AMERUS LIFE HOLDINGS INC, S-1, 1996-09-18

AMERUS LIFE HOLDINGS INC
S-1, 1996-09-18

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 1996

REGISTRATION NO.
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------

AMERUS LIFE HOLDINGS, INC.
(Exact name of registrant as specified in its Articles of Incorporation)

<TABLE>
<S> <C> <C>
IOWA 6719 42-1459712
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Identification
incorporation or Code Number) No.)
organization)
</TABLE>

418 SIXTH AVENUE
DES MOINES, IOWA 50306-2499
(515) 280-1331
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

JAMES A. SMALLENBERGER
SENIOR VICE PRESIDENT AND SECRETARY
AMERUS LIFE HOLDINGS, INC.
418 SIXTH AVENUE
DES MOINES, IOWA 50306-2499
(515) 280-1331
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------

Copies to:

<TABLE>
<S> <C>
RICHARD G. CLEMENS, ESQ. WILLIAM D. TORCHIANA, ESQ.
SIDLEY & AUSTIN SULLIVAN & CROMWELL
ONE FIRST NATIONAL PLAZA 125 BROAD STREET
CHICAGO, ILLINOIS 60603 NEW YORK, NEW YORK 10004
(312) 853-7642 (212) 558-4000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C>
Class A Common Stock, no par value...................................... $115,000,000 $39,656
</TABLE>

(1) Estimated pursuant to Rule 457(o) under the Securities Act of 1933 solely
for the purpose of calculating the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1996

AMERUS LIFE HOLDINGS, INC.

CLASS A COMMON STOCK
(NO PAR VALUE)
--------------

All of the shares of Class A Common Stock of AmerUs Life Holdings,
Inc., an Iowa corporation, offered hereby (the "Shares") are being offered on a
non-underwritten basis by the Company to Subscription Policyowners (as such term
is defined herein) pursuant to nontransferable subscription rights (the
"Subscription Offering"). The Company intends to offer all or a portion of the
Shares not subscribed for in the Subscription Offering to the public in a
subsequent underwritten public offering, the closing of which would occur
contemporaneously with the closing of the Subscription Offering (the "Public
Offering," and together with the Subscription Offering, the "Offerings"). See
"The Subscription Offering" and "The Public Offering."

The Company has two classes of authorized common stock, no par value (the
"Common Stock"), consisting of (i) the Class A Common Stock, which has one vote
per share, and (ii) the Class B Common Stock, the holder of which shall at all
times have a majority of the voting power of the Common Stock. Under Iowa law,
the Class B Common Stock must be held, directly or indirectly, by American
Mutual Holding Company, an Iowa mutual insurance holding company ("AMHC"), and
is automatically convertible into Class A Common Stock in the event of the
demutualization of AMHC. Following the Offerings, AMHC will own, directly or
indirectly, % of the Company's Class A Common Stock (assuming no exercise of
the underwriters' over-allotment option in the Public Offering) and 100% of the
Class B Common Stock, which together will represent % of the voting power of
the Common Stock and % of the economic value of the Company. See "Risk
Factors--Control by AMHC; Anti-Takeover Effects of Iowa Law and the Company's
Articles of Incorporation and Bylaws" and "Description of the Capital Stock."

The issuance of Shares in the Subscription Offering is not contingent upon
the receipt by the Company of subscriptions for a minimum number of Shares in
the Subscription Offering or upon the consummation of the Public Offering. A
partial subscription and the failure to effect the Public Offering might have an
adverse effect on the market for the Class A Common Stock, the ability of
purchasers of the Shares in the Subscription Offering to resell such Shares, and
the ability of the Company to raise additional capital in the equity markets in
the future. See "Risk Factors--Effect of Partial Subscription for Shares;
Cancellation or Rescission of the Subscription Offering." Subscribers for Shares
in the Subscription Offering may subscribe for a minimum of 100 Shares and a
maximum of 5,000 Shares. There can be no assurance that subscribers for the
Shares in the Subscription Offering will in fact be able to purchase such
Shares, because the Company may in its sole discretion determine to cancel or
rescind the Subscription Offering at any time prior to the closing of the
Subscription Offering. See "The Subscription Offering."

Upon consummation of the Offerings, the Company expects, subject to market
conditions, to sell trust preferred securities to the public in an aggregate
amount of up to $75 million pursuant to a separate prospectus (the "Preferred
Offering"). See "The Preferred Offering."

Prior to the Offerings, there has been no public market for the Class A
Common Stock of the Company. The price of the Shares in the Subscription
Offering (the "Subscription Price") will be $ per Share. The Subscription
Price was set by the Company after consultation with its financial advisors. If
the Subscription Price is greater than the price per share to the public in the
Public Offering (the "Public Offering Price") or the Revised Subscription Price
(as defined herein) the Company will issue refunds to subscribing policyowners
in the form of a check equal to the amount of such difference multiplied by the
number of Shares subscribed for by each such policyowner. See "The Subscription
Offering." If the Public Offering Price or the Revised Subscription Price is
more than the Subscription Price, subscribers will not be required to pay any
additional amounts for the Shares subscribed for, nor will there be any
adjustment in the number of Shares issued to them. See "The Subscription
Offering."

Application has been made for quotation of the Class A Common Stock on the
Nasdaq National Market under the symbol "AMRS".

THE SUBSCRIPTION OFFERING EXPIRES AT 4:00 P.M., NEW YORK TIME, ON NOVEMBER
, 1996 (THE "SUBSCRIPTION EXPIRATION DATE"). SUBSCRIPTION ORDER FORMS AND
PAYMENT IN FULL FOR THE SHARES BEING SUBSCRIBED FOR MUST BE RECEIVED BY
(THE "TRANSFER AND ESCROW AGENT") NOT LATER THAN 4:00 P.M., NEW
YORK TIME, ON THE SUBSCRIPTION EXPIRATION DATE. SUBSCRIPTIONS FOR SHARES ARE
IRREVOCABLE BY THE SUBSCRIBER.

Subscription funds will be held in an escrow account with the Transfer and
Escrow Agent pending consummation of the Subscription Offering or the refund of
such funds to subscribers. Please read this Prospectus for additional
information on subscription procedures and on other aspects of this Subscription
Offering.

SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
--------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
SUBSCRIPTION PROCEEDS TO THE
PRICE(1) COMPANY(2)
----------------- ---------------------
<S> <C> <C>
Per Share.............................................................................. $ $
Total........................................................................Minimum(3) $ 0 $ 0
Maximum(4) $ $
</TABLE>

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(1) If the Public Offering Price or the Revised Subscription Price (as defined
herein) is less than the Subscription Price, the Company will issue refunds
to subscribing policyowners in the form of a check equal to the amount of
such difference multiplied by the number of Shares subscribed for by each
such policyowner. See "The Subscription Offering."
(2) Before deducting expenses of the Subscription Offering payable by the
Company, estimated to be $ million.
(3) Assumes no Shares are sold in the Subscription Offering.
(4) Assumes all Shares are sold in the Subscription Offering.
------------------

The date of this Prospectus is , 1996.
<PAGE>
AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1 (including all amendments
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Class A Common Stock offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement.
For further information with respect to the Company and the Class A Common Stock
offered hereby, reference is hereby made to the Registration Statement and to
the exhibits and schedules filed therewith. Statements contained in this
Prospectus regarding the contents of any agreement or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is made to the copy of such agreement filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at Room 204, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and Seven World Trade Center, New York, New York 10048; and
copies of all or any part thereof may be obtained from such office upon payment
of the prescribed fees. The Commission maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants who file electronically with the Commission.

As a result of the Offerings, the Company will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). So long as the Company is subject to the periodic
reporting requirements of the Exchange Act, it will continue to furnish the
reports and other information required thereby to the Commission. The Company
intends to furnish holders of the Class A Common Stock with annual reports
containing, among other information, audited consolidated financial statements
certified by an independent public accounting firm and quarterly reports
containing unaudited condensed consolidated financial information for the first
three quarters of each fiscal year. The Company also intends to furnish such
other reports as it may determine or as may be required by law.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE IOWA
COMMISSIONER OF INSURANCE NOR HAS THE IOWA COMMISSIONER OF INSURANCE RULED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
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THIS PROSPECTUS RELATES SOLELY TO THE SUBSCRIPTION OFFERING AND DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, COMMON STOCK
IN THE ANTICIPATED PUBLIC OFFERING. COMMON STOCK, IF ANY, TO BE OFFERED IN THE
ANTICIPATED PUBLIC OFFERING WILL BE OFFERED ONLY BY MEANS OF A SEPARATE
PROSPECTUS.
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IN CONNECTION WITH THE PUBLIC OFFERING THAT MAY FOLLOW THIS SUBSCRIPTION
OFFERING, THE UNDERWRITERS FOR SUCH PUBLIC OFFERING MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE OVER-
THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE>
--------------

THE PLAN OF REORGANIZATION OF AMERICAN MUTUAL LIFE INSURANCE COMPANY AND
IOWA LAW REQUIRE AMHC AT ALL TIMES TO OWN DIRECTLY, OR INDIRECTLY THROUGH ONE OR
MORE INTERMEDIATE HOLDING COMPANY SUBSIDIARIES, SHARES OF CAPITAL STOCK WHICH
CARRY THE RIGHT TO CAST A MAJORITY OF THE VOTES ENTITLED TO BE CAST BY ALL OF
THE OUTSTANDING SHARES OF THE CAPITAL STOCK AT A SHAREHOLDERS' MEETING OF THE
COMPANY. ANY ATTEMPT TO EFFECT ANY TRANSACTION PURSUANT TO WHICH AMHC WOULD NO
LONGER HAVE SUCH VOTING MAJORITY WOULD BE NULL AND VOID AND INEFFECTUAL TO
TRANSFER SUCH VOTING RIGHTS.
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THE IOWA INSURANCE HOLDING COMPANY SYSTEMS STATUTE APPLICABLE TO THE COMPANY
PROVIDES THAT NO PERSON MAY SEEK TO ACQUIRE CONTROL OF THE COMPANY, AND THUS
INDIRECT CONTROL OF AMERUS LIFE, WITHOUT THE PRIOR APPROVAL OF THE IOWA
COMMISSIONER OF INSURANCE. GENERALLY, ANY PERSON WHO DIRECTLY OR INDIRECTLY
OWNS, CONTROLS, HOLDS WITH POWER TO VOTE OR HOLDS PROXIES REPRESENTING 10% OR
MORE OF THE COMPANY'S VOTING SECURITIES (CONSISTING OF THE COMBINED OUTSTANDING
SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK) WOULD BE PRESUMED TO
HAVE ACQUIRED SUCH CONTROL, UNLESS SUCH PRESUMPTION IS REBUTTED BY A SHOWING
THAT SUCH CONTROL DOES NOT EXIST IN FACT.
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FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THE PROSPECTUS.
--------------

3
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION, CONSOLIDATED FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. CERTAIN INSURANCE TERMS AND
OTHER CAPITALIZED TERMS USED IN THIS PROSPECTUS ARE DEFINED IN THE "GLOSSARY OF
CERTAIN INSURANCE AND OTHER DEFINED TERMS" HEREIN AND ARE PRINTED IN BOLD THE
FIRST TIME THEY APPEAR IN TEXT BELOW. FOR PURPOSES OF THIS PROSPECTUS, THE TERM
"COMPANY" REFERS TO AMERUS LIFE HOLDINGS, INC. AND ITS SUBSIDIARIES,
COLLECTIVELY, UNLESS THE CONTEXT OTHERWISE REQUIRES. THE TERM "AMERUS LIFE"
REFERS AT ALL TIMES TO AMERUS LIFE INSURANCE COMPANY AND ITS SUBSIDIARIES. THE
TERM "AMERICAN MUTUAL LIFE" REFERS TO AMERICAN MUTUAL LIFE INSURANCE COMPANY
PRIOR TO ITS CONVERSION INTO A STOCK LIFE COMPANY AND NAME CHANGE TO AMERUS LIFE
INSURANCE COMPANY ON JUNE 30, 1996, EXCLUDING AMERUS FINANCIAL SERVICES, INC.
("AFS") AND ITS SUBSIDIARIES (TOGETHER WITH AFS, THE "NON-LIFE INSURANCE
SUBSIDIARIES"). THE TERM "PLAN" refers to the Plan of Reorganization of American
Mutual Life dated October 27, 1995, the effective date of which was June 30,
1996.

THE INFORMATION CONTAINED IN THIS PROSPECTUS, UNLESS OTHERWISE INDICATED,
GIVES EFFECT TO (I) THE REORGANIZATION (AS DEFINED HEREIN) OF AMERICAN MUTUAL
LIFE AND (II) THE DISTRIBUTION BY AMERUS LIFE OF ITS NON-LIFE INSURANCE
SUBSIDIARIES (THE "DISTRIBUTION") TO AMERUS GROUP CO. ("AMERUS GROUP"), THE
COMPANY'S IMMEDIATE PARENT CORPORATION, AS IF BOTH HAD BEEN COMPLETED AT THE
BEGINNING OF THE PERIODS IDENTIFIED HEREIN AND ASSUMES THAT, DURING THE PERIODS
PRESENTED, THE COMPANY OWNED AND OPERATED THE ASSETS IT WILL OWN AS A RESULT OF
SUCH REORGANIZATION AND DISTRIBUTION. THE INFORMATION CONTAINED HEREIN, UNLESS
OTHERWISE INDICATED, DOES NOT GIVE EFFECT TO A CAPITAL CONTRIBUTION ( THE
"CAPITAL CONTRIBUTION") BY AMERUS LIFE TO AFS OF (I) ASSETS CONSISTING PRIMARILY
OF COMMERCIAL MORTGAGES, REAL ESTATE AND FIXED MATURITY SECURITIES HAVING AN
APPROXIMATE NET CARRYING VALUE OF $79 MILLION AND (II) A 9% SURPLUS NOTE, DUE
, 2006, IN THE FACE AMOUNT OF $50 MILLION ISSUED BY AMERUS LIFE TO
AFS. UNLESS OTHERWISE SPECIFIED, THE INFORMATION CONTAINED HEREIN ASSUMES NO
EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION IN THE PUBLIC OFFERING.

ALL FINANCIAL INFORMATION IN THIS PROSPECTUS IS PRESENTED IN ACCORDANCE WITH
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR LIFE INSURANCE
COMPANIES ("GAAP") UNLESS OTHERWISE SPECIFIED. STATUTORY DATA INCLUDED HEREIN
HAVE BEEN DERIVED FROM THE ANNUAL AND QUARTERLY STATEMENTS OF AMERICAN MUTUAL
LIFE AS FILED WITH INSURANCE REGULATORY AUTHORITIES AND PREPARED IN ACCORDANCE
WITH STATUTORY ACCOUNTING PRACTICES.

THE COMPANY

The Company is engaged in the business of marketing, UNDERWRITING and
distributing a broad range of individual life insurance and ANNUITY products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of WHOLE LIFE, UNIVERSAL LIFE and
TERM LIFE INSURANCE policies and FIXED ANNUITIES. In addition, on April 1, 1996
the Company acquired a 34% interest in a variable life insurance and annuity
company through a joint venture arrangement (the "Ameritas Joint Venture") with
Ameritas Life Insurance Corp. ("Ameritas"). The Company's distribution systems
now market fixed annuities issued by Ameritas Variable Life Insurance Company
("AVLIC") and have begun to sell AVLIC's variable life insurance and VARIABLE
ANNUITY products. The Company has a history of competitive product performance
and, as a result, is consistently ranked by A.M. BEST among industry leaders in
delivering low-cost products to its customers.

