Business Context and Reporting Period
Company: Conseco, Inc. (Note: Metadata references CNO Financial Group, Inc., but the filing text identifies the registrant as Conseco, Inc.)
Filing Type: Form 8-K (Current Report)
Date: January 20, 2009
Event: Entry into a Material Definitive Agreement (Section 382 Rights Plan).
Key Financial Metrics
This filing is a current report regarding a corporate governance action and does not contain financial statements. Consequently, the filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes
The primary material change is the declaration of a dividend of one preferred share purchase right (a "Right") for each outstanding share of Common Stock. This action was taken to protect the Company's tax net operating loss (NOL) carryforwards under Section 382 of the Internal Revenue Code.
Guidance, Outlook, and Management Commentary
- Purpose: The Rights Agreement is intended to deter any person from becoming a "5-percent shareholder" without Board approval, which could jeopardize the availability of NOL carryforwards.
- Terms:
- Record Date: January 30, 2009.
- Exercise Price: $20.00 per one one-thousandth of a share of Series A Junior Participating Preferred Stock.
- Expiration: The earlier of January 20, 2012, or the first anniversary of adoption if shareholder approval is not received.
- Redemption: The Board may redeem Rights in whole at $0.01 per Right prior to the time an Acquiring Person becomes such.
- Trigger Events: If an "Acquiring Person" acquires 5% or more of the stock, Rights holders (excluding the Acquiring Person) may purchase Common Stock with a market value of two times the Purchase Price.
Investor Verification Checklist
- Verify the exact number of outstanding Common Shares as of the Record Date (January 30, 2009) to determine the total number of Rights issued.
- Confirm the status of shareholder approval for the Rights Agreement, as expiration is tied to this approval.
- Review the specific definition of "Exempted Entity" and "Grandfathered Person" to understand which existing shareholders are excluded from the deterrent provisions.
- Monitor for any future announcements regarding the redemption of Rights or the occurrence of a triggering acquisition event.