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                                                                 EXHIBIT-10.1.12



                              EMPLOYMENT AGREEMENT

                  EMPLOYMENT AGREEMENT, dated as of the 31st day of March, 1998,
as amended and restated as of May 26, 1999, and as further  amended and restated
as  of  December  15,  1999,  between  CONSECO,  INC.,  an  Indiana  corporation
(hereinafter  called the "Company"),  and Thomas J. Kilian  (hereinafter  called
"Executive").

                                    RECITALS

         WHEREAS,  Executive  has been  employed  by the Company for a number of
years,   and  the  services  of  Executive,   his  managerial  and  professional
experience,  and his  knowledge of the affairs of the Company are of great value
to the Company; and

         WHEREAS, the Company deems it to be essential for it to have the
benefit and advantage of the services of the Executive for an extended period;
and

         WHEREAS,  the  Company  and  Executive  are  parties  to an  employment
agreement dated as of March 31, 1998, as amended and restated as of May 26, 1999
(as so  amended,  the  "Existing  Employment  Agreement"),  and the  Company and
Executive  desire  to make  certain  modifications  to the  Existing  Employment
Agreement;

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
covenants  contained herein,  the parties agree that the Existing  Employment be
amended and restated in its entirety to be as follows:

         1.  Employment.  The Company  hereby  employs  Executive  and Executive
hereby accepts employment upon the terms and conditions hereinafter set forth.

         2. Term. The effective date of this Agreement  shall be March 31, 1998.
Subject to the provisions for termination as provided in Section 10 hereof,  the
term of this Agreement shall be the period  beginning March 31, 1998, and ending
December 31, 2002, (hereinafter called the "Basic Employment Period").

         3. Duties. Executive is engaged by the Company in an executive capacity
as its chief operations  officer.  Executive shall report to the Chief Executive
Officer  regarding  the  performance  of his  duties and shall be subject to the
direction  and  control  of the Board of  Directors  of the  Company  (sometimes
referred to herein as the "Board") and the Chief Executive Officer.  Executive's
position with the Company shall  initially be Executive Vice President and Chief
Operations  Officer and such other  positions as may be determined  from time to
time by the Board.

         4. Extent of Services.  Executive, subject to the direction and control
of the Chief Executive Officer and the Board, shall have the power and authority
commensurate  with his  executive  status and  necessary  to perform  his duties
hereunder.  The Company agrees to provide to Executive such  assistance and work
accommodations  as are  suitable  to the  character  of his  positions  with the
Company and adequate for the  performance of his duties.  Executive shall devote
his entire  employable  time,  attention and best efforts to the business of the
Company,  and shall not, without the consent of the Company,  during the term of
this Agreement be actively engaged in any other

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business  activity,  whether or not such business  activity is pursued for gain,
profit  or  other  pecuniary  advantage;  but this  shall  not be  construed  as
preventing  Executive  from  investing his assets in such form or manner as will
not  require any  services  on the part of  Executive  in the  operation  of the
affairs of the  companies in which such  investments  are made.  For purposes of
this  Agreement,  full-  time  employment  shall  be the  normal  work  week for
individuals in comparable executive positions with the Company.

         5. Compensation.

            (a) As compensation for services  hereunder rendered during the term
         hereof,  Executive  shall receive a base salary ("Base  Salary") of Two
         Hundred Fifty  Thousand  Dollars  ($250,000)  per year payable in equal
         installments in accordance with the Company's payroll procedure for its
         salaried employees. Salary and all other payments made pursuant to this
         Agreement  shall be  subject to  withholding  of taxes.  Executive  may
         receive  increases in his Base Salary from time to time, based upon his
         performance  in his executive and management  capacity.  The amounts of
         any  such  salary  increases  shall  be  approved  by the  Board or the
         Compensation  Committee  of the Board  upon the  recommendation  of the
         Chief Executive Officer.

            (b) In addition to Base  Salary,  Executive  may receive  such other
         bonuses or incentive  compensation as the Compensation Committee or the
         Board may approve  from time to time,  upon the  recommendation  of the
         Chief Executive Officer;  provided, that Executive shall receive a cash
         bonus of at least Seven Hundred Fifty Thousand  Dollars  ($750,000) for
         each of the first two calendar  years (i.e.,  1998 and 1999)  completed
         under this Agreement.

         6. Fringe Benefits.

            (a)  Executive  shall be entitled to  participate  in such  existing
         employee  benefit plans and insurance  programs offered by the Company,
         or which it may adopt form time to time,  for its executive  management
         or supervisory personnel generally,  in accordance with the eligibility
         requirements  for  participation  therein.   Nothing  herein  shall  be
         construed  so as to prevent the Company from  modifying or  terminating
         any employee benefit plans or programs, or employee fringe benefits, it
         may adopt from time to time.

            (b)  During  the  term of this  Agreement,  the  Company  shall  pay
         Executive a monthly  automobile  allowance in the amount of Six Hundred
         Dollars  ($600),  and the Company shall pay directly or shall reimburse
         Executive for the cost of fuel that he incurs in using his automobile.

            (c) Executive  shall be entitled to four (4) weeks vacation with pay
         each year during the term hereof.