The Company's subsidiary, AmerUs Life, was originally incorporated in 1896
as a mutual insurance company under the name Central Life Assurance Society of
the United States. Its name was changed to American Mutual Life Insurance
Company in 1994 following the merger of American Mutual Life Insurance Company
("Old AML") into Central Life Assurance Company ("Central Life"). On June 30,
1996, American Mutual Life was converted into a stock life insurance company
pursuant to the Plan and its name was changed to AmerUs Life. As of June 30,
1996, AmerUs Life had approximately 423,000 life insurance POLICIES and annuity
contracts outstanding and individual life insurance IN FORCE, net of

4
<PAGE>
REINSURANCE, of approximately $26.2 billion. As of June 30, 1996, the Company
had total assets of $4.2 billion and total shareholders' equity of $375 million
(prior to the Offerings, after giving effect to the Capital Contribution).

The Company's target markets are individuals in the middle and upper income
brackets and small businesses. Its geographic focus is national in scope (except
for Connecticut, Maine, New Hampshire, New York and Vermont, in which the
Company is not licensed to do business), and it primarily serves suburban and
rural areas. The Company distributes its products primarily through a
combination of CAREER GENERAL AGENCY and PERSONAL PRODUCING GENERAL AGENCY
("PPGA") distribution systems, as well as a network of independent brokers. The
career general agency system consists of a network of 33 career general
agencies, with approximately 525 career agents. The PPGA system is comprised of
approximately 450 PPGAs, with approximately 1,000 agents. Variable life
insurance products and the fixed and variable annuities offered by the Ameritas
Joint Venture are marketed through the Company's distribution systems and the
distribution systems of Ameritas and AVLIC, which consist of approximately 250
agents and 450 independent broker-dealers (with approximately 7,500 registered
representatives), respectively.

AmerUs Life's claims-paying ability is rated "AA-" (Very high) by DUFF &
PHELPS and "A" (Good) by STANDARD & POOR'S. AmerUs Life's financial strength is
rated "A" (Excellent) by A.M. Best and "A2" (Good) by MOODY'S. See "Risk
Factors--Importance of Ratings."

BUSINESS STRATEGY

The Company's business strategy to achieve earnings growth and increase
shareholder value is focused on managing certain operating fundamentals that
historically have compared favorably to the industry. The Company intends to
utilize these operating strengths to differentiate its products by maintaining
its position and reputation as a low-cost producer that provides high-value
products to its life insurance and annuity customers, while also providing
superior service to both agents and customers. The Company believes it is well
positioned to compete effectively based upon a number of strengths including its
strong operating performance, customer-driven product offerings, productive and
diversified distribution systems, sophisticated asset/liability management
capabilities and a customer service orientation. In addition, the Company
intends to continue to seek new business opportunities through mergers,
acquisitions and strategic alliances. From 1980 through 1995, as a result of
mergers and acquisitions, as well as through internal growth, the Company
sustained a compound annual growth rate (on a statutory basis) of 11.8% in
premium income, of 13.2% in assets, and of 12.6% in surplus and ASSET VALUATION
RESERVE, versus 6.8%, 10.4% and 8.2%, respectively, for the industry as a whole.
(Source for industry growth rates: A.M. Best).

The Company believes that its operating performance is significantly
impacted by four basic elements: (i) MORTALITY, (ii) PERSISTENCY, (iii)
operating expenses, and (iv) investment yield. Management focuses on these
principal elements to generate strong operating performance and enhance
shareholder value. The Company believes that its results for each of these
elements for the last several years compares favorably with others in the life
insurance industry. In addition to realizing efficiencies from the merger of Old
AML into Central Life in 1994, the Company has benefited from its efficient use
of technology, its advanced customer service systems, its variable-cost based
distribution system, and its sophisticated asset/liability management system.

The Company has other strengths which enable it to compete effectively in
the industry. The Company's products have a long history of being competitive
within the industry, as measured by data compiled and published by A.M. Best.
See "Business--Products." The Company also has a productive and diversified
distribution system, with a distribution network comprised of a career general
agency system, a PPGA system, distribution channels available to it through the
Ameritas Joint Venture and a sales network of certain of the Company's
affiliates.

Management believes that mergers, acquisitions and strategic alliances will
be necessary to more fully utilize the Company's distribution and administrative
capacity and to obtain improved economies of

5
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scale and a lower cost structure. The mutual holding company structure provides
the Company with access to the capital markets, creating the flexibility to
selectively pursue acquisitions of stock insurance companies and to continue to
pursue mergers (through AMHC) with mutual insurance companies. The Company has
historically sought mergers, acquisitions and strategic alliances with the goal
of improving its position in existing market segments or entering desirable new
market segments. Based on the Company's success in identifying and effectively
implementing mergers, acquisitions and strategic alliances, management intends
to actively and selectively participate in such transactions in the future as a
means to further enhance shareholder value. Notable recent activities include
the combination by merger of Old AML into Central Life in 1994, and the Ameritas
Joint Venture which was completed in April 1996.

CONTROLLING SHAREHOLDER

Following the Offerings, AMHC will continue to be the indirect controlling
shareholder of the Company through its ownership of AmerUs Group. After the
Offerings, AmerUs Group will own all five million of the outstanding shares of
Class B Common Stock and million of the outstanding shares of Class A Common
Stock, representing approximately % of the combined voting power of the Class
A Common Stock and Class B Common Stock. AMHC acquired its ownership interest in
the Company as a result of the Reorganization, pursuant to which American Mutual
Life formed AMHC as a mutual insurance holding company and American Mutual Life
was converted into a stock life insurance company as a wholly owned subsidiary
of AMHC. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries."

6
<PAGE>
ORGANIZATIONAL STRUCTURE

The following chart illustrates the general organization of AMHC and its
subsidiaries, including the Company, after the Offerings:

[GRAPH]

* The Non-Life Insurance Subsidiaries consist of AFS and its subsidiaries,
which include AmerUs Bank, FSB, AmerUs Mortgage, Inc., Iowa Realty Co., Inc.
and AmerUs Properties, Inc.

** AmerUs Life participates in the Ameritas Joint Venture through its ownership
interest in AMAL Corporation, a Nebraska corporation ("AMAL"). See
"Business--Ameritas Joint Venture."

7
<PAGE>
THE REORGANIZATION AND DISTRIBUTION OF THE NON-LIFE INSURANCE SUBSIDIARIES

On October 27, 1995, the Board of Directors of American Mutual Life adopted
the Plan, which authorized American Mutual Life to reorganize into a mutual
insurance holding company structure (the "Reorganization"). The Iowa
Commissioner of Insurance (the "Iowa Commissioner") held a public hearing on the
Reorganization on November 21, 1995. The Plan was approved by American Mutual
Life's policyowners on November 28, 1995, and the Iowa Commissioner approved the
Plan on December 13, 1995. The Reorganization became effective on June 30, 1996
(the "Effective Date"). American Mutual Life was the first company to obtain
approval under the Iowa mutual insurance holding company statute to form a
mutual insurance holding company.

Pursuant to the Reorganization, American Mutual Life formed AMHC as a mutual
insurance holding company and American Mutual Life was converted into a stock
life insurance company and its name was changed to AmerUs Life Insurance
Company. As part of the Reorganization, the policyowners' contract rights in
their insurance policies and annuities remained with AmerUs Life and the
policyowners automatically became MEMBERS of AMHC, and thereby became entitled
to vote for directors of AMHC. Purchasers of insurance policies and annuities
from AmerUs Life after the Reorganization automatically become members of AMHC
(subject to certain exceptions and conditions set forth in the Plan).

Prior to the Distribution, AmerUs Life will make the Capital Contribution to
AFS. It is anticipated that the net assets contributed in the Capital
Contribution will have an aggregate carrying value of approximately $129 million
as of the date such contribution is made. Following the Capital Contribution and
prior to the effective date of the Registration Statement relating to the
Offerings, a series of transactions will be undertaken by the Company and its
AFFILIATES. AmerUs Life will effect the Distribution, pursuant to which it will
distribute AFS and the other Non-Life Insurance Subsidiaries to AmerUs Group.
Immediately after the Distribution, AmerUs Group will contribute all of its
shares of common stock in AmerUs Life to the Company. Under this structure, the
Company will be an intermediate holding company, with AmerUs Group as its direct
parent company and AmerUs Life as its wholly-owned subsidiary. Under Iowa law,
AMHC is required to retain direct or indirect ownership and control of shares
representing a majority of the vote of the outstanding capital stock of the
Company. Immediately following the Distribution, the Company intends to enter
into a bank credit facility pursuant to which it will borrow $50 million in term
debt and $125 million under a revolving line of credit (the "Bank Credit
Facility"). The Company intends to use the proceeds from such borrowings to make
a $175 million capital contribution to AmerUs Life. The Company will use certain
proceeds of the Offerings and the Preferred Offering (as defined below) to repay
such borrowings.

The Distribution will effectively separate AMHC's non-life insurance
businesses from the life insurance businesses owned by the Company, such that
the companies engaged in non-life insurance businesses will no longer be
subsidiaries of the Company. See "The Reorganization and Distribution of the
Non-Life Insurance Subsidiaries."

8
<PAGE>
THE SUBSCRIPTION OFFERING

The Shares are being offered by the Company in the Subscription Offering in
accordance with the priority subscription rights provided under the Plan to
eligible policyowners of AmerUs Life ("Subscription Policyowners"). Subscription
Policyowners may purchase between 100 and 5,000 whole Shares in the Subscription
Offering at a per share price of $ (the "Subscription Price"), subject to
adjustment if (i) the Public Offering Price or the Revised Subscription Price
(as defined below) is less than the Subscription Price or (ii) if the
Subscription Offering is oversubscribed. While it is currently the intention of
the Company to offer all or a portion of the Shares not subscribed for in the
Subscription Offering to the public in the Public Offering and to close the
Subscription Offering contemporaneously with the closing of the Public Offering,
the Company may close the Subscription Offering without commencing or closing
the Public Offering. In the event that the Company determines that the closing
of the Subscription Offering shall occur without undertaking the Public Offering
and provided that the Company elects to proceed with the Subscription Offering,
then the Company will determine, after consultation with its financial advisors,
the price per share at which the Common Stock would trade in the public market
on the closing of the Subscription Offering (the "Revised Subscription Price").
If the Public Offering Price or the Revised Subscription Price is more than the
Subscription Price, subscribers will not be required to pay any additional
amounts for the Shares subscribed for, nor will there be any adjustment in the
number of Shares issued to them. See "The Subscription Offering--Subscription
Price and Payment for Shares."

<TABLE>
<S> <C>
Class A Common Stock Offered by the
Company Pursuant to the Subscrip-
tion Offering...................... shares
Class A Common Stock to be Out-
standing Immediately After the
Offerings.......................... shares. (Assumes that all Shares offered pursuant to
the Subscription Offering are sold in the
Subscription Offering and/or the Public Offering and
that the underwriters for the Public Offering do not
exercise their over-allotment option.)
Class B Common Stock to be Out-
standing Immediately After the
Offerings.......................... 5,000,000 shares
Proposed Nasdaq Symbol.............. AMRS
Voting Rights....................... The Class A Common Stock has one vote per share. The
voting rights of the Class B Common Stock provide the
holder of the Class B Common Stock with a majority of
the voting power of the Class A Common Stock and the
Class B Common Stock combined. Both classes generally
vote together as a single class on all matters,
except that the holders of Class A Common Stock and
the holders of Class B Common Stock will vote
separately as a class with respect to certain matters
for which class voting is required under Iowa law.
See "Description of the Capital Stock."
</TABLE>

9
<PAGE>

<TABLE>
<S> <C>
Use of Proceeds..................... The amount of proceeds from the Offerings, if any,
will vary according to, among other things, the total
number of Shares subscribed for by Subscription
Policyowners. Assuming that the Public Offering Price
(or the Revised Subscription Price if the Public
Offering is not consummated) is equal to $ per
Share, the net proceeds to the Company from the
Offerings are expected to be approximately $92
million after deducting the estimated expenses of the
Offerings. Of such estimated net proceeds, $50
million will be advanced to AmerUs Life in exchange
for a surplus note issued by AmerUs Life and $42
million will be used by the Company to repay debt
which will be outstanding under the Bank Credit
Facility. AmerUs Life will use the proceeds it
receives from the surplus note issued to the Company
to redeem the surplus note which AmerUs Life
previously issued to AFS in the Capital Contribution.
See "Use of Proceeds," "The Subscription Offering"
and "The Public Offering."
Dividend Policy..................... Subject to the Company's financial results,
applicable regulatory constraints and declaration by
the Board of Directors of the Company, the Company
currently intends to pay a quarterly dividend of
$ per share of Common Stock commencing with the
quarter ending on March 31, 1997. However, there can
be no assurance that the Company will declare and pay
any dividends. See "Dividend Policy."
Subscription Price.................. $ per share. If the Public Offering Price or
the Revised Subscription Price is less than the
Subscription Price, the Company will issue refunds to
subscribing policyowners in the form of a check equal
to the amount of such difference multiplied by the
number of Shares subscribed for by each such
policyowner. If the Subscription Price is less than
the Public Offering Price or the Revised Subscrip-
tion Price, subscribers will not be required to pay
any additional amounts for the Shares subscribed for.
See "The Subscription Offering."
Subscription Minimum and Maximum.... The minimum number of Shares a Subscription
Policyowner is entitled to subscribe for is 100. The
maximum number of Shares a Subscription Policyowner
is entitled to subscribe for is 5,000. In the event
that Subscription Policyowners in the aggregate
subscribe for more than Shares (the amount
of Shares being offered hereby), Subscription
Policyowners will be permitted to purchase, to the
extent possible, 100 shares and thereafter will
receive a pro-rated number of Shares in the same
proportion that the subscription of each bears to the
total subscriptions received by the Company in the
Subscription Offering. The Company will issue refunds
to each Subscription Policyowner for Shares
subscribed for but not received. See "The
Subscription Offering."
</TABLE>

10
<PAGE>

<TABLE>
<S> <C>
Subscription Procedures............. Together with this Prospectus, the Company is
delivering to each Subscription Policyowner a
subscription order form pursuant to which such
Subscription Policyowner shall have the right to
subscribe for Shares.
To exercise its right to subscribe for Shares, a
Subscription Policyowner must complete and sign the
subscription order form and such form must be
received, together with payment in full for the
Shares subscribed for, by the Transfer and Escrow
Agent not later than 4:00 p.m., New York time, on the
Subscription Expiration Date. Payment for the Shares
shall be made by check or money order in United
States dollars. SUBSCRIPTIONS FOR SHARES ARE
IRREVOCABLE BY THE SUBSCRIBER.
Subscription order forms received by the Transfer and
Escrow Agent may not be modified, amended or
rescinded without the consent of the Company. See
"The Subscription Offering."
Subscription Expiration Date........ The Subscription Offering expires at 4:00 p.m., New
York time, on November , 1996. Properly executed
subscription order forms must be received, together
with payment in full for the Shares subscribed for,
by the Transfer and Escrow Agent by such time on such
date. See "The Subscription Offering."
Cancellation of Subscription The Company may in its sole discretion at any time
Offering........................... prior to the closing of the Subscription Offering
determine to cancel or rescind the Subscription
Offering. See "The Subscription Offering."
Escrow of Subscription Funds........ Subscription funds will be held in an escrow account
with the Transfer and Escrow Agent pending
consummation of the Subscription Offering or the
refund of such funds to subscribers. If the Company
cancels the Subscription Offering, payments made by
subscribers will be promptly refunded with interest
at a rate of 3.5% simple interest per annum (the
"Subscription Interest Rate"). If the period from the
Subscription Expiration Date to the closing of the
Subscription Offering exceeds 60 days, interest will
be paid to each subscriber on all subscription
amounts at the Subscription Interest Rate from such
sixtieth day until the closing of the Subscription
Offering. See "The Subscription Offering."
Subscription Agent.................. The Chicago Corporation
Transfer and Escrow Agent...........
</TABLE>

11
<PAGE>
THE PUBLIC OFFERING

If the Shares offered hereby are not fully subscribed for in the
Subscription Offering, the Company intends to sell all or a portion of such
Shares in an underwritten offering (the "Public Offering"). See "The Public
Offering."

