Registration No. 333-41114
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CONSECO, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1468632
(State or other jurisdiction (I.R.S. Employee
of incorporation or organization) Identification Number)
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
John J. Sabl, Esquire
Conseco, Inc.
11825 N. Pennsylvania St.
Carmel, Indiana 46032
(317) 817-6100
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
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 (as defined below), other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ___ _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ___
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ___
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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 or until this registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
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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. The 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 August 15, 2000
Prospectus
CONSECO, INC.
10,500,000 Warrants
10,500,000 Shares of Common Stock
In a private transaction in June 2000, we issued Warrants to purchase
our common stock to GE Capital Equity Investments, Limited. Under this
prospectus, we are offering the shares of our common stock that holders of
Warrants may purchase upon exercising the Warrants. In addition the holders of
these Warrants who are listed inside may offer and sell their Warrants under
this prospectus.
Our common stock is quoted on the New York Stock Exchange and traded
under the symbol "CNC."
Investing in the Warrant or in our common stock involves certain risks
which are described in the "Risk Factors" section beginning on page 5 of this
prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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TABLE OF CONTENTS
Page
Prospectus Summary............................................................ 2
The Company.......................................................... 2
The Offering......................................................... 2
Risk Factors................................................................. 5
Use of Proceeds............................................................... 6
Selling Warrantholders........................................................ 6
Description of the Warrants................................................... 7
Description of Capital Stock..................................................11
Plan of Distribution..........................................................14
Legal Matters.................................................................15
Experts.......................................................................15
Where You Can Find More Information ..........................................15
Note on 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 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," "optimistic" 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:
. 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;
. our ability to achieve anticipated synergies and levels of
operational efficiencies;
. customer response to new products, distribution channels and
marketing initiatives;
. mortality, morbidity, usage of health care services and
other factors which may affect the profitability of our
insurance products;
. performance of our investments;
. changes in the Federal income tax laws and regulations which
may affect the relative tax advantages of some of our
products;
. increasing competition in the sale of insurance
and annuities and in the finance business;
. 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;
. the outcome of our efforts to sell assets and reduce,
refinance, or modify indebtedness and the availability and
cost of capital in connection with this process;
. actions by rating agencies and the effects of past or future
actions by these agencies on our business; and
. the risk factors or uncertainties listed from time to time in
any prospectus supplement or any document incorporated into
this prospectus by reference.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements, including the notes thereto, contained or
incorporated by reference in this prospectus. In this prospectus, Conseco, Inc.
may be referred to as "Conseco," "Company" or "we". You should read this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
The Company
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.
Our principal executive offices are located at 11825 N. Pennsylvania
Street, Carmel, Indiana 46032, and our telephone number is (317) 817-6100.
The Offering
Securities Offered ......................... We are offering 10,500,000
Warrants and 10,500,000 shares of
our common stock issuable upon the
exercise of the Warrants and any
additional shares that become
issuable pursuant to the
anti-dilution provisions of the
Warrants. No fractional shares of
common stock will be issued upon
exercise of the Warrants. Instead,
at the time of exercise, the
Company will pay to the holder of
the Warrant an amount in cash equal
to the current market value of any
fractional share.
Expiration of Warrants ......................The Warrants are scheduled to
expire on June 28, 2005.
Exercise of Warrants ........................The Warrants became exercisable on
June 28, 2000. Each Warrant
entitles its holder to purchase one
share of our common stock at an
exercise price of $5.75 per share.
If certain events listed in the
warrant agreement dated June 28,
2000 occur, we may adjust the
number of shares of common stock
for which, and the price per share
at which, a Warrant is exercisable.
In lieu of payment of the exercise
price, a holder of the Warrants may
elect a net issue exercise in which
the holder exchanges the Warrants
for such number of shares of common
stock as could be purchased with
the difference between the current
market price and the exercise price
on the date of the exchange.
Listing or Quotation
of Common Stock..............................Our common stock is traded on the
New York Stock Exchange under the
symbol "CNC."
