plan, and (ii) the employee benefits (including, but not limited to, coverage
under any medical insurance and split-dollar life insurance arrangements or
programs) to which he would have been entitled under all employee benefit plans,
programs or arrangements maintained by the Company if he had remained in the
employ of the Company and such plan, programs or arrangements had remained in
effect for 60 calendar months after his termination; or the value of the amounts
described in clauses (i) and (ii) next preceding. The amount of the payments
described in the preceding sentence shall be determined and such payments shall
be distributed as soon as it is reasonably possible.
10
<PAGE> 11
12. Tax Indemnity Payments. (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or its affiliated companies to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of the Agreement or otherwise but determined without regard to any
additional payments required under this Section 12 (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986 (as amended the "Code"), or any successor provision (collectively,
"Section 4999"), or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any Federal, state or local income and employment
taxes and Excise Tax (and any interest and penalties imposed with respect to any
such taxes) imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 12(c), all determinations
required to be made under this Section 12, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by the Company's public accounting firm (the "Accounting Firm") which
shall provide detailed supporting calculations both to the Company and
Executive within fifteen (15) business days of the receipt of notice from
Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving
as accountant or auditor for the individual, entity or group effecting the
Change in Control, Executive shall appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 12, shall be paid by the Company to Executive within five (5) days
of the receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by Executive, it shall
furnish Executive with a written opinion that failure to report the Excise
Tax on Executive's applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a
result of the uncertainty in the application of Section 4999 at the time of
the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should
have been made ("Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 12(c) and Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
the Company of, or
11
<PAGE> 12
change in the amount of the payment by the Company of, the Gross-Up
Payment. Such notification shall be given as soon as practicable after
Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid; provided that the failure to give any notice pursuant
to this Section 12(c) shall not impair Executive's rights under this
Section 12 except to the extent the Company is materially prejudiced
thereby. Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which Executive gives such notice to
the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive
in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(1) give the Company any information reasonably requested by the
Company relating to such claim,
(2) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(3) cooperate with the Company in good faith in order effectively to
contest such claim, and
(4) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income, employment or other tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 12(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided further, that if the Company directs Executive
to pay such claim and sue for a refund, the Company shall advance the amount of
such payment to Executive on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income,
employment or other tax (including interest or penalties with respect to any
such taxes) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further, that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable
12
<PAGE> 13
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by Executive of an amount advanced by the Company
pursuant to Section 12(c), Executive becomes entitled to receive, and receives,
any refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of Section 12(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 12(c), a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
13. Payment for Options. In the event of a Control Termination of this
Agreement, Executive may elect, within sixty (60) days after such Control
Termination, to receive (in addition to any other amounts owed to Executive
under this Agreement) a lump sum payment in cash equal to the sum of the
following: (i) all or any portion of the number of shares of common stock of the
Company which may be acquired pursuant to options granted by the Company and
held by Executive at the time of such election, multiplied by the Conseco Put
Price; plus (ii) all or any portion of the number of Successor Securities which
may be acquired pursuant to options (which options were granted to Executive in
exchange or substitution for options to acquire the common stock of the Company)
held by Executive at the time of such election, multiplied by the Successor
Security Put Price; plus (iii) the number of shares of common stock of the
Company which were acquired pursuant to options granted by the Company which
were exercised, or which were discharged and satisfied by the payment to
Executive of cash or other property (other than options for Successor
Securities), in connection with the change in control subsequent to the first
public announcement of the transaction or event which led to the change in
control, multiplied by the respective per share exercise prices of such
exercised or discharged options. For purposes of calculating the above lump sum
payment, the options described in clauses (i) and (ii) shall include all such
options, whether or not then exercisable, and, to compensate Executive for the
loss of the potential future speculative value of unexercised options, there
shall not be any deduction of the respective per share exercise prices for any
of the options described in such clauses (i) and (ii). The cash payment due from
the Company pursuant to this Section 13 shall be made to Executive within ten
(10) days after the date of such election hereunder, against the execution and
delivery by Executive to the Company of an appropriate agreement confirming the
surrender to the Company of the options in respect of which the lump sum cash
payment is being made to Executive.
"Successor Securities" means any securities of any person received by the
holders of the common stock of the Company in exchange, substitution or payment
for, or upon conversion of, the common stock of the Company in connection with a
change in control.
"Conseco Put Price" means the greater of (i) the Change in Control Price or
(ii) the Current Market Price of the common stock of the Company.
13
<PAGE> 14
"Successor Security Put Price" means the greater of (i) the Change in
Control Price divided by the Exchange Ratio or (ii) the Current Market Price of
the Successor Securities.
"Current Market Price" for any security means the average of the daily
Prices per security for the twenty (20) consecutive trading days ending on the
trading day which is immediately prior to Executive's election under this
Section 13.
"Price" for any security means the average of the highest and lowest sales
price of such security (regular way) on a trading day as shown on the Composite
Tape of the New York Stock Exchange (or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading) or,
in case no sales take place on such day, the average of the closing bid and
asked prices on the New York Stock Exchange (or, if such security is not listed
or admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading) or,
if it is not listed or admitted to trading on any national securities exchange,
the average of the highest and lowest sales prices of such security on such day
as reported by the NASDAQ Stock Market, or in case no sales take place on such
day, the average of the closing bid and asked prices as reported by NASDAQ, or
if such security is not so reported, the average of the closing bid and asked
prices as furnished by any securities broker-dealer of recognized national
standing selected from time to time by the Company (or its successor in
interest) for that purpose.
"Change in Control Price" means (i) in the case of a change in control
which occurs solely as a result of a change in the composition of the Board of
Directors of the Company or which occurs in a transaction, or series of related
transactions, in which the same consideration is paid or delivered to all of the
holders of common stock of the Company (or, in the event of an election by
holders of the common stock of the Company of different forms of consideration,
if the same election is offered to all of the holders of common stock of the
Company), the Price per share of the common stock of the Company on the date on
which the change in control occurs, or if such date is not a trading day, then
the trading day immediately prior to such date, or (ii) in the case of a change
in control effected through a series of related transactions, or in a single
transaction in which less than all of the outstanding shares of common stock of
the Company is acquired, the highest price paid to the holders of common stock
of the Company in the transaction or series of related transactions whereby the
change in control takes place. In determining the highest price paid to the
holders pursuant to clause (ii) of the immediately preceding sentence, in the
case of Successor Securities paid or delivered to the holders of common stock of
the Company in exchange, payment or substitution for, or upon conversion of, the
common stock of the Company, the price paid to such holders shall be the Price
of such security at the time or times paid or delivered to such holders.
"Exchange Ratio" means, in connection with a change in control, the number
of Successor Securities to be paid or delivered to the holders of common stock
of the Company in exchange, payment or substitution for, or upon conversion of,
each share of such common stock.
14. Character of Termination Payments. The amounts payable to Executive
upon any termination of this Agreement shall be considered severance pay in
consideration of past services
14
<PAGE> 15
rendered on behalf of the Company and his continued service from the date hereof
to the date he becomes entitled to such payments. Executive shall have no duty
to mitigate his damages by seeking other employment and, should Executive
actually receive compensation from any such other employment, the payments
required hereunder shall not be reduced or offset by any such other
compensation.
15. Grant of Stock Option. On the Approval Date, the Company shall grant to
Executive, a nonqualified stock option under the Code to purchase One Million
Five Hundred Thousand (1,500,000) shares of common stock at the fair market
value per share of common stock on the Effective Date. Such stock option shall
expire ten (10) years after the Approval Date of grant and shall become
exercisable with respect to one-half of the shares covered on the third
anniversary of the Approval Date, with respect to one-quarter of such shares on
the fourth anniversary of the Approval Date and with respect to the remaining
one-quarter of such shares on the fifth anniversary of the Approval Date.
16. Arbitration of Disputes; Injunctive Relief.
(a) Except as specified in paragraph (b) below, any controversy or
claim arising out of or relating to this Agreement or the breach thereof,
shall be settled by binding arbitration in the City of Indianapolis,
Indiana, in accordance with the laws of the State of Indiana by three
arbitrators, one of whom shall be appointed by the Company, one by
Executive and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment
of a third arbitrator, then the third arbitrator shall be appointed by the
Chief Judge of the United States District Court for the Southern District
of Indiana. The arbitration shall be conducted in accordance with the rules
of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this Section.
Judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. In the event that it shall be necessary
or desirable for Executive to retain legal counsel and/or incur other costs
and expenses in connection with the enforcement of any and all of his
rights under this Agreement, the Company shall pay (or Executive shall be
entitled to recover from the Company, as the case may be) his reasonable
attorneys' fees and costs and expenses in connection with such rights,
regardless of the final outcome, unless the arbitrators shall determine
that under the circumstances recovery by Executive of all or a part of any
such fees and costs and expenses would be unjust.
(b) Executive acknowledges that a breach or threatened breach by
Executive of Section 8 of this Agreement will give rise to irreparable
injury to the Company and that money damages will not be adequate relief
for such injury. Notwithstanding paragraph (a) above, the Company and
Executive agree that the Company may seek and obtain injunctive relief,
including, without limitation, temporary restraining orders, preliminary
injunctions and/or permanent injunctions, in a court of proper jurisdiction
to restrain or prohibit a breach or threatened breach of Section 8 of this
Agreement. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from Executive.
15
<PAGE> 16
17. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified registered
mail to his residence, in the case of Executive, or to its principal offices in
the case of the Company.
18. Waiver of Breach and Severability. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by either party. In the
event any provision of this Agreement is found to be invalid or unenforceable,
it may be severed from the Agreement and the remaining provisions of the
Agreement shall continue to be binding and effective.
19. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally, but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought. This Agreement supersedes and
replaces all prior employment and compensatory agreements, understandings and
arrangements between Executive and the Company or any subsidiary of the Company.
20. Binding Agreement and Governing Law. This Agreement shall be binding
upon and shall insure to the benefit of the parties and their successors in
interest and shall be construed in accordance with and governed by the laws of
the State of Indiana. This Agreement is personal to each of the parties hereto,
and neither party may assign nor delegate any of its rights or obligations
hereunder without the prior written consent of the other.
16
<PAGE> 17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CONSECO, INC.
By: /s/ Rollin M. Dick /s/ Stephen C. Hilbert
--------------------------- ------------------------------
Rollin M. Dick Stephen C. Hilbert
"Company" "Executive"
17
<PAGE> 1
Exhibit 10.1.17
PROMISSORY NOTE
$23,000,000.00 Indianapolis, Indiana
April 6, 2000
FOR VALUE RECEIVED, the undersigned, STEPHEN C. HILBERT ("MAKER"), promises
to pay to the order of CONSECO, INC. (hereinafter called "LENDER," which term
shall include any holder hereof) at such place as Lender may designate by
written notice to Maker or, in the absence of such designation, at Lender's
Principal executive offices in Carmel, Indiana, or at such other location as
Lender may direct by written notice to Maker, the sum of Twenty Three Million
Dollars ($23,000,000.00) (hereinafter referred to as the "LOAN"), together with
interest as hereinafter provided and payable at the time and in the manner
hereinafter provided.