            (d)  Executive  may incur  reasonable  expenses  for  promoting  the
         Company's business,  including expenses for entertainment,  travel, and
         similar  items.  The Company  shall  reimburse  Executive  for all such
         reasonable  expenses  upon  Executive's  periodic  presentation  of  an
         itemized account of such expenditures.

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            (e) The Company shall,  upon periodic  presentation  of satisfactory
         evidence and to a maximum of Ten Thousand  Dollars  ($10,000)  per each
         year of this  Agreement,  reimburse  Executive for  reasonable  medical
         expenses  incurred  by  Executive  and  his  dependents  which  are not
         otherwise  covered by health  insurance  provided  to  Executive  under
         Section 6(a).

            (f)  During the term of this  Agreement,  the  Company  shall at its
         expense  maintain a term life insurance  policy or policies on the life
         of  Executive  in the face  amount  of Five  Hundred  Thousand  Dollars
         ($500,000), payable to such beneficiaries as Executive may designate.

         7.  Disability.  If  Executive  shall  become  physically  or  mentally
disabled  during the term of this  Agreement  to the extent  that his ability to
perform his duties and services hereunder is materially and adversely  impaired,
his salary, bonus and other compensation provided herein shall continue while he
remains employed by the Company; provided, that if such disability (as confirmed
by  competent  medical  evidence)  continues  for at least nine (9)  consecutive
months, the Company may terminate Executive's employment hereunder in which case
the  Company  shall  immediately  pay  Executive  a lump  sum  payment  equal to
one-quarter  of the sum of his annual  salary and bonus with respect to the most
recent  fiscal  year then ended  and,  provided  further,  that no such lump sum
payment shall be required if such disability  arises primarily from: (a) chronic
depressive  use  of  intoxicants,  drugs  or  narcotics,  or  (b)  intentionally
self-inflicted  injury or intentionally  self-induced  sickness; or (c) a proven
unlawful act or enterprise on the part of Executive.

         8. Disclosure of Information.  Executive  acknowledges that in and as a
result of his  employment  with the Company,  he has been and will be making use
of,  acquiring  and/or adding to  confidential  information  of the Company of a
special and unique nature and value. As a material  inducement to the Company to
enter into this  Agreement  and to pay to Executive the  compensation  stated in
Section 5, as well as any additional benefits stated herein, Executive covenants
and agrees that he shall not, at any time  during or  following  the term of his
employment,  directly  or  indirectly,  divulge  or  disclose  for  any  purpose
whatsoever,  any confidential information that has been obtained by or disclosed
to him as a result of his employment with the Company, except to the extent that
such  confidential  information  (a)  becomes a matter  of  public  record or is
published in a newspaper,  magazine or other periodical available to the general
public,  other  than as a result of any act or  omission  of  Executive,  (b) is
required  to be  disclosed  by any law,  regulation  or  order  of any  court or
regulatory  commission,  department  or agency,  provided that  Executive  gives
prompt notice of such  requirement  to the Company to enable the Company to seek
an appropriate protective order or confidential  treatment,  or (c) is necessary
to  perform  properly   Executive's  duties  under  this  Agreement.   Upon  the
termination of this  Agreement,  Executive  shall return all materials  obtained
from or belonging to the Company which he may have in his possession or control.

         9.  Covenants   Against   Competition   and   Solicitation.   Executive
acknowledges  that the  services he is to render to the Company are of a special
and unusual  character,  with a unique value to the  Company,  the loss of which
cannot  adequately be compensated by damages or an action at law. In view of the
unique value to the Company of the  services of Executive  for which the Company
has contracted hereunder, because of the confidential information to be obtained
by, or disclosed  to,  Executive  as  hereinabove  set forth,  and as a material
inducement to the Company to


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enter into this  Agreement  and to pay to Executive the  compensation  stated in
Section 5, as well as any additional  benefits stated herein, and other good and
valuable  consideration,  Executive  covenants  and agrees that  throughout  the
period  Executive  remains  employed  hereunder  and  for one  year  thereafter,
Executive  shall not,  directly or indirectly,  anywhere in the United States of
America (i) render any services, as an agent, independent contractor, consultant
or  otherwise,  or become  employed or  compensated  by, any other  corporation,
person or entity engaged in the business of selling or providing life,  accident
or health insurance products or services; (ii) render any services, as an agent,
independent   contractor,   consultant  or  otherwise,  or  become  employed  or
compensated by, any other corporation,  person or entity engaged in the business
of selling or providing any lending or other financial products or services that
are competitive with the lending or other financial products or services sold or
provided by the Company or its  subsidiaries,  (iii) in any manner  compete with
the Company or any of its  subsidiaries;  (iv)  solicit or attempt to convert to
other insurance carriers,  finance companies or other  corporations,  persons or
other entities  providing these same or similar products or services provided by
the Company and its subsidiaries, any customers or policyholders of the Company,
or any of its subsidiaries; or (v) solicit for employment or employ any employee
of the Company or any of its  subsidiaries.  The  covenants of Executive in this
Section 9 shall be void and unenforceable in the event of a Control  Termination
of this Agreement as defined in Section 10 below. Should any particular covenant
or provision of this Section 9 be held unreasonable or contrary to public policy
for any reason,  including,  without limitation,  the time period,  geographical
area, or scope of activity covered by any restrictive covenant or provision, the
Company and  Executive  acknowledge  and agree that such  covenant or  provision
shall  automatically  be deemed  modified  such that the  contested  covenant or
provision  shall have the closest  effect  permitted  by  applicable  law to the
original  form and shall be given effect and enforced as so modified to whatever
extent would be reasonable and enforceable under applicable law.