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Registration ................................The warrant registration rights
agreement, dated as of June 28,
2000, requires us to register the
Warrants and the common stock we
will issue when Warrants are
exercised. Under the terms of the
warrant registration rights
agreement, we must use our best
efforts to keep this registration
statement continuously effective as
follows:
Duration of effectiveness: as to
the Warrants, until the transfer
of the Warrants is no longer
restricted as a result of the
Warrants:
- having been sold and distributed
under this registration statement
- having been sold under the resale
provisions of Rule 144 of the
Securities Act
- being eligible to be resold
pursuant to Rule 144(k) of the
Securities Act or all the holder's
Warrants may be resold in a single
90 day period under Rule 144(e)(i)
of the Securities Act and do not
require qualification under any
states securities laws, or
- ceasing to be issued and
outstanding for any reason
as to the common stock issuable
upon exercise of the Warrants,
until the common stock has been
issued under this registration
statement or all Warrants have been
exercised or expired.
Suspensions of effectiveness may
occur:
- not more than one time during
any consecutive 365-day period;
- for no more than 90 consecutive
days per suspension and
- only in connection with a SEC
order suspending the effectiveness
of the registration statement, or
our proceeding to amend or
supplement the registration
statement.
No Public Market for the Warrants
There is no public market for the
Warrants and we do not intend to
apply for listing of the Warrants
on any securities exchange or on
the New York Stock Exchange. We are
applying for listing of the shares
of common stock to be issued upon
exercise of Warrants on the New
York Stock Exchange.
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We cannot guarantee that a liquid
market for the Warrants will
develop. If an active market does
not develop, the market price and
liquidity of the Warrants may be
adversely affected.
Will Not List the Warrants. We do
not intend to apply for listing of
the Warrants on any securities
exchange or authorization for
quotation of the Warrants on any
quotation system.
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RISK FACTORS
Your investment in the Warrant or the common stock will involve certain
risks. You should carefully consider the following discussion of risks, and the
other information included or incorporated by reference in this prospectus,
before deciding whether this investment is suitable for you.
Debt Maturities and Related Actions
Conseco has debt and guarantees at the parent company level of
approximately $1.4 billion which are expected to become due on or before
September 30, 2000. Because of the time required to complete the sale of assets
and other contemplated activities described in the paragraph which follows,
extension of our bank credit facilities will be required if we are to meet our
September debt maturities. We are currently in discussions with our bank lenders
and management is optimistic appropriate extensions can be negotiated. However,
there can be no assurance that these negotiations will be successful, or as to
the amount, maturity, cost or terms associated with any such extension. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity of Conseco (parent company)" in our Form 10-Q for the
period ended June 30, 2000.
On July 27, 2000, we announced several courses of action with respect
to Conseco Finance Corp., a wholly owned subsidiary of Conseco, as well as an
asset disposition program with respect to certain non-strategic assets held at
the parent company level, which are designed to allow us to reduce parent
company debt over time. The contemplated actions with respect to Conseco
Finance, include:
o the sale, closing or runoff of five units (i.e., asset-based
lending, vendor finance, bankcards, transportation and park
construction);
o efforts to better utilize existing assets so as to increase cash;
and
o cost savings and restructuring of ongoing businesses such as the
streamlining of the field force in the manufactured housing and
home equity lending divisions.
We believe these contemplated actions currently offer better
opportunities than the previously announced plan to explore the sale of Conseco
Finance and are designed to provide a business model which will result in
positive cash flow at Conseco Finance. In addition, we plan to sell certain
non-strategic assets, such as our investment in the wireless communication
company, Tritel, Inc., our interest in the riverboat casino in Lawrenceberg,
Indiana, and our subprime auto loan portfolio. We believe the sale of
non-strategic assets and the actions contemplated at Conseco Finance will
generate cash proceeds of approximately $2.0 billion over the next 12 to 15
months. We are already well underway with these actions, and have completed the
sale of the bankcard business and our subprime auto loan portfolio, generating
cash proceeds of over $300 million. However, no assurance can be provided as to
the timing, proceeds, or other terms related to the possible disposition of
assets, the timing or extent of the cost savings to be achieved, or the amount
of the restructuring or other charges to be incurred with respect to these
actions. Furthermore, the Company's ability to use cash generated from the
actions being undertaken at Conseco Finance is substantially limited by
restrictions in agreements with Lehman Brothers Holdings, Inc. and its
affiliates (collectively, with its direct and indirect subsidiaries, referred to
as "Lehman"). In connection with the negotiations with our banks relating to the
extension of the maturity dates of our debt, we are also engaged in discussions
with Lehman concerning a modification of these restrictions and are optimistic
an acceptable modification can be obtained. However, there can be no assurance
that these negotiations will be successful, or as to the terms of any such
modification. See the note entitled "Changes in Corporate Notes Payable and
Commercial Paper" in our Form 10-Q for the period ended June 30, 2000.