THE PREFERRED OFFERING

Upon consummation of the Offerings, the Company expects, subject to market
conditions, to sell through AmerUs Capital I (the "Trust"), a statutory business
trust to be formed under the laws of the State of Delaware and a wholly-owned
subsidiary of the Company, trust preferred securities to the public in an
aggregate amount of approximately $75 million pursuant to a separate prospectus
(the "Preferred Offering"). The Trust would invest the net proceeds of the
Preferred Offering, which are expected to be $72.4 million after giving effect
to the underwriting discount and estimated offering expenses, in deferrable
interest subordinated debentures (the "Junior Subordinated Debt Securities") of
the Company. It is expected that the Company would use the proceeds received in
the Preferred Offering to repay amounts outstanding under the Bank Credit
Facility. See "The Preferred Offering" and "Management's Discussion and Analysis
of Results of Operation and Financial Condition--Liquidity and Capital
Resources."

The consummation of the Offerings is not conditioned upon completion of the
Preferred Offering, and there can be no assurance that the Preferred Offering
will be completed. See "The Preferred Offering."

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The summary consolidated financial data below for each of the three years
ending December 31, 1995 are derived from the Consolidated Financial Statements
of the Company, which financial statements have been audited by KPMG Peat
Marwick LLP, independent auditors. The summary consolidated financial data
provided below for each of the six-month periods ending June 30, 1996 and 1995
and for each of the two years ending December 31, 1992 are derived from the
unaudited consolidated financial statements of the Company.

The foregoing give effect to the Reorganization and the Distribution as if
both had been completed prior to the periods presented, but do not give effect
to the Capital Contribution. In the opinion of management, the financial
information presented for all interim periods reflects all adjustments
(consisting only of normal recurring adjustments) necessary for a full
presentation of such data. Results for the six-month periods ending June 30,
1996 and 1995 are not necessarily indicative of results that may be expected for
any other interim period or the year as a whole. This data should be read in
conjunction with (i) "Management's Discussion and Analysis of Results of
Operations and Financial Condition," (ii) the audited Consolidated Financial
Statements of the Company as of December 31, 1995 and 1994, and for each of the
years in the three-year period ended December 31, 1995, which financial
statements have been audited by KPMG Peat Marwick LLP, independent auditors,
together with the related notes and the report thereon, (iii) the unaudited
consolidated financial statements of the Company as of June 30, 1996 and 1995
and for each of the six-month periods ended June 30, 1996 and 1995 and (iv)
other financial data included elsewhere in this Prospectus.

12
<PAGE>

<TABLE>
<CAPTION>
AS OF OR FOR THE SIX
MONTHS ENDED JUNE AS OF OR FOR THE YEAR ENDED DECEMBER 31,(A)
30,(A)
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Revenues:
Insurance premiums.............................. $ 123.3 $ 121.3 $ 244.1 $ 237.9 $ 226.4 $ 192.9 $ 186.9
Product charges................................. 29.3 29.5 57.3 56.3 57.4 57.2 50.8
Net investment income........................... 143.9 141.3 285.2 275.7 269.9 273.1 268.6
Realized gains (losses) on investments.......... 64.4 24.1 51.4 (19.9) 15.5 10.1 15.7
Other income.................................... 1.3 0.3 5.4 2.4 2.4 0.9 3.6
--------- --------- --------- --------- --------- --------- ---------
Total revenues.................................... 362.2 316.5 643.4 552.4 571.6 534.2 525.6
Benefits and expenses:
Total policyowner benefits...................... 189.3 188.2 374.6 369.9 364.3 334.8 327.8
Total expenses.................................. 55.1 49.4 108.9 111.4 106.0 100.0 87.6
Dividends to policyowners....................... 26.3 24.0 49.4 45.0 45.5 42.1 40.9
--------- --------- --------- --------- --------- --------- ---------
Total benefits and expenses....................... 270.7 261.6 532.9 526.3 515.8 476.9 456.3
--------- --------- --------- --------- --------- --------- ---------

Income before income taxes........................ 91.5 54.9 110.5 26.1 55.8 57.3 69.3
Income tax expense................................ 33.6 20.9 41.2 19.4 21.4 18.6 24.5
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of a change in
accounting principles............................ 57.9 34.0 69.3 6.7 34.4 38.7 44.8
Cumulative effect of a change in accounting
principles, net of tax........................... 0.0 0.0 0.0 0.0 (3.2) 0.0 0.0
--------- --------- --------- --------- --------- --------- ---------
Net income........................................ $ 57.9 $ 34.0 $ 69.3 $ 6.7 $ 31.2 $ 38.7 $ 44.8
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share................................

CONSOLIDATED BALANCE SHEET DATA:
Total invested assets............................. $ 3,824.1 $ 3,415.1 $ 3,965.0 $ 3,491.7 $ 3,639.3 $ 3,274.8 $ 3,155.8
Total assets...................................... 4,274.0 4,243.1 4,371.9 4,036.9 4,030.7 3,707.6 3,572.5
Total liabilities................................. 3,770.0 3,747.4 3,832.0 3,618.6 3,524.8 3,286.4 3,195.6
Total shareholders' equity (B).................... 504.0 495.7 539.9 418.3 505.9 421.2 376.9

OTHER OPERATING DATA:
Adjusted net income (C)........................... $ 21.0 $ 19.1 $ 38.0 $ 34.4 $ 24.2 $ 32.1 $ 36.3
Adjusted earnings per share (C)................... -- -- -- --
Adjusted return on average equity (C)............. 8.0% 8.4% 7.9% 7.4% 5.2% 8.0% 10.5%

Adjusted pro forma net income (D)................. $ 26.3 $ -- $ 40.9 -- -- -- --
Adjusted pro forma earnings per share (D)......... -- -- -- --
Adjusted pro forma return on average equity (D)... 10.9% -- 9.3% -- -- -- --

Individual life insurance in force, net of
reinsurance...................................... $ 26,219 $ 25,631 $ 25,984 $ 25,282 $ 24,698 $ 23,947 $ 23,181
Number of employees............................... 405 406 406 457 489 505 526

STATUTORY DATA:
Statutory premiums and deposits:
Individual life................................. $ 158.6 $ 152.1 $ 307.1 $ 296.4 $ 286.3 $ 270.2 $ 261.7
Annuities (E)................................... 56.5 112.7 197.1 187.8 90.4 65.2 108.5
</TABLE>

- ------------------
(A) The merger of Old AML into Central Life, which was consummated in 1994, has
been accounted for as a pooling of interests transaction.

(B) Amounts reported prior to June 30, 1996 reflect policyowners' equity. From
December 31, 1993, results reflect the impact of SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities." See Note 2 to
Consolidated Financial Statements.

(C) Adjusted data reflects net income adjusted to eliminate certain items which
management believes are not indicative of overall operating trends,
including realized gains and losses, merger-related costs, reorganization
costs, curtailment gain, and SFAS 106 transition obligation, all of which
are net of tax, and mutual life insurance company EQUITY ADD-ON TAX. See
"Management's Discussion and Analysis of Results of Operations and
Financial Condition--Adjusted Net Income."

(D) Amounts represent net income adjusted for the items set forth in footnote
(C) above and the effects of the Offerings (other than the Preferred
Offering). See "Unaudited Pro Forma Condensed Consolidated Financial
Statements."

(E) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See
"Business--Ameritas Joint Venture."

13
<PAGE>
RISK FACTORS

POTENTIAL INVESTORS SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" AND OTHER
INFORMATION IN THIS PROSPECTUS PRIOR TO MAKING AN INVESTMENT DECISION REGARDING
THE CLASS A COMMON STOCK.

HOLDING COMPANY STRUCTURE; LIMITATIONS ON DIVIDENDS

The Company is an insurance holding company whose assets consist primarily
of all of the outstanding shares of common stock of AmerUs Life. The Company's
ongoing ability to pay dividends to its shareholders and meet its other
obligations, including operating expenses and any debt, is primarily dependent
upon the receipt of sufficient funds from AmerUs Life. The payment of dividends
by AmerUs Life to the Company is regulated under Iowa law. Under Iowa law,
AmerUs Life may pay dividends only from the earned surplus arising from its
business and must receive the prior approval of the Iowa Commissioner to pay a
dividend if such dividend would exceed certain statutory limitations. The
current statutory limitation is the greater of (i) 10% of AmerUs Life's capital
and statutory surplus as of the preceding year end or (ii) the net gain from
operations for the previous calendar year. Iowa law gives the Iowa Commissioner
broad discretion to disapprove requests for dividends in excess of these limits.
Based on this limitation and 1995 statutory results, and absent the
Distribution, AmerUs Life would have been able to pay approximately $40 million
in dividends to the Company in 1996 without obtaining the Iowa Commissioner's
approval. However, as a result of the Distribution, AmerUs Life will not be able
to pay any additional dividends in the 12-month period following the
Distribution without the prior approval of the Iowa Commissioner. AmerUs Life's
inability to pay dividends to the Company in the future in an amount sufficient
for the Company to pay dividends to its shareholders and meet its other
obligations could have a material adverse effect on the Company and the market
value of the Class A Common Stock. See "Dividend Policy," "Supervision and
Regulation" and "Description of the Capital Stock-- Common Stock."

In connection with the Preferred Offering, it is anticipated that the
Company will agree not to declare or pay any dividends on the Company's capital
stock (including the Class A Common Stock) during any period of time in which
dividends on the preferred securities issued in connection with the Preferred
Offering are suspended, except for stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is being paid.
See "The Preferred Offering."

CONTROL BY AMHC; ANTI-TAKEOVER EFFECTS OF IOWA LAW AND THE COMPANY'S ARTICLES OF
INCORPORATION AND BYLAWS

AMHC indirectly owns 100% of the Class B Common Stock of the Company and,
following completion of the Offerings, will indirectly hold % of the combined
voting power of the Class A Common Stock and Class B Common Stock (assuming that
the underwriters in the Public Offering do not exercise their over-allotment
option). Moreover, under Iowa law, AMHC is required to own, directly or
indirectly through one or more intermediate holding companies, shares of capital
stock of the Company which carry the right to cast a majority of the votes
entitled to be cast by all of the outstanding shares of the capital stock at a
shareholders' meeting of the Company. Consequently, AMHC may, without the
approval of the other shareholders of the Company, prevent a potential takeover
or merger proposal (even if advantageous to the other shareholders). In
addition, AMHC may, without the approval of the other shareholders of the
Company, elect all of the directors of the Company, approve matters submitted
for shareholder approval and effect a possible transaction to go private. In the
event that AMHC adopts a plan of conversion to stock company form and
demutualizes pursuant to Iowa law, each share of Class B Common Stock would
automatically be converted to become a share of Class A Common Stock. See
"Description of the Capital Stock--Common Stock" and "Supervision and
Regulation--Regulation of the Company and AMHC."

In addition to the requirement under Iowa law that AMHC directly or
indirectly own shares of capital stock of the Company giving it a majority of
the votes entitled to be cast by all of the outstanding shares of capital stock,
certain provisions included in the Company's Articles of Incorporation and its
Bylaws (the "Bylaws") may also have anti-takeover effects and may delay, defer
or prevent a takeover attempt that a shareholder might consider in his or her
best interests. These provisions include provisions

14
<PAGE>
relating to the Class B Common Stock, so-called "blank check" preferred stock
and a classified board of directors. Such provisions may adversely affect the
prevailing market price of the Class A Common Stock. See "Certain Provisions of
the Articles of Incorporation and Bylaws of the Company" for a description of
these provisions.

RELATIONSHIP WITH AMHC

AMHC is a mutual insurance holding company which is operated for the benefit
of its members. The members of AMHC are policyowners of AmerUs Life. AMHC
(through certain of its wholly-owned subsidiaries) has entered or will enter
into agreements with the Company and/or AmerUs Life whereby the Company and/or
AmerUs Life will provide to such subsidiaries certain management, data
processing, legal and other services, or whereby such subsidiaries will provide
services to the Company and/or AmerUs Life. Although management believes the
terms of such agreements are fair and reasonable, none of these contracts were
the result of arms' length negotiations between independent parties. These
agreements may be modified in the future and additional agreements or
transactions may be entered into between AMHC or subsidiaries of AMHC and the
Company and its subsidiaries. See "Certain Transactions and Relationships."

As a result of these arrangements, there may be a number of potential
conflicts of interest between the Company and AMHC. In an effort to address such
potential conflicts, and consistent with proposed regulations recently
promulgated by the Iowa Commissioner, at least three of the Company's outside
directors will not be directors of AMHC or any of AMHC's subsidiaries. Following
the completion of the Offerings, it is the Company's intent that at least two of
the Company's outside directors will have had no previous affiliation with the
Company. Outside directors of the Company will review any intercompany
transactions involving potential conflicting interests. However, there can be no
assurance that decisions made by AMHC will not adversely affect the Company. See
"Certain Transactions and Relationships" and "Management--Board of Directors of
the Company."

COMPETITIVE ENVIRONMENT

The Company competes with a large number of other insurers and non-insurance
financial service companies, such as banks, broker-dealers and mutual funds,
many of whom have greater financial resources, offer alternative products and,
with respect to other insurers, have higher claims-paying ability and financial
strength ratings than the Company. Competition exists for individual consumers
and agents and other distributors of life insurance and annuity products.
National banks, with their pre-existing customer bases for financial services
products, may pose increasing competition in the future to insurers who sell
life insurance and annuity products, including the Company. Recent United States
Supreme Court decisions have expanded the authority of national banks to sell
life insurance products and annuities.

Several proposals to repeal or modify the Glass-Steagall Act of 1933, as
amended, and the Bank Holding Company Act of 1956, as amended, have been made by
members of Congress and the Clinton administration. Currently, the Bank Holding
Company Act restricts banks from being affiliated with insurance companies.
Certain of the proposals would repeal or modify these restrictions and permit
banks to become affiliated with insurance companies. None of these proposals has
yet been enacted, and it is not possible to predict whether any of these
proposals will be enacted or, if enacted, their potential effect on the Company.

The Company must attract and retain productive agents to sell its life
insurance and annuity products. Strong competition exists among insurance
companies for agents with demonstrated ability. Competition among insurance
companies for such agents is based on, among other things, the services provided
to, and relationships developed with, these agents in addition to compensation
and product structure.

IMPORTANCE OF RATINGS

Ratings with respect to claims-paying ability and financial strength have
become an increasingly important factor in establishing the competitive position
of insurance companies. Each of the rating

15
<PAGE>
agencies reviews its ratings periodically and there can be no assurance that
current ratings will be maintained in the future. Claims-paying and financial
strength ratings are based upon factors relevant to policyowners and are not
directed toward protection of shareholders. AmerUs Life's claims-paying ability
is currently rated "AA-" (Very high) by Duff & Phelps and "A" (Good) by Standard
& Poor's. Its financial strength is rated "A" (Excellent) by A.M. Best and "A2"
(Good) by Moody's. A downgrade in such ratings could significantly affect sales
of life insurance and annuity products and could have a material adverse effect
on the results of operations of the Company. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition."

INTEREST RATE FLUCTUATIONS; RISK OF IMPACT OF FORCED LIQUIDATION OF INVESTMENT
PORTFOLIO

Severe interest rate fluctuations could adversely affect AmerUs Life's
ability to pay policyowner benefits with operating and investment cash flows,
cash on hand and other cash sources. In the unanticipated event that such
sources would prove inadequate, management believes the Company could meet
shortfalls with funds available to the Company as a result of its membership in
the Federal Home Loan Bank of Des Moines, as well as other borrowing sources.
See "Management's Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources."

