SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
FBL FINANCIAL GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LOGO]
FBL FINANCIAL GROUP, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
March 30, 1998
Dear Stockholder:
You are cordially invited to attend the Company's 1998 annual meeting to
be held on Tuesday, May 19, 1998 at 9:00 a.m. central time, in the auditorium
of the Company's home office building, 5400 University Avenue, West Des Moines,
Iowa.
The notice of meeting and proxy statement following this letter describe
the business expected to be transacted at the meeting. During the meeting we
will also report on the current activities of the Company, and you will have an
opportunity to ask questions.
Whether or not you plan to attend this meeting, we urge you to sign and
date the enclosed proxy card and return it as soon as possible so that your
shares will be represented. The vote of every stockholder is important. Please
note that mailing your completed proxy will not prevent you from voting in
person at the meeting if you wish to do so.
Your Board of Directors and management look forward to greeting personally
those stockholders who are able to attend.
Sincerely,
/s/ Edward M. Wiederstein /s/ Thomas R. Gibson
Edward M. Wiederstein Thomas R. Gibson
CHAIRMAN OF THE BOARD CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
FBL FINANCIAL GROUP, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
MARCH 30, 1998
Richard D. Harris
Senior Vice President,
Treasurer and Secretary
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of FBL Financial Group, Inc. (the
"Company"), will be held in the auditorium of the Company's home office
building, 5400 University Avenue, West Des Moines, IA 50266 on Tuesday, May 19,
1998, at 9:00 a.m. central time, for the following purposes:
1. For the holders of Class A Common Stock and Preferred Stock, Series B,
voting as a single class, to elect three Class A directors;
2. For the holders of Class B Common Stock to elect 18 Class B directors;
3. For all holders of Class A Common Stock, Class B Common Stock and
Preferred Stock, Series B to vote on the recommendation of the Board of
Directors that the Director Compensation Plan be approved.
4. For all holders of Class A Common Stock, Class B Common Stock and
Preferred Stock, Series B to vote on the recommendation of the Board of
Directors that Ernst & Young LLP be appointed auditors of the Company for
1998; and
5. To transact such other business as may properly come before the meeting.
By Order of the Board of Directors
/s/ Richard D. Harris
Richard D. Harris
SECRETARY
<PAGE>
[LOGO]
FBL FINANCIAL GROUP, INC.
------------------
PROXY STATEMENT
MARCH 30, 1998
------------------
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of FBL Financial Group, Inc. (the
Company) for the annual meeting of stockholders to be held on May 19, 1998.
Only stockholders of record at the close of business on March 23, 1998 are
entitled to notice of and to vote at the meeting. There were 16,813,693 Class A
Common Shares, 1,192,990 Class B Common Shares and 5,000,000 Preferred Shares,
Series B, outstanding and entitled to vote on that date. Each stockholder will
be entitled to one vote per share on each matter to be voted on, except that
the holders of Class A Common Shares and Preferred Shares, Series B, vote
together as a group to elect Class A Directors, and the holders of Class B
Common Shares vote to elect Class B Directors. The holders of a majority of the
total number of shares entitled to vote, present in person or represented by
proxy, constitute a quorum for the transaction of business.
The Company is mailing its annual report for the year ended December 31,
1997 together with this proxy statement and the enclosed proxy on or about
March 30, 1998, to stockholders entitled to vote at the annual meeting.
When you sign and return the enclosed proxy, the shares represented
thereby will be voted for the nominees for director of the respective class
listed in this proxy statement, and for the proposals set forth in Item 2 and
Item 3 in the Notice of Meeting, unless otherwise indicated on the proxy.
Returning your completed proxy will not prevent you from voting in person at
the meeting should you be present and wish to do so. In addition, you may
revoke your proxy any time before it is voted by sending notice to the
Secretary of the Company prior to the meeting. If you submit more than one
proxy, each later-dated proxy will revoke all previous proxies.
The Board of Directors expects all nominees named below to be available
for election. In case any nominee is not available, the proxy holders may vote
for a substitute. Regulations of the Securities and Exchange Commission permit
the proxies solicited pursuant to the proxy statement to confer discretionary
authority with respect to matters on which the Company did not know a
reasonable time before the meeting, or which were omitted from the proxy
statement and form of proxy pursuant to Securities and Exchange Commission
rules. Accordingly, the proxy holders may use their discretionary authority to
vote with respect to any such matter pursuant to the proxy solicited hereby.
<PAGE>
Directors of each class will be elected at the annual meeting by a
majority of the votes of such class cast at the meeting by the holders of
shares represented in person or by proxy and entitled to vote. Approval of the
Director Compensation Plan and of the appointment of auditors requires the
affirmative vote of the holders of a majority of shares represented in person
or by proxy at the meeting and entitled to vote. With respect to the election
of directors, votes may be cast in favor of or withheld from each nominee;
votes that are withheld or abstained, and broker non-votes, will be excluded
entirely from the vote and will have no effect except to determine the
existence of a quorum. Abstentions may be specified on all other proposals and
will be counted as shares present for determination of a quorum, and will have
the effect of a negative vote on the item voted upon. Broker non-votes with
respect to approval of the Director Compensation Plan and of the appointment of
auditors will not be counted in determining the amount of shares voted on such
item and will have no effect on the outcome of the vote on the item.
ITEM 1:
ELECTION OF DIRECTORS
The terms of all directors will expire at this Annual Meeting. No person,
other than the directors of the Corporation acting solely in that capacity, is
responsible for the naming of the nominees for Class A Director. A person who
is an employee, officer or director of a holder of Class B shares or of any
other Farm Bureau organization is not eligible to be elected as a Class A
Director. Nomination and election of the Class B Directors by the holders of
the Class B shares is subject to the provisions of the Class B Common
Stockholder Agreement. The Class B Common Stockholder Agreement obligates the
holders of Class B shares to elect the Presidents of the 15 state Farm Bureau
federations in the states in which the Company's operations are conducted as
Class B Directors. Jack M. Givens, James K. Harmon and Frank S. Priestley were
elected as Class B Directors by the Board of Directors during the year, as they
became presidents of the Farm Bureau Federations in the states of Oklahoma,
North Dakota and Idaho, respectively. The Class B Common Stockholder Agreement
also obligates the holders of Class B shares to cause the election of the
President of the Iowa Farm Bureau Federation as Chairman of the Board and to
elect the Chief Executive Officer of the Company and two other officers of the
Company nominated by the Chairman of the Board as Class B Directors.
Information as to each nominee follows. Unless otherwise indicated, each
nominee has served for at least five years in the business position currently
or most recently held.
NOMINEES FOR CLASS A DIRECTOR
JERRY L. CHICOINE is a Class A Director of the Company. He became Executive
Vice President and Chief Operating Officer of Pioneer Hi-Bred International,
Inc. (seed corn business) in September 1997, and was elected a director of
Pioneer in March 1998. He previously served as Senior Vice President and Chief
Financial Officer since 1989. Mr. Chicoine was Senior General Counsel of Pioneer
Hi-Bred International, Inc. from 1986 to 1988. Prior thereto he was a partner in
the accounting firm of McGladrey & Pullen from 1969 to 1986. Mr. Chicoine is a
lawyer and a certified public accountant. He is also a member of the board of
directors of AmerUs Bank and Edge Technologies, Inc.
MEMBER: Audit, Budget, and Compensation Committees
DIRECTOR SINCE 1996 AGE: 55
<PAGE>
JOHN W. CREER is a Class A Director of the Company. Since 1980, he has been
President and Chief Executive Officer of the Farm Management Company, the
agricultural real estate holding and management company wholly owned by the
Church of Jesus Christ of Latter-day Saints (Mormon). As such he is responsible
for management of a substantial multi-national resource. He is also Secretary of
the worldwide church's Investment Policy Committee. Mr. Creer is a lawyer and
received a doctorate of law degree from the University of Munich.
MEMBER: Audit, Budget, and Class A Directors Nominating Committees
DIRECTOR SINCE 1996 AGE: 58
JOHN E. WALKER is a Class A Director of the Company. Mr. Walker retired
January 1, 1996 from Business Men's Assurance (BMA), Kansas City, Missouri,
where he had been the Managing Director of Reinsurance Operations since 1979. He
had been a member of the board of directors of BMA for 11 years before his
retirement, and a member of its executive committee. Mr. Walker is also a
director and member of the Audit Committee of LabOne, Inc., Lenexa, Kansas, a
publicly traded blood and urine testing business.
MEMBER: Audit, Compensation, and Class A Directors Nominating Committees
DIRECTOR SINCE 1996 AGE: 59
NOMINEES FOR CLASS B DIRECTOR
EDWARD M. WIEDERSTEIN is the Chairman of the Board and a Class B Director
of the Company. He has been a director of the Iowa Farm Bureau Federation since
1986 and in 1995 was elected President of the Iowa Farm Bureau Federation. He is
also a director and president of Farm Bureau Mutual Insurance Company (Farm
Bureau Mutual) and Farm Bureau Life Insurance Company (Farm Bureau Life), and a
director of Western Agricultural Insurance Company (Western Ag). Mr. Wiederstein
owns and operates a 1,200 acre farm near Audubon, Iowa where he has been engaged
in the business of cattle and hog feeding and grain farming since 1973. He is
also a director of American Farm Bureau Insurance Services, Inc. and of
Wellmark, Inc.
MEMBER: Executive and Compensation Committees
DIRECTOR SINCE 1995 AGE: 49
THOMAS R. GIBSON, FSA, CLU, FLMI, is the Chief Executive Officer of the
Company and of its major operating subsidiaries and a Class B Director of the
Company. Mr. Gibson is also a director of AccessAir Holdings, Inc., and
president of the Iowa Life and Health Insurance Association. Mr. Gibson has been
employed by the Company and its affiliates since 1966.
MEMBER: Executive and Investment Committees
DIRECTOR SINCE 1996 AGE: 53
RICHARD D. HARRIS is Senior Vice President and Secretary-Treasurer of the
Company and its major operating subsidiaries and a Class B Director of the
Company. He is Executive Director, Secretary and Treasurer of the Iowa Farm
Bureau Federation; Senior Vice President and Assistant Secretary and Treasurer
of South Dakota Farm Bureau Mutual Insurance Company (South Dakota Mutual), and
Vice President and Treasurer of Farm Bureau Management Corporation (Management
Corp.), a subsidiary of the Iowa Farm Bureau Federation. He was elected to all
of those positions effective September 1, 1996. Mr. Harris has been employed by
the Company and its affiliates since 1996, and by the Iowa Farm Bureau
Federation since 1968.