Recent Rating Actions
Following several recent events described in the note to the
consolidated financial statements entitled "Special Charges and Recent Events"
in our Form 10-Q for the period ended June 30, 2000, rating agencies lowered
their credit ratings on our public debt and the financial strength ratings of
our insurance companies, and many of our ratings were placed on review as the
agencies analyze the impact of the developing events. The recent rating actions
are adversely affecting the marketing and persistency of our insurance products
and other asset accumulation products. These ratings also make it difficult for
us to issue additional securities in the public markets. We are not able to
predict the extent to which these or possible additional ratings actions will
further affect us. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Premium and Asset Accumulation Product
Collections" and " - Liquidity of Conseco (parent company)" in our Form 10-Q for
the period ended June 30, 2000 for additional information.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the Warrants. To the
extent that any holder exercises Warrants and does not elect to pay the exercise
price through cancellation of indebtedness of the Company or net issue exercise,
we will receive the exercise price for the common stock we issue upon the
exercise, which is $5.75 per share subject to adjustment as provided for in the
Warrant agreement. We expect to use any proceeds we receive for general
corporate purposes. However, we cannot guarantee that any Warrants will be
exercised.
SELLING WARRANTHOLDER
We issued the Warrants in June 2000 to the Selling Warrantholder, GE
Capital Equity Investments, Limited. The Warrants were issued concurrently with
the hiring of our new Chairman and Chief Executive Officer, Gary C. Wendt, as
consideration for the waiver of certain noncompetition obligations Mr. Wendt
owes to General Electric Company. As part of this transaction, we also entered
into a registration rights agreement dated as of June 28, 2000, with General
Electric Company. The Selling Warrantholder is an indirect subsidiary of General
Electric Company.
The Selling Warrantholder does not have, nor has it had within the past
three years, any material relationship with us or any of our predecessors or
affiliates.
The Selling Warrantholder may offer from time to time Warrants owned by
it representing 10,500,000 shares of our common stock issuable upon the exercise
of the Warrants. Such number of shares of common stock represents approximately
3% of our outstanding common stock on a diluted basis as of June 28, 2000.
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DESCRIPTION OF THE WARRANTS
The Warrants were issued as of June 28, 2000 in a private transaction
that was not subject to the registration requirements of the Securities Act. The
following summary of certain provisions of the Warrants does not purport to be
complete and is qualified in its entirety by reference to the Warrants,
including the definitions of certain terms in the Warrants.
Exercise Price: $5.75 per Share of Common Stock
Each Warrant, when exercised by its holder, will entitle the holder to
receive one fully paid and non-assessable share of our common stock at an
exercise price of $5.75 per share, subject to adjustment. The exercise price and
the number of shares of common stock issuable upon exercise of a Warrant are
both subject to adjustment as described later in this section.
Expiration Date: June 28, 2005
The Warrants became exercisable on June 28, 2000. Unless exercised, the
Warrants will expire on June 28, 2005. The Warrants entitle the holders of the
Warrants to purchase, in the aggregate, approximately 3% of our outstanding
common stock on a diluted basis as of the date of issuance of the Warrants,
after giving effect to the exercise of all in-the-money outstanding options and
rights we have issued. If in connection with the exercise of a Warrant
regulatory approval is required, including expiration of any applicable waiting
period, then the expiration date will be extended while any such regulatory
approval or waiting period is pending. The expiration date will be extended by
the total number of days during which a suspension notice, regarding the
effectiveness of this registration statement, is outstanding throughout the
exercise period.
