CARMEL, Ind.--(BUSINESS WIRE)--May 30, 1997--Conseco, Inc. (NYSE:CNC) today completed its merger with Pioneer Financial Services, Inc. (NYSE:PFS). As a result of the merger, PFS is now a wholly owned subsidiary of Conseco.

In the merger, each outstanding share of PFS common stock was converted into the right to receive 0.7077 of a share of Conseco common stock. First Union National Bank of North Carolina will act as agent for the conversion. Appropriate forms for presenting PFS stock certificates will be mailed shortly to all PFS stockholders of record. For further information, holders may contact First Union at (800) 829-8432. Each $1,000 of PFS's 6- 1/2% Convertible Subordinated Notes due 2003 will be convertible into 35.385 shares of Conseco common stock. Conseco also announced that its chief executive officer and executive vice presidents exercised outstanding vested stock options to purchase approximately 8.6 million shares of the company's common stock. The options exercised would otherwise have remained exercisable for approximately seven years. As a result of the exercise, the company will be able to realize a tax deduction of approximately $225 million, equal to the aggregate tax gain recognized by the executives as a result of the exercise. No cash was either received or paid by the participants in the program; participants paid for the exercised options by tendering approximately 2.9 million previously owned shares and Conseco withheld approximately 2.6 million shares from the exercise proceeds to cover federal and state taxes owed by the executives as a result of the exercise transaction.
As part of the inducement to exercise the options, the Compensation Committee, composed entirely of nonmanagement directors, also granted new options at the current market price to the executive officers equal to the number of shares surrendered and withheld for the exercise price and taxes.

Net of withheld shares, the participants received a total of 3.1 million shares of common stock in the program. As a result of the program, the number of shares owned by executives increased and the dilution attributable to stock options decreased, Conseco said. The program also made it possible for the executives to avoid having to sell a large number of shares in the open market to pay the tax obligations generated by the option exercise, thereby eliminating a potentially adverse effect on the market price of Conseco stock.

Conseco is a financial services organization headquartered in Carmel, Ind. Through its subsidiaries, Conseco is one of the nation's leading providers of supplemental health insurance, retirement annuities and universal life insurance.

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