MEMBER: Executive and Investment Committees
DIRECTOR SINCE 1996 AGE: 53
<PAGE>
STEPHEN M. MORAIN is Senior Vice President and General Counsel of the
Company and a Class B Director. He also serves as General Counsel and Assistant
Secretary of the Iowa Farm Bureau Federation; General Counsel, Secretary and
director of Management Corp., and Senior Vice President and General Counsel of
the Company's major operating subsidiaries. Mr. Morain is also a director of
Computer Aided Design Software, Inc., a director of Iowa Business Development
Finance Corporation, and chairman and a director of Edge Technologies, Inc. Mr.
Morain has been employed by the Company and its affiliates since 1977.
MEMBER: Executive and Investment Committees
DIRECTOR SINCE 1996 AGE: 52
ROGER BILL MITCHELL is a Class B Director and the First Vice Chair of the
Company. He has been President of the Colorado Farm Bureau since 1991. Mr.
Mitchell is also First Vice President of Western Life, President and director of
Colorado Farm Bureau Mutual Insurance Company, director of Western Ag and a
member of the Colorado Water Quality Control Commission. Mr. Mitchell is
managing general partner of Mitchell Ag Production, a family limited partnership
with his two sons, which is a ten quarter potato and barley farming operation in
the San Luis Valley of south central Colorado.
MEMBER: Budget Committee
DIRECTOR SINCE 1994 AGE: 53
KAREN J. HENRY is a Class B Director and the Second Vice Chair of the
Company. She was elected as President of the Wyoming Farm Bureau Federation in
1994, after having served as a director since 1992. Ms. Henry is a director and
President of Mountain West Farm Bureau Mutual Insurance Company and a director
of Western Life and of Western Ag. She is involved in a family ranch and cattle
operation.
DIRECTOR SINCE 1995 AGE: 51
KENNETH R. ASHBY is a Class B Director of the Company and has been the
President of the Utah Farm Bureau Federation since November 1986. He has been a
director and Vice President of Utah Farm Bureau Insurance Company (Utah
Insurance) and a director of Farm Bureau Life. Mr. Ashby has been President and
General Manager of Ashby's Valley View Farms since September 1966.
MEMBER: Class A Directors Nominating Committee
DIRECTOR SINCE 1994 AGE: 57
AL CHRISTOPHERSON is a Class B Director of the Company. He has been
President of the Minnesota Farm Bureau Federation since December 1988 and is
also a director of Farm Bureau Mutual and American Ag. Mr. Christopherson is
also a director of the American Farm Bureau Federation and serves on a number of
agricultural boards including the Agricultural Utilization and Research
Institute. Mr. Christopherson is a diversified grain and livestock farmer from
Pennock, Minnesota, where he operates a family farm which includes nearly 1,800
acres. Farming operations consist of raising hogs, corn, soybeans, and wheat.
MEMBER: Compensation Committee
DIRECTOR SINCE 1994 AGE: 57
<PAGE>
KENNY J. EVANS is a Class B Director of the Company. He is President and a
director of the Arizona Farm Bureau Federation. Mr. Evans, a farmer, corporate
executive and business owner, is also a former Chairman of the National
Agricultural Labor Advisory Committee and a former Chairman of the Arizona
Commission of Agriculture and Horticulture. He is a director of Western Life and
a director and president of Western Ag.
MEMBER: Budget Committee
DIRECTOR SINCE 1994 AGE: 52
JACK M. GIVENS is a Class B Director of the Company. He was elected in
January 1998 after becoming President of the Oklahoma Farm Bureau Federation and
its insurance affiliates, of which he has been a director since 1988. Mr. Givens
is a Regent of Oklahoma State University and A&M Colleges, a director of Cotton
Incorporated, New York, NY, a director of Oklahoma Baptist University National
Board of Development, a director of Oklahoma Medical Research Foundation, a
director of Oklahoma Cotton Growers Association and a director of the Oklahoma
Art Institute. He is also a director of Western Life and of Western Ag. Mr.
Givens has farming and ranching operations in Jackson, Greer and Kiowa counties,
Oklahoma, where irrigated cotton, wheat and registered Angus are produced, and
in Logan and Clark counties, Ohio, where the crops are corn and soybeans.
MEMBER: Class A Directors Nominating Committee
DIRECTOR SINCE 1998 AGE: 75
GARY HALL is a Class B Director of the Company. He has been the President
of the Kansas Farm Bureau Federation and affiliated companies, including Kansas
Farm Bureau Life Insurance Company and Kansas Farm Bureau Mutual Insurance
Company, since 1994. Mr. Hall is also a director of Western Ag. He has been a
self-employed farmer and stockman since 1974, and he served as Kansas Secretary
of Agriculture in 1990 and 1991.
DIRECTOR SINCE 1995 AGE: 47
JAMES K. HARMON is a Class B Director of the Company. He was elected
President of the North Dakota Farm Bureau Federation in 1997 and has been a
member of its board of directors since 1989. Mr. Harmon became President of
NODAK Mutual Insurance Company in 1997, after serving as Vice President since
1993, and has been a director of Western Life since 1993. He is also a member of
the board of directors of Central Dakota Growers, a high value crops development
task force. Mr. Harmon and his wife operate a fourth generation farm near
Carrington, North Dakota, raising irrigated potatoes, sunflowers, durum, hard
red spring wheat, canola and dry edible beans.
MEMBER: Class B Directors Nominating Committee
DIRECTOR SINCE 1998 AGE: 39
RICHARD KJERSTAD is a Class B Director of the Company. He and his family
have extensive farming and cattle ranching operations in western South Dakota.
Mr. Kjerstad was elected President of the South Dakota Farm Bureau Federation in
1995. He is also President and a director of South Dakota Mutual and a director
of Farm Bureau Life. Mr. Kjerstad is one of eleven individuals who have been
charged with violations of the Lacey Act in the United States District Court for
the District of South Dakota. The Lacey Act is federal legislation regulating
interstate and international commerce in wildlife. In essence, the defendants
are charged with improperly agreeing to transfer deer hunting licenses to
non-residents of South Dakota and of improperly doing so. Counsel to Mr.
Kjerstad has filed a motion to dismiss the indictment.
MEMBER: Class B Directors Nominating Committee
DIRECTOR SINCE 1995 AGE: 55
<PAGE>
DAVID L. MCCLURE is a Class B Director of the Company. He is a
farmer-rancher raising wheat, barley, hay, and cattle in the Lewiston, Montana
area. Mr. McClure has been President of the Montana Farm Bureau Federation since
1987 and is also a director and Vice President of Mountain West Farm Bureau
Mutual Insurance Company, a director of American Ag and Western Ag and a
director and Vice President of Western Life. He was a member of the board of
directors of the American Farm Bureau Federation from 1993 through 1996.
MEMBER: Budget Committee
DIRECTOR SINCE 1994 AGE: 58
BRYCE P. NEIDIG is a Class B Director. He has been President of the
Nebraska Farm Bureau Federation and of Farm Bureau Insurance Company of Nebraska
since 1981. He is also a director of Farm Bureau Life, American Ag and Western
Ag. Mr. Neidig is also a director of the American Farm Bureau Federation and a
director of Nebraska Blue Cross Blue Shield. He raises irrigated and dry land
corn as well as soybeans and alfalfa on his Madison County farm.
DIRECTOR SINCE 1994 AGE: 66
HOWARD D. (DAN) POULSON, a Class B Director of the Company, has been
President and Administrator of the Wisconsin Farm Bureau Federation and
President of its affiliated companies, including Rural Mutual Insurance Company,
since August 1991. He has served on the board of directors of Wisconsin Farm
Bureau since 1969. He was appointed to the State of Wisconsin Department of
Natural Resources Board in October 1995. Mr. Poulson is also a director of Farm
Bureau Life. He and his wife operate a 250 acre hog and grain farm near Palmyra
in Jefferson County, Wisconsin.
MEMBER: Compensation Committee
DIRECTOR SINCE 1994 AGE: 61
FRANK S. PRIESTLEY, a Class B Director of the Company, was elected
President of the Idaho Farm Bureau Federation in 1997, having first been elected
to the Board of Directors of Idaho Farm Bureau Federation in 1985. He is also
President and a director of Farm Bureau Mutual Insurance Company of Idaho and
Farm Bureau Finance Company (Idaho). Mr. Priestley graduated from Western
College of Auctioneering in 1967 and has actively practiced auctioning. He
operates a family dairy farm near Franklin, Idaho with a herd of 70 Holstein
cows.
MEMBER: Class B Directors Nominating Committee
DIRECTOR SINCE 1998 AGE: 49
JOHN J. VAN SWEDEN is a Class B Director of the Company. Mr. Van Sweden is
President and a director of the New Mexico Farm and Livestock Bureau, President
and a director of Western Farm Bureau Mutual Insurance Company (Western Mutual),
and a director of Western Life and Western Ag. He is also President of V7 Ranch
Co., Inc., which has been in his family for five generations since 1868. This is
a cow/calf/yearling and ranch operation, producing approximately 650 tons of hay
per year, in the area of Raton, New Mexico.
MEMBER: Class A Directors Nominating Committee
DIRECTOR SINCE 1994 AGE: 50
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information as to shares of voting
stock of the Company beneficially owned by each director and nominee, each
executive officer named in the Summary Compensation Table below, and by all
executive officers and directors of the Company as a group, including shares
subject to employee and non-employee directors stock options exercisable on or
prior to April 29, 1998. The percentage of Company shares beneficially owned by
any Company director or nominee or by all directors and officers of the Company
as a group, does not exceed 1%. Unless indicated otherwise in the footnotes
below, all shares are directly owned as of February 28, 1998. On March 17, 1998
the Board of Directors declared a two-for-one stock split, in the form of a
share dividend, to holders of record April 6, 1998, payable April 17, 1998. All
share numbers given herein are before the stock split.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
SHARES
BENEFICIALLY
NAME OWNED
------------
Kenneth R. Ashby 2,000(a)
Jerry L. Chicoine 2,500(a)
Al Christopherson 2,000(a)
John W. Creer 2,000(a)
Kenny J. Evans 2,000(a)
Thomas R. Gibson 17,144(d)
Jack M. Givens 2,000(a)
Gary Hall 2,000(a)
James K. Harmon 0
Richard D. Harris 4,664(d)
Karen J. Henry 2,000(a)
Timothy J. Hoffman 7,420(d)
Richard Kjerstad 5,000(a)
David L. McClure 2,000(a)
Roger Bill Mitchell 2,000(a)
Stephen M. Morain 12,394(d)
Bryce P. Neidig 2,150(a)
James W. Noyce 8,125(d)
William J. Oddy 16,387(d)
Howard D. Poulson 2,000(a)
Frank S. Priestley 2,000(a)
John J. Van Sweden 2,000(b)
John E. Walker 2,600(a)
Richard D. Warming 8,772(d)
Edward M. Wiederstein 6,960(d)
All directors and executive officers
as a group (34 persons) 143,637(c)(d)
- ------------------
(a) Includes 2,000 shares subject to options exercisable within 60 days.
(b) Includes 1,332 shares subject to options exercisable within 60 days.
(c) Includes 120,574 shares subject to options exercisable within 60 days.
(d) Includes shares subject to options exercisable within 60 days held by the
following named executive officers: Gibson, 14,140; Harris, 3,728;
Hoffman, 6,411; Morain, 8,894; Noyce, 6,087; Oddy, 11,379; Warming, 6,127,
and Wiederstein, 6,955.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS(a)
<TABLE>
<CAPTION>
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER(b) OWNERSHIP(c) OF CLASS
- ----------------------- -------------------------------------- -------------- ---------
<S> <C> <C> <C>
Class A Common ........ Iowa Farm Bureau Federation 9,466,189 * 56.3
Class B Common ........ Iowa Farm Bureau Federation 761,855 63.9
Series B Preferred .... Iowa Farm Bureau Federation 5,000,000 100.0
Class B Common ........ Farm Bureau Mutual Insurance Company 186,866 15.7
</TABLE>
- ------------------
* Before accounting for a transaction scheduled to close March 30, 1998
pursuant to which Iowa Farm Bureau Federation will surrender 1,268,056
shares of Class A Common Stock to the Company in exchange for a subsidiary
which holds title to the Company's home office real estate. See "Certain
Relationships and Related Transactions."
(a) No other person to the knowledge of the Company was the beneficial owner of
5% or more of the outstanding shares of any class of Company stock.
(b) The address of Iowa Farm Bureau Federation and Farm Bureau Mutual Insurance
Company is 5400 University Avenue, West Des Moines, Iowa 50266.
(c) The named beneficial owners have sole dispositive and voting power with
respect to the shares owned by them.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors held six meetings during 1997. Each director
attended at least 75% of the Board meetings and meetings of committees of which
he or she is a member. The standing committees of the Board of Directors and
the number of meetings held by each such committee in 1997 were as follows:
NUMBER OF MEETINGS
COMMITTEE NAME HELD DURING 1997
------------------------------------------------ -------------------
Executive Committee ............................ 19
Audit Committee ................................ 4
Budget Committee ............................... 0
Compensation Committee ......................... 3
Class A Directors Nominating Committee ......... 1
Class B Directors Nominating Committee ......... 1
The Company has established an Executive Committee composed of Messrs.
Wiederstein (Chairman), Gibson, Harris and Morain. The Executive Committee may
exercise all powers of the Board of Directors during intervals between meetings
of the Board, except for matters reserved to the Board by the Iowa Business
Corporation Act, and except for removal or replacement of the Chairman or Chief
Executive Officer.
The Company has established an Audit Committee composed of Class A
Directors Messrs. Chicoine, Creer and Walker, with Mr. Chicoine serving as
Chairman. The Audit Committee must include only Class A Directors who are
independent of management and free from any relationships that would interfere
with the exercise of independent judgment. The Audit Committee reviews the
professional services to be provided by the Company's independent auditors and
the independence of such auditors from management of the Company. The Audit
Committee also reviews the scope of the audit by the Company's independent
auditors, the annual financial statements of the Company, the Company's system
of internal accounting controls and such other matters with respect to the
accounting, auditing and financial reporting practices and procedures of the
Company as it may find appropriate or as may
<PAGE>
be brought to its attention, and meets from time to time with a member or
members of the Company's internal audit staff. In addition to the usual and
customary functions of an Audit Committee governed by the requirements of the
New York Stock Exchange, the Audit Committee is required to review with the
auditors and management any material transaction or series of similar
transactions to which the Company was, within the past year, or is currently
expected to be, a party, and with respect to which a director, executive
officer, or holder of more than five percent of any class of stock of the
Company is a party. If the Audit Committee determines that any transaction or
proposed transaction between the Company and Farm Bureau Mutual is unfair to
the Company, the Company is required to submit the matter to a coordinating
committee for resolution.
The Company has established a Class A Directors Nominating Committee which
nominates candidates for election to the Board of Directors as Class A
Directors. The Committee members are nominated by the Chairman of the Board,
and include Messrs. Ashby, Creer, Givens, Van Sweden and Walker, with Mr. Ashby
serving as Chairman of the Committee. The Committee must include at least
two-thirds of the Class A Directors and may consist of up to five members of
the Board nominated by the Chairman of the Board. Any action of the Class A
Directors Nominating Committee requires the concurrence of at least 50% of the
Class A Directors who are members of the Committee. The Committee will consider
a nominee for election as a Class A Director recommended by a stockholder if
the stockholder submits the nomination to the Committee. Stockholders may
submit such nominations by addressing a letter to the Chairman of the Class A
Directors Nominating Committee, FBL Financial Group, Inc., 5400 University
Avenue, West Des Moines, Iowa 50266. Under the Company's By-Laws a stockholder
must provide advance notice to the Company in order for such stockholder to
place into nomination a director at the annual meeting. Such notice must be
received by the Secretary at the above address not less than 90 days prior to
the first anniversary date of the preceding year's annual meeting, and must set
forth the name, age, principal occupation, number of shares of Company stock
beneficially owned, and the business and residence addresses of both the
proposed nominee and the stockholder proposing to make such nomination.
The Company has established a Compensation Committee of the Board of
Directors which has oversight responsibility with respect to compensation
matters involving executive officers of the Company. The Compensation Committee
is composed of Messrs. Wiederstein, Chicoine, Christopherson, Poulson, and
Walker, with Mr. Wiederstein serving as the Chairman of the Committee.
The Company has established a Budget Committee designated by the Chairman
of the Board and composed of Messrs. Mitchell, Chicoine, Creer, Evans and
McClure, with Mr. Mitchell as Chairman. The Budget Committee reviews all
budgets proposed by management and makes recommendations thereon to the Board
of Directors.
The Company has also established an Investment Committee composed of
Messrs. Gibson, Harris, Morain and five executive officers, and an Advisory
Committee, and may establish other committees in its discretion. The Advisory
Committee is composed of the general managers of the Farm Bureau affiliated
property-casualty insurance companies in the Company's market territory.
DIRECTORS' COMPENSATION AND BENEFITS
All non-employee Directors receive an annual retainer of $2,000, a fee of
$1,000 for each board meeting attended and a fee of $500 for each committee
meeting attended. In addition, Class A Directors receive an annual retainer of
$13,333. All Directors will be reimbursed for travel and other out of pocket
expenses incurred in attending board or committee meetings. Each non-employee
Director receives an
<PAGE>
option to purchase 2,000 shares of Class A Common Stock of the Company upon
initial election to the Board of Directors of the Company. See "Executive
Compensation -- 1996 Class A Common Stock Compensation Plan."
EXECUTIVE OFFICERS
Most of the executive and other officers of the Company devote all of
their time to the affairs of the Company. Services performed for affiliates of
the Company are charged to such affiliates on the basis of a time allocation
and the affiliates are required to reimburse the Company for the cost of such
services, plus a fee. See "Certain Relationships and Related Transactions --
Management and Marketing Agreements." Three officers, Mr. Wiederstein, Mr.
Harris and Mr. Morain, do not devote all of their time to the affairs of the
Company as they are also employed by Management Corp., a wholly owned
subsidiary of the Iowa Farm Bureau Federation, and they are compensated by the
Company for their services to the Company and by the Iowa Farm Bureau
Federation for their services to it based on the portion of their time expected
to be expended on behalf of each entity.
The current executive officers of the Company are as follows:
NAME AGE POSITION
- ------------------------- ---- -----------------------------------------------
Edward M. Wiederstein ... 49 Chairman of the Board and Director
Thomas R. Gibson ........ 53 Chief Executive Officer and Director
Richard D. Harris ....... 53 Senior Vice President, Secretary and Treasurer
and Director
Stephen M. Morain ....... 52 Senior Vice President and General Counsel and
Director
William J. Oddy ......... 53 Chief Operating Officer
Timothy J. Hoffman ...... 47 Chief Property-Casualty Officer
Richard D. Warming ...... 64 Chief Investment Officer and Assistant Treasurer
James W. Noyce .......... 42 Chief Financial Officer
Thomas E. Burlingame .... 53 Vice President, Associate General Counsel
Barbara J. Moore ........ 46 Vice President, Property-Casualty Operations
John M. Paule ........... 41 Vice President, Information Technology
Monte R. Roumpf ......... 58 Vice President, Corporate Administration
JoAnn W. Rumelhart ...... 44 Vice President, Life Operations
Lou Ann Sandburg ........ 49 Vice President, Investments
Robert L. Tatge ......... 51 Vice President, Property-Casualty Operations
F. Walter Tomenga ....... 51 Vice President, Corporate Affairs and Marketing
Services
Lynn E. Wilson .......... 48 Vice President, Life Sales
Set forth below is a description of the business experience, principal
occupation and employment during the last five years of the executive officers
of the Company:
<PAGE>
Biographical information for Messrs. Wiederstein, Gibson, Harris and Morain
is set forth above under "Election of Directors."
William J. Oddy, FSA, MAAA, is Chief Operating Officer of the Company; in
March 1997 he was also named as Executive Vice President and General Manager of
the Company's life insurance subsidiaries. He is a member of the Investment
Committee. Mr. Oddy has been employed by the Company and its affiliates since
1968. He is also a director of American Equity Investment Life Insurance
Company, Berthel, Fisher & Company and Berthel, Fisher & Company Financial
Services, Inc.
Timothy J. Hoffman, FSA, CLU, ChFC, FLMI, LLIF, MAAA, was named Chief
Property-Casualty Officer of the Company and Executive Vice President and
General Manager of the Company's property-casualty subsidiaries in March 1997.
He had been Chief Marketing Officer since 1993. He is a member of the Investment
Committee. Mr. Hoffman has been employed by the Company and its affiliates since
1971.
Richard D. Warming is Chief Investment Officer and Assistant Treasurer of
the Company and of the major operating subsidiaries. He is chairman of the
Investment Committee of each of the companies. Mr. Warming has been employed by
the Company and its affiliates since 1959, and has announced his retirement,
effective April 1, 1998.
James W. Noyce, CPA, FCAS, ASA, FLMI, MAAA, is Chief Financial Officer of
the Company and its major operating subsidiaries. He is a member of the
Investment Committee, and Chairman of the Benefits Administration Committee for
each of the companies and Chairman of the Asset Liability Management Committee
of the Life companies. Mr. Noyce has been employed by the Company and its
affiliates since 1985. He is also a director of Berthel, Fisher & Company,
Berthel, Fisher & Company Financial Services, Inc. and Berthel, Fisher & Company
Leasing Services, Inc.
Thomas E. Burlingame is Vice President, Associate General Counsel of the
Company and its major operating subsidiaries. Mr. Burlingame has been employed
by the Company and its affiliates since 1980.
Barbara J. Moore, CPCU, AIM, Are, AAM, became Vice President,
Property-Casualty Operations for the Company and its major operating
subsidiaries in January 1997. Ms. Moore was Senior Vice President of
Property-Casualty Operations for Western Ag and Western Mutual from 1991 to
1996. Ms. Moore has been employed by the Company and its affiliates since 1978.
John M. Paule was elected Vice President, Information Technology in January
1998, after joining the Company in 1997. Mr. Paule had been employed by IBM
Corporation since 1978, including during his last five years of employment being
its manager of the North American general business insurance segment and its
senior state executive in Iowa. He is a member of the Board of Directors of the
West Des Moines Community School District.
Monte R. Roumpf, CPCU, FLMI, has been employed by the Company since 1968
and had served as its Vice President, Information Technology since 1991, before
being named Vice President, Corporate Administration in January 1997. Mr. Roumpf
has announced his retirement, effective August 1, 1998.
JoAnn W. Rumelhart, FSA, MAAA, became Vice President -- Life Operations of
the Company and its major operating subsidiaries in July of 1994. She began
working for the Company in 1978, and served as Vice President -- Client Services
from January 1991.
Lou Ann Sandburg, CFA, FLMI, was named Vice President, Investments in
January 1998. She joined the Company in 1980 as the portfolio manager of FBL
Money Market Fund, Inc., and later assumed the management of the Company's
tax-exempt bonds and the mortgage-backed securities
<PAGE>
portfolios. Ms. Sandburg was Securities Vice President in 1993 and Investment
Vice President, Securities, from 1994 through 1997. She serves on the
Asset-Liability Committee, the Investment Committee and the Credit Committee.
She is past president and board member of the Iowa Society of Financial
Analysts.
Robert L. Tatge, FCAS, MAAA, CLU, ChFC, became Vice President --
Property-Casualty Operations for the Company and its major operating
subsidiaries in July 1994. He has been employed by the Company since 1968 and
previously served as Vice President -- Underwriting and Claims from 1991.
F. Walter Tomenga, MPA, is the Company's Vice President, Corporate Affairs
and Marketing Services. He was Vice President, Corporate Affairs from June 1994
to March 1997. He has been employed by the Company since 1989, previously
serving as Member Health Services Vice President and as Vice President --
Research and Development.
Lynn E. Wilson, CLU, CHFC, MSFS, was named Vice President, Life Sales in
March 1997, after serving as Vice President, Multi-State Sales since July 1994.
From 1989 to July 1994 he was Senior Vice President of Marketing for Western
Life. He was an agent, and an agency manager for the Company from 1973 to 1985.
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company and
certain affiliates to the Chief Executive Officer and to the Company's five
most highly compensated executive officers, other than the Chief Executive
Officer, who were serving on December 31, 1997, for services rendered to the
Company and these affiliates in all capacities during the fiscal years ended
December 31, 1995, 1996 and 1997. No "long-term compensation" was paid to any
executive officer of the Company in these years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------
ANNUAL COMPENSATION AWARDS
--------------------------------- ---------------
ALL OTHER(c)
NAME AND PRINCIPAL POSITION(a) YEAR SALARY BONUS OPTIONS(#)(b) COMPENSATION
- -------------------------------- ------ ----------- ---------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Thomas R. Gibson ............... 1995 $275,000 $ 73,123 0 $24,662
Chief Executive Officer 1996 294,000 86,707 67,200 26,483
1997 322,000 106,630 3,500 30,025
Stephen M. Morain .............. 1995 235,000 25,216 0 14,683
Senior Vice President 1996 251,215 55,567 43,065 14,490
and General Counsel 1997 266,215 66,118 1,406 20,440
William J. Oddy ................ 1995 227,000 60,360 0 22,581
Chief Operating Officer 1996 241,000 71,076 55,086 25,660
1997 262,000 86,761 3,235 27,194
Timothy J. Hoffman ............. 1995 171,000 32,478 0 15,879
Chief Property-Casualty Officer 1996 181,000 40,036 31,029 16,272
1997 200,000 62,256 8,009 19,881
Richard D. Warming ............. 1995 163,000 30,959 0 30,360
Chief Investment Officer 1996 173,000 38,266 29,657 35,418
and Assistant Treasurer 1997 183,500 45,575 984 46,006
James W. Noyce ................. 1995 145,500 22,568 0 22,796
Chief Financial Officer 1996 171,000 37,824 29,314 18,818
1997 183,000 45,450 1,125 11,193
</TABLE>
- ------------------
(a) In 1995, each person named was employed by Management Corp., a subsidiary
of the Iowa Farm Bureau Federation, and, in addition to providing services
to the Company, also provided services to affiliates of the Company such as
Farm Bureau Mutual, South Dakota Mutual, and the Iowa Farm Bureau
Federation, the financial results of which are not included in the
Company's consolidated financial statements. The compensation expenses for
these executives were allocated among the Company and each of the
affiliates to which services were provided based primarily on the amount of
time the executive devoted to each entity's affairs. For 1995, for each of
the named persons, the portion of such executive's total compensation
allocated to the Company was as follows: Gibson, 70.8%; Morain, 51.7%;
Oddy, 63.6%; Hoffman, 77.0%; Warming, 98.2%; and Noyce, 59.0%. In 1996,
these executives became employees of the Company and, accordingly, receive
their total compensation from the Company (except for Mr. Morain who is an
employee of the Company (as to approximately 85% of his 1996 and 1997
compensation) and of Management Corp.). The Company charges a management
fee for services provided by these executives to the Company's affiliates.
See "Certain Transactions and Relationships -- Service Agreement with Farm
Bureau Management Corporation."
<PAGE>
(b) Awards comprised of qualified and nonqualified stock options. The options
have vesting periods as described in "Option Grants in Last Fiscal Year"
table. Unvested options are forfeited upon voluntary termination of
employment with the Company. All options will vest in the event of a change
of control of the Company.
(c) All other compensation includes such items as the cost of life insurance
coverage, the value of personal use of a company fleet automobile, a
company flex cash (cafeteria) account and educational bonus.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options during the last fiscal year to the named executive officers under the
Company's 1996 Class A Common Stock Compensation Plan. No stock options,
freestanding stock appreciation rights (SARs) or other equity-based awards were
granted to any executive officer or other persons by the Company prior to 1996.
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NUMBER OF OPTIONS GRANTED TO
SECURITIES UNDERLYING EMPLOYEES IN EXERCISE OR EXPIRATION GRANT DATE
OPTIONS GRANTED(a)(c) FISCAL YEAR BASE PRICE($/Sh) DATE PRESENT VALUE(b)
----------------------- ------------------- ------------------ ------------ -----------------
<S> <C> <C> <C> <C> <C>
Thomas R. Gibson 3,500 5.1% $ 24.00 1/15/07 $21,868
Stephen M. Morain 1,406 2.0 24.00 1/15/07 8,784
William J. Oddy 1,813 4.7 24.00 1/15/07 11,327
1,422 32.00 9/01/07 8,884
Timothy J. Hoffman 1,031 11.6 24.00 1/15/07 6,441
5,228 25.25 4/01/07 32,664
1,750 32.00 9/01/07 10,934
Richard D. Warming 984 1.4 24.00 1/15/07 6,148
James W. Noyce 1,125 1.6 24.00 1/15/07 7,029
</TABLE>
- ------------------
(a) The exercise price of the options equals the fair market price of the
underlying shares on the date of grant. Each of these options has a term of
up to 10 years and becomes exercisable in five approximately equal annual
installments on each of the first, second, third, fourth and fifth
anniversaries of the date of grant. Unvested options are forfeited upon a
voluntary termination of employment with the Company. Options vest in the
event of a change of control of the Company. The options granted are
incentive stock options to the extent permitted under the Plan and the
Internal Revenue Code, and the remainder are nonqualified stock options.
(b) The grant date present value of these options was estimated using a
Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rate of 6.34%; dividend yield of 1.6%;
volatility factor of the expected market price of the Company's Class A
Common Stock of 0.12, and a weighted average life expectancy of the options
of 5.1 years. The weighted average grant date fair value of the options
granted during 1997 was $4.58 per share. The actual value, if any, an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, giving no assurance
that the value realized by a named individual will be at or near the value
estimated by the Black-Scholes model.
(c) In 1996 and 1997, options for the purchase of 821,232 and 68,842 shares,
respectively, of Class A Common Stock were granted, leaving approximately
879,875 shares of Class A Common Stock available for grant as additional
Awards under the Plan, including 19,949 shares previously forfeited. To
date, no grants of SARs or stock bonuses have been made under the Plan.
<PAGE>
AGGREGATED OPTIONS/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTIONS/SAR VALUES
The following table provides information with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and value of unexercised options held as of the end of the fiscal year:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
SHARES UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END(#) OPTIONS/SARS AT FY-END($)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(a)
-------------------- ------------- ---------- --------------------------- -----------------------------
<S> <C> <C> <C> <C>
Thomas R. Gibson 0 0 13,440/57,260 304,080/1,272,758
Stephen M. Morain 0 0 8,613/35,858 194,869/802,148
William J. Oddy 0 0 11,017/47,304 249,260/1,037,850
Timothy J. Hoffman 0 0 6,205/32,833 140,388/670,253
Richard D. Warming 0 0 5,931/24,710 134,189/552,668
James W. Noyce 0 0 5,862/24,577 132,628/548,742
</TABLE>
- ------------------
(a) Value determined from market price at fiscal year end ($40.125) less
exercise price. The actual value, if any, that an executive may realize
will depend on the stock price on date of exercise of an option, so there
is no assurance the value stated would be equal to the value realized by
the executive.
PENSION BENEFITS
Employees are generally covered under the Farm Bureau Retirement Plan and
the Iowa Farm Bureau Federation Affiliates Supplemental Retirement Plan (Pension
Plans). The two plans operate as a single plan to provide total benefits to all
participants. The former is a qualified plan under Section 401(a) and the latter
plan is a nonqualified plan which provides benefits according to the overall
plan formulas, but includes compensation exceeding $160,000 under Section
401(a)(1) and provides benefits provided by the formula which are otherwise
limited by Section 415 of the Internal Revenue Code. The pension plans are
available to all employees and officers generally and provide for the same
method of allocation of benefits between management and non-management
participants. Active participants include employees over age 21 who have worked
at least one year and provided at least 1,000 hours of service during that year.
The pension table below reflects the total pension benefits provided according
to remuneration and completed years of service.
ANNUAL PENSION PLAN BENEFITS*
YEARS OF SERVICE
ASSUMED HIGH --------------------------------------------------------------
36 MONTH AVERAGE
ANNUAL SALARY 15 20 25 30 35
- ---------------- ---------- ---------- ---------- ---------- ----------
$ 125,000 $ 40,625 $ 56,250 $ 71,875 $ 87,500 $ 87,500
150,000 48,750 67,500 86,250 105,000 105,000
175,000 56,875 78,750 100,625 122,500 122,500
200,000 65,000 90,000 115,000 140,000 140,000
225,000 73,125 101,250 129,375 157,500 157,500
250,000 81,250 112,500 143,750 175,000 175,000
300,000 97,500 135,000 172,500 210,000 210,000
350,000 113,750 157,500 201,250 245,000 245,000
- ------------------
* The above table is a calculation of benefits according to the formula for
services rendered prior to 1998.
<PAGE>
The credited years of service as of December 31, 1997 for Messrs. Gibson,
Morain, Oddy, Hoffman, Warming, and Noyce were 31, 20, 29, 26, 38, and 12,
respectively.
The plan is a defined benefit plan which provides monthly income to
retirees who have worked for at least 10 years and attained age 55. The amount
provided is a percentage of the high 36 consecutive month average salary
calculated according to the following formula: For service prior to 1998, 2% per
year for the first 10 years of service, plus 2 1/2% for each year above 10 years
of service up to 30 years of service. Unreduced early retirement benefits are
provided upon attainment of 85 age plus service points. For service after 1997,
1.675% per year of service, plus, upon attainment of 85 age plus service points,
.325% per year of service to age 65. After age 65, .325% per year of service
times the average salary less social security covered compensation.
Years of service include all years in which an individual first exceeds
1,000 hours of service and any year thereafter in which the person exceeds 500
hours of service.
The plan formula provides a monthly benefit for life with a guarantee of
120 monthly payments. Other options, including lump sum, are available to the
retiree on an actuarially equivalent basis.
The compensation covered by the Pension Plan is calculated based upon total
salary and bonuses paid to the participant during the given year.
The annual benefits shown in the above table are not reduced to reflect the
limitations imposed by federal tax laws, which place upper limits on the
benefits which may be provided to any individual by tax qualified pension plans.
The Iowa Farm Bureau Affiliates Supplemental Retirement Plan is an unfunded,
non-qualified plan, which provides that it will pay directly the difference
between the retirement benefit normally calculated under the Farm Bureau
Retirement Plan, consistent with federal tax law. In 1997, Messrs. Gibson,
Morain, Oddy, Hoffman, Warming, and Noyce received allocations under the
Supplemental Plan for services provided to the Company of $95,961, $54,074,
$71,368, $17,173, $151,410, and $10,610, which amounts are not included in the
Summary Compensation Table set forth above.
OTHER COMPENSATION PLANS
The Company and Farm Bureau Mutual sponsor a bonus plan for all employees,
which includes a management performance (bonus) plan in which executives,
department heads and managers participate. On an annual basis, the companies
establish various and distinct goals for its executives, division heads and
managers. Goals generally relate to such matters as life insurance and
property-casualty new business production, expense levels and earnings per
share. Attainment of individual goals is targeted to result in payment of cash
bonuses ranging up to 33 1/3% of base salary for Messrs. Gibson, Oddy, Hoffman
and Noyce, and up to 8% for managers. Exceptional performance could increase
cash bonuses up to 50% of base salary for the executive group and up to 12% for
managers. Payment of the performance incentive is made annually in a single,
separate lump sum payment on or before February 14th of the ensuing year.
The Company also has a trustee qualified 401(k) plan for all employees
after 30 days of employment and attainment of age 21. Employee contributions up
to 4% of compensation are matched by Company contributions on a 50% basis,
subject to Employee Retirement Income Security Act (ERISA) limitations, with the
match paid in shares of the Company's Class A Common Stock. The Company match is
forfeited should an employee terminate prior to three years of service, after
which the match is nonforfeitable.
<PAGE>
BOARD COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is responsible for oversight of compensation policies which govern
annual compensation, stock ownership programs, and employee benefit programs for
the executive officers as well as other employees of the Company and its
subsidiaries. The Committee was established in July 1996 at the time of the
Company's initial public offering. It has affirmed the Company's historical
compensation framework and expects to continue examining the relationship of the
compensation criteria to existing systems and incentives.
COMPENSATION CRITERIA
In making compensation determinations, the Committee considers and
endeavors to attain the following goals:
1) attract and retain highly qualified and motivated executive officers
and employees,
2) encourage and reward achievement of annual and long-term financial
goals and operating plans of the Company, and
3) encourage executive officers and employees to become stockholders with
interests aligned with those of other stockholders.
The Committee's policy with regard to the compensation of executive
officers is to meet the foregoing goals through a combination of base salary,
annual bonus, stock ownership, and other benefits with a particular focus on
encouraging executive officers to attain performance goals that are designed to
favorably impact overall Company performance.
COMPENSATION COMPONENTS
The basic components of compensation for executive officers, including
those individuals listed in the Summary Compensation Table, are in four areas:
BASE SALARY: The Committee sets salary ranges annually which are intended
to reflect the median level of base pay for comparable positions at companies of
similar size and complexity. The Committee reviews salary survey data provided
by independent survey consultants and information provided by the Standard and
Poors property-casualty insurance segment. Based on the scope and responsibility
of the position in the survey compared to the scope and responsibility of the
position at the Company, the Committee determines whether the officer's salary
range should be set above or below the median level of the industry. To
determine the level of a specific salary within its range, the Committee
considers management input regarding the officer's length of service in the
position, experience, and management skills in handling short and long range
issues. In addition, the Committee reviews the officer's performance during the
prior year measured against predetermined corporate and individual plans and
objectives set by management.
ANNUAL BONUS: The Committee believes that a significant portion of annual
cash compensation for the executive officers should be variable ("at risk") and
tied to the Company's financial results. The Company annually establishes
profit, growth, and other goals. Attainment of the goals is designed to produce
bonuses to the executive officers of 33 1/3% of base salary, with exceptional
performance allowing bonus payments up to 50% of base salary.
The Committee may use its discretion to modify a portion of a participant's
award, either upward or downward, based on management's recommendation of the
participant's contribution to the achievement of goals.
<PAGE>
STOCK OWNERSHIP: The Committee believes that a fundamental goal of
executive compensation is to encourage and create opportunities for long-term
executive stock ownership. The Committee expects that over time, executive
officers will establish ownership positions that are of significant value as a
percentage of the annual salary of such officers.
The Employee Stock Option Plan provides for the award of stock options
(nonqualified and incentive stock options), stock appreciation rights ("SARs"),
and shares of restricted stock. The Board of Directors encourages ownership of
Company stock through the grant of options to participants in the Plan. To
determine who will participate and the amount of awards, the Company adopted a
formula which covers key management employees, and bases awards on their
position, salary, and previous grants. Generally, the amount increases with the
level of position. The Committee and the Board of Directors intend to make
grants of options on an annual basis and establish a vesting schedule at each
grant date. The options granted in 1996 in conjunction with the initial public
offering were "front end loaded" to represent the bulk of grants to be made
under the formula during the first four years of the Plan. The options vest in
20% increments on the first, second, third, fourth, and fifth anniversary of the
grant date. In 1996, a total of 821,232 options were awarded to 100
participants. In 1997, 68,842 options were awarded to 60 participants.
EMPLOYEE BENEFITS: The Company offers benefit plans such as vacation,
medical, life and disability insurance to executive officers on the same basis
as offered to all employees.
CEO COMPENSATION: The compensation of Mr. Gibson includes the above four
factors. Mr. Gibson has been Chief Executive Officer of the Company since its
formation in 1993, and chief executive officer of its major operating
subsidiaries since 1991. His base salary has been set based on market factors,
his prior performance and in part in recognition of his additional
responsibilities with formation of the Company and its growth. Under Mr.
Gibson's leadership, the company has grown both internally and by combining
other Farm Bureau insurance entities either under management agreements or as
subsidiaries. The Company has become positioned as a consolidator of Farm Bureau
insurance companies and believes it is well positioned to continue its internal
growth due to its geographic spread, growth of exclusive agency force and
ability to cross sell its various products to its existing customers. Mr.
Gibson's base salary was increased by 9.5% in 1997 to $322,000, and he earned a
bonus equal to 32.9% of that base salary based on 1997 Company performance of
established goals. Mr. Gibson was awarded options for 3,500 shares of Class A
Common Stock in 1997, which is 5.1% of the awards granted to all employees in
the year.
<PAGE>
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code (the "Code") generally limits
to $1 million per individual per year the federal income tax deduction for
compensation paid by a publicly-held company to the company's chief executive
officer and its other four highest paid executive officers. Compensation that
qualifies as performance-based compensation for purposes of Section 162(m) is
not subject to the $1 million deduction limitation. Options and stock
appreciation rights granted under the Stock Option Plan satisfy the requirements
for performance-based compensation. The Committee currently does not anticipate
that any executive officer will be paid compensation from the Company in excess
of $1 million in any year (including amounts that do not qualify as
performance-based compensation under the Code), and accordingly, the Committee
anticipates that all amounts paid as executive compensation will be deductible
by the Company for federal income tax purposes.
COMPENSATION COMMITTEE
Edward Wiederstein, CHAIRMAN
Jerry Chicoine
Al Christopherson
Howard D. Poulson
John E. Walker
<PAGE>
PERFORMANCE GRAPHS
The following performance graph compares the performance of the Company's
Class A common stock since its initial public offering on July 19, 1996 with the
performance of the S & P 500 index and with the performance of the Value Line
Insurance: Life Index. The graph plots the changes in value of an initial $100
investment over the indicated time periods, assuming all dividends are
reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
FBL Financial Group, Inc., Standard & Poors 500 and Value Line Insurance:
Life Index
(Performance Results Through December 31, 1997)
[PLOT POINTS GRAPH]
FBL FINANCIAL STANDARD & INSURANCE:
GROUP, INC. POORS 500 LIFE
----------- --------- ----
JULY 19, 1996 $100.00 $100.00 $100.00
DECEMBER 31, 1996 $138.59 $117.01 $126.97
DECEMBER 31, 1997 $226.31 $156.07 $217.30
Assumes $100 invested at the open of trading (July 19, 1996) in FBL Financial
Group, Inc. Class A Common Stock, Standard & Poors 500, and the Value Line
Insurance: Life Index.
SOURCE: VALUE LINE, INC.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ORGANIZATION OF THE COMPANY
FBL Financial Group, Inc. was incorporated as an Iowa corporation in 1993.
It is a holding company which, through its subsidiaries, currently underwrites,
markets and distributes life and disability income insurance, annuities,
property-casualty insurance and mutual funds to individuals and small businesses
in 15 midwestern and western states.
CAPITAL AND INVESTMENT TRANSACTIONS: On May 30, 1997, FBL Financial Group
Capital Trust (the Trust), a consolidated wholly-owned subsidiary of the
Company, issued $97,000,000 of 5% Preferred Securities to the Iowa Farm Bureau
Federation. As of December 31, 1997, 97,000 shares of 5% Preferred Securities
were outstanding, all of which are unconditionally guaranteed by the Company.
Concurrent with the issuance of the 5% Preferred Securities, the Company
purchased from the Iowa Farm Bureau Federation the Company's Series A preferred
stock at its liquidation value of $100,000,000. In addition, the Company issued
5,000,000 shares of Series B preferred stock to the Iowa Farm Bureau Federation
for $3,000,000. Each share of Series B preferred stock has a liquidation
preference of $0.60 and voting rights identical to that of Class A common stock.
The Series B preferred stock pays cumulative annual cash dividends of $0.03 per
share, payable quarterly, and is redeemable by the Company, at the option of the
Company, at $0.60 per share plus unpaid dividends if the stock ceases to be
beneficially owned by a Farm Bureau organization.
On March 18, 1997, the Company's Board of Directors approved a plan to
repurchase up to 1,000,000 unregistered shares of Company's Class A common
stock. On April 4, 1997, the Company purchased 965,370 shares of Class A common
stock under this plan at $25.725 per share ($24,834,000), the average of the
closing prices over the prior ten days of trading on the New York Stock
Exchange. Included in these totals are 532,370 Class A shares sold by Farm
Bureau Mutual to the Company for $13,695,000.
During the first quarter of 1998, the Company's Board of Directors approved
a transaction whereby the Company will exchange its home office properties for
1,268,056 unregistered shares of Class A common stock owned by the Iowa Farm
Bureau Federation. The value of the transaction is $45,650,000, or $36.00 per
common share.
On March 17, 1998, the Board of Directors approved a two-for-one stock
split to holders of record on April 6, 1998, to be effected in the form of a
share dividend payable on April 17, 1998. The two-for-one split is not reflected
in the information contained in this proxy statement.
Also on March 17, 1998, the Company's Board of Directors approved the sale
of Utah Insurance to Farm Bureau Mutual. As a result of the transaction, which
is subject to the approval of regulatory authorities, the Company will no longer
have property-casualty operations. The Company will receive $25,000,000 in cash
on the date of the sale. In addition, the Company may receive additional
consideration during each of the five years in the period ending December 31,
2002, in accordance with an earn-out provision included in the underlying sales
agreement. Under the earn-out arrangement, the Company and Farm Bureau Mutual
will share equally in the dollar amount by which the incurred losses on Utah
Insurance's direct business, net of reinsurance ceded, is less than the incurred
losses assumed in the valuation model used to derive the initial $25,000,000
acquisition price. The earn-out calculation will be performed and any settlement
(subject to a maximum of $2,000,000 per year) will be made on a calendar year
basis. The book value of Utah Insurance at December 31, 1997 was $27,711,000. It
is anticipated that the transaction will close on March 31, 1998.
<PAGE>
During 1997, the Company, through its subsidiaries, sold investments to
Farm Bureau Mutual Insurance Company as follows: (a) FBL Ventures of South
Dakota, Inc. sold its investment in one private equity security for $1,630,000;
(b) Farm Bureau Life sold its investment in one equity security (an affiliate)
for $5,111,000; and (c) Western Farm Bureau Life sold its investment in one
equity security (an affiliate) for $5,111,000. These sales were made at the
estimated fair market values of the securities being sold on the respective
dates of the transactions.
MANAGEMENT AND MARKETING AGREEMENTS: Prior to January 1, 1996, the Company
participated in a management agreement with Management Corporation. Under this
agreement, Management Corporation provided general business, administration and
management services to the Company. During 1996, the Company assumed
responsibility for providing a majority of these services for itself as well as
Management Corporation and other affiliates. The Management Contract is
terminable by either party upon 180 days prior written notice to the other
party, or immediately in the event of certain insolvency events with respect to
either party. During 1997, the Company incurred expenses under the contract with
Management Corporation of $770,000. During 1997, the management fee earned by
the Company was equal to one-half of one percent of all expenses incurred
related to the services provided. During 1997, the Company earned management fee
income of $203,000 related to these services provided to Farm Bureau Mutual.
Beginning in 1998 for Farm Bureau Mutual, the management fee rate will be
changed to equal a percentage of premiums collected.
The Company has marketing agreements with the property-casualty companies
operating within its marketing territory, including Farm Bureau Mutual and other
affiliates. Under the marketing agreements, the property-casualty companies
develop and manage the Company's agency force for a fee equal to a percentage of
commissions on first year life insurance premiums and annuity deposits. In
addition, a service fee commission is paid to the property-casualty companies
operating in the multi-line states equal to 30% of commissions on renewal
premiums. The Company paid $2,532,000 to Farm Bureau Mutual under these
arrangements during the year ended December 31, 1997.
FARM BUREAU MUTUAL POOL
Utah Insurance participates in the Farm Bureau Mutual pool with Farm Bureau
Mutual, South Dakota Mutual, Western Ag and Western Mutual with all five
companies operating under the common management of the Company. All retained
insurance business of Utah Insurance, South Dakota Mutual, Western Ag and
Western Mutual is assumed by Farm Bureau Mutual. The combined business,
excluding certain reinsurance assumed exposures, is then assumed by the five
property-casualty companies, in specified proportions, not in excess of an
amount that would create a net written premium to surplus ratio that exceeds
acceptable industry standards.
In the pool, all premiums, losses, loss adjustment expenses, acquisition
and other underwriting and administrative expenses are combined and distributed
proportionately to each property-casualty company, thus providing the three
companies with substantially the same underwriting results. The overall
operating results of the three companies differ based on their respective
investment income, changes in the level of participation in the pool and other
miscellaneous items. Effective January 1, 1997, Utah Insurance's reinsurance
pool participation percentage decreased from 20 percent to 18 percent.
STOCKHOLDERS' AGREEMENT REGARDING MANAGEMENT AND TRANSFER OF SHARES OF CLASS B
COMMON STOCK
All of the Class B Common Stock of the Company is owned by Farm Bureau
organizations. As holders of all of the Class B Common Stock of the Company,
these organizations have entered into the
<PAGE>
Class B Common Stockholders' Agreement regarding management and the transfer of
the Class B Common Stock (Stockholders' Agreement).
The Stockholders' Agreement provides that the holders of the Class B Common
Stock will vote for the election, as Class B Directors of the Company, of (i)
the Presidents of each of the 15 state Farm Bureau Federations which own or are
affiliated with the owners of the Class B Common Stock and (ii) the Chief
Executive Officer of the Company and two additional officers of the Company
nominated by the Chairman of the Board. The Stockholders' Agreement also
provides that as long as a single state Farm Bureau Federation and its
affiliates own in excess of 50% of the outstanding shares of Class B Common
Stock (the Iowa Farm Bureau Federation owns approximately 63.9% of the Class B
Common Stock), the Class B Common Stockholders will direct the Class B Directors
to elect the President of such state Farm Bureau Federation as the Chairman of
the Board, and to elect persons nominated by the Chairman to serve as Chief
Executive Officer, Secretary and Treasurer.
In the event that a Class B Director chooses to vote other than as directed
pursuant to the requirements of the Shareholders' Agreement, the holders of not
less than 10% of the Class B Common Stock may request a special meeting of the
Class B Common Stockholders, for the purpose of removing the Class B Director,
and either replacing such director with a qualified person or leaving the
position vacant.
The holders of Class B Common Stock may not transfer the stock to any
person which is not a Farm Bureau organization, and any attempted transfer in
violation of the Stockholder's Agreement causes the Class B Common Stock so
transferred to automatically be converted to Class A Common Stock.
The holders of 90% of the Class B Common Stock, together with the Company,
may amend the Stockholders' Agreement.
RELATIONSHIP WITH FARM BUREAU ORGANIZATIONS
American Farm Bureau Federation is a national federation of member
organizations having as a major objective and purpose to promote, protect and
represent the business, economic, social and educational interests of farmers
and ranchers of the nation, and to develop agriculture, and a further objective
to correlate Farm Bureau activities and strengthen member state Farm Bureau
Federations. Through a membership agreement the Iowa Farm Bureau Federation (the
Company's principal stockholder) and similar state Farm Bureau Federations
throughout the country agree to cooperate in reaching these objectives.
American Farm Bureau Federation is the owner of the "Farm Bureau" and "FB"
trade names and related trademarks and service marks including "FB design" which
has been registered as a service mark with the U.S. Patent and Trademark Office.
Under the state membership agreements, use of such trade names and marks in each
state is restricted to members of the federation and their approved affiliates.
The Company is licensed by the Iowa Farm Bureau Federation to use the "Farm
Bureau" and "FB" designations in Iowa, and pursuant thereto incurred royalty
expense of $641,000 for the year ended December 31, 1997. The Company's
subsidiaries have similar arrangements with Farm Bureau organizations in the
other states of the market territory. Royalty expense incurred pursuant to these
arrangements totaled $1,204,000. Royalty payments in 1997 in excess of $60,000
were made to Farm Bureau organizations in Idaho ($124,000), Minnesota
($148,000), Nebraska ($79,000), Oklahoma ($133,000), Utah ($113,000), and
Wisconsin ($94,000).
HOME OFFICE BUILDING AND OTHER SERVICES
The Company shares home office facilities, as well as certain management
personnel, with the Iowa Farm Bureau Federation and certain of its affiliates,
including Farm Bureau Mutual and various service
<PAGE>
companies. Costs are allocated by factors such as the amount of space used for
functions of the various companies, and time studies and estimates of time
spent by personnel for each of the companies. The allocations are reviewed and
approved by the boards of directors of the respective companies.
The Company and its subsidiaries provide a number of services to, and
receive certain services from, other Farm Bureau organizations, including the
Company's two largest stockholders, the Iowa Farm Bureau Federation and Farm
Bureau Mutual. The Company providing such services is reimbursed based on an
allocation of the cost of providing such services.
The Company's home office facilities are owned by Farm Bureau Life which
leases a portion of such facilities to the Iowa Farm Bureau Federation, Farm
Bureau Mutual and other affiliates. In 1997, the Iowa Farm Bureau Federation
paid Farm Bureau Life rent of approximately $67,000 and Farm Bureau Mutual paid
Farm Bureau Life rent of approximately $1,538,000. As noted above, the Company
has agreed to exchange a subsidiary of Farm Bureau Life which owns the property
for 1,268,056 shares of Class A common stock owned by the Iowa Farm Bureau
Federation. The Company will subsequently lease office space back from the
subsidiary of Iowa Farm Bureau Federation under a 15-year operating lease.
Farm Bureau Life owns aircraft which are available for use by the Company's
affiliates. In 1997, Farm Bureau Mutual paid the Company approximately $114,000
for use of such aircraft.
Through its subsidiary, FBL Leasing Services, Inc., the Company leases
computer equipment, furniture and automobiles to other Farm Bureau
organizations. In 1997, the Iowa Farm Bureau Federation paid approximately
$448,000 and Farm Bureau Mutual paid approximately $2,137,000 for such leasing
services.
Through its investment advisor subsidiary, FBL Investment Advisory
Services, Inc., the Company provides investment advice and related services.
Farm Bureau Mutual paid the Company approximately $349,000 for such services in
1997.
In connection with an investment in a limited partnership in September
1996, the Company, through a subsidiary, has agreed to pay any cash flow
deficiencies of a real estate property owned by the partnership through January
1, 2001. The partnership has a $5,352,000 mortgage loan with Farm Bureau Mutual
that is due October 1, 2006.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act generally requires the
officers and directors of a public company, and persons who own more than ten
percent of a registered class of a public company's equity securities, to file
reports of beneficial ownership and changes in beneficial ownership with the
Securities and Exchange Commission. Based solely on its review of the copies of
such reports received by it, or upon written representations received from
certain reporting persons, the Company believes that, during 1997, its officers,
directors and ten-percent shareholders complied with all section 16(a) filing
requirements applicable to them.
<PAGE>
ITEM 2:
APPROVAL OF THE DIRECTOR COMPENSATION PLAN
Item 2 concerns the recommendation of the Board of Directors that the
Director Compensation Plan be approved. The Director Compensation Plan is
established to allow the non-employee directors of FBL Financial Group, Inc. to
participate in the ownership of the Company through ownership of shares of FBL
Class A common stock or deferred stock units. In addition, the Plan is intended
to allow non-employee directors to defer all or a portion of their compensation
for their service as directors. See "Exhibit A -- Director Compensation Plan."
The Plan applies only to directors who are not employees of the Company or
of any of its affiliates. At the date of this Proxy Statement there were 17
persons eligible to participate in the Plan. The Plan permits electing directors
to receive any director cash compensation or fees either in shares of Class A
common stock or to defer receipt of the compensation to a unit account which
will be paid in shares of Class A common stock after cessation of the director's
service, either in a lump sum or in up to ten installments.
As discussed elsewhere in this Proxy Statement, the non-employee directors
of the Company receive annual compensation of $2,000 plus fees of $1,000 for
each board meeting attended and $500 for each committee meeting attended. In
addition, the Class A directors receive an annual retainer of $13,333. Costs and
expenses of attending meetings are reimbursed, and each non-employee director
receives a non-qualified stock option to purchase 2,000 shares of Class A common
stock upon initial election to the board. See "Directors' Compensation and
Benefits."
Directors electing to participate in the plan will receive their
compensation payments quarterly in arrears, and Class A common stock will be
issued to them (or units deferred for them) at the closing price of the shares
on the New York Stock Exchange the last business day of each quarter. Each unit
in an account is equivalent to one share of Class A common stock. For persons
electing to defer the compensation to a unit account, the Company will credit to
their account on the date any dividend is paid on the Class A common stock, an
additional number of units equal to the dividend that would be paid on the
number of shares equal to the number of units in such person's account, divided
by the closing market price on such date.
The dollar amount of benefits receivable under the Plan are not
determinable and therefore no tabular presentation of new plan benefits is
available. The Plan may be amended or terminated at any time, by the board of
directors or by its compensation committee, but not in a manner that would
adversely affect the right of a participant to receive shares issuable or cash
payable that the participant has in any unit account at the effective date of
the amendment or termination. However, the Company at its option may accelerate
the payment of all deferred and other benefits payable under the Plan at its
termination.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE DIRECTOR COMPENSATION PLAN, AS PROPOSED IN ITEM 2.
<PAGE>
ITEM 3:
APPROVAL OF INDEPENDENT AUDITORS
Item 3 concerns the recommendation of the Audit Committee and the Board of
Directors that Ernst & Young LLP be appointed independent auditors for 1998,
which is being presented to stockholders for approval. Representatives of Ernst
& Young LLP will be present at the meeting, will be available to respond to
questions and may make a statement if they so desire.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR 1998, AS PROPOSED IN ITEM 3.
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to present at the 1999 annual meeting
of stockholders must be received by the Secretary of the Company, Richard D.
Harris, FBL Financial Group, Inc., 5400 University Avenue, West Des Moines, Iowa
50266 by November 30, 1998, and must otherwise comply with rules promulgated by
the Securities and Exchange Commission in order to be eligible for inclusion in
the proxy material for the 1999 annual meeting. In addition, under the Company's
By-Laws a stockholder must provide advance notice to the Company in order for
such stockholder to bring any business before the annual meeting. Such notice
must be received by the Secretary at the above address not less than 90 days
prior to the first anniversary date of the preceding year's annual meeting, and
must describe the business proposed to be brought before the annual meeting, the
reasons for bringing it, any material interest of the stockholder in such
business, the stockholder's name and address and the number of shares of Company
stock beneficially owned by the stockholder.
OTHER MATTERS
Officers and other employees of the Company and its subsidiaries may
solicit proxies by personal interview, telephone and telegram, in addition to
the use of the mails. None of these individuals will receive special
compensation for these services which will be performed in addition to their
regular duties, and some of them may not necessarily solicit proxies. The
Company has also made arrangements with brokerage firms, banks, nominees and
other fiduciaries to forward proxy solicitation materials for shares held of
record by them to the beneficial owners of such shares. The Company will
reimburse them for reasonable out-of-pocket expenses. The Company will pay the
cost of all proxy solicitation.
By order of the Board of Directors,
/s/ Richard D. Harris
Richard D. Harris
SECRETARY
Dated: March 30, 1998
<PAGE>
EXHIBIT A
FBL FINANCIAL GROUP, INC.
DIRECTOR COMPENSATION PLAN
PURPOSE. This Director Compensation Plan is established to allow the
non-employee directors of FBL Financial Group, Inc. (FBL) to participate in the
ownership of FBL through ownership of shares of the FBL common stock or deferred
stock units. In addition, the Plan is intended to allow non-employee directors
to defer all or a portion of their compensation for their service as directors.
DEFINITIONS. The following words have the definitions given them below:
"Affiliate" means any corporation, company limited by shares, partnership,
limited liability company, business trust, other entity, or other business
association that is controlled by FBL.
"Board" means the board of directors of FBL.
"Business Day" means a day on which FBL's executive offices in West Des
Moines, Iowa, are open for business and on which trading is conducted on the
New York Stock Exchange.
"Common Stock" means the Class A Common Stock, no par value per share, of
FBL.
"Compensation Date" means the last Business Day of each calendar quarter.
"Director" means any director of FBL who is not an employee of FBL or an
Affiliate.
"Distribution Date" means the date on which a Director ceases to be a
director of FBL or on which a Director becomes employed by FBL or an
Affiliate.
"Fair Market Value" means, as to any particular day, the closing price
quoted for a share of Common Stock trading on the New York Stock Exchange on
that day, or if no such prices were quoted for the shares of Common Stock on
the New York Stock Exchange for that day, the closing price quoted on the
last Business Day on which prices were quoted. The closing price for the
shares of Common Stock shall be that published in the edition of The Wall
Street Journal or any successor publication for the next Business Day.
"Plan Year" means each 12-month period beginning on each January 1 and
ending on each December 31.
"Retainer" means the amount of compensation set by the Board from time to
time as payable to a Director in each Plan Year, including a fixed portion
and a portion that is variable depending on the number of Board and committee
meetings attended, including any portion thereof that a Director elects to
defer as provided in this Plan.
"Shares" means shares of the Common Stock.
"Special Ledger" means a record established and maintained by FBL in which
the Unit Accounts for the Directors and the Units credited to the accounts
are noted.
"Unit Account" shall mean the account maintained in the Special Ledger for
a Director to which Units allocable to the Director under this Plan are
credited.
"Unit" means a credit in a Unit Account representing one Share.
<PAGE>
ANNUAL RETAINER. During each Plan Year in which a person is a Director
during the existence of this Plan, the Director will be eligible to receive the
Retainer payable as follows:
A. At the Director's option, any percentage up to 100% of the Retainer
will be (1) payable to the Director in Shares, or (2) at the Director's
option, deferred by FBL crediting Units to a Unit Account maintained for the
Director as provided in this Plan.
B. The balance of the Retainer shall be payable in cash.
The Retainer will be payable in arrears in equal quarterly installments on
each Compensation Date unless deferred as provided below. Each quarterly
installment will consist of one-fourth of the fixed annual amount, plus the
amount determined by the number of Board and committee meetings attended in that
quarter, if any, for each Director.
ELECTIONS. Each Director who was a Director during the prior Plan Year must
elect by no later than December 31 of the prior Plan Year how he or she will
receive the Retainer. Each Director who becomes a Director during a Plan Year
must elect within 30 days after becoming a Director how he or she will receive
the Retainer. Each election must be made by the Director filing an election form
with the Secretary of FBL. If a Director does not file an election form for each
Plan Year by the specified date, the Director will be deemed to have elected to
receive all of the Retainer in cash. Any person who becomes a Director during a
Plan Year and does not file the required election within 30 days thereafter will
be deemed to have elected to receive all of the Retainer in cash. Any election
to defer a portion of the Retainer made by a person who becomes a Director
during a Plan Year will be valid as to the portion of the Retainer received
after the election is filed with the Secretary of FBL. When an election is made
for a Plan Year, the Director may not revoke or change that election.
THE SHARES. If a Director elects to receive Shares in payment of all or any
part of the Director's Retainer, the number of Shares to be issued on any
Compensation Date shall equal the amount of the Retainer then payable, divided
by the Fair Market Value of a Share on the Compensation Date, with any fraction
of a Share to be paid in cash. Any Shares issued under this Plan will be
registered under the Securities Act of 1933, as amended, and, so long as shares
of the Common Stock are listed for trading on the New York Stock Exchange, will
be listed for trading on the New York Stock Exchange.
THE UNITS. If a Director defers any portion of the Retainer in the form of
Units, then on each Compensation Date, FBL will credit a Unit Account maintained
for the Director with a number of Units equal to (1) the dollar amount of the
Retainer then payable that the Director has elected to defer in the form of
Units, divided by (2) the Fair Market Value on the Compensation Date, rounded to
the nearest one-thousandth of a Unit. If the Common Stock is the subject of a
stock dividend, stock split, or a reverse stock split, the number of Units will
be increased or decreased, as the case may be, in the same proportion as the
outstanding shares of Common Stock. FBL will credit to the Director's Unit
Account on the date any dividend is paid on the Common Stock, an additional
number of Units equal to (1) the aggregate amount of the dividend that would be
paid on a number of Shares equal to the number of Units credited to the
Director's Unit Account on the date the dividend is paid, divided by (2) the
Fair Market Value on that date, rounded to the nearest one-thousandth Unit.
DISTRIBUTION OF THE AMOUNTS IN A UNIT ACCOUNT. After the Distribution Date
for a former Director, FBL will issue to the former Director that number of
Shares equal to the number of Units with which the former Director's Unit
Account is credited, with any fractions of a Share to be paid in cash. The
former Director may elect to receive all of the Shares at one time or in up to
10 annual installments as described below. If the Director has elected to
receive all of the Shares at one time, FBL will issue the Shares as soon as
practicable after the Distribution Date.
<PAGE>
If the former Director has elected to receive the Shares in installments, a
pro rata number of Shares will be issued for each installment plus additional
Shares equal to the Units credited to the Unit Account respecting dividends paid
on the Common Stock since the last installment was made. FBL will issue the
first installment of Shares as soon as practicable after the former Director's
Distribution Date. The remaining installments of Shares will be issued on or
about each anniversary of the Director's Distribution Date.
DISTRIBUTION IN THE EVENT OF A DIRECTOR'S DEATH. Each Director who defers
any part of the Retainer payable to him or her in any Plan Year must designate
one or more beneficiaries of the Director's Unit Account, who may be changed
from time to time. The designation of a beneficiary must be made by filing with
FBL's Secretary a form prescribed by FBL. If no designation of a beneficiary is
made, any deferred benefits under this Plan will be paid to the Director's or
former Director's estate. If a Director dies while in office or a former
Director dies during the installment payment period, FBL will issue the Shares
and pay the amounts of cash that are issuable and payable to the Director or
former Director at one time as soon as practicable after the death of the
Director or the former Director.
TIMING OF ELECTION TO RECEIVE DEFERRED BENEFITS IN INSTALLMENTS. If the
Director wants the benefits distributed in installments, the election to receive
payments in installments must be on file for a period of at least 12 full months
prior to the Director ceasing to be a director of FBL. The last valid election
on file with FBL's Secretary for at least 12 full months will be the given
effect by FBL in distributing the benefits.
WITHHOLDING FOR TAXES. FBL will withhold the amount of cash and Shares
necessary to satisfy FBL's obligation to withhold federal, state, and local
income and other taxes on any benefits received by the Director, the former
Director or a beneficiary under this Plan.
NO TRANSFER OF RIGHTS UNDER THIS PLAN. A Director or former Director shall
not have the right to transfer, grant any security interest in, or otherwise
encumber rights he or she may have under this Plan or any Unit Account
maintained for the Director or former Director or any interest therein. No right
or interest of a Director or a former Director in a Unit Account shall be
subject to any forced or involuntary disposition or to any charge, liability, or
obligation of the Director or former Director, whether as the direct or indirect
result of any action of the Director or former Director or any action taken in
any proceeding, including any proceeding under any bankruptcy or other
creditors' rights law. Any action attempting to effect any transaction of that
type shall be null, void, and without effect.
UNFUNDED PLAN. This Plan will be unfunded for federal tax purposes. The
Deferral Accounts and the Unit Accounts are entries in the Special Ledger only
and are merely a promise to make payments in the future. FBL's obligations under
this Plan are unsecured, general contractual obligations of FBL.
AMENDMENT AND TERMINATION OF THE PLAN. The Board or Compensation Committee
of the Board may amend or terminate this Plan at any time. An amendment or the
termination of this Plan will not adversely affect the right of a Director,
former Director, or Beneficiary to receive Shares issuable or cash payable at
the effective date of the amendment or termination of any rights that a
Director, former Director, or a Beneficiary has in any Unit Account at the
effective date of the amendment or termination. If the Plan is terminated,
however, FBL may, at its option, accelerate the payment of all deferred and
other benefits payable under this Plan.
<PAGE>
GOVERNING LAW. This Plan shall be governed by the laws of the State of
Iowa. FBL has the right to interpret this Plan, and any interpretation by FBL
shall be conclusive as to the meaning of this Plan.
EFFECTIVE DATE AND TRANSITION. The effective date of this Plan shall be
January 1, 1998, and the Plan became operative and in effect on the date,
subject only to the ratification of the Plan by the stockholders of FBL at FBL's
1998 annual stockholders' meeting. The Board has reserved and authorized for
issuance, pursuant to the terms and conditions of this Plan, 10,000 shares of
Common Stock.
I certify that the above Directors
Compensation Plan document fully
reflects the Plan adopted by the Board
of Directors of FBL Financial Group,
Inc. on November 17, 1997.
/s/ Richard D. Harris
Richard D. Harris
Secretary
March 30, 1998
<PAGE>
PROXY
CLASS A COMMON SHAREHOLDERS
FBL FINANCIAL GROUP, INC.
ANNUAL MEETING MAY 19, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned Class A shareholder(s) of FBL Financial Group, Inc., an Iowa
corporation, appoints Edward M. Wiederstein and Thomas R. Gibson, or either of
them, with full power to act alone, the true and lawful attorneys-in-fact of the
undersigned, with full power of substitution and revocation, to vote all shares
of stock of said Corporation which the undersigned is entitled to vote at the
annual meeting of the shareholders to be held at the principal executive offices
of the Corporation at 5400 University Avenue, West Des Moines, Iowa, on May 19,
1998, at 9:00 a.m. and at any adjournment thereof, with all powers the
undersigned would possess if personally present, as indicated on the reverse
hereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as [ X ]
indicated in
this example
1. Election of Class A Directors: CLASS A DIRECTORS:
FOR WITHHOLD Jerry L. Chicoine, John W. Creer,
all nominees AUTHORITY John E. Walker
listed (except as to vote for all
marked to the nominees listed (INSTRUCTIONS: TO WITHHOLD AUTHORITY
contrary at right) at right TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE
BELOW.
[ ] [ ]
--------------------------------------
2. Proposal to approve the Director Compensation Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to ratify the appointment of Ernst & Young LLP as independent
auditors for the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
On any other matter that may be submitted to a vote of shareholders.
- ------------------------------ THIS PROXY WILL BE VOTED "FOR" ITEMS 1, 2
AND 3 IF NO INSTRUCTION TO THE CONTRARY IS
INDICATED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATION
OF MANAGEMENT.
Date: , 1998
---------------------------------
---------------------------------------------
Signature
---------------------------------------------
Signature
Please sign name or names as appearing on
this proxy. If signing as a representative,
please indicate capacity.
- ---------------------------------------------------------------------
(YOU ARE REQUESTED TO COMPLETE, SIGN, AND RETURN THIS PROXY PROMPTLY)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[LOGO]
FBL FINANCIAL GROUP, INC.
March 30, 1998
Dear Shareholder:
The annual meeting of Stockholders of FBL Financial Group, Inc. will be
held at the principal executive offices of the Corporation at 5400 University
Avenue, West Des Moines, Iowa at 9:00 a.m. on Tuesday, May 19, 1998. At the
meeting Class A Stockholders will elect three directors, Class B Stockholders
will elect 18 directors, and the stockholders will act on proposals to approve
the Director Compensation Plan and to ratify the selection of Ernst & Young LLP
as independent auditors.
It is important that your shares are represented at this meeting.
Whether or not you plan to attend the meeting, please review the enclosed proxy
materials, complete the attached proxy form above, and return it promptly in the
envelope provided.