         10. Termination.

            (a) Either the Company or Executive may terminate  this Agreement at
         any  time  for any  reason  upon  written  notice  to the  other.  This
         Agreement  shall also terminate upon (i) the death of Executive or (ii)
         termination by the Company pursuant to Section 7.

            (b) In the event this  Agreement  is  terminated  by the Company and
         such  termination  is not pursuant to the last sentence of (a) above or
         for "just  cause" as  defined  in (e) below and does not  constitute  a
         Control  Termination  as  defined  in (d)  below,  Executive  shall  be
         entitled to receive  Executive's Base Salary, as determined pursuant to
         Section 5(a) hereof,  for the remainder of the Basic Employment  Period
         (provided,  that,  if  such  amount  for  the  remainder  of the  Basic
         Employment  Period  aggregates  less than  $1,000,000,  Executive shall
         receive an  aggregate  lump sum  payment of  $1,000,000)  and all other
         unpaid  amounts  previously  accrued or awarded  pursuant  to any other
         provision of this Agreement.

            (c) In the  event  this  Agreement  is  terminated  by the  death of
         Executive,  is terminated by the Company for "just cause" as defined in
         (e) below, or is terminated by Executive and such  termination does not
         constitute  a Control  Termination  as defined in (d) below,  Executive
         shall be  entitled  to receive  Executive's  Base Salary as provided in
         Section 5(a) accrued but unpaid as of the date of termination,  and all
         other  unpaid  amounts  previously  accrued or awarded  pursuant to any
         other provision of this Agreement.

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            (d) The term  "Control  Termination"  as used herein  shall mean (A)
         termination of this Agreement by the Company in  anticipation of or not
         later than two years following a "change in control" of the Company (as
         defined  below),  or (B)  termination  of this  Agreement  by Executive
         following  "change in control"  of the Company (as defined  below) upon
         the occurrence of any of the following events:

                  (i) a significant change in the nature or scope of Executive's
            authorities or duties from those in existence  immediately  prior to
            the change in control,  a reduction in his total  compensation  from
            that in existence  immediately prior to the change in control,  or a
            breach by the Company of any other provision of this Agreement; or

                  (ii) the  reasonable  determination  by Executive  that,  as a
            result  of a change in  circumstances  significantly  affecting  his
            position, he is unable to exercise Executive's authorities,  powers,
            functions or duties in existence  immediately prior to the change in
            control, or

                  (iii) the  Company's  principal  executive  offices  are moved
            outside the geographic area comprised of Marion County, Indiana, and
            the seven contiguous  counties or Executive is required to work at a
            location other than the Company's principal executive offices; or

                  (iv) the giving of notice of termination  by Executive  during
            the 6-month  period  commencing  six (6) months  after the change in
            control.

The term  "change in  control"  shall mean a change in control of a nature  that
would be required  to be  reported  in response to Item 6(e) of Schedule  14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the "Act")
if such Item 6(e) were  applicable  to the  Company as such Item is in effect on
May 26, 1999; provided that, without limitation,

            (x) such a change in 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 Act) is or  becomes a
         "beneficial  owner" (as such term is defined in Rule 13d-3  promulgated
         under the Act),  directly or  indirectly,  of securities of the Company
         representing  25% or more of the combined voting power of the Company'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, or contest for election
         of  directors,  or any  combination  of the foregoing  transactions  or
         events, individuals who, as of the date hereof, constitute the Board of
         Directors of the Company (the "Incumbent Board") cease to constitute at
         least a majority of such Board; provided,  however, that any individual
         who  becomes a director of the  Company  subsequent  to the date hereof
         whose  election  was  approved  by a vote of at least a majority of the
         directors then comprising the Incumbent Board,  shall be deemed to have
         been a member of the Incumbent  Board;  and provided  further,  that no
         individual who was initially  elected as a director of the Company as a
         result of an actual or threatened  election contest,  as such terms are
         used in Rule 14a-11 of Regulation 14A promulgated under the Act, or any
         other actual or threatened solicitation of

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         proxies or consents by or on behalf of any person  other than the Board
         of  Directors  shall be deemed  to have been a member of the  Incumbent
         Board,  or (C)  any  reorganization,  merger  or  consolidation  or the
         issuance  of  shares  of  common  stock of the  Company  in  connection
         therewith unless immediately after any such  reorganization,  merger or
         consolidation  (i)  more  than 60% of the then  outstanding  shares  of
         common  stock of the  corporation  surviving  or  resulting  from  such
         reorganization,  merger  or  consolidation  and  more  than  60% of the
         combined  voting  power  of the  then  outstanding  securities  of such
         corporation entitled to vote generally in the election of directors are
         then   beneficially   owned,   directly  or   indirectly,   by  all  or
         substantially   all  of  the  individuals  or  entities  who  were  the
         beneficial  owners,  respectively,  of the outstanding shares of common
         stock of the  Company  and the  outstanding  voting  securities  of the
         Company   immediately   prior  to  such   reorganization,   merger   or
         consolidation  and in substantially  the same  proportions  relative to
         each   other   as   their   ownership,   immediately   prior   to  such
         reorganization,  merger or consolidation,  of the outstanding shares of
         common stock of the Company and the  outstanding  voting  securities of
         the  Company,  as the case may be, and (ii) at least a majority  of the
         members  of the board of  directors  of the  corporation  surviving  or
         resulting  from  such  reorganization,  merger  or  consolidation  were
         members  of the Board of  Directors  of the  Company at the time of the
         execution of the initial  agreement or action of the Board of Directors
         providing for such reorganization,  merger or consolidation or issuance
         of shares of common stock of the Company, and

            (y) no change of  control  shall be deemed to have  occurred  if and
         when  any  such  person  becomes,  with the  approval  of the  Board of
         Directors of the Company,  the  beneficial  owner of  securities of the
         Company  representing  25% or more  but less  than 50% of the  combined
         voting power of the Company'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 Company,  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  Company,  of a single
         individual  to serve as a member of, or observer  at  meetings  of, the
         Company's  Board of  Directors,  shall not be  considered  "changing or
         influencing  the  control of the  Company"  within  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.

Upon the occurrence of a change in control,  the Company shall  promptly  notify
Executive in writing of the  occurrence of such event (such notice,  the "Change
in Control Notice"). If the Change in Control Notice is not given within 10 days
after the  occurrence  of a change in  control  the period  specified  in clause
(d)(A) of this Section 10 shall be extended until the second  anniversary of the
date such Change in Control Notice is given.


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            (e) For purposes of this Agreement "just cause" shall mean:

                  (i) a material  breach by  Executive  of this  Agreement,  the
            commission of gross negligence,  or willful  malfeasance or fraud or
            dishonesty  of  a  substantial  nature  in  performing   Executive's
            services on behalf of the Company, which is in each case (A) willful
            and  deliberate  on  Executive's  part and committed in bad faith or
            without  reasonable belief that such breach is in the best interests
            of the Company and (B) not  remedied by  Executive  in a  reasonable
            period of time  after  receipt of written  notice  from the  Company
            specifying such breach;

                  (ii)  Executive's  breach of any provisions of this Agreement,
            or his use of alcohol or drugs which interferes with the performance
            of his duties  hereunder  or which  compromises  the  integrity  and
            reputation of the Company, its employees, and products;

                  (iii)  Executive's  conviction by a court of law, or admission
            that he is  guilty,  of a felony  or  other  crime  involving  moral
            turpitude; or

                  (iv)  Executive's  absence from his employment other than as a
            result of Section 7 hereof, for whatever cause, for a period of more
            than one (1) month, without prior written consent from the Company.

         11.  Payments  for  Control  Termination.  In the  event  of a  Control
Termination of this  Agreement,  the Company shall pay Executive and provide him
with the following:

            (a) During the remainder of the Basic Employment Period, the Company
         shall  continue  to pay  Executive  his Base Salary at the same rate as
         payable immediately prior to the date of termination plus the estimated
         amount  of any  bonuses  to which he would  have been  entitled  had he
         remained  in the employ of the  Company  and a change in control of the
         Company had not occurred,  which  estimate shall be reasonable and made
         by the Company in good faith.

            (b) During the remainder of the Basic Employment  Period,  Executive
         shall continue to be treated as an employee under the provisions of all
         incentive  compensation   arrangements   applicable  to  the  Company's
         executive  employees.  In  addition,  Executive  shall  continue  to be
         entitled  to all  benefits  and  service  credits  for  benefits  under
         medical,  insurance  and other  employee  benefit  plans,  programs and
         arrangements  of the  Company as if he were still  employed  under this
         Agreement and a change in control of the Company had not occurred.

            (c) If,  despite the  provisions  of paragraph  (b) above,  benefits
         under any employee  benefit plan shall not be payable or provided under
         any such plan to Executive,  or Executive's  dependents,  beneficiaries
         and estate,  because he is no longer an employee  of the  Company,  the
         Company itself shall, to the extent necessary to provide the full value
         of such

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         benefits  and service  credits to  Executive,  Executive's  dependants,
         beneficiaries  and estate,  pay or provide for payment of such benefits
         and service  credits for such  benefits to Executive,  his  dependents,
         beneficiaries and estate.

            (d) If, despite the  provisions of paragraph (b) above,  benefits or
         the right to accrue  further  benefits  under any stock option or other
         incentive compensation arrangement shall not be provided under any such
         arrangement to Executive, or his dependents,  beneficiaries and estate,
         because he is no longer an employee of the Company,  the Company shall,
         to the extent necessary, pay or provide for payment of such benefits to
         Executive, his dependents, beneficiaries and estate.

         12. Severance Allowance.  In the event of a Control Termination of this
Agreement,  Executive may elect, within 60 days after such Control  Termination,
to be paid a lump sum severance  allowance,  in lieu of the termination payments
provided for in Section 11 above,  in an amount which is equal to the sum of the
amounts determined in accordance with the following clauses (a) and (b):

            (a) an  amount  equal to the  aggregate  of salary  payments  for 60
         calendar  months at the rate of Base  Salary  which he would  have been
         entitled to receive in accordance with Section 5(a); and

            (b) an amount equal to the aggregate of 60 calendar  months of bonus
         at the  greater of (i) the  monthly  rate of the bonus  payment for the
         annual bonus period immediately prior to this termination date, or (ii)
         the monthly  rate of the  estimated  amount of the bonus for the annual
         bonus period which includes his termination date.

         In the event that Executive makes an election  pursuant to this Section
to receive a lump sum severance allowance of the amount described in clauses (a)
and (b),  then, in addition to such amount,  he shall receive (i) in addition to
the benefits  provided  under any deferred  compensation,  retirement or pension
benefit plan maintained by the Company, the benefits he would have accrued under
such  benefit plan if he had remained in the employ of the Company and such plan
had  remained  in effect for 60 calendar  months  after his  termination,  which
benefits  will be paid  concurrently  with,  and in  addition  to, the  benefits
provided under such benefit plan, and (ii) the employee benefits (including, but
not  limited  to,  coverage  under  any  medical  insurance  and life  insurance
arrangements  or  programs)  to which he would  have  been  entitled  under  all
employee benefit plans, programs or arrangements maintained by the Company if he
had  remained  in  the  employ  of the  Company  and  such  plans,  programs  or
arrangements   had  remained  in  effect  for  60  calendar   months  after  his
termination;  or the value of the amounts described in clauses (i) and (ii) next
preceding.  The amount of the payments described in the preceding sentence shall
be determined and such payments shall be distributed as soon as it is reasonably
possible.



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         13. Tax Indemnity Payments.

            (a) Anything in this Agreement to the contrary  notwithstanding,  in
         the event it shall be determined  that any payment or  distribution  by
         the  Company  or its  affiliated  companies  to or for the  benefit  of
         Executive,  whether  paid or payable or  distributed  or  distributable
         pursuant to the terms of the  Agreement  or  otherwise  but  determined
         without regard to any additional  payments  required under this Section
         13 (a "Payment"), would be subject to the excise tax imposed by Section
         4999 of the Internal  Revenue Code of 1986 (as amended the "Code"),  or
         any successor provision (collectively, "Section 4999"), or any interest
         or penalties are incurred by Executive  with respect to such excise tax
         (such excise tax,  together with any such interest and  penalties,  are
         hereinafter  collectively  referred  to  as  the  "Excise  Tax"),  then
         Executive  shall be  entitled  to  receive  an  additional  payment  (a
         "Gross-Up  Payment") in an amount such that after  payment by Executive
         of all taxes (including any interest or penalties  imposed with respect
         to such taxes),  including,  without limitation,  any Federal, state or
         local income and employment  taxes and Excise Tax (and any interest and
         penalties  imposed  with  respect to any such taxes)  imposed  upon the
         Gross-Up  Payment,  Executive retains an amount of the Gross-Up Payment
         equal to the Excise Tax imposed upon the Payments.

            (b) Subject to the provisions of Section 13(c),  all  determinations
         required to be made under this Section 13, including whether and when a
         Gross-Up  Payment is required and the amount of such  Gross-Up  Payment
         and the  assumptions to be utilized in arriving at such  determination,
         shall be made by the Company's public  accounting firm (the "Accounting
         Firm") which shall provide detailed supporting calculations both to the
         Company and Executive  within fifteen (15) business days of the receipt
         of notice from Executive that there has been a Payment, or such earlier
         time as is requested by the Company.  In the event that the  Accounting
         Firm is serving as accountant or auditor for the individual,  entity or
         group  effecting the Change in Control,  Executive may appoint  another
         nationally recognized public accounting firm to make the determinations
         required  hereunder (which accounting firm shall then be referred to as
         the Accounting Firm hereunder). All fees and expenses of the Accounting
         Firm shall be borne solely by the Company.  Any  Gross-Up  Payment,  as
         determined pursuant to this Section 13, shall be paid by the Company to
         Executive within five (5) days of the receipt of the Accounting  Firm's
         determination.  If the Accounting Firm determines that no Excise Tax is
         payable by Executive, it shall furnish Executive with a written opinion
         that failure to report the Excise Tax on Executive's applicable federal
         income tax return would not result in the imposition of a negligence or
         similar  penalty.  Any  determination  by the Accounting  Firm shall be
         binding upon the Company and Executive.  As a result of the uncertainty
         in the  application  of  Section  4999  at  the  time  of  the  initial
         determination  by the Accounting  Firm  hereunder,  it is possible that
         Gross-Up  Payments  which will not have been made by the Company should
         have been made by the  Company  ("Underpayment"),  consistent  with the
         calculations  required  to be made  hereunder.  In the  event  that the
         Company  exhausts its remedies  pursuant to Section 13(c) and Executive
         thereafter  is  required  to make a  payment  of any  Excise  Tax,  the
         Accounting Firm shall determine the amount of the Underpayment that has
         occurred  and any  such  Underpayment  shall  be  promptly  paid by the
         Company to or for the benefit of Executive.


                                        9
<PAGE>   10

            (c)  Executive  shall  notify the Company in writing of any claim by
         the Internal  Revenue  Service  that,  if  successful,  would require a
         payment by the  Company of, or a change in the amount of the payment by
         the Company of, the Gross-Up Payment.  Such notification shall be given
         as soon as practicable  after  Executive is informed in writing of such
         claim and shall apprise the Company of the nature of such claim and the
         date on which such claim is  requested  to be paid;  provided  that the
         failure to give any notice  pursuant  to this  Section  13(c) shall not
         impair  Executive's  rights  under this Section 13 except to the extent
         the Company is materially  prejudiced thereby.  Executive shall not pay
         such claim prior to the  expiration of the 30-day period  following the
         date on which  Executive  gives  such  notice to the  Company  (or such
         shorter  period  ending  on the date  that any  payment  of taxes  with
         respect to such claim is due).  If the Company  notifies  Executive  in
         writing  prior to the  expiration  of such  period  that it  desires to
         contest such claim, Executive shall:

                (1) give the Company any information reasonably requested by the
            Company relating to such claim,

                (2) take such action in connection with contesting such claim as
            the Company shall  reasonably  request in writing from time to time,
            including,  without limitation,  accepting legal representation with
            respect  to such claim by an  attorney  reasonably  selected  by the
            Company,

                (3)   cooperate   with  the  Company  in  good  faith  in  order
            effectively to contest such claim, and

                (4)  permit  the  Company  to  participate  in  any  proceedings
            relating to such claim;


provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  additional  interest and penalties) incurred in connection
with such  contest  and  shall  indemnify  and hold  Executive  harmless,  on an
after-tax  basis,  for  any  Excise  Tax or  income,  employment  or  other  tax
(including  interest and penalties with respect  thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing  provisions  of this  Section  13(c),  the Company  shall  control all
proceedings  taken in connection with such contest and, at its sole option,  may
pursue or forgo any and all administrative  appeals,  proceedings,  hearings and
conferences  with the taxing  authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or  contest  the  claim in any  permissible  manner,  and  Executive  agrees  to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial  jurisdiction  and in one or more  appellate  courts,  as the
Company shall determine; provided further, that if the Company directs Executive
to pay such claim and sue for a refund,  the Company shall advance the amount of
such payment to Executive on an interest-free basis and shall indemnify and hold
Executive  harmless,  on an  after-tax  basis,  from any  Excise  Tax or income,
employment  or other tax  (including  interest or penalties  with respect to any
such taxes)  imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further, that any extension of
the statute of limitations  relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to

                                       10
<PAGE>   11


be due is limited solely to such contested  amount.  Furthermore,  the Company's
control  of the  contest  shall be  limited  to issues  with  respect to which a
Gross-Up  Payment would be payable  hereunder and Executive shall be entitled to
settle or contest,  as the case may be, any other issue  raised by the  Internal
Revenue Service or any other taxing authority.

            (d) If, after the receipt by Executive of an amount  advanced by the
         Company  pursuant  to Section  13(c),  Executive  becomes  entitled  to
         receive, and receives, any refund with respect to such claim, Executive
         shall  (subject to the Company's  complying  with the  requirements  of
         Section  12(c))  promptly  pay to the Company the amount of such refund
         (together  with any  interest  paid or  credited  thereon  after  taxes
         applicable  thereto).  If,  after the receipt by Executive of an amount
         advanced by the Company  pursuant to Section 13(c), a determination  is
         made that Executive shall not be entitled to any refund with respect to
         such claim and the Company does not notify  Executive in writing of its
         intent to contest  such  denial of refund  prior to the  expiration  of
         thirty (30) days after such  determination,  then such advance shall be
         forgiven  and shall not be required to be repaid and the amount of such
         advance shall  offset,  to the extent  thereof,  the amount of Gross-Up
         Payment required to be paid.

         14. Payment for Options.  In the event of a Control Termination of this
Agreement,  Executive may also elect,  within sixty (60) days after such Control
Termination,  to receive (in  addition to any other  amounts  owed to  Executive
under  this  Agreement)  a lump  sum  payment  in cash  equal  to the sum of the
following: (i) all or any portion of the number of shares of common stock of the
Company  which may be acquired  pursuant  to options  granted by the Company and
held by  Executive  at the time of such  election,  multiplied,  with respect to
shares  subject to any such  options by the  difference  between the Conseco Put
Price and the  respective  exercise price under such option with respect to such
shares; plus (ii) all or any portion of the number of Successor Securities which
may be acquired  pursuant to options (which options were granted to Executive in
exchange or substitution for options to acquire the common stock of the Company)
held by  Executive  at the time of such  election,  multiplied  with  respect to
shares  subject to any such  options  relating to Successor  Securities,  by the
difference between the Successor Security Put Price and the respective  exercise
price under such option with respect to such shares. For purposes of calculating
the above lump sum payment,  the options described in clauses (i) and (ii) shall
include all such options, whether or not then exercisable.  The cash payment due
from the Company  pursuant to this Section 14 shall be made to Executive  within
ten (10) days after the date of such election  hereunder,  against the execution
and delivery by Executive to the Company of an appropriate  agreement confirming
the  surrender  to the  Company of the  options in respect of which the lump sum
cash payment is being made to Executive.