Interest rate fluctuations may also have an impact on policyowner behavior.
To the extent that the Company does not maintain competitive interest rates with
those credited in the marketplace, increased policyowner lapses may be
experienced. While such lapses would generate surrender charges during the
current period, they would reduce the Company's future income. Although
historically the Company's actual lapse experience has been better than the
industry average, no assurance can be given that this will always be true in the
future.

The Company's actual cash flows from investments may differ from those
anticipated at the time of investment. Some of the Company's corporate bonds
have call features which could cause the Company to reinvest these proceeds at
lower interest rates if such bonds were called prior to their stated maturities.
As of June 30, 1996, approximately $337 million, or 15% of the bond portfolio
(excluding mortgage and other asset-backed securities), was subject to call. The
Company's collateralized mortgage obligations ("CMOs") and other asset-backed
securities are purchased based on assumptions regarding rates of prepayments. To
the extent that actual prepayments are earlier or later than anticipated at the
time of purchase, the Company may not receive cash flows when expected or
needed. These prepayment rates are influenced by interest rates available for
new mortgages as well as general economic conditions.

FUTURE POLICY BENEFITS

The liability established by the Company for future life insurance and
annuity policy benefits is based upon assumptions concerning a number of
factors, including future interest rates, mortality, persistency and expenses.
Actual experience will likely differ from assumed experience. Should the
Company's provision for future policy benefits prove inadequate, future earnings
will be adversely affected.

REGULATORY AND RELATED MATTERS

AmerUs Life is subject to regulation by state regulators under the insurance
laws of states in which it conducts business. The Company, AmerUs Life and AMHC
are also subject to regulation by the Insurance Division of the Iowa Department
of Commerce. The purpose of such regulation is primarily to provide safeguards
for policyowners rather than to protect the interests of shareholders. The
insurance laws of the various states establish regulatory agencies with broad
administrative powers including, among others, the authority to grant or revoke
operating licenses and to regulate sales practices, investments, deposits of
securities, the form and content of financial statements and insurance policies,
accounting practices and the maintenance of specified RESERVES and capital. See
"Supervision and Regulation."

The insurance regulatory framework has been subject to increasing scrutiny
by the National Association of Insurance Commissioners ("NAIC"), state
legislatures, regulators and Congress. The NAIC and

16
<PAGE>
state regulators have from time to time re-examined laws and regulations, with
an emphasis on insurance company investment and solvency issues. State
legislatures have considered or enacted legislative proposals that alter, and in
many cases increase, state regulation of insurance companies. In recent years,
various legislative proposals have been introduced in Congress that called for
the federal government to assume some role in the regulation of the insurance
industry. To date, none of the Congressional proposals has been enacted and it
cannot be predicted what form any such future proposals might take or what
effect, if any, such proposals might have on AmerUs Life if enacted into law.

Insurance regulators have also given greater emphasis in recent years to the
investigation of allegations of improper sales practices by insurance agents,
including churning and misleading sales presentations. The NAIC has adopted a
model law and regulation which would standardize the form and content of any
illustrations provided to prospective purchasers of individual life insurance
products. The model law has been enacted, to be effective January 1, 1997, in
North Carolina and Utah, and is currently under consideration in California,
Louisiana, North Dakota and Texas. Management expects that similar legislation
will eventually be enacted in additional states in which AmerUs Life sells
individual life insurance products. There can be no assurance as to whether this
reform will have a material adverse impact on sales of such products by the
industry as a whole or by AmerUs Life. In recent years, life insurance
companies, including AmerUs Life, have been named defendants in class action
lawsuits relating to life insurance pricing and sales practices. While the
litigation is being vigorously defended and AmerUs Life denies the allegations,
there can be no assurance that this or future litigation or regulatory
initiatives will not have a material adverse effect on the life insurance
industry generally or on the Company. "See Business--Legal Proceedings."

State guaranty associations assess insurance companies to pay contractual
benefits owed by impaired, insolvent or failed insurance companies. AmerUs Life
was assessed, net of amounts estimated to be recoverable from future state
PREMIUM taxes, approximately $0.3 million during the six months ended June 30,
1996 and $0.4 million, $1.2 million and $3.3 million for the years ended
December 31, 1995, 1994, and 1993, respectively. AmerUs Life cannot predict the
amount of any future assessments. See "Supervision and Regulation."

In addition, the Iowa Commissioner has proposed rules that would regulate
the issuance of stock by the Company in the Offerings and in subsequent
offerings. See "Supervision and Regulation--Regulation of the Company and AMHC."

POTENTIAL TAX LEGISLATION

Congress has from time to time considered possible legislation that would
reduce or eliminate the benefits to policyowners of the deferral of taxation on
the accretion of value within certain annuities and life insurance products or
otherwise affect the taxation of annuities and life insurance products and
insurance companies. Other possible legislation, including a simplified "flat
tax" income tax structure with an exemption from taxation for investment income,
could also adversely affect purchases of annuities and life insurance products
if such legislation were to be enacted. There can be no assurance as to what, if
any, future legislation might be enacted or, if enacted, whether any such
legislation would contain provisions with possible adverse effects on the
Company's life insurance and annuity products.

THE CLOSED BLOCK

Under the Plan, AmerUs Life established and will operate a CLOSED BLOCK for
the benefit of the CLOSED BLOCK BUSINESS. The Closed Block is based on a concept
included in demutualization plans of other mutual life insurance companies and
is designed to give reasonable assurance to policyowners included therein that,
after the Reorganization, assets will be available to maintain DIVIDEND SCALES
and interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues. In accordance with the Plan,
certain of AmerUs Life's invested assets, as well as cash and short-term
investments, were allocated by AmerUs Life to the Closed Block as of June 30,
1996. Non-investment grade bonds, mortgage loans, preferred stock, real estate
and certain other invested assets were not included in this allocation to the
Closed Block. The amount of assets allocated to the Closed Block is expected to
produce cash flows which, together with future revenues from the Closed Block

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Business, are expected to be sufficient to support the Closed Block Business,
including provisions for payment of claims, taxes and certain limited expenses
and for the continuation of policyowner dividend scales and interest credits in
effect prior to the Reorganization, if the experience underlying such dividend
scales continues. The assets, including the revenue therefrom, allocated to the
Closed Block Business will accrue solely to the benefit of owners of the
policies included in the Closed Block Business until such time as the Closed
Block is no longer in effect; accordingly, such assets and the revenue therefrom
will not be available for the benefit of AmerUs Life or the Company.

To the extent that over time cash flows from the assets allocated to the
Closed Block and other experience relating to the Closed Block are, in the
aggregate, more or less favorable than assumed in establishing the Closed Block,
total dividends paid to Closed Block policyowners in the future would be greater
than or less than the total dividends that would have been paid to these
policyowners if the dividend scales in effect prior to the Reorganization had
been continued. Any excess of cumulative favorable deviations for Closed Block
policies over unfavorable deviations will be available for distribution over
time to Closed Block policyowners and will not be available to AmerUs Life or
the Company. Unless the Iowa Commissioner consents to an earlier termination,
the Closed Block will continue to be in effect until the date on which none of
the policies in the Closed Block remains in force.

The Company will continue to pay guaranteed benefits under all policies,
including the policies included in the Closed Block in accordance with their
terms. If the assets allocated to the Closed Block, the investment cash flows
from those assets and the revenues from the policies included in the Closed
Block including investment income thereon prove to be insufficient to pay the
benefits guaranteed under the policies included in the Closed Block, the Company
will be required to make such payments from its general funds. The Company bears
the costs of operating and managing the Closed Block and, accordingly, such
costs were not funded as part of the assets allocated to the Closed Block. Any
increase in such costs in the future would be borne by the Company. See "The
Reorganization and Distribution of the Non-life Insurance
Subsidiaries--Establishment and Operation of the Closed Block."

EFFECT OF PARTIAL SUBSCRIPTION FOR SHARES; CANCELLATION OR RESCISSION OF THE
SUBSCRIPTION OFFERING

A partial subscription and the failure to effect the Public Offering might
have an adverse effect on the market for the Class A Common Stock, the ability
of the purchasers of Shares in the Subscription Offering to resell such Shares,
and the ability of the Company to raise additional capital in the equity markets
in the future. In addition, the Company may cancel or rescind the Subscription
Offering in its sole discretion at any time prior to the closing of the
Offerings; accordingly there can be no assurance that Subscription Policyowners
who subscribe for Shares will be able to purchase such Shares. See "The
Subscription Offering."

CLASS A COMMON STOCK ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Class A Common Stock (including shares of
Class B Common Stock converted into Class A Common Stock), or the perception
that such sales could occur, could have an adverse effect on the price of the
Class A Common Stock. The Company believes that none of the shares of Class A
Common Stock or Class B Common Stock which will be held by AmerUs Group will be
eligible for sale under Rule 144 promulgated under the Act for two years.
Thereafter, such shares will be subject to the volume and timing requirements of
Rule 144. However, the Company and AmerUs Group will be parties to an agreement
which will provide AmerUs Group with certain registration rights with respect to
such shares. See "Certain Transactions and Relationships--Intercompany
Agreement" and "Shares Eligible for Future Sale."

NO PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF COMMON STOCK PRICE

Prior to the Offerings there has been no public market for shares of either
class of the Company's Common Stock. Application has been made for quotation of
the Class A Common Stock on the Nasdaq National Market. There can be no
assurance, however, that an active trading market for the Class A Common Stock
will develop, or, if developed, will continue. The Subscription Price has been
established by the Company after consultation with its financial advisors. See
"The Subscription Offering." The

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Public Offering Price for the Class A Common Stock will be determined by
negotiations between the Company and the representatives of the underwriters for
the Public Offering. Among the factors to be considered in determining the
Public Offering Price of the Class A Common Stock, in addition to prevailing
market conditions, will be the Company's historical performance, estimates of
the business potential and earnings prospects of the Company, an assessment of
the Company's management and the consideration of these factors in relation to
market valuations of companies in related businesses. The price at which the
Class A Common Stock is sold in the Offerings may not be indicative of the
market price of the Class A Common Stock after completion of the Offerings. In
addition, factors such as variations in the Company's financial results or other
developments affecting the Company could cause the market price of the Class A
Common Stock to fluctuate significantly after the Offerings.

THE COMPANY

AmerUs Life Holdings, Inc. is an Iowa business corporation which was formed
in August of 1996 primarily for the purpose of owning all of the stock of AmerUs
Life following the Reorganization. See "The Reorganization and Distribution of
the Non-Life Insurance Subsidiaries." AmerUs Life, the Company's principal asset
and wholly-owned subsidiary, is an Iowa stock life insurance company.

AmerUs Life was originally incorporated in 1896 as a mutual insurance
company under the name Central Life Assurance Society of the United States. In
1994, Old AML merged into Central Life and the resulting entity changed its name
to American Mutual Life. On June 30, 1996, pursuant to the Plan, American Mutual
Life formed AMHC as a mutual insurance holding company and American Mutual Life
was converted into a stock life insurance company and its name was changed to
AmerUs Life Insurance Company.

The Company offers a broad line of individual life insurance and annuity
products through a nationwide distribution system. It presently conducts
business in 45 states and the District of Columbia. As of June 30, 1996, the
Company had approximately 423,000 life insurance policies and annuity contracts
outstanding and individual life insurance in force, net of reinsurance, of
approximately $26.2 billion. As of June 30, 1996, the Company had total assets
of $4.2 billion and total shareholders' equity of $375 million (prior to the
Offerings, after giving effect to the Capital Contribution).

The Company's executive offices are located at 418 Sixth Avenue, Des Moines,
Iowa 50306-2499, and its telephone number is (515) 280-1331.

THE REORGANIZATION AND DISTRIBUTION OF THE
NON-LIFE INSURANCE SUBSIDIARIES

DESCRIPTION OF THE REORGANIZATION

On October 27, 1995, the Board of Directors of American Mutual Life adopted
the Plan, which authorized American Mutual Life to effect the Reorganization.
Pursuant to the Reorganization, American Mutual Life formed AMHC as a mutual
insurance holding company and American Mutual Life was converted into a stock
life insurance company and its name was changed to AmerUs Life Insurance
Company. The Iowa Commissioner held a public hearing on the Reorganization on
November 21, 1995. The Plan was approved by American Mutual Life's policyowners
on November 28, 1995. The Iowa Commissioner approved the Plan on December 13,
1995, and the Plan became effective on June 30, 1996 (the "Effective Date").

As part of the Reorganization, all of the shares of capital stock of AmerUs
Life were issued to AMHC. Subsequent to the Reorganization, on August 1, 1996,
AMHC contributed all of its shares of capital stock of AmerUs Life to AmerUs
Group. The Company was formed on August 1, 1996, as of which date all of its
shares of capital stock were issued to AmerUs Group. Immediately after the
Distribution, AmerUs Group will contribute all of its shares of common stock in
AmerUs Life to the Company. Under this structure, the Company will be an
intermediate holding company, with AmerUs Group as its direct parent company

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and AmerUs Life as its wholly-owned subsidiary. Under Iowa law, AMHC is required
to retain direct or indirect ownership and control of shares representing a
majority of the vote of the outstanding capital stock of the Company.

Immediately following the Reorganization, the policyowners' contract rights
in their life insurance policies and annuities remained with AmerUs Life and the
policyowners automatically became members of AMHC, and thereby became entitled
to vote for directors of AMHC and on certain other matters as set forth in
AMHC's articles of incorporation. Purchasers of life insurance policies and
annuities from AmerUs Life after the Reorganization automatically become members
of AMHC (subject to certain exceptions and conditions set forth in the Plan).

American Mutual Life was the first company to obtain approval under the Iowa
mutual holding company statute to form a mutual insurance holding company. The
Company understands that a number of other states, including California,
Minnesota, Missouri, Pennsylvania and Vermont, and the District of Columbia,
have recently adopted laws authorizing the formation of mutual insurance holding
companies.

DISTRIBUTION OF THE NON-LIFE INSURANCE SUBSIDIARIES AND RELATED TRANSACTIONS

Prior to the Distribution, AmerUs Life will make the Capital Contribution to
AFS. It is anticipated that the net assets contributed in the Capital
Contribution will have an aggregate carrying value of approximately $129 million
as of the date such contribution is made. Following the Capital Contribution and
prior to the effective date of the Registration Statement relating to the
Offerings, a series of transactions will be undertaken by the Company and its
affiliates. AmerUs Life will effect the Distribution, pursuant to which it will
distribute AFS and the other Non-Life Insurance Subsidiaries to AmerUs Group.
Immediately following the Distribution, the Company intends to borrow $50
million in term debt and $125 million under a revolving line of credit pursuant
to the Bank Credit Facility. The Company intends to use the proceeds from such
borrowings to make a $175 million capital contribution to AmerUs Life. The
Consolidated Financial Statements and other financial information presented
herein give effect to the Reorganization and the Distribution as if both had
been completed prior to the periods presented (including giving effect to the
establishment of the Closed Block from June 30, 1996 forward), but do not give
effect to the Capital Contribution.

BACKGROUND AND REASONS FOR THE REORGANIZATION AND DISTRIBUTION

Recognizing the capital-raising difficulties faced by mutual insurers and
the present competitive state of the insurance industry, the Iowa legislature in
1995 amended Iowa's insurance law to permit mutual insurance companies
incorporated in Iowa to reorganize into a mutual insurance holding company
structure.

As a mutual life insurance company, American Mutual Life had no ability to
issue shares of capital stock and consequently had no access to market sources
of equity capital and limited ability to increase its surplus and fund future
growth while maintaining the financial strength necessary to assure policyowners
that their obligations will be met. The Reorganization will position the Company
to obtain access to equity capital through the Offerings and will enable the
Company to effect future equity offerings as necessary and appropriate to
satisfy its capital requirements.

The Reorganization is also intended to facilitate potential mergers,
acquisitions and strategic alliances by creating a more flexible corporate
structure. Among other things, the Reorganization will facilitate the issuance
of stock by the Company to consummate acquisitions, while at the same time
maintaining the ability to enter into mergers at the AMHC level with mutual
insurance holding companies and to acquire mutual insurance companies which
could be converted into stock insurance subsidiaries of AMHC.