MATURITY
This Promissory Note ("Note") shall mature on that date (the "MATURITY
DATE") which is the earliest of: (i) April 5, 2002; (ii) termination of Maker's
employment with Conseco, Inc. ("CONSECO"), whether by election of Maker or
Conseco or by reason of Maker's death or disability; (iii) that date which is
seven (7) calendar days after the average of the high and low trading price of
Conseco's common stock on the New York Stock Exchange Composite Tape is $20.00
or more per share for ten (10) consecutive trading days; or (iv) that date on
which Lender accelerates payment of this Note in accordance with the terms
hereof. On the Maturity Date, the principal balance of the Loan outstanding on
such date, together with all accrued, unpaid interest thereon, shall be due and
payable in full.
INTEREST
The principal balance of the Loan outstanding from time to time from and
after the date of this Note (the "CLOSING DATE") shall bear interest (computed
on the basis of a 365-day year and actual days elapsed) as follows: (i) from and
after the Closing Date until the Maturity Date, at a rate per annum equal to
eight and one-half percent (8.5 %) per annum; and (ii) after the Maturity Date,
until paid in full, at ten and one-half percent (10.5 %) per annum.
MANNER OF PAYMENT
The interest which accrues on this Note shall be due and payable on the
last day of June, 2000, and thereafter on the last day of each successive
September, December, March and June until the Maturity Date. The principal of
the Loan and all unpaid, accrued interest thereon, shall be due and payable in
full on the Maturity Date. After the Maturity Date, if any principal of the Loan
remains unpaid, interest which accrues thereon shall be due and payable as it
accrues, without any further demand or notice. All amounts paid under this Note,
as received by Lender prior to the Maturity Date, shall be applied as follows:
(i) first, to the payment of interest accrued to the date of receipt of payment;
and (ii) the balance, if any, to principal of the Loan. All amounts paid under
this Note after the Maturity Date, as received, may be applied against the
interest and principal owed hereunder in such order as Lender may determine is
<PAGE> 2
appropriate in its discretion. All amounts payable under this Note shall be
payable without relief from valuation and appraisement laws, and with all
collection costs and reasonable attorneys' fees. The principal of this Note may
be prepaid in whole or in part at any time and from time to time without penalty
or premium.
SECURITY
This Note is secured by a Collateral Assignment and Security Agreement,
dated of even date, executed by Maker in favor of Lender (as the same may be
amended and/or restated from time to time, the "COLLATERAL ASSIGNMENT") and by a
Pledge Agreement, dated of even date, executed by Maker in favor of Lender (as
the same may be amended and/or restated from time to time and at any time, the
"PLEDGE AGREEMENT"; the Pledge Agreement and the Collateral Assignment are
referred to collectively as the "COLLATERAL AGREEMENTS".)
DEFAULT
Each of the following events shall constitute an "EVENT OF DEFAULT" for
purposes of this Note and each such Event of Default shall be deemed to exist
and continue so long as, but only so long as, it shall not have been remedied:
(a) Maker shall default in the payment for a period of ten (10) days from
the date when due of any amount payable under this Note or either of the
Collateral Agreements.
(b) There shall be a default in the due and punctual observance or
performance of any other agreement or covenant in this Note or either of the
Collateral Agreements and such default shall continue for a period of thirty
(30) calendar days after written notice specifying such default shall have been
given to Maker by Lender.
(c) Maker shall make a general assignment of assets for the benefit of
creditors or shall admit in writing inability to pay his debts as they become
due.
(d) A decree or order for relief by a court having jurisdiction in the
premises in respect of Maker shall be entered in an involuntary case under the
United States Bankruptcy Code, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of Maker or for all or substantially all the property of
Maker or ordering the winding up or liquidation of the affairs of Maker and the
continuance of any such decree or order unstayed and in effect for a period of
ninety (90) consecutive days.
(e) A voluntary case shall be commenced by Maker under the United States
Bankruptcy Code, as now constituted or hereafter amended, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or
Maker shall consent to the appointment of
2
<PAGE> 3
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Maker or for all or substantially
all the property of Maker or for any of the property and rights which comprise
the collateral under either of the Collateral Agreements.
(g) Any monies, deposits or other property of Maker now or hereafter on
deposit with or in the possession or under the control of Lender shall be
attached, levied upon, or become subject to distraint proceedings, garnishment
order or process of any court.
In the Event of Default, the entire unpaid balance of principal and
interest of this Note shall become due and payable immediately, without notice
or demand, at the election of Lender.
GENERAL PROVISIONS
Maker, and any endorser, surety, or guarantor, hereby waives presentment,
notice of dishonor, protest, notice of protest, and diligence in bringing suit
against any party hereto, waive the defenses of impairment of collateral for the
obligations evidenced hereby, impairment of a person against whom Lender has any
right of recourse, and any defenses of any accommodation maker and consent that
without discharging any of them, the time of payment of this Note may be
extended an unlimited number of times before or after maturity without notice to
Maker. Maker agrees that it will pay the obligations evidenced hereby,
irrespective of any action or lack of action on Lender's part in connection with
the acquisition, perfection, possession, enforcement, disposition, or
modification of all the obligations evidenced hereby or any and all security
therefore, and no omission or delay on Lender's part in exercising any right
against, or taking any action to collect from or pursue Lender's remedies
against any party hereto will release, discharge, or modify the duties of Maker
to make payments hereunder. Maker agrees that Lender, without notice to or
further consent from Maker, may release any collateral, security, document or
other guaranties now held or hereafter acquired, or substitute other guaranties,
and no such action will release, discharge or modify the duties of Maker
hereunder or under the Collateral Agreements. Maker agrees that Lender will not
be required to pursue or exhaust any of its rights or remedies against Maker or
any guarantor of the obligations evidenced hereby with respect to the payment of
any said obligations, or to pursue, exhaust or preserve any of Lender's rights
or remedies with respect to any collateral, security or other guaranties given
to secure said obligations. Maker waives any claim or other right it might now
have or hereafter acquire against any other person or entity that is primarily
or contingently liable on the obligations that arise from the existence or
performance of Maker's obligations under this Note, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, or any right to participate in any claim or remedy of Lender or
any collateral security which Lender now has or hereafter acquires, whether such
claim, remedy or right arises in equity, under contact or statute, at common
law, or otherwise. Nothing in this paragraph shall constitute or be deemed to be
a waiver or release by Maker of any of Maker's rights under his
<PAGE> 4
Employment Agreement (as such term is defined in the Collateral Assignment) or
any claim Maker now or hereafter may have under such Employment Agreement.
Neither Maker nor Lender by its execution or acceptance of this Note or the
Collateral Agreements is waiving or shall be deemed to have waived any of their
respective rights of set off or offset available at law with respect to any
claim each may have against the other.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security interest, collateral assignment, mortgage lien or other lien which
secures the obligations evidenced hereby shall remain in full force and effect
notwithstanding any such substitution, renewal, or extension.
The captions used herein are for references only and shall not be deemed a
part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected.
WAIVER OF RIGHT TO TRIAL BY JURY/JURISDICTION/GOVERNING LAW
MAKER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN
OR AMONG MAKER AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE, THE
COLLATERAL ASSIGNMENT, OR ANY OTHER RELATED DOCUMENT. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED IN THIS NOTE.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO ITS CHOICE OR
CONFLICTS OF LAWS PROVISIONS.
MAKER AND LENDER (BY ITS ACCEPTANCE HEREOF) AGREE THAT, SUBJECT TO THE
ARBITRATION PROVISIONS OF THIS NOTE, THE COURTS OF THE STATE OF INDIANA LOCATED
IN HAMILTON COUNTY, INDIANA, AND THE FEDERAL COURTS LOCATED IN THE SOUTHERN
DISTRICT OF INDIANA, MARION COUNTY, HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL
ACTIONS AND PROCEEDINGS INVOLVING THIS NOTE OR ANY COLLATERAL ASSIGNMENT MADE IN
CONNECTION HEREWITH AND MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO
SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH ACTION OR
PROCEEDING. MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION
THAT MAKER
<PAGE> 5
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING,
INCLUDING ANY CLAIM THAT SUCH COURT IS AN INCONVENIENT FORUM, AND CONSENTS TO
SERVICE OF PROCESS PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF.
FINAL JUDGMENT IN ANY SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR
WAIVED SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR AS OTHERWISE PROVIDED BY LAW.
ARBITRATION OF DISPUTES
Any controversy or claim arising out of or relating to this Note, the
indebtedness evidenced hereby, or the Collateral Assignment or the breach
thereof, shall be settled by binding arbitration in the City of Indianapolis,
Indiana, in accordance with the laws of the State of Indiana by three
arbitrators, one of whom shall be appointed by Lender, one by Maker and the
third of whom shall be appointed by the first two arbitrators. If the first two
arbitrators cannot agree on the appointment of a third arbitrator, then the
third arbitrator shall be appointed by the Chief Judge of the United States
District Court for the Southern District of Indiana. The arbitration shall be
conducted in accordance with the rules of the American Arbitration Association,
except with respect to the selection of arbitrators which shall be as provided
herein. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. No act to take or dispose of any of the
collateral under the Collateral Assignment ( collectively, the "ASSIGNMENT
COLLATERAL") shall constitute a waiver of this arbitration agreement or be
prohibited by this arbitration agreement. This arbitration agreement shall not
limit the right of any party during any dispute, claim or controversy to seek,
use, and employ ancillary, equitable or preliminary rights and/or remedies,
judicial or otherwise, for the purposes of realizing upon, preserving,
protecting, or foreclosing upon any of the Assignment Collateral or preventing
the same, and any such action shall not be deemed an election of remedies. Such
remedies include, without limitation, obtaining injunctive relief or a temporary
restraining order, obtaining a writ of attachment, garnishment, or imposition of
a receivership, bankruptcy or exercising any rights relating to the Assignment
Collateral, including taking or disposing of such property with or without
judicial process pursuant to applicable law or when applicable, a judgment. Any
disputes, claims or controversies concerning the lawfulness or reasonableness of
an act, or exercise of any right or remedy concerning any Assignment Collateral,
including any claim to rescind, reform, revoke, avoid or otherwise modify the
Collateral Assignment or any other agreement relating to the Assignment
Collateral, shall also be arbitrated; provided, however that no arbitrator shall
have the right or the power to enjoin or restrain any act of any party. Nothing
in this arbitration agreement shall preclude any party from seeking equitable
relief from a court of competent jurisdiction. The statute of limitations,
estoppel, waiver, laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall
be deemed the commencement of any action for these purposes.
<PAGE> 6
Executed and delivered this 6th day of April, 2000.
/s/ Stephen C. Hilbert
----------------------------------------
STEPHEN C. HILBERT
<PAGE> 1
EXHIBIT 10.1.18
PLEDGE AGREEMENT
FOR VALUE RECEIVED, STEPHEN C. HILBERT (hereinafter referred to as
"PLEDGOR"), hereby transfers, assigns, delivers, sets over, hypothecates and
pledges to CONSECO, INC. ("LENDER"), and grants to Lender a security interest
in, all of Pledgor's right, title and interest in and to the following (referred
to herein collectively as the "COLLATERAL"):
(a) All of Pledgor's right, title and interest in and to all of the common
capital stock of Conseco, Inc. identified on EXHIBIT A attached hereto
and made a part hereof for all purposes (such corporation hereinafter
being referred to as "ISSUER") now owned by Pledgor (collectively, the
"PLEDGED STOCK"), together with all certificates representing the
Pledged Stock and all cash, securities, dividends, interest and other
property at any time and from time to time declared, received,
receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Stock, and all securities hereafter
delivered to Pledgor in substitution for or in addition to any of the
foregoing, all certificates and instruments representing or evidencing
such securities, together with all cash, securities, interest,
dividends and other property at any time and from time to time
declared, received, receivable or otherwise distributed in respect of
or in exchange for any or all of the foregoing, (all of the foregoing
being referred to herein collectively as the "STOCK COLLATERAL");
(b) All income, payments and other distributions on or with respect to the
Stock Collateral; and
(c) All "proceeds" (as such term is defined in Section 9-306 of the
Indiana Uniform Commercial Code, as amended) of property described in
(a), (b), or (c) above.
The pledge and security interest hereby made and granted to Lender is given
to secure the performance and payment when due of the Indebtedness. As used
herein, the term "INDEBTEDNESS" shall mean, collectively:
(1) all indebtedness, obligations and liabilities, and all renewals
and extensions thereof, now or hereafter owed by Pledgor to
Lender, and evidenced by, arising under or in connection with or
by virtue of the Note or the Loan, whether such indebtedness,
obligations and liabilities are direct, indirect, fixed,
contingent, liquidated, unliquidated;
<PAGE> 2
(2) all extensions, renewals, amendments, restatements or
replacements of the foregoing, together with all costs, expenses
and reasonable attorneys' fees incurred by Lender in the
enforcement or collection of any of the foregoing; and
(3) all costs, expenses and reasonable attorneys' fees incurred by
Lender in the enforcement or collection of any of the foregoing
or in the enforcement of this Pledge Agreement.
As used in this Pledge Agreement, the term "NOTE" means the Promissory Note,
dated of even date, executed by Pledgor to the order of Lender in the original
principal amount of $23,000,000.00, as the same may be amended, renewed,
extended, replaced and/or restated from time to time and at any time. As used in
this Pledge Agreement, the term "LOAN" means the loan in the original principal
sum of $23,000,000 made by Lender to Pledgor and which is evidenced by the Note.
Pledgor represents and warrants to and agrees with Lender as follows:
1. Delivery of Possession/Representations and Warranties. Within ten (10)
days of the date of execution of this Pledge Agreement, and subject to the terms
and conditions hereof, Pledgor shall deliver, or cause to be delivered, to
Lender, the original share certificates or other instruments or documents
evidencing the Pledged Stock and all other Stock Collateral in existence on the
date hereof, and concurrently with the execution of this Pledge Agreement
Pledgor shall execute and deliver to Lender appropriate stock powers or other
instruments of assignment endorsed in blank. Pledgor represents and warrants to
Lender that:
(a) There are no restrictions on the transfer of any of the Pledged Stock,
other than may appear on the face of the certificates;
(b) The Pledged Stock is issued and registered in the name of Pledgor as
the legal and beneficial owner thereof and is duly authorized, validly
issued and fully paid and nonassessable;
(c) Pledgor has the right to transfer the Pledged Stock free of all
encumbrances without obtaining the consent of the Issuer thereof or
any other shareholder of the Issuer thereof, and Pledgor will defend
its title to and the pledge and security interest of Lender in the
Pledged Stock against the claims of all persons and entities;
(d) The pledge of, the grant of the security interest in, and the delivery
of the certificates evidencing the Stock Collateral are effective to
vest in Lender a valid and perfected first and prior security
interest, superior to the rights of any other person in and to the
Stock Collateral;
(e) Pledgor has and will maintain at all times full and absolute equitable
and legal title to and ownership of the Collateral, free of all
security interests, liens, encumbrances, charges, claims of third
parties and rights of set off or recoupment,
-2-
<PAGE> 3
excepting only the pledge and security interest granted pursuant to
this Pledge Agreement (collectively, the "PERMITTED SECURITY
INTERESTS"), and Pledgor has good right to pledge the Collateral and
to subject the Collateral to the pledge and security interests herein
granted; and
(f) This Pledge Agreement has been duly executed and delivered by Pledgor
and constitutes a legal, valid, and binding obligation of Pledgor,
enforceable in accordance with its terms.
Notice of acceptance of this Pledge Agreement by Lender is hereby waived.
2. Voting. Prior to maturity of the Note, Pledgor will have the right to
exercise all voting rights with respect to the Stock Collateral.
3. Dividends/Distributions. For so long as the Note has not matured and
except as provided in Paragraph 4 of this Pledge Agreement, Pledgor has the
right to receive any sums paid and any cash dividends and other distributions
made upon or in respect of any of the Stock Collateral, including without
limitation distributions made upon the liquidation or dissolution of the Issuer
(collectively, "DISTRIBUTIONS"). Except as provided in the preceding sentence,
all Distributions shall be paid over directly to Lender, and shall be held in
trust as additional Collateral for the Indebtedness, or, at the option of
Lender, applied against the Indebtedness in accordance with Paragraph 7 of this
Pledge Agreement. Pledgor agrees to take such action as Lender may reasonably
require to collect or enforce any claim for payment or other right or privilege
assigned to Lender pursuant to this Pledge Agreement.
4. Stock Dividends/Additional Collateral. In the event any additional
shares of capital stock of any Issuer are issued to Pledgor as a stock dividend
on any of the Stock Collateral as a result of any split of the Stock Collateral
by reclassification or otherwise, such additional shares will be immediately
delivered to Lender and will be subject to this Pledge Agreement as a part of
the Stock Collateral to the same extent as the original Stock Collateral.
Pledgor will cause any additional securities or property issued to or received
by it in respect of any of the Collateral, whether for value paid by it or
otherwise, to be delivered to Lender and pledged hereunder, in each case
accompanied by proper instruments of assignment duly executed in blank by
Pledgor.
-3-
<PAGE> 4
5. Covenants. Pledgor covenants and agrees that from and after the date
hereof and until the Indebtedness is fully satisfied or the Collateral is
otherwise released and delivered to Pledgor:
(a) Without the prior written consent of Lender, Pledgor will not: (i)
sell, assign, transfer, exchange, convert or otherwise dispose of, or
grant any option with respect to, the Collateral or any part thereof;
or (ii) take any other action with respect to any of the Collateral
that would impair the interest or rights of Lender or Pledgor in, to
or with respect to any of the Collateral;
(b) Without the prior written consent of Lender, Pledgor will not create,
incur or permit to exist any lien, security interest, or other
encumbrance in or against any of the Collateral, or any interest
therein, except for the Permitted Security Interests, will take any
and all action necessary to remove any lien, security interest or
encumbrance, and Pledgor will pay prior to the delinquency all taxes
and assessments against any of the Collateral;
(c) Pledgor will, at Pledgor's expense, duly and promptly execute and
deliver any and all further instruments and documents and take such
further action as Lender may deem reasonably necessary to perfect and
continue perfected the pledge and security interest granted in this
Pledge Agreement, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code
as in effect in each relevant jurisdiction and the giving of
appropriate notices to bailees or other parties in actual or
constructive possession of any of the Collateral, and Pledgor also
hereby authorizes Lender to file any such financing statement or
continuation statement without the signature of Pledgor to the extent
permitted by applicable law; and
(d) Immediately following the execution of this Pledge Agreement, Pledgor
shall give written notice to Issuer, together with a copy of this
Pledge Agreement, instructing Issuer in writing (which instructions by
their terms shall not be revocable by Pledgor) that upon receipt by
such Issuer of written notice from Lender, the Issuer is to pay all
Distributions, as and when payable, directly to Lender.
-4-
<PAGE> 5
6. Rights of Lender.
(a) In the event Pledgor fails or refuses to perform any of its covenants
and obligations under this Pledge Agreement, Lender may, but shall have no
obligation to, do all things deemed necessary or appropriate by it to fulfill
discharge of such covenants and obligations, and sums paid and expenses incurred
by Lender in connection therewith (including, without limitation, reasonable
attorneys' fees and expenses) shall be reimbursed by Pledgor on demand by
Lender, shall constitute a part of the Indebtedness and shall bear interest from
the date paid or incurred at a per annum rate equal to the rate at which
interest accrues on the principal balance of the Note after maturity. Pledgor
acknowledges and agrees that nothing contained herein shall obligate or impose
any duty upon Lender to assume any duties or obligations of Pledgor with respect
to the Collateral.
(b) Lender may hold any of the Collateral, endorsed or assigned in blank,
and may deliver any of the Collateral to the Issuer or other issuer thereof for
the purpose of making denominational exchanges or registrations or transfers or
for such other purpose in furtherance of this Pledge Agreement as Lender may
deem desirable.
7. Events of Default/Remedies. The occurrence of each of the following
events shall constitute an Event of Default under this Pledge Agreement ("EVENT
OF DEFAULT"):
(a) The occurrence of any "Event of Default" (as such term is defined in
the Note) and the acceleration of the maturity of the Note by Lender.
(b) Maturity of the Note by reason of the passage of time and the failure
of Pledgor to pay the entire unpaid balance of the Note within ten days of such
maturity.
(c) Breach or default by Pledgor of any of the terms of this Pledge
Agreement, which breach or default has continued for more than thirty (30) days
after written notice from Lender.
Upon the occurrence and during the continuance of an Event of Default, and
following ten (10) days' prior written notice, Lender may, itself or through one
or more nominees, at its option:
(i) exercise all rights and remedies of a pledgee and secured party
allowed by applicable law and this Pledge Agreement;
-5-
<PAGE> 6
(ii) cause the Stock Collateral and other securities included in the
Collateral to be registered in the name of Lender or its nominee or
cause new certificates evidencing the Stock Collateral and such other
securities to be issued;
(iii) exercise all voting and corporate rights at any meeting of any Issuer,
or otherwise, and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to
any Stock Collateral as if it were the absolute owner thereof; and
(iv) demand, collect, receive, settle, compromise, adjust, sue for,
foreclose or realize upon any of the Collateral, as Lender reasonably
may determine, and may receive, open and dispose of mail addressed to
Pledgor and endorse notes, checks, drafts, money orders, documents of
title or other evidences of payment, shipment or storage or any form
of Collateral on behalf of and in the name of Pledgor, as its
attorney-in-fact.
Further, Lender may, without demand and without advertisement, notice or
legal process of any kind (except as may be required by law), all of which
Pledgor waives, at any time or times (i) apply any cash dividends received by
Lender pursuant to Paragraph 3 of this Pledge Agreement to the Indebtedness in
accordance with this Paragraph 7, and (ii) if following such application there
remains outstanding any Indebtedness, sell the remaining Collateral, or any part
thereof, at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as Lender reasonably
shall deem appropriate. Lender shall be authorized at any such sale (if, on the
advice of counsel, it deems it advisable to do so) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with a
view to the distribution or resale thereof, and upon consummation of any such
sale Lender shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Lender shall comply with
all applicable federal and state securities laws in connection with any such
sale. Each such purchaser at any such sale shall hold the property sold
absolutely and free from any claim or right of Pledgor, and Pledgor hereby
waives (to the extent permitted by law) all rights of redemption, stay and/or
appraisal which Pledgor now has or may have at any time in the future under any
rule of law or statute now existing or hereafter enacted. The proceeds realized
from the sale of any Collateral shall be applied first to the reasonable costs,
expenses and attorneys' fees and expenses incurred by Lender for collection and
for acquisition, completion, protection, removal, sale and delivery of the
Collateral; and second to the remainder of the Indebtedness and applied in such
amounts and in such manner as Lender may determine in its sole discretion. If
any deficiency shall remain, Pledgor shall remain liable therefor.
-6-
<PAGE> 7
In addition thereto, Pledgor further agrees that in the event that notice
is necessary under applicable law, written notice given to Pledgor in the manner
specified herein for notice, ten (10) business days prior to the date of the
disposition of the Collateral at any such public sale or sale at any broker's
board or on any such securities exchange, or prior to the date after which
private sale or any other disposition of said Collateral will be made, shall
constitute reasonable and fair notice.
Pledgor irrevocably designates, makes, constitutes and appoints Lender (and
all persons designated by Lender) as Pledgor's true and lawful attorney, and
Lender, or Lender's designee may, without notice to Pledgor, and at such time or
times as Lender, in its reasonable discretion, may determine, in Pledgor's or
Lender's name: (i) do all acts and things necessary, in Lender's discretion, to
fulfill Pledgor's obligations under this Pledge Agreement; (ii) execute and
deliver stock powers and bond powers with respect to any of the Collateral; and
(iii) endorse the name of Pledgor upon any checks, notes, acceptances, money
orders, certificates, drafts or other forms of payment of security that come
into Lender's possession.
All remedies of Lender shall be cumulative to the full extent provided by
law. The pursuit by Lender of certain judicial or other remedies shall not abate
nor bar resort to other remedies with respect to all or some of the Collateral
and shall not bar other remedies with respect to the Indebtedness or to other
portions of the Collateral. Lender may exercise its rights to the Collateral
without resorting or regard to other collateral or sources of security or
reimbursement for the Indebtedness.
8. Limitations on Lender's Duty. Lender shall exercise reasonable care in
the custody and preservation of the Collateral, and shall be deemed to have
exercised such reasonable care if it takes such action for that purpose as
Pledgor shall request in writing, but failure of Lender to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure on the part of Lender to preserve or protect any rights with respect
to the Collateral against prior parties shall be deemed a failure to exercise
reasonable care in the custody or preservation of the Collateral. Except as
otherwise provided in the preceding sentence, Lender shall be accountable only
for amounts that it actually receives as a result of the exercise of powers
herein conferred, and neither it nor any of its officers, directors, employees
or agents shall be responsible to Pledgor for any act or failure to act or any
delay in acting, except for Lender's gross negligence or willful misconduct.
Except as otherwise provided in this Pledge Agreement, Lender shall not be under
any duty or obligation whatsoever to make or give any presentment, demand for
performance, notice of nonperformance, protest, notice of
-7-
<PAGE> 8
protest, or notice of dishonor in connection with any of the Indebtedness.
Pledgor recognizes that Lender may be unable to effect a public sale of any or
all of the Collateral by reason of certain prohibitions contained in applicable
laws, but it may be compelled to resort to one or more private sales thereof to
a restricted group of purchasers who will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale (if
otherwise conducted in a commercially reasonable manner) shall be deemed to have
been made in a commercially reasonable manner. Lender shall not be under any
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit any Issuer to register such securities for public sale under
applicable laws.
9. Waiver; Amendment. All rights and remedies of Lender expressed herein
are in addition to all other rights and remedies possessed by it. No delay on
the part of Lender in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy. No action of Lender permitted hereunder shall impair or affect the
rights of Lender in and to the Collateral. None of the terms or provisions of
this Pledge Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by Lender.
10. Termination. Upon full satisfaction of the Indebtedness and the other
obligations of Pledgor hereunder, or such earlier date that Lender voluntarily
releases the Collateral to Pledgor, Lender shall promptly cause to be
redelivered to Pledgor the Collateral, and this Pledge Agreement shall terminate
forthwith.
11. Successors and Assigns. This Pledge Agreement and all obligations of
Pledgor hereunder shall be binding upon Pledgor and its successors and assigns
and shall inure to the benefit of Lender and its successors and assigns. Without
Lender's prior consent Pledgor shall be entitled at Pledgor's option to transfer
and assign the Stock Collateral or any part thereof to the Trustee of the trust
established under the Stephen C. Hilbert Amended Trust Agreement, dated
December, 1996, provided that concurrently with any such transfer the Trustee of
such trust executes and delivers to Lender those documents reasonably required
by Lender to confirm and establish the continuation of the pledge and security
interest granted hereby in the Stock Collateral owned or held by such Trust and
to continue its perfection.
-8-
<PAGE> 9
12. Notices. Any and all notices or other communications required or
permitted under this Pledge Agreement shall be in writing and shall be
sufficiently given if in accordance with the terms of the Collateral Assignment
(as such term is defined in the Note.)
13. General. Wherever possible each provision of this Pledge Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under any such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
Executed and delivered as of the 6th day of April, 2000.
/s/ Stephen C. Hilbert
--------------------------------------------
Stephen C. Hilbert, for himself
("PLEDGOR")
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for the State of Indiana, County of
Marion, personally appeared Stephen C. Hilbert, who, being first duly sworn,
acknowledged execution of
-9-
<PAGE> 10
the foregoing Pledge Agreement and stated that the representations contained
therein are true and correct.
Witness my hand and Notarial Seal this 6th day of April, 2000.
/s/
(SEAL) ---------------------------------------------------------
Notary
____________________________________,
Public
(Printed Name)
I am a resident of
_______________ County, Indiana
My Commission Expires:
______________________________________
CONSENT AND ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges and consents to the pledge of the
Pledged Stock of which it is the Issuer, and (ii) by executing this Consent and
Acknowledgment it acknowledges receipt of a copy of this Pledge Agreement which
it agrees shall be deemed to constitute written notice of such pledge and of
irrevocable instructions from Pledgor that upon receipt of written notice from
Lender, it is to make all payments of Distributions directly to Lender.
Date: As of April, 2000
CONSECO, INC.
By: /s/ Rollin M. Dick
--------------------------------------------
Rollin M. Dick, Executive Vice President
--------------------------------------------
-10-
<PAGE> 11
Exhibit A to Pledge Agreement
PLEDGED STOCK
<TABLE>
<CAPTION>
Number of
Corporation Certificate No. Shares
----------------------------------------------------------------------
<S> <C> <C>
CONSECO, INC. FC57893 One Million
</TABLE>
-11-
<PAGE> 1
EXHIBIT 10.1.19
COLLATERAL ASSIGNMENT
THIS COLLATERAL ASSIGNMENT has been executed as of April 6, 2000, by
STEPHEN C. HILBERT ("ASSIGNOR") in favor of CONSECO, INC. ("ASSIGNEE").
RECITALS
1. Concurrently with execution of this Collateral Assignment, Assignee is
lending to Assignor a term loan in the original principal amount of Twenty-Three
Million Dollars ($23,000,000.00) (the "Loan"), which Loan is evidenced by a
Promissory Note, dated April 6, 2000, executed by Assignor to the order of
Assignee in the original principal amount of Twenty-Three Million Dollars
($23,000,000.00) (as the same may be amended, extended, renewed, replaced and/or
restated from time to time and at any time, the "NOTE").
2. It is a condition of extension of the Loan to Assignor that Assignor
execute and deliver to Assignee this Collateral Assignment.
ASSIGNMENT
NOW, THEREFORE, FOR VALUE RECEIVED Assignor hereby assigns, transfers and
sets over to Assignee, and grants to Assignee a security interest in, all of
Assignor's rights, title and interests, now existing or hereafter arising, in,
to or under the following (collectively, the "ASSIGNED PAYMENTS"):
(a) all bonus payments and distributions (howsoever named or referred
to) now or hereafter owed or to be paid to Assignor under or pursuant
to Section 5(b), Section 9(c) or any other Section of the Employment
Agreement (as such term is defined below);
(a) all severance payments and distributions (howsoever named or
referred to) now or hereafter owed or to be paid to Assignor under or
pursuant to Section 9(b), Section 11 or any other Section of the
Employment Agreement;
(a) all cash payments and distributions which hereafter may become
due and payable to Assignor under or pursuant to Section 13 of the
Employment Agreement;
(a) all salary and wage payments and distributions now or hereafter
owed or to be paid to Assignor under or pursuant to Section 5(a),
Section 9(c) or Section 10(a) of the Employment Agreement (all of such
salary and wage payments being referred to hereinafter collectively as
"WAGES"); with Assignor reserving and retaining the right to revoke,
terminate and cancel the inclusion of all or any part of the Wages as
part
<PAGE> 2
of the Assigned Payments subject to this Collateral Assignment, with
the right of revocation being exercisable without cause and at any
time upon written notice to Assignee and, to the extent Assignee is
not then the employer under the Employment Agreement, to the employer
under the Employment Agreement (the "EMPLOYER");
(a) all payments and distributions hereafter owed or to be paid to
Assignee under or pursuant to Section 12 of the Employment Agreement;
(a) all claims, options, privileges, rights, title and interests of
Assignor in or with respect to all of the foregoing; and
(a) all proceeds of the foregoing.
The foregoing assignment and grant of security interest is subject to all of the
terms and conditions of the Employment Agreement and subject to the following
additional conditions and provisions:
1. This Collateral Assignment is made to secure payment by Assignor of the
Indebtedness (as such term is defined below). Upon payment of the Indebtedness
in full, any balance of sums received by Assignee pursuant to this Collateral
Assignment from the Employer shall be paid by Assignee to Assignor or such other
person as Assignor may have directed by written notice to Assignee. This
Collateral Assignment assigns, transfers and sets over to Assignee the sole
right to collect from the Employer and to receive directly from the Employer
payment of each of the Assigned Payments when each becomes due and payable;
provided, however, that unless and until there shall be an "Event of Default"
(as such term is defined below) and Assignee shall have given written notice of
its declaration of default to the Employer (if such Employer is not Assignee)
and to Assignor, all payments and distributions of the Assigned Payments by the
Employer shall continue to be made directly to Assignor.
2. The Employer is hereby authorized to recognize Assignee's claims to
receive all Assigned Payments hereunder without investigating the reason for any
action taken by Assignee, or the validity or the amount of the Indebtedness or
the existence of any Event of Default, or the giving of any notice pursuant to
the terms of this Collateral Assignment or otherwise, or the application to be
made by Assignee of any amounts to be paid to Assignee. The sole signature of
Assignee shall be sufficient for the exercise of any rights under the Employment
Agreement assigned and transferred hereby and the sole receipt of Assignee for
any payments of Assigned Payments shall be a full discharge and release therefor
to the Employer. Checks for each Assigned Payments shall be drawn to the
exclusive order of Assignee if and when pursuant to the terms of Section 1 above
such Assigned Payments are to be made directly to Assignee.
<PAGE> 3
3. The exercise of any right, option, privilege or power given in this
Collateral Assignment or otherwise to Assignee shall be at the option of
Assignee, but (except as otherwise specifically required in this Collateral
Assignment) Assignee may exercise any such right, option, privilege or power
without notice to, or assent by, or affecting the liability of, or releasing any
interest hereby assigned by, Assignor.
4. Assignee may take or release other security and collateral for the
Indebtedness, may release any party primarily or secondarily liable for any of
the Indebtedness, may grant extensions, renewals or indulgences with respect to
the Indebtedness, or may apply to the Indebtedness in such order as Assignee
shall determine, the proceeds of the Assigned Payments received by Assignee by
reason of the exercise of its rights under this Collateral Assignment, without
resorting or regard to any other security.
5. Assignor hereby irrevocably appoints and constitutes Assignee as its
true and lawful attorney-in-fact with full power of substitution for and on
behalf of Assignor to request, demand, enforce payment of, collect and receive
the Assigned Payments and to endorse any checks, drafts or orders evidencing
payment of Assigned Payments. All Assigned Payments received by Assignee shall
be applied against the Indebtedness, as received.
6. Assignor hereby covenants, represents and warrants to Assignee that the
Assigned Payments are free and clear of any prior security interest, assignment,
lien or other encumbrance.
7. This Collateral Assignment shall not operate to release or relieve
Assignor, as an employee under the Employment Agreement, from the full
performance of all of Assignor's obligations and covenants under the Employment
Agreement. Assignor shall faithfully abide by, perform and discharge each and
every obligation, covenant and agreement to be performed by Assignor under the
Employment Agreement. Without the prior written consent of Assignee, Assignor
shall not further encumber any of the Assigned Payments. Assignor shall not
waive, excuse, condone or in any manner release or discharge the Employer under
the Employment Agreement of or from any obligation to pay the Assigned Payments,
except upon the prior written consent of Assignee.
8. As used in this Collateral Assignment, the following terms shall have
the meaning ascribed to them:
(a) "EMPLOYMENT AGREEMENT" shall mean the Employment Agreement,
between Conseco, Inc. and Assignor, dated as of January 1,1998, as
amended and /or restated through the date of this Collateral
Assignment and as the same may hereafter be amended, modified and/or
restated at any time and from time to time;
(b) "EVENT OF DEFAULT" shall have the meaning ascribed to such term
in the Note.
(c) "INDEBTEDNESS" shall mean all present and future indebtedness,
obligations and liabilities, and all renewals and extensions thereof,
now or hereafter owed to Assignee by Assignor and arising under, by
virtue of or pursuant to the Loan, the Note or this Collateral
<PAGE> 4
Assignment, together with all costs, expenses and reasonable
attorneys' fees incurred by Assignee in the enforcement or collection
thereof, whether such indebtedness, obligations and liabilities are
direct, indirect, fixed, contingent, liquidated, unliquidated, now
exist or hereafter arise;
9. Any notice required or permitted to be given under this Collateral
Assignment shall be sufficient if in writing and if sent by certified or
registered mail to his residence, in the case of Assignor, or to its principal
offices, in the case of Assignee.
10. The waiver by either party of a breach of any provision of this
Collateral Assignment by the other party shall not operate nor be construed as a
waiver of any subsequent breach by either party. In the event any provision of
this Collateral Assignment is found to be invalid or unenforceable or is
revoked, it may be severed from this Collateral Assignment and the remaining
provisions of this Collateral Assignment shall continue to be binding and
effective.
11. This Collateral Assignment may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. This Collateral
Assignment shall be binding upon and shall inure to the benefit of the parties
and their successors in interest and assigns and shall be construed in
accordance with and governed by the laws of the State of Indiana. At the request
of Assignee, Assignor shall execute such financing statements, notices and other
documents as Assignee from time to time reasonably may request to assure
vesting, effectiveness and perfection of the assignment and security interest
granted by this Collateral Assignment. This Collateral Assignment shall
terminate upon payment in full of the Indebtedness.
12. Any controversy or claim arising out of or relating to this Collateral
Assignment, the Note, the indebtedness evidenced hereby, or any other security
agreement, pledge agreement or security document given by Assignor to Assignee
with respect to the Indebtedness (the "Other Security Agreements"), shall be
settled by binding arbitration in the City of Indianapolis, Indiana, in
accordance with the laws of the State of Indiana by three arbitrators, one of
whom shall be appointed by Lender, one by Maker and the third of whom shall be
appointed by the first two arbitrators. If the first two arbitrators cannot
agree on the appointment of a third arbitrator, then the third arbitrator shall
be appointed by the Chief Judge of the United States District Court for the
Southern District of Indiana. The arbitration shall be conducted in accordance
with the rules of the American Arbitration Association, except with respect to
the selection of arbitrators which shall be as provided herein. Judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. No act to take or dispose of any of the collateral under
this Collateral Assignment or any of the Other Security Agreements shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This arbitration agreement shall not limit the right of
any party during any dispute, claim or controversy to seek, use, and employ
ancillary, equitable or preliminary rights and/or remedies, judicial or
otherwise, for the purposes of realizing upon, preserving, protecting, or
foreclosing upon any of the Assigned Payments or any other collateral under any
<PAGE> 5
of the Other Security Agreements, or preventing the same, and any such action
shall not be deemed an election of remedies. Such remedies include, without
limitation, obtaining injunctive relief or a temporary restraining order,
obtaining a writ of attachment, garnishment, or imposition of a receivership,
bankruptcy or exercising any rights relating to the Assigned Payments or other
such collateral, including taking or disposing of such property with or without
judicial process pursuant to applicable law or when applicable, a judgment. Any
disputes, claims or controversies concerning the lawfulness or reasonableness of
an act, or exercise of any right or remedy concerning the Assigned Payments or
any of the collateral under the Other Security Agreements, including any claim
to rescind, reform, revoke, avoid or otherwise modify this Collateral Assignment
or any of the Other Security Agreements, shall also be arbitrated; provided,
however that no arbitrator shall have the right or the power to enjoin or
restrain any act of any party. Nothing in this arbitration agreement shall
preclude any party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches and similar
doctrines which would otherwise be applicable in an action brought by a party
shall be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of any action for these
purposes.
IN WITNESS WHEREOF, Assignor has executed this Collateral Assignment as of
the 6th day of April, 2000.
/s/ Stephen C. Hilbert
------------------------------------------
Stephen C. Hilbert
Accepted:
CONSECO, INC.
By: /s/ Rollin M. Dick
----------------------------------------
Rollin M. Dick, Executive Vice President
<PAGE> 6
STATE OF INDIANA )
) SS:
COUNTY OF __________ )
Before me, a Notary Public in and for the State of Indiana, personally
appeared Stephen C. Hilbert, who being first duly sworn, acknowledged execution
of the foregoing Collateral Assignment as his voluntary act and deed.
/s/
____________________________________
_____________________, Notary Public
My commission expires:
____________________________
I am a resident of ________________ County, Indiana
<PAGE> 1
Exhibit 10.1.20
AGREEMENT
Conseco, Inc. ("Company") and Stephen C. Hilbert ("Executive") for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged have entered into this agreement as of April 28, 2000.
Recitals
A. Company and Executive are parties to an Employment Agreement dated as of
January 1, 1998 and amended and restated from time to time thereafter
including April 6, 2000 (the "Employment Agreement").
B. The parties wish to effect a termination of Executive's employment and to
provide for Executive's resignation of his positions with the Company and
its affiliates.
C. Capitalized terms not defined herein have the meanings ascribed in the
Employment Agreement.
D. Prior to termination of Executive's employment hereunder, Company has
granted to Executive 3-year options to purchase 2 million shares of the
Company's common stock under the Company's 1994 Stock and Incentive Plan
and the 1997 Non-qualified Stock Option Plan with an exercise price of the
mean of the high and the low sales prices reported on the NYSE Composite
Stock Tape for April 27, 2000.
Agreement
In consideration of the foregoing and the mutual covenants and undertakings
contained herein the parties agree as follows:
1. The parties agree that the Executive's employment is terminated effective
as of April 28, 2000 (the "Termination Date") and that their rights and
obligations are and will be fixed as though the Company terminated the
Executive's employment pursuant to Section 9(a) of the Employment Agreement
and such termination is not a "Control Termination."
2. Pursuant to and provided in Section 9(b) of the Employment Agreement the
Company will make a severance distribution to Executive on or before May 8,
2000 (the "Distribution Date") of (i) the Note, the Debt, and the
Collateral Documents and (ii) $49,382,165 minus additional interest
accruing at the rate of $5,356.16 per day from the Termination Date to the
Distribution Date less any withholding that the Company is required to
make.
3. Company will pay Executive a bonus pursuant to Section 5(b)(vi) of the
Employment Agreement that has accrued with respect to his first quarter of
fiscal year 2000 (his "First Quarter Payment"). However, if the First
Quarter Payment exceeds 25% of the Maximum Bonus payable with respect to
the entire fiscal year had Executive been employed for the full year,
Executive shall repay to the Company the excess.
<PAGE> 2
4. Executive hereby resigns all of his offices and positions as a director,
member or trustee with the Company and all of its subsidiaries, affiliates
and employee benefit plans or trusts.
5. The parties have contemporaneously entered into a Consulting Agreement
providing, among other things, that Executive will be available to perform
specified services during a three year term.
6. The existing rights of Executive and obligations of Company with regard to
indemnification of Executive that are not dependent upon Executive's
continued employment or holding an office or directorship with the Company
and indemnification rights under Company's current by-laws shall continue
and will not be amended to the prejudice of Executive's rights and
Company's obligations thereunder.
7. With regard to stock purchases before the Termination Date made by
Executive under the Company's Director and Officer Stock Purchase Plans
during the term of the Consulting Agreement the Company will continue to
treat Executive as though he were an employee/participant for purposes of
the Company's Director and Officer Stock Purchase Plans and the Company's
established practices and accommodations in connection therewith including
waivers of any guarantee fees and advancement of any interest payments due.
8. The Company agrees that it will use reasonable efforts to cause Executive
to be included at all times as an insured at the Company's cost under
Company officer and director liability insurance with regard to any acts,
actions, facts, circumstances, errors or omissions performed or occurring
prior to the Termination Date.
9. The Company and Executive will continue to honor their existing contractual
obligations to make premium payments when due in accordance with the terms
of various split-dollar insurance agreements between the Company and
Executive or trusts for the benefit of Executive or his family.
10. The parties agree to execute any and all additional documents and take all
actions reasonably required to more fully evidence or implement the intent
of the parties expressed herein.
11. This Agreement will be governed by the laws of the State of Indiana.
12. This Agreement has been duly authorized by each party and constitutes a
valid and binding obligation in accordance with its terms. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors in interest.
CONSECO, INC.
By /s/ Thomas J. Kilian
-------------------------------------
Thomas J. Kilian, President
/s/ Stephen C. Hilbert
-------------------------------------
Stephen C. Hilbert
<PAGE> 1
EXHIBIT 10.1.21
CONSULTING AGREEMENT
This Consulting Agreement made and entered into as of April 28, 2000 by and
between Stephen C. Hilbert ("Consultant") and Conseco, Inc. ("Conseco").
RECITALS
A. Conseco seeks to retain by contract a qualified Consultant to provide
certain consulting services to Conseco related to the businesses of Conseco and
its affiliates; and
B. Consultant has the necessary educational and business expertise to enter
into this Consulting Agreement for the rendition of consulting services pursuant
to the terms and conditions of this Agreement.
AGREEMENT
Now therefore, in consideration of the foregoing Recitals and the mutual
promises and covenants contained herein and each act done pursuant thereto, the
parties hereby agree as follows:
1. Term. The consulting period under this Agreement commences as of the
date of this Agreement and shall continue for 3 years.
2. Consulting Services. Conseco hereby engages Consultant to serve as a
consultant to Conseco, and Consultant hereby accepts such engagement, all in
accordance with and subject to the terms and conditions contained herein. The
Consultant hereby agrees to consult with Conseco by providing up to an average
of 25 hours per month giving financial and business advice and other consulting
services as may be reasonably requested by Conseco from time to time
("Services"). The Consultant shall perform the Services in a professional and
businesslike manner, and within guidelines established by Conseco, and the
Consultant shall comply with all applicable laws. The Consultant shall exercise
diligence and shall devote such time and effort as is required to properly and
timely perform the Services.
3. Representations. Consultant represents and warrants that Consultant is
not subject to any noncompetition or nondisclosure agreements, covenants or
restrictions or other agreements that would conflict with or prohibit Consultant
from providing any services hereunder. Conseco enters into this Agreement in
reliance upon such representations and warranties.
<PAGE> 2
4. Compensation and Other Provisions.
A. Conseco shall pay Consultant the amount of $1,000 per year, payable
monthly.
B. Conseco shall, at its expense, provide Consultant with health and dental
insurance coverage comparable to that provided to Conseco's Executive Officers
during the term hereof.
C. Conseco shall continue to provide security services for Consultant's
home comparable to those previously provided through December 31, 2000.
D. During the term hereof, Consultant shall be entitled to the use of
Conseco's jet aircraft so long as Conseco maintains aircraft for corporate use
for up to 20 round trips per year, subject to availability. Consultant shall
schedule such use at mutually convenient times and shall reimburse Conseco for
such use on the same basis as Conseco charges its Executives for such use.
E. Conseco shall reimburse Consultant for reasonable out-of-pocket expenses
(such as travel, entertainment and long-distance telephone expenses) which may
be incurred by Consultant directly in the performance of the Services at the
request of Conseco and after submission of written documentation by Consultant
reasonably satisfactory to Conseco.
5. Ownership of Work Product.
A. All the know-how, innovations, product ideas, inventions, discoveries,
improvements, procedures, programs, computer programs and specifications which
have been or may be developed, conceived or reduced to practice during the term
of this Agreement, whether or not in concert with other employees or shown or
delivered to Conseco, which are related to any services provided by Consultant
hereunder whether or not they are eligible for patent, copyright, trademark,
trade secret or other legal protection, shall be the property of Conseco, and
Consultant hereby assigns and transfers to Conseco all of its right, title and
interest in and to the same. Consultant agrees to execute, acknowledge, and
deliver to Conseco such documents of transfer and take such other actions, at
Conseco's expense, that Conseco may reasonably request.
B. Consultant will communicate to Conseco promptly any new product ideas
and all improvements Consultant makes or conceives (either solely or jointly
with others) during the term of this Agreement and conceived by Consultant
within a period of one (1) year thereafter (the "Period") if based on or related
to the confidential information of Conseco described in this Agreement, work or
research of Conseco or which results from or suggested by any work Consultant
may do for Conseco.
2
<PAGE> 3
C. The work product of the Services or any additional services under this
Agreement shall be owned solely and exclusively by Conseco and Consultant will
not have any rights with respect to the work product. To that end, Consultant
acknowledges and agrees that all such work product is considered to be "work
made for hire" and the exclusive property of Conseco. To the extent any of the
work product is not considered "work made for hire" under applicable law,
Consultant hereby assigns to Conseco all right, title, and interest in and to
its rights to such work product. Consultant agrees to execute, acknowledge, and
deliver to Conseco such documents of transfer and take such other actions, at
Conseco's expense, that Conseco may reasonably request. Further, Consultant
warrants to Conseco that all such work product shall be the original work of
Consultant and that Consultant shall not infringe any third party's rights
(including intellectual property rights); and Consultant agrees to indemnify,
defend, and hold Conseco harmless from and against any and all claims of
infringement. For the purposes of this Agreement, the term "work product" shall
mean the actual data and tangible materials provided to Conseco as a result of
Services pursuant to this Agreement, and all the means, methods, processes and
concepts which Consultant utilizes in creating such data and tangible materials.
6. Confidential Information.
A. Consultant acknowledges that in and as a result of his engagement with
Conseco, he has been and will be making use of, acquiring and/or adding to
confidential or proprietary information of Conseco of a special and unique
nature and value. As a material inducement to Conseco to enter into this
Agreement and to pay to Consultant the compensation stated in Section 4,
Consultant covenants and agrees that he shall not, at any time during or
following the term of his engagement, directly or indirectly, divulge or
disclose for any purpose whatsoever, any confidential or proprietary information
that has been obtained by or disclosed to him as a result of his engagement with
Conseco or any work product defined in Section 5, (collectively, "Information")
except to the extent that such Information (a) becomes a matter of public record
or is published in a newspaper, magazine or other periodical available to the
general public, other than as a result of any act or omission of Consultant, (b)
is required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that Consultant gives
prompt notice of such requirement to Conseco to enable Conseco to seek an
appropriate protective order or confidential treatment, or (c) is necessary to
perform properly Consultant's duties under this Agreement.
B. Consultant agrees that Consultant's obligation of confidentiality shall
survive the cancellation or expiration of this Agreement for so long as is
necessary to give effect to the express confidentiality provisions of this
Agreement. Also, Consultant agrees not to disclose to any other person the fact
that the Information has been made available or developed or any of the terms,
conditions, or other facts relating to this Agreement, except as required by
applicable law, in which case Consultant will provide Conseco with prior written
notice so that Conseco may have the opportunity to seek an appropriate
protective order.
3
<PAGE> 4
7. Covenants Against Competition and Solicitation. Consultant acknowledges
that the services he is to render to the Company are of a special and unusual
character, with a unique value to the Company, the loss of which cannot
adequately be compensated by damages or an action at law. In view of the unique
value to the Company of the services of Consultant for which the Company has
contracted hereunder, because of the confidential information to be obtained by,
or disclosed to, Consultant as hereinabove set forth, and as a material
inducement to the Company to enter into this Agreement and to pay to Consultant
the compensation stated in Section 4, as well as any additional benefits stated
herein, and other good and valuable consideration, Consultant covenants and
agrees that throughout the term hereof, Consultant shall not, directly or
indirectly, anywhere in the United States of America (i) render any services, as
an agent, independent contractor, consultant or otherwise, or become employed or
compensated by, any other corporation, person or entity engaged in the business
of selling or providing life, accident or health insurance products or services;
(ii) render any services, as an agent, independent contractor, consultant or
otherwise, or become employed or compensated by, any other corporation, person
or entity engaged in the business of selling or providing any lending or other
financial products or services that are competitive with the lending or other
financial products or services sold or provided by the Company or its
subsidiaries, (iii) in any manner compete with the Company or any of its
subsidiaries; (iv) solicit or attempt to convert to other insurance carriers,
finance companies or other corporations, persons or other entities providing
these same or similar products or services provided by the Company and its
subsidiaries, any customers or policyholders of the Company, or any of its
subsidiaries; or (v) solicit for employment or employ any employee of the
Company or any of its subsidiaries. Should any particular covenant or provision
of this Section 7 be held unreasonable or contrary to public policy for any
reason, including, without limitation, the time period, geographical area, or
scope of activity covered by any restrictive covenant or provision, the Company
and Consultant acknowledge and agree that such covenant or provision shall
automatically be deemed modified such that the contested covenant or provision
shall have the closest effect permitted by applicable law to the original form
and shall be given effect and enforced as so modified to whatever extent would
be reasonable and enforceable under applicable law.
8. Independent Contractor. It is expressly understood by the parties hereto
that the Consultant shall be an independent contractor and not an employee of
Conseco. Consultant shall be free to engage in the activities not inconsistent
with the terms of this Agreement. Consultant shall not be an agent of Conseco
and shall have no authority to act for or bind Conseco and shall not represent
such authority to third parties. Conseco shall have no control over or right to
control or direct the business of the Consultant or the manner in which the
Consultant approaches and performs the Services, except as provided in paragraph
2 above. As an independent contractor, the Consultant specifically understands
that Consultant shall not be treated as an employee of Conseco for purposes of
employee benefits, social security benefits and taxes, any other employment
taxes, or unemployment and worker's compensation benefits except that Consultant
may participate in Conseco's medical and dental insurance benefits as provided
in Section 4. The Consultant shall be liable for any and all Federal and state
income and employment taxes and worker's compensation insurance. Conseco shall
treat
4
<PAGE> 5
the Consultant as an independent contractor for purposes of filing any
information returns which may be required pursuant to the Internal Revenue Code
of 1986, as amended, or any state tax law.
9. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
Consultant's residence, or if to Conseco directed to the attention of: John J.
Sabl, Executive Vice President, General Counsel and Secretary, Conseco, Inc.,
11815 North Pennsylvania Street, P.O. Box 1911, Carmel, Indiana 46032, or to
such other address as a party may specify to the other party in writing from
time to time.
10. Waiver of Breach and Severability. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach. In the event any provision
of this Agreement is found to be invalid or unenforceable, it may be severed
from the Agreement and the remaining provisions of the Agreement shall continue
to be binding and effective.
11. Survival. The parties agree that all provisions of paragraphs 3, 5, 6
and 7, and all subparagraphs thereof, shall survive the termination of this
Agreement.
12. Entire Agreement; Conflict. This Agreement and the Agreement of even
date herewith relating to the separation of Consultant as employee of Conseco
contain the entire agreement of the parties and supersede any prior discussions,
understandings and agreements between them respecting the subject matter of this
Agreement. This Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
13. Binding Agreement and Governing Law. This Agreement may not be assigned
by a party without the prior written consent of the other party. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
permitted successors in interest and shall be construed in accordance with and
governed by the laws of the State of Indiana.
14. Arbitration of Disputes. Except as specified in Sections 6 or 7 above
or Section 15 below, any controversy or claim arising out of or relating to this
Agreement or the breach thereof, shall be settled by binding arbitration in the
City of Indianapolis, Indiana, in accordance with the laws of the State of
Indiana by three arbitrators, one of whom shall be appointed by Conseco, one by
Consultant and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the Chief
Judge of the United States District Court for the Southern District of Indiana.
The arbitration shall be conducted in accordance with the rules of the American
Arbitration Association, except with respect to the
5
<PAGE> 6
selection of arbitrators which shall be as provided in this Section. Judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
15. Injunctive Relief. Consultant acknowledges that a breach or threatened
breach by Consultant of Section 6 or 7 of this Agreement will give rise to
irreparable injury to the Company and that money damages will not be adequate
relief for such injury. Notwithstanding Section 14 above, the Company and
Consultant agree that the Company may seek and obtain injunctive relief,
including, without limitation, temporary restraining orders, preliminary
injunctions and/or permanent injunctions, in a court of proper jurisdiction to
restrain or prohibit a breach or threatened breach of Section 6 or 7 of this
Agreement. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from Consultant.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be effective as of the date first above written.
/s/ Stephen C. Hilbert
------------------------------------------
Stephen C. Hilbert
"Consultant"
Conseco, Inc.
By: /s/ Thomas J. Kilian
---------------------------------------
Thomas J. Kilian,
President
"Conseco"
6
<PAGE> 1
Exhibit 10.1.22
AGREEMENT
Conseco, Inc. ("Company") and Rollin M. Dick ("Executive") for good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged have entered into this agreement as of April 28, 2000.
Recitals
A. Company and Executive are parties to an Employment Agreement dated as of
July 1, 1991 and amended and restated on December 15, 1999 (the "Employment
Agreement").
B. The parties wish to effect a termination of Executive's employment and to
provide for Executive's resignation of his positions with the Company and
its affiliates.
C. Capitalized terms not defined herein have the meanings ascribed in the
Employment Agreement.
D. Prior to termination of Executive's employment hereunder, Company has
granted to Executive 3-year options to purchase 600,000 shares of the
Company's common stock under the Company's 1994 Stock and Incentive Plan
and the 1997 Non-qualified Stock Option Plan with an exercise price of the
mean of the high and the low sales prices reported on the NYSE Composite
Stock Tape for April 27, 2000.
Agreement
In consideration of the foregoing and the mutual covenants and undertakings
contained herein the parties agree as follows:
1. The parties agree that the Executive's employment is terminated effective
as of April 28, 2000 (the "Termination Date") and that their rights and
obligations are and will be fixed as though the Company terminated the
Executive's employment pursuant to Section 10(a) of the Employment
Agreement and such termination is not a "Control Termination."
2. Pursuant to and provided in Section 10(b) of the Employment Agreement, the
Company will pay Executive's Base Salary through December 31, 2001 and all
other unpaid amounts previously accrued or awarded as provided in Section
10(b) less any withholding that the Company is required to make.
3. Executive hereby resigns all of his offices and positions as a director,
member or trustee with the Company and all of its subsidiaries, affiliates
and employee benefit plans or trusts.
4. The parties have contemporaneously entered into a Consulting Agreement
providing, among other things, that Executive will be available to perform
specified services during a three year term.
<PAGE> 2
5. The existing rights of Executive and obligations of Company with regard to
indemnification of Executive that are not dependent upon Executive's
continued employment or holding an office or directorship with the Company
and indemnification rights under Company's current by-laws shall continue
and will not be amended to the prejudice of Executive's rights and
Company's obligations thereunder.
6. With regard to stock purchases before the Termination Date made by
Executive under the Company's Director and Officer Stock Purchase Plans
during the term of the Consulting Agreement the Company will continue to
treat Executive as though he were an employee/participant for purposes of
the Company's Director and Officer Stock Purchase Plans and the Company's
established practices and accommodations in connection therewith including
waivers of any guarantee fees and advancement of any interest payments due.
7. The Company agrees that it will use reasonable efforts to cause Executive
to be included at all times as an insured at the Company's cost under
Company officer and director liability insurance with regard to any acts,
actions, facts, circumstances, errors or omissions performed or occurring
prior to the Termination Date.
8. The Company and Executive will continue to honor their existing contractual
obligations to make premium payments when due in accordance with the terms
of various split-dollar insurance agreements between the Company and
Executive or trusts for the benefit of Executive or his family.
9. The parties agree to execute any and all additional documents and take all
actions reasonably required to more fully evidence or implement the intent
of the parties expressed herein.
10. This Agreement will be governed by the laws of the State of Indiana.
11. This Agreement has been duly authorized by each party and constitutes a
valid and binding obligation in accordance with its terms. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors in interest.
CONSECO, INC.
By /s/ Thomas J. Kilian
--------------------------------------
Thomas J. Kilian, President
/s/ Rollin M. Dick
--------------------------------------
Rollin M. Dick
<PAGE> 1
Exhibit 10.1.23
CONSULTING AGREEMENT
This Consulting Agreement made and entered into as of April 28, 2000 by and
between Rollin M. Dick ("Consultant") and Conseco, Inc. ("Conseco").
RECITALS
A. Conseco seeks to retain by contract a qualified Consultant to provide
certain consulting services to Conseco related to the businesses of Conseco and
its affiliates; and
B. Consultant has the necessary educational and business expertise to enter
into this Consulting Agreement for the rendition of consulting services pursuant
to the terms and conditions of this Agreement.
AGREEMENT
Now therefore, in consideration of the foregoing Recitals and the mutual
promises and covenants contained herein and each act done pursuant thereto, the
parties hereby agree as follows:
1. Term. The consulting period under this Agreement commences as of the
date of this Agreement and shall continue for 3 years.
2. Consulting Services. Conseco hereby engages Consultant to serve as a
consultant to Conseco, and Consultant hereby accepts such engagement, all in
accordance with and subject to the terms and conditions contained herein. The
Consultant hereby agrees to consult with Conseco by providing up to an average
of 25 hours per month giving financial and business advice and other consulting
services as may be reasonably requested by Conseco from time to time
("Services"). The Consultant shall perform the Services in a professional and
businesslike manner, and within guidelines established by Conseco, and the
Consultant shall comply with all applicable laws. The Consultant shall exercise
diligence and shall devote such time and effort as is required to properly and
timely perform the Services.
3. Representations. Consultant represents and warrants that Consultant is
not subject to any noncompetition or nondisclosure agreements, covenants or
restrictions or other agreements that would conflict with or prohibit Consultant
from providing any services hereunder. Conseco enters into this Agreement in
reliance upon such representations and warranties.
<PAGE> 2
4. Compensation and Other Provisions.
A. Conseco shall pay Consultant the amount of $1,000 per year, payable
monthly.
B. Conseco shall, at its expense, provide Consultant with health and dental
insurance coverage comparable to that provided to Conseco's Executive Officers
during the term hereof.
C. During the term hereof, Consultant shall be entitled to the use of
Conseco's jet aircraft so long as Conseco maintains aircraft for corporate use
for up to 10 round trips per year, subject to availability. Consultant shall
schedule such use at mutually convenient times and shall reimburse Conseco for
such use on the same basis as Conseco charges its Executives for such use.
D. Conseco shall reimburse Consultant for reasonable out-of-pocket expenses
(such as travel, entertainment and long-distance telephone expenses) which may
be incurred by Consultant directly in the performance of the Services at the
request of Conseco and after submission of written documentation by Consultant
reasonably satisfactory to Conseco.
5. Ownership of Work Product.
A. All the know-how, innovations, product ideas, inventions, discoveries,
improvements, procedures, programs, computer programs and specifications which
have been or may be developed, conceived or reduced to practice during the term
of this Agreement, whether or not in concert with other employees or shown or
delivered to Conseco, which are related to any services provided by Consultant
hereunder whether or not they are eligible for patent, copyright, trademark,
trade secret or other legal protection, shall be the property of Conseco, and
Consultant hereby assigns and transfers to Conseco all of its right, title and
interest in and to the same. Consultant agrees to execute, acknowledge, and
deliver to Conseco such documents of transfer and take such other actions, at
Conseco's expense, that Conseco may reasonably request.
B. Consultant will communicate to Conseco promptly any new product ideas
and all improvements Consultant makes or conceives (either solely or jointly
with others) during the term of this Agreement and conceived by Consultant
within a period of one (1) year thereafter (the "Period") if based on or related
to the confidential information of Conseco described in this Agreement, work or
research of Conseco or which results from or suggested by any work Consultant
may do for Conseco.
C. The work product of the Services or any additional services under this
Agreement shall be owned solely and exclusively by Conseco and Consultant will
not have any rights with respect to the work product. To that end, Consultant
acknowledges and agrees that all such work product is considered to be "work
made for hire" and the exclusive property of Conseco. To the extent any of the
work product is not considered "work made for hire" under applicable law,
Consultant hereby assigns to Conseco all right, title, and interest in and to
its rights to such work
2
<PAGE> 3
product. Consultant agrees to execute, acknowledge, and deliver to Conseco such
documents of transfer and take such other actions, at Conseco's expense, that
Conseco may reasonably request. Further, Consultant warrants to Conseco that all
such work product shall be the original work of Consultant and that Consultant
shall not infringe any third party's rights (including intellectual property
rights); and Consultant agrees to indemnify, defend, and hold Conseco harmless
from and against any and all claims of infringement. For the purposes of this
Agreement, the term "work product" shall mean the actual data and tangible
materials provided to Conseco as a result of Services pursuant to this
Agreement, and all the means, methods, processes and concepts which Consultant
utilizes in creating such data and tangible materials.
6. Confidential Information.
A. Consultant acknowledges that in and as a result of his engagement with
Conseco, he has been and will be making use of, acquiring and/or adding to
confidential or proprietary information of Conseco of a special and unique
nature and value. As a material inducement to Conseco to enter into this
Agreement and to pay to Consultant the compensation stated in Section 4,
Consultant covenants and agrees that he shall not, at any time during or
following the term of his engagement, directly or indirectly, divulge or
disclose for any purpose whatsoever, any confidential or proprietary information
that has been obtained by or disclosed to him as a result of his engagement with
Conseco or any work product defined in Section 5, (collectively, "Information")
except to the extent that such Information (a) becomes a matter of public record
or is published in a newspaper, magazine or other periodical available to the
general public, other than as a result of any act or omission of Consultant, (b)
is required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that Consultant gives
prompt notice of such requirement to Conseco to enable Conseco to seek an
appropriate protective order or confidential treatment, or (c) is necessary to
perform properly Consultant's duties under this Agreement.
B. Consultant agrees that Consultant's obligation of confidentiality shall
survive the cancellation or expiration of this Agreement for so long as is
necessary to give effect to the express confidentiality provisions of this
Agreement. Also, Consultant agrees not to disclose to any other person the fact
that the Information has been made available or developed or any of the terms,
conditions, or other facts relating to this Agreement, except as required by
applicable law, in which case Consultant will provide Conseco with prior written
notice so that Conseco may have the opportunity to seek an appropriate
protective order.
7. Covenants Against Competition and Solicitation. Consultant acknowledges
that the services he is to render to the Company are of a special and unusual
character, with a unique value to the Company, the loss of which cannot
adequately be compensated by damages or an action at law. In view of the unique
value to the Company of the services of Consultant for which the Company has
contracted hereunder, because of the confidential information to be obtained by,
or disclosed to, Consultant as hereinabove set forth, and as a material
inducement to the Company to enter into this Agreement and to pay to Consultant
the compensation stated in Section 4, as well as any additional benefits stated
herein, and other good and valuable consideration, Consultant covenants and
agrees that throughout the term hereof, Consultant shall
3
<PAGE> 4
not, directly or indirectly, anywhere in the United States of America (i) render
any services, as an agent, independent contractor, consultant or otherwise, or
become employed or compensated by, any other corporation, person or entity
engaged in the business of selling or providing life, accident or health
insurance products or services; (ii) render any services, as an agent,
independent contractor, consultant or otherwise, or become employed or
compensated by, any other corporation, person or entity engaged in the business
of selling or providing any lending or other financial products or services that
are competitive with the lending or other financial products or services sold or
provided by the Company or its subsidiaries, (iii) in any manner compete with
the Company or any of its subsidiaries; (iv) solicit or attempt to convert to
other insurance carriers, finance companies or other corporations, persons or
other entities providing these same or similar products or services provided by
the Company and its subsidiaries, any customers or policyholders of the Company,
or any of its subsidiaries; or (v) solicit for employment or employ any employee
of the Company or any of its subsidiaries. Should any particular covenant or
provision of this Section 7 be held unreasonable or contrary to public policy
for any reason, including, without limitation, the time period, geographical
area, or scope of activity covered by any restrictive covenant or provision, the
Company and Consultant acknowledge and agree that such covenant or provision
shall automatically be deemed modified such that the contested covenant or
provision shall have the closest effect permitted by applicable law to the
original form and shall be given effect and enforced as so modified to whatever
extent would be reasonable and enforceable under applicable law.
8. Independent Contractor. It is expressly understood by the parties
hereto that the Consultant shall be an independent contractor and not an
employee of Conseco. Consultant shall be free to engage in the activities not
inconsistent with the terms of this Agreement. Consultant shall not be an agent
of Conseco and shall have no authority to act for or bind Conseco and shall not
represent such authority to third parties. Conseco shall have no control over or
right to control or direct the business of the Consultant or the manner in which
the Consultant approaches and performs the Services, except as provided in
paragraph 2 above. As an independent contractor, the Consultant specifically
understands that Consultant shall not be treated as an employee of Conseco for
purposes of employee benefits, social security benefits and taxes, any other
employment taxes, or unemployment and worker's compensation benefits except that
Consultant may participate in Conseco's medical and dental insurance benefits as
provided in Section 4. The Consultant shall be liable for any and all Federal
and state income and employment taxes and worker's compensation insurance.
Conseco shall treat the Consultant as an independent contractor for purposes of
filing any information returns which may be required pursuant to the Internal
Revenue Code of 1986, as amended, or any state tax law.
9. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
Consultant's residence, or if to Conseco directed to the attention of: John J.
Sabl, Executive Vice President, General Counsel and Secretary, Conseco, Inc.,
11815 North Pennsylvania Street, P.O. Box 1911, Carmel, Indiana 46032, or to
such other address as a party may specify to the other party in writing from
time to time.
4
<PAGE> 5
10. Waiver of Breach and Severability. The waiver by either party of a
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach. In the event any provision
of this Agreement is found to be invalid or unenforceable, it may be severed
from the Agreement and the remaining provisions of the Agreement shall continue
to be binding and effective.
11. Survival. The parties agree that all provisions of paragraphs 3, 5, 6
and 7, and all subparagraphs thereof, shall survive the termination of this
Agreement.
12. Entire Agreement; Conflict. This Agreement and the Agreement of even
date herewith relating to the separation of Consultant as employee of Conseco
contain the entire agreement of the parties and supersede any prior discussions,
understandings and agreements between them respecting the subject matter of this
Agreement. This Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
13. Binding Agreement and Governing Law. This Agreement may not be assigned
by a party without the prior written consent of the other party. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
permitted successors in interest and shall be construed in accordance with and
governed by the laws of the State of Indiana.
14. Arbitration of Disputes. Except as specified in Sections 6 or 7 above
or Section 15 below, any controversy or claim arising out of or relating to this
Agreement or the breach thereof, shall be settled by binding arbitration in the
City of Indianapolis, Indiana, in accordance with the laws of the State of
Indiana by three arbitrators, one of whom shall be appointed by Conseco, one by
Consultant and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the Chief
Judge of the United States District Court for the Southern District of Indiana.
The arbitration shall be conducted in accordance with the rules of the American
Arbitration Association, except with respect to the selection of arbitrators
which shall be as provided in this Section. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
15. Injunctive Relief. Consultant acknowledges that a breach or threatened
breach by Consultant of Section 6 or 7 of this Agreement will give rise to
irreparable injury to the Company and that money damages will not be adequate
relief for such injury. Notwithstanding Section 14 above, the Company and
Consultant agree that the Company may seek and obtain injunctive relief,
including, without limitation, temporary restraining orders, preliminary
injunctions and/or permanent injunctions, in a court of proper jurisdiction to
restrain or prohibit a breach or threatened breach of Section 6 or 7 of this
Agreement. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from Consultant.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.
/s/ Rollin M. Dick
----------------------------------------
Rollin M. Dick
"Consultant"
Conseco, Inc.
By: /s/ Thomas J. Kilian
-------------------------------------
Thomas J. Kilian,
President
"Conseco"
<PAGE> 1
EXHIBIT 10.1.24
SECOND AMENDMENT AGREEMENT
THIS SECOND AMENDMENT AGREEMENT, dated as of November 1, 1999 (this
"Agreement"), is by and between Conseco Finance Corp. (fka Green Tree Financial
Corporation), a Delaware corporation (the "Company") and Lawrence M. Coss (the
"Executive").
WITNESSETH:
WHEREAS, the Company and the Executive are parties to a Noncompetition
Agreement dated as of February 9, 1996, as amended as of April 6, 1998 (as so
amended the "Noncompetition Agreement");
WHEREAS, the Company and the Executive desire to amend the Noncompetition
Agreement as set forth below, effective as of November 1, 1999.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
AMENDMENTS
Article V of the Noncompetition Agreement shall be amended to add the
following language at the end thereof:
Notwithstanding the foregoing the Company will discontinue
providing Mr. Coss a security person as of October 31, 1999, a
personal secretary as of November 30, 1999 and office space as of
December 31, 1999 and in lieu thereof shall make the following
payments to Mr. Coss on the respective dates set forth below:
November 30, 1999 $ 19,000
June 30, 2000 $171,000
June 20, 2001 $171,600
June 30, 2002 $171,600
ARTICLE II
MISCELLANEOUS
This Agreement shall be binding upon and shall inure to the benefit of the
Company, its successors and assigns.
<PAGE> 2
All other provisions of the Noncompetition Agreement not specifically
amended hereby shall remain in full force and effect.
This Agreement shall be construed and interpreted under the applicable
laws and decisions of the State of Minnesota.
The provisions of this Agreement shall be considered severable and the
invalidity of one shall not render invalid or impair the binding nature and
effect of any other provision contained herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CONSECO FINANCE CORP.
By: /s/ Rollin M. Dick
--------------------------
Name: Rollin M. Dick
------------------------
Its: Executive Vice President
------------------------
/s/ Lawrence M. Coss
-------------------------
Lawrence M. Coss
2
<PAGE> 1
Exhibit 10.1.25
PROMISSORY NOTE
$1,000,000.00 Saint Paul, Minnesota
July 1, 1999
FOR VALUE RECEIVED, I hereby promise to pay to Green Tree Financial
Corporation ("Green Tree"), a Delaware corporation, the sum of One Million and
00/100 Dollars ($1,000,000.00). The unpaid principal amount of this note,
together with interest thereon at the rate of 7% per annum, shall be due and
payable upon the earlier of (i) June 30, 2000; and (ii) the date of the
undersigned's voluntary termination of employment with Green Tree.
Payments made hereunder shall be made at 1100 Landmark Towers, Saint Paul,
Minnesota. This note, together with accrual interest, may be paid in full or in
part at any time without premium or penalty.
/s/ Bruce A. Crittenden
---------------------------
Bruce A. Crittenden
10 Lake Court
North Oaks, Minnesota 55127
<PAGE> 1
Exhibit 10.1.26
PROMISSORY NOTE
$201,693.00 Saint Paul Minnesota
November 20, 1997
FOR VALUE RECEIVED, I hereby promise to pay to the order of Green Tree
Financial Corporation ("Green Tree"), a Delaware corporation, on demand the sum
of Two Hundred One Thousand Six Hundred Ninety-Three and 00/100 Dollars
($201,693.00), together with interest on the unpaid principal balance at the
rate of 6.00% per annum from the date above until paid in full. Accrued interest
shall be paid annually on December 31 of each year beginning in 1998. If demand
is not sooner made, the unpaid principal amount of this note, together with all
unpaid and accrued interest, shall be due and payable upon the earlier of: (i)
30 days after the date of my resignation or other termination of employment with
Green Tree or any of its subsidiaries; or (ii) November 19, 2000.
Payments made hereunder shall be made at 1100 Landmark Towers, Saint Paul,
Minnesota, and shall be applied initially to accrued interest and, thereafter,
to reduction of principal. This note may be paid in full or in part at any time
without premium or penalty.
/s/ Bruce A. Crittenden
---------------------------
Bruce A. Crittenden
10 Lake Court
North Oaks, Minnesota 55127