Exercise and Payment Procedures
Holders may exercise the Warrants by surrendering the Warrant
certificates to us evidencing the Warrants to be exercised along with the
accompanying form of election to purchase, properly completed and executed, and
the payment of the exercise price. Holders may choose to pay the exercise price
in the form of cash, check payable to the order of the Company, wire transfer,
cancellation of indebtedness of the Company to the holder or by surrender of
additional Warrants. Upon surrender of the Warrant certificate and payment of
the exercise price, we will deliver or cause to be delivered, to or upon the
written order of the holder, stock certificates representing the number of whole
shares of common stock or other securities or property to which such holder is
entitled under the Warrants. We will also deliver, if applicable, any cash
payment to adjust for fractional shares of common stock issuable upon the
exercise. If less than all of the Warrants evidenced by a Warrant certificate
are exercised, we will issue a new Warrant certificate.
Fractional Shares Will Not Be Issued
We will not issue any fractional shares of common stock upon exercise
of the Warrants. When the holder exercises the Warrant, we will pay to the
holder an amount in cash equal to the current market value of the fractional
share.
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Warrant Holders Do Not Have Common Stockholder Rights
The holders of the Warrants will have no right to vote on matters we
submit to our stockholders and will have no right to receive ordinary dividends.
We Must Keep This Registration Statement Effective
The warrant registration rights agreement, dated as of June 28, 2000,
requires us to use our best efforts to keep the registration statement, of which
this prospectus is a part, continuously effective until the Warrants expire or,
if earlier, all of the Warrants and common stock we issue upon exercise of
Warrants cease to be "Registrable Securities." A Warrant ceases to be
"Registrable Securities" when such Warrant:
has been effectively registered under the Securities Act and sold
and distributed in accordance with the registration statement
covering it;
is sold in satisfaction of all applicable resale provisions of
Rule 144 under the Securities Act;
may be resold pursuant to Rule 144(k) under the Securities Act
(or any successor provision) or all the holder's Warrants may
be resold in a single 90 day period under 144(e)(i) of the
Securities Act and do not require qualification under any
state securities or "blue sky" laws, in each case, the Company
has removed any restrictive legend on the Warrants; or
ceases to be issued and outstanding for any reason.
The shares of common stock issuable upon exercise of the Warrants cease
to be "Registrable Securities" when they have been issued pursuant to this
registration statement.
During any consecutive 365-day period, we are entitled to suspend the
effectiveness of this registration statement on one occasion for a period of not
more than 90 consecutive days if:
the SEC issues a stop order suspending the effectiveness of the
registration statement;
any state securities commission suspends the qualification
of the Warrants for sale in any jurisdiction; or
there exists any fact or any event happens that makes any
statement of a material fact in the registration statement or
prospectus inaccurate or requires the making of any additions
or changes to the prospectus in order to make the statements
therein, in the light of the circumstance in which they were
made, not misleading.
The Exercise Price is Subject to Adjustment
The exercise price and number of shares of common stock that can be
purchased by exercising Warrants will be subject to adjustment in certain
events, including:
the payment by the Company of dividends, or other distributions,
on common stock payable in common stock;
the subdivision, split, combination or reclassification of common
stock;
the distribution to all holders of common stock of any of our
assets including cash, debt securities, property or any rights
or warrants to purchase any such securities (excluding
distributions of common stock referred to in the bullet points
above and ordinary dividends with a per share
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value of not more than 20% of the Company's net income for the
immediately preceding fiscal year);
the repurchase of any shares of common stock at a price greater
than the "current market price" (as defined below) at the date
of determination;
the issuance of additional shares of common stock at less than
the "current market price" per share of common stock
(excluding certain "permitted issuances" (as defined below)
and securities issued in transactions referred to in the first
three bullet points above);
the issuance of securities convertible into or exchangeable for
common stock for a conversion or exchange price plus
consideration received upon issuance less than the then
"current market price" per share of common stock (excluding
certain "permitted issuances" and securities issued in
transactions referred to in the bullet points above); and
certain other events that could have the effect of depriving
holders of Warrants of the benefit of all or a portion of the
purchase rights evidenced by the Warrants.
"Current market price" means, so long as the common stock is listed on the
New York Stock Exchange, the volume weighted average of the daily market prices
over 20 consecutive trading days commencing 30 days immediately before such date
of determination. If there is no public market for the common stock, then its
current market price is determined by its fair market value as described in the
warrant agreement.