             "Successor  Securities" means any securities of any person received
by the holders of the common stock of the Company in exchange,  substitution  or
payment  for,  or upon  conversion  of,  the  common  stock  of the  Company  in
connection with a change in control.

             "Conseco  Put Price" means the greater of (i) the Change in Control
Price or (ii) the Current Market Price of the common stock of the Company.


                                       11
<PAGE>   12


             "Successor  Security Put Price" means the greater of (i) the Change
in Control Price divided by the Exchange  Ratio or (ii) the Current Market Price
of the Successor Securities.

             "Current  Market  Price" for any security  means the average of the
daily Prices per security for the twenty (20) consecutive trading days ending on
the trading day which is immediately  prior to  Executive's  election under this
Section 14.

             "Price"  for any  security  means the  average of the  highest  and
lowest sales price of such  security  (regular way) on a trading day as shown on
the Composite  Tape of the New York Stock  Exchange (or, if such security is not
listed or admitted to trading on the New York Stock  Exchange,  on the principal
national  securities  exchange  on which such  security is listed or admitted to
trading) or, in case no sales take place on such day, the average of the closing
bid and asked prices on the New York Stock Exchange (or, if such security is not
listed or admitted to trading on the New York Stock  Exchange,  on the principal
national  securities  exchange  on which such  security is listed or admitted to
trading)  or,  if it is not  listed  or  admitted  to  trading  on any  national
securities exchange,  the average of the highest and lowest sales prices of such
security on such day as reported by the NASDAQ Stock Market, or in case no sales
take place on such day,  the  average  of the  closing  bid and asked  prices as
reported by NASDAQ,  or if such security is not so reported,  the average of the
closing bid and asked  prices as furnished by any  securities  broker-dealer  of
recognized  national  standing selected from time to time by the Company (or its
successor in interest) for that purpose.

             "Change  in  Control  Price"  means  (i) in the case of a change in
control  which occurs solely as a result of a change in the  composition  of the
Board of Directors of the Company or which occurs in a transaction, or series of
related  transactions,  in which the same  consideration is paid or delivered to
all of the  holders  of  common  stock of the  Company  (or,  in the event of an
election  by holders of the common  stock of the Company of  different  forms of
consideration,  if the same  election is offered to all of the holders of common
stock of the Company), the Price per share of the common stock of the Company on
the date on which the change in control occurs, or if such date is not a trading
day, then the trading day immediately prior to such date, or (ii) in the case of
a change in control effected through a series of related  transactions,  or in a
single  transaction in which less than all of the  outstanding  shares of common
stock of the  Company is  acquired,  the  highest  price paid to the  holders of
common stock of the Company in the transaction or series of related transactions
whereby the change in control takes place. In determining the highest price paid
to the holders pursuant to clause (ii) of the immediately preceding sentence, in
the case of  Successor  Securities  paid or  delivered  to the holders of common
stock  of the  Company  in  exchange,  payment  or  substitution  for,  or  upon
conversion  of, the common stock of the Company,  the price paid to such holders
shall be the Price of such  security at the time or times paid or  delivered  to
such holders.

             "Exchange Ratio" means, in connection with a change in control, the
number of Successor  Securities to be paid or delivered to the holders of common
stock  of the  Company  in  exchange,  payment  or  substitution  for,  or  upon
conversion of, each share of such common stock.

         15. Character of Termination Payments. The amounts payable to Executive
upon any  termination  of this  Agreement  shall be considered  severance pay in
consideration  of past  services  rendered  on  behalf  of the  Company  and his
continued  service from the date hereof to the date he becomes  entitled to such
payments. Executive shall have no duty to mitigate his damages by seeking

                                       12
<PAGE>   13


other employment and, should Executive  actually receive  compensation  from any
such other employment,  the payments required  hereunder shall not be reduced or
offset by any such other compensation.

         16. Right of First Refusal to Purchase Stock. Executive agrees that the
Company shall have  throughout  the Basic  Employment  Period the right of first
refusal to  purchase  all or any portion of the shares of the  Company's  common
stock owned by him (the "Shares") at the following price:

            (a) in the event of a bona fide  offer for the  Shares,  or any part
         thereof,  received by  Executive  from any other person (a "Third Party
         Offer"),  the  price to be paid by the  Company  shall be the price set
         forth in such Third Party Offer; and

            (b) in the event Executive  desires to sell the Shares,  or any part
         thereof,  in the public securities  market, the price to be paid by the
         Company  shall be the last  sale  price  quoted  on the New York  Stock
         Exchange (or any other  exchange or national  market  system upon which
         price   quotations  for  the  Company's   common  stock  are  regularly
         available)  for the  Company's  common  stock on the last  business day
         preceding  the date on which  Executive  notifies  the  Company of such
         desire.

         In the event  Executive  shall  receive a Third  Party  Offer  which he
desires to accept, he shall deliver to the Company a written notification of the
terms  thereof  and the  Company  shall  have a period  of 48 hours  after  such
delivery in which to notify  Executive  of its desire to  exercise  its right of
first refusal hereunder.

         In the event Executive desires to sell any portion of the Shares in the
public  market he shall  deliver to the  Company a written  notification  of the
amount of Shares he desires to sell,  and the Company  shall have a period of 24
hours after such  delivery  to notify  Executive  of its desire to exercise  its
right of first refusal hereunder with respect to such amount of Shares.

         Upon  each  exercise  by the  Company  of its  right of  first  refusal
hereunder,  it shall make payment to Executive for the Shares in accordance with
standard practice in the securities  brokerage  industry.  After each failure by
the Company to exercise  its right of first  refusal  hereunder,  Executive  may
proceed to complete  the sale of Shares  pursuant to the Third Party Offer or in
the open market in  accordance  with his  notification  to the Company,  but his
failure to complete  such sale within two weeks  after his  notification  to the
Company  shall  reinstate  the  Company's  right of first  refusal  with respect
thereto and require a new notification to the Company.

         17. Arbitration of Disputes; Injunctive Relief.

             (a) Except as provided in paragraph (b) below,  any  controversy or
         claim  arising  out of or  relating  to this  Agreement  or the  breach
         thereof,  shall  be  settled  by  binding  arbitration  in the  City of
         Indianapolis,  Indiana,  in  accordance  with the laws of the  State of
         Indiana by three  arbitrators,  one of whom shall be  appointed  by the
         Company,  one by Executive  and the third of whom shall be appointed by
         the first two arbitrators. If the first two arbitrators cannot agree on
         the appointment of a third arbitrator,  then the third arbitrator shall
         be appointed by the Chief Judge of the United States District Court for
         the Southern District of

                                       13
<PAGE>   14


         Indiana.  The  arbitration  shall be conducted in  accordance  with the
         rules of the American Arbitration  Association,  except with respect to
         the  selection  of  arbitrators  which  shall  be as  provided  in this
         Section.  Judgment upon the award  rendered by the  arbitrators  may be
         entered in any court having jurisdiction  thereof. In the event that it
         shall be necessary or desirable  for  Executive to retain legal counsel
         and/or  incur  other  costs  and  expenses  in   connection   with  the
         enforcement  of any and all of his  rights  under this  Agreement,  the
         Company  shall pay (or  Executive  shall be entitled to recover from he
         Company,  as the case may be) his reasonable  attorneys' fees and costs
         and expenses in  connection  with the  enforcement  of any  arbitration
         award in court, regardless of the final outcome, unless the arbitrators
         shall determine that under the  circumstances  recovery by Executive of
         all or a part of any such fees and costs and expenses would be unjust.

            (b) Executive  acknowledges  that a breach or  threatened  breach by
         Executive  of  Sections  8 or 9 of this  Agreement  will  give  rise to
         irreparable  injury to the Company and that money  damages  will not be
         adequate relief for such injury.  Notwithstanding  paragraph (a) above,
         the  Company and  Executive  agree that the Company may seek and obtain
         injunctive relief, including, without limitation, temporary restraining
         orders,  preliminary  injunctions  and/or permanent  injunctions,  in a
         court of  proper  jurisdiction  to  restrain  or  prohibit  a breach or
         threatened  breach of Section 8 or 9 of this Agreement.  Nothing herein
         shall be construed as  prohibiting  the Company from pursuing any other
         remedies available to the Company for such breach or threatened breach,
         including the recovery of damages from Executive.

         18.  Notices.  Any notice  required or permitted to be given under this
Agreement  shall be sufficient  if in writing and if sent by registered  mail to
his residence,  in the case of Executive, or to the business office of its Chief
Executive Officer, in the case of the Company.

         19. Waiver of Breach and Severability.  The waiver by either party of a
breach of any  provision of this  Agreement by the other party shall not operate
or be construed as a waiver of any  subsequent  breach by either  party.  In the
event any provision of this  Agreement is found to be invalid or  unenforceable,
it may be  severed  from  the  Agreement  and the  remaining  provisions  of the
Agreement shall continue to be binding and effective.

         20. Entire Agreement.  This instrument contains the entire agreement of
the parties and supersedes all prior agreements between them. This agreement may
not be changed orally,  but only by an instrument in writing signed by the party
against  whom  enforcement  of any waiver,  change,  modification,  extension or
discharge is sought.

         21.  Binding  Agreement and Governing  Law;  Assignment  Limited.  This
Agreement  shall be binding  upon and shall  inure to the benefit of the parties
and their lawful  successors  in interest  and shall be construed in  accordance
with  and  governed  by the laws of the  State of  Indiana.  This  Agreement  is
personal  to each of the  parties  hereto,  and  neither  party may  assign  nor
delegate any of its rights or  obligations  hereunder  without the prior written
consent of the other.




                                       14
<PAGE>   15

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first above written.

                                            CONSECO, INC.



                                            By: /s/ Stephen C. Hilbert
                                                -------------------------
                                                Stephen C. Hilbert
                                                   Chairman of the Board

                                                "Company"



                                                /s/ Thomas J. Kilian
                                                -------------------------
                                                Thomas J. Kilian

                                                     "Executive"



                                       15