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The Iowa legislation would permit AMHC subsequently to demutualize, a
process which would cause AMHC to convert from mutual to stock form and become
publicly owned by shareholders. Pursuant to the Company's Articles of
Incorporation, upon a demutualization all of the Company's shares of outstanding
Class B Common Stock will automatically convert into shares of Class A Common
Stock. See "Description of the Capital Stock." AMHC has no present plans to
demutualize.

REGULATION OF AMHC AFTER THE REORGANIZATION

AMHC, as a mutual insurance holding company incorporated in Iowa, is subject
to regulation at a level substantially equal to that of an Iowa domestic
insurance company. The Iowa Commissioner retains jurisdiction at all times over
a mutual insurance holding company and any intermediate insurance holding
company to assure that policyowners' interests are protected. See "Supervision
and Regulation."

Under Iowa law, shares of capital stock of AmerUs Life which carry the right
to cast a majority of the votes entitled to be cast by all of the outstanding
shares of the capital stock (which are required at all times to be owned,
directly or indirectly, by AMHC) may not be conveyed, transferred, assigned,
pledged, subjected to a security interest or lien, encumbered, or otherwise
hypothecated or alienated by AMHC or any intermediate holding company, including
the Company. Any conveyance, transfer, assignment, pledge, security interest,
lien, encumbrance, hypothecation or alienation by AMHC or any intermediate
holding company, in or on such shares of AmerUs Life having a voting majority
shall be deemed void in inverse chronological order from the date of such
transaction to the extent necessary to give AMHC unencumbered direct or indirect
ownership of such shares having a voting majority.

ESTABLISHMENT AND OPERATION OF THE CLOSED BLOCK

In connection with the Reorganization, the Closed Block was established.
Insurance policies which had a dividend scale in effect as of June 30, 1996 were
included in the Closed Block. The Closed Block was designed to provide
reasonable assurance to policyowners included therein that, after the
Reorganization, assets will be available to maintain the dividend scales and
interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues. The establishment of the Closed
Block did not alter, diminish, reduce or in any other way adversely affect these
policyowners' contractual rights.

The Closed Block was established on June 30, 1996. Pursuant to the Plan,
assets were allocated to the Closed Block at June 30, 1996 in an amount which
the Company expects to produce cash flows which, together with anticipated
revenues from the Closed Block Business, are expected to be sufficient to
support the Closed Block Business, including provision for payment of claims,
taxes and certain limited expenses and for the continuation of dividend scales
and interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues or for appropriate adjustments in
such scales and credits if the experience changes. The assets, including the
revenue therefrom, allocated to the Closed Block will accrue solely to the
benefit of policyowners included in the Closed Block Business until such time as
the Closed Block is no longer in effect. To the extent that over time cash flows
from the assets allocated to the Closed Block and other experience relating to
the Closed Block are, in the aggregate, more or less favorable than assumed in
establishing the Closed Block, total dividends and interest credits paid to
Closed Block policyowners in the future may be greater than or less than the
total dividends and interest credits that would have been paid to these
policyowners if the dividend scales and interest credits in effect prior to the
Reorganization had been continued. Dividends and interest credits on policies
included in the Closed Block, as in the past, will be declared at the discretion
of AmerUs Life's Board of Directors and may vary from time to time (reflecting
changes in investment, mortality, persistency and other experience factors).
AmerUs Life will not be required to support the payment of dividends and
interest credits on Closed Block policies from its general funds above certain
guaranteed levels, although it could choose to provide such support if it were
deemed to be in the best interests of AmerUs Life's shareholders.

AmerUs Life will continue to pay guaranteed benefits under all policies,
including the policies included in the Closed Block, in accordance with their
terms. If the assets allocated to the Closed Block,

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<PAGE>
the investment cash flows from those assets and the revenues from the policies
included in the Closed Block including investment income thereon prove to be
insufficient to pay the benefits guaranteed under the policies included in the
Closed Block, AmerUs Life will be required to make such payments from its
general funds. AmerUs Life bears the costs of operating and managing the Closed
Block and, accordingly, such costs were not funded as part of the assets
allocated to the Closed Block. Any increase in such costs in the future would be
borne by AmerUs Life. Since the Closed Block has been funded to provide for
payment of guaranteed benefits as well as future dividends, it should not be
necessary to use other general funds to pay guaranteed benefits unless the
Closed Block Business experiences substantial adverse deviations in investment,
mortality, persistency or other experience factors. While AmerUs Life will use
its best efforts to support the policies included in the Closed Block with the
assets allocated to the Closed Block, these assets will be subject to the same
liabilities (with the same priority in liquidation) as assets outside the Closed
Block.

The Closed Block Business will consist of the policies within the classes
specified in the Plan, but only to the extent such policies were in force on
June 30, 1996. A policy may be within a class for which there is a dividend
scale currently in effect, even if it does not receive a current dividend, and,
therefore, the policy would be included in the Closed Block.

Premiums received and policy benefits paid by AmerUs Life on the policies
included in the Closed Block and investment cash flows from the assets allocated
to the Closed Block and from the investment of net cash flow will be added to or
withdrawn from the Closed Block as provided in the Plan. The Closed Block will
be allocated its share of state, local and federal taxes paid on the Closed
Block Business in accordance with tax sharing procedures set forth in the Plan.
However, commissions and other expenses (including investment management
expenses) of operating and administering the Closed Block will not be charged to
the Closed Block except to the limited extent provided in the Plan. If expenses
of operating and administering the Closed Block were to increase after June 30,
1996, such increases would be paid by AmerUs Life. Future estimated cash
outflows were considered in determining the amount of assets allocated to the
Closed Block.

Dividends and interest credits on the Closed Block policies will be set
periodically by AmerUs Life's Board of Directors in accordance with applicable
law and with the objective that all of the assets will be distributed to owners
of Closed Block policies. Such dividends and interest credits will also be
allocated among the policies included in the Closed Block so as to reflect the
underlying experience of the Closed Block and the degree to which the various
classes of Closed Block policies contributed to such experience. An income
statement, balance sheet and schedule of investments for the Closed Block will
be prepared and submitted to the Iowa Commissioner and AmerUs Life's Board of
Directors annually. AmerUs Life will retain an independent consulting actuary to
review the operation of the Closed Block and dividend and interest credit
determinations and to report his or her findings to the Iowa Commissioner and
AmerUs Life's Board of Directors at least every three years, with the first
review to be made as of December 31, 1998.

The Closed Block will continue in effect until either (i) the last policy in
the Closed Block is no longer in force or (ii) the Closed Block is dissolved.
The Plan provides that the Closed Block may not be dissolved without the
approval of the Iowa Commissioner, which approval could only be obtained if
dissolution were demonstrated not to be adverse to the interests of the
policyowners whose policies make up the Closed Block. If the Closed Block is
dissolved, the assets associated with the Closed Block will become part of
AmerUs Life's general funds. If the Closed Block is not dissolved, the expected
life of the Closed Block is in excess of 75 years.

CLOSED BLOCK ASSETS AND LIABILITIES

In accordance with the Plan, certain of AmerUs Life's invested assets, as
well as cash and short-term investments, were allocated to the Closed Block at
June 30, 1996. Non-investment grade bonds, commercial mortgage loans, common and
preferred stock and real estate owned were not included in this allocation to
the Closed Block.

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<PAGE>
The bonds allocated to the Closed Block include assets of similar asset type
and maturity that were part of the investment segment for AmerUs Life's
TRADITIONAL LIFE INSURANCE policies. In addition, AmerUs Life included in the
Closed Block cash and short-term investments in order to meet the short-term
liquidity requirements of the Closed Block. For GAAP purposes, Closed Block
assets include deferred acquisition costs relating to policies in the Closed
Block.

The composition of assets in the Closed Block will change over time as a
result of new investments, prepayments, calls, maturities and sales. New
investments for the Closed Block acquired with Closed Block cash flows shall be
allocated to the Closed Block upon acquisition and shall consist only of
investments permitted by the investment policy for the Closed Block. In the
event of liquidation, the assets allocated to the Closed Block will be subject
to the same liabilities (with the same priority) as assets outside the Closed
Block.

The establishment and operation of the Closed Block as contemplated by the
Plan is intended to make adequate provision for allocating to the Closed Block
assets which will be reasonably sufficient to enable the Closed Block to provide
for the guaranteed benefits, certain expenses and taxes associated with Closed
Block policies, and to provide for the continuation of the current dividend
scales and interest credits in effect prior to the Reorganization if the
experience underlying those scales and credits continues. As of June 30, 1996
the Closed Block assets of $1,160.6 million and liabilities of $1,511.8 million
were established on a preliminary basis. Final funding of the Closed Block will
occur prior to the completion of the Offerings.

The excess of Closed Block Liabilities over Closed Block Assets represents
the expected future after-tax contributions (before expense charges, which were
not funded in the Closed Block) from the Closed Block which may be recognized in
income over the period the policies in the Closed Block remain in force.

If the actual contribution from the Closed Block in any given period equals
or exceeds the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be recognized
in income from continuing operations for that period. Any excess of the actual
contribution over the expected contribution would also be recognized in income
from continuing operations to the extent that the aggregate expected
contribution for all prior periods exceeded the aggregate actual contribution.
Any remaining excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future policyowners' dividends.
This accrual for future dividends effectively limits the actual Closed Block
contribution recognized in income from continuing operations to the Closed Block
contribution expected to emerge from operation of the Closed Block as determined
as of the date of establishment of the Closed Block.

If over the period the policies and contracts in the Closed Block remain in
force and the actual contribution from the Closed Block is less than the
expected contribution from the Closed Block, only such actual contribution
(which could reflect a loss) would be recognized in income from continuing
operations. If the actual contribution from the Closed Block in any given period
is less than the expected contribution for that period and changes in dividends
scales are inadequate to offset the negative performance in relation to the
expected performance, the contribution inuring to shareholders of AmerUs Life
will be reduced. If a liability for policyowners' dividends had been previously
established in the Closed Block because the actual contribution to the relevant
date had exceeded the expected contribution to such date, such liability would
be reduced (but not below zero) in any periods in which the actual contribution
for that period is less than the expected contribution for such period.

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<PAGE>
THE SUBSCRIPTION OFFERING

Pursuant to the Plan, million Shares are being offered in the
Subscription Offering to Subscription Policyowners prior to the Public Offering.
If the number of Shares subscribed for in the Subscription Offering exceeds
, the Company will (i) pro-rate Shares among subscribers so as to permit
each subscriber to purchase, to the extent possible, 100 shares and thereafter
pro rata in the same proportion that the subscription of each bears to the total
subscriptions received by the Company in the Subscription Offering and (ii)
issue a refund to Subscription Policyowners in the form of a check for each
Share subscribed for but not received. No policyowner will have a preemptive
right to purchase any shares of Class A Common Stock not subscribed for in the
Subscription Offering which are issued in connection with the Public Offering.
The Company intends to close the Subscription Offering contemporaneously with
the closing of the Public Offering. If the Public Offering is not completed, the
Subscription Offering will close as soon as practicable after November , 1996
(the "Subscription Expiration Date"), but in no event more than 90 days after
the Subscription Expiration Date, unless cancelled by the Company. See
"--Cancellation of the Subscription Offering."

The Company will not be required to offer Shares in the Subscription
Offering to any Subscription Policyowner who resides in a foreign country or who
resides in a jurisdiction of the United States with respect to which compliance
with securities laws would, in the opinion of the Company, be onerous and
impractical for reason of cost or otherwise. The Subscription Offering expires
at 4:00 P.M., New York time, on the Subscription Expiration Date.

SUBSCRIPTION PRICE AND PAYMENT FOR SHARES

The Subscription Price is $ per share. Each Subscription Policyowner
shall have the right to subscribe in the Subscription Offering for a minimum of
100 Shares and a maximum of 5,000 Shares. The Subscription Price was set by the
Company after consultation with its financial advisors. If the Public Offering
Price is less than the Subscription Price, then the Company will issue refunds
to subscribing policyowners in the form of a check equal to the amount of such
difference multiplied by the number of Shares subscribed for by each such
policyowner. Such refunds will be mailed to subscribers within 60 days after the
closing of the Public Offering. If the Public Offering Price is more than the
Subscription Price, the Subscription Policyowners who purchase Shares in the
Subscription Offering will not be required to pay any additional amounts for the
Shares nor will there be any adjustment in the number of Shares issued to them.
As a result, the Public Offering Price may be greater than the effective price
per Share of Class A Common Stock issued in the Subscription Offering. The
Public Offering Price will be determined by negotiations between the
representatives of the underwriters for the Public Offering and the Company.

While it is currently the intention of the Company to offer all or a portion
of the Shares not subscribed for in the Subscription Offering to the public in
the Public Offering, the Company may close the Subscription Offering without
commencing or closing the Public Offering. In the event that the Company
determines that the closing of the Subscription Offering shall occur prior to
the closing of the Public Offering and provided that the Company elects to
proceed with the Subscription Offering, then a bona fide determination will be
made by the Company after consultation with its financial advisors of the price
per share at which the Class A Common Stock would trade in the public market on
the closing of the Subscription Offering (the "Revised Subscription Price"). If
the Revised Subscription Price is less than the Subscription Price, then the
Company will issue refunds to subscribing policyowners in the form of a check
equal to the amount of such difference multiplied by the number of Shares
subscribed for by each such policyowner. Such refunds will be mailed to
subscribers within 60 days after the closing of the Subscription Offering. If
the Revised Subscription Price is more than the Subscription Price, the
Subscription Policyowners who purchase Shares in the Subscription Offering will
not be required to pay any additional amounts for such Shares nor will there be
any adjustment in the number of Shares issued to them.

There has not been any public market for the Class A Common Stock. Some of
the major factors that may influence the determination of the Public Offering
Price or the Revised Subscription Price are, in addition to prevailing market
conditions, the historical performance of the Company, estimates of the

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<PAGE>
business potential and earning prospects of the Company, an assessment of the
Company's management, and the consideration of the above factors in relation to
market valuations of other insurance companies.

has been appointed Transfer and Escrow Agent in connection with
the Subscription Offering. The subscription order form and required payment for
Shares subscribed for should be mailed to the Transfer and Escrow Agent as
follows:

[Name and address]

EXERCISE OF SUBSCRIPTION RIGHTS

Each Subscription Policyowner shall have the right to subscribe in the
Subscription Offering for a minimum of 100 Shares and a maximum of 5,000 Shares.
Subscriptions may only be for whole shares. In order for Subscription
Policyowners to exercise subscription rights to receive Shares, the subscription
order form must be received by the Transfer and Escrow Agent by 4:00 P.M., New
York time, on the Subscription Expiration Date. Any person electing to purchase
Shares must submit the required payment for such Shares at that time. If a
subscription order form is not received by the Transfer and Escrow Agent by such
time, or is executed incorrectly or is received without full payment, the
associated subscription right will expire (subject to the Company's
discretionary right to waive any defect or permit correction). Once an executed
subscription order form is received by the Transfer and Escrow Agent, it may not
be modified, amended or rescinded without the consent of the Company. The
Company has the right to waive or permit correction of incomplete or improperly
executed forms, but does not represent that it will do so, and any Subscription
Policyowner not submitting such a form shall have been deemed to have waived and
released its right to subscribe for Shares.

Payment for Shares by Subscription Policyowners shall be made by check or
money order in United States dollars. If the period from the Subscription
Expiration Date to the closing of the Subscription Offering exceeds 60 days,
interest will be paid to each subscriber on all subscription amounts at the
Subscription Interest Rate from such sixtieth day until the closing of the
Subscription Offering.