"Permitted issuances" includes (a) the issuance by us after June 21, 2000
of options or restricted stock to existing and future employees and directors of
the Company for up to 30,000,000 shares of common stock, provided that no more
than 18,200,000 of such shares or options shall have an issue or exercise price
that is lower than the "fair market value" of the common stock (as defined for
purposes of ss. 422 of the Internal Revenue Code as of the date of issuance),
(b) the issuance of up to an aggregate of 79,808,413 shares of common stock upon
conversion of our outstanding convertible securities as of June 21, 2000; and
(c) any issuance of common stock or convertible securities in connection with
either a bona fide financing at a price not more than 1% below the price of the
common stock at the pricing date, or with an arms-length acquisition by the
Company of control over another company.
In case of certain "organic changes" (as defined below) to the Company each
Warrant shall thereafter be exercisable for the right to receive the kind and
amount of shares of stock or other securities or property to which such holder
would have been entitled as a result of such organic change had the Warrants
been exercised immediately prior to the organic change. In addition, the person
formed by or surviving any such organic change (if other than the Company), or
to which such sale shall have been made, will assume our obligations under the
Warrants.
"Organic change" means (a) any sale, lease, exchange or other transfer of
all or substantially all of our property, assets or business, (b) our
liquidation, dissolution or winding up, (c) any merger or consolidation to which
we are a party if holders of our voting securities immediately prior thereto own
less than 60% of the outstanding voting securities of the surviving entity or do
not have the ability to elect a majority of the board of the surviving entity,
or (d) any person or group of persons shall either beneficially own 50% or more
of our voting securities then outstanding or have the ability to elect a
majority of members of the board of directors of the surviving entity.
We Have Reserved Sufficient Shares
We have authorized and reserved for issuance the number of shares of common
stock that will be issuable upon the exercise of all outstanding Warrants. These
shares of common stock, when paid for and issued, will be duly and validly
issued, fully paid and non-assessable, free of preemptive rights and free from
all restrictions on transfer, taxes, liens,
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charges and security interests.
We and All Holders May Amend the Warrants
We must obtain the written consent of each holder of the Warrant to amend
the Warrants.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock was 1,020,000,000 shares as of July 31,
2000, consisting of:
20,000,000 shares of preferred stock, of which 2,637,008 were
outstanding; and
1,000,000,000 shares of common stock, of which 325,292,186 shares
were outstanding.
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.
Preferred Stock
The board of directors may issue preferred stock in one or more series
and may fix the designations, preferences, powers and relative, participating,
optional and other rights, qualifications, limitations and restrictions on the
preferred stock, including the dividend rate, conversion rights, voting rights,
redemption price and liquidation preference, and may fix the number of shares to
be included in any such series. Any preferred stock may rank senior to the
common stock for the payment of dividends or amounts upon liquidation,
dissolution or winding-up, or both. In addition, any shares of preferred stock
may have class or series voting rights. As of July 31, 2000, we had 2,637,008
shares of preferred stock outstanding. Issuances of preferred stock, while
providing us with flexibility in connection with general corporate purposes,
may, among other things, have an adverse effect on the rights of holders of
common stock. The board of directors, without stockholder approval, can issue
preferred stock with voting and conversion rights that could adversely affect
the voting power and other rights of holders of common stock. Preferred stock
could thus be issued quickly with terms calculated to delay or prevent a change
of control of the Company or to make the removal of management more difficult.
In certain circumstances, this could have the effect of decreasing the market
price of the common stock.
Certain Provisions of the Company's Certificate of Incorporation and Bylaws
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
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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 member 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 the 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:
the relevant business combination has been approved by two-thirds
of the continuing directors; or
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.
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 by-laws 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 the Company.
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
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voting stock, may be entered into unless it has been approved by the board of
directors of the corporation or:
five years have expired since the acquisition of shares of the
corporation by the interested shareholder;
all requirements of the corporation's articles of incorporation
relating to business combinations have been satisfied; and
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 the Company, 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 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.
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<PAGE>
PLAN OF DISTRIBUTION
Distribution of Warrants
The Selling Warrantholder may, from time to time, sell the Warrants to
purchasers directly. Alternatively, the Selling Warrantholder may, from time to
time, offer to sell the Warrants to or through underwriters, broker-dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Warrantholder or the purchasers of
Warrants. The Selling Warrantholder and any underwriters, broker-dealers or
agents that participate in the distribution of the Warrants may be deemed to be
"underwriters" within the meaning of the Securities Act. Any profit on the sale
of Warrants by them, and any discounts, commissions, concessions or other
compensation received by any of them, may be deemed to be underwriting discounts
and commissions under the Securities Act.
The Holder may offer and sell the Warrants under this prospectus from
time to time in one or more transactions. These sales may be at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. The Selling Warrantholder will
determine these prices either alone or by agreement with underwriters and
dealers who may receive fees or commissions in connection with sales. The
Selling Warrantholder may use any of the following methods when selling
Warrants, which may involve crosses or block transactions:
sales on any national securities exchange or quotation service on
which the Warrants may be listed or quoted at the time of
sale;
sales in the over-the-counter market;
transactions otherwise than on such exchanges or in the
over-the-counter market; or
sales through the writing of options.
If required, a prospectus supplement will be distributed at the time a
particular offering of Warrants is made. The supplement will set forth the
aggregate amount and type of Warrants offered and the terms of the offering.
Terms listed may include the name or names of any underwriters, broker-dealers
or agents, any discounts, commissions and other terms constituting compensation
from the Selling Warrantholder and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers.
Distribution of Common Stock
We are offering our common stock to the Selling Warrantholder in
connection with the exercise of the Warrants. The Selling Warrantholder has no
obligation to, and we do not intend that the Selling Warrantholder will, use
this prospectus in connection with resales of this common stock.
We Will List the Common Stock But Not the Warrants on NYSE
Our outstanding common stock is listed on the New York Stock Exchange,
and we are applying for listing of the shares of common stock to be issued upon
exercise of Warrants on the New York Stock Exchange. We do not intend to apply
for listing of the Warrants on any securities exchange or authorization for
quotation of the Warrants on any quotation system. We cannot guarantee that any
liquid trading market will develop for the Warrants.
We Will Register the Warrants and Common Stock
We filed the registration statement, of which this prospectus forms a
part, with the Commission, as required
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pursuant to the terms of a warrant registration rights agreement, dated as of
June 28, 2000 among the Company and General Electric Company of the 10,500,000
Warrants and underlying common stock. See "Description of Warrants -- We Must
Keep This Registration Statement Effective."
The warrant registration rights agreement provides that we will pay
expenses associated with the registration of the Warrants and the common stock
issued upon exercise of the Warrants, including, but not limited to, SEC filing
fees and transfer taxes, if any. We have agreed with holders of Warrants and
common stock acquired upon exercise of Warrants to indemnify each other against
certain liabilities, including certain liabilities arising under the Securities
Act.
LEGAL MATTERS
Certain legal matters with respect to the Warrants and shares of common
stock offered by this prospectus will be passed upon for the Company by John J.
Sabl, our Executive Vice President and General Counsel. Mr. Sabl is a full-time
employee and owns 90,000 shares and holds options to purchase 450,000 shares of
our common stock.
EXPERTS
The consolidated financial statements of Conseco at December 31, 1999 and
1998, and for each of the three years in the period ended December 31, 1999,
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 year 1997, 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.
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 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 and the
securities offered under this prospectus, you should read the registration
statement, including its exhibits and the documents incorporation 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, 1999;
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2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 and
June 30, 2000;
3. Current Reports on Form 8-K dated February 7, 2000, March 31, 2000 and
July 10, 2000; 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;
Tammy M. Hill, Senior Vice President, Investor Relations
Conseco, Inc.
11825 N. Pennsylvania Street
Carmel, Indiana 46032
Telephone: (317) 817-2893
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus in connection with
the offering of the Warrants and the common stock issuable upon the exercise of
Warrants. If information or representations are given or made you must not rely
on it as if we authorized it. Neither the delivery of this prospectus nor any
sale made hereunder shall, under any circumstances, create an implication that
the information contained or incorporated by reference herein is correct as of
any time subsequent to its date or that there has been no change in the affairs
of the Company since such date. This prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any securities offered hereby in any
jurisdiction in which such offer or solicitation is not permitted, or to anyone
whom it is unlawful to make such offer or solicitation.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the estimated expenses (other than underwriting discounts
and commissions) of the issuance and distribution of the securities being
registered to be paid by the Company.
SEC registration fee..............................................$15,939
Legal fees and expenses............................................25,000
Accounting fees and expenses.......................................10,000
Transfer agent fees................................................ 1,000
Listing fees.......................................................21,450
Miscellaneous...................................................... 6,611
-------
Total.............................................................$80,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
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 Company's By-laws 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 the Company, 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 the Company or at least not opposed to its best
interests and, in addition, with respect to any criminal claim, is determined to
have had reasonable cause to believe that his or her conduct was lawful or had
no reasonable cause to believe that his or her conduct was unlawful. Such
indemnification shall be against the reasonable expenses, including attorneys'
fees, incurred by such person in connection with the defense of such action,
suit or proceeding and amounts paid in settlement. If such person was not wholly
successful, the determination of entitlement to indemnification shall be made by
one of the following methods, such method to be selected by the board of
directors: (a) by the board of directors by a majority vote of a quorum
consisting of directors who are not and have not been parties to the claim; (b)
by the majority vote of a committee duly designated by the board of directors,
consisting solely of two or more directors who are not and have not been parties
to the claim; and (c) by special legal counsel.
The above discussion of Company's By-laws and the Indiana Business
Corporation law is not intended to be exhaustive and is qualified in its
entirety by such By-laws and the Indiana Business Corporation Law.
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<PAGE>
We have purchased director and officer liability insurance which would provide
coverage against certain liabilities, including liabilities under the securities
laws.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits
4 Warrant agreement dated June 28, 2000. *
5 Opinion of John J. Sabl, Executive Vice President and General Counsel.
10.1 Registration rights agreement dated June 28, 2000. *
23.1 Consent of PricewaterhouseCoopers LLP, independent public accountants,
with respect to the financial statements of Conseco, Inc.
23.2 Consent of KPMG LLP, independent public accountants, with respect to the
financial statements of Conseco Finance Corp. (formerly Green Tree
Financial Corporation).
23.3 Consent of John J. Sabl, Executive Vice President and General Counsel (to
be included in Exhibit 5 to this registration statement).
24 Powers of Attorney of directors and officers of the Company (included in
the signature page of the initial filing). *
------
*Filed previously.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(i) 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) of the Securities Act
if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(ii) 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) do not
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<PAGE>
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes 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 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant 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 registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant 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 registrant 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Carmel, State of Indiana, on the 15th day of
August, 2000.
CONSECO, INC.
By: /s/ Thomas J. Kilian
------------------------------------------
Name: Thomas J. Kilian
Title: President
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
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<PAGE>
<TABLE>
<S> <C> <C>
Signature Title Date
--------- ----- ----
* Director, Chairman of the Board August 15, 2000
----------------------------- and Chief Executive Officer
Gary C. Wendt (Principal Executive Officer)
* Senior Vice President, Chief August 15, 2000
----------------------------- Accounting Officer and Treasurer
James S. Adams (Principal Accounting Officer)
*
----------------------------- Director August 15, 2000
Lawrence M. Coss
*
----------------------------- Director August 15, 2000
Ngaire E. Cuneo
*
----------------------------- Director August 15, 2000
David R. Decatur
*
----------------------------- Director August 15, 2000
Donald F. Gongaware
/s/ Thomas M. Hagerty
----------------------------- Director and Chief Financial Officer August 15, 2000
Thomas M. Hagerty (Principal Financial Officer)
*
----------------------------- Director August 15, 2000
David V. Harkins
*
----------------------------- Director August 15, 2000
M. Phil Hathaway
II-6
<PAGE>
*
----------------------------- Director August 15, 2000
James D. Massey
*
----------------------------- Director August 15, 2000
Dennis E. Murray, Sr.
*
----------------------------- Director August 15, 2000
John M. Mutz
*
----------------------------- Director August 15, 2000
Robert S. Nickoloff
* By: /s/ Karl W. Kindig
----------------------- Attorney-in-fact August 15, 2000
Karl W. Kindig
</TABLE>
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