REGISTRATION NO. 333-xxxxx
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CONSECO, INC. INDIANA 35-1468632
Conseco Financing Trust VIII Delaware 91-1988898
Conseco Financing Trust IX Delaware 91-1988899
Conseco Financing Trust X Delaware 91-1988900
Conseco Financing Trust XII Delaware Applied for
(Exact name of the (State or other (I.R.S. Employer
Registrants as specified jurisdiction of Identification No.)
in their respective incorporation or
charters) organization)
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6100
(Address, including zip code, and telephone number,
including area code, of each Registrant's principal
executive offices)
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John J. Sabl, Esquire
Conseco, Inc.
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6163
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each
Registrant)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c)
<PAGE>
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<TABLE>
<CAPTION>
Calculation of Registration Fee
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<S> <C> <C> <C> <C>
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER UNIT (2)(3) PRICE (2)(3) FEE(3)(7)
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Debt Securities of Conseco,
Inc. ...........................
Preferred Stock of Conseco, Inc.,
no par value(4).................
Depositary Shares of Conseco,
Inc.(4).........................
Common Stock of Conseco, Inc.,
no par value (4)................
Stock Purchase Units of Conseco,
Inc.(5).........................
Stock Purchase Contracts of
Conseco, Inc.(5)................
Warrants of Conseco, Inc. ........
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Preferred Securities of Conseco
Financing Trust VIII............
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Preferred Securities of Conseco
Financing Trust IX..............
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Preferred Securities of Conseco
Financing Trust X...............
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Preferred Securities of Conseco
Financing Trust XII.............
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Guarantees and back-up undertakings
of Conseco, Inc. in connection
with Preferred Securities of
Conseco Financing Trust VIII,
Conseco Financing Trust IX,
Conseco Financing Trust X and
Conseco Financing Trust XII by
Conseco, Inc.(6)................
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Total............................. $3,000,000,000 100% $3,000,000,000 $792,000
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<FN>
(1) Such indeterminate number or amount of Debt Securities, Preferred Stock,
Depositary Shares, Common Stock, Stock Purchase Units, Stock Purchase Contracts,
Guarantees and Warrants of Conseco, Inc. and Preferred Securities of Conseco
Financing Trust VIII, Conseco Financing Trust IX, Conseco Financing Trust X and
Conseco Financing Trust XII (the "Conseco Trusts") as may from time to time be
issued at indeterminate prices. Debt Securities of Conseco, Inc. may be issued
and sold to the Conseco Trusts, in which event such Debt Securities may later be
distributed to the holders of Preferred Securities of
<PAGE>
the Conseco Trusts upon a dissolution of any such Conseco Trust and the
distribution of the assets thereof. The amount registered is in United States
dollars or the equivalent thereof in any other currency, currency unit or units,
or composite currency or currencies.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457. The aggregate offering price of the Debt
Securities, Preferred Stock, Depositary Shares, Common Stock, Stock Purchase
Units, Stock Purchase Contracts, Warrants and Preferred Securities, and the
exercise price of any securities issuable upon exercise of Warrants
registered hereby, will not exceed $3,000,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) Also includes such indeterminate number of shares of Preferred Stock
and Common Stock as may be issued upon conversion of or exchange for any
Debt Securities or Preferred Stock that provide for conversion or exchange
into other securities. No separate consideration will be received for the
Preferred Stock or Common Stock issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock. Also consists of such indeterminate
number of shares of Common Stock to be issuable by Conseco, Inc. upon
settlement of the Stock Purchase Contracts of Conseco, Inc.
(5) Each Stock Purchase Unit of Conseco, Inc. is a unit that consists of (i) a
Stock Purchase Contract of Conseco, Inc. under which the holder, upon
settlement of such Stock Purchase Contract, will purchase an indeterminate
number of shares of Common Stock, Preferred Stock, Depositary Shares or
other securities of Conseco, Inc. and (ii) initially a beneficial interest
in Preferred Securities of a Conseco Trust or debt obligations of third
parties, including U.S. Treasury Securities, pledged to secure the
obligation of such holder to purchase such shares of Common Stock. No
separate consideration will be received for the Stock Purchase Contracts.
(6) Includes the rights of holders of the Preferred Securities under
the Guarantees of Preferred Securities and back-up undertakings, consisting
of obligations of Conseco, Inc. to provide certain indemnities in respect
of, and pay and be responsible for, certain expenses, costs, liabilities and
debts of, as applicable, the Conseco Trusts as set forth in the Declaration
of Trust (including the obligation to pay expenses of the Conseco Trusts),
the Indenture and any applicable supplemental indentures thereto, and the
Debt Securities issued to the Conseco Trusts, in each case as further
described in the Registration Statement. No separate consideration will be
received for the Guarantees or any back-up undertakings.
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</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
<PAGE>
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 14, 2000
PROSPECTUS
$3,000,000,000
CONSECO, INC.
Debt Securities, Preferred Stock, Depositary Shares, Common Stock, Stock
Purchase Contracts, Stock Purchase Units and Warrants
CONSECO FINANCING TRUST VIII
CONSECO FINANCING TRUST IX
CONSECO FINANCING TRUST X
CONSECO FINANCING TRUST XII
Preferred Securities fully and unconditionally
guaranteed by Conseco, Inc.
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We will provide the specific terms of the particular securities issued under
this prospectus in a prospectus supplement for each security. You should read
this prospectus and any supplement carefully before investing.
The amount of the securities issued under this prospectus will be limited to a
total of U.S. $3,000,000,000 or the equivalent amount if denominated in foreign
currencies.
Our common stock is listed on the New York Stock Exchange under the trading
symbol "CNC".
----------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy of accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is January __, 2000.
<PAGE>
TABLE OF CONTENTS
Page
About This Prospectus.....................................................3
Where You Can Find More Information.......................................3
The Securities We May Offer...............................................5
Conseco, Inc..............................................................6
The Conseco Trusts........................................................6
Use of Proceeds...........................................................7
Ratios of Earnings to Fixed Charges, Earnings to Fixed Charges and
Preferred Stock Dividends and Earnings to Fixed Charges,
Preferred Stock Dividends and Distributions on Company-Obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts................................................................8
Description of Debt Securities............................................9
Description of Capital Stock.............................................23
Description of Depositary Shares.........................................28
Description of Warrants..................................................32
Description of Preferred Securities of the Conseco Trusts................33
Description of Guarantees................................................36
Description of Stock Purchase Contracts and Stock Purchase Units.........40
Plan of Distribution.....................................................40
Special Note Regarding Forward-Looking Statements........................43
Legal Matters............................................................44
Experts..................................................................44
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ABOUT THIS PROSPECTUS
In this prospectus, Conseco, Inc. may be referred to as "Conseco" or
"we". This prospectus is part of a registration statement that we and Conseco
Financing Trust VIII, Conseco Financing Trust IX, Conseco Financing Trust X and
Conseco Financing Trust XII, referred to in this prospectus as the "Conseco
Trusts", filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may sell any combination of
the securities described in this prospectus in one or more offerings up to a
total dollar amount of $3,000,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "WHERE YOU CAN FIND MORE INFORMATION."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
We and the Conseco Trusts have filed with the SEC a registration
statement under the Securities Act of 1933 to register the securities offered by
this prospectus. This prospectus constitutes only part of the registration
statement and does not contain all of the information in the registration
statement and its exhibits because parts of the registration statement are
allowed to be omitted by SEC rules. Statements in this prospectus or in any
prospectus supplement about documents filed as an exhibit to the registration
statement or otherwise filed with the SEC are only summary statements and may
not contain all the information that may be important to you. For further
information about Conseco, the Conseco Trusts and the securities offered under
this prospectus, you should read the registration statement, including its
exhibits and the documents incorporated into it by reference.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15 (d) of the Securities Exchange Act of 1934
until we sell all of the securities offered under this prospectus.
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1998;
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<PAGE>
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999, as amended and September 30, 1999;
3. Current Reports on Form 8-K dated August 31, 1999, October 21,
1999, November 29, 1999, and December 15, 1999; and
4. The description of our common stock in the registration statements
filed by us with the SEC and any amendment or report filed for the purpose of
updating the description.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address;
John A. Dolphin, Senior Vice President, Investor Relations
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Telephone: (317) 817-4418
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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<PAGE>
THE SECURITIES WE MAY OFFER
We may offer and sell from time to time, in one or more series,
o debt securities,
o preferred stock, which may be represented by depositary shares,
o common stock,
o stock purchase contracts, also called securities purchase
contracts, to purchase shares of our common stock, preferred stock,
depositary shares or other securities,
o stock purchase units, also called securities purchase units,
each representing ownership of a stock purchase contract and
preferred securities of one of the Conseco Trusts or debt
obligations of third parties, including U.S. treasury securities,
securing the holder's obligations to purchase our common stock
under the stock purchase contracts and
o warrants to purchase debt securities, preferred stock, common stock
or other securities or rights.
The Conseco Trusts may offer, from time to time, preferred securities
representing preferred undivided beneficial interests in the assets of a Conseco
Trust, referred to in this prospectus as "preferred securities". We will
guarantee the payment of periodic cash distributions on preferred securities out
of moneys held by each of the Conseco Trusts, and payments on liquidation,
redemption or otherwise with respect to the preferred securities to the extent
described in this prospectus or the applicable prospectus supplement. We will
directly or indirectly acquire common securities representing undivided
beneficial interests in the assets of each Conseco Trust, referred to in this
prospectus as "common securities". We may issue subordinated debt securities in
one or more series to a Conseco Trust as part of the investment of the proceeds
from the offering of preferred securities and common securities of the Conseco
Trust. The subordinated debt securities purchased by a Conseco Trust may be
subsequently distributed on a proportionate basis to holders of preferred
securities and common securities in connection with the dissolution of the
Conseco Trust.
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<PAGE>
CONSECO, INC.
We are a financial services holding company. We conduct and manage our
business through two operating segments, reflecting our major lines of business:
(1) insurance and fee-based operations and (2) finance operations. Our insurance
subsidiaries develop, market and administer supplemental health insurance,
annuity, individual life insurance, individual and group major medical insurance
and other insurance products. Our finance subsidiaries make, purchase, sell and
service consumer and commercial finance loans throughout the United States.
Since 1982, we have acquired 19 insurance groups. In 1998, we acquired Conseco
Finance Corp. (formerly Green Tree Financial Corporation), which comprises our
finance operations. Our operating strategy is to grow our businesses by focusing
our resources on developing and expanding profitable products and strong
distribution channels, by actively managing assets to seek to achieve superior
investment returns and by controlling expenses.
Our principal executive offices are located at 11825 N. Pennsylvania
Street, Carmel, Indiana 46032. Our telephone number is (317) 817-6100.
THE CONSECO TRUSTS
Each of the Conseco Trusts is a statutory business trust formed under
Delaware law. Each Conseco Trust exists for the exclusive purposes of:
o issuing and selling the preferred securities and the
common securities;
o using the proceeds from the sale of the preferred securities and
common securities to acquire our subordinated debt securities; and
o engaging in only those other activities that are related to those
purposes.
All of the common securities will be directly or indirectly owned by
Conseco. The common securities will rank equally, and payments will be made
proportionally, with the preferred securities, except that, if an event of
default under the declaration of trust of the Conseco Trust has occurred and is
continuing, the rights of the holders of the common securities to payment of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the preferred securities. We will
directly or indirectly acquire common securities in an amount equal to at least
3% of the total capital of each Conseco Trust.
Unless otherwise specified in the applicable prospectus supplement,
each Conseco Trust has a term of up to 55 years but may terminate earlier, as
provided in the declaration of trust. Each Conseco Trust's business and affairs
will be conducted by the trustees appointed by us as the direct or indirect
holder of all of the common securities. We will be entitled to appoint, remove
or replace any of, or increase or reduce the number of, the trustees of each
Conseco Trust. The declaration of trust will set forth the duties and
obligations of the trustees. A majority of the trustees of each Conseco Trust
will be employees or officers of or persons who are affiliated with Conseco,
referred to as "regular trustees".
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<PAGE>
One trustee of each Conseco Trust will be an institution, referred to as the
"institutional trustee", that is not affiliated with Conseco and has a minimum
amount of combined capital and surplus of not less than $50,000,000, which will
act as property trustee and as indenture trustee for the purposes of compliance
with the provisions of Trust Indenture Act of 1939, under the terms of the
applicable prospectus supplement. In addition, unless the institutional trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one trustee of each Conseco Trust will
be an institution having a principal place of business in, or a natural person
resident of, the State of Delaware, referred to as the "Delaware trustee".
Conseco will pay all fees and expenses related to the Conseco Trust and the
offering of the preferred securities and the common securities.
Unless otherwise specified in the applicable prospectus supplement, the
institutional trustee for each Conseco Trust will be Harris Trust and Savings
Bank. Unless otherwise specified in the applicable prospectus supplement, the
Delaware trustee for each Conseco Trust will be First Union Trust Company,
National Association, and its address in the State of Delaware is One Rodney
Square, 920 King Street, Wilmington, Delaware 19801. The principal place of
business of each Conseco Trust is c/o Conseco, Inc., 11825 N. Pennsylvania
Street, Carmel, Indiana 46032; telephone (317) 817-6100.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying prospectus supplement,
we expect to use the net proceeds received by us from the sale of the securities
offered by this prospectus for general corporate purposes. The proceeds from the
sale of preferred securities by the Conseco Trusts will be invested in our
subordinated debt securities. Except as may otherwise be described in the
prospectus supplement relating to the preferred securities, we expect to use the
net proceeds from the sale of subordinated debt securities to the Conseco Trusts
for general corporate purposes. Any specific allocation of the proceeds to a
particular purpose that has been made at the date of any prospectus supplement
will be described in the prospectus supplement.
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<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES, EARNINGS TO FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
AND EARNINGS TO FIXED CHARGES, PREFERRED STOCK DIVIDENDS
AND DISTRIBUTIONS ON COMPANY-OBLIGATED MANDATORILY
REDEEMABLE PREFERRED SECURITIES OF SUBSIDIARY TRUSTS
Our ratios of earnings to fixed charges, earnings to fixed charges
and preferred stock dividends and earnings to fixed charges, preferred stock
dividends and distributions on company-obligated mandatorily redeemable
preferred securities of subsidiary trusts for each of the five years ended
December 31, 1998 and for the nine months ended September 30, 1998 and 1999 are
set forth in the following table:
<TABLE>
<CAPTION>
Nine months
Year ended December 31, ended September 30,
------------------------------------------------ -------------------
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
As reported.................................. 5.80x 4.94x 4.85x 5.55x 3.30x 2.63x 4.62x
Excluding interest expense on debt related
to finance receivables and other
investments (1)............................ 9.28x 7.36x 7.80x 13.00x 6.79x 5.25x 11.23x
Ratio of earnings to fixed charges, preferred
stock dividends and distributions on
Company-obligated mandatorily redeemable
preferred securities of subsidiary trusts:
As reported................................ 4.48x 4.14x 3.74x 4.10x 2.47x 2.02x 3.35x
Excluding interest expense on debt related
to finance receivables and other
investments (1).......................... 6.14x 5.61x 5.11x 6.72x 3.68x 2.94x 5.42x
<FN>
- -------------------
(1) These ratios are included to assist the reader in analyzing the impact
of interest expense on debt related to finance receivables and other
investments (which is generally offset by interest earned on finance
receivables and other investments financed by such debt). The ratios are
not intended to, and do not, represent the following ratios prepared in
accordance with generally accepted accounting principles: the ratio of
earnings to fixed charges; or the ratio of earnings to fixed charges,
preferred stock dividends and distributions on Company-obligated
mandatorily redeemable preferred securities of subsidiary trusts.
</FN>
</TABLE>
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
We may offer one or more series of debt securities that are either
senior debt securities or subordinated debt securities. Unless otherwise
specified in the applicable prospectus supplement, the debt securities will be
issued under the senior indenture or the subordinated indenture, in each case
between us and the trustee identified in the indenture, copies of which have
been filed as exhibits to the registration statement of which this prospectus
forms a part. Except for the subordination provisions of the subordinated
indenture, which do not exist in the senior indenture, the provisions of the
subordinated indenture are substantially identical in substance to the
provisions of the senior indenture that bear the same section numbers.
We have summarized below the material provisions of the indentures and
the debt securities, or indicated which material provisions will be described in
the applicable prospectus supplement. These descriptions are only summaries, and
you should refer to the indentures which describe completely the terms and
definitions summarized below and contain additional information regarding the
debt securities. All article and section references in this prospectus are to
articles and sections of the applicable indenture and whenever particular
sections or defined terms of the indentures are referred to in this prospectus
or in a prospectus supplement, the sections or defined terms are incorporated
into this prospectus or the prospectus supplement by reference.
The debt securities will be unsecured obligations of Conseco. The
indentures do not limit the aggregate amount of debt securities that we may
issue and do not limit the incurrence or issuance by us of other secured or
unsecured debt. The debt securities issued under the senior indenture will be
unsecured and will rank equally with all our other unsecured and unsubordinated
obligations. The debt securities issued under the subordinated indenture will be
subordinate and junior in right of payment, to the extent and in the manner set
forth in the subordinated indenture, to all our senior indebtedness. See "--
Subordination under the Subordinated Indenture."
The applicable prospectus supplement will describe the specific terms
of the series of debt securities being offered. The following terms may be
included:
o the title, designation and purchase price, of the debt securities;
o whether the debt securities are senior debt securities or
subordinated debt securities and whether the debt securities will
be issued under the senior indenture, the subordinated indenture or
another indenture described in the prospectus supplement;
o any limit upon the aggregate principal amount of the debt
securities;
o the date or dates on which the principal of and premium, if any, on
the debt securities will mature or the method of determining or
resetting the date or dates;
o the rate or rates, which may be fixed or variable, at which the
debt securities will bear interest, if any, or the method of
calculating or resetting the rate or rates;
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<PAGE>
o the date or dates from which interest, if any, will accrue or the
method by which the date or dates will be determined;
o the date or dates on which interest, if any, will be payable and
the record date or dates for payment of interest;
o the place or places where principal of, premium, if any, and
interest, if any, on the debt securities will be payable;
o our right, if any, to defer payment of interest on debt securities
and the maximum length of any permitted deferral period;
o the period or periods within which, the price or prices at which,
the currency or currencies, including currency unit or units, in
which, and the terms and conditions upon which, the debt securities
may be redeemed, in whole or in part, at our option;
o our obligation, if any, to redeem or purchase the debt securities
under any sinking fund or similar provisions or upon the happening
of a specified event and the period or periods within which, the
price or prices at which and the other terms and conditions upon
which, the debt securities will be redeemed or purchased, in whole
or in part, under these obligations;
o the authorized denominations of the debt securities;
o the currency or currency unit for which debt securities
may be purchased or in which debt securities may be denominated
and/or the currency or currencies, including currency unit or
units, in which principal of, premium, if any, and interest, if
any, on the debt securities will be payable and whether we or the
holders of any debt securities may elect to receive payments in
respect of the debt securities in a currency or currency unit other
than that in which the debt securities are stated to be payable;
o if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities which will
be payable upon declaration of the acceleration of the maturity of
the debt securities or the method by which that portion will be
determined;
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<PAGE>
o the person to whom any interest on any debt security will be
payable if other than the person in whose name the debt security is
registered on the applicable record date;
o any addition to, or modification or deletion of, any event of
default or any of our covenants specified in the indenture for the
debt securities;
o the application, if any, of defeasance or covenant defeasance
provisions to the debt securities;
o whether the debt securities are to be issued in whole or in part
in the form of one or more temporary or permanent global securities
and, if so, the identity of the depositary for the global security
or securities;
o any federal income tax considerations applicable to holders of
the debt securities; and
o any other special terms relating to the debt securities.
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will not be listed on any securities exchange. (Section 3.1.)
Unless otherwise specified in the applicable prospectus supplement,
debt securities will be issued in fully-registered form without coupons. Where
debt securities of any series are issued in bearer form and are payable to the
bearer of the security, the special restrictions and considerations, including
special offering restrictions and special federal income tax considerations,
applicable to the debt securities and to payment on and transfer and exchange of
the debt securities will be described in the applicable prospectus supplement.
Bearer debt securities will be transferable by delivery. (Section 3.5.)
Debt securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Federal income tax consequences and
special considerations applicable to these debt securities, or to debt
securities issued at par that are treated as having been issued at a discount,
will be described in the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one
or more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, or by reference to
commodity prices, equity indices or other factors, the restrictions, elections,
federal income tax considerations, specific terms and other information about
the issue of debt securities and the foreign currency or currency units or
commodity prices, equity indices or other factors will be set forth in the
applicable prospectus supplement. In general, holders of these series of debt
securities may receive a principal amount on any principal payment date, or a
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<PAGE>
payment of premium, if any, on any premium interest payment date or a payment
of interest on any interest payment date, that is greater than or less than the
amount of principal, premium, if any, or interest otherwise payable on the
payment dates, depending on the value on the payment dates of the applicable
currency, commodity, equity index or other factor.
Payment, Registration, Transfer and Exchange
Unless otherwise provided in the applicable prospectus supplement,
payments with respect to the debt securities will be made in the designated
currency at the office or agency maintained for that purpose that we may
designate from time to time, except that, at our option, interest payments, if
any, on debt securities in registered form may be made (1) by checks mailed to
the holders of debt securities entitled to receive these payments at their
registered addresses or (2) by wire transfer to an account maintained by the
person entitled to receive these payments as specified in the register
maintained to record the holders of the debt securities and transfer of debt
securities. (Sections 3.7(a) and 9.2.) Unless otherwise indicated in the
applicable prospectus supplement, payment of any installment of interest on debt
securities in registered form will be made to the person in whose name the debt
security is registered at the close of business on the regular record date for
payment of interest. (Section 3.7(a).)
Payment with respect to debt securities in bearer form will be made in
the currency and in the manner designated in the prospectus supplement, subject
to any applicable laws and regulations, at paying agencies outside the United
States that we may appoint from time to time. The paying agents outside the
United States initially appointed by us for a series of debt securities will be
named in the prospectus supplement. We may at any time designate additional
paying agents or rescind the designation of any paying agents, except that, if
debt securities of a series are issuable as registered securities, we will be
required to maintain at least one paying agent in each place, a "place of
payment", where payment of principal, premium, if any, and interest or other
payments on the securities are payable and, if debt securities of a series are
issuable as bearer securities, we will be required to maintain a paying agent in
a place of payment outside the United States where debt securities of the series
and any coupons may be presented and surrendered for payment. (Section 9.2.)
Unless otherwise provided in the applicable prospectus supplement, debt
securities in registered form will be transferable or exchangeable at the agency
maintained for this purpose that we will designate from time to time. (Sections
3.5 and 9.2.) Debt securities may be transferred or exchanged without service
charge, other than any tax or other governmental charge imposed in connection
with the transfer or exchange. (Section 3.5.)
Global Debt Securities
Unless otherwise specified in the applicable prospectus supplement, the
debt securities of a series may be issued in whole or in part in the form of one
or more global securities that will be deposited with the depositary or with a
nominee for the depositary identified in the applicable prospectus supplement.
In this event, one or more global securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding debt securities of the series to be represented by the global
security or securities. (Section 3.3.) Except as described in the applicable
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prospectus supplement, unless and until it is exchanged in whole or in part for
debt securities in definitive certificated form, a global security may not be
registered for transfer or exchange except as a whole by:
o the depositary for the global security to a nominee of the
depositary;
o a nominee of the depositary to the depositary or another nominee
of the depositary; or
o the depositary or any nominee to a successor depositary for the
series or a nominee of the successor depositary. (Section 3.5.)
The specific terms of the depositary arrangement for any portion of a
series of debt securities to be represented by a global security will be
described in the applicable prospectus supplement. Unless otherwise specified in
the applicable prospectus supplement, we expect that the following provisions
will apply to the depositary arrangements.
Ownership of beneficial interests in a global security will be limited
to persons that have accounts with the depositary or a nominee of the
depositary, referred to as "participants", or persons that may hold interests
through participants. Upon the issuance of any global security, and the deposit
of the global security with or on behalf of the depositary for the global
security, the depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the debt securities
represented by the global security to the accounts of participants. The accounts
to be credited will be designated by the underwriters or agents engaging in the
distribution of the debt securities or by us, if the debt securities are offered
and sold directly by us. Ownership of beneficial interests by participants in
the global security will be shown on, and the transfer of these beneficial
interests will be effected only through, records maintained by the depositary
for the global security or by its nominee. Ownership of beneficial interests in
a global security by persons that hold through participants will be shown on,
and the transfer of these beneficial interests within the participants will be
effected only through, records maintained by the participants. The laws of some
jurisdictions require that some purchasers of securities take physical delivery
of securities in certificated form. The limitations described above and these
laws may impair the ability to transfer beneficial interests in the global
security.
So long as the depositary for a global security, or its nominee, is the
registered owner of the global security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the debt securities
represented by the global security for all purposes under the applicable
indenture. Unless otherwise specified in the applicable prospectus supplement
and except as specified below, owners of beneficial interests in the global
security will not be entitled to have debt securities of the series represented
by the global security registered in their names, will not receive or be
entitled to receive physical delivery of debt securities of that series in
certificated form and will not be considered the holders of the debt securities
for any purposes under the relevant indenture. (Section 3.8.) Accordingly, each
person owning a beneficial interest in a global security must rely on the
procedures of the depositary and, if the person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the relevant indenture. The
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depositary may grant proxies and otherwise authorize participants to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action which a holder is entitled to give or take under the relevant
indenture. We understand that, under existing industry practices, if we request
any action of holders or if any owner of a beneficial interest in a global
security desires to give any notice or take any action which a holder is
entitled to give or take under the relevant indenture, the depositary would
authorize the participants to give the notice or take the action, and the
participants would authorize beneficial owners owning through the participants
to give the notice or take the action or would otherwise act upon the
instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable prospectus supplement,
payments of principal, premium, if any, and interest, if any, on debt securities
represented by a global security registered in the name of a depositary or its
nominee will be made to the depositary or its nominee, as the case may be, as
the registered owner of the global security. We expect that the depositary for
any debt securities represented by a global security, upon receipt of any
payment of principal, premium or interest, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the global security as shown on the records
of the depositary. We also expect that payments by participants to owners of
beneficial interests in a global security held through the participants will be
governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names," and will be the responsibility of the participants. Neither we nor the
trustees nor any agent of ours or the trustees will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial interests of a global security, or for maintaining, supervising or
reviewing any records relating to the beneficial interests. (Section 3.8.)
Unless otherwise specified in the applicable prospectus supplement, if
the depositary for any debt securities represented by a global security is at
any time unwilling or unable to continue as depositary or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 and a duly
registered successor depositary is not appointed by us within 90 days, we will
issue these debt securities in definitive certificated form in exchange for the
global security. In addition, we may at any time and in our sole discretion
determine not to have any of the debt securities of a series represented by one
or more global securities and, in that event, will issue debt securities of the
series in definitive certificated form in exchange for the global security or
securities representing the debt securities. (Section 3.5.)
The debt securities of a series may also be issued in whole or in part
in the form of one or more global securities issued as a bearer security that
will be deposited with a depositary, or with a nominee for the depositary,
identified in the applicable prospectus supplement. Bearer global securities may
be issued in temporary or permanent form. (Section 3.4.) The specific terms and
procedures, including the specific terms of the depositary arrangement, for any
portion of a series of debt securities to be represented by one or more bearer
global securities will be described in the applicable prospectus supplement.
Consolidation, Merger or Sale by Conseco
Unless otherwise specified in the applicable prospectus supplement, we
may not consolidate with or merge into any other corporation or sell our assets
substantially as an entirety, unless:
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o the corporation formed by the consolidation or into which we are
merged or the corporation which acquires our assets is organized in
the United States;
o the corporation formed by the consolidation or into which we are
merged or which acquires our assets substantially as an entirety
expressly assumes all of our obligations under each indenture;
o immediately after giving effect to the transaction, no default or
event of default under the applicable indenture has happened and is
continuing, and
o if, as a result of the transaction, our properties or assets would
become subject to an encumbrance which would not be permitted by
the terms of any series of debt securities, we or the successor
corporation, as the case may be, take the steps that are necessary
to secure the debt securities equally and ratably with all
indebtedness secured by that encumbrance.
Upon the consolidation, merger or sale, the successor corporation
formed by the consolidation, or into which we are merged or to which the sale is
made, will succeed to, and be substituted for us under each indenture. (Section
7.1.)
Events of Default, Notice and Rights on Default
Each indenture provides that, if an event of default occurs relating to
the debt securities of any series and is continuing, the trustee for the series
or the holders of 25% in aggregate principal amount of all of the outstanding
debt securities of that series, by written notice to us and to the trustee for
the series, if notice is given by the holders of debt securities, may declare
the principal of or, if the debt securities of that series provide for an amount
that is more or less than the principal amount of the debt securities to be due
and payable upon a declaration of maturity of the debt securities upon an event
of default, that portion of the principal amount specified in the prospectus
supplement, and accrued interest on all the debt securities of that series to be
due and payable; provided, for any debt securities issued under the subordinated
indenture, that the payment of principal and interest on the debt securities
will remain subordinated to the extent provided in the subordinated indenture.
(Section 5.2.)
Unless otherwise specified in the applicable prospectus supplement,
events of default for debt securities of any series are defined in each
indenture as being:
o default for 30 days in payment of any interest on any debt
security of that series or any coupon pertaining to the debt
security or any additional amount payable on debt securities of
that series as specified in the applicable prospectus supplement
when due;
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o default in payment of principal, or premium, if any, at maturity
or on redemption or otherwise, or in the making of a mandatory
sinking fund payment on any debt securities of that series when
due;
o default for 60 days after notice to us by the trustee for that
series, or by the holders of 25% in aggregate principal amount of
the debt securities of that series then outstanding, in the
performance of any other agreement in the debt securities of that
series, in the indenture or in any supplemental indenture or board
resolution referred to in the indenture under which the debt
securities of that series may have been issued;
o default resulting in acceleration of any of our other indebtedness
for borrowed money where the aggregate principal amount so
accelerated exceeds $25 million and the acceleration is not
rescinded or annulled within 30 days after the written notice of
the default to us by the trustee or to us and the trustee by the
holders of 25% in aggregate principal amount of the debt securities
of that series then outstanding, provided that the event of default
will be remedied, cured or waived if the default that resulted in
the acceleration of the other indebtedness is remedied, cured or
waived; and
o our bankruptcy, insolvency or reorganization. (Section 5.1.)
The definition of event of default in each indenture specifically
excludes a default under a secured debt under which the obligee has recourse,
exclusive of recourse for ancillary matters including environmental indemnities,
misapplication of funds and costs of enforcement, only to the collateral pledged
for repayment and where the fair market value of the collateral is 2% or less of
our total assets appearing on our most recently prepared consolidated balance
sheet as at the end of one of our fiscal quarters, prepared in accordance with
generally accepted accounting principles, at the time of the default.
Events of default for a specified series of debt securities may be
added to the indenture and, if so added, will be described in the applicable
prospectus supplement. (Sections 3.1 and 5.1(7).) Each indenture provides that
the trustee will, within 90 days after the occurrence of a default for the debt
securities of any series, give to the holders of the debt securities of that
series notice of all defaults known to it unless the default has been cured or
waived; provided that except in the case of a default in payment on the debt
securities of that series, the trustee may withhold the notice if and so long as
a committee of its officers determines that withholding the notice is in the
interests of the holders of the debt securities of that series. (Section 6.6.)
Each indenture provides that the holders of a majority in aggregate principal
amount of the debt securities of each series affected, with each series voting
as a class, may, subject to limited conditions, direct the time, method and
place of conducting any proceeding for any remedy available to the trustee for
the series, or exercising any trust or power conferred on the trustee. (Section
5.8.) Each indenture includes a covenant that we will file annually with the
trustee a certificate as to our compliance with all conditions and covenants of
the indenture. (Section 9.5.) The holders of a majority in aggregate principal
amount of any series of debt securities by notice to the trustee for the series
may
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waive, on behalf of the holders of all debt securities of the series, any past
default or event of default for that series and its consequences except a
default or event of default in the payment of the principal of, premium, if any,
or interest, if any, on any debt security, and except for an event of default
resulting from the breach of a covenant or provision of either indenture which,
under the applicable indenture, cannot be amended or modified without the
consent of the holders of each outstanding debt security of the series affected.
(Section 5.7.)
Option to Defer Interest Payments
If provided in the applicable prospectus supplement, we will have the
right at any time and from time to time during the term of the series of debt
securities to defer the payment of interest for the number of consecutive
interest payment periods specified in the applicable prospectus supplement,
subject to the terms, conditions and covenants, if any, specified in the
prospectus supplement, provided that the deferral period may not extend beyond
the stated maturity of the debt securities. Material United States federal
income tax consequences and special considerations applicable to these debt
securities will be described in the applicable prospectus supplement. Unless
otherwise specified in the applicable prospectus supplement, at the end of the
deferral period, we will pay all interest then accrued and unpaid together with
interest on accrued and unpaid interest compounded semiannually at the rate
specified for the debt securities to the extent permitted by applicable law;
provided, that during the deferral period we may not:
o declare or pay dividends on, make distributions regarding, or
redeem, purchase, acquire or make a liquidation payment regarding,
any of our capital stock, other than:
(1) purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations under any
employee or agent benefit plans or the satisfaction of our
obligations under any contract or security outstanding on the
date of the event requiring us to purchase capital stock,
(2) as a result of a reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital stock,
(3) the purchase of fractional interests in shares of our
capital stock in connection with the conversion or exchange
provisions of that capital stock or the security being
converted or exchanged,
(4) dividends or distributions in our capital stock, or rights
to acquire capital stock, or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock, or
(5) redemptions or repurchases of any rights outstanding under
a shareholder rights plan,
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o make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by us that
rank junior to the debt securities, and
o make any guarantee payments regarding the foregoing, other than
payments under our guarantee of the preferred securities or the
common securities.
Prior to the termination of any deferral period, we may further defer
payments of interest by extending the interest payment period; provided,
however, that, the deferral period, including all previous and further
extensions, may not extend beyond the maturity of the debt securities.
Upon the termination of any deferral period and the payment of all
amounts then due, we may commence a new deferral period, subject to the terms
set forth in this section. No interest during a deferral period, except at the
end of the deferral period, will be due and payable, but we may prepay at any
time all or any portion of the interest accrued during a deferral period. We
have no present intention of exercising our right to defer payments of interest
by extending the interest payment period on the debt securities. If the
institutional trustee is the sole holder of the debt securities, we will give
the regular trustees and the institutional trustee notice of our selection of a
deferral period one business day before the earlier of (1) the date
distributions on the preferred securities are payable or (2) the date the
regular trustees are required to give notice to the New York Stock Exchange, or
other applicable self-regulatory organization, or to holders of the preferred
securities of the record or payment date of the distribution. The regular
trustees will give notice of our selection of the deferral period to the holders
of the preferred securities. If the institutional trustee is not the sole holder
of the debt securities, we will give the holders of the debt securities notice
of our selection of a deferral period ten business days before the earlier of
(1) the interest payment date or (2) the date upon which we are required to give
notice to the New York Stock Exchange, or other applicable self-regulatory
organization, or to holders of the debt securities of the record or payment date
of the related interest payment.
Modification of the Indentures
Unless otherwise specified in the applicable prospectus supplement,
each indenture contains provisions permitting us and the trustee to enter into
one or more supplemental indentures without the consent of the holders of any of
the debt securities in order to:
o evidence the succession of another corporation to Conseco and the
assumption of our covenants by the successor;
o add to our covenants or surrender any of our rights or powers;
o add additional events of default for any series of debt securities;
o add or change any provisions to the extent necessary to permit or
facilitate the issuance of bearer securities;
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o change or eliminate any provision affecting only debt securities
not yet issued;
o provide for security for the debt securities;
o to establish the form or terms of debt securities;
o evidence and provide for successor trustees;
o if allowed without penalty under applicable laws and regulations,
permit payment in respect of bearer securities in the United
States;
o correct any defect or supplement any inconsistent provisions or to
make any other provisions concerning matters or questions arising
under the indenture, provided that the action does not adversely
affect the interests of any holder of debt securities of any
series; or
o cure any ambiguity or correct any mistake.
The subordinated indenture also permits us and the trustee to enter into
supplemental indentures to modify the subordination provisions contained in the
subordinated indenture except in a manner adverse to any outstanding debt
securities. (Section 8.1.)
Unless otherwise specified in the applicable prospectus supplement,
each indenture also contains provisions permitting us and the trustee, with the
consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities affected by a supplemental indenture, with the debt
securities of each series voting as a class, to execute supplemental indentures
adding any provisions to or changing or eliminating any of the provisions of the
indenture or any supplemental indenture or modifying the rights of the holders
of debt securities of that series, except that, without the consent of the
holder of each debt security so affected, no supplemental indenture may:
o change the time for payment of principal or premium, if any, or
interest on any debt security;
o reduce the principal of, or any installment of principal of, or
premium, if any, or interest on any debt security, or change the
manner in which they are determined;
o reduce the amount of premium, if any, payable upon the redemption
of any debt security;
o reduce the amount of principal payable upon acceleration of the
maturity of any debt security providing for an amount more or less
than the principal amount of the debt security to be due and
payable upon a declaration of maturity upon an event of default;
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o change the currency or currency unit in which any debt security or
any premium or interest on the debt security is payable;
o impair the right to institute suit for the enforcement of any
payment on or regarding any debt security;
o reduce the percentage in principal amount of the outstanding debt
securities affected by the supplemental indenture the consent of
whose holders is required for amendment of the indenture or for
waiver of compliance with provisions of the indenture or for waiver
of defaults;
o change our obligation to maintain an office or agency in the
places and for the purposes specified in the indenture;
o modify the provisions relating to the subordination of outstanding
debt securities of any series in a manner adverse to the holders
of the debt securities; or
o modify the provisions relating to waiver of defaults or any of the
provisions set forth above. (Section 8.2.)
Subordination under the Subordinated Indenture
The subordinated indenture provides that any subordinated debt
securities issued under the subordinated indenture are subordinate and junior in
right of payment to the extent provided in the subordinated indenture (Section
12.1 of the subordinated indenture.) to our senior indebtedness, which is
defined as:
o all of our indebtedness, whether outstanding on the date of the
subordinated indenture or created after that date, incurred or
assumed, which is for money borrowed, or evidenced by a note or
similar instrument given in connection with the acquisition of any
business, properties or assets, including securities;
o any indebtedness of others of the kinds described in the preceding
bulletpoint for the payment of which we are is responsible or
liable as guarantor or otherwise; and
o amendments, renewals, extensions and refundings of any of that
indebtedness, unless in any instrument or instruments evidencing or
securing that indebtedness or under which the indebtedness is
outstanding.
Senior indebtedness will continue to be senior indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of the senior indebtedness or
extension or renewal of the senior indebtedness. Senior indebtedness does not
include:
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o any of our indebtedness to any of our subsidiaries;
o indebtedness incurred for the purchase of goods or materials or for
services obtained in the ordinary course of business; and
o any indebtedness which by its terms ranks equally with or
subordinate to the subordinated debt securities. (Section 12.2 of
the subordinated indenture.)
If (1) we default in the payment of any principal, or premium, if any,
or interest on any senior indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or declaration or
otherwise or (2) an event of default occurs for any senior indebtedness
permitting the holders of the senior indebtedness to accelerate the maturity of
the senior indebtedness and written notice of the event of default, requesting
that payments on subordinated debt securities cease, is given to us by the
holders of senior indebtedness, then unless and until the default in payment or
event of default is cured or waived or ceases to exist, no direct or indirect
payment, in cash, property or securities, by set-off or otherwise, will be made
or agreed to be made on account of the subordinated debt securities or interest
on the subordinated debt securities or with respect to any repayment,
redemption, retirement, purchase or other acquisition of subordinated debt
securities. (Section 12.4 of the subordinated indenture.)
In the event of:
o any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar
proceeding relating to us, our creditors or our property,
o any proceeding for the liquidation, dissolution or other winding-up
of Conseco, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings,
o any assignment by us for the benefit of our creditors, or
o any other marshaling of our assets,
then all senior indebtedness including, without limitation, interest accruing
after the commencement of the proceeding, assignment or marshaling of assets,
must first be paid in full before any payment or distribution, whether in cash,
securities or other property, is made by us on account of subordinated debt
securities. In that event, except as described in this paragraph, any payment or
distribution, which, but for the subordination provisions, would be payable or
deliverable with respect to subordinated debt securities, will be paid or
delivered directly to the holders of senior indebtedness, or to their
representative or trustee, in accordance with the priorities then existing among
the holders until all senior indebtedness has been paid in full. (Section 12.3
of the subordinated indenture.) The payments or distributions described in the
previous sentence include those which may be payable or deliverable
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because of the payment of any other indebtedness of ours being subordinated to
the payment of subordinated debt securities. The payments or distributions
described in the first sentence of this paragraph do not include payments or
distributions of our securities or the securities of any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinate, at least to the extent provided in the subordination provisions
of the subordinated indenture for the indebtedness evidenced by subordinated
debt securities, to the payment of all senior indebtedness at the time
outstanding and to any securities issued with respect to the senior indebtedness
under the plan of reorganization or readjustment. No present or future holder of
any senior indebtedness will be prejudiced in the right to enforce subordination
of the indebtedness evidenced by subordinated debt securities by any act or
failure to act on our part. (Section 12.9 of the subordinated indenture.)
Senior indebtedness will be deemed to have been paid in full if the
holders of senior indebtedness will have received cash, securities or other
property equal to the amount of the senior indebtedness then outstanding. Upon
the payment in full of all senior indebtedness, the holders of subordinated debt
securities will be subrogated to all the rights of any holders of senior
indebtedness to receive any further payments or distributions applicable to the
senior indebtedness until all subordinated debt securities are paid in full. The
payments or distributions received by any holder of subordinated debt
securities, by reason of the subrogation, of cash, securities or other property
which otherwise would be paid or distributed to the holders of senior
indebtedness, will, as between us and our creditors other than the holders of
senior indebtedness, on the one hand, and the holders of subordinated debt
securities, on the other, be deemed to be a payment by us on account of senior
indebtedness, and not on account of subordinated debt securities. (Section 12.7
of the subordinated indenture.)
The subordinated indenture provides that the subordination provisions
described in this section, to the extent as they relate to any particular issue
of subordinated debt securities, may be changed before the issuance of the
subordinated debt securities. Any change of this nature would be described in
the applicable prospectus supplement relating to the subordinated debt
securities.
Defeasance and Covenant Defeasance
If indicated in the applicable prospectus supplement, we may elect
either to defease and be discharged from any and all obligations with respect to
the debt securities of or within any series, referred to as "defeasance", or to
be released from our obligations with respect to selected covenants applicable
to the debt securities of or within any series, referred to as "covenant
defeasance", upon the deposit with the appropriate trustee, in trust for that
purpose, of money and/or U.S. government obligations which through the payment
of principal and interest in accordance with their terms will provide money in
an amount sufficient, without reinvestment, to pay the principal of and any
premium or interest on the debt securities to maturity or redemption, as the
case may be, and any mandatory sinking fund or similar payments on the debt
securities. As a condition to defeasance or covenant defeasance, we must deliver
to the trustee an opinion of counsel to the effect that the holders of the debt
securities will not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts and in the same manner and at
the same times as would have been the case if the defeasance or covenant
defeasance had not occurred. The opinion of counsel, in the case of defeasance,
must refer to and be based upon a ruling of the Internal Revenue
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Service or a change in applicable federal income tax law occurring after the
date of the relevant indenture. (Article 4.) If indicated in the applicable
prospectus supplement, in addition to obligations of the United States or an
agency or instrumentality of the United States, government obligations may
include obligations of the government or an agency or instrumentality of the
government issuing the currency or currency unit in which debt securities of the
series are payable. (Section 3.1.)
In addition, in order for covenants contained in the subordinated
indenture to be discharged no event or condition may exist that, under
provisions described in "-- Subordination under the Subordinated Indenture"
above, would prevent us from making payments of principal of, and premium, if
any, and interest on subordinated debt securities at the date of the required
irrevocable deposit. (Section 4.6(j) of the subordinated indenture.)
We may exercise our defeasance option for the debt securities in spite
of our earlier exercise of our covenant defeasance option. If we exercise our
defeasance option, payment of the debt securities may not be accelerated because
of a default or an event of default. (Section 4.4.) If we exercise our covenant
defeasance option, payment of the debt securities may not be accelerated by
reason of a default or an event of default under the covenants to which the
covenant defeasance is applicable. However, if the acceleration occurs by reason
of another event of default, the realizable value at the acceleration date of
the money and government obligations in the defeasance trust could be less than
the principal and interest then due on the debt securities, because the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.
The Trustees
Unless otherwise specified in the applicable prospectus supplement,
Bank of New York will be the trustee under the senior indenture, and Harris
Trust and Savings Bank will be the trustee under the subordinated indenture. We
may also maintain banking and other commercial relationships with each of the
trustees and their affiliates in the ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock was 1,020,000,000 shares as of January
4, 2000, consisting of:
o 20,000,000 shares of preferred stock, of which 2,598,396 were
outstanding; and
o 1,000,000,000 shares of common stock, of which 327,678,638 shares
were outstanding.
In general, our authorized preferred stock is afforded preferences
regarding dividends and liquidation rights over our common stock. Our board of
directors is empowered, without approval of our
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shareholders, to cause the preferred stock to be issued in one or more series,
with the numbers of shares of each series and the rights, preferences and
limitations of each series to be determined by the board, including the dividend
rights, conversion rights, redemption rights and liquidation preferences, if
any, of any wholly unissued series of preferred stock, or of the entire class of
preferred stock if none of the shares have been issued, the number of shares
constituting each series and the terms and conditions of the issue of each
series. The following is a summary of the terms of our preferred stock and
common stock and provisions of our articles of incorporation, bylaws and
statutes that affect our preferred stock and common stock and is subject to the
actual provisions of the articles of incorporation, bylaws and these statutes.
Preferred Stock
The applicable prospectus supplement will describe the following terms
of any preferred stock offered pursuant to this prospectus, to the extent
applicable to the preferred stock:
o the specific designation, number of shares, seniority and purchase
price;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates on which any dividends
will be payable, or the method by which the rates or dates will be
determined;
o any voting rights;
o if other than the currency of the United States, the currency or
currencies, including composite currencies, in which the preferred
stock is denominated and/or in which payments will or may be
payable;
o the method by which amounts with respect to the preferred stock may
be calculated and any commodities, currencies or indices, or value,
rate or price, relevant to the calculation;
o whether the preferred stock is convertible or exchangeable and, if
so, the securities or rights into which the preferred stock is
convertible or exchangeable, which may include other preferred
stock, debt securities, common stock or other securities or rights
of Conseco, including rights to receive payment in cash or
securities based on the value, rate or price of one or more
specified commodities, currencies or indices, or a combination any
of these, and the terms and conditions upon which the conversions
or exchanges will be effected, including the initial conversion or
exchange prices or rates, the conversion or exchange period and any
other related provisions;
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o the place or places where dividends and other payments on the
preferred stock will be payable; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares", we may, at our
option, elect to offer depositary shares evidenced by depositary receipts, each
representing an interest, to be specified in the applicable prospectus
supplement for the particular series of the preferred stock, in a share of the
particular series of the preferred stock issued and deposited with a preferred
stock depositary. All shares of preferred stock offered by this prospectus, or
issuable upon conversion, exchange or exercise of securities, will, when issued,
be fully paid and non-assessable.
Common Stock
The prospectus supplement relating to an offering of common stock will
describe relevant terms, including the number of shares offered, the initial
offering price, market price and dividend information.
Dividends. Holders of common stock are entitled to receive dividends
and other distributions in cash, stock or property, when, as and if declared by
the board of directors out of our assets or funds legally available for payment
of dividends or other distributions and will share equally on a per share basis
in all dividends and other distributions, subject to the rights of holders of
preferred stock.
Voting Rights. At every meeting of shareholders, every holder of common
stock is entitled to one vote per share. Subject to any voting rights which may
be granted to holders of preferred stock, any action submitted to shareholders
is approved if the number of votes cast in favor of the action exceeds the
number of votes against, except where other provision is made by law and subject
to applicable quorum requirements.
Liquidation Rights. If there is any liquidation, dissolution or
winding-up of Conseco, whether voluntary or involuntary, the holders of common
stock are entitled to share equally in the assets available for distribution
after payment of all liabilities and provision for the liquidation preference of
any shares of preferred stock then outstanding.
The holders of common stock have no preemptive rights, cumulative
voting rights, subscription rights, or conversion rights and the common stock
may not be redeemed. The transfer agent and registrar for the common stock is
First Union National Bank. The common stock is traded on the New York Stock
Exchange under the symbol "CNC". All shares of common stock offered by this
prospectus, or issuable upon conversion, exchange or exercise of securities,
will, when issued, be fully paid and non-assessable.
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Provisions of Our Articles of Incorporation and By-laws
Some provisions of our articles of incorporation and bylaws may make it
more difficult to effect a change in control if our board of directors
determines that the change in control would not be in the best interests of our
shareholders. It could be argued, contrary to the belief of our board of
directors, that these provisions are not in the best interests of the
shareholders to the extent that they will have the effect of tending to
discourage possible takeover bids, which might be at prices that are higher than
the recent market prices for our common stock. The most important of those
provisions are described below.
Our articles of incorporation authorize the establishment in the bylaws
of a classified board of directors. The bylaws, in turn, provide that the
directors serve staggered three-year terms, with the members of only one class
being elected in any year.
A classified board of directors may increase the difficulty of removing
incumbent directors, providing the directors with enhanced ability to retain
their positions. A classified board of directors may also make it more difficult
for a third party to acquire control of Conseco by means of a proxy contest. In
addition, the classification may make it more difficult to replace a majority of
directors for business reasons unrelated to a change in control.
Our articles of incorporation provide that holders of our voting stock
will not be entitled to vote on some business transactions, defined to include,
among other things, some mergers, consolidations, sales, leases, transfers or
other dispositions of a substantial part of our assets, with related persons,
including persons beneficially owning more than 10% of our outstanding voting
stock, nor may the business combination transactions be effected, unless:
o the relevant business combination has been approved by two-thirds
of the continuing directors; or
o the aggregate amount of the cash and the fair value of any
consideration other than cash to be received by any holder of our
common stock or preferred stock in the business combination for
each share of common stock or preferred stock will be at least
equal to the highest per share price paid by the related person to
acquire any shares of common stock or preferred stock, as the case
may be, beneficially owned by the related person.
As discussed above, our preferred stock may be issued from time to time
in one or more series with the rights, preferences, limitations and restrictions
that may be determined by the board of directors. The issuance of preferred
stock could be used, under some circumstances, as a method of delaying or
preventing a change of control of Conseco and could have a detrimental effect on
the rights of holders of common stock, including loss of voting control.
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The provisions of our articles of incorporation regarding the
classified board of directors and business combination transactions may be
amended only with the affirmative approval of holders of at least 80% of our
outstanding voting stock.
Our bylaws may be amended by majority vote of the board of directors.
Provisions of Corporate and Insurance Laws
In addition to our articles of incorporation and bylaws, some
provisions of Indiana law may delay, deter or prevent a merger, tender offer or
other takeover attempt of Conseco.
Under the Indiana Business Corporation Law, a director may, in
considering the best interests of a corporation, consider the effects of any
action on shareholders, employees, suppliers and customers of the corporation,
on communities in which offices or other facilities of the corporation are
located, and any other factors the director considers pertinent.
The Indiana Business Corporation Law provides that no business
combination, defined to include some mergers, sales of assets, sales of 5% or
more of outstanding stock, loans, recapitalizations or liquidations or
dissolutions, involving a corporation and an interested shareholder, defined to
include any holder of 10% or more of the corporation's voting stock, may be
entered into unless it has been approved by the board of directors of the
corporation or:
o five years have expired since the acquisition of shares of the
corporation by the interested shareholder;
o all requirements of the corporation's articles of incorporation
relating to business combinations have been satisfied; and
o either (1) a majority of shareholders of the corporation, excluding
the interested shareholder, approve the business combination or (2)
all shareholders are paid fair value for their stock, as defined in
the statute.
However, this law does not restrict any offer to purchase all of a corporation's
shares.
The Indiana Business Corporation Law also provides that when a target
corporation, incorporated in Indiana and having its principal place of business,
principal office or substantial assets in Indiana, like Conseco, has a specified
threshold of ownership by Indiana residents, any acquisition which, together
with its previous holdings, gives the acquiror at least 20% of the target's
voting stock triggers a shareholder approval mechanism. If the acquiror files a
statutorily required disclosure statement, the target's management has 50 days
within which to hold a special meeting of shareholders at which all
disinterested shareholders of the target not affiliated with the acquiror or any
officer or inside director of the target consider and vote upon whether the
acquiror will have voting rights for the shares of the target held by it.
Without shareholder approval, the shares acquired by the acquiror have no voting
rights. If the acquiror fails to file the statutorily required disclosure
statement, the target can redeem the acquiror's
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shares at a price to be determined according to procedures devised by the
target. These provisions of the Indiana Business Corporation Law apply to
Indiana corporations, unless the corporation has elected otherwise, which we
have not done, in its articles of incorporation or bylaws.
In addition, the insurance laws and regulations of the jurisdictions in
which we or our insurance subsidiaries do business may impede or delay a
business combination involving us. State insurance holding company laws and
regulations applicable to us generally provide that no person may acquire
control of a company, and thus indirect control of its insurance subsidiaries,
unless the person has provided required information to, and the acquisition is
approved or not disapproved by, the appropriate insurance regulatory
authorities. Generally, any person acquiring beneficial ownership of 10% or more
of the common stock would be presumed to have acquired control, unless the
appropriate insurance regulatory authorities upon advance application determine
otherwise.
DESCRIPTION OF DEPOSITARY SHARES
The following sections summarize the material terms of a deposit
agreement which we may, at our option, elect to enter into, and of depositary
shares and depositary receipts which would be described in the deposit
agreement, and are qualified by, and are subject to, the form of deposit
agreement, if any, and form of depositary receipts, if any, relating to each
series of the preferred stock, as well as the articles of incorporation or any
required amendment to the articles of incorporation describing the applicable
series of preferred stock.
We may, at our option, elect to have shares of preferred stock be
represented by depositary shares. The shares of any series of the preferred
stock underlying the depositary shares will be deposited under a separate
deposit agreement to be entered into by us and a bank or trust company selected
by us as a preferred stock depositary. The prospectus supplement relating to a
series of depositary shares will set forth the name and address of the preferred
stock depositary. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, proportionately, to all the rights,
preferences and privileges of the preferred stock represented by the depositary
share, including dividend, voting, redemption, conversion, exchange and
liquidation rights.
The depositary shares will be evidenced by depositary receipts issued
in accordance with the deposit agreement, each of which will represent the
fractional interest in the number of shares of a particular series of the
preferred stock described in the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary will distribute all cash dividends or
other cash distributions with respect to the series of preferred stock
represented by the depositary shares to the record holders of depositary
receipts in proportion, to the extent possible, to the number of depositary
shares owned by the holders. The depositary, however, will distribute only the
amount that can be distributed without attributing to any depositary share a
fraction of one cent, and any undistributed balance will be added to
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and treated as part of the next sum received by the depositary for distribution
to record holders of depositary receipts then outstanding.
If a distribution of property other than cash on the preferred stock
occurs, the preferred stock depositary will distribute the property to the
record holders of depositary receipts in proportion, to the extent possible, to
the number of depositary shares owned by the holders, unless the preferred stock
depositary determines, after consultation with us, that it is not feasible to
make the distribution, in which case the preferred stock depositary may, with
our approval, adopt a method it deems equitable and practicable for the purpose
of effecting the distribution, including a public or private sale of the
property, and distribution of the net proceeds from the sale to the holders.
The amount distributed to record holders of depositary receipts in any
of the cases described in this section will be reduced by any amount that we or
the preferred stock depositary are required to withhold on account of taxes.
Conversion and Exchange
If any series of preferred stock underlying the depositary shares is
subject to provisions relating to its conversion or exchange, as set forth in
the applicable prospectus supplement relating to that series, each record holder
of depositary receipts will have the right or obligation to convert or exchange
the depositary shares represented by the depositary receipts under their terms.
Redemption of Depositary Shares
If any series of preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the proceeds
received by the preferred stock depositary resulting from the redemption, in
whole or in part, of the preferred stock held by the preferred stock depositary.
Whenever we redeem preferred stock from the preferred stock depositary, the
preferred stock depositary will redeem as of the same redemption date a
proportionate number of depositary shares representing the shares of preferred
stock that were redeemed. If less than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or on a
proportionate basis as we may determine.
After the date fixed for redemption, the depositary shares so called
for redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price upon redemption. Any funds that we deposit with the preferred
stock depositary relating to depositary shares which are not redeemed by the
holders of the depositary shares will be returned to us after a period of two
years from the date the funds are deposited by us.
Voting
Upon receipt of notice of any meeting at which the holders of any
shares of preferred stock underlying the depositary shares are entitled to vote,
the preferred stock depositary will mail the information contained in the notice
to the record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date, which will be the same date as the
record date for the preferred
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stock, will be entitled to instruct the preferred stock depositary as to the
exercise of the voting rights pertaining to the number of shares of preferred
stock underlying the holder's depositary shares. The preferred stock depositary
will endeavor, to the extent practicable, to vote the number of shares of
preferred stock underlying the depositary shares in accordance with the holder's
instructions, and we will take all reasonable action that is deemed necessary by
the preferred stock depositary to enable the preferred stock depositary to do
so. Unless the preferred stock depositary receives specific written instructions
from holders of depositary receipts, it will abstain from voting any of the
preferred stock.
Record Date
Subject to the provisions of the deposit agreement, the preferred
stock depositary will fix a record date, which will be the same as the record
date for the preferred stock, for the determination of the holders of depositary
receipts that are entitled to receive a distribution, exercise voting rights or
receive a notice whenever:
o any cash dividend or other cash distribution becomes payable;
o any distribution other than cash is to be made;
o any rights, preferences or privileges will be offered relating to
the preferred stock;
o the preferred stock depositary receives notice of any meeting at
which holders of preferred stock are entitled to vote or of which
holders of preferred stock are entitled to notice; or
o the preferred stock depositary receives notice of the mandatory
conversion of, or any election on our part to call for redemption,
any preferred stock.
Withdrawal of Preferred Stock
Upon surrender of depositary receipts at the principal office of the
preferred stock depositary, upon payment of any unpaid amount due the preferred
stock depositary, and subject to the terms of the deposit agreement, the owner
of the depositary shares evidenced by the depositary receipts is entitled to
delivery of the number of whole shares of preferred stock and all money and
other property, if any, represented by the depositary shares. Partial shares of
preferred stock will not be issued. If the depositary receipts delivered by the
holder evidence a number of depositary shares in excess of the number of
depositary shares representing the number of whole shares of preferred stock to
be withdrawn, the preferred stock depositary will deliver to the holder at the
same time a new depositary receipt evidencing the excess number of depositary
shares. Holders of preferred stock that are withdrawn will not be entitled to
deposit the shares that have been withdrawn under the deposit agreement or to
receive depositary receipts.
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Amendment and Termination of the Deposit Agreement
The deposit agreement will provide that the form of depositary receipt
and any provision of the deposit agreement may at any time be amended by
agreement between us and the preferred stock depositary. However, any amendment
which imposes or increases any fees, taxes or other charges payable by the
holders of depositary receipts, other than taxes and other governmental charges,
fees and other expenses payable by the holders as stated under "Charges of
Preferred Stock Depositary", or which otherwise prejudices any substantial
existing right of holders of depositary receipts, will not take effect as to
outstanding depositary receipts until the expiration of 90 days after notice of
the amendment has been mailed to the record holders of outstanding depositary
receipts.
Whenever directed by us to do so, the preferred stock depositary will
terminate the deposit agreement by mailing notice of the termination to the
record holders of all depositary receipts then outstanding at least 30 days
before the date fixed in the notice for the termination. The preferred stock
depositary may likewise terminate the deposit agreement if at any time 45 days
have expired after the preferred stock depositary has delivered to us a written
notice of its election to resign and a successor depositary has not been
appointed and accepted its appointment. If any depositary receipts remain
outstanding after the date of termination, the preferred stock depositary will
discontinue the transfer of depositary receipts, will suspend the distribution
of dividends to the holders of depositary receipts, and will not give any
further notices, other than notice of the termination, or perform any further
acts under the deposit agreement except as provided below and except that the
preferred stock depositary will continue to collect dividends and any other
distributions on the preferred stock and deliver the preferred stock together
with the dividends and distributions and the net proceeds of any sales of
rights, preferences, privileges or other property, without liability for any
interest, in exchange for surrendered depositary receipts. At any time after the
expiration of two years from the date of termination, the preferred stock
depositary may sell the preferred stock then held by it at public or private
sales, at any place or places and upon terms as it deems proper, and may hold
the net proceeds of any sale, together with any money and other property then
held by it, without liability for any interest, for the benefit, on a
proportionate basis, of the holders of depositary receipts which have not been
surrendered.
Charges of Preferred Stock Depositary
We will pay all charges of the preferred stock depositary including
charges in connection with:
o the initial deposit of the preferred stock,
o the initial issuance of the depositary receipts,
o the distribution of information to the holders of depositary
receipts regarding matters on which holders of preferred stock are
entitled to vote,
o withdrawals of the preferred stock by the holders of depositary
receipts, or
o redemption or conversion of the preferred stock,
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except for taxes, including transfer taxes, if any, and other governmental
charges and the other charges that are expressly provided in the deposit
agreement to be at the expense of holders of depositary receipts or persons
depositing preferred stock.
Duties of Preferred Stock Depositary
The preferred stock depositary will make available for inspection by
holders of depositary receipts, at its corporate office and its office in New
York City, all reports and communications from us which are delivered to the
preferred stock depositary as the holder of preferred stock. Neither the
preferred stock depositary nor we will be liable if it is prevented or delayed
by law or any circumstance beyond its control in performing its obligations
under the deposit agreement. The obligations of the preferred stock depositary
under the deposit agreement are limited to performing its duties without
negligence or bad faith. Our obligations under the deposit agreement are limited
to performing our duties in good faith. Neither we nor the preferred stock
depositary is obligated to prosecute or defend any legal proceeding with respect
to any depositary shares or preferred stock unless satisfactory indemnity is
furnished. We and the preferred stock depositary are entitled to rely upon
advice of or information from counsel, accountants or other persons believed to
be competent and on documents believed to be genuine.
The preferred stock depositary may resign at any time or be removed by
us, effective upon the acceptance by its successor of its appointment; provided,
that if a successor preferred stock depositary has not been appointed or
accepted the appointment within 45 days after the preferred stock depositary has
delivered a notice of election to resign to us, the preferred stock depositary
may terminate the deposit agreement.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, preferred stock,
common stock or any combination of any of them, and these warrants may be issued
independently or together with any debt securities, preferred stock or common
stock and may be attached to or separate from these securities. Each series of
warrants will be issued under a separate warrant agreement to be entered into
between us and a warrant agent. The warrant agent will act solely as our agent
in connection with the warrants of each series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
warrants. Further terms of the warrants and the applicable warrant agreement
will be included in the applicable prospectus supplement.
The applicable prospectus supplement will describe the terms of any
warrants for which this prospectus is being delivered, including the following:
o the title of the warrants;
o the aggregate number of warrants;
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o the price or prices at which the warrants will be issued;
o the currency or currencies, including composite currencies, in
which the price of the warrants may be payable;
o the designation and terms of the securities, other than preferred
securities and common securities, purchasable upon exercise of the
warrants;
o the price at which and the currency or currencies, including
composite currencies, in which the securities, other than preferred
securities and common securities, purchasable upon exercise of the
warrants may be purchased;
o the date on which the right to exercise the warrants will commence
and the date on which this right will expire;
o whether the warrants will be issued in registered form or bearer
form;
o if applicable, the minimum or maximum amount of the warrants that
may be exercised at any one time;
o if applicable, the designation and terms of the securities, other
than preferred securities and common securities, with which the
warrants are issued and the number of warrants issued with each
security;
o if applicable, the date on and after which the warrants and the
related securities, other than preferred securities and common
securities, will be separately transferable;
o information about book-entry procedures, if any;
o if applicable, a discussion of applicable United States federal
income tax considerations; and
o any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
DESCRIPTION OF PREFERRED SECURITIES OF THE CONSECO TRUSTS
Each Conseco Trust may issue, from time to time, only one series of
preferred securities having terms described in the prospectus supplement. The
declaration of trust of each Conseco Trust authorizes the regular trustees of
the Conseco Trust to issue on behalf of the Conseco Trust one series of
preferred securities. Each declaration of trust will be qualified as an
indenture under the Trust Indenture Act. The
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institutional trustee, an independent trustee, will act as indenture trustee for
the preferred securities for purposes of compliance with the provisions of the
Trust Indenture Act. The preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights, maturity date or dates
and the other preferred, deferred or other special rights or restrictions as are
established by the regular trustees in accordance with the applicable
declaration of trust or as are set forth in the declaration of trust or made
part of the declaration of trust by the Trust Indenture Act. The prospectus
supplement relating to the preferred securities of a Conseco Trust will set
forth the specific terms of the preferred securities, including, to the extent
applicable:
o the distinctive designation of the preferred securities;
o the number of preferred securities issued by the Conseco Trust;
o the annual distribution rate, or method of determining the
rate, for preferred securities issued by the Conseco Trust and the
date or dates upon which distributions will be payable; provided,
however, that distributions on the preferred securities will,
subject to any deferral provisions and any provisions for payment
of defaulted distributions, be payable on a quarterly basis to
holders of the preferred securities as of a record date in each
quarter during which the preferred securities are outstanding and
any provisions relating to the resetting or adjustment of the
distribution rate;
o any right of the Conseco Trust to defer quarterly distributions on
the preferred securities as a result of an interest deferral right
exercised by us on the subordinated debt securities held by the
Conseco Trust;
o whether distributions on preferred securities will be cumulative,
and, in the case of preferred securities having cumulative
distribution rights, the date or dates or method of determining the
date or dates from which distributions on preferred securities will
be cumulative;
o the amount or amounts which will be paid out of the assets of the
Conseco Trust to the holders of preferred securities upon voluntary
or involuntary dissolution, winding-up or termination of the
Conseco Trust;
o the obligation or option, if any, of the Conseco Trust to purchase
or redeem preferred securities and the price or prices at which,
the period or periods within which and the terms and conditions
upon which preferred securities will be purchased or redeemed, in
whole or in part, under this obligation or option with the
redemption price or formula for determining the redemption price to
be specified in the applicable prospectus supplement;
o the voting rights, if any, of preferred securities in addition to
those required by law, including the number of votes per preferred
security and any requirement for the
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approval by the holders of preferred securities as a condition
to specified action or amendments to the declaration of trust;
o the terms and conditions, if any, upon which subordinated debt
securities held by the Conseco Trust may be distributed to holders
of preferred securities; and
o any other relevant terms, rights, preferences, privileges,
limitations or restrictions of preferred securities consistent with
the declaration of trust or applicable law.
All preferred securities offered by the prospectus will be guaranteed by us to
the extent set forth below under "Description of Guarantees." The guarantee
issued by us to each Conseco Trust, when taken together with our back-up
undertakings, consisting of our obligations under each declaration of trust,
including the obligation to pay expenses of each Conseco Trust, the applicable
indenture and any applicable supplemental indentures and the subordinated debt
securities issued to any Conseco Trust will provide a full and unconditional
guarantee by us of amounts due on the preferred securities issued by each
Conseco Trust. The payment terms of the preferred securities will be the same as
the subordinated debt securities issued to the applicable Conseco Trust by us.
Each declaration of trust authorizes the regular trustees to issue on
behalf of the applicable trust one series of common securities having terms,
including distributions, redemption, voting and liquidation rights, and
restrictions that are established by the regular trustees in accordance with the
declaration of trust or that are otherwise set forth in the declaration of
trust. The terms of the common securities issued by each Conseco Trust will be
substantially identical to the terms of the preferred securities issued by the
Conseco Trust, and the common securities will rank equally, and payments will be
made on the common securities on a proportionate basis, with the preferred
securities except that, if an event of default under the declaration of trust
has occurred and is continuing, the rights of the holders of the common
securities to payment of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the preferred
securities. The common securities will also carry the right to vote and to
appoint, remove or replace any of the trustees of the Conseco Trust. We will own
directly or indirectly all of the common securities of each Conseco Trust.
The financial statements of any Conseco Trust that issues preferred
securities will be reflected in our consolidated financial statements with the
preferred securities shown as company-obligated mandatorily-redeemable preferred
securities of a subsidiary trust under minority interest in consolidated
subsidiaries. We will include in a footnote to our audited financial statements,
statements that the applicable Conseco Trust is wholly-owned by us and that the
sole asset of the Conseco Trust is the subordinated debt securities, indicating
the principal amount, interest rate and maturity date of the subordinated debt
securities.
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DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the guarantees
that will be executed and delivered by us for the benefit of the holders, from
time to time, of preferred securities. Each guarantee will be qualified as an
indenture under the Trust Indenture Act. Unless otherwise specified in the
applicable prospectus supplement, Harris Trust and Savings Bank will act as the
preferred securities guarantee trustee. The terms of each guarantee will be set
forth in the guarantee and will include the terms made part of the guarantee by
the Trust Indenture Act. The following is a summary of the material terms of the
guarantees. You should refer to the provisions of the form of guarantee, a copy
of which has been filed as an exhibit to the registration statement of which
this prospectus is a part, and the Trust Indenture Act. Each guarantee will be
held by the preferred securities guarantee trustee for the benefit of the
holders of the preferred securities of the applicable Conseco Trust.
Unless otherwise specified in the applicable prospectus supplement, we
will agree, to the extent set forth in each guarantee, to pay in full to the
holders of the preferred securities, the payments and distributions to be made
with respect to the preferred securities, except to the extent paid by the
applicable Conseco Trust, as and when due, regardless of any defense, right of
set-off or counterclaim which the Conseco Trust may have or assert. The
following payments or distributions with respect to the preferred securities, to
the extent not paid by the Conseco Trust, will be subject to the guarantee,
without duplication:
o any accrued and unpaid distributions that are required to be paid
on the preferred securities, to the extent the Conseco Trust has
funds available to make the payment;
o the redemption price, to the extent the Conseco Trust has funds
available to make the payment, for any preferred securities called
for redemption by the Conseco Trust; and
o upon a voluntary or involuntary dissolution, winding-up or
termination of the Conseco Trust, other than in connection with the
distribution of subordinated debt securities to the holders of
preferred securities or the redemption of all of the preferred
securities upon maturity or redemption of the subordinated debt
securities, the lesser of (1) the sum of the liquidation amount and
all accrued and unpaid distributions on the preferred securities to
the date of payment, to the extent the Conseco Trust has funds
available to make the payment or (2) the amount of assets of the
Conseco Trust remaining for distribution to holders of the
preferred securities in liquidation of the Conseco Trust.
Our obligation to make a guarantee payment may be satisfied by our direct
payment of the required amounts to the holders of preferred securities or by
causing the applicable Conseco Trust to pay the amounts to the holders.
Each guarantee will not apply to any payment of distributions except to
the extent the applicable
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Conseco Trust has funds available to make the payment. If we do not make
interest or principal payments on the subordinated debt securities purchased by
the Conseco Trust, the Conseco Trust will not pay distributions on the preferred
securities issued by the Conseco Trust and will not have funds available to make
the payment.
We have also agreed to guarantee the obligations of each Conseco Trust
with respect to the common securities issued by the Conseco Trust to the same
extent as the guarantee with respect to the preferred securities, except that,
if an event of default under the subordinated indenture has occurred and is
continuing, holders of preferred securities guaranteed by us will have priority
over holders of the common securities guaranteed by us with respect to
distributions and payments on liquidation, redemption or otherwise.
Covenants of Conseco
Unless otherwise specified in the applicable prospectus supplement, in
each guarantee of the payment obligations of a Conseco Trust with respect to
preferred securities, we will covenant that, so long as any preferred securities
issued by the Conseco Trust remain outstanding, if there has occurred any event
of default under the guarantee or under the declaration of trust of the Conseco
Trust, then we will not:
o declare or pay any dividend on, make any other distributions on, or
redeem, purchase, acquire or make a liquidation payment regarding,
any of our capital stock, except:
(1) purchases or acquisitions of our capital stock in
connection with the satisfaction of our obligations under any
employee or agent benefit plans or the satisfaction of our
obligations under any contract or security outstanding on the
date of the event requiring us to purchase our capital stock;
(2) as a result of a reclassification of our capital stock or
the exchange or conversion of one class or series of our
capital stock for another class or series of our capital stock;
(3) the purchase of fractional interests in shares of our
capital stock in connection with the conversion or exchange
provisions of our capital stock or the security being converted
or exchanged;
(4) dividends or distributions in our capital stock, or rights
to acquire our capital stock, or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital
stock; or
(5) redemptions or repurchases of any rights outstanding under
a shareholder rights plan;
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o make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by us which
rank junior to the subordinated debt securities issued to the
applicable Conseco Trust; and
o make any guarantee payments regarding the foregoing, other than
under a guarantee of the payment obligations of a Conseco Trust
with respect to preferred securities.
Modification of the Guarantees; Assignment
Except for any changes that do not adversely affect the rights of
holders of preferred securities, in which case no consent of the holders will be
required, each guarantee of the payment obligations of a Conseco Trust with
respect to preferred securities may be amended only with the prior approval of
the holders of at least a majority in liquidation amount of the outstanding
preferred securities of the Conseco Trust. The manner of obtaining any approval
of holders of the preferred securities will be set forth in accompanying
prospectus supplement. All guarantees and agreements contained in a guarantee of
the obligations of a Conseco Trust with respect to preferred securities will
bind the successors, assigns, receivers, trustees and representatives of Conseco
and will inure to the benefit of the holders of the preferred securities of the
applicable Conseco Trust then outstanding.
Events of Default
An event of default under a preferred securities guarantee will occur
upon our failure to perform any of our payment or other obligations under the
guarantee. The holders of a majority in liquidation amount of the preferred
securities to which the preferred securities guarantee relates have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the preferred securities guarantee trustee with respect to the
guarantee or to direct the exercise of any trust or power conferred upon the
preferred securities guarantee trustee under the guarantee.
If the preferred securities guarantee trustee fails to enforce the
guarantee, any record holder of preferred securities to which the guarantee
relates may institute a legal proceeding directly against us to enforce the
preferred securities guarantee trustee's rights under the guarantee without
first instituting a legal proceeding against the applicable Conseco Trust, the
preferred securities guarantee trustee or any other person or entity. If we have
failed to make a guarantee payment under a guarantee, a record holder of
preferred securities to which the guarantee relates may directly institute a
proceeding against us for enforcement of the guarantee for the payment to the
record holder of the preferred securities to which the guarantee relates of the
principal of or interest on the applicable subordinated debt securities on or
after the respective due dates specified in the subordinated debt securities,
and the amount of the payment will be based on the holder's proportionate share
of the amount due and owing on all of the preferred securities to which the
guarantee relates. We have waived any right or remedy to require that any action
be brought first against the applicable Conseco Trust or any other person or
entity before proceeding directly against us. The record holder in the case of
the issuance of one or more global preferred securities certificates will be The
Depository Trust Company, or its nominee, acting at the direction of the
beneficial owners of the preferred securities.
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We will be required to provide annually to the preferred securities
guarantee trustee a statement as to the performance of our obligations under
each outstanding preferred securities guarantee and as to any default in our
performance.
Information Concerning the Preferred Securities Guarantee Trustee
The preferred securities guarantee trustee, before the occurrence of a
default under a preferred securities guarantee, undertakes to perform only the
duties that are specifically set forth in the guarantee and, after a default
under a guarantee, will exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to this
provision, the preferred securities guarantee trustee is under no obligation to
exercise any of the powers vested in it by a preferred securities guarantee at
the request of any holder of preferred securities to which the guarantee relates
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred by the preferred securities guarantee trustee
in exercising any of its powers.
Termination
Each preferred securities guarantee will terminate as to the preferred
securities issued by the applicable Conseco Trust upon full payment of the
redemption price of all preferred securities of the Conseco Trust, upon
distribution of the subordinated debt securities held by the Conseco Trust to
the holders of all of the preferred securities of the Conseco Trust or upon full
payment of the amounts payable in accordance with the declaration of trust of
the Conseco Trust upon liquidation of the Conseco Trust. Each preferred
securities guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of preferred securities issued by the
applicable Conseco Trust must restore payment of any sums paid under the
preferred securities or the preferred securities guarantee.
Status of the Guarantees
The preferred stock guarantees will constitute our unsecured
obligations and will rank:
o subordinate and junior in right of payment to all of our other
liabilities, including the subordinated debt securities, except
those liabilities made equivalent or subordinate by their terms;
o equivalently with the most senior preferred or preference stock now
or hereafter issued by us and with any guarantee now or hereafter
entered into by us in respect of any preferred or preference stock
of any of our affiliates; and
o senior to our common stock.
The terms of the preferred securities provide that each holder of preferred
securities by acceptance of the preferred securities agrees to the subordination
provisions and other terms of our guarantee relating to the preferred
securities.
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Each preferred securities guarantee will constitute a guarantee of
payment and not of collection. This means that the guaranteed party may
institute a legal proceeding directly against us to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity.
Governing Law
The preferred securities guarantees will be governed by and construed
in accordance with the law of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, shares of common
stock, preferred stock, depositary shares or other securities at a future date
or dates or, in any case, a number or dollar amount to be determined by a
specified formula or some other means. The consideration for the common stock,
preferred stock, depositary shares or other securities may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts. The stock purchase
contracts may be issued separately or as a part of stock purchase units
consisting of a stock purchase contract and our debt securities, preferred
securities issued by a Conseco Trust or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the common stock, preferred stock, depositary shares or other
securities under the stock purchase contracts. We may be required under the
stock purchase contracts to make periodic payments to the holders of the stock
purchase units or by the stock purchase units to make periodic payments to the
holders of the stock purchase units, and these payments may be unsecured or
prefunded on some basis. The stock purchase contracts may require holders to
secure their obligations under those contracts in a specified manner. The
applicable prospectus supplement will describe the terms of any stock purchase
contracts or stock purchase units.
PLAN OF DISTRIBUTION
We and/or any Conseco Trust may sell any of the securities being
offered by this prospectus in any one or more of the following ways from time
to time:
o through agents;
o to or through underwriters;
o through dealers; or
o directly to purchasers.
The prospectus supplement for the securities will set forth the terms
of the offering of the securities, including the name or names of any
underwriters, dealers or agents; the purchase price of the securities and the
proceeds to us and/or a Conseco Trust from the sale; any underwriting discounts
and
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commissions or agency fees and other items constituting underwriters' or
agents' compensation; any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers and any securities exchange
on which the securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
The distribution of the securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices.
Offers to purchase securities may be solicited by agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named, and any
commissions payable by us and/or the applicable Conseco Trust to the agent will
be set forth, in the applicable prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any agent will be acting on a reasonable
best efforts basis for the period of its appointment. Any agent may be deemed to
be an underwriter, as that term is defined in the Securities Act of 1933, of the
securities so offered and sold.
If securities are sold by means of an underwritten offering, we and/or
the applicable Conseco Trust will execute an underwriting agreement with an
underwriter or underwriters at the time an agreement for the sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and dealers, if any,
will be set forth in the prospectus supplement which will be used by the
underwriters to make resales of the securities in respect of which this
prospectus is delivered to the public. We and/or the applicable Conseco Trust
may also agree with an underwriter or underwriters to enter into an underwriting
agreement or conduct an underwritten offering, in each case, at some future
date. If underwriters are utilized in the sale of the securities with respect to
which this prospectus is delivered, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at fixed public offering
prices or at varying prices determined by the underwriter at the time of sale.
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing underwriters.
If any underwriter or underwriters are utilized in the sale of the securities,
unless otherwise indicated in the prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
specific conditions and that the underwriters for a sale of securities will be
obligated to purchase all of the securities of a series if any are purchased.
If a dealer is utilized in the sales of the securities with respect to
which this prospectus is delivered, we and/or the applicable Conseco Trust will
sell the securities to the dealer as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the
time of resale. Any dealer may be deemed to be an underwriter, as the term is
defined in the Securities Act of 1933, of the securities so offered and sold.
The name of the dealer and the terms of the transaction will be set forth in the
prospectus supplement relating to the sale of securities.
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Offers to purchase securities may be solicited directly by us and/or
the applicable Conseco Trust and the sale of securities may be made by us and/or
the applicable Conseco Trust directly to institutional investors or others, who
may be deemed to be underwriters within the meaning of the Securities Act of
1933 for any resale of securities. The terms of any sales will be described in
the prospectus supplement relating to the sale of securities.
Agents, underwriters and dealers may be entitled under relevant
agreements to indemnification or contribution by us and/or the applicable
Conseco Trust against specified liabilities, including liabilities under the
Securities Act of 1933.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, us and our subsidiaries in the
ordinary course of business.
Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment under their terms, the
occurrence of specified events, or otherwise, by one or more remarketing firms,
acting as principals for their own accounts or as agents for us and/or the
applicable Conseco Trust. Any remarketing firm will be identified and the terms
of its agreement, if any, with its compensation will be described in the
applicable prospectus supplement. Remarketing firms may be deemed to be
underwriters, as the term is defined in the Securities Act of 1933, in
connection with the securities remarketed by the remarketing firms. Remarketing
firms may be entitled under agreements which may be entered into with us and/or
the applicable Conseco Trust to indemnification or contribution by us and/or the
applicable Conseco Trust against specified civil liabilities, including
liabilities under the Securities Act of 1933, and may be customers of, engage in
transactions with or perform services for us and our subsidiaries in the
ordinary course of business.
If so indicated in the applicable prospectus supplement, we and/or the
applicable Conseco Trust may authorize agents, underwriters or dealers to
solicit offers by specified types of institutions to purchase securities from us
and/or the applicable Conseco Trust at the public offering prices set forth in
the applicable prospectus supplement under delayed delivery contracts providing
for payment and delivery on a specified date or dates in the future. A
commission indicated in the applicable prospectus supplement will be paid to
underwriters, dealers and agents soliciting purchases of securities under the
delayed delivery contracts accepted by us and/or the applicable Conseco Trust.
No dealer, salesman or other individual has been authorized to give any
information or to make any representations not contained in this prospectus, any
accompanying prospectus supplement or the documents incorporated or deemed
incorporated into this prospectus by reference. If given or made, the
information or representations must not be relied upon as having been authorized
by us or any underwriter, dealer or agent. This prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, any securities other
than the registered securities to which it relates, or an offer to sell or a
solicitation of an offer to buy those securities to which it relates, in any
jurisdiction where, or to any person to whom, it is unlawful to make the offer
or solicitation. Neither the delivery of this prospectus or any prospectus
supplement nor any sale made under this prospectus should, under any
circumstances,
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create any implication that there has not been any change in the facts set
forth in this prospectus or in our affairs since the date of this prospectus.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements, trend analyses and other information contained in this
prospectus, any prospectus supplement or any document incorporated into this
prospectus by reference relative to markets for the our products and trends in
our operations or financial results, as well as other statements including words
like "anticipate," "believe," "plan," "estimate," "expect," "intend," "should,"
"could," "goal," "target," "on track," "comfortable with," and other similar
expressions, constitute forward-looking statements under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
known and unknown risks, uncertainties and other factors which may cause actual
results to be materially different from those contemplated by the
forward-looking statements. These factors include, among other things:
o general economic conditions and other factors, including prevailing
interest rate levels, stock and credit market performance and
health care inflation, which may affect, among other things, our
ability to sell our products, make loans and access capital
resources and the costs associated therewith, the market value of
our investments, the lapse rate and profitability of our policies
and the level of defaults and prepayments of loans we make;
o our ability to achieve anticipated synergies and levels of
operational efficiencies;
o customer response to new products, distribution channels and
marketing initiatives;
o mortality, morbidity, usage of health care services and other
factors which may affect the profitability of our insurance
products;
o changes in the federal income tax laws and regulations which may
affect the relative tax advantages of some of our products;
o increasing competition in the sale of insurance and annuities and
in the finance business;
o regulatory changes or actions, including those relating to
regulation of financial services affecting, among other things,
bank sales and underwriting of insurance products, regulation of
the sale, underwriting and pricing of insurance products, and
health care regulation affecting our health insurance products;
o the availability and terms of future acquisitions;
o our ability and the ability of our vendors and other external
parties to achieve year 2000 readiness for significant systems and
operations on a timely basis; and
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o the risk factors or uncertainties listed from time to time in any
prospectus supplement or any document incorporated into this
prospectus by reference.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, the
legal validity of securities, other than the preferred securities, will be
passed upon for us by John J. Sabl, our Executive Vice President and General
Counsel. Mr. Sabl is a full-time employee and owns shares and holds options to
purchase shares of our common stock. Matters of Delaware law relating to the
validity of the preferred securities will be passed upon for the Conseco Trusts
by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware
counsel to the Conseco Trusts.
EXPERTS
The consolidated financial statements of Conseco at December 31, 1998
and 1997, and for each of the three years in the period ended December 31, 1998,
which are incorporated by reference in this prospectus, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report thereon, which as to the years 1997 and 1996, insofar as the financial
statements relate to Conseco Finance Corp. (formerly Green Tree Financial
Corporation), is based on the report of KPMG LLP, independent auditors. The
financial statements referred to above are incorporated herein by reference in
reliance upon these reports given upon the authority of the firms as experts in
accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee.............. $ 792,000
New York Stock Exchange listing fees............................. 100,000
Legal fees and expenses.......................................... 250,000
Accounting fees.................................................. 175,000
Printing expenses and engraving expense.......................... 325,000
Trustee's fees and expenses...................................... 75,000
Rating agencies' fees............................................ 700,000
Miscellaneous.................................................... 83,000
----------
Total...................................................... $2,500,000
==========
Except for the SEC registration fee, all of the foregoing are
estimates.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Indiana Business Corporation Law grants authorization to Indiana
corporations to indemnify officers and directors for their conduct if such
conduct was in good faith and was in the corporation's best interests or, in the
case of directors, was not opposed to such best interests, and permits the
purchase of insurance in this regard. In addition, the shareholders of a
corporation may approve the inclusion of other or additional indemnification
provisions in the articles of incorporation and by-laws.
The Bylaws of Conseco provide for the indemnification of any person made a
party to any action, suit or proceeding by reason of the fact that he is a
director, officer or employee of Conseco, if (a) such person is wholly
successful with respect to such action, suit or proceeding or (b) if such person
is determined to have acted in good faith, in what he or she reasonably believed
to be the best interests of Conseco or at least not opposed to its best
interests and, in addition, with respect to any criminal claim, is determined to
have had reasonable cause to believe that his or her conduct was lawful or had
no reasonable cause to believe that his or her conduct was unlawful. Such
indemnification shall be against the reasonable expenses, including attorneys'
fees, incurred by such person in connection with the defense of such action,
suit or proceeding and amounts paid in settlement. If such person was not wholly
successful, the determination of entitlement to indemnification shall be made by
one of the following methods, such method to be selected by the Board of
Directors: (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who are not and have not been parties to the claim; (b)
by the majority vote of a committee duly designated by the Board of Directors,
consisting solely of two or more directors who are not and have not been parties
to the claim; and (c) by special legal counsel.
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The above discussion of Conseco's Bylaws and the Indiana Business
Corporation Law is not intended to be exhaustive and is qualified in its
entirety by such Bylaws and the Indiana Business Corporation Law.
Conseco has purchased director and officer liability insurance which would
provide coverage against certain liabilities, including liabilities under the
securities laws.
The Declaration of Trust for each of Conseco Financing Trust VIII, Conseco
Financing Trust IX, Conseco Financing Trust X and Conseco Financing Trust XII
(the "Trusts") provides that no Institutional Trustee or any of its Affiliates,
Delaware Trustee or any of its Affiliates, or any officer, director,
shareholder, member, partner, employee, representative, custodian, nominee or
agent of the Institutional Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any Regular Trustee,
or any officer, director, shareholder, member, partner, employee, representative
or agent of any Regular Trustee or any Affiliate thereof, or any employee or
agent of any of the Trusts or any of their Affiliates (each a "Company
Indemnified Person") shall be liable, responsible or accountable in damages or
otherwise to any of such Trusts or any officer, director, shareholder, partner,
member, representative, employee or agent of any such Trust or its Affiliates or
to any holder of Preferred Securities for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Fiduciary Indemnified
Person or Company Indemnified Person in good faith on behalf of any of such
Trusts and in a manner such Fiduciary Indemnified Person or Company Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Fiduciary Indemnified Person or Company Indemnified Person by such
Declaration or by law, except that a Fiduciary Indemnified Person or Company
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Fiduciary Indemnified Person's or Company Indemnified Person's
gross negligence or willful misconduct with respect to such acts or omissions.
The Declaration of Trust for each of such Trusts also provides that to the
full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of any such Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of any such Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. Each of the Declaration of Trusts also provides that to
the full extent permitted by law, the Company shall indemnify any Company
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of any
such trust to procure a judgment in its favor by reason of the fact that such
person is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or
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settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of any such trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to any such trust
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem proper. The
Declaration of Trust for each such Trust further provides that expenses
(including attorneys' fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in the immediately preceding two sentences shall be paid
by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the Company as authorized
in any such Declaration.
The Declaration of Trust for each Trust also provides that the Company
shall indemnify each Fiduciary Indemnified Person against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts under
any such Trust, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties thereunder.
ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
1.1 Form of Purchase Agreement -- Debt Securities is
incorporated herein by reference to Exhibit 1.1 to the
Registration Statement on Form S-3 of the Registrant (No.
33-53095).
1.2 Form of Purchase Agreement -- Equity is incorporated
herein by reference to Exhibit 1.2 to the Registration
Statement on Form S-3 of the Registrant (No. 33-53095).
3.1 Amended and Restated Articles of Incorporation of Conseco,
Inc. and Articles of Amendment thereto.
3.2 Amended and Restated Bylaws of Conseco, Inc.
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4.1 Senior Indenture, dated as of November 13, 1997 by and
between Conseco, Inc. and Bank of New York as successor in
interest to LTCB Trust Company, as Trustee, pursuant to
which the Senior Debt Securities are to be issued.*
4.2 Subordinated Indenture, dated as of July 21, 1999, between
Conseco, Inc. and Harris Trust and Savings Bank, as Trustee,
pursuant to which the Subordinated Debentures are to be
issued. **
4.3 Form of Deposit Agreement will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.4 Certificate of Trust of Conseco Financing Trust XII.
4.5 Declaration of Trust of Conseco Financing Trust XII.
4.6 Certificate of Trust of Conseco Financing Trust VIII. **
4.7 Declaration of Trust of Conseco Financing Trust VIII. **
4.8 Certificate of Trust of Conseco Financing Trust IX. **
4.9 Declaration of Trust of Conseco Financing Trust IX. **
4.10 Certificate of Trust of Conseco Financing Trust X. **
4.11 Declaration of Trust of Conseco Financing Trust X. **
4.12 Form of Amended and Restated Declaration of Trust is
incorporated by reference to Exhibit 4.10 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991).
4.13 Form of Preferred Securities Guarantee Agreement by Conseco,
Inc. is incorporated by reference to Exhibit 4.11 to
Amendment No. 1 to the Registration Statement on Form S-3 of
Conseco (No. 333-14991)
4.14 Form of Debt Security -- The form or forms of such Debt
Securities with respect to each particular offering will be
filed as an exhibit subsequently included or incorporated by
reference herein.
4.15 Form of Preferred Stock -- Any amendment to the Company's
Articles of Incorporation authorizing the creation of any
series of Preferred Stock or Depositary Shares representing
such shares of Preferred Stock and setting forth the rights,
preferences and designations thereof will be filed as an
exhibit subsequently included or incorporated by reference
herein.
4.16 Form of Warrant Agreement will be filed as an exhibit
subsequently included or incorporated by reference herein.
4.17 Form of Preferred Security is incorporated by reference
to Exhibit 4.15 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No.333-14991).
4.18 Form of Supplemental Indenture is incorporated by reference
to Exhibit 4.16 to Amendment No. 1 to the Registration
Statement on Form S-3 of Conseco (No. 333-14991).
4.19 Form of __% Subordinated Deferrable Interest Debenture is
incorporated by reference to Exhibit 4.17 to Amendment No. 1
to the Registration Statement on Form S-3 of Conseco (No.
333-14991).
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5.1 Opinion of John J. Sabl.
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts
23.1 Consent of John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of PricewaterhouseCoopers LLP with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG LLP with respect to the financial statements
of Conseco Finance Corp. (formerly Green Tree Financial
Corporation)
24.1 Powers of Attorney from Stephen C. Hilbert, Rollin M. Dick,
James S. Adams, Lawrence M. Coss, Ngaire E. Cuneo, David R.
Decatur, M. Phil Hathaway, Donald F. Gongaware, James D.
Massey, Dennis E. Murray, Sr., John M. Mutz, Robert S.
Nickoloff and David V. Harkins are included on the signature
pages of this Registration Statement.
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Bank of New York, as
Trustee under the Senior Indenture.
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee under the Subordinated Indenture.
25.3 Statements of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee under the the Declaration of Trust
of Conseco Financing Trust VIII, the Declaration of Trust of
Conseco Financing Trust IX, the Declaration of Trust of
Conseco Financing Trust X and the Declaration of Trust of
Conseco Financing Trust XII.
25.4 Statements of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee of the Preferred Securities
Guarantees for the benefit of the holders of Preferred
Securities of Conseco Financing Trust VIII, Conseco
Financing Trust IX, Conseco Financing Trust X and Conseco
Financing Trust XII.
* Incorporated herein by reference to the corresponding exhibit to Amendment No.
1 to the Registration Statement on Form S-3 of Conseco (No. 33-53095).
** Incorporated herein by reference to the corresponding exhibit to the
Registration Statement on Form S-3 of Conseco (No. 333-83465).
II-5
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such
II-6
<PAGE>
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, each of the Registrants has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer
or controlling person of the Registrants in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrants will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(d) If the securities to be registered are to be offered at competitive
bidding, the undersigned Registrants hereby undertake: (1) to use
its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number
of copies of a prospectus which at that time meets the requirements
of Section 10(a) of the Act, and relating to the securities offered
at competitive bidding, as contained in the Registration Statement,
together with any supplements thereto, and (2) to file an amendment
to the Registration Statement reflecting the results of bidding, the
terms of the reoffering and related matters to the extent required
by the applicable form, not later than the first use, authorized by
the issuer after the opening of bids, of a prospectus relating to
the securities offered at competitive bidding, unless no further
public offering of such securities by the issuer and no reoffering
of such securities by the purchasers is proposed to be made.
(e) The undersigned Registrants hereby undertake that (1) for purposes
of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was
declared effective; and (2) for the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-7
<PAGE>
(f) The undersigned Registrants hereby undertake to file, if necessary,
an application for the purpose of determining the eligibility of the
Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939, as amended, in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission
under Section 305(b)(2) of such Act.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, there unto duly
authorized, in the City of Carmel, State of Indiana, on January 14, 2000.
CONSECO, INC.
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick,
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears below
hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either of
whom may act without the joinder of the other, as his or her attorney-in-fact to
sign on his or her behalf individually and in the capacity stated below and to
file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Stephen C. Hilbert Director, Chairman of the Board, January 14, 2000
- --------------------------- President and Chief Executive Officer
Stephen C. Hilbert (Principal Executive Officer
/s/ Rollin M. Dick Director, Executive Vice President January 14, 2000
- --------------------------- and Chief Financial Officer
Rollin M. Dick (Principal Financial Officer
/s/ James S. Adams Senior Vice President, Chief January 14, 2000
- --------------------------- Accounting Officer and Treasurer
James S. Adams (Principal Accounting Office)
/s/ Lawrence M. Coss Director January 14, 2000
- ---------------------------
Lawrence M. Coss
/s/ Ngaire E. Cuneo Director January 14, 2000
- ---------------------------
Ngaire E. Cuneo
/s/ David R. Decatur Director January 14, 2000
- ---------------------------
David R. Decatur
/s/ M. Phil Hathaway Director January 14, 2000
- ---------------------------
M. Phil Hathaway
/s/ Donald F. Gongaware Director January 14, 2000
- ---------------------------
Donald F. Gongaware
/s/ James D. Massey Director January 14, 2000
- ---------------------------
James D. Massey
/s/ Dennis E. Murray, Sr. Director January 14, 2000
- ---------------------------
Dennis E. Murray, Sr.
/s/ John M. Mutz Director January 14, 2000
- ---------------------------
John M. Mutz
/s/ Robert S. Nickoloff Director January 14, 2000
- ---------------------------
Robert S. Nickoloff
/s/ David V. Harkins Director January 14, 2000
- ---------------------------
David V. Harkins
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust VIII certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on January 14, 2000.
CONSECO FINANCING TRUST VIII
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust IX certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on January 14, 2000.
CONSECO FINANCING TRUST IX
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust X certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on January 14, 2000.
CONSECO FINANCING TRUST X
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Conseco
Financing Trust XII certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Carmel, State of Indiana, on January 14, 2000.
CONSECO FINANCING TRUST XII
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
POWER OF ATTORNEY
Each person whose signature to this Registration Statement appears
below hereby appoints John J. Sabl and Karl W. Kindig, and each of them, either
of whom may act without the joinder of the other, as his or her attorney-in-fact
to sign on his or her behalf individually and in the capacity stated below and
to file all amendments and post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
By: /s/ Stephen C. Hilbert
------------------------------
Stephen C. Hilbert, as Trustee
By: /s/ Rollin M. Dick
------------------------------
Rollin M. Dick, as Trustee
II-14
<PAGE>
EXHIBIT INDEX
TO REGISTRATION STATEMENT
ON FORM S-3
CONSECO, INC.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
3.1 Amended and Restated Articles of Incorporation of Conseco,
Inc. and Articles of Amendment thereto.
3.2 Amended and Restated Bylaws of Conseco, Inc.
4.4 Certificate of Trust of Conseco Financing Trust XII.
4.5 Declaration of Trust of Conseco Financing Trust XII.
5.1 Opinion of John J. Sabl
5.2 Opinion of Richards, Layton & Finger, P.A.
12.1 Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-obligated
Mandatorily Redeemable Preferred Securities of Subsidiary
Trusts
23.1 Consent of John J. Sabl (included in Exhibit 5.1 hereto)
23.2 Consent of PricewaterhouseCoopers LLP with respect to the
financial statements of Conseco, Inc.
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2 hereto)
23.4 Consent of KPMG LLP with respect to the financial statements
of Conseco Finance Corp. (formerly Green Tree Financial
Corporation)
25.1 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Bank Of New York, as
Trustee under the Senior Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee under the Subordinated Indenture.
25.3 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee under the Declaration of Trust of
Conseco Financing Trust VIII, the Declaration of Trust of
Conseco Financing Trust IX, the Declaration of Trust of
Conseco Financing Trust X and the Declaration of Trust of
Conseco Financing Trust XII.
25.4 Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended, of Harris Trust and
Savings Bank, as Trustee of the Preferred Securities
Guarantees for the benefit of the holders of Preferred
Securities of Conseco Financing Trust VIII, Conseco
Financing Trust IX, Conseco Financing Trust X and Conseco
Financing Trust XII.
II-15
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
CONSECO, INC.
The undersigned officer of Conseco, Inc. (hereinafter referred to as the
"Corporation") existing pursuant to the provisions of the Indiana Business
Corporation Law, as amended (hereinafter referred to as the "Act"), desiring to
give notice of certain corporate action effectuating amendment of provisions of
its Articles of Incorporation, by the adoption of new Amended and Restated
Articles of Incorporation, superseding and replacing all Articles of
Incorporation, and amendments and restatements thereto heretofore existing,
hereby certifies as follows:
ARTICLE I
Text of the Amended and Restated Articles
The exact text of the entire Articles of Incorporation of the Corporation,
as amended and restated (hereinafter referred to as the "Amended Articles"), is
as follows:
ARTICLE I
NAME
The name of the Corporation is Conseco, Inc.
ARTICLE II
Purpose
The purposes for which the Corporation is formed are: to transact for
pecuniary profit any lawful business or businesses as permitted by the Act.
ARTICLE III
Period of Existence
The period during which the Corporation shall continue is perpetual.
<PAGE>
ARTICLE IV
Resident Agent and Principal Office
Section 1. Resident Agent. The name and address of the Corporation's
Resident Agent for service of process is John J. Sabl, 11825 N. Pennsylvania
Street, Carmel, Indiana 46032.
Section 2. Principal Office. The post office address of the principal
office of the Corporation is 11825 N. Pennsylvania Street, Carmel, Indiana
46032.
ARTICLE V
Terms of Authorized Shares
Section 1. Designation. The authorized shares of the Corporation shall
be divided into two (2) classes, as follows:
(a) 1,000,000,000 shares of Common Stock without par value. The shares
of Common Stock shall be identical with each other in all respects.
(b) 20,000,000 shares of Preferred Stock without par value, which
shares may, in the discretion of the Board of Directors of the Corporation, be
issued in one or more classes or series having differing rights, preferences,
restrictions and limitations. All shares of Preferred Stock of the same series
shall be identical with each other in all respects.
The Preferred Stock and any class or series thereof shall possess such
relative rights, preferences, limitations and restrictions as may be established
by resolution of the Board of Directors of the Corporation prior to the issuance
thereof, which is vested to the fullest extent permitted by law with authority
to fix the relative rights, preferences, qualifications, limitations or
restrictions for the Preferred Stock or any class or any series thereof,
including without limiting the generality of the foregoing, the following:
(i) The number of shares which shall initially constitute
each class or series of a class of Preferred Stock;
(ii) The rate or rates and the time or times at which
dividends and other distributions on the shares of each class or each
series thereof shall be paid, the relationship or priority of such
dividends to those
2
<PAGE>
payable on Common Stock or to other classes or series of Preferred
Stock, and whether or not any such dividends shall be cumulative;
(iii) The amount payable on the shares of each class or series
in the event of the voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation, and the relative
priorities, if any, to be accorded such payments in liquidation;
(iv) The terms and conditions upon which either the
Corporation may exercise a right to redeem shares of each class or
series or upon which the holder of such shares may exercise a right to
require redemption of such Shareholder's Preferred Stock, including any
premiums or penalties applicable to exercise of such rights;
(v) Whether or not a sinking fund shall be created for the
redemption of the shares of a class or series, and the terms and
conditions of any such fund;
(vi) Rights, if any, to convert any shares of Preferred Stock
either into shares of Common Stock or into other classes or series of
Preferred Stock and the prices, premiums or penalties, ratios and other
terms applicable to any such conversion;
(vii) Restrictions on acquisition, rights of first refusal or
other limitations on transfer as may be applicable to any class or
series, including any series intended to be offered to a special
class or group; and
(viii) Any other relative rights, preferences, limitations,
qualifications or restrictions on the Preferred Stock or any class or
series of such shares, including rights and remedies in the event of
default in connection with dividends, other distributions or
redemptions.
Section 2. Preemptive Rights. No holder of any share of capital stock
of the Corporation shall have any preemptive rights.
3
<PAGE>
Section 3. Issuance of Shares. The shares of capital stock of the
Corporation may be issued by the Corporation from time to time in the discretion
of the Board of Directors to such persons for such consideration and upon such
terms and conditions as it may determine, subject to the provisions of the Act
and these Amended Articles. Such of its shares as the Corporation may reacquire
may be resold or otherwise disposed of upon such terms and conditions and for
such consideration as the Board of Directors may determine from time to time.
The Board of Directors may from time to time grant or issue options, warrants or
rights to purchase shares of capital stock of the Corporation upon such terms
and conditions and for such consideration as it shall determine, subject to the
provisions of the Act.
Section 4. Dissolution Distribution on Common Stock. In the event of
any voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the holders of the outstanding shares of Common Stock shall be
entitled, after due payment or provisions for payment of the debts and other
liabilities of the Corporation, and after and subject to such distributions as
may be required with respect to any class or series of Preferred Stock
outstanding, to share ratably, share for share, in the remaining net assets of
the Corporation.
ARTICLE VI
Directors
Section 1. Number of Directors. The number of director(s) may be from
time to time fixed by the Bylaws of the Corporation at any number. In the
absence of a Bylaw fixing the number of directors, the number shall be seven
(7).
Section 2. Names and Post Office Addresses of the Board of Directors.
The names and post office addresses of the Board of Directors of the Corporation
holding office at the time of the adoption of these Amended Articles are:
<TABLE>
<CAPTION>
Number and
Name Street or Building City State Zip Code
- ---- ------------------ ---- ----- --------
<S> <C> <C> <C> <C>
Stephen C. Hilbert 11825 N. Pennsylvania St., Carmel, Indiana 46032
Rollin M. Dick 11825 N. Pennsylvania St., Carmel, Indiana 46032
Donald F. Gongaware 11825 N. Pennsylvania St., Carmel, Indiana 46032
Ngaire E. Cuneo 11825 N. Pennsylvania St., Carmel, Indiana 46032
4
<PAGE>
John M. Mutz 11825 N. Pennsylvania St., Carmel, Indiana 46032
M. Phil Hathaway 11825 N. Pennsylvania St., Carmel, Indiana 46032
David R. Decatur 11825 N. Pennsylvania St., Carmel, Indiana 46032
James D. Massey 11825 N. Pennsylvania St., Carmel, Indiana 46032
Dennis E. Murray, Sr. 11825 N. Pennsylvania St., Carmel, Indiana 46032
</TABLE>
Section 3. Qualifications of Directors (if any). Qualifications for
the directors, if any, shall be set out in the Bylaws.
Section 4. Staggered Terms of Directors Authorized. At any time as such
may be permitted under the laws of the State of Indiana applicable to and
governing the Corporation, the Bylaws of the Corporation may provide for the
staggering of the terms of office of the Directors of the Corporation by
dividing the total number of Directors into groups and the election of the
groups in alternate years for terms of more than one year. The number of groups,
lengths of terms and other provisions for such staggering may be in any manner
permitted by the laws of the State of Indiana, as such may be amended from time
to time.
Section 5. Amendment of Section 4. Notwithstanding any provisions of
these Amended Articles to the contrary, the provisions of Section 4 above of
this Article VI may not be amended, altered, changed or repealed, nor may any
provision inconsistent with said provisions be added to these Amended Articles
or to the Bylaws of the Corporation, except upon the affirmative vote of the
holders of not less than 80% of the total voting power of all outstanding shares
of the Voting Stock of the Corporation (as hereinafter defined in Article VIII,
Section 5) voting as a single class.
ARTICLE VII
President and Secretary
The names and post office addresses of the President and Secretary of
the Corporation at the time of filing these Amended Articles are:
<TABLE>
<CAPTION>
Number and
Name Street or Building City State Zip Code
---- ------------------ ---- ----- --------
<S> <C> <C> <C> <C>
Stephen C. Hilbert 11825 N. Pennsylvania St., Carmel, Indiana 46032
President
5
<PAGE>
John J. Sabl 11825 N. Pennsylvania St., Carmel, Indiana 46032
Secretary
</TABLE>
ARTICLE VIII
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
Section 1. Bylaws. Bylaws will be adopted by the Directors from time
to time.
Section 2. Place of Meetings. Meetings of the Shareholders shall be
held at such time or place as set out in the calls, notices or waivers for such
meetings and may be either inside or outside the State of Indiana.
Section 3. Purchase of Corporate Stock. By resolution of Directors to
the extent required by any purchase of the Corporation's own stock, such
purchase may be made out of unreserved and unrestricted capital surplus
available therefor.
Section 4. Distribution Out of Capital Surplus. The Directorsmay from
time to time distribute to Shareholders out of capital surplus a portion of the
Corporation's assets, in cash or property, as provided by the Act.
Section 5. Minimum Price Provisions for Certain Business Combinations.
This Section 5 shall govern the approval of certain business combination
transactions involving the Corporation. Each capitalized term used in this
Section 5 shall have the meaning ascribed to it in Clause (d) hereof.
(a) Special Business Combination Transactions. Except as provided in
subsection (b) of this Section 5, holders of Voting Stock shall not be entitled
to vote on a Special Business Combination Transaction and such Special Business
Combination Transaction shall not be effected unless the aggregate amount of the
cash and the fair value of any consideration other than cash to be received per
share by holders of the Corporation's Common Stock in such Special Business
Combination Transaction shall be at least equal to the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees and adjusted for any intervening stock splits and stock dividends) paid in
order to acquire any shares of Common Stock beneficially owned by the Related
Person, and the aggregate amount of the cash and the fair value of any
consideration other than cash to be received per share by holders of any class
or series of the Corporation's Preferred Stock in such Special Business
Combination
6
<PAGE>
Transaction shall be at least equal to the highest per share price (including
any brokerage commissions, transfer taxes, and soliciting dealers' fees and
adjusted for any intervening stock splits and stock dividends) paid in order to
acquire any shares of such class or series of Preferred Stock beneficially owned
by the Related Person. In the event of a Special Business Combination
Transaction in which the Corporation survives, the phrase "any consideration
other than cash to be received" as used in this subsection (a) of Section 5
shall include the shares of Common Stock or Preferred Stock retained by the
holders thereof.
(b) Exceptions for Approval by Continuing Directors. The provisions
of subsection (a) of this Section 5 shall not apply to any Special Business
Combination Transaction if such Special Business Combination Transaction shall
have been approved by two-thirds of the Continuing Directors.
(c) Definitions. For purposes of this Section 5, the following
definitions shall apply:
(1) The term "Special Business Combination Transaction" shall
mean:
(i) any merger or consolidation of the Corporation or any
Subsidiary with (x) any Related Person or (y) any other corporation or
entity (whether or not itself a Related Person) which is, or after each
merger or consolidation would be, an Affiliate of a Related Person; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or in a series of transactions)
to or with any Related Person or any Affiliate of any Related Person of
all or a Substantial Part of the assets of the Corporation (including,
without limitation, any securities of a Subsidiary) or any Subsidiary;
or
(iii) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of a Related
Person or any Affiliate of a Related Person; or
(iv) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or in a series of related transactions)
of any securities of the
7
<PAGE>
Corporation or any Subsidiary to a Related Person, or any Affiliate of
a Related Person, in exchange for cash, securities or other property
(or a combination thereof); or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization or reorganization of the Corporation,
or any merger or consolidation of the Corporation with any of its
Subsidiaries, or any self tender offer for or repurchase of securities
of the Corporation or any Subsidiary by the Corporation or any
Subsidiary, or any other transaction (whether or not with or into or
otherwise involving a Related Person) which in any such case has the
effect, directly or indirectly, of increasing the proportionate shares
of the outstanding shares of any class or series of stock or securities
convertible into stock of the Corporation or any Subsidiary which is
directly or indirectly beneficially owned by any Related Person or any
Affiliate of any Related Person.
(2) The term "Substantial Part" (as distinguished from the phrase "all
or substantially all") shall mean more than 10% of the book value of the total
assets of the person or entity in question, as of the end of its most recent
fiscal year ending prior to the time of the determination.
(3) The term "person" shall mean any individual, firm, corporation,
partnership, group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as in effect on April 23, 1986) or other entity.
(4) The term "Related Person" shall mean any person (other than the
Corporation or Subsidiary or any employee benefit plan of the Corporation or any
Subsidiary) who or which, as of the date on which such determination is made:
(i) is the beneficial owner, directly or indirectly,
of more than 10 percent of the combined voting power of the
then outstanding shares of Voting Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior thereto was
the beneficial owner, directly or
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indirectly, of 10 percent or more of the combined voting power of the
then outstanding shares of Voting Stock; or
(iii) which is an assignee of or has otherwise succeeded to
the beneficial ownership of any shares of Voting Stock that were at any
time within the two-year period immediately prior thereto beneficially
owned by a Related Person, if such assignment or succession shall have
occurred in the course of a transaction or series of transactions not
utilizing the facilities of a national securities exchange, occurring
in the national over-the-counter market or involving a public
distribution.
(5) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (b) the right to vote or direct the vote pursuant to any agreement,
arrangement or understanding; or
(iii) which is beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock.
(6) For the purposes of determining whether a person is a Related
Person pursuant to subsection (c)(4) of this Section 5, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned through
application of subsection (c)(5) of this Section 5 but shall not include any
other shares of Voting Stock that may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
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(7) The terms "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.
(8) "Subsidiary" shall mean any corporation more than 50 percent of
whose outstanding stock having ordinary voting power in the election of
directors is owned, directly or indirectly, by the Corporation or by a
Subsidiary or by the Corporation and one or more Subsidiaries; provided,
however, that for the purposes of the definition of Related Person set forth in
subsection (c)(4) of this Section 5, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
(9) "Continuing Director" shall mean any director who (i) was a member
of the Corporation's Board of Directors on April 23, 1986, or (ii) was
designated (before such person's initial election as a Director) by a majority
of the Continuing Directors as a Continuing Director, or (iii) with respect to a
Special Business Combination Transaction, was a member of the Board of Directors
immediately prior to the date on which any Related Person involved, either
directly or through an Affiliate or Associate, in such Special Business
Combination Transaction first became a Related Person.
(10) The term "Voting Stock" shall mean all outstanding shares of
capital stock of all classes and series of the Corporation entitled to vote
generally in the election of Directors of the Corporation, in each case voting
together as a single class (it being understood that for purposes of this
Section 5 each share of the Voting Stock shall have the number of votes granted
to it pursuant to Article V of these Amended Articles).
(d) Determinations by Continuing Directors. A majority of the
Continuing Directors shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Section 5, including, without limitation:
(1) whether a person is a Related Person;
(2) the number of shares of Voting Stock beneficially owned by any
person;
(3) whether a person is an Affiliate or Associate of another
person; and
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(4) the fair value of any consideration other than cash to be
received by holders of shares of any class or series of Voting
Stock in a Special Business Combination Transaction.
The good faith determination of a majority of the Continuing Directors
on such matters shall be conclusive and binding for all purposes of this Section
5.
(e) Amendment of Section 5. Notwithstanding any provision of these
Amended Articles to the contrary, the provisions set forth in Section 5 of
Article VIII may not be amended, altered, changed or repealed, nor may any
provision inconsistent with said provisions be added to these Amended Articles
or to the Bylaws of the Corporation, except upon the affirmative vote of the
holders of not less than 80% of the total voting power of all outstanding shares
of the Voting Stock of the Corporation voting as a single class.
ARTICLE IX
Designations, Rights and Preferences of
Series E Preferred Stock
The designations, rights, preferences, limitations and restrictions of
the shares of Preferred Stock, without par value, to be designated as Series E
Redeemable Preferred Stock (in addition to those set forth elsewhere in these
Amended Articles) are hereby fixed as follows:
Section 1. Designation; Number of Shares; Stated Value. Ninety Thousand
(90,000) shares of Preferred Stock shall be designated Series E Redeemable
Preferred Stock (hereinafter referred to as the "Series E Preferred Stock").
Shares of the Series E Preferred Stock shall have a stated value of $10,000 per
share.
Section 2. Dividends.
(a) The holders of the shares of Series E Preferred Stock shall be
entitled to receive cumulative cash dividends, when and as declared by the Board
of Directors out of funds legally available therefor, at a rate of $400.00 per
share per annum and no more, before any dividend or distribution in cash or
other property (other than dividends or distributions payable in stock ranking
junior to the Series E Preferred Stock as to dividends or upon liquidation,
dissolution or winding-up) on any class or series of stock of the Corporation
ranking junior to the Series E Preferred Stock as to dividends or upon
liquidation, dissolution or winding-up shall be declared or paid or set apart
for
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payment.
(b) Dividends on the Series E Preferred Stock shall be declared by the
Board of Directors on or prior to December 31 of each calendar year and payable
on March 1 of the next calendar year, commencing March 1, 1995 (each such date
being hereinafter individually a "Dividend Payment Date" and collectively the
"Dividend Payment Dates"), except that if any such Dividend Payment Date is a
Saturday, Sunday or legal holiday then such dividend shall be payable on the
first immediately succeeding calendar day which is not a Saturday, Sunday or
legal holiday, to holders of record as they appear on the books of the
Corporation on December 31 of the year preceding such Dividend Payment Date or
such other date as may be determined by the Board of Directors. Dividends in
arrears may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on such date as may be fixed by the
Board of Directors of the Corporation. Dividends payable on the Series E
Preferred Stock for the initial dividend period and for any period less than a
yearly period shall be computed on the basis of a 360-day year of twelve 30-day
months.
(c) Dividends on the Series E Preferred Stock shall be cumulative and
shall accrue from and after December 31, 1993, whether or not declared by the
Board of Directors. Accruals of dividends shall not bear interest.
(d) No dividend may be declared on any other class or series of stock
ranking on a parity with the Series E Preferred Stock as to dividends in respect
of any dividend period unless there shall also be or have been declared on the
Series E Preferred Stock like dividends ratably in proportion to the respective
annual dividend rates fixed therefor.
Section 3. Redemption.
(a) The Corporation, at its sole option, may redeem shares of the
Series E Preferred Stock, in whole or in part, at any time or from time to time,
at the stated value, plus in each case accrued and unpaid dividends thereon to
the date fixed for redemption (the total sum so payable on any such redemption
being herein referred to as the "redemption price"). In the case of the
redemption of a part only of the shares of the Series E Preferred Stock at the
time outstanding, the shares to be so redeemed shall be selected by lot, pro
rata (as nearly as may be), or in such other equitable manner as the Board of
Directors may determine.
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(b) Notice of any redemption pursuant to this Section 3 shall be mailed
at least 30, but not more than 60, days in advance of the date designated for
such redemption (herein called the "redemption date") to the holders of record
of shares of the Series E Preferred Stock so to be redeemed at their respective
addresses as the same shall appear on the books of the Corporation; but no
failure to mail such notice to particular shareholders or any defect therein or
in the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of the Series E Preferred Stock. In order to facilitate
the redemption of shares of the Series E Preferred Stock, the Board of Directors
may fix a record date for the determination of holders of shares of the Series E
Preferred Stock to be redeemed not more than 60 days prior to the redemption
date. Each such notice shall state: (1) the redemption date; (2) the number of
shares of Series E Preferred Stock to be redeemed and, if less than all the
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the redemption price; (4) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price; and (5) that dividends on the shares to be redeemed will cease
to accrue on such redemption date. If less than all the shares represented by
any such surrendered certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
(c) The Corporation shall, on or prior to the date fixed for redemption
of any shares, but not earlier than 45 days prior to the date fixed for
redemption, deposit with a redemption agent selected by the Board of Directors
of the Corporation, as a trust fund, a sum sufficient to redeem the shares
called for redemption, with irrevocable instructions and authority to such
redemption agent to give or complete the notice of redemption thereof and to pay
the respective holders of such shares, as evidenced by a list of such holders
certified by an officer of the Corporation, the redemption price upon surrender
of their respective share certificates. Such deposit shall be deemed to
constitute full payment of such shares to their holders; and from and after the
date of such deposit, notwithstanding that any certificates for such shares
shall not have been surrendered for cancellation, the shares represented thereby
shall no longer be deemed outstanding, the rights to receive dividends and
distributions shall cease to accrue from and after the redemption date, and all
rights of the holders of the shares of the Series E Preferred Stock called for
redemption, as shareholders of the Corporation with respect to such shares,
shall cease and terminate, except the right to receive the redemption price,
without interest, upon the surrender of their respective certificates. In case
the holders of any shares shall not, within six years after such deposit, claim
the amount deposited for redemption thereof, such
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redemption agent shall, upon demand, pay over to the Corporation the balance of
such amount so deposited. Thereupon, such transfer agent or other redemption
agent shall be relieved of all responsibility to the holders thereof and the
sole right of such holders shall be as general creditors of the Corporation. Any
interest accrued on any funds so deposited shall belong to the Corporation, and
shall be paid to it from time to time on demand.
Section 4. No Conversion Rights. The holders of shares of Series E
Preferred Stock shall not have the right to convert such shares into any other
shares of capital stock of the Corporation.
Section 5. Voting. The shares of the Series E Preferred Stock shall not
have any voting powers, either general or special, except as set forth in this
Amended and Restated Certificate or as otherwise provided by law.
Section 6. Liquidation Rights. Upon the dissolution, liquidation or
winding-up of the Corporation, whether voluntary or involuntary, the holders of
the shares of the Series E Preferred Stock shall be entitled to receive, before
any payment or distribution of the assets of the Corporation or proceeds thereof
(whether capital or surplus) shall be made to or set apart for the holders of
the Common Stock or any other class or series of stock ranking junior to the
Series E Preferred Stock upon liquidation, dissolution or winding-up, the amount
of $10,000 per share, plus a sum equal to all dividends on such shares (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution, but such holders shall not be entitled to any further payment. If,
upon any liquidation, dissolution or winding-up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
shares of the Series E Preferred Stock and any other class or series of
Preferred Stock ranking on a parity with the Series E Preferred Stock as to
payments upon liquidation, dissolution or winding-up shall be insufficient to
pay in full the preferential amount aforesaid, then such assets or the proceeds
thereof shall be distributed among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all amounts payable
thereon were paid in full. For the purposes of this Section 6, the voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property or
assets of the Corporation to, or a consolidation or merger of the Corporation
with, one or more other corporations (whether or not the Corporation is the
corporation surviving such consolidation or merger) shall not be deemed to be a
liquidation, dissolution or winding-up, voluntary or involuntary.
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Section 7. No Purchase, Retirement or Sinking Fund. The shares of the
Series E Preferred Stock shall not be subject to the operation of any purchase,
retirement or sinking fund.
Section 8. Status. Shares of the Series E Preferred Stock which have
been issued and reacquired in any manner by the Corporation (excluding, until
the Corporation elects to retire them, shares which are held as treasury shares,
but including shares redeemed and shares purchased and retired) shall, upon
compliance with any applicable provisions of the Indiana Business Corporation
Law, have the status of authorized and unissued shares of Preferred Stock and
may be reissued as a part of a new series of Preferred Stock to be established
by the Board of Directors or as part of any other series of Preferred Stock the
terms of which do not prohibit such reissue.
Section 9. Priority. The Common Stock of the Corporation shall rank
junior to and the Cumulative Convertible Preferred Stock of the Corporation
shall rank on a parity with the Series E Preferred Stock as to dividends and
distribution of assets upon liquidation, dissolution or winding-up.
Section 10. Special Rights on Default.
(a) If at any time the Corporation shall have failed to pay dividends
in full on the Series E Preferred Stock, thereafter and until dividends in full,
including all accumulated and unpaid dividends to the next preceding Dividend
Payment Date on the Series E preferred Stock outstanding, shall have been
declared and set apart for payment or paid, the Corporation shall not redeem any
Preferred Stock, by operation of any sinking fund or otherwise, including shares
of Series E Preferred Stock, unless all then outstanding shares of Preferred
Stock are redeemed, and neither the Corporation nor any subsidiary may purchase
any shares of Preferred Stock, including shares of Series E Preferred Stock, and
neither the Corporation nor any subsidiary may redeem or purchase any shares of
stock subordinate to the shares of Series E Preferred Stock in respect of
dividends or distribution of assets upon liquidation, provided that nothing
shall prevent the Corporation from completing the purchase or redemption of
shares of Preferred Stock for which a purchase contract was entered into, or
notice of redemption of which was initially given, prior to such default.
(b) Whenever, at any time or times, dividends payable on the shares of
Series E Preferred Stock shall be in arrears in an amount equal to at least two
full annual dividends on the shares at the time outstanding, the holders of the
outstanding shares of Series E
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Preferred Stock shall have the exclusive right, voting separately as a class
with holders of shares of any one or more other series of Preferred Stock
ranking on a parity with Series E Preferred Stock either as to dividends or the
distribution of assets upon liquidation, dissolution or winding-up and upon
which like voting rights have been conferred and are exercisable, to elect two
directors of the Corporation at the Corporation's next annual meeting of
shareholders and at each subsequent annual meeting of shareholders. At meetings
for election of such directors, the presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Series E Preferred Stock
(together with the holders of shares of any one or more other series of
Preferred Stock ranking on a parity with respect to the election of such
additional directors) shall be required and be sufficient to constitute a quorum
of such class for the election of such directors. At meetings for election of
such directors or adjournments thereof, (1) the absence of a quorum of Series E
Preferred Stock (together with the holders of shares of any one or more other
series of Preferred Stock ranking on a parity with respect to the election of
such additional directors) shall not prevent the election of the directors to be
elected otherwise than pursuant to this subsection (b), and the absence of a
quorum of the holders of stock other than holders of Series E Preferred Stock
(together with the holders of shares of any one or more other series of
Preferred Stock ranking on a parity with respect to the election of such
additional directors) shall not prevent the election of the directors to be
elected pursuant to this subsection (b), and (2) in the absence of such quorum
either of holders of Series E Preferred Stock or of holders of stock other than
Series E Preferred Stock, or both, a majority of the holders, present in person
or by proxy, of the class or classes of stock which lack a quorum shall have a
power to adjourn the meeting for the election of directors whom they are
entitled to elect, from time to time without notice other than announcement at
the meeting, until a quorum shall be present. Upon the vesting of such right of
the holders of Series E Preferred Stock, the maximum authorized number of
members of the Board of Directors shall automatically be increased by two and
the two vacancies so created shall be filled by vote of the holders of the
outstanding shares of Series E Preferred Stock (together with the holders of
shares of any one or more other series of Preferred Stock ranking on a parity
with respect to the election of such additional directors) as herein set forth.
The right of the holders of Series E Preferred Stock, voting separately as a
class, to elect (together with the holders of shares of any one or more other
series of Preferred Stock ranking on a parity with respect to the election of
such additional directors) members of the Board of Directors of the Corporation
as aforesaid shall continue until such time as all dividends in arrears on this
Series E Preferred Stock shall have been
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paid in full, at which time such right shall immediately terminate, except as
herein or by law expressly provided, subject to revesting in the event of each
and every subsequent default of the character above mentioned.
Each director elected by the holders of shares of Series E Preferred
Stock shall continue to serve as such director until such time as all dividends
in arrears on the Series E Preferred Stock shall have been paid in full, at
which time the term of office of all persons elected as directors by the holders
of shares of Series E Preferred Stock shall immediately terminate and the number
of members of the Board of Directors of the Corporation shall be reduced
accordingly. If the office of any director elected by the holders of Series E
Preferred Stock voting as a class becomes vacant by reason of death,
resignation, retirement, disqualification, removal from office, or otherwise,
the remaining director elected by the holders of Series E Preferred Stock voting
as a class may choose a successor who shall hold office for the unexpired term
in respect of which such vacancy occurred. Whenever the term of office of the
directors elected by the holders of Series E Preferred Stock as provided in this
subsection (b) shall have expired, the number of directors shall be such number
as may be provided for in the Bylaws irrespective of any increase made pursuant
to the provisions of this subsection (b).
Section 11. Relative Rights of Series E Preferred Stock. So long as any
of the Series E Preferred Stock is outstanding, the Corporation will not:
(a) Declare, or pay, or set apart for payment, any dividends (other
than dividends or distributions payable in stock ranking junior to the Series A
Preferred Stock as to dividends or upon liquidation, dissolution or winding-up)
or make any distribution in cash or other property on any other class or series
of stock of the Corporation ranking junior to the Series E Preferred Stock
either as to dividends or upon liquidation, dissolution or winding-up, and will
not redeem, purchase or otherwise acquire any shares of any such junior class or
series of stock if at the time of making such declaration, payment or setting
apart for payment, distribution, redemption, purchase or acquisition the
Corporation shall be in default with respect to any dividend payable on, or any
obligation to retire shares of Series E Preferred Stock; and
(b) Without the affirmative vote or consent of the holders, given in
person or by proxy, either in writing or by resolution adopted either at an
annual meeting or special meeting called for the purpose, of at least (i) a
majority of the shares of Series E Preferred Stock at
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the time outstanding (the holders of Series E Preferred Stock consenting or
voting separately as a class), authorize, create, or issue, or increase the
authorized or issued amount, of any class or series of stock ranking prior to
the Series E Preferred Stock, either as to dividends or upon liquidation,
dissolution or winding-up, or (ii) 66 2/3% of the shares of Series E Preferred
Stock at the time outstanding (the holders of Series E Preferred Stock
consenting or voting separately as a class), amend, alter or repeal (whether by
merger, consolidation or otherwise) any of the provisions of these Amended
Articles so as to materially and adversely affect the preferences, special
rights, privileges or powers of the Series E Preferred Stock; provided, however,
that any increase in the authorized Preferred Stock or the creation and issuance
of any other series of Preferred Stock ranking on a parity with or junior to the
Series E Preferred Stock shall not be deemed to materially and adversely affect
such preferences, rights, privileges or powers.
ARTICLE X
Designations, Rights and Preferences of
7% PRIDES (SM), Convertible Preferred Stock
The designations, rights, preferences, limitations and restrictions of
the shares of Preferred Stock, without par value, to be designated as 7% PRIDES
(SM), Convertible Preferred Stock are hereby fixed as follows;
Section 1. Designation and Amount. The designation of the series of
Preferred Stock created by this Article X shall be "7% PRIDES (SM), Convertible
Preferred Stock, no par value per share" (the "PRIDES"). The PRIDES are
Preferred Redeemable Increased Dividend Equity Securities (SM). The authorized
number of shares constituting the PRIDES shall be 4,370,000.
(SM) Service mark of Merrill Lynch & Co., Inc.
Section 2. Dividends.
(a) The holders of outstanding shares of PRIDES shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available therefor, cumulative preferential dividends from January 23, 1996, at
the rate per share of $4.279 per annum, and no more, payable quarterly for each
share of PRIDES, payable in arrears on the 1st day of each February, May, August
and November, respectively (each such date being hereinafter referred to as a
"Dividend Payment Date"), or, if any Dividend Payment Date is not a business
day, then the Dividend Payment Date shall be the next succeeding business day;
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provided, however, that, with respect to any dividend period during which a
redemption occurs, the Corporation may, at its option, declare accrued dividends
to, and pay such dividends on, the redemption date, in which case such dividends
would be payable on the redemption date in cash to the holders of the shares of
PRIDES as of the record date for such dividend payment and such accrued
dividends would not be included in the calculation of the related Call Price (as
hereinafter defined). Each dividend on the shares of PRIDES shall be payable to
holders of record as they appear on the stock register of the Corporation on
such record date, not less than 10 (except as otherwise provided with respect to
the first dividend payment) nor more than 60 days preceding the payment dates
thereof, as shall be fixed by the Board of Directors. The first dividend payment
shall be for the period from January 23, 1996 to but excluding February 1, 1996
and the first dividend will be payable on February 1, 1996 to holders of record
at the close of business on January 23, 1996. Dividends (or amounts equal to
accrued and unpaid dividends) payable on shares of PRIDES for any period less
than a full quarterly dividend period will be computed on the basis of a 360-day
year of twelve 30-day months and the actual number of days elapsed in any period
less than one month.
Dividends on the shares of PRIDES will accrue whether or not there are
funds legally available for the payment of such dividends and whether or not
such dividends are declared on a daily basis from the previous Dividend Payment
Date. Accumulated unpaid dividends shall not bear interest. Dividends will cease
to accrue in respect of shares of PRIDES on the Mandatory Conversion Date (as
hereinafter defined) or on the date of their earlier conversion or redemption.
The shares of PRIDES will rank on a parity, both as to payment of
dividends and distribution of assets upon liquidation, with the Cumulative
Convertible Preferred Stock and with any future preferred stock issued by the
Corporation (the "Preferred Stock") that by its terms ranks on a parity with the
shares of PRIDES.
(b) As long as any shares of PRIDES are outstanding, no dividends for
any dividend period (other than dividends payable in shares of, or warrants,
rights or options exercisable for or convertible into shares of, Common Stock
(as defined below) or any other capital stock of the Corporation ranking junior
to the shares of PRIDES as to the payment of dividends and the distribution of
assets upon liquidation ("Junior Stock") and cash in lieu of fractional shares
of such Junior Stock in connection with any such dividend) will be paid in cash
or otherwise, nor will any other distribution be made (other than a distribution
payable in Junior Stock and cash in lieu of fractional shares of such Junior
Stock in connection with any such distribution), on any Junior
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Stock unless: (i) full dividends on all outstanding shares of Preferred Stock
(including the shares of PRIDES), that does not constitute Junior Stock ("Parity
Preferred Stock") have been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such Junior Stock
dividend or distribution payment to the extent such dividends are cumulative;
(ii) dividends in full, in the case of a dividend payment with respect to Junior
Stock, for any Parity Preferred Stock dividend period commencing on or prior to
the date of such Junior Stock dividend payment or, in the case of any other
distribution with respect to Junior Stock, for the current quarterly dividend
period, have been paid, or declared and set aside for payment, on all
outstanding shares of Parity Preferred Stock to the extent such dividends are
cumulative; (iii) the Corporation has paid or set aside all amounts, if any,
then or theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any outstanding shares of Parity
Preferred Stock; and (iv) the Corporation is not in default on any of its
obligations to redeem any outstanding shares of Parity Preferred Stock.
In addition, as long as any shares of PRIDES are outstanding, no shares
of any Junior Stock may be purchased, redeemed, or otherwise acquired by the
Corporation or any of its subsidiaries (except in connection with a
reclassification or exchange of any Junior Stock through the issuance of other
Junior Stock (and cash in lieu of fractional shares of such Junior Stock in
connection therewith) or the purchase, redemption, or other acquisition of any
Junior Stock with any Junior Stock (and cash in lieu of fractional shares of
such Junior Stock in connection therewith)) nor may any funds be set aside or
made available for any sinking fund for the purchase or redemption of any Junior
Stock unless: (i) full dividends on all outstanding shares of Parity Preferred
Stock have been paid, or declared and set aside for payment, for all dividend
periods terminating on or prior to the date of such purchase, redemption or
acquisition to the extent such dividends are cumulative; (ii) the Corporation
has paid or set aside all amounts, if any, then or theretofore required to be
paid or set aside for all purchase, retirement, and sinking funds, if any, for
any outstanding shares of Parity Preferred Stock; and (iii) the Corporation is
not in default on any of its obligations to redeem any outstanding shares of
Parity Preferred Stock.
Subject to the provisions described above, such dividends or other
distributions (payable in cash, property, or Junior Stock) as may be determined
by the Board of Directors may be declared and paid on the shares of any Junior
Stock from time to time and Junior Stock may be purchased, redeemed or otherwise
acquired by the Corporation or any of
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its subsidiaries from time to time. In the event of the declaration and payment
of any such dividends or other distributions, the holders of such Junior Stock
will be entitled, to the exclusion of holders of any outstanding Parity
Preferred Stock, to share therein according to their respective interests.
As long as any shares of PRIDES are outstanding, dividends for any
dividend period or other distributions may not be paid on any outstanding shares
of Parity Preferred Stock (other than dividends or other distributions payable
in Junior Stock and cash in lieu of fractional shares of such Junior Stock in
connection therewith), unless either: (a) (i) full dividends on all outstanding
shares of Parity Preferred Stock have been paid, or declared and set aside for
payment, for all dividend periods terminating on or prior to the date of such
Parity Preferred Stock dividend or distribution payment to the extent such
dividends are cumulative; (ii) dividends in full, in the case of a dividend
payment, for any Parity Preferred Stock dividend period commencing on or prior
to the date of such dividend payment or, in the case of any other distribution,
for the current quarterly dividend period, have been paid, or declared and set
aside for payment, on all outstanding shares of Parity Preferred Stock to the
extent such dividends are cumulative; (iii) the Corporation has paid or set
aside all amounts, if any, then or theretofore required to be paid or set aside
for all purchase, retirement and sinking funds, if any, for any outstanding
shares of Parity Preferred Stock; and (iv) the Corporation is not in default on
any of its obligations to redeem any outstanding shares of Parity Preferred
Stock; or (b) any such dividends are declared and paid pro rata so that the
amounts of any dividends declared and paid per share on outstanding shares of
PRIDES and each other share of such Parity Preferred Stock will in all cases
bear to each other the same ratio that accrued and unpaid dividends (including
any accumulation with respect to unpaid dividends for prior dividend periods, if
such dividends are cumulative) per share of outstanding shares of PRIDES and
such other outstanding shares of Parity Preferred Stock bear to each other.
In addition, as long as any shares of PRIDES are outstanding, the
Corporation may not purchase, redeem or otherwise acquire any Parity Preferred
Stock (except with any Junior Stock and cash in lieu of fractional shares of
such Junior Stock in connection therewith) unless: (i) full dividends on Parity
Preferred Stock have been paid, or declared and set aside for payment, for all
dividend periods terminating on or prior to the date of such Parity Preferred
Stock purchase, redemption or other acquisition payment to the extent such
dividends are cumulative; (ii) the Corporation has paid or set aside all
amounts, if any, then or theretofore required to be paid or set
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aside for all purchase, retirement, and sinking funds, if any, for any Parity
Preferred Stock; and (iii) the Corporation is not in default of any of its
obligations to redeem any Parity Preferred Stock.
(c) Any dividend payment made on the shares of PRIDES shall first be
credited against the earliest accrued but unpaid dividend due with respect to
the shares of PRIDES.
(d) All dividends paid with respect to the shares of PRIDES shall be
paid pro rata to the holders entitled thereto.
(e) Holders of the shares of PRIDES shall be entitled to receive
dividends in preference to and in priority over any dividends upon any shares of
the Corporation ranking junior to the shares of PRIDES as to dividends, but
subject to the rights of holders of shares of the Corporation having a
preference and a priority over the payment of dividends on the shares of PRIDES.
Section 3. Redemption and Conversion.
(a) Mandatory Conversion. On February 1, 2000 (the "Mandatory
Conversion Date"), each outstanding share of PRIDES shall convert automatically
(the "Mandatory Conversion") into shares of Common Stock at the Common
Equivalent Rate (as hereinafter defined) in effect on the Mandatory Conversion
Date and the right to receive an amount in cash equal to all accrued and unpaid
dividends on such share of PRIDES (other than previously declared dividends
payable to a holder of record on a prior date) to the Mandatory Conversion Date,
whether or not declared, out of funds legally available for the payment of
dividends, subject to the right of the Corporation to redeem the shares of
PRIDES on or after February 1, 1999 (the "Initial Redemption Date") and prior to
the Mandatory Conversion Date, as described below, and subject to the conversion
of the shares of PRIDES at the option of the holder at any time prior to the
Mandatory Conversion Date. The Common Equivalent Rate is initially one share of
Common Stock for each share of PRIDES and is subject to adjustment as set forth
below. Dividends on the shares of PRIDES shall cease to accrue and such shares
shall cease to be outstanding on the Mandatory Conversion Date. The Corporation
shall make such arrangements as it deems appropriate for the issuance of
certificates representing shares of Common Stock and for the payment of cash in
respect of such accrued and unpaid dividends, if any, or cash in lieu of
fractional shares, if any, in exchange for and contingent upon surrender of
certificates representing the shares of PRIDES, and the Corporation may defer
the payment of dividends on such shares of Common Stock and the voting thereof
until, and make such payment and voting contingent upon, the surrender of such
certificates representing
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<PAGE>
the shares of PRIDES, provided that the Corporation shall give the holders of
the shares of PRIDES such notice of any such actions as the Corporation deems
appropriate and upon such surrender such holders shall be entitled to receive
such dividends declared and paid on such shares of Common Stock subsequent to
the Mandatory Conversion Date. Amounts payable in cash in respect of the shares
of PRIDES or in respect of such shares of Common Stock shall not bear interest.
(b) Redemption by the Corporation.
(i) Right to Redeem. Shares of PRIDES are not redeemable by
the Corporation prior to the Initial Redemption Date. At any time and
from time to time on or after the Initial Redemption Date and prior to
the Mandatory Conversion Date, the Corporation shall have the right to
redeem, in whole or in part, the outstanding shares of PRIDES. Upon any
such redemption, the Corporation shall deliver to the holders of shares
of PRIDES, in accordance with the provisions of this Article X, in
exchange for each share so redeemed, the greater of (A) a number of
shares of Common Stock equal to the Call Price in effect on the
redemption date, divided by the Current Market Price (as hereinafter
defined) of the Common Stock determined as of the second trading day
immediately preceding the Notice Date (as hereinafter defined) or (B)
.855 of a share of Common Stock (subject to adjustment in the same
manner as the Optional Conversion Rate (as hereinafter defined) is
adjusted). The public announcement of any call for redemption shall be
made prior to, or at the time of, the mailing of the notice of such
call to holders of shares of PRIDES as described below. If fewer than
all the outstanding shares of PRIDES are to be redeemed, shares of
PRIDES to be redeemed shall be selected by the Corporation from
outstanding shares of PRIDES not previously redeemed by lot or pro rata
(as nearly as may be practicable) or by any other method determined by
the Board of Directors in its sole discretion to be equitable. As used
in this subparagraph (b), the term "Notice Date" with respect to any
notice given by the Corporation in connection with a redemption of
shares of PRIDES means the date on which first occurs either the public
announcement of such redemption or the commencement of mailing of such
notice to the holders of shares of PRIDES.
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<PAGE>
(ii) Notice of Redemption. The Corporation shall provide
notice of any redemption of the shares of PRIDES to holders of record
of PRIDES to be called for redemption not less than 15 nor more than 60
days prior to the date fixed for such redemption. Such notice shall be
provided by mailing notice of such redemption, first class postage
prepaid, to each holder of record of shares of PRIDES to be redeemed,
at such holder's address as it appears on the stock register of the
Corporation; provided, however, that neither failure to give such
notice nor any defect therein shall affect the validity of the
proceeding for the redemption of any shares of PRIDES to be redeemed
except as to the holders to whom the Corporation has failed to give
said notice or whose notice was defective.
Each such notice shall state, as appropriate, the following and may
contain such other information as the Corporation deems advisable:
(A) the redemption date;
(B) that all outstanding shares of PRIDES are to be
redeemed or, in the case of a call for redemption of
fewer than all outstanding shares of PRIDES, the
number of such shares held by such holder to be
redeemed;
(C) the number of shares of Common Stock deliverable upon
redemption of each share of PRIDES to be redeemed
and, if applicable, the Call Price and the Current
Market Price used to calculate such number of shares
of Common Stock;
(D) the place or places where certificatesfor such shares
are to be surrendered for redemption; and
(E) that dividends on the shares of PRIDES to be redeemed
shall cease to accrue on such redemption date (except
as otherwise provided herein).
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<PAGE>
(iii) Deposit of Shares and Funds. The Corporation's
obligation to deliver shares of Common Stock and provide funds upon
redemption in accordance with this Section 3 shall be deemed fulfilled
if, on or before a redemption date, the Corporation shall irrevocably
deposit, with a bank or trust company, or an affiliate of a bank or
trust company, having an office or agency in New York City and having a
capital and surplus of at least $50,000,000, or shall set aside or make
other reasonable provision for the issuance of such number of shares of
Common Stock as are required to be delivered by the Corporation
pursuant to this Section 3 upon the occurrence of the related
redemption (and for the payment of cash in lieu of the issuance of
fractional share amounts and accrued and unpaid dividends payable in
cash on the shares to be redeemed as and to the extent provided by this
Section 3). Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any shares of Common Stock or funds so
deposited and unclaimed at the end of two years from such redemption
date shall be repaid and released to the Corporation, after which the
holder or holders of such shares of PRIDES so called for redemption
shall look only to the Corporation for delivery of such shares of
Common Stock or funds.
(iv) Surrender of Certificates; Status. Each holder of
shares of PRIDES to be redeemed shall surrender the certificates
evidencing such shares (properly endorsed or assigned for transfer, if
the Board of Directors shall so require and the notice shall so state)
to the Corporation at the place designated in the notice of such
redemption and shall thereupon be entitled to receive certificates
evidencing shares of Common Stock and to receive any funds payable
pursuant to this Section 3 following such surrender and following the
date of such redemption. In case fewer than all the shares represented
by any such surrendered certificate are called for redemption, a new
certificate shall be issued at the expense of the Corporation
representing the unredeemed shares. If such notice of redemption shall
have been given, and if on the date fixed for redemption, shares of
Common Stock and funds necessary for the redemption shall have been
irrevocably either set aside by the Corporation separate and apart from
its other funds or assets in
25
<PAGE>
trust for the account of the holders of the shares to be redeemed or
converted (and so as to be and continue to be available therefor) or
deposited with a bank or a trust company or an affiliate thereof as
provided herein or the Corporation shall have made other reasonable
provision therefor, then, notwithstanding that the certificates
evidencing any shares of PRIDES so called for redemption or subject to
conversion shall not have been surrendered, the shares represented
thereby so called for redemption shall be deemed no longer outstanding,
dividends with respect to the shares so called for redemption shall
cease to accrue on the date fixed for redemption (except that holders
of shares of PRIDES at the close of business on a record date for any
payment of dividends shall be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares following such record
date and prior to such Dividend Payment Date) and all rights with
respect to the shares so called for redemption shall forthwith after
such date cease and terminate, except for the rights of the holders to
receive the shares of Common Stock and funds, if any, payable pursuant
to this Section 3 without interest upon surrender of their certificates
therefor (unless the Corporation defaults on the delivery of such
shares or the payment of such funds). Holders of shares of PRIDES that
are redeemed shall not be entitled to receive dividends declared and
paid on such shares of Common Stock, and such shares of Common Stock
shall not be entitled to vote, until such shares of Common Stock are
issued upon the surrender of the certificates representing such shares
of PRIDES and upon such surrender such holders shall be entitled to
receive such dividends declared and paid on such shares of Common Stock
subsequent to such redemption date without interest thereon.
(c) Conversion at Option of Holder. Shares of PRIDES are convertible,
in whole or in part, at the option of the holders thereof, at any time prior to
the Mandatory Conversion Date, unless previously redeemed, into shares of Common
Stock at a rate of .855 of a share of Common Stock for each share of PRIDES (the
"Optional Conversion Rate") (equivalent to a conversion price of $71.49 per
share of Common Stock), subject to adjustment as set forth below. The right to
convert shares of PRIDES called for redemption shall terminate immediately prior
to
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<PAGE>
the close of business on the redemption date.
Conversion of shares of PRIDES at the option of the holder may be
effected by delivering certificates evidencing such shares, together with
written notice of conversion and a proper assignment of such certificates to the
Corporation or in blank, to the office or agency to be maintained by the
Corporation for that purpose (and, if applicable, cash payment of an amount
equal to the dividend payable on such shares), and otherwise in accordance with
conversion procedures established by the Corporation. Each optional conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which the foregoing requirements shall have been satisfied. The
conversion shall be at the Optional Conversion Rate in effect at such time and
on such date.
Holders of shares of PRIDES at the close of business on a record date
for any payment of declared dividends shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion of such shares following such record date and
prior to the corresponding Dividend Payment Date. However, shares of PRIDES
surrendered for conversion after the close of business on a record date for any
payment of dividends and before the opening of business on the next succeeding
Dividend Payment Date must be accompanied by payment in cash of an amount equal
to the dividend thereon which is to be paid on such Dividend Payment Date
(unless such shares have been called for redemption on a redemption date between
such record date and such Dividend Payment Date). A holder of shares of PRIDES
called for redemption on February 1, 1999 or any other Dividend Payment Date
thereafter will receive the dividend on such shares payable on that date without
paying an amount equal to such dividend to the Corporation upon conversion.
Except as provided above, upon any optional conversion of shares of PRIDES, the
Corporation shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares of PRIDES or for previously declared
dividends or distributions on the shares of Common Stock issued upon such
conversion.
(d) Common Equivalent Rate and Optional Conversion Rate Adjustments.
The Common Equivalent Rate and the Optional Conversion Rate shall be each
subject to adjustment from time to time as provided below in this section (d).
(i) If the Corporation shall, after January 23,
1996:
(A) pay a stock dividend or make a
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<PAGE>
distribution with respect to its Common Stock in
shares of such Common Stock,
(B) subdivide or split its outstanding Common Stock into
a greater number of shares,
(C) combine its outstanding shares of Common Stock into a
smaller number of shares, or
(D) issue by reclassification of its shares of Common
Stock any shares of common stock of the Corporation,
then, in any such event, the Common Equivalent Rate
and the Optional Conversion Rate in effect
immediately prior to such event shall each be
adjusted so that the holder of any shares of PRIDES
shall thereafter be entitled to receive, upon
Mandatory Conversion or upon conversion at the option
of the holder, the number of shares of Common Stock
of the Corporation which such holder would have owned
or been entitled to receive immediately following any
event described above had such shares of PRIDES been
converted immediately prior to such event or any
record date with respect thereto. Such adjustment
shall become effective at the opening of business on
the business day next following the record date for
determination of stockholders entitled to receive
such dividend or distribution, in the case of a
dividend or distribution, and shall become effective
immediately after the effective date, in the case of
a subdivision, split, combination or
reclassification. Such adjustment shall be made
successively.
(ii) If the Corporation shall, after January 23, 1996, issue
rights or warrants to all holders of its Common Stock entitling them
(for a period not exceeding
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<PAGE>
45 days from the date of such issuance) to subscribe for or purchase
shares of Common Stock at a price per share less than the Current
Market Price of the Common Stock, then, in any such event unless such
rights or warrants are issued to holders of shares of PRIDES on a pro
rata basis with the shares of Common Stock based on the Common
Equivalent Rate on the date immediately preceding such issuance, the
Common Equivalent Rate and Optional Conversion Rate shall each be
adjusted by multiplying the Common Equivalent Rate and the Optional
Conversion Rate, in effect immediately prior to the date of issuance of
such rights or warrants, by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants, immediately prior to such
issuance, plus the number of additional shares of Common Stock offered
for subscription or purchase pursuant to such rights or warrants, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at such
Current Market Price (determined by multiplying such total number of
shares by the exercise price of such rights or warrants and dividing
the product so obtained by such Current Market Price). Such adjustment
shall become effective at the opening of business on the business day
next following the record date for the determination of stockholders
entitled to receive such rights or warrants. To the extent that shares
of Common Stock are not delivered after the expiration of such rights
or warrants, the Common Equivalent Rate and the Optional Conversion
Rate shall each be readjusted to the Common Equivalent Rate and the
Optional Conversion Rate which would then be in effect had the
adjustments been made upon the issuance of such rights or warrants upon
the basis of delivery of only the number of shares of Common Stock
actually delivered. Such adjustment shall be made successively.
(iii) If the Corporation shall, after January 23, 1996, pay a
dividend or make a distribution to all holders of its Common Stock of
evidences of its
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<PAGE>
indebtedness, cash or other assets (including capital stock of the
Corporation but excluding any cash dividends or distributions, other
than Extraordinary Cash Distributions (as hereinafter defined) and
dividends referred to in subparagraph (i) above) or shall issue to all
holders of its Common Stock rights or warrants to subscribe for or
purchase any of its securities (other than Rights issued pursuant to
the Rights Plan and those referred to in subparagraph (ii) above), then
unless such dividend is paid or distribution is made to each holder of
shares of PRIDES on a pro rata basis with the shares of Common Stock
based on the Common Equivalent Rate on the date immediately preceding
such payment or distribution, in any such event, the Common Equivalent
Rate and the Optional Conversion Rate shall each be adjusted by
multiplying the Common Equivalent Rate and the Optional Conversion Rate
in effect on the record date mentioned below, by a fraction of which
the numerator shall be the Current Market Price per share of the Common
Stock on the record date for the determination of stockholders entitled
to receive such dividend or distribution, and of which the denominator
shall be such Current Market Price per share of Common Stock less the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution
adopted with respect thereto) as of such record date of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights or warrants applicable to one share of Common
Stock. Such adjustment shall become effective on the opening of
business on the business day next following the record date for the
determination of stockholders entitled to receive such dividend or
distribution. Such adjustment shall be made successively. As used in
this section (d), the term "Extraordinary Cash Distributions" means,
with respect to any cash dividend or distribution paid on any date, the
amount, if any, by which all cash dividends and cash distributions on
the Common Stock paid during the consecutive 12-month period ending on
and including such date (other than cash dividends and cash
distributions for which an adjustment to the Common Equivalent Rate and
the Optional Conversion Rate was previously made) exceeds, on a per
share of Common Stock basis, 10% of the average of the daily Closing
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<PAGE>
Prices of the Common Stock over such consecutive 12- month period.
(iv) Any shares of Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately prior to the
close of business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock under
subsection (ii) above.
(v) The Corporation shall also be entitled to make upward
adjustments in the Common Equivalent Rate, the Optional Conversion Rate
and the Call Price, as it in its sole discretion shall determine to be
advisable, in order that any stock dividends, subdivisions of shares,
distribution of rights to purchase stock or securities, or distribution
of securities convertible into or exchangeable for stock (or any
transaction which could be treated as any of the foregoing transactions
pursuant to Section 305 of the Internal Revenue Code of 1986, as
amended) made by the Corporation to its stockholders after January 23,
1996 shall not be taxable.
(vi) In any case in which subsection 3(d) shall require that
an adjustment as a result of any event become effective at the opening
of business on the business day next following a record date and the
date fixed for conversion pursuant to subsection 3(a) or redemption
pursuant to subsection 3(b) occurs after such record date, but before
the occurrence of such event, the Corporation may, in its sole
discretion, elect to defer the following until after the occurrence of
such event: (A) issuing to the holder of any converted or redeemed
shares of PRIDES the additional shares of Common Stock issuable upon
such conversion or redemption over the shares of Common Stock issuable
before giving effect to such adjustments and (B) paying to such holder
any amount in cash in lieu of a fractional share of Common Stock
pursuant to subsection 3(g).
(vii) All adjustments to the Common Equivalent Rate and the
Optional Conversion Rate shall be calculated to the nearest 1/100th of
a share of Common Stock. No adjustment in the Common Equivalent Rate
or
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<PAGE>
the Optional Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustment which by reason of this
subsection (vii) is not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
(e) Adjustment for Consolidation or Merger. In case of any
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the surviving or continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation remains unchanged), or in case of any sale or transfer
to another corporation of the property of the Corporation as an entirety or
substantially as an entirety, or in case of any statutory exchange of securities
with another corporation (other than in connection with a merger or
acquisition), proper provision shall be made so that each share of PRIDES shall,
after consummation of such transaction, be subject to (i) conversion at the
option of the holder into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of PRIDES might have been
converted immediately prior to consummation of such transaction, (ii) conversion
on the Mandatory Conversion Date into the kind and amount of securities, cash or
other property receivable upon consummation of such securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of PRIDES would have
converted if the conversion on the Mandatory Conversion Date had occurred
immediately prior to the date of consummation of such transaction, plus the
right to receive cash in an amount equal to all accrued and unpaid dividends on
such shares of PRIDES (other than previously declared dividends payable to a
holder of record as of a prior date), (iii) redemption on any redemption date in
exchange for the kind and amount of securities, cash or other property
receivable upon consummation of such transaction by a holder of the number of
shares of Common Stock that would have been issuable at the Call Price in effect
on such redemption date upon a redemption of such share immediately prior to
consummation of such transaction, assuming that, if the Notice Date for such
redemption is not prior to such transaction, the Notice Date had been the date
of such transaction and assuming in each case that such holder of Common Stock
failed to exercise rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon consummation of such
transaction (provided that if the kind or amount of securities, cash or other
property receivable upon consummation of such transaction is not
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<PAGE>
the same for each non-electing share, then the kind and amount of securities,
cash or other property receivable upon consummation of such transaction for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). The kind and amount of
securities into or for which the shares of PRIDES shall be convertible or
redeemable after consummation of such transaction shall be subject to adjustment
as described in the immediately preceding paragraph following the date of
consummation of such transaction. The Corporation may not become a party to any
such transaction unless the terms thereof are consistent with the foregoing or
consistent with clause (iii) of Section 7(c).
For purposes of the immediately preceding paragraph and subsection 3(g)
(iii), any sale or transfer to another corporation of property of the
Corporation which did not account for at least 50% of the consolidated net
income of the Corporation for its most recent fiscal year ending prior to the
consummation of such transaction shall not in any event be deemed to be a sale
or transfer of the property of the Corporation as an entirety or substantially
as an entirety.
(f) Notice of Adjustments. Whenever the Common Equivalent Rate
and Optional Conversion Rate are adjusted as herein provided, the Corporation
shall:
(i) forthwith compute the adjusted Common Equivalent Rate and
Optional Conversion Rate in accordance herewith and prepare a
certificate signed by an officer of the Corporation setting forth the
adjusted Common Equivalent Rate and the Optional Conversion Rate, the
method of calculation thereof in reasonable detail and the facts
requiring such adjustment and upon which such adjustment is based,
which certificate shall be conclusive, final and binding evidence of
the correctness of the adjustment, and file such certificate forthwith
with the transfer agent for the shares of PRIDES and the Common Stock;
and
(ii) make a prompt public announcement and mail a notice to
the holders of the outstanding shares of PRIDES stating that the Common
Equivalent Rate and the Optional Conversion Rate have been adjusted,
the facts requiring such adjustment and upon which such adjustment is
based and setting forth the adjusted Common Equivalent Rate and
Optional Conversion Rate, such notice to be mailed at or prior to the
time the
33
<PAGE>
Corporation mails an interim statement to its stockholders covering the
fiscal quarter during which the facts requiring such adjustment
occurred, but in any event within 45 days of the end of such fiscal
quarter.
(g) Notices. In case, at any time while any of the shares of
PRIDES are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock, excluding any cash dividends; or
(ii) the Corporation shall authorize the issuance to all
holders of its Common Stock of rights or warrants to subscribe for or
purchase shares or its Common Stock or of any other subscription rights
or warrants; or
(iii) the Corporation shall authorize any reclassification of its
Common Stock (other than a subdivision or combination thereof) or any
consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation is required
(except for a merger of the Corporation into one of its subsidiaries
solely for the purpose of changing the corporate domicile of the
Corporation to another state of the United States and in connection
with which there is no substantive change in the rights or privileges
of any securities of the Corporation other than changes resulting from
differences in the corporate statutes of the then existing and the new
state of domicile), or the sale or transfer to another corporation of
the property of the Corporation as an entirety or substantially as an
entirety; or
(iv) the Corporation shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of PRIDES, and
shall cause to be mailed to the holders of shares of PRIDES at their
last addresses as they shall appear on the stock register, at least 10
days before the date hereinafter specified (or the
34
<PAGE>
earlier of the dates hereinafter specified, in the event that more than
one date is specified), a notice stating (A) the date on which a record
is to be taken for the purpose of such dividend, distribution, rights
or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (B) the date
on which any such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock
for securities or other property (including cash), if any, deliverable
upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. The failure to give or receive
the notice required by this subsection (g) or any defect therein shall
not affect the legality or validity of such dividend, distribution,
right or warrant or other action.
(h) Effect of Conversions and Redemptions. The person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon any conversion or redemption shall be deemed to have
become on the date of any such conversion or redemption the holder or holders of
record of the shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Corporation shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open.
(i) No Fractional Shares. No fractional shares or script representing
fractional shares of Common Stock shall be issued upon the redemption or
conversion of any shares of PRIDES. In lieu of any fractional share otherwise
issuable in respect of the aggregate number of shares of PRIDES of any holder
which are redeemed or converted on any redemption date or upon Mandatory
Conversion or any optional conversion, such holder shall be entitled to receive
an amount in cash (computed to the nearest cent) equal to the same fraction of
the (i) Current Market Price as of the second trading day immediately preceding
the Notice Date, in the case of redemption, or (ii) Closing Price of the Common
Stock determined (A) as of the fifth Trading Date immediately preceding the
Mandatory Conversion Date, in the case of
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<PAGE>
Mandatory Conversion, or (B) as of the second Trading Date immediately preceding
the effective date of conversion, in the case of an optional conversion by a
holder. If more than one share shall be surrendered for conversion or redemption
at one time by or for the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of PRIDES so surrendered or redeemed.
(j) Reissuance. Shares of PRIDES that have been issued and reacquired
in any manner, including shares purchased, exchanged, redeemed or converted,
shall not be reissued as part of PRIDES and shall (upon compliance with any
applicable provisions of the laws of the State of Indiana) have the status of
authorized and unissued shares of the Preferred Stock undesignated as to series
and may be redesignated and reissued as part of any series of Preferred Stock.
(k) Definitions. As used in this Article X:
(i) the term "business day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State
of Indiana are authorized or obligated by law or executive order to
close or are closed because of a banking moratorium or otherwise;
(ii) the term "Call Price" of each share of PRIDES shall be
the sum of (x) $62.195 on and after February 1, 1999, to and including
April 30, 1999, $61.928 on and after May 1, 1999, to and including July
31, 1999, $61.660 on and after August 1, 1999, to and including October
31, 1999, $61.393 on and after November 1, 1999, to and including
December 31, 1999, and $61.125 on and after January 1, 2000 to and
including February 1, 2000 and (y) all accrued and unpaid dividends
thereon to but not including the redemption date (other than previously
declared dividends payable to a holder of record as of a prior date);
(iii) the term "Closing Price" on any day shall mean the
last reported sales price on such day or, in case no such sale takes
place on such day, the average of the reported closing high and low
quotations, in each case on the New York Stock Exchange or, if the
Common Stock is not listed on the New York Stock
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Exchange, on the Nasdaq National Market, or, if the Common Stock is not
listed on the Nasdaq National Market, the average of the high bid and
low-asked quotations of the Common Stock in the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting service, or,
if no such quotations are available, the fair market value of the
Common Stock as determined by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for such purpose;
(iv) the term "Current Market Price" per share of Common Stock
at any date shall be deemed to be the lesser of (x) the average of the
daily Closing Prices for the fifteen consecutive Trading Dates ending
on and including the date in question or (y) the Closing Price of the
Common Stock for such date of determination; provided, however, if any
event that results in an adjustment of the Common Equivalent Rate
occurs during such fifteen-day period, the Current Market Price as
determined pursuant to the foregoing shall be appropriately adjusted to
reflect the occurrence of such event; and
(v) the term "Trading Date" shall mean a date on which the New
York Stock Exchange (or any successor thereto) is open for the
transaction of business.
(l) Payment of Taxes. The Corporation shall pay any and all
documentary, stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on the redemption or conversion of
shares of PRIDES pursuant to this Section 3; provided, however, that the
Corporation shall not be required to pay any tax which may be payable in respect
of any registration of transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the registered holder of shares of
PRIDES redeemed or converted or to be redeemed or converted, and no such issue
or delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(m) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock and/or its
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issued Common Stock held in its treasury, for the purpose of effecting any
Mandatory Conversion of the shares of PRIDES or any conversion of the shares of
PRIDES at the option of the holder, the full number of shares of Common Stock
then deliverable upon any such conversion of all outstanding shares of PRIDES.
Section 4. Liquidation Rights.
(a) In the event of the liquidation, dissolution, or winding up of the
business of the Corporation, whether voluntary or involuntary, the holders of
shares of PRIDES then outstanding, after payment or provision for payment of the
debts and other liabilities of the Corporation and the payment or provision for
payment of any distribution on any shares of the Corporation having a preference
and a priority over the shares of PRIDES on liquidation, and before any
distribution to the holders of Junior Stock, shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders an
amount per share of PRIDES in cash equal to the sum of (i) $61.125 plus (ii) all
accrued and unpaid dividends thereon. In the event the assets of the Corporation
available for distribution to the holders of the shares of PRIDES upon any
dissolution, liquidation or winding up of the Corporation shall be insufficient
to pay in full the liquidation payments payable to the holders of outstanding
shares of PRIDES and of all other series of Parity Preferred Stock, the holders
of shares of PRIDES and of all other series of Parity Preferred Stock shall
share ratably in such distribution of assets in proportion to the amount which
would be payable on such distribution if the amounts to which the holders of
outstanding shares of PRIDES and the holders of outstanding shares of such
Parity Preferred Stock were paid in full. Except as provided in this Section 4,
holders of PRIDES shall not be entitled to any distribution in the event of
liquidation, dissolution or winding up of the affairs of the Corporation.
(b) For the purposes of this Section 4, none of the following shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation:
(i) the sale, lease, transfer or exchange of all or
substantially all of the assets of the Corporation; or
(ii) the consolidation or merger of the Corporation with one
or more other corporations (whether or not the Corporation is the
corporation surviving such consolidation or merger).
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Section 5. Definition. As used in this Article XV, the term "Common
Stock" shall mean any stock of any class of the Corporation which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and which is not subject to redemption by the Corporation. However,
shares of Common Stock issuable upon conversion of shares of PRIDES shall
include only shares of the class designated as Common stock as of January 23,
1996, or shares of the Corporation of any class or classes resulting from any
reclassification or reclassification thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and which
are not subject to redemption by the Corporation; provided, however, that, if at
any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from such reclassification bears
to the total number of shares of all classes resulting from all such
reclassification.
Section 6. No Preemptive Rights. The holders of shares of PRIDES shall
have no preemptive rights, including preemptive rights with respect to any
shares of capital stock or other securities of the Corporation convertible into
or carrying rights or options to purchase any such shares.
Section 7. Voting Rights.
(a) The holders of shares of PRIDES shall have the right with the
holders of Common Stock to vote in the election of directors and upon each other
matter coming before any meeting of the stockholders on the basis of 4/5 of a
vote for each share held. The holders of shares of PRIDES and the holders of
Common stock shall vote together as one class except as otherwise set forth
herein or as otherwise provided by law or elsewhere in these Amended Articles.
(b) If at any time dividends payable on the shares of PRIDES or any
other series of Preferred Stock are in arrears and unpaid in an aggregate amount
equal to or exceeding the aggregate amount of dividends payable thereon for six
quarterly dividend periods, or if any other series of Preferred Stock shall be
entitled for any other reason to exercise voting rights, separate from the
Common Stock, to elect any Directors of the Corporation ("Preferred Stock
Directors"), the holders of the shares of PRIDES, voting separately as a class
with the holders of all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable, with each share of PRIDES
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entitled to vote on this and other matters upon which Preferred Stock votes as a
group, shall have the right to vote for the election of two Preferred Stock
Directors of the Corporation, such Directors to be in addition to the number of
Directors constituting the Board of Directors immediately prior to the accrual
of such right. Such right of the holders of shares of PRIDES to elect two
Preferred Stock Directors shall, when vested, continue until all dividends in
arrears on the shares of PRIDES and such other series of Preferred Stock shall
have been paid in full and the right of any other series of Preferred Stock to
exercise voting rights, separate from the Common Stock, to elect Preferred Stock
Directors shall terminate or have terminated and, when so paid, and any such
termination occurs or has occurred, such right of the holders of shares of
PRIDES to elect two Preferred Stock Directors separately as a class shall cease,
subject always to the same provisions for the vesting of such right of the
holders of the shares of PRIDES to elect two Preferred Stock Directors in the
case of future dividend defaults.
The term of office of each Director elected pursuant to the preceding
paragraph shall terminate on the earlier of (i) the next annual meeting of
stockholders at which a successor shall have been elected and qualified or (ii)
the termination of the right of the holders of shares of PRIDES and such other
series of Preferred Stock to vote for Directors pursuant to the preceding
paragraph. Vacancies on the Board of Directors resulting from the death,
resignation or other cause of any such Director shall be filled exclusively by
no less than two-thirds of the remaining Directors and the Director so elected
shall hold office until a successor is elected and qualified.
(c) For as long as any shares of PRIDES remain outstanding, the
affirmative consent of the holders of at least two-thirds thereof actually
voting (voting separately as a class) given in person or by proxy, at any annual
meeting or special meeting of the shareholders called for such purpose, shall be
necessary to (i) amend, alter or repeal any of the provisions of these Amended
Articles of the Corporation which would adversely affect the powers, preferences
or rights of the holders of the shares of PRIDES then outstanding or reduce the
minimum time required for any notice to which holders of shares of PRIDES then
outstanding may be entitled; provided, however, that any such amendment,
alteration or repeal that would authorize, create or increase the authorized
amount of any additional shares of Junior Stock or any other shares of stock
(whether or not already authorized) ranking on a parity with the shares of
PRIDES shall be deemed not to adversely affect such powers, preferences or
rights and shall not be subject to approval by the holders of shares of PRIDES;
and provided further that clause (i) shall not be applicable to the
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amendment, alteration or repeal of any provisions of these Amended Articles of
the Corporation approved at a meeting of the shareholders the record date of
which is prior to the issuance of any shares of PRIDES; (ii) authorize or
create, or increase the authorized amount of, any capital stock, or any security
convertible into capital stock, of any class ranking senior to PRIDES as to
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up of the Corporation; or (iii) merge or consolidate with or into any
other corporation, unless each holder of the shares of PRIDES immediately
preceding such merger or consolidation shall have the right either to (A)
receive or continue to hold in the resulting corporation the same number of
shares, with substantially the same rights and preferences, as correspond to the
shares of PRIDES so held or (B) convert into shares of Common Stock at the
Common Equivalent Rate in effect on the date immediately preceding the
announcement of any such merger or consolidation.
There is no limitation on the issuance by the Corporation of Parity
Preferred Stock or of any class ranking junior to the shares of PRIDES.
Notwithstanding the provisions summarized in the preceding two
paragraphs, however, no such approval described therein of the holders of the
shares of PRIDES shall be required to authorize an increase in the number of
authorized shares of Preferred Stock or if, at or prior to the time when such
amendment, alteration, or repeal is to take effect or when the authorization,
creation or increase of any such senior stock or security is to be made, or when
such consolidation or merger, liquidation, dissolution or winding up is to take
effect, as the case may be, provision is made for the redemption of all shares
of PRIDES at the time outstanding."
ARTICLE XI
Manner of Adoption and Vote
Section 1. Action by Directors. The Board of Directors of the
Corporation or at a meeting thereof, duly called, constituted and held on March
23, 1998 at which a quorum of such Board of Directors was present, duly adopted
a resolution that the provisions and terms of its Amended and Restated Articles
of Incorporation, as amended, be amended and restated so as to read as set forth
above.
Section 2. Shareholder Vote Not Required. The Amended Articles set
forth above were adopted by the Board of Directors without shareholder action
and shareholder action was not required.
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IN WITNESS WHEREOF, the undersigned Corporation has caused these
Amended Articles to be signed and verified by a duly authorized officer, acting
for and on behalf of such Corporation; and the undersigned verifies subject to
the penalties of perjury that the facts contained herein are true.
Dated this 23rd day of March, 1998.
CONSECO, INC.
BY:/S/STEPHEN C. HILBERT
-------------------------
Stephen C. Hilbert,
Chairman of the Board,
Chief Executive Officer and
President
This instrument was prepared by John J. Sabl, General Counsel
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
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ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
CONSECO, INC.
Date of Incorporation: August 28, 1979
CONSECO, INC. (hereinafter referred to as the "Corporation"), an
Indiana corporation existing pursuant to the provisions of the Indiana Business
Corporation Law, as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment of its Articles of
Incorporation, as previously restated and amended (the "Articles of
Incorporation"), certifies the following facts:
ARTICLE I
THE AMENDMENT
Section 1. Creation of New Article XI. There is hereby created a new
Article XI of the Articles of Incorporation the exact text of which is as
follows:
ARTICLE XI
Designations, Rights and Preferences of
Series F Common-Linked Convertible Preferred Stock
The designations, rights, preferences, limitations and restrictions of
the shares of Preferred Stock, without par value, to be designated as Series F
Common-Linked Convertible Preferred Stock (in addition to those set forth
elsewhere in the Corporation's Articles of Incorporation) are hereby fixed as
follows.
Section 1. Designation; Number of Shares; Stated Value. Three Million
One Hundred Twenty Thousand (3,120,000) shares of Preferred Stock shall be
designated Series F Common-Linked Convertible Preferred Stock (hereinafter
referred to as the "Series F Preferred Stock"). Shares of the Series F Preferred
Stock shall have a stated value of One Hundred Ninety Two Dollars and Fifty
Cents ($192.50) per share.
Section 2. Dividends.
(a) The holders of the shares of Series F Preferred Stock shall be
entitled to receive per share cumulative cash dividends, at the time and in an
amount not less than the amount
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declared payable by the Board of Directors per share of Common Stock multiplied
by the applicable Conversion Rate, prior to, or at the same time as, any
dividend or distribution in cash on shares of Common Stock shall be declared or
paid or set apart for payment. The holders of the shares of Series F Preferred
Stock also shall be entitled to receive per share dividends and distributions
prior to, or at the same time as, any non-cash dividend or distribution (other
than a dividend or distribution payable solely in shares of Common Stock) shall
be declared or paid on shares of Common Stock, such per share dividend or
distribution on each share of Series F Preferred Stock being equal to the
dividend or distribution payable per share on Common Stock multiplied by the
number of shares of Common Stock into which a share of Series F Preferred Stock
is then convertible and payable in the same type of property paid to holders of
Common Stock.
(b) In the event that the per share cash dividends paid to the holders
of the shares of Series F Preferred Stock pursuant to Section 2(a) above in any
fiscal quarter are less than $1.925, then the holders of the shares of Series F
Preferred Stock shall be entitled to receive an additional dividend per share,
payable in shares of Series F Preferred Stock, in a number of shares equal to
(A) the difference between (i) $1.925 and (ii) the cash dividend paid in such
fiscal quarter pursuant to Section 2(a) above, divided by (B) $192.50, subject
to adjustment as provided in the last sentence of Section 2(c) below.
(c) In-kind dividends on the Series F Preferred Stock shall be declared
by the Board of Directors on or prior to the last business day of each fiscal
quarter (the term "business day" as used herein shall mean any day other than a
Saturday, Sunday or legal holiday) and payable on the first day of the next
fiscal quarter, commencing January 3, 2000 (each such date being hereinafter
individually a "Dividend Payment Date" and collectively the "Dividend Payment
Dates"), except that if any such Dividend Payment Date is not a business day,
then such dividend shall be payable on the first immediately succeeding calendar
day which is a business day to holders of record as they appear on the books of
the Corporation on the last business day of the fiscal quarter immediately
preceding such Dividend Payment Date or such other date as may be determined by
the Board of Directors. In-kind dividend payments shall be rounded to the
nearest 1/100th of a share of Series F Preferred Stock or if there is no nearest
1/100th to the next highest 1/100th of a share. Dividends in arrears may be
declared and paid at any time, without reference to any regular Dividend Payment
Date, to holders of record on such date as may be fixed by the Board of
Directors of the Corporation. Dividends payable on the Series F Preferred Stock
for the initial dividend period and for any period less than a full fiscal
quarter shall be prorated based on the number of days such Series F Preferred
Stock is outstanding during such quarter, and computed on the basis of a 90 day
quarter; provided that any share of Series F Preferred Stock issued as part of
an in-kind dividend on the first business day of a fiscal quarter shall be
deemed for purposes of calculating dividends to be outstanding for the full
fiscal quarter whether or not such day of issuance was the first day of such
fiscal quarter.
(d) Dividends on the Series F Preferred Stock shall be cumulative and
shall accrue from and after the date of issuance, whether or not declared by the
Board of Directors.
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(e) No dividend may be declared on any other class or series of stock
ranking on a parity with the Series F Preferred Stock as to dividends in respect
of any dividend period unless there shall also be or have been declared on the
Series F Preferred Stock like dividends ratably in proportion to the respective
annual dividend rates fixed therefor.
Section 3. Conversion.
(a) Each issued and outstanding share of Series F Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the date
of issuance and without the payment of any additional consideration therefor,
into fully paid and nonassessable shares of Common Stock at a rate of ten (10)
shares of Common Stock for each share of Series F Preferred Stock (the
"Conversion Rate"), subject to adjustment as set forth below.
(b) In order for a holder to convert shares of Series F Preferred Stock
into shares of Common Stock, such holder shall surrender the certificate or
certificates for such shares of Series F Preferred Stock, at the office of the
transfer agent for the Series F Preferred Stock (or at the principal office of
the Corporation if the Corporation serves as its own transfer agent), together
with written notice that such holder elects to convert all or any number of the
shares of the Series F Preferred Stock represented by such certificate or
certificates. Such notice shall state such holder's name or the names of the
nominees in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued and the number of shares of Series F Preferred
Stock to be converted. If required by the Corporation, certificates surrendered
for conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or such holder's attorney duly authorized in writing
accompanied by the payment of any applicable transfer taxes. The date of receipt
of such certificates and notice by the transfer agent (or by the Corporation if
the Corporation serves as its own transfer agent) shall be the conversion date
(the "Conversion Date") and the conversion shall be deemed effective as of the
close of business on the Conversion Date. The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of Series F Preferred Stock, or to his or its nominees, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled, together with cash in lieu of any fraction of a share.
(c) The Corporation may require that shares of Series F Preferred Stock
be converted (a "Mandatory Conversion Event") as follows:
(i) On or after June 15, 2001 and prior to December 15, 2002, any
holder wishing to transfer shares of Series F Preferred Stock
shall give the Secretary of the Corporation prior written
notice of such proposed transfer at least five business days
before the date of such proposed transfer, and upon receipt
of a notice of proposed transfer from a holder of shares of
Series F Preferred Stock, if the Closing Price per share of
the Corporation's Common Stock is $55.00 or greater for any
period of 20 consecutive trading days within the 45 trading
days preceding the receipt
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of such notice, the Corporation may, within 15 business days
following receipt of such notice, convert any or all of the
outstanding shares of Series F Preferred Stock covered by
such notice into fully paid and nonassessable shares of
Common Stock at the Conversion Rate;
(ii) On or after December 15, 2002, if the Closing Price per share
of the Corporation's Common Stock is $55.00 or greater for 20
consecutive trading days, the Corporation may, within 15
business days following such 20th consecutive trading day,
convert any or all of the outstanding shares of Series F
Preferred Stock into fully paid and nonassessable shares of
Common Stock at the Conversion Rate;
(iii) The term "Closing Price" on any day shall mean the last
reported sales price on such day or, in case no such sale
takes place on such day, the average of the reported closing
high and low quotations, in each case on the New York Stock
Exchange or, if the Common Stock is not listed on the New
York Stock Exchange, on the principal national securities
market or quotation system on which the Common Stock is then
traded or quoted, or, if the Common Stock is then not so
traded or quoted, on the Nasdaq National Market, or, if the
Common Stock is not listed on the Nasdaq National Market, the
average of the high bid and low-asked quotations of the
Common Stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting
service, or, if no such quotations are available, the fair
market value of the Common Stock as determined by any New
York Stock Exchange member firm selected from time to time by
the Board of Directors for such purpose.
(d) In the event the Corporation elects to exercise its conversion
rights pursuant to Section 3(c) above, then the Corporation shall notify by mail
all applicable holders of the Series F Preferred Stock of such election, who
shall in turn within ten days after receipt of such notice, surrender such
holder's certificates evidencing such shares being converted at the principal
office of the Corporation or at such other place as the Corporation shall
designate, and shall thereupon be entitled to receive certificates evidencing
the number of shares of Common Stock into which such shares of Series F
Preferred Stock are converted, together with cash in lieu of any fraction of a
share. On the date of mailing by the Corporation of the notice of the Mandatory
Conversion Event, each holder of record of shares of Series F Preferred Stock
being converted shall be deemed to be the holder of record of the Common Stock
issuable upon such conversion, notwithstanding that the certificates
representing such shares of Series F Preferred Stock shall not have been
surrendered at the office of the Corporation, that notice from the Corporation
shall not have been received by any holder of record of shares of Series F
Preferred Stock, or that the certificates evidencing such shares of Common Stock
shall not then be actually delivered to such holder.
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(e) The Conversion Rate shall be subject to adjustment from time to
time as provided below in this section (e).
(i) If the Corporation shall, after the first date any shares of
Series F Preferred Stock are issued:
(A) pay a stock dividend or make a distribution with respect
to its Common Stock in shares of such Common Stock,
(B) subdivide or split its outstanding Common Stock into a
greater number of shares,
(C) combine its outstanding shares of Common Stock into a
smaller number of shares, or
(D) issue by reclassification of its shares of Common Stock
any shares of common stock of the Corporation,
then, in any such event, the Conversion Rate in effect
immediately prior to such event shall be adjusted so that the
holder of any shares of Series F Preferred Stock shall
thereafter be entitled to receive, upon conversion, the
number of shares of Common Stock of the Corporation which
such holder would have owned or been entitled to receive
immediately following any event described above had such
shares of Series F Preferred Stock been converted immediately
prior to such event or any record date with respect thereto.
Such adjustment shall become effective at the opening of
business on the business day next following the record date
for determination of stockholders entitled to receive such
dividend or distribution, in the case of a dividend or
distribution, and shall become effective immediately after
the effective date, in the case of a subdivision, split,
combination or reclassification. Such adjustment shall be
made successively.
(ii) The Corporation shall also be entitled to make upward
adjustments in the Conversion Rate, as it in its sole
discretion shall determine to be advisable, in order that any
stock dividends, subdivisions of shares, distribution of
rights to purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock (or any
transaction which could be treated as any of the foregoing
transactions pursuant to Section 305 of the Internal Revenue
Code of 1986, as amended) made by the Corporation to its
stockholders after the first date any shares of Series F
Preferred Stock are issued shall not be taxable.
(iii) In any case in which subsection 3(e) shall require that an
adjustment become effective at the opening of business on the
business day next following a record date and the date fixed
for conversion pursuant to subsection 3(a) occurs after such
record date, but before the occurrence of such event, the
Corporation may, in its sole discretion, elect to defer the
following until after the occurrence of such event: (A)
issuing to the holder of any converted shares of Series F
Preferred Stock the additional shares of Common Stock
issuable upon such conversion over the shares of
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Common Stock issuable before giving effect to such
adjustments and (B) paying to such holder any amount in cash
in lieu of a fractional share of Common Stock pursuant to
subsection 3(h).
(iv) All adjustments to the Conversion Rate shall be calculated to
the nearest 1/100th of a share of Common Stock. No adjustment
in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least
one percent therein; provided, however, that any adjustment
which by reason of this subsection (iv) is not required to be
made shall be carried forward and taken into account in any
subsequent adjustment.
(f) Adjustment for Consolidation or Merger. In case of any
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the surviving or continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation remains unchanged), or in case of any sale or transfer
to another entity of the property of the Corporation as an entirety or
substantially as an entirety, or in case of any statutory exchange of securities
with another entity (other than in connection with a merger or acquisition),
proper provision shall be made so that each share of Series F Preferred Stock
shall, after consummation of such transaction, be subject to (i) conversion at
the option of the holder into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of Series F Preferred
Stock might have been converted immediately prior to consummation of such
transaction, and (ii) conversion on a Mandatory Conversion Event into the kind
and amount of securities, cash or other property receivable upon consummation of
such transaction by a holder of the number of shares of Common Stock into which
such share of Series F Preferred Stock would have converted if the conversion on
a Mandatory Conversion Event had occurred immediately prior to the date of
consummation of such transaction, plus the right to receive cash in an amount
equal to all accrued and unpaid dividends on such shares of Series F Preferred
Stock (other than previously declared dividends payable to a holder of record as
of a prior date). The kind and amount of securities into or for which the shares
of Series F Preferred Stock shall be convertible after consummation of such
transaction shall be subject to adjustment as described in the immediately
preceding paragraph following the date of consummation of such transaction.
For purposes of the immediately preceding paragraph and subsection 3(h)
(iii), any sale or transfer to another corporation of property of the
Corporation which did not account for at least 50% of the consolidated net
income of the Corporation for its most recent fiscal year ending prior to the
consummation of such transaction shall not in any event be deemed to be a sale
or transfer of the property of this Corporation as an entirety or substantially
as an entirety.
(g) Notice of Adjustments. Whenever the Conversion Rate is adjusted as
herein provided, the Corporation shall:
(i) forthwith compute the adjusted Conversion Rate in accordance
herewith and prepare a certificate signed by an officer of the Corporation
setting forth the adjusted
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Conversion Rate, the method of calculation thereof in reasonable detail and the
facts requiring such adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of the correctness
of the adjustment, and file such certificate forthwith with the transfer agent
for the shares of Series F Preferred Stock and the Common Stock; and
(ii) mail a notice to the holders of the outstanding shares of
Series F Preferred Stock stating that the Conversion Rate had been adjusted, the
facts requiring such adjustment and upon which such adjustment is based and
setting forth the adjusted Conversion Rate, such notice to be mailed within 45
days of the end of the fiscal quarter during which the facts requiring such
adjustment occurred.
(h) Notices. In case, at any time while any of the shares of Series F
Preferred Stock are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock, excluding any cash
dividends; or
(ii) the Corporation shall authorize the issuance to all holders
of its Common Stock of rights or warrants to subscribe for or
purchase shares of its Common Stock or of any other
subscription rights or warrants; or
(iii) the Corporation shall authorize any reclassification of its
Common Stock (other than a subdivision or combination
thereof) or any consolidation or merger to which the
Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a
merger of the Corporation into one of its subsidiaries solely
for the purpose of changing the corporate domicile of the
Corporation to another state of the United States and in
connection with which there is no substantive change in the
rights or privileges of any securities of the Corporation
other than changes resulting from differences in the
corporate statutes of the then existing and the new state of
domicile), or the sale or transfer to another corporation of
the property of the Corporation as an entirety or
substantially as an entirety; or
(iv) the Corporation shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of Series F
Preferred Stock, and shall cause to be mailed to the holders of shares
of Series F Preferred Stock at their last addresses as they shall
appear on the stock register, at least 10 days before the date
hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one date is specified), a notice
stating (A) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as
7
<PAGE>
of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or (B)
the date on which any such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property (including cash), if any,
deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. The failure to give
or receive the notice required by this subsection (h) or any defect
therein shall not affect the legality or validity of such dividend,
distribution, right or warrant or other action.
(i) All certificates evidencing shares of Series F Preferred Stock that
are required to be surrendered for conversion in accordance with the provisions
hereof, from and after the date such certificates are so required to be
surrendered shall represent the shares of Common Stock into which the shares of
Series F Preferred Stock previously represented thereby shall have been
converted for all purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates on or prior to such date. The Corporation
from time to time thereafter shall take appropriate action to reduce the
authorized Series F Preferred Stock accordingly.
(j) No fractional shares of Common Stock shall be issued upon
conversion of the Series F Preferred Stock. In lieu of any fractional shares to
which the holder would otherwise be entitled, the Corporation shall pay cash
equal to the product of such fraction multiplied by the Closing Price of the
Common Stock on the date of conversion.
(k) The Corporation shall at all times when the Series F Preferred
Stock shall be outstanding, reserve and keep available out of its authorized but
unissued stock, for the purpose of effecting the conversion of the Series F
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Series F Preferred Stock.
(l) All shares of Series F Preferred Stock surrendered for conversion
as herein provided shall no longer be deemed to be outstanding and all rights
with respect to such shares, including the rights, if any, to receive notices,
to vote and to accrual of dividends shall immediately cease and terminate at the
close of business on the conversion date (except only the right of the holders
thereof to receive shares of Common Stock in exchange therefor), and any shares
of Series F Preferred Stock so converted shall be retired and canceled by the
Corporation.
(m) All dollar amounts set forth herein shall be subject to equitable
adjustment whenever there shall occur a stock split, subdivision, combination,
reclassification, dividend (other than regular cash dividend), issuance of
rights or warrants to holders of stock to purchase shares of stock,
consolidation, merger, or sale or transfer of the property of the Corporation as
an entirety or substantially as an entirety or other similar event. Any such
adjustment shall be made by the Board of Directors of the Corporation (whose
determination shall be conclusive, final and binding). Promptly after the making
of any such adjustment, the Corporation shall send notice thereof to the holders
of Series F Preferred Stock and to the transfer agent for the Series F
8
<PAGE>
Preferred Stock.
Section 4. Voting.
(a) The shares of the Series F Preferred Stock shall have the right to
vote on an as-converted basis together with all other classes entitled to vote
thereon, on all matters which from time to time may be brought for action by the
common shareholders of the Corporation.
(b) For as long as any shares of Series F Preferred Stock remain
outstanding, the affirmative consent of the holders of at least a majority
thereof (voting separately as a class but excluding from any calculation any
shares of Series F Preferred Stock held by the Corporation or any subsidiary
thereof) given in person or by proxy, at any annual meeting or special meeting
of the shareholders called for such purpose, shall be necessary to amend, alter
or repeal any of the provisions of the Articles of Incorporation of the
Corporation which would adversely affect the powers, preferences or rights of
the holders of the shares of Series F Preferred Stock then outstanding
(including, without limitation, by any merger, consolidation or reorganization),
except as otherwise provided by the Articles of Incorporation, as amended.
Section 5. Liquidation Rights.
(a) Upon the dissolution, liquidation or winding-up of the Corporation,
whether voluntary or involuntary, the holders of the shares of the Series F
Preferred Stock shall be entitled to receive, before any payment or distribution
of the assets of the Corporation or proceeds thereof (whether capital or
surplus) shall be made to or set apart for the holders of the Series E Preferred
Stock, the Common Stock or any other class or series of stock ranking junior to
the Series F Preferred Stock upon liquidation, dissolution or winding-up, the
greater amount of (i) $192.50 per share, plus a sum equal to all dividends on
such shares (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution, and (ii) the amount the holder would have
received upon such final distribution, if the shares of Series F Preferred Stock
had been converted into shares of Common Stock pursuant to Section 3 of this
Article. If, upon any liquidation, dissolution or winding-up of the Corporation,
the assets of the Corporation, or proceeds thereof, distributable among the
holders of shares of the Series F Preferred Stock and any other class or series
of Preferred Stock ranking on a parity with the Series F Preferred Stock as to
payments upon liquidation, dissolution or winding-up shall be insufficient to
pay in full the preferential amount aforesaid, then such assets or the proceeds
thereof shall be distributed among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all amounts payable
thereon were paid in full.
(b) For the purposes of this Section 5, none of the following shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation:
(i) the sale, lease, transfer or exchange of all or substantially
all of the assets of the Corporation; or
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<PAGE>
(ii) the consolidation or merger of the Corporation with one or
more other corporations (whether or not the Corporation is
the corporation surviving such consolidation or merger).
Section 6. No Purchase, Retirement or Sinking Fund. The shares of the
Series F Preferred Stock shall not be subject to the operation of any purchase,
retirement or sinking fund.
Section 7. Status. Shares of the Series F Preferred Stock which have
been issued and reacquired in any manner by the Corporation (excluding, until
the Corporation elects to retire them, shares which are held as treasury shares,
but including shares redeemed and shares purchased and retired) shall, upon
compliance with any applicable provisions of the Indiana Business Corporation
Law, have the status of authorized and unissued shares of Preferred Stock and
may be reissued as a part of a new series of Preferred Stock to be established
by the Board of Directors or as part of any other series of Preferred Stock the
terms of which do not prohibit such reissue.
Section 8. Priority. The Common Stock and the Series E Preferred Stock
of the Corporation shall each rank junior to the Series F Preferred Stock as to
dividends and distribution of assets upon liquidation, dissolution or
winding-up.
Section 9. Relative Rights of Series F Preferred Stock. So long as any
of the Series F Preferred Stock is outstanding, the Corporation will not
declare, or pay, or set apart for payment, any dividends (other than dividends
or distributions payable in stock ranking junior to the Series F Preferred Stock
as to dividends or upon liquidation, dissolution or winding-up) or make any
distribution in cash or other property on any other class or series of stock of
the Corporation ranking junior to the Series F Preferred Stock either as to
dividends or upon liquidation, dissolution or winding-up, and will not redeem,
purchase or otherwise acquire any shares of any such junior class or series of
stock if at the time of making such declaration, payment or setting apart for
payment, distribution, redemption, purchase or acquisition the Corporation shall
be in default with respect to any dividend payable on any shares of Series F
Preferred Stock.
Section 10. Issuance of Additional Shares. Notwithstanding the
foregoing, the Board of Directors of the Corporation may authorize additional
shares of the Series F Preferred Stock and amend the Articles of Incorporation
without approval of the holders of the Series F Preferred Stock or any other
class of stock then outstanding, at any time and from time to time, solely for
the purpose of issuing such shares as in-kind dividends to the holders of shares
of Series F Preferred Stock pursuant to Section 2(b) hereof.
ARTICLE II
The foregoing amendment was adopted on December 14, 1999.
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ARTICLE III
MANNER OF ADOPTION AND VOTE
Section 1. Action by Directors. The amendment set forth above was
adopted by the Board of Directors of the Corporation and shareholder action was
not required.
ARTICLE IV
COMPLIANCE WITH LEGAL REQUIREMENTS
The manner of the adoption of the Articles of Amendment and the vote by
which they were adopted constitute full legal compliance with the provisions of
the Act, the Articles of Incorporation, and the Bylaws of the Corporation.
IN WITNESS WHEREOF, the undersigned Corporation has caused these
Articles of Amendment to be signed and verified by a duly authorized officer,
acting for and on behalf of such Corporation; and the undersigned verifies
subject to the penalties of perjury that the facts contained herein are true
this 14th day of December, 1999.
CONSECO, INC.
By: /S/ ROLLIN M. DICK
----------------------------------------
Rollin M. Dick
Executive Vice President
and Chief Financial Officer
This instrument was prepared by John J. Sabl, General Counsel, Conseco, Inc.,
11825 N. Pennsylvania Street, Carmel, IN 46032.
11
AMENDED AND RESTATED
BYLAWS OF CONSECO, INC.
Effective December 15, 1999
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE 1 - Shares................................................................................................1
Section 1.1. Certificate for Shares.....................................................................1
Section 1.2. Transfer of Shares.........................................................................1
Section 1.3. Regulations................................................................................1
Section 1.4. Lost, Stolen or Destroyed Certificates.....................................................2
Section 1.5. Redemption of Shares Acquired in Control Share Acquisitions................................2
ARTICLE 2 - Shareholders..........................................................................................2
Section 2.1. Place of Meetings..........................................................................2
Section 2.2. Annual Meetings............................................................................2
Section 2.3. Special Meetings...........................................................................3
Section 2.4. Notice of Meeting..........................................................................3
Section 2.5. Addresses of Shareholders..................................................................3
Section 2.6. Quorum.....................................................................................3
Section 2.7. Voting.....................................................................................3
Section 2.8. Voting Lists...............................................................................4
Section 2.9. Fixing of Record Date......................................................................4
Section 2.10. Organization...............................................................................4
Section 2.11. Shareholder Proposals and Board Nominations................................................4
ARTICLE 3- Board of Directors.....................................................................................6
Section 3.1. Number, Election and Term of Office........................................................6
Section 3.2. Vacancies..................................................................................6
Section 3.3. Quorum; Action.............................................................................6
Section 3.4. Action by Consent..........................................................................6
Section 3.5. Telephonic Meetings........................................................................7
Section 3.6. Attendance and Failure to Object or Abstain................................................7
Section 3.7. Annual Meeting.............................................................................7
Section 3.8. Regular Meetings...........................................................................7
Section 3.9. Special Meetings...........................................................................7
Section 3.10. Place of Meeting...........................................................................8
Section 3.11. Compensation of Directors..................................................................8
</TABLE>
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TABLE OF CONTENTS (continued)
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE 4 - Committees............................................................................................8
Section 4.1. Committees.................................................................................8
Section 4.2. Quorum and Manner of Acting................................................................8
Section 4.3. Committee Chairman, Books and Records, Etc.................................................8
Section 4.4. Executive Committee........................................................................8
Section 4.5. Compensation Committee.....................................................................8
Section 4.6. Audit Committee............................................................................9
ARTICLE 5 - Officers..............................................................................................9
Section 5.1. Officers, General Authority and Duties.....................................................9
Section 5.2. Election, Term of Office, Qualifications...................................................9
Section 5.3. Other Officers, Elections or Appointment...................................................9
Section 5.4. Resignation...............................................................................10
Section 5.5. Removal...................................................................................10
Section 5.6. Vacancies.................................................................................10
Section 5.7. The Chairman of the Board.................................................................10
Section 5.8. The President.............................................................................10
Section 5.9. The Vice Presidents.......................................................................10
Section 5.10. Second or Assistant Vice Presidents.......................................................11
Section 5.11. The Secretary.............................................................................11
Section 5.12. The Assistant Secretaries.................................................................11
Section 5.13. The Treasurer.............................................................................12
Section 5.14. The Assistant Treasurers..................................................................12
Section 5.15. The Chief Accounting Officer..............................................................12
Section 5.16. The Salaries..............................................................................13
ARTICLE 6 - Corporate Instruments, Loans and Funds...............................................................13
Section 6.1. Execution of Instruments Generally........................................................13
Section 6.2. Execution and Endorsement of Negotiable Instruments.......................................13
Section 6.3. Opening of Bank Accounts..................................................................13
Section 6.4. Voting of Stock Owned by Corporation......................................................13
</TABLE>
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TABLE OF CONTENTS (continued)
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<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE 7 - Indemnification......................................................................................14
Section 7.1. Indemnification of Officers, Directors and Other Eligible Persons.........................14
Section 7.2. Definition of Claim.......................................................................14
Section 7.3. Definition of Eligible Person.............................................................15
Section 7.4. Definitions of Liability and Expense......................................................15
Section 7.5. Definition of Wholly Successful...........................................................15
Section 7.6. Definition of Change of Control...........................................................15
Section 7.7. Procedure for Determination of Entitlement to Indemnification.............................16
Section 7.8. Application to Court for Determination....................................................17
Section 7.9. Nonexclusivity............................................................................17
Section 7.10. Advancement of Expenses...................................................................17
Section 7.11. Insurance, Contracts and Funding..........................................................17
Section 7.12. Nature of Provisions......................................................................18
Section 7.13. Applicability of Provisions...............................................................18
ARTICLE 8 - Miscellaneous........................................................................................18
Section 8.1. Amendments................................................................................18
Section 8.2. Seal......................................................................................18
Section 8.3. Fiscal Year...............................................................................18
</TABLE>
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<PAGE>
ARTICLE 1
---------
Shares
Section 1.1. Certificate for Shares. Shares of the Corporation may be
issued in book-entry form or evidenced by certificates. However, unless
otherwise specified in the provisions of the Articles of Incorporation relating
to the class of shares, every holder of shares of the Corporation shall be
entitled upon request to have a certificate evidencing the shares owned by the
shareholder, signed in the name of the Corporation by the Chairman of the Board,
the President or a Vice President and the Secretary or an Assistant Secretary,
certifying the number of shares owned by the shareholder in the Corporation. The
signatures of the Chairman of the Board, the President, Vice President,
Secretary and Assistant Secretary, the signature of the transfer agent and
registrar, and the seal of the Corporation may be facsimiles. In case any
officer or employee who shall have signed, or whose facsimile signature or
signatures shall have been used on, any certificate shall cease to be an officer
or employee of the Corporation before the certificate shall have been issued and
delivered by the Corporation, the certificate may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed the certificate or whose facsimile signature or signatures have been used
thereon had not ceased to be such officer or employee of the Corporation; and
the issuance and delivery by the Corporation of any such certificate shall
constitute an adoption thereof.
Subject to the foregoing provisions, certificates representing shares
of the Corporation shall be in such form as shall be approved by the Board of
Directors. There shall be entered upon the stock books of the Corporation at the
time of the issuance or transfer of each share the number of the certificate
representing such share (if any), the name of the person owning the shares
represented thereby, the class of such share and the date of the issuance or
transfer thereof.
Section 1.2. Transfer of Shares. Shares of the Corporation shall be
transferable only on the books of the Corporation and if the shares are
evidenced by certificates, upon surrender of the certificate or certificates
representing the same properly endorsed by the registered holder or by his or
her duly authorized attorney, such endorsement or endorsements to be witnessed
by one witness. The requirement for such witnessing may be waived in writing
upon the form of endorsement by the Chairman of the Board, the President, a Vice
President or the Secretary of the Corporation.
The Corporation and its transfer agents and registrars shall be
entitled to treat the holder of record of any shares the absolute owner thereof
for all purposes, and accordingly shall not be bound to recognize any legal,
equitable or other claim to or interest in such shares on the part of any other
person whether or not it or they shall have express or other notice thereof,
except as otherwise expressly provided by statute. Shareholders shall notify the
Corporation in writing of any changes in their addresses from time to time.
Section 1.3. Regulations. Subject to the provisions of this Article 1
the Board of Directors may make such rules and regulations as it may deem
expedient concerning the issuance, transfer and regulation of certificates for
shares or book-entry shares of the Corporation.
1
<PAGE>
Section 1.4. Lost, Stolen or Destroyed Certificates. The Corporation
may issue a new certificate for shares of the Corporation in the place of any
certificate theretofore issued and alleged to have been lost, stolen or
destroyed, but the Board of Directors may require the owner of such lost, stolen
or destroyed certificate, or such holder's legal representative, to furnish
affidavit as to such loss, theft, or destruction, and to give a bond in such
form and substance, and with such surety or sureties, with fixed or open
penalty, as it may direct, to indemnify the Corporation and its transfer agents
and registrars against any claim that may be made on account of the alleged
loss, theft or destruction of such certificate or the issuance of such new
certificate.
Section 1.5. Redemption of Shares Acquired in Control Share
Acquisitions. Any or all control shares acquired in a control share acquisition
shall be subject to Corporation's right to redeem, if either:
(a) No acquiring person statement has been filed with the Corporation
with respect to the control share acquisition; or
(b) The control shares are not accorded full voting rights by the
Corporation's shareholders as provided in IC 23-1-42-9.
A redemption pursuant to Section 1.5(a) may be made at any time during
the period ending sixty (60) days after the date of the last acquisition of
control shares by the acquiring person. A redemption pursuant to Section 1.5(b)
may be made at any time during the period ending two (2) years after the date of
the shareholder vote with respect to the voting rights of the control shares in
question. Any redemption pursuant to this Section 1.5 shall be made at the fair
value of the control shares and pursuant to such procedures for the redemption
as may be set forth in these Bylaws or adopted by resolution of the Board of
Directors.
As used in this Section 1.5, the terms "control shares," "control
share acquisition," "acquiring person statement" and "acquiring person" shall
have the meanings ascribed to them in IC 23-1-42.
ARTICLE 2
---------
Shareholders
------------
Section 2.1. Place of Meetings. Meetings of shareholders of the
Corporation shall be held at the place within or without the State of Indiana,
specified in the notices for such meetings.
Section 2.2. Annual Meetings. The annual meeting of the shareholders of
the Corporation for the election of directors and for the transaction of such
other business as properly may come before the meeting shall be held prior to
June 30 of each year on such date as the Board of Directors shall determine by
resolution. The failure to hold an annual meeting in any year shall not affect
otherwise valid corporate acts or work any forfeiture or a dissolution of the
Corporation.
2
<PAGE>
Section 2.3. Special Meetings. Special meetings of shareholders of the
Corporation may be called by the Board of Directors, the Chairman of the Board
or the President. The business transacted at a special meeting of shareholders
shall be limited to the purpose or purposes specified in the notice for such
meeting.
Section 2.4. Notice of Meeting. A written or printed notice, stating
the place, day and hour of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary of the Corporation, or by the officers or persons
calling the meeting, to each shareholder of record entitled to vote on the
business proposed to be transacted at such meeting, at such address as appears
upon the records of the Corporation, at least ten (10) days, and not more than
sixty (60) days, before the date of the meeting. Notice of any such meeting may
be waived in writing by any shareholder before or after the meeting. Attendance
at any meeting in person, or by proxy when the instrument of proxy sets forth in
reasonable detail the purpose or purposes for which the meeting is called, shall
constitute a waiver of notice of such meeting. Notice of any adjourned meeting
of the shareholders of the Corporation shall not be required to be given unless
required by statute.
Section 2.5. Addresses of Shareholders. The address of any shareholder
appearing upon the records of the Corporation shall be deemed to be the same
address as the latest address of such shareholder appearing on the records
maintained by the transfer agent for the class of shares held by such
shareholder.
Section 2.6. Quorum. At any meeting of the shareholders a majority of
the outstanding shares entitled to vote on a matter at such meeting, represented
in person or by proxy, shall constitute a quorum for action on that matter. In
the absence of a quorum, the holders of a majority of the shares entitled to
vote present in person or by proxy, or, if no shareholder entitled to vote is
present in person or by proxy, any officer entitled to preside at or act as
Secretary of such meeting, may adjourn such meeting from time to time, until a
quorum shall be present. At any such adjourned meeting at which a quorum may be
present any business may be transacted which might have been transacted at the
meeting as originally called.
Section 2.7. Voting. Except as otherwise provided by statute or by the
Articles of Incorporation, at each meeting of the shareholders each holder of
shares entitled to vote shall have the right to one vote for each share standing
in the shareholder's name on the books of the Corporation on the record date
fixed for the meeting under Section 2.9. Each shareholder entitled to vote shall
be entitled to vote in person or by proxy executed in writing (which shall
include telegraphing, cabling, facsimile, or electronic transmission) by the
shareholder or a duly authorized attorney in fact. The vote of shareholders
approving any matter to which the Articles of Incorporation, or any applicable
statute, specifies a different percentage of affirmative vote shall require such
percentage of affirmative vote. All other matters, except the election of
directors, shall require that the votes cast in favor of the matter exceed the
votes cast opposing the matter at a meeting at which a quorum is present. In the
event that the Articles of Incorporation or any applicable statute shall require
one or more classes of shares to vote as a separate voting class, the vote of
each class shall be considered and decided separately.
3
<PAGE>
Section 2.8. Voting Lists. The Secretary shall make or cause to be made
after a record date for a meeting of shareholders has been fixed under Section
2.9 and at least five (5) business days before such meeting, a complete list of
the shareholders entitled to vote at such meeting, arranged in alphabetical
order, with the address of each such shareholder and the number of shares so
entitled to vote held by each which list shall be on file at the principal
office of the Corporation and subject to inspection by any shareholder entitled
to vote at the meeting. Such list shall be produced and kept open at the time
and place of the meeting and subject to the inspection of any such shareholder
during the holding of such meeting or any adjournment. Except as otherwise
required by law, such list shall be the only evidence as to who are the
shareholders entitled to vote at any meeting of the shareholders. In the event
that more than one group of shares is entitled to vote as a separate voting
group at the meeting, there shall be a separate listing of the shareholders of
each group.
Section 2.9. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of the shareholders for any other proper purpose,
the Board of Directors shall fix in advance a date as the record date for any
such determination of shareholders, not more than seventy (70) days prior to the
date on which the particular action requiring this determination of shareholders
is to be taken. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, the
determination shall, to the extent permitted by law, apply to any adjournment
thereof.
Section 2.10. Organization. Meetings of shareholders shall be presided
over by the Chairman of the Board, or in his or her absence, by the President,
or in his or her absence, by a chairman designated by the Board of Directors, or
in the absence of such designation by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence, the
chairman of the meeting may appoint any person or act as secretary of the
meeting.
Section 2.11. Shareholder Proposals and Board Nominations.
(a) At any annual meeting of the Corporation's shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be (i)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors, (ii) otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or (iii) otherwise
properly brought before the meeting by a shareholder in accordance with these
Bylaws. Business may be properly brought before an annual meeting by a
shareholder only if written notice of the shareholder's intent to propose such
business has been delivered, either by personal delivery, United States mail,
first class postage prepaid, or other similar means, to the Secretary of the
Corporation not later than ninety (90) calendar days in advance of the
anniversary date of the release of the Corporation's proxy statement to
shareholders in connection with the preceding year's annual meeting of
shareholders, except that if no annual meeting was held in the previous year or
the date of the annual meeting has been changed by more than thirty (30)
calendar days from the anniversary of the annual meeting date stated in the
previous year's proxy statement, a shareholder proposal shall be received by the
Corporation a reasonable time before the solicitation is made.
4
<PAGE>
(b) Each notice of new business must set forth: (i) the name and
address of the shareholder who intends to raise the new business; (ii) the
business desired to be brought forth at the meeting and the reasons for
conducting such business at the meeting; (iii) a representation that the
shareholder is a holder of record of shares of the Corporation entitled to vote
with respect to such business and intends to appear in person or by proxy at the
meeting to move the consideration of such business; (iv) such shareholder's
total beneficial ownership of the Corporation's voting shares; and (v) such
shareholder's interest in such business. The chairman of the meeting may refuse
to acknowledge a motion to consider any business that he or she determines was
not made in compliance with the foregoing procedures.
(c) An adjourned meeting, if notice of the adjourned meeting is not
required to be given to shareholders, shall be regarded as a continuation of the
original meeting, and any notice of new business must have met the foregoing
requirements as of the date of the original meeting. In the event of an
adjourned meeting where notice of the adjourned meeting is required to be given
to shareholders, any notice of new business made by a shareholder with respect
to the adjourned meeting must meet the foregoing requirements based upon the
date on which notice of the date of the adjourned meeting was given.
(d) Nominations for the election of directors may be made by the Board
of Directors or a committee appointed by the Board of Directors or by any
shareholder entitled to vote in the election of directors generally. However,
any shareholder entitled to vote in the election of directors may nominate one
or more person for election as director(s) at a meeting only if written notice
of such shareholder's intent to make such nomination or nominations has been
delivered, either by personal delivery, United States mail, first class postage
prepaid, or other similar means, to the Secretary of the Corporation not later
than (i) with respect to an election to be held at an annual meeting of
shareholders, ninety (90) calendar days in advance of the anniversary date of
the release of the Corporation's proxy statement to shareholders in connection
with the preceding year's annual meeting of shareholders, except that if no
annual meeting was held in the previous year or the date of the annual meeting
has been changed by more than thirty (30) calendar days from the anniversary of
the annual meeting date stated in the previous year's proxy statement, a nominee
proposal shall be received by the Corporation a reasonable time before the
solicitation is made, and (ii) with respect to an election to be held at a
special meeting of shareholders for the election of directors, the close of
business on the tenth day following the date on which notice of such meeting is
first given to shareholders.
(e) Each such notice shall set forth: (i) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (ii) a representation that the shareholder is a holder of record
of shares of the Corporation entitled to vote at such meeting to nominate the
person or persons specified in the notice; (iii) a description of all
relationships, arrangements or understandings between the shareholder and each
nominee and any other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the shareholder; (iv)
such other information regarding each nominee proposed by such shareholder as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board of Directors; and (v) the
consent of each nominee to serve as a director of the Corporation if so elected.
The chairman of the meeting may determine and declare to the meeting that a
nomination was not made in compliance with the foregoing procedures in which
case the nomination shall be disregarded.
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ARTICLE 3
---------
Board of Directors
------------------
Section 3.1. Number, Election and Term of Office. The business of the
Corporation shall be managed by a Board of Directors consisting of twelve (12)
members, which number may be increased or diminished by not less than a majority
of the Directors then in office; provided that the number may not be increased
to more than fourteen (14) and may not be diminished below five (5) and no
reduction in number shall have the effect of shortening the term of any
incumbent Director. Directors need not be shareholders of the Corporation.
Except as otherwise provided by law, the Articles of Incorporation or by these
Bylaws, the Directors of the Corporation shall be elected at the annual meeting
of shareholders in each year by a plurality of the votes cast by shareholders
entitled to vote in the election at the meeting, provided a quorum is present.
The Board of Directors shall be divided into three classes, as nearly equal in
number as the then total number of Directors constituting the whole Board
permits, with the term of office of one class expiring each year.
At each annual meeting of shareholders the successors to the class of
Directors whose term shall then expire shall be elected and each Director so
elected shall hold office until such Director's successor is elected and
qualified, or until his or her earlier resignation or removal. If the number of
Directors is changed, any increase or decrease in the number of Directors shall
be apportioned among the three classes so as to make all classes as nearly equal
in number as possible. Notwithstanding the foregoing, whenever holders of any
Preferred Stock, or any series thereof, shall be entitled, voting separately as
a class, to elect any Directors, all Directors so elected shall be allocated,
each time they are so elected, to the class whose term expires at the next
succeeding annual meeting of shareholders and the terms of all Directors so
elected by such holders shall expire at the next succeeding annual meeting of
shareholders, in each case except to the extent otherwise provided in the
Articles of Incorporation.
Section 3.2. Vacancies. Except as may be otherwise provided in the
Articles of Incorporation, any vacancy which may occur in the Board of Directors
caused by resignation, death or other incapacity, or increase in the number of
Directors shall be filled by a majority vote of the remaining members of the
Board of Directors. Each replacement or new Director shall serve for the balance
of the term of the class of the Director he or she succeeds or, in the event of
an increase in the number of directors, of the class to which he or she is
assigned.
Section 3.3. Quorum; Action. A majority of the actual number of
Directors elected and qualified, from time to time, shall be necessary to
constitute a quorum for the transaction of any business, except for any matters
which the Articles of Incorporation, these Bylaws or any applicable statute
specifies may be approved by a lesser number. If a quorum is present when a vote
is taken, the affirmative vote of a majority of the Directors present is the act
of the Board of Directors, unless the Articles of Incorporation or these Bylaws
provide otherwise.
Section 3.4. Action by Consent. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting,
if taken by all members of the Board of Directors, as the case may be, evidenced
by one or more written consents signed by all such members and effective on the
date, either prior or subsequent to the date of the consent, specified in the
written consent, or if no effective date is specified in the written consent,
the date on which the consent is filed with the minutes of proceedings of the
Board of Directors.
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Section 3.5. Telephonic Meetings. Directors, or any committee of
Directors designated by the Board of Directors, may participate in a meeting of
the Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 3.5 shall constitute presence in person at such meeting.
Section 3.6. Attendance and Failure to Object or Abstain. A Director
who is present at a meeting of the Board of Directors or a committee of the
Board of Directors when corporate action is taken is deemed to have assented to
the action taken unless:
(a) The Director objects at the beginning of the meeting (or promptly
upon the Director's arrival) to holding it or transacting business at the
meeting;
(b) The Director's dissent or abstention from the action taken is
entered in the minutes of the meeting; or
(c) The Director delivers written notice of the Director's dissent or
abstention to the presiding officer of the meeting before its adjournment or to
the Secretary of the Corporation immediately after adjournment of the meeting.
The right of dissent or abstention is not available to a Director who votes in
favor of the action taken.
Section 3.7. Annual Meeting. Unless otherwise provided by resolution of
the Board of Directors, the Board of Directors shall meet each year immediately
after the annual meeting of the shareholders, at the place where such meeting of
the shareholders has been held, for the purpose of appointment of committees,
election of officers, and consideration of any other business that may properly
be brought before the meeting. No notice of any kind to either old or new
members of the Board of Directors for such annual meeting shall be necessary.
Section 3.8. Regular Meetings. Regular meetings of the Board of
Directors may be held without any notice whatever at such places and times, as
may be fixed from time to time by resolution of the Board of Directors.
Section 3.9. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or the
President, and shall be called on the written request of any two Directors.
Notice of the date, time and place of such a special meeting shall be sent by
the Secretary or an Assistant Secretary to each Director at his or her residence
or usual place of business by letter, telegram or facsimile, at such time that,
in regular course, such notice would reach such place not later than during the
day immediately preceding the day for such meeting; or may be delivered by the
Secretary or an Assistant Secretary to a Director personally at any time during
such preceding day. The notice need not describe the purpose of the special
meeting. In lieu of such notice, a Director may sign a written waiver of notice
either before the time of the meeting, at the time of the meeting, or after the
time of the meeting.
Any meeting of the Board of Directors for which notice is required
shall be a legal meeting, without notice thereof having been given, if all the
Directors, who do not waive notice thereof in writing, shall be present in
person.
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Section 3.10. Place of Meeting. The Directors may hold their meetings,
within and without the State of Indiana.
Section 3.11. Compensation of Directors. The Board of Directors is
empowered and authorized to fix and determine the compensation of Directors for
attendance at meetings of the Board and additional compensation for such
additional services any of such Directors may perform for the Corporation.
ARTICLE 4
---------
Committees
----------
Section 4.1. Committees. The Board of Directors may from time to time,
in its discretion, by resolution passed by a majority of the entire Board of
Directors, designate committees of the Board of Directors consisting of such
number of directors as the Board of Directors shall determine, which shall have
and may exercise such lawfully delegable powers and duties of the Board of
Directors as shall be conferred or authorized by such resolution. The Board of
Directors shall have the power to change at any time the members of any such
committee, to fill vacancies and to dissolve any such committee.
Section 4.2. Quorum and Manner of Acting. A majority of the members of
any committee of the Board of Directors shall constitute a quorum for the
transaction of business at any meeting of such committee, and the act of a
majority of the members present at any meeting at which a quorum is present
shall be the act of such committee.
Section 4.3. Committee Chairman, Books and Records, Etc. The chairman
of each committee of the Board of Directors shall be selected from among the
members of such committee by the Board of Directors. Each committee shall keep a
record of its acts and proceedings, and all actions of each committee shall be
reported to the Board of Directors when required. Except to the extent
inconsistent with the resolutions of the Board of Directors creating a
committee, the provisions of these Bylaws concerning meetings of the Board of
Directors, actions without meetings, notice and waiver of notice and telephonic
participation apply to each committee.
Section 4.4. Executive Committee. Two or more Directors of the
Corporation shall be appointed by the Board of Directors to act as an Executive
Committee. The Executive Committee shall have and exercise all power and
authority of the Board of Directors in the management of the Corporation to the
fullest extent permitted by statute.
Section 4.5. Compensation Committee. Two or more Directors of the
Corporation shall be appointed by the Board of Directors to act as a
Compensation Committee, each of whom shall be a director who is not an employee
of the Corporation or any subsidiary thereof. The Compensation Committee shall
have the power and authority to set the compensation of the officers of the
Corporation and to act with respect to the compensation, option and other
benefit plans of the Corporation.
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Section 4.6. Audit Committee. Two or more Directors of the Corporation
shall be appointed by the Board of Directors to act as an Audit Committee, each
of whom shall be a director who is not an employee of the Corporation or any
subsidiary thereof. The Audit Committee shall have general oversight
responsibility with respect to the Corporation's accounting and financial
reporting activities, including meeting with the Corporation's independent
auditors and its chief financial and accounting officers to review the scope,
cost and results of the independent audit and to review internal accounting
controls, policies and procedures. The Audit Committee also shall make
recommendations to the Board of Directors as to the selection of independent
auditors. In addition, the Audit Committee shall oversee the compliance programs
of the Corporation and its subsidiaries where such oversight is delegated to the
Audit Committee by either the Board of Directors or embodied in an agreement
executed by the Corporation or the applicable subsidiary. In undertaking the
foregoing responsibilities, the Audit Committee shall have unrestricted access,
if necessary, to the Corporation's personnel and documents and shall be provided
with the resources and assistance necessary to discharge its responsibilities,
including periodic reports from management assessing the impact of regulation,
accounting, and reporting of other significant matters that may affect the
Corporation.
ARTICLE 5
---------
Officers
--------
Section 5.1. Officers, General Authority and Duties. The officers of
the Corporation shall be a Chairman of the Board, a President, one (1) or more
Vice Presidents, a Secretary, a Treasurer, a Chief Accounting Officer, and such
other officers as may be elected or appointed in accordance with the provisions
of Section 5.3. One (1) or more of the Vice Presidents may be designated by the
Board to serve as an Executive Vice President. Any two (2) or more offices may
be held by the same person. All officers and agents of the Corporation, as
between themselves and the Corporation, shall have such authority and perform
such duties in the management of the Corporation as may be provided in these
Bylaws or as may be determined by resolution of the Board of Directors not
inconsistent with these Bylaws.
Section 5.2. Election, Term of Office, Qualifications. Each officer
(except such officers as may be appointed in accordance with the provisions of
Section 5.3) shall be elected by the Board of Directors. Each such officer
(whether elected at an annual meeting of the Board of Directors or to fill a
vacancy or otherwise) shall hold office until the officer's successor is chosen
and qualified, or until death, or until the officer shall resign in the manner
provided in Section 5.4 or be removed in the manner provided in Section 5.5. The
Chairman of the Board shall be chosen from among the Directors. Any other
officer may but need not be a Director of the Corporation. Election or
appointment of an officer shall not of itself create contract rights.
Section 5.3. Other Officers, Election or Appointment. The Board of
Directors from time to time may elect such other officers or agents (including
one or more Second or Assistant Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers) as it may deem necessary or
advisable. The Board of Directors may delegate to any officer the power to
appoint any such officers or agents and to prescribe their respective terms of
office, powers and duties.
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Section 5.4. Resignation. Any officer may resign at any time by giving
written notice of such resignation to the Board of Directors, the Chairman of
the Board, the President or the Secretary of the Corporation. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof and unless otherwise specified in it, the acceptance of the
resignation shall not be necessary to make it effective.
Section 5.5. Removal. The officers specifically designated in Section
5.1 may be removed, either for or without cause, at any meeting of the Board of
Directors called for such purpose, by the vote of a majority of the actual
number of Directors elected and qualified. The officers and agents elected or
appointed in accordance with the provisions of Section 5.3 may be removed,
either for or without cause, at any meeting of the Board of Directors at which a
quorum be present, by the vote of a majority of the Directors present at such
meeting, by any superior officer upon whom such power of removal shall have been
conferred by the Board of Directors, or by any officer to whom the power to
appoint such officer has been delegated by the Board of Directors pursuant to
Section 5.3. Any removal shall be without prejudice to the contract rights, if
any, of the person so removed.
Section 5.6. Vacancies. A vacancy in any office by reason of death,
resignation, removal, disqualification or any other cause, may be filled by the
Board of Directors or by an officer authorized under Section 5.3 to appoint to
such office.
Section 5.7. The Chairman of the Board. The Chairman of the Board, who
shall be chosen from among the Directors, shall have general supervision and
direction over the business and affairs of the Corporation and shall exercise
executive management of the day-to-day operations of the Corporation, subject
however to the control of the Board of Directors, shall preside at all meetings
of the Board of Directors and the shareholders, and shall perform such other
duties as, from time to time, may be assigned to him or her by the Board of
Directors. The Chairman of the Board shall be the Chief Executive Officer.
Section 5.8. The President. The President shall perform all the duties
ordinarily connected with the office of President and shall perform such other
duties as, from time to time, may be assigned to him or her by the Board of
Directors. In the case of the absence or inability to act of the Chairman of the
Board, the President shall perform the duties of the Chairman of the Board, and,
when so acting, shall have all the powers of the Chairman of the Board.
Section 5.9. The Vice Presidents. Each Vice President shall have such
powers and perform such duties as the Board of Directors may from time to time
prescribe or as the Chairman of the Board or the President may from time to time
delegate to him or her. The Board of Directors may designate certain Vice
Presidents as being in charge of designated divisions or functions of the
Corporation's business and add appropriate descriptions to their titles. At the
request of the President, any Executive Vice President may, in the case of the
absence or inability to act of the President, temporarily act in such officer's
place, and, when so acting, shall have all the powers of the President. In the
case of the death of the President, or in the case of his or her absence or
inability to act without having designated an Executive Vice President to act
temporarily in his or her place, the Executive Vice President so to perform the
duties of the President shall be designated by the Board of Directors.
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Section 5.10. Second or Assistant Vice Presidents. Each Second or
Assistant Vice President (if one or more Second or Assistant Vice Presidents be
elected or appointed) shall perform such other duties as are from time to time
delegated to him or her by the Chairman of the Board, the President, a Vice
President, or the Board of Directors. At the request of one of the Vice
Presidents, or in his or her absence or inability to act, a Second or Assistant
Vice President designated by the Vice President shall perform the duties of such
Vice President, and when so acting shall have all the powers of the Vice
President. In the case of the death of a Vice President, or in the case of his
or her absence or inability to act without having designated a Second or
Assistant Vice President to act temporarily in his or her place, the Second or
Assistant Vice President so to perform the duties of the Vice President shall be
designated by the Board of Directors, the Chairman of the Board or the
President.
Section 5.11. The Secretary. The Secretary shall:
(a) record all the proceedings of the meetings of the shareholders and
of the Board of Directors in books to be kept for such purposes;
(b) cause all notices to be duly given in accordance with the
provisions of these Bylaws and as required by statute;
(c) be custodian of the seal of the Corporation, and cause the seal to
be affixed to all certificates representing shares of the Corporation prior to
the issuance thereof (subject, however, to the provisions of Article 1) and to
all instruments the execution of which on behalf of the Corporation under its
seal shall have been duly authorized in accordance with these Bylaws;
(d) subject to the provisions of Article 1, sign certificates
representing shares of the Corporation the issuance of which shall have been
authorized by the Board of Directors; and,
(e) in general, perform all duties incident to the office of Secretary
and such other duties as may, from time to time, be given to him or her by these
Bylaws, the Board of Directors, the Chairman of the Board, the President or any
Vice President.
Section 5.12. The Assistant Secretaries. Each Assistant Secretary (if
one or more Assistant Secretaries be elected or appointed) shall assist the
Secretary in his or her duties, and shall perform such other duties as the Board
of Directors may from time to time prescribe or the Chairman of the Board, the
President, any Vice President or the Secretary may from time to time delegate to
him or her. At the request of the Secretary, any Assistant Secretary may, in the
case of the absence or inability to act of the Secretary, temporarily act in the
Secretary's place. In the case of the death of the Secretary, or in the case of
his or her absence or inability to act without having designated an Assistant
Secretary to act temporarily in his or her place, the Assistant Secretary so to
perform the duties of the Secretary shall be designated by the Board of
Directors, Chairman of the Board or the President.
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Section 5.13. The Treasurer. The Treasurer shall:
(a) have charge of the funds, securities, receipts and disbursements of
the Corporation;
(b) cause the moneys and other valuable effects of the Corporation to
be deposited or invested in the name and to the credit of the Corporation in
such banks or trust companies or with such bankers or other depositories or
investments as shall be selected in accordance with resolutions adopted by the
Board of Directors;
(c) cause the funds of the Corporation to be disbursed from the
authorized depositories of the Corporation, and cause to be taken and preserved
proper records of all moneys disbursed; and,
(d) in general, shall perform all the duties incident to the office of
Treasurer and such other duties as, from time to time, may be assigned to him by
the Board of Directors, the Chairman of the Board, the President or any Vice
President.
Section 5.14. The Assistant Treasurers. Each Assistant Treasurer (if
one or more Assistant Treasurers be elected or appointed) shall assist the
Treasurer in his or her duties, and shall perform such other duties as the Board
of Directors, the Chairman of the Board, the President, any Vice President or
Treasurer may from time to time delegate to him or her. At the request of the
Treasurer, any Assistant Treasurer may, in the case of the absence or inability
to act of the Treasurer, temporarily act in his or her place. In the case of the
death of the Treasurer, or in the case of his or her absence or inability to act
without having designated an Assistant Treasurer to act temporarily in his or
her place, the Assistant Treasurer so to perform the duties of the Treasurer
shall be designated by the Board of Directors, the Chairman of the Board or the
President.
Section 5.15. The Chief Accounting Officer. The Chief Accounting
Officer shall:
(a) keep or cause to be kept full and accurate accounts of all assets,
liabilities, commitments, receipts, disbursements, costs and expenses and other
financial transactions of the Corporation in books belonging to the Corporation,
and conform them to sound accounting principles with adequate internal control;
(b) cause regular audits of such books and records to be made;
(c) see that all expenditures are made in accordance with procedures
duly established, from time to time, by the Corporation;
(d) render financial statements upon the request of the Board of
Directors, and a full financial report prior to the annual meeting of
shareholders, as well as such other financial statements as are required by law
or regulation; and
(e) in general, perform all the duties ordinarily connected with the
office of Chief Accounting Officer and such other duties as, from time to time,
may be assigned to him or her by the Board of Directors, the Chairman of the
Board, the President or any Vice President.
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Section 5.16. Salaries. The salaries of the officers shall be fixed,
from time to time, by the Board of Directors or the Compensation Committee. No
officer shall be prevented from receiving such salary by reason of the fact he
is also a Director of the Corporation.
ARTICLE 6
---------
Corporate Instruments, Loans and Funds
--------------------------------------
Section 6.1. Execution of Instruments Generally. All deeds, contracts,
notes, bonds and other instruments requiring execution by the Corporation may be
signed by the Chairman of the Board, the President, any Vice President,
Treasurer or the Secretary. Authority to sign any deed, contract, note, bond or
other instrument requiring execution by the Corporation may be conferred by the
Board of Directors upon any person or person whether or not such person or
persons be officers of the Corporation. Such person or person may delegate, from
time to time, by instrument in writing, all or any part of such authority to any
other person or persons if authorized so to do by the Board of Directors.
Section 6.2. Execution and Endorsement of Negotiable Instruments. All
checks, drafts, bills of exchange and orders for the payment of money of the
Corporation shall, unless otherwise directed by the Board of Directors, or
unless otherwise required by law, be signed or endorsed for deposit in its
behalf by any one of the following officers: the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer or the
Secretary. Checks payable to the Corporation may also be endorsed for deposit in
one of the bank accounts of the Corporation by the affixation of a rubber stamp
bearing the legend "For Deposit Only -- CONSECO, INC.". Authority to sign any
checks, drafts, bills of exchange and orders for payment of money requiring
execution by the Corporation may be conferred by the Board of Directors upon any
person or persons whether or not such person or persons be officers of the
Corporation. Such person or persons may delegate, from time to time, by
instrument in writing, all or any part of such authority to any other person or
persons if authorized to do so by the Board of Directors.
Section 6.3. Opening of Bank Accounts. Bank accounts shall be opened in
the name of the Corporation by any one of the following officers: The Chairman
of the Board, the President, any Vice President, the Chief Accounting Officer,
the Treasurer or any Assistant Treasurer of the Corporation. Each of such
officers shall have power to open bank accounts in the name of the Corporation,
singly, without necessity of countersignature. The Board of Directors may
designate officers and employees of the Corporation, other than those named
above, who may open bank accounts in the name of the Corporation. The term "bank
accounts" shall include, without limiting the generality thereof, accounts with
banks, banking associations, trust companies, building and loan associations,
savings and loan associations, cooperative banks, investment bankers and
brokerage firms.
Section 6.4. Voting of Stock Owned by Corporation. Subject always to
the further orders and directions of the Board of Directors, any share or shares
of stock issued by any other corporation and owned or controlled by the
Corporation may be voted at any shareholders' meeting of such other corporation
by the Chairman of the Board, the President, any Vice President or the Treasurer
of the Corporation. Whenever, in the judgment of the Chairman of the Board, the
President or Treasurer,
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it is desirable for the Corporation to execute a proxy or give a stockholders'
consent in respect to any share or shares of stock issued by any other
corporation and owned by the Corporation, such proxy or consent shall be
executed in the name of the Corporation by the Chairman of the Board, the
President, any Vice President or the Treasurer. Any person or persons designated
in the manner above stated as the proxy or proxies of the Corporation shall have
full right, power and authority to vote shares of stock issued by such other
corporation and owned by the Corporation the same as such shares might be voted
by the Corporation.
ARTICLE 7
---------
Indemnification
---------------
Section 7.1. Indemnification of Officers, Directors and Other Eligible
Persons. To the fullest extent not inconsistent with applicable law, every
Eligible Person shall be indemnified by the Corporation against all Liability
and Expense that may be incurred by him or her in connection with or resulting
from any Claim, (a) if such Eligible Person is Wholly Successful with respect to
the Claim, or (b) if not Wholly Successful, then if such Eligible Person is
determined, as provided in either Section 7.7 or 7.8, to have acted in good
faith, in what he or she reasonably believed to be the best interests of the
Corporation or at least not opposed to its best interests and, in addition, with
respect to any criminal claim, is determined to have had reasonable cause to
believe that his or her conduct was lawful or had no reasonable cause to believe
that his or her conduct was unlawful. The termination of any Claim, by judgment,
order, settlement (whether with or without court approval), or conviction or
upon a plea of guilty or of nolo contendere, or its equivalent, shall not create
a presumption that an Eligible Person did not meet the standards of conduct set
forth in clause (b) of this Section 7.1. The actions of an Eligible Person with
respect to an employee benefit plan shall be deemed to have been taken in what
the Eligible Person reasonably believed to be the best interests of the
Corporation or at least not opposed to its best interests if the Eligible Person
acted in good faith and in a manner he or she reasonably believed to be in the
interest of the participants or beneficiaries of the employee benefit plan.
To the extent an Eligible Person has the right to receive indemnity
from another entity (including, but not limited to, a subsidiary of the
Corporation), the indemnity obligations of the Corporation under this Article 7
to the Eligible Person are (as between the Corporation and such other entity)
subordinate and junior to the indemnity obligations of such entity to the
Eligible Person. If the Corporation indemnifies an Eligible Person entitled to
indemnity from another entity (including, but not limited to, a subsidiary of
the Corporation), the Corporation shall have the right of subrogation to be
reimbursed from such other entity the amount of indemnity payments the Eligible
Person was otherwise entitled to receive from such other entity.
Section 7.2. Definition of Claim. The term "Claim" as used in this
Article 7 shall include every pending, threatened or completed claim, action,
suit or proceeding and all appeals thereof (whether brought by or in the right
of the Corporation or any other corporation or otherwise, and whether civil,
criminal, administrative or investigative, formal or informal), in which an
Eligible Person may become involved, as a party or otherwise (including, without
limitation, as a witness):
(a) by reasons of his or her being or having been an Eligible Person,
or
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(b) by reason of any action taken or not taken by such Eligible Person
in his or her capacity as an Eligible Person, whether or not such Eligible
Person continued in such capacity at the time any Liability or Expense related
to such Claim shall have been incurred.
Section 7.3. Definition of Eligible Person. The term "Eligible Person"
as used in this Article 7 shall mean every person (and the estate, heirs and
personal representatives of such person) who is or was a director, officer or
employee of the Corporation or a wholly-owned subsidiary of the Corporation
(including, but not limited to, Conseco Services, LLC) or who, while a director,
officer or employee of the Corporation or a wholly-owned subsidiary of the
Corporation, is or was serving at the request of the Corporation or a
wholly-owned subsidiary of the Corporation as a director, officer, employee,
partner, member, manager, trustee or fiduciary of another foreign or domestic
corporation, partnership, joint venture, limited liability company, trust,
employee benefit plan or other organization or entity, whether for profit or
not. An Eligible Person shall also be considered to have been serving an
employee benefit plan at the request of the Corporation or a wholly-owned
subsidiary of the Corporation if his or her duties to the Corporation or a
wholly-owned subsidiary of the Corporation also imposed duties on, or otherwise
involved services by, him or her to the plan or to participants in or
beneficiaries of the plan. The Corporation shall not be required to indemnify a
person in connection with a proceeding initiated by such person, including a
counterclaim or cross claim, unless the proceeding was authorized by the Board
of Directors or commenced following a Change of Control with respect to actions
or failure to act prior to such Change of Control.
Section 7.4. Definitions of Liability and Expense. The Terms
"Liability" and "Expense" as used in this Article 7 shall include, but shall not
be limited to, reasonable counsel fees and disbursements and amounts of
judgments, fines or penalties against (including excise taxes assessed with
respect to an employee benefit plan), and amounts paid in settlement by or on
behalf of, an Eligible Person.
Section 7.5. Definition of Wholly Successful. The term "Wholly
Successful" as used in this Article 7 shall mean (i) termination of any Claim
against the Eligible Person in question without any finding of liability or
guilt against him or her, (ii) approval by a court, with knowledge of the
indemnity herein provided, of a settlement of any Claim, or (iii) the expiration
of a reasonable period of time after the making or threatened making of any
Claim without the institution of the same, without any payment or promise made
to induce a settlement.
Section 7.6. Definition of Change of Control. The term "Change of
Control" as used in this Article 7 shall mean a change of 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 and Exchange Act of 1934 (the
"1934 Act") as revised effective January 20, 1987, or, if Item 6(e) is no longer
in effect, any regulations issued by the Securities and Exchange Commission
pursuant to the 1934 Act which serve similar purposes; provided, that, without
limitation, (x) such a change of control shall be deemed to have occurred if and
when either (A) except as provided in (y) below, any "person" (as such term is
used in Sections 13(d) and 14(d) of the 1934 Act) is or becomes a "beneficial
owner" (as such term is defined in Rule 13d-3 promulgated under the 1934 Act),
directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation's then outstanding
securities entitled to vote with respect to the election of its Board of
Directors or (B) as the result of a tender offer, merger, consolidation, sale of
assets,
15
<PAGE>
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 the Corporation immediately prior to any such transaction or event shall not
constitute a majority of the Board of Directors following such transaction or
event, and (y) no such change of control shall be deemed to have occurred if and
when either (A) any such change is the result of a transaction which constitutes
a "Rule 13e-3 transaction" as such term is defined in Rule 13e-3 promulgated
under the 1934 Act or (B) any such person becomes, with the approval of the
Board of Directors of the Corporation, the beneficial owner of securities of the
Corporation representing 25% or more but less than 50% of the combined voting
power of the Corporation'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 Securities and Exchange Commission 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 the Corporation, nor in connection with or as a
participant in any transaction having such purpose or effect," or words of
comparable meaning and import. The designation by any such person, with the
approval of the Board of Directors of the Corporation, of a single individual to
serve as a member of, or observer at meetings of, the Corporation's Board of
Directors, shall not be considered "changing or influencing the control of the
Corporation" within the meaning of the meaning of the immediately preceding
clause (B), so long as such individual does not constitute at any time more than
one-third of the total number of directors serving on such Board.
Section 7.7. Procedure for Determination of Entitlement to
Indemnification. The determination of whether an Eligible Person who is or at
the time of Claim was a Director (other than one who has been Wholly Successful
with respect to any Claim or one who has requested indemnification following a
Change of Control with respect to actions or failure to act prior to such Change
of Control) is entitled to indemnification shall be made by any one of the
following methods, such method to be selected by the Board of Directors:
(a) by the Board of Directors by a majority vote of a quorum
consisting of Directors who are not and have not been parties to the Claim;
(b) if a quorum cannot be obtained under (a), by the majority vote of a
committee duly designated by the Board of Directors (in which designation
Directors who are or who have been parties to the Claim may participate),
consisting solely of two or more Directors who are not and have not been parties
to the Claim;
(c) by special legal counsel (which may be regular counsel of the
Corporation) (i) selected by the Board of Directors or a committee thereof in
the manner prescribed in (a) or (b); or (ii) if a quorum of the Board of
Directors cannot be obtained under (a) and a committee cannot be designated
under (b), selected by a majority vote of the full Board of Directors (in which
selection Directors who are or who have been parties to the Claim may
participate).
If a Change in Control shall have occurred, the Eligible Person who is
or at the time of Claim was a Director shall be presumed to be entitled to
indemnification (with respect to actions or failures to act occurring prior to
such Change in Control) upon submission of a request for indemnification, and
thereafter the Corporation shall have the burden of proof to overcome that
presumption in
16
<PAGE>
reaching a contrary determination. The method for determining entitlement to
indemnification shall be by special legal counsel selected by the Eligible
Person, but only such special legal counsel to which a majority of the Directors
who are not and have not been parties to the Claim do not object.
In the case of Eligible Persons who are not or were not Directors of
the Corporation, the determination of whether the Eligible Person (other than
one who has been Wholly Successful with respect to any Claim) is entitled to
indemnification shall be made (a) by the Chairman of the Board or (b) if the
Chairman of the Board so directs or in his or her absence, in the manner such
determination would have been made if the Eligible Person was a Director of the
Corporation.
Section 7.8. Application to Court for Determination. If an Eligible
Person claiming indemnification pursuant to Section 7.7 is found not to be
entitled thereto, the Eligible Person may apply for indemnification with respect
to a Claim to a court of competent jurisdiction, including a court in which the
Claim is pending against the Eligible Person. On receipt of an application, the
court, after giving notice to the Corporation and giving the Corporation
opportunity to present to the court any information or evidence relating to the
claim for indemnification that the Corporation deems appropriate, may order
indemnification if it determines that the Eligible Person is entitled to
indemnification with respect to the Claim because such Eligible Person met the
standards of conduct set forth in Section 7.1(b). If the court determines that
the Eligible Person is entitled to indemnification, the court shall also
determine the reasonableness of the Eligible Person's Expenses.
Section 7.9. Nonexclusivity. The rights of indemnification provided in
this Article 7 shall be in addition to any rights to which any Eligible Person
may otherwise be entitled. Irrespective of the provisions of this Article 7, the
Board of Directors may, at any time and from time to time, (a) approve
indemnification of any Eligible Person to the fullest extent permitted by the
provisions of applicable law at the time in effect, whether on account of past
or future transactions, and (b) authorize the Corporation to purchase and
maintain insurance on behalf of any Eligible Person against any Liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Corporation would
have the power to indemnify him or her against such Liability.
Section 7.10. Advancement of Expenses. The Corporation shall advance to
an Eligible Person who is a director or officer of the Corporation the Expenses
incurred by such Eligible Person with respect to any Claim. The Corporation may
advance to an Eligible Person who is not a director or officer of the
Corporation the Expenses incurred by such Eligible Person with respect to any
Claim. The Corporation shall advance such Expenses within sixty (60) days after
the receipt by the Corporation of a statement or statements from the Eligible
Person requesting such advance or advances from time to time, whether prior to
or after final disposition of such Claim unless a determination has been made
pursuant to Section 7.1 that such Eligible Person is not entitled to
indemnification. Any such statement or statements shall reasonably evidence the
expenses incurred by the Eligible Person and shall include a written affirmation
or undertaking to repay advances if it is ultimately determined that the
Eligible Person is not entitled to indemnification under this Article.
Section 7.11. Insurance, Contracts and Funding. The Corporation may
purchase and maintain insurance to protect itself and any Eligible Person
against any expense, judgments, fines and amounts relating to any Claim or
incurred by any Eligible Person in connection with any Claim,
17
<PAGE>
to the fullest extent permitted by applicable law now or hereafter in effect.
The Corporation may enter into agreements with any Eligible Person supplemental
to or in furtherance of the provisions of this Article and may create a trust
fund or use other means (including, without limitation, a letter of credit) to
ensure the payment of such amounts as may be necessary to effect indemnification
and advancement of expenses as provided in this Article.
Section 7.12. Nature of Provisions. The provisions of this Article 7
shall be deemed to be a contract between the Corporation and each Eligible
Person, and an Eligible Person's rights hereunder shall not be diminished or
otherwise adversely affected by any repeal, amendment or modification of this
Article 7 that occurs subsequent to such person becoming an Eligible Person with
respect to acts occurring prior to such repeal, amendment or modification.
Section 7.13. Applicability of Provisions. The provisions of this
Article 7 shall be applicable to Claims made or commenced after the adoption
hereof, whether arising from acts or omissions to act occurring before or after
the adoption hereof.
ARTICLE 8
---------
Miscellaneous
-------------
Section 8.1. Amendments. The power to make, alter, amend, or repeal
these Bylaws is vested in the Board of Directors, but the affirmative vote of a
majority of the actual number of Directors elected and qualified, from time to
time, shall be necessary to effect any alteration, amendment or repeal of these
Bylaws.
Section 8.2. Seal. The seal of the Corporation shall be circular in
form and mounted on a metal die, suitable for impressing the same upon paper.
About the upper periphery of the seal shall appear the words "CONSECO, INC.,"
and about the lower periphery thereof, the word "Indiana." In the center of the
seal shall appear the word "Seal."
Section 8.3. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January of each year and end upon the last day of
December in the same year.
18
CERTIFICATE OF TRUST
OF
CONSECO FINANCING TRUST XII
THIS Certificate of Trust of Conseco Financing Trust XII (the
"Trust"), dated as of January 11, 2000 is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. ss. 3801, et seq.)(the "Act").
1. Name. The name of the business trust formed hereby is
Conseco Financing Trust XII.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of Delaware
is First Union Trust Company, National Association, Corporate Trust
Administration, One Rodney Square, 920 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of the State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have duly executed this Certificate of Trust in accordance with Section
3801(a)(11) of the Act as of the date first-above written.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as trustee of the
Trust
By: /S/ STEPHEN J. KABA
------------------------------
Name: Stephen J. Kaba
Title: Vice President
ROLLIN M. DICK, not in his individual
capacity but solely as trustee of the Trust
/S/ ROLLIN M. DICK
-------------------------------------
STEPHEN C. HILBERT, not in his individual
capacity but solely as trustee of the Trust
/S/ STEPHEN C. HILBERT
-------------------------------------
DECLARATION OF TRUST
OF
CONSECO FINANCING TRUST XII
THIS DECLARATION OF TRUST is made as of January 11, 2000 (this
"Declaration of Trust"), by and among Conseco, Inc., an Indiana corporation, as
sponsor (the "Sponsor"), and First Union Trust Company, National Association, as
trustee, Rollin M. Dick, as trustee, and Stephen C. Hilbert, as trustee
(collectively, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "Conseco Financing Trust
XII" (the "Trust"), in which name the Trustees or the Sponsor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. Such amount shall constitute the initial trust estate. It
is the intention of the parties hereto that the Trust created hereby constitute
a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
ss. 3801, et seq. (the "Business Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in such form as the Trustees may approve.
3. The Sponsor and the Trustees will enter into an amended and restated
Declaration of Trust satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Preferred Securities and Common Securities referred to therein. Prior to the
execution and delivery of such amended and restated Declaration of Trust, the
Trustees shall not have any duty or obligation hereunder or with respect of the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Sponsor, as the sponsor of the Trust, is hereby authorized, in
its discretion, (i) to prepare one or more offering memoranda or circular in
preliminary and final form relating to the offering and sale of Preferred
Securities of the Trust in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and
such forms or filings as may be required by the 1933 Act, the Securities
Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as
amended, in each case relating to the Preferred Securities of the Trust; (ii) to
file and execute on behalf of the Trust, such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process and
other papers and documents that shall be necessary or desirable to register or
establish the exemption from registration of the Preferred Securities of the
Trust under the securities or "Blue Sky" laws of such jurisdictions as the
Sponsor, on behalf of the Trust, may deem necessary or desirable; (iii) to
execute and file an application, and all other applications, statements,
certificates,
<PAGE>
agreements and other instruments that shall be necessary or desirable, to the
Private Offerings, Resales and Trading through Automated Linkages ("PORTAL")
Market; (iv) to execute and deliver letters or documents to, or instruments for
filing with, a depository relating to the Preferred Securities of the Trust; and
(v) to execute, deliver and perform on behalf of the Trust one or more purchase
agreements, dealer manager agreements, escrow agreements, remarketing
agreements, registration rights agreements and other related agreements
providing for or relating to the sale of the Preferred Securities of the Trust.
In the event that any filing referred to in this Section 4 is required
by the rules and regulations of the Securities and Exchange Commission (the
"Commission"), PORTAL or state securities or "Blue Sky" laws to be executed on
behalf of the Trust by the Trustees, the Trustees, in their capacity as trustees
of the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustees, in their capacity as trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, PORTAL or state
securities or "Blue Sky" laws.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of trustees of the Trust initially shall be three and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Sponsor which may
increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Sponsor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Sponsor.
7. First Union Trust Company, National Association, in its capacity as
Trustee, shall not have the powers or duties of the Trustees set forth herein
(except as may be required under the Business Trust Act) and shall be a trustee
hereunder for the sole and limited purpose of fulfilling the requirements of
Section 3807(a) of the Business Trust Act.
8. The Trust may be dissolved and terminated before the issuance of the
Preferred Securities at the election of the Sponsor.
9. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
CONSECO, INC., as Sponsor
By: /S/ ROLLIN M. DICK
--------------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual capacity but
solely as trustee of the Trust
By: /S/ STEPHEN J. KABA
--------------------------------------
Name: Stephen J. Kaba
Title: Vice President
ROLLIN M. DICK, not in his individual capacity
but solely as trustee of the Trust
/S/ ROLLIN M. DICK
--------------------------------------
STEPHEN C. HILBERT, not in his individual
capacity but solely as trustee of the Trust
/S/ STEPHEN C. HILBERT
--------------------------------------
-3-
January 12, 2000
Board of Directors
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, IN 46032
Re: Registration Statement on Form S-3
Gentlemen and Madam:
I am Executive Vice President, General Counsel and Secretary of Conseco, Inc.
(the "Corporation"). At your request, I have examined or caused to be examined
the above-referenced Registration Statement on Form S-3 (the "Registration
Statement") of the Corporation with respect to unsecured senior debt securities
(the "Senior Debt Securities"), unsecured subordinated debt securities (the
"Subordinated Debt Securities"), shares of preferred stock, without par value
(the "Preferred Stock"), shares of common stock, without par value (the "Common
Stock"), stock purchase units, stock purchase contracts and warrants to purchase
Senior Debt Securities, Subordinated Debt Securities, Preferred Stock or Common
Stock or any combination thereof, as shall be designated by the Corporation at
the time of the offering (the "Warrants") in amounts, at prices and on terms to
be determined at the time of the offering. The Registration Statement also
relates to the guarantees by the Corporation of preferred securities of Conseco
Financing Trust VIII, Conseco Financing Trust IX, Conseco Financing Trust X and
Conseco Financing Trust XII, pursuant to guarantee agreements to be entered into
by the Corporation (the "Preferred Securities Guarantee Agreements"). Unless
otherwise specified in the applicable prospectus supplement, the Senior Debt
Securities will be issued under the Senior Indenture (the "Senior Indenture")
between the Corporation and Bank of New York, as Trustee. Unless otherwise
specified in the applicable prospectus supplement, the Subordinated Debt
Securities will be issued under the Subordinated Indenture (the "Subordinated
Indenture") between the Corporation and Harris Bank and Trust Company, as
Trustee.
In rendering this opinion, I, or attorneys under my supervision (together
referred to herein as "we"), have examined the Registration Statement. We have
also examined originals, or copies of originals certified to our satisfaction,
of such agreements, documents, certificates and statements of government
officials and other instruments, and have examined such questions of law and
have satisfied ourselves as to such matters of fact, as we have considered
relevant and necessary as a basis for this opinion. We have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of all natural persons and the conformity
with the original documents of any copies thereof submitted to us for
examination.
<PAGE>
Board of Directors
January 12, 2000
Page 2
Based on the foregoing, and subject to the qualifications and limitations
hereinafter set forth, I am of the opinion that:
1. When (i) the Registration Statement, as finally amended (including any
necessary post- effective amendments), shall have become effective under
the Securities Act of 1933, as amended (the "Securities Act") and the
Senior Indenture, including any necessary supplemental indenture, shall
have been duly qualified under the Trust Indenture Act of 1939, as amended,
(ii) a prospectus supplement with respect to such series of Senior Debt
Securities shall have been filed with the Commission in compliance with the
Securities Act and the rules and regulations thereunder; (iii) a Board
Resolution or Officer's Certificate within the meaning of the Senior
Indenture shall have been duly issued, or supplemental indenture entered
into, in accordance with the Senior Indenture detailing the establishment
of such series of Senior Debt Securities; and (iv) such series of Senior
Debt Securities shall have been duly executed and authenticated and shall
have been duly delivered to the purchasers thereof against payment of the
agreed consideration therefor, each such series of Senior Debt Securities
will be legally issued and binding obligations of the Corporation (except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity, regardless of whether considered in a proceeding in
equity or at law).
2. When (i) the Registration Statement, as finally amended (including any
necessary post- effective amendments), shall have become effective under
the Securities Act and the Subordinated Indenture, including any necessary
supplemental indenture, shall have been duly qualified under the Trust
Indenture Act of 1939, as amended; (ii) a prospectus supplement with
respect to such series of Subordinated Debt Securities shall have been
filed with the Commission in compliance with the Securities Act and the
rules and regulations thereunder; (iii) a Board Resolution or Officers'
Certificate within the meaning of the Subordinated Indenture shall have
been duly issued, or supplemental indenture entered into, in accordance
with the Subordinated Indenture detailing the establishment of such series
of Subordinated Debt Securities; and (iv) such series of Subordinated Debt
Securities shall have been duly executed and authenticated and shall have
been duly delivered to the purchasers thereof against payment of the agreed
consideration therefor, each such series of Subordinated Debt Securities
will be legally issued and binding obligations of the Corporation (except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity, regardless of whether considered in a proceeding in
equity or at law).
<PAGE>
Board of Directors
January 12, 2000
Page 3
3. When the Common Stock has been duly issued and the consideration therefor
has been received by the Corporation, the Common Stock will be legally
issued, fully paid and nonassessable.
4. When (i) the Board of Directors of the Corporation or a duly authorized
committee thereof has duly adopted resolutions specifying the terms and
conditions of the applicable series of Preferred Stock; (ii) the
Corporation has filed with the Indiana Secretary of State articles of
amendment with respect to such series of Preferred Stock; and (iii) such
series of Preferred Stock has been duly issued and the consideration
therefor has been received by the Corporation, such series of Preferred
Stock will be legally issued, fully paid and nonassessable.
5. When the terms of the stock purchase contracts have been duly established
by the Board of Directors of the Corporation or any duly authorized
committee thereof or authorized officer of the Corporation and when the
stock purchase contracts have been duly executed and delivered and sold in
the form and manner contemplated in the Registration Statement and any
prospectus supplement thereto, such stock purchase contracts (whether
issued separately or as part of a securities purchase unit) will be legally
binding obligations of the Corporation (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting the enforcement of creditors'
rights generally and by the effect of general principles of equity,
regardless of whether considered in a proceeding in equity or at law).
6. When (i) the Warrant Agreement relating to the Warrants (the "Warrant
Agreement") has been duly executed and delivered; (ii) the terms of the
Warrants and of their issuance and sale have been duly established in
conformity with the Warrant Agreement relating to such Warrants so as not
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental or
regulatory body having jurisdiction over the Corporation; and (iii) the
Warrants have been duly executed and countersigned in accordance with the
Warrant Agreement relating to such Warrants, and issued and sold in the
form and manner contemplated in the Registration Statement and any
prospectus supplement relating thereto, such Warrants will be legally
issued and binding obligations of the Corporation (except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of
equity, regardless of whether considered in a proceeding in equity or at
law).
<PAGE>
Board of Directors
January 12, 2000
Page 4
7. When a Preferred Securities Guarantee has been duly executed and delivered
by the Corporation and such preferred guarantee trustee, such Preferred
Securities Guarantee will constitute the legal and binding obligation of
the Corporation (except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting the enforcement of creditors' rights generally and
by the effect of general principles of equity, regardless of whether
considered in a proceeding in equity or at law).
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the sale of the securities to be
registered pursuant to the Registration Statement. Without limiting the
generality of the foregoing, I express no opinion in connection with the matters
contemplated by the Registration Statement, and no opinion may be implied or
inferred except as expressly set forth herein.
This opinion is limited to the laws of the State of Indiana and of the United
States of America to the extent applicable. If any of the securities included in
the Registration Statement are governed by the laws of a state other than
Indiana, I have assumed for purposes of this opinion that the laws of such other
state are the same as those of the State of Indiana.
I hereby consent to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and to all references to me in the Registration Statement
or the Prospectus included therein.
Very truly yours,
/S/ John J. Sabl
- ---------------------------------
John J. Sabl
Executive Vice President,
General Counsel and Secretary
January 11, 2000
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
Conseco Financing Trust XII
c/o Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Re: Conseco Financing Trust VIII, Conseco Financing Trust IX,
Conseco Financing Trust X and Conseco Financing Trust XII
Ladies and Gentlemen:
We have acted as special Delaware counsel for Conseco, Inc.,
an Indiana corporation (the "Company"), Conseco Financing Trust VIII, a Delaware
business trust ("Trust VIII"), Conseco Financing Trust IX, a Delaware business
trust ("Trust IX"), Conseco Financing Trust X, a Delaware business trust ("Trust
X"), and Conseco Financing Trust XII, a Delaware business trust ("Trust XII")
(Trust VIII, Trust IX, and Trust X and Trust XII are hereinafter collectively
referred to as the "Trusts" and sometimes hereinafter individually referred to
as a "Trust"), in connection with the matters set forth herein. At your request,
this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
<PAGE>
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
Conseco Financing Trust XII
January 11, 2000
Page 2
(a) The Certificate of Trust of Trust VIII, dated July 22,
1999, as filed with the Secretary of State on July 22, 1999;
(b) The Certificate of Trust of Trust IX, dated July 22, 1999,
as filed with the Secretary of State on July 22, 1999;
(c) The Certificate of Trust of Trust X, dated July 22, 1999,
as filed with the Secretary of State on July 22, 1999;
(d) The Certificate of Trust of Trust XII, dated January 11,
2000, as filed with the Secretary of State on January 11, 2000;
(e) The Declaration of Trust of Trust VIII, dated as of July
22, 1999 between the Company and the trustees of Trust VIII named therein;
(f) The Declaration of Trust of Trust IX, dated as of July 22,
1999 between the Company and the trustees of Trust IX named therein;
(g) The Declaration of Trust of Trust X, dated as of July 22,
1999 between the Company and the trustees of Trust X named therein;
(h) The Declaration of Trust of Trust XII, dated as of January
11, 2000 between the Company and the trustees of Trust XII named therein;
(i) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the Preferred Securities of the Trusts representing preferred undivided
beneficial interests in the assets of the Trusts (each, a "Preferred Security"
and collectively, the "Preferred Securities"), to be filed by the Company and
the Trusts with the Securities and Exchange Commission on or about January 11,
2000;
(j) A form of Amended and Restated Declaration of Trust for
each of the Trusts, to be entered into between the Company, the trustees of the
Trust named therein, and the holders, from time to time, of the undivided
beneficial interests in the assets of such Trust (including the exhibits and
Annex I thereto) (collectively, the "Declarations" and individually, a
"Declaration"), attached as an exhibit to the Registration Statement; and
<PAGE>
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
Conseco Financing Trust XII
January 11, 2000
Page 3
(k) A Certificate of Good Standing for each of the Trusts,
dated January 11, 2000, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declarations.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (k) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (k) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each of
the Declarations constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the applicable Trust, and that the Declarations and
the Certificates of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its organization or formation, (iii) the legal capacity
of natural persons who are parties to the documents examined by us, (iv) that
each of the parties to the documents examined by us has the power and authority
to execute and deliver, and to perform its obligations under, such documents,
(v) the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trusts (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for such Preferred Security, in accordance with the Declarations and
the Registration Statement, and (vii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Declarations
and the Registration
<PAGE>
Conseco Financing Trust VIII
Conseco Financing Trust IX
Conseco Financing Trust X
Conseco Financing Trust XII
January 11, 2000
Page 4
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly
existing in good standing as a business trust under the Business Trust Act.
2. The Preferred Securities of each Trust will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the applicable
Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Preferred
Security Holders may be obligated to make payments as set forth in the
Declarations.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other person for any purpose.
Very truly yours,
/S/ Richards, Layton & Finger, P.A.
<PAGE>
<TABLE>
<CAPTION>
CONSECO, INC. AND SUBSIDIARIES
Exhibit 12.1
Computation of Ratios of Earnings to Fixed Charges,
Preferred Dividends and Distributions on Company-Obligated Mandatorily
Redeemable Preferred Securities of Subsidiary Trusts
(Dollars in millions)
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- --------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pretax income from operations:
Net income.................................... $ 330.5 $ 470.9 $ 452.2 $ 866.4 $ 467.1 $ 183.5 $ 787.4
Add income tax expense........................ 231.2 240.7 302.2 560.1 445.6 275.1 503.9
Add extraordinary charge on
extinguishment of debt...................... 4.0 2.1 26.5 6.9 42.6 42.6 -
Add minority interest......................... 59.0 109.0 34.9 52.3 90.4 60.4 93.9
Less equity in undistributed
earnings of CCP Insurance, Inc.............. (23.8) - - - - - -
Less equity in undistributed
earnings of Western National Corp........... (37.2) - - - - - -
------ -------- -------- -------- -------- -------- --------
Pretax income from operations........... 563.7 822.7 815.8 1,485.7 1,045.7 561.6 1,385.2
------ -------- -------- -------- -------- -------- --------
Add fixed charges:
Interest expense on corporate debt,
including amortization..................... 59.3 119.4 108.1 109.4 165.4 120.6 124.0
Interest expense on finance debt.............. 41.6 57.3 70.1 160.9 209.8 160.3 204.5
Interest expense on investment borrowings..... 7.7 22.2 22.0 42.0 65.3 51.9 42.8
Other ....................................... .9 1.0 .9 .7 .5 .4 .3
Portion of rental(1).......................... 7.9 8.9 10.9 13.7 14.6 11.0 11.1
------ -------- -------- -------- -------- -------- --------
Fixed charges............................. 117.4 208.8 212.0 326.7 455.6 344.2 382.7
------ -------- -------- -------- -------- -------- --------
Adjusted earnings......................... $681.1 $1,031.5 $1,027.8 $1,812.4 $1,501.3 $ 905.8 $1,767.9
====== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges...... 5.80X 4.94X 4.85X 5.55X 3.30X 2.63X 4.62X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
excluding interest expense on debt
related to finance receivables and
other investments..................... 9.28X 7.36X 7.80X 13.00X 6.79X 5.25X 11.23X
===== ===== ===== ====== ===== ====== ======
Fixed charges................................. $117.4 $ 208.8 $ 212.0 $ 326.7 $ 455.6 $344.2 $382.7
Add dividends on preferred stock, including
dividends on preferred stock of subsidiaries
(divided by the rate of income before
minority interest and extraordinary
charge to pretax income).................... 34.8 40.3 57.6 40.4 13.6 11.6 .9
Add distributions on Company-obligated
mandatorily redeemable preferred securities
of subsidiary trusts........................ - - 5.5 75.4 139.1 92.2 144.5
------ -------- -------- -------- -------- --------- ------
Fixed charges............................. $152.2 $ 249.1 $ 275.1 $ 442.5 $ 608.3 $ 448.0 $ 528.1
====== ======== ======== ======== ======== ======== ========
Adjusted earnings......................... $681.1 $1,031.5 $1,027.8 $1,812.4 $1,501.3 $ 905.8 $1,767.9
====== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities
of subsidiary trusts.................. 4.48X 4.14X 3.74X 4.10X 2.47X 2.02X 3.35X
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges,
preferred dividends and distributions
on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts, excluding interest
expense on debt related to finance
receivables and other investments..... 6.14X 5.61X 5.11X 6.72X 3.68X 2.94X 5.42X
===== ===== ===== ===== ===== ===== =====
<FN>
(1) Interest portion of rental is assumed to be 33 percent.
</FN>
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Conseco, Inc. on Form S-3 (File No. 333-00000), of our report dated March 30,
1999 on our audits of the consolidated financial statements and financial
statement schedules of Conseco, Inc. and subsidiaries as of December 31, 1998
and 1997, and for the years ended December 31, 1998, 1997 and 1996, included in
the Annual Report on Form 10-K, which as to the years 1997 and 1996, insofar as
such financial statements relate to Conseco Finance Corp. (formerly Green Tree
Financial Corporation), is based on the report of KPMG LLP, independent
auditors. We also consent to the reference to our firm under the caption
"Experts".
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Indianapolis, Indiana
January 11, 2000
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Conseco, Inc.:
We consent to the incorporation by reference in the Registration Statement for
the registration of securities totaling $3,000,000,000 on Form S-3 of Conseco,
Inc. of our report dated January 27, 1998, relating to the consolidated balance
sheet of Conseco Finance Corp. and subsidiaries, formerly known as Green Tree
Financial Corporation, as of December 31, 1997, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
years in the two-year period ended December 31, 1997, not separately presented
in or incorporated by reference in the Annual Report on Form 10-K of Conseco,
Inc. for the year ended December 31, 1998, and to the reference to our firm
under the heading "EXPERTS" in the Registration Statement. Our report refers to
the Company's adoption of the Financial Accounting Standards Board's Statement
No. 125 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," in 1997.
/s/ KPMG LLP
------------
KPMG LLP
Minneapolis, Minnesota
January 11, 2000
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive office) (Zip code)
-------------
CONSECO, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-1468632
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(Address of principal executive offices) (Zip code)
-------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 5th day of January, 2000.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
--------------------------
Name: MICHAEL CULHANE
Title: VICE PRESDIENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin................................................. $ 6,394,412
Interest-bearing balances.................................. 3,966,749
Securities:
Held-to-maturity securities................................ 805,227
Available-for-sale securities.............................. 4,152,260
Federal funds sold and Securities purchased
under agreements to resell................................. 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned
income................................................... 37,900,739
LESS: Allowance for loan and
lease losses............................................. 572,761
LESS: Allocated transfer risk
reserve.................................................. 11,754
Loans and leases, net of unearned income,
allowance, and reserve................................... 37,316,224
Trading Assets................................................ 1,646,634
Premises and fixed assets (including capitalized 678,439
leases)....................................................
Other real estate owned....................................... 11,571
Investments in unconsolidated subsidiaries and 183,038
associated companies.......................................
Customers' liability to this bank on acceptances
outstanding................................................ 349,282
Intangible assets............................................. 790,558
Other assets.................................................. 2,498,658
-----------
Total assets.................................................. $60,242,491
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices........................................ $26,030,231
Noninterest-bearing........................................ 11,348,986
Interest-bearing........................................... 14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs................................... 18,530,950
Noninterest-bearing........................................ 156,624
Interest-bearing........................................... 18,374,326
Federal funds purchased and Securities sold
under agreements to repurchase............................. 2,094,678
Demand notes issued to the U.S.Treasury....................... 232,459
Trading liabilities........................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less................ 863,201
With remaining maturity of more than one
year through three years................................. 449
With remaining maturity of more than three
years.................................................... 31,080
Bank's liability on acceptances executed and
outstanding................................................ 351,286
Subordinated notes and debentures............................. 1,308,000
Other liabilities............................................. 3,055,031
----------
Total liabilities............................................. 54,578,827
==========
EQUITY CAPITAL
Common stock.................................................. 1,135,284
Surplus....................................................... 815,314
Undivided profits and capital reserves........................ 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities.............................. (15,440)
Cumulative foreign currency translation (30,658)
adjustments................................................
-----------
Total equity capital.......................................... 5,663,664
-----------
Total liabilities and equity capital.......................... $60,242,491
===========
</TABLE>
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Directors
- -----------------
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO, INC.
(Obligor)
INDIANA
(State of Incorporation)
35-1468632
(I.R.S Employer identification No.)
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
0which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to
exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now
in effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
==========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST VIII
(Obligor)
DELAWARE
(State of Incorporation)
91-1988898
(I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices))
Beneficial Interest
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
----------
TOTAL EQUITY CAPITAL $1,262,616
==========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST IX
(Obligor)
DELAWARE
(State of Incorporation)
91-1988899
(I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices))
Beneficial Interest
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST X
(Obligor)
DELAWARE
(State of Incorporation)
91-1988900
(I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices))
Beneficial Interest
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
-----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves.............................................. $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST XII
(Obligor)
DELAWARE
(State of Incorporation)
applied for
(I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street
Carmel, Indiana 46032
(Address of principal executive offices)
Beneficial Interest
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it 1is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
-----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
----------
TOTAL EQUITY CAPITAL $1,262,616
==========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST VIII CONSECO, INC.
(Obligor) (Guarantor)
DELAWARE INDIANA
(State of Incorporation (State of Incorporation)
91-1988898 35-1468632
(I.R.S Employer identification No.) (I.R.S Employer identification No.)
c/o Conseco, Inc. 11825 North Pennsylvania Street
11825 North Pennsylvania Street Carmel, Indiana 46032
Carmel, Indiana 46032
(Address of principal executive offices)(Address of principal executive offices)
Preferred Securities Guarantee
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its supervising
or examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST IX CONSECO, INC.
(Obligor) (Guarantor)
DELAWARE INDIANA
(State of Incorporation (State of Incorporation)
91-1988899 35-1468632
(I.R.S Employer identification No.) (I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street 11825 North Pennsylvania Street
Carmel, Indiana 46032 Carmel, Indiana 46032
(Address of principal executive offices)(Address of principal executive offices)
Preferred Securities Guarantee
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now
in effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves............................................................ $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING TRUST X CONSECO, INC.
(Obligor) (Guarantor)
DELAWARE INDIANA
(State of Incorporation (State of Incorporation)
91-1988900 35-1468632
(I.R.S Employer identification No.) (I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street 11825 North Pennsylvania Street
Carmel, Indiana 46032 Carmel, Indiana 46032
(Address of principal executive offices)(Address of principal executive offices)
Preferred Securities Guarantee
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
-----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
CONSECO FINANCING XII CONSECO, INC.
(Obligor) (Guarantor)
DELAWARE INDIANA
(State of Incorporation (State of Incorporation)
applied for 35-1468632
(I.R.S Employer identification No.) (I.R.S Employer identification No.)
c/o Conseco, Inc.
11825 North Pennsylvania Street 11825 North Pennsylvania Street
Carmel, Indiana 46032 Carmel, Indiana 46032
(Address of principal executive offices)(Address of principal executive offices)
Preferred Securities Guarantee
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 5th day of January, 2000.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1999, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1999, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................................... $1,139,804
Interest bearing balances.............................................................. $223,943
Securities:..........................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,773,313
Federal funds sold and securities purchased under agreements to resell $148,650
Loans and lease financing receivables:
Loans and leases, net of unearned income............................................... $9,752,500
LESS: Allowance for loan and lease losses............................................. $111,660
----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................................... $9,640,840
Assets held in trading accounts...................................................................... $193,520
Premises and fixed assets (including capitalized leases)............................................. $271,847
Other real estate owned.............................................................................. $339
Investments in unconsolidated subsidiaries and associated companies.................................. $0
Customer's liability to this bank on acceptances outstanding......................................... $44,067
Intangible assets.................................................................................... $245,968
Other assets......................................................................................... $1,328,114
-----------
TOTAL ASSETS $19,010,405
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices............................................................................. $9,579,731
Non-interest bearing................................................................... $2,953,755
Interest bearing....................................................................... $6,625,976
In foreign offices, Edge and Agreement subsidiaries, and IBF's.................................. $1,396,781
Non-interest bearing................................................................... $21,682
Interest bearing....................................................................... $1,375,099
Federal funds purchased and securities sold under agreements to repurchase in domestic offices
of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............................. $3,951,113
Trading Liabilities 91,252
Other borrowed money:................................................................................
a. With remaining maturity of one year or less $1,978,203
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $44,067
Subordinated notes and debentures.................................................................... $225,000
Other liabilities.................................................................................... $481,642
-----------
TOTAL LIABILITIES $17,747,789
===========
EQUITY CAPITAL
Common stock......................................................................................... $100,000
Surplus.............................................................................................. $609,913
a. Undivided profits and capital reserves........................................................... $657,705
b. Net unrealized holding gains (losses) on available-for-sale securities ($105,002)
-----------
TOTAL EQUITY CAPITAL $1,262,616
===========
Total liabilities, limited-life preferred stock, and equity capital.................................. $19,010,405
===========
</TABLE>
I, Christy Wipper, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
CHRISTY WIPPER
10/26/99
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
Directors
--------------------
ALAN G. McNALLY,
EDWARD W. LYMAN,
LEO M. HENIKOFF
4