Subscription Policyowners who are associated with a broker or dealer are
required to contact James A. Smallenberger, Esq., Senior Vice President and
Secretary of the Company, at the address or telephone number indicated on the
subscription order form, prior to participating in the Subscription Offering.
Participation by such persons in the Subscription Offering is only permissible
in accordance with, and subject to the limitations of, Rule 2110 of the Conduct
Rules of the National Associations of Securities Dealers, Inc. ("NASD") and the
"Free-Riding and Withholding Interpretation" promulgated thereunder. In general,
"associated with a broker/dealer" includes (i) every officer, director, general
partner, employee or agent of a broker/dealer that is a member of the NASD (a
"member"), (ii) every sole proprietor, partner, officer, director, or branch
manager of any member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the investment
banking or securities business who is directly or indirectly controlling or
controlled by such member, whether or not any such person is registered or
exempt from registration with the NASD and (iii) any immediate family member of
any such person; and "immediate family" includes parents, mother-in-law or
father-in-law, husband or wife, brother or sister, brother-in-law or
sister-in-law, son-in-law or daughter-in-law, and children and any other person
who is supported, directly or indirectly, to a material extent by any person
referred to in clause (i) or (ii).

DELIVERY OF SHARE CERTIFICATES AND REFUNDS

Under the Plan, on the closing date of the Subscription Offering or as soon
thereafter as reasonably practicable, the Company will issue Shares sold
pursuant to the Subscription Offering and issue refunds, as applicable, for (i)
the excess of the Subscription Price over the Public Offering Price or Revised
Subscription Price, if any, or (ii) Shares subscribed for but not purchased as a
result of the Subscription Offering being oversubscribed. There may be a
substantial delay between the Subscription Expiration Date and the delivery of
share certificates and refunds after the closing of the Subscription Offering.
Any certificates or refunds returned as undeliverable will be held by the
Company until claimed

25
<PAGE>
by the persons legally entitled thereto or otherwise disposed of in accordance
with applicable law. Until certificates are delivered to Subscription
Policyowners, such Subscription Policyowners may not be able to sell their
shares of Class A Common Stock.

RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS

Under the Plan, Subscription Policyowners may not transfer or assign their
right to subscribe for Shares in the Subscription Offering. Persons found to be
transferring rights to subscribe for Shares in the Subscription Offering will
automatically forfeit such rights.

CANCELLATION OF THE SUBSCRIPTION OFFERING

The Company may, in its sole discretion, at any time prior to the closing of
the Subscription Offering, elect to cancel or rescind the Subscription Offering.
In such event, subscriptions for Class A Common Stock will not be executed and
all payments submitted by Subscription Policyowners in accordance with the
Subscription Offering will be refunded, together with interest thereon computed
at the Refund Interest Rate from the date of receipt of such payments until the
date of mailing of the refunds.

SUBSCRIPTION AGENT

The Chicago Corporation, a registered broker-dealer, has been engaged by the
Company to assist it in effecting the Subscription Offering by serving as
Subscription Agent. The Subscription Agent will forward copies of this
Prospectus and subscription materials to Subscription Policyowners upon request.
In addition, the Subscription Agent will be available to answer certain
questions from potential subscribers during the Subscription Period.

The Company anticipates that The Chicago Corporation will be one of the
underwriters in the Public Offering. John A. Wing is a Director of the Company
and Chairman of The Chicago Corporation. See "The Public Offering" and "Plan of
Distribution."

TRANSFER AND ESCROW AGENT

Following receipt of subscription order forms from prospective subscribers,
the Transfer and Escrow Agent will verify that (i) the submitted checks and
money orders are honored, (ii) the subscription order form has been fully and
properly completed and signed, (iii) the subscriber has not previously submitted
a subscription, and (iv) the subscriber is an eligible policyowner. All
subscriptions which the Transfer and Escrow Agent is not able to so verify will
be rejected and returned to the prospective subscriber after consultation with
the Company.

Upon the closing of the Subscription Offering, the Transfer and Escrow Agent
will cause refunds, if any, to be sent to those subscribers whose subscriptions
have been accepted by the Company.

THE PUBLIC OFFERING

The Company intends to offer all or a portion of the shares not subscribed
for in the Subscription Offering to the public in the Public Offering. The
Public Offering may, at the discretion of the Board of Directors of the Company,
close simultaneously with or at any time after the closing of the Subscription
Offering.

It is anticipated that Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette
Securities Corporation, Salomon Brothers Inc and The Chicago Corporation will
act as the representatives of the underwriters in the Public Offering. An
underwriting agreement between the Company and the underwriters with respect to
the Public Offering will not be executed until after the Subscription Expiration
Date. See "The Subscription Offering."

In the event that there is a Public Offering, the underwriters will receive
underwriting compensation for the shares sold in the Public Offering in an
amount to be determined by the Company and the representatives of the
underwriters. The Company will also agree to indemnify the underwriters against
certain liabilities and expenses, including liabilities under the federal
securities laws.

26
<PAGE>
THE PREFERRED OFFERING

The Company intends to form AmerUs Capital I (the "Trust"), a statutory
business trust to be organized under Delaware law, which will be a wholly owned
subsidiary of the Company. The Trust, together with the Company, expects to file
a registration statement under the Securities Act relating to the offering of
approximately $75 million of trust preferred securities of the Trust (the
"Preferred Securities") representing undivided beneficial interests in the
assets of such Trust. Substantially all of the assets of the Trust will be
invested in junior subordinated deferrable interest debentures (the "Junior
Subordinated Debt Securities") of the Company. The Junior Subordinated Debt
Securities will be direct, unsecured obligations of the Company that will rank
junior and subordinate in right of payment to senior indebtedness of the
Company. The Junior Subordinated Debt Securities will bear interest, payable
quarterly in arrears, subject to certain circumstances described below. In
addition, the Company will guarantee certain payments with respect to the
Preferred Securities.

The net proceeds of the Preferred Offering to the Company are expected to be
$72.4 million after giving effect to the underwriting discount and estimated
offering expenses. It is expected that the Company will use such proceeds to
repay debt which will be outstanding pursuant to the Bank Credit Facility. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources."

Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions thereon, payable quarterly in arrears. The distribution rate
and the distribution payment date and other payment dates of the Preferred
Securities will correspond to the interest rate and interest payment dates and
other payment dates on the Junior Subordinated Debt Securities.

The Company will have the right from time to time to defer payments of
interest on the Junior Subordinated Debt Securities by extending the interest
payment period on the Junior Subordinated Debt Securities at any time for up to
20 consecutive quarters (each, an "Extension Period"), PROVIDED, that no
Extension Period may extend beyond the maturity of the Junior Subordinated Debt
Securities. If interest payments are so deferred, distributions on the Preferred
Securities will also be deferred. During such Extension Period, interest on the
Junior Subordinated Debt Securities and distributions on the Preferred
Securities will continue to accrue with interest thereon (to the extent
permitted by applicable law) compounded quarterly. It is anticipated that the
Company will agree, among other things, not to declare or pay any dividends on
the Company's capital stock (including the Class A Common Stock) during any
Extension Period, except stock dividends paid by the Company where the dividend
stock is the same stock as that on which the dividend is being paid.

The Junior Subordinated Debt Securities will be redeemable by the Company,
in whole or in part, from time to time, on or after dates specified in the
Preferred Offering or at any time, in whole or in part, in certain circumstances
upon the occurrence of certain tax events. If the Company redeems Junior
Subordinated Debt Securities, the Trust must redeem Preferred Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Junior Subordinated Debt Securities so redeemed plus accrued and unpaid
distributions thereon to the date fixed for redemption. In addition, upon the
occurrence of certain events arising from a change in law or a change in legal
interpretation regarding tax or investment company matters, unless the Junior
Subordinated Debt Securities are redeemed under limited circumstances, the Trust
will be dissolved, with the result that the Junior Subordinated Debt Securities
will be distributed to the holders of the Preferred Securities of the Trust, on
a PRO RATA basis, in lieu of any cash distribution.

In the event of the involuntary or voluntary dissolution, winding up or
termination of the Trust, the holders of Preferred Securities will be entitled
to receive for each such Preferred Security, a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities.

The consummation of the Offerings is not conditioned upon completion of the
Preferred Offering, and there can be no assurance that the Preferred Offering
will be consummated. See "The Preferred Offering."

27
<PAGE>
USE OF PROCEEDS

The proceeds to the Company from the Offerings, if any, may vary according
to: (i) the total number of Shares subscribed for by Subscription Policyowners
in the Subscription Offering and the Subscription Price (or Revised Subscription
Price); and (ii) the total number of shares sold in the Public Offering and the
Public Offering Price, if the Company completes the Public Offering.

Assuming that the Public Offering Price (or the Revised Subscription Price
if the Public Offering is not consummated) is equal to $ per Share, the net
proceeds to the Company from the Offerings are expected to be approximately $92
million after deducting the estimated expenses of the Offerings. Of such
estimated proceeds, $50 million will be advanced by the Company to AmerUs Life
in exchange for a surplus note issued by AmerUs Life and $42 million will be
used by the Company to repay debt under the Bank Credit Facility. AmerUs Life
will use the proceeds it receives from the surplus note to redeem the surplus
note contributed to AFS as part of the Capital Contribution.

The Company estimates the net proceeds it would receive from the Preferred
Offering, if completed, to be $72.4 million after giving effect to the
underwriting discount and estimated offering expenses of the Company. It is
expected that the Company would use such proceeds to repay debt under the Bank
Credit Facility. See "The Preferred Offering" and "Management's Discussion and
Analysis of Results of Operation and Financial Condition--Liquidity and Capital
Resources."

MARKET FOR COMMON STOCK

Prior to the Offerings, there has been no public market for shares of either
class of the Company's Common Stock. Application has been made for quotation of
the Class A Common Stock on the Nasdaq National Market under the symbol "AMRS."
There can be no assurance, however, that an active market for the Class A Common
Stock will develop or, if developed, will continue. See "Risk Factors--No Prior
Market for Common Stock; Possible Volatility of Common Stock Price."

DIVIDEND POLICY

The Company's Board of Directors currently intends to pay a quarterly
dividend of $ per share of Common Stock, commencing with the quarter ending
on March 31, 1997. The declaration and payment of dividends in the future is
subject to the discretion of the Company's Board of Directors and will be
dependent upon the Company's financial condition, results of operations, cash
requirements, future prospects, regulatory restrictions on the payment of
dividends by AmerUs Life and other factors deemed relevant by the Company's
Board of Directors. There is no requirement or assurance that the Company will
declare and pay any dividends. For a discussion of the Company's cash sources
and needs, see "Management's Discussion and Analysis of Results of Operations
and Financial Condition-- Liquidity and Capital Resources--The Company."

The Company is an insurance holding company whose principal asset will
consist of all of the outstanding shares of the common stock of AmerUs Life. The
Company's ongoing ability to pay dividends to its shareholders and meet its
other obligations, including operating expenses and any debt service, primarily
depends upon the receipt of sufficient funds from the payment of dividends and
interest on a surplus note by AmerUs Life to the Company. In connection with the
Distribution, the Company has agreed with the Iowa Commissioner not to cause
AmerUs Life to pay any additional shareholder dividends in 1996. In addition, as
a result of the Distribution, AmerUs Life will not be able to pay dividends to
the Company in the 12 month period following the Distribution without the prior
approval of the Iowa Commissioner. See "Risk Factors--Holding Company Structure;
Limitations on Dividends," "Supervision and Regulation" and "Description of the
Capital Stock--Common Stock."

In connection with the Preferred Offering, it is anticipated that the
Company will agree not to declare or pay any dividends on the Company's capital
stock (including the Class A Common Stock) during any Extension Period, except
for stock dividends paid by the Company where the dividend stock is the same
stock as that on which the dividend is being paid. See "The Preferred Offering."

28
<PAGE>
CAPITALIZATION

The following table sets forth the unaudited consolidated capitalization of
the Company at June 30, 1996 on an actual basis and on a pro forma basis as
adjusted to reflect (i) the Capital Contribution, (ii) the sale of million
shares of Class A Common Stock in the Offerings at a per share price of $ ,
as if such sales had occurred as of June 30, 1996 (after deducting the
underwriting discount and estimated offering expenses payable by the Company),
(iii) the issuance of the Junior Subordinated Debt Securities in connection with
the Preferred Offering and (iv) the establishment of the Bank Credit Facility,
as if such Capital Contribution, sale, issuance and establishment had occurred
as of June 30, 1996. See "Use of Proceeds," "The Subscription Offering," "The
Public Offering" and "The Preferred Offering." This table should be read in
conjunction with the Consolidated Financial Statements, including the related
notes and report thereon and the Unaudited Pro Forma Condensed Consolidated
Financial Statements of the Company appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AT JUNE 30, 1996
--------------------------------------------------------------------------------------------------
PRO FORMA FOR
PRO FORMA THE CAPITAL
ADJUSTMENTS FOR PRO FORMA FOR CONTRIBUTIONS,
THE CAPITAL THE CAPITAL PRO FORMA AS ADJUSTED FOR PRO FORMA
CONTRIBUTION, AND CONTRIBUTION ADJUSTMENTS FOR THE OFFERINGS ADJUSTMENTS FOR
THE BANK CREDIT AND THE BANK THE AND THE BANK THE PREFERRED
HISTORICAL FACILITY(A) CREDIT FACILITY OFFERINGS(B) CREDIT FACILITY OFFERING(C)
----------- ----------------- --------------- --------------- --------------- ---------------
(IN MILLIONS)

<S> <C> <C> <C> <C> <C> <C>
Long Term Debt................ $ 29.3 $ 216.2 $ 245.5 $ (92.0) $ 153.5 $ (72.4)
----------- ------- ------- ------ ------- ------
Company-obligated
mandatorily-redeemable
Preferred Securities(C)...... -- -- -- -- -- 75.0
------
Equity:(D)
Preferred Stock, no par
value, 25,000,000 shares
authorized; no shares
issued and outstanding..... -- -- -- -- -- --
Class A Common Stock, no par
value, 75,000,000 shares
authorized;
shares issued and
outstanding historical and
shares pro
forma...................... -- -- --
Class B Common Stock, no par
value, 50,000,000 shares
authorized; 5,000,000
shares issued and
outstanding................ 5.0 -- 5.0 -- 5.0 --
Additional paid-in
capital.................... -- -- -- 92.0 92.0 --
Retained earnings........... 479.5 (129.0) 350.5 -- 350.5 --
Unrealized appreciation of
invested assets, net....... 19.5 -- 19.5 -- 19.5 --
----------- ------- ------- ------ ------- ------
Total equity.............. 504.0 (129.0) 375.0 92.0 467.0 --
----------- ------- ------- ------ ------- ------
Total capitalization.......... $ 533.3 $ 87.2 $ 620.5 -- $ 620.5 $ 2.6
----------- ------- ------- ------ ------- ------
----------- ------- ------- ------ ------- ------

PRO FORMA FOR
THE CAPITAL
CONTRIBUTIONS,
AS ADJUSTED FOR
THE OFFERINGS,
THE BANK CREDIT
FACILITY AND
THE PREFERRED
OFFERING
---------------

<S> <C>
Long Term Debt................ $ 81.1
-------
Company-obligated
mandatorily-redeemable
Preferred Securities(C)...... 75.0
-------
Equity:(D)
Preferred Stock, no par
value, 25,000,000 shares
authorized; no shares
issued and outstanding..... --
Class A Common Stock, no par
value, 75,000,000 shares
authorized;
shares issued and
outstanding historical and
shares pro
forma......................
Class B Common Stock, no par
value, 50,000,000 shares
authorized; 5,000,000
shares issued and
outstanding................ 5.0
Additional paid-in
capital.................... 92.0
Retained earnings........... 350.5
Unrealized appreciation of
invested assets, net....... 19.5
-------
Total equity.............. 467.0
-------
Total capitalization.......... $ 623.1
-------
-------
</TABLE>

- ------------------
(A) Represents AmerUs Life's Capital Contribution to AFS of certain net assets
having an aggregate net carrying value of approximately $129 million as of
the date such contribution is made, including the issuance of a $50 million
surplus note. Also represents the establishment of the Bank Credit Facility,
which the Company anticipates will consist of $50 million in term debt and a
$125 million revolving credit facility.

(B) Represents the issuance of Class A Common Stock (net of related issuance
costs).

(C) Represents the issuance of the Preferred Securities by the Trust (net of
related issuance costs). One hundred percent of the assets of the Trust will
consist of approximately $75 million in principal amount of the Junior
Subordinated Debt Securities of the Company. The financial statements of the
Trust will be reflected in the Company's consolidated financial statements
with the Preferred Securities shown as Company-obligated
mandatorily-redeemable Preferred Securities of the Trust.

(D) Retroactively restated to give effect to the issuance of Class A Common
Stock and Class B Common Stock to AmerUs Group.

29
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth certain financial and operating data of the
Company. The selected consolidated financial data below for each of the three
years ending December 31, 1995 are derived from the Consolidated Financial
Statements of the Company, which financial statements have been audited by KPMG
Peat Marwick LLP, independent auditors. The selected consolidated financial data
provided below for each of the six-month periods ending June 30, 1996 and 1995
and for each of the two years ending December 31, 1992 are derived from the
unaudited consolidated financial statements of the Company.

The foregoing give effect to the Reorganization and the Distribution as if
both had been completed prior to the periods presented, but do not give effect
to the Capital Contribution. In the opinion of management, the financial
information presented for all interim periods reflects all adjustments
(consisting only of normal recurring adjustments) necessary for a full
presentation of such data. Results for the six-month periods ending June 30,
1996 and 1995 are not necessarily indicative of results that may be expected for
any other interim period or the year as a whole. This data should be read in
conjunction with (i) "Management's Discussion and Analysis of Results of
Operations and Financial Condition," (ii) the audited Consolidated Financial
Statements of the Company as of December 31, 1995 and 1994, and for each of the
years in the three-year period ended December 31, 1995, which financial
statements have been audited by KPMG Peat Marwick LLP, independent auditors,
together with the related notes and the report thereon, (iii) the unaudited
consolidated financial statements of the Company as of June 30, 1996 and 1995
and for each of the six-month periods ended June 30, 1996 and 1995, and (iv)
other financial data included elsewhere in this Prospectus.

30
<PAGE>

<TABLE>
<CAPTION>
AS OF OR FOR THE SIX
MONTHS ENDED JUNE
30,(A) AS OF OR FOR THE YEAR ENDED DECEMBER 31,(A)
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Revenues:
Insurance premiums................... $ 123.3 $ 121.3 $ 244.1 $ 237.9 $ 226.4 $ 192.9 $ 186.9
Product charges...................... 29.3 29.5 57.3 56.3 57.4 57.2 50.8
Net investment income................ 143.9 141.3 285.2 275.7 269.9 273.1 268.6
Realized gains (losses) on
investments......................... 64.4 24.1 51.4 (19.9) 15.5 10.1 15.7
Other income......................... 1.3 0.3 5.4 2.4 2.4 0.9 3.6
--------- --------- --------- --------- --------- --------- ---------
Total revenues......................... 362.2 316.5 643.4 552.4 571.6 534.2 525.6
Benefits and expenses:
Total policyowner benefits........... 189.3 188.2 374.6 369.9 364.3 334.8 327.8
Total expenses....................... 55.1 49.4 108.9 111.4 106.0 100.0 87.6
Dividends to policyowners............ 26.3 24.0 49.4 45.0 45.5 42.1 40.9
--------- --------- --------- --------- --------- --------- ---------
Total benefits and expenses............ 270.7 261.6 532.9 526.3 515.8 476.9 456.3
Income before income taxes............. 91.5 54.9 110.5 26.1 55.8 57.3 69.3
Income tax expense..................... 33.6 20.9 41.2 19.4 21.4 18.6 24.5
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of a
change in accounting principles....... 57.9 34.0 69.3 6.7 34.4 38.7 44.8
Cumulative effect of a change in
accounting principles, net of tax..... 0.0 0.0 0.0 0.0 (3.2) 0.0 0.0
--------- --------- --------- --------- --------- --------- ---------
Net income............................. $ 57.9 $ 34.0 $ 69.3 $ 6.7 $ 31.2 $ 38.7 $ 44.8
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share.....................

CONSOLIDATED BALANCE SHEET DATA:
Total invested assets.................. $ 3,824.1 $ 3,415.1 $ 3,965.0 $ 3,491.7 $ 3,639.3 $ 3,274.8 $ 3,155.8
Total assets........................... 4,274.0 4,243.1 4,371.9 4,036.9 4,030.7 3,707.6 3,572.5
Total liabilities...................... 3,770.0 3,747.4 3,832.0 3,618.6 3,524.8 3,286.4 3,195.6
Total shareholders' equity (B)......... 504.0 495.7 539.9 418.3 505.9 421.2 376.9

OTHER OPERATING DATA:
Adjusted net income (C)................ $ 21.0 $ 19.1 $ 38.0 $ 34.4 $ 24.2 $ 32.1 $ 36.3
Adjusted earnings per share (C)........ $ $ $ -- -- -- --
Adjusted return on average equity
(C)................................... 8.0% 8.4% 7.9% 7.4% 5.2% 8.0% 10.5%
Adjusted pro forma net income (D)...... $ 26.3 -- $ 40.9 -- -- -- --
Adjusted pro forma earnings
per share (D)......................... -- -- -- -- -- -- --
Adjusted pro forma return on average
equity (D)............................ 10.9% -- 9.3% -- -- -- --
Individual life insurance in force, net
of reinsurance........................ $ 26,219 $ 25,631 $ 25,984 $ 25,282 $ 24,698 $ 23,947 $ 23,181
Number of employees.................... 405 406 406 457 489 505 526

STATUTORY DATA:
Statutory premiums and deposits:
Individual life...................... $ 158.6 $ 152.1 $ 307.1 $ 296.4 $ 286.3 $ 270.2 $ 261.7
Annuities (E)........................ 56.5 112.7 197.1 187.8 90.4 65.2 108.5
</TABLE>

- ------------------
(A) The merger of Central Life and Old AML, which was consummated in 1994, has
been accounted for as a pooling of interests transaction.

(C) Adjusted data reflects net income adjusted to eliminate certain items which
management believes are not indicative of overall operating trends,
including realized gains and losses, merger-related costs, reorganization
costs, curtailment gain, and SFAS 106 transition obligations, all of which
are net of tax, and mutual life insurance company equity add-on tax. See
"Management's Discussion and Analysis of Results of Operations and
Financial Condition--Adjusted Net Income."

(E) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See
"Business--Ameritas Joint Venture."

31
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed Consolidated Financial
Statements give effect to (i) the establishment of the Closed Block, (ii) the
Capital Contribution, (iii) the sale of shares of Class A Common Stock in
the Offerings at an estimated per share price of $ (after deducting the
underwriting discount and assuming no exercise of the underwriters'
over-allotment option), (iv) the Preferred Offering, and (v) the establishment
of the Bank Credit Facility, as if the establishment of the Closed Block, the
Capital Contribution, the Offerings, the Preferred Offering and the Bank Credit
Facility had occurred as of June 30, 1996, for the purposes of the unaudited pro
forma condensed consolidated balance sheet and as of the beginning of the
respective periods for the purposes of the consolidated pro forma condensed
consolidated statements of income for the six months ended June 30, 1996 and the
year ended December 31, 1995.

The unaudited pro forma information reflects estimated net proceeds from the
Offerings of $92 million and estimated net proceeds from the Preferred Offering
of $72.4 million (in each case after deducting the underwriting discount and
estimated offering expenses payable by the Company). Of the $92 million
estimated net proceeds from the Offerings, (i) $50 million will be advanced to
AmerUs Life in exchange for a surplus note to be issued by AmerUs Life (which
will be used to redeem the $50 million surplus note held by AFS) and (ii) an
estimated $42 million will be used by the Company to retire debt under the Bank
Credit Facility. The estimated net proceeds from the Preferred Offering will be
used to repay debt under the Bank Credit Facility. At the time of the
Distribution, $50 million will be borrowed by the Company as term debt and $125
million under the revolving loan component of the Bank Credit Facility. The
Company intends to use the proceeds from such borrowings to make a $175 million
capital contribution to AmerUs Life. See "Use of Proceeds," "The Subscription
Offering" and "The Preferred Offering."

The Unaudited Pro Forma Condensed Consolidated Financial Statements are
based on available information and on assumptions management believes are
reasonable and that reflect the effects of the transactions described above.
Such Unaudited Pro Forma Condensed Consolidated Financial Statements are
provided for informational purposes only and should not be construed to be
indicative of the Company's consolidated financial position or results of
operations had these transactions been consummated on the dates assumed and do
not in any way represent a projection or forecast of the Company's consolidated
financial position or results of operations for any future date or period. The
Unaudited Pro Forma Condensed Consolidated Financial Statements should be read
in conjunction with the notes thereto, the audited Consolidated Financial
Statements of the Company, together with the related notes and report thereon,
the unaudited consolidated statements of the Company included elsewhere in this
Prospectus and with the information set forth under "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and "Business."

32
<PAGE>
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
JUNE 30, 1996
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- -------------------- ------------- ----------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
ASSETS:
Invested assets
Fixed maturities.................... $ 2,326.9 $ 170.3 (B)(D $ 2,497.2 $ 2,497.2
Equity securities................... 90.4 (0.7)(B) 89.7 89.7
Short-term investments.............. 23.2 23.2 23.2
Mortgage loans...................... 278.3 (35.0)(B) 243.3 243.3
Real estate......................... 44.1 (42.2)(B) 1.9 1.9
Policy loans........................ 63.6 63.6 63.6
Other investments................... 65.6 (5.2)(B) 60.4 60.4
Closed Block invested assets........ 932.0 932.0 932.0
------------- ------- ------ ----------- -------------
Total investments................... 3,824.1 87.2 3,911.3 3,911.3
Accrued investment income............. 35.7 35.7 35.7
Deferred policy acquisition costs..... 128.8 128.8 128.8
Deferred income taxes................. 3.6 3.6 3.6
Property and equipment, net........... 13.6 13.6 13.6
Other assets.......................... 39.6 2.6 42.2 39.6
Closed Block other assets............. 228.6 228.6 228.6
------------- ------- ------ ----------- -------------
Total assets...................... $ 4,274.0 $ 87.2 $ 2.6 $ 4,363.8 $ 4,361.2
------------- ------- ------ ----------- -------------
------------- ------- ------ ----------- -------------
LIABILITIES:
Policyowner reserves and policyowner
funds................................ $ 2,098.0 $ 2,098.0 $ 2,098.0
Other liabilities..................... 130.9 130.9 130.9
Long-term debt........................ 29.3 124.2 (B)(C)(D (72.4) 81.1 153.5
Closed Block liabilities.............. 1,511.8 1,511.8 1,511.8
------------- ------- ------ ----------- -------------
Total liabilities................. 3,770.0 124.2 (72.4) 3,821.8 3,894.2
Company-obligated mandatorily
redeemable preferred securities...... -- 75.0 75.0 --
SHAREHOLDERS' EQUITY:
Preferred stock, no par value,
20,000,000 shares authorized, no
shares issued and outstanding........ --
Common stock, Class A, no par value,
75,000,000 shares authorized;
shares issued and
outstanding historical;
shares pro forma.....................
Common stock, Class B, no par value,
50,000,000 shares authorized;
5,000,000 shares issued and
outstanding.......................... 5.0 5.0 5.0
Additional paid in capital............ 92.0(C) 92.0 92.0
Retained earnings..................... 479.5 (129.0)(B) 350.5 350.5
Unrealized appreciation of available
for sale securities.................. 19.5 19.5 19.5
------------- ------- ------ ----------- -------------
Total shareholders' equity........ 504.0 (37.0) -- 467.0 467.0
------------- ------- ------ ----------- -------------
Total liabilities and
shareholders' equity............. $ 4,274.0 $ 87.2 $ 2.6 $ 4,363.8 $ 4,361.2
------------- ------- ------ ----------- -------------
------------- ------- ------ ----------- -------------
</TABLE>

(The Accompanying Notes are an integral part of this Unaudited
Pro Forma Condensed Consolidated Balance Sheet)

33
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1996
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- --------------------- ------------ ----------- -------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Insurance premiums................. $ 123.3 $ (96.3)(H) $ 27.0 $ 27.0
Product charges.................... 29.3 (9.1)(H) 20.2 20.2
Net investment income.............. 143.9 (27.7)(B)(H)(N) 116.2 116.2
Realized gains on investments...... 64.4 1.2(H) 65.6 65.6
Other.............................. 1.3 1.0(I) 2.3 2.3
Contribution from the Closed
Block............................. 0.0 6.4(H) 6.4 6.4
------------- ------- ------------ ----------- -------------
Total revenues..................... 362.2 (124.5) -- 237.7 237.7
------------- ------- ------------ ----------- -------------
BENEFITS AND EXPENSES:
Total policyowner benefits......... 189.3 (104.0)(H) 85.3 85.3
Total expenses..................... 55.1 4.4 (M)(K 1.2(L) 60.7 59.5
Dividends to policyowners.......... 26.3 (26.3)(H)
------------- ------- ------------ ----------- -------------
Total benefits and expenses........ 270.7 (125.9) 1.2 146.0 144.8
------------- ------- ------------ ----------- -------------
Income before income taxes........... 91.5 1.4 (1.2) 91.7 92.9
Income tax expense................... 33.6 (3.9)(J)(O) (0.4)(O) 29.3 29.7
------------- ------- ------------ ----------- -------------
Net income........................... $ 57.9 $ 5.3 $ (0.8) $ 62.4 $ 63.2
------------- ------- ------------ ----------- -------------
------------- ------- ------------ ----------- -------------
Net income per share.................
Shares used in the calculation of net
income per share....................
</TABLE>

(The Accompanying Notes are an integral part of this
Unaudited Pro Forma Condensed Consolidated Statement of Income)

34
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- --------------------- ------------ ----------- -------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Insurance premiums................. $ 244.1 $ (181.1)(H) $ 63.0 $ 63.0
Product charges.................... 57.3 (16.9)(H) 40.4 40.4
Net investment income.............. 285.2 (59.3)(B)(H)(N) 225.9 225.9
Realized gains on investments...... 51.4 (0.9)(H) 50.5 50.5
Other.............................. 5.4 1.2 (H)(I 6.6 6.6
Contribution from the Closed
Block............................. 27.0(H) 27.0 27.0
------------- ------- ------------ ----------- -------------
Total revenues..................... 643.4 (230.0) -- 413.4 413.4
------------- ------- ------------ ----------- -------------
BENEFITS AND EXPENSES:
Total policyowner benefits......... 374.6 (192.6)(H) 182.0 182.0
Total expenses..................... 108.9 7.6 (M)(K 2.3(L) 118.8 116.5
Dividends to policyowners.......... 49.4 (49.4)(H)
------------- ------- ------------ ----------- -------------
Total benefits and expenses........ 532.9 (234.4) 2.3 300.8 298.5
------------- ------- ------------ ----------- -------------
Income before income taxes........... 110.5 4.4 (2.3) 112.6 114.9
Income tax expense................... 41.2 1.5(O) (0.8)(O) 41.9 42.7
------------- ------- ------------ ----------- -------------
Net income........................... $ 69.3 $ 2.9 $ (1.5) $ 70.7 $ 72.2
------------- ------- ------------ ----------- -------------
------------- ------- ------------ ----------- -------------
Net income per share.................
Shares used in the calculation of net
income per share....................
</TABLE>

(The Accompanying Notes are an integral part of this
Unaudited Pro Forma Condensed Consolidated Statement of Income)

35
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(A) Prior to the effective date of the Registration Statement relating to
the Offerings, AmerUs Life will effect the Distribution which will cause its
Non-Life Insurance Subsidiaries to be distributed to AmerUs Group. Accordingly,
the Consolidated Financial Statements include only the accounts and operations,
after eliminations, of the Company and its wholly-owned life insurance
subsidiaries, principally, AmerUs Life and American Vanguard Life Insurance
Company.

(B) The Capital Contribution consists of a contribution of net assets as
follows:

<TABLE>
<CAPTION>
BOOK VALUE
JUNE 30, 1996
--------------
(IN MILLIONS)
<S> <C>
Fixed maturity securities..................................................... $ 4.7
Equity securities............................................................. 0.7
Mortgage loans................................................................ 35.0
Real estate................................................................... 42.2
Other investments............................................................. 5.2
Surplus note issued by AmerUs Life............................................ 50.0
Long-term debt assumed........................................................ (8.8)
-------
$ 129.0
-------
-------
</TABLE>

Such contributions will be made prior to the effective date of the
Registration Statement related to the Offerings. Net investment income has been
reduced by $2.1 million and $3.7 million for the six months ended June 30, 1996
and the year ended December 31, 1995, respectively, which represents the actual
net investment income of the assets to be distributed.

(C) Represents estimated net proceeds of $92 million from the issuance of
shares of Class A Common Stock and the use of the proceeds to retire long-term
debt including the surplus note issued to AFS as part of the Capital
Contribution.

(D) Represents $175 million of proceeds from the Bank Credit Facility and
the investment of such proceeds in fixed maturity securities.

(E) Represents estimated net proceeds of $72.4 million from the Preferred
Offering and the use of such proceeds to repay long-term debt. See "The
Preferred Offering."

(F) Giving effect to the establishment of the Closed Block, management fee
income, the Capital Contribution, the Offerings, the Bank Credit Facility, and
the Preferred Offering.

(G) Giving effect to the establishment of the Closed Block, management fee
income, the Capital Contribution, the Offerings and the Bank Credit Facility,
but not the Preferred Offering.

(H) The unaudited pro forma condensed consolidated statements of income
reflect an allocation of revenues and expenses to the Closed Block based on
certain estimates and assumptions that management believes are reasonable. The
contribution from the Closed Block reflected in the unaudited pro forma
condensed consolidated statements of income is not necessarily indicative of the
Closed Block's contribution had the Closed Block been established as of January
1, 1995 or of the expected contribution for any future period.

The Closed Block will include only those revenues, benefits, expenses and
dividends considered in funding the Closed Block. See "The Reorganization and
Distribution of the Non-Life Insurance Subsidiaries--Establishment and Operation
of the Closed Block." The pre-tax contribution from the Closed Block is reported
as a single line item of total revenues from continuing operations. Many
expenses related to the Closed Block operations are charged to operations
outside the Closed Block, accordingly, the contribution from the Closed Block
does not represent the actual profitability of the Closed Block

36
<PAGE>
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside the Closed Block. Income tax
expense applicable to the Closed Block, which will be funded in the Closed
Block, is reflected as a component of income tax expense.

The excess of Closed Block liabilities over Closed Block assets as of June
30, 1996 represents the total estimated future contribution from the Closed
Block expected to emerge from operations in the Closed Block after income taxes.
If the actual contribution from the Closed Block in any given period equals or
exceeds the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be recognized
in income from continuing operations for that period. Any excess of the actual
contribution over the expected contribution would also be recognized in income
from continuing operations to the extent that the aggregate expected
contribution for all prior periods exceeded the aggregate actual contribution.
Any remaining excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future policyowners' dividends.
This accrual for the future dividends effectively limits the actual Closed Block
contribution recognized in income from continuing operations to the Closed Block
contribution expected to emerge from operation of the Closed Block as determined
as of the date of establishment of the Closed Block.

The following is a summary of Closed Block pro forma income statement data
for the respective periods:

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------------ -------------------
(IN MILLIONS)
<S> <C> <C>
CLOSED BLOCK REVENUES
Insurance premiums....................................................... $ 96.3 $ 181.1
Product charges.......................................................... 9.1 16.9
Net investment income.................................................... 32.5 69.3
Realized gains (losses) on investments................................... (1.2) 0.9
Other.................................................................... -- 0.8
------- -------
$ 136.7 $ 269.0
CLOSED BLOCK EXPENSES
Total policyowner benefits............................................... 104.0 192.6
Dividends to policyowners................................................ 26.3 49.4
------- -------
$ 130.3 $ 242.0
------- -------
------- -------
Contributions from the Closed Block...................................... $ 6.4 $ 27.0
------- -------
------- -------
</TABLE>

If over the period the policies and contracts in the Closed Block remain in
force the actual contributions from the Closed Block is less than the expected
contribution from the Closed Block, only such actual contribution would be
recognized in income from continuing operations. If the actual contribution from
the Closed Block in any given period is less than the expected contribution for
that period and changes in dividend scales are inadequate to offset the negative
performance in relation to the expected performance, the contribution inuring to
shareholders of the Company will be reduced. If a liability for policyowners'
dividends had been previously established in the Closed Block because the actual
contribution to the relevant date had exceeded the expected contribution to such
date, such liability would be reduced (but not below zero) in any periods in
which the actual contribution for that period is less than the expected
contribution for such period. See "The Reorganization and Distribution of the
Non-Life Insurance Subsidiaries" and "Management's Discussion of Results of
Operations and Financial Conditions."

(I) Represents management and other fees to be received under an
Intercompany Agreement between AmerUs Group and the Company as compensation for
services rendered by Company employees. See "Certain Transactions and
Relationships."

(J) Represents the elimination of $4.4 million of the mutual company equity
add-on tax for the six months ended June 30, 1996, which is applicable only to
mutual life insurance companies. This

37
<PAGE>
adjustment can vary significantly from year to year, based on rates published by
the IRS. The Company believes that this tax will not be applicable to the
Company after the Reorganization due to AmerUs Life's conversion into a stock
corporation.

(K) Total expenses have been reduced by $0.5 million and $1.1 million for
the six months ended June 30, 1996 and the year ended December 31, 1995,
respectively, as a result of the assignment of a certain employment contract to
AMHC.

(L) Represents dividends on the shares issued in conjunction with the
Preferred Offering which are assumed to be payable at 8 3/4% per annum and are
classified as interest expense, net of the reduction in interest expense
resulting from the retirement of long-term debt from the proceeds from the
Preferred Offering.

(M) Represents interest expense under the Bank Credit Facility based upon a
rate of 6% per annum, and interest expense on the surplus note at 9% per annum.
The resulting adjustment was $4.9 million and $8.8 million for the six months
ended June 30, 1996 and the year ended December 31, 1995, respectively.

(N) Net investment income was adjusted to reflect the investment of the net
proceeds from the Bank Credit Facility at the average rate of return on the
Company's investment portfolio (7.86% and 7.84% for the six months ended June
30, 1996 and the year ended December 31, 1995, respectively). The resulting
adjustment was $6.9 million and $13.7 million for the six months ended June 30,
1996 and the year ended December 31, 1995, respectively.

(O) Represents the income tax effect on the net pro forma adjustments.

38
<PAGE>
ORGANIZATIONAL STRUCTURE

The following chart illustrates the general organization of AMHC and its
subsidiaries, including the Company, after the Offerings:

[GRAPH]

* The Non-Life Insurance Subsidiaries consist of AFS and its subsidiaries,
which include AmerUs Bank, FSB, AmerUs Mortgage, Inc., Iowa Realty Co., Inc.
and AmerUs Properties, Inc.

** AmerUs Life participates in the Ameritas Joint Venture through its ownership
interest in AMAL Corporation, a Nebraska corporation ("AMAL"). See
"Business--Ameritas Joint Venture."

39
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

THE FOLLOWING ANALYSIS OF THE CONSOLIDATED RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA AND CONSOLIDATED FINANCIAL
STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS PROSPECTUS.

BACKGROUND

THE REORGANIZATION, THE CAPITAL CONTRIBUTION AND THE DISTRIBUTION

The Company is an insurance holding company formed on August 1, 1996, in
connection with the Reorganization of American Mutual Life on June 30, 1996. As
part of the Reorganization, all of the shares of capital stock of AmerUs Life
were issued to AMHC. Subsequent to the Reorganization, on August 1, 1996, AMHC
contributed all of its shares of capital stock of AmerUs Life to AmerUs Group.
On August 1, 1996, all of the shares of the Company's capital stock were issued
to AmerUs Group. See "The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries."

Prior to the effective date of the Registration Statement relating to the
Offerings, AmerUs Life will make the Capital Contribution to AFS. It is
anticipated that the Capital Contribution will consist of (i) commercial
mortgages, real estate and fixed maturity securities having a net carrying value
of approximately $79 million and (ii) the Surplus Note, which will have a face
amount of $50 million. Following the Capital Contribution and prior to the
effective date of the Registration Statement relating to the Offerings, a series
of transactions will be undertaken by the Company and its affiliates. AmerUs
Life will effect the Distribution pursuant to which it will distribute AFS and
the other Non-Life Insurance Subsidiaries to AmerUs Group. Immediately after the
Distribution, AmerUs Group will contribute all of its shares of common stock in
AmerUs Life to the Company. Under this structure, the Company will be an
intermediate holding company, with AmerUs Group as its direct parent company and
AmerUs Life as its wholly-owned subsidiary. Under Iowa law, AMHC is required to
retain direct or indirect ownership and control of shares representing a
majority of the vote of the outstanding capital stock of the Company.
Immediately following the Distribution, the Company intends to enter into the
Bank Credit Facility, pursuant to which it will borrow $50 million in term debt
and $125 million through a revolving line of credit. The Company intends to use
the proceeds from such borrowings to make a $175 million capital contribution to
AmerUs Life. The Company will use certain proceeds of the Offerings and the
Preferred Offering to repay such borrowings.

THE CLOSED BLOCK

In connection with the Reorganization, the Closed Block was established.
Insurance policies which had a dividend scale in effect as of June 30, 1996 were
included in the Closed Block. The Closed Block is designed to provide reasonable
assurance to owners of insurance policies included therein that, after the
Reorganization, assets will be available to maintain the dividend scales and
interest credits in effect for 1995 if the experience underlying such scales and
credits continues. See "Risk Factors--The Closed Block" and "The Reorganization
and Distribution of the Non-Life Insurance Subsidiaries--Establishment and
Operation of the Closed Block." Although the Closed Block is not expected to
affect the net income of the Company, the financial presentation of the results
of operations and financial position of the Company will be affected in future
reporting periods.

The contribution to the operating income of the Company from the Closed
Block will be reported as a single line item in the income statement.
Accordingly, premiums, product charges, investment income, realized gains
(losses) on investments, policyowner benefits, expenses and dividends
attributable to the Closed Block will be shown as a net number, the
"Contribution from the Closed Block." This will result in material reductions in
the respective line items in the income statement in future periods while having
no

40
<PAGE>
affect on net income. Also, all investments allocated to the Closed Block will
be grouped together and shown as a single item entitled "Closed Block
Investments," and all other assets allocated to the Closed Block will be grouped
together and shown as a separate item entitled "Closed Block Assets." Likewise,
all liabilities attributable to the Closed Block will be combined and disclosed
as the "Closed Block Liabilities." See "Unaudited Pro Forma Condensed
Consolidated Financial Statements."

ACCOUNTING TREATMENT

The Selected Consolidated Financial and Operating Data, the Consolidated
Financial Statements and other financial data of the Company presented herein
give effect to the Reorganization and the Distribution as if both had been
completed prior to the periods presented (including giving effect to the
establishment of the Closed Block as of June 30, 1996), but do not give effect
to the Capital Contribution.

AMERITAS JOINT VENTURE

Under the Ameritas Joint Venture, the Company will no longer offer DEFERRED
FIXED ANNUITIES for sale to new customers except through the Ameritas Joint
Venture, although the Company will continue to issue renewal and replacement
annuity contracts with respect to annuity contracts issued by it prior to the
formation of the Ameritas Joint Venture. Consequently, future sales of fixed
annuities by the Company will be substantially reduced, which will have an
effect on future investment income and product charges of the Company.
Management believes that any reductions in net income resulting from the
curtailment of direct annuity sales by the Company will be more than offset by
management fees and by the Company's increased equity interest in the net income
of the Ameritas Joint Venture.

OVERVIEW

The Company is engaged in the business of underwriting, marketing and
distributing a broad range of individual life insurance and annuity products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of whole life, universal life and
term life insurance policies and fixed annuities. Since April 1, 1996 the
Company has been a party to the Ameritas Joint Venture with Ameritas Life
Insurance Corp., through which it now markets fixed annuities and has begun to
sell variable annuities and variable life insurance products. See
"Business--Products" and "Business--Ameritas Joint Venture."

In accordance with GAAP, universal life insurance premiums and annuity
deposits received are reflected as increases in liabilities for policyowner
account balances and not as revenues. Revenues reported for universal life and
annuity products consist of policy charges for the cost of insurance,
administration charges and surrender charges assessed against policyowner
account balances. Surrender benefits paid relating to universal life insurance
policies and annuity products are reflected as decreases in liabilities for
policyowner account balances and not as expenses. Amounts for interest credited
to universal life and annuity policyowner account balances and benefit claims in
excess of policyowner account balances are reported as expenses in the financial
statements. The Company receives investment income earned from the funds
deposited into account balances by universal life and annuity policyowners, the
majority of which is passed through to such policyowners in the form of interest
credited.

Premium revenues reported for traditional life insurance products are
recognized as revenues when due. Future policy benefits and policy acquisition
costs are recognized as expenses over the life of the policy by means of a
provision for future policy benefits and amortization of deferred policy
acquisition costs.

The costs related to acquiring new business, including certain costs of
issuing policies and certain other variable selling expenses (principally
commissions), defined as deferred policy acquisition costs, are capitalized and
amortized as an expense in proportion to expected profits or margins from such
policies. This amortization is adjusted when current or estimated future gross
profits or margins on the underlying policies vary from previous estimates. For
example, the amortization of deferred policy acquisition costs is accelerated
when policy terminations are higher than originally estimated or when
investments supporting the policies are sold at a gain prior to their
anticipated maturity. Death and other

41
<PAGE>
policyowner benefits reflect exposure to mortality risk and fluctuate from
period to period based on the level of claims incurred within insurance
retention limits. The profitability of the Company is primarily affected by
expense levels, interest spread results (i.e., the excess of investment earnings
over the interest credited to policyowners) and fluctuations in mortality and
other policyowner benefits. The Company has the ability to mitigate adverse
experience through adjustments to credited interest rates, policyowner dividends
or cost of insurance charges.

ADJUSTED NET INCOME

The following table reflects net income adjusted to eliminate certain items
(net of applicable income taxes) which management believes are not necessarily
indicative of overall operating trends, including net realized gains or losses
on investments:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net income........................................ $ 57,921 $ 34,002 $ 69,348 $ 6,667 $ 31,209 $ 38,753 $ 44,847
Net realized (gains) losses on investments (A).... (41,866) (15,698) (32,244) 11,223 (10,187) (6,646) (8,547)
Merger-related costs (B).......................... 821 1,451 6,882
Equity add-on tax (C)............................. 4,397 9,585
Reorganization costs (D).......................... 588 1,426
Adoption of SFAS 106 (E).......................... 3,214
Curtailment gain (F).............................. (2,015)
--------- --------- --------- --------- --------- --------- ---------
Adjusted net income............................... $ 21,040 $ 19,125 $ 37,966 $ 34,357 $ 24,236 $ 32,107 $ 36,300
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Adjusted earnings per share....................... $ $ $ -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>

- ------------------
(A) Represents realized gains or losses on investments less that portion of the
amortization of deferred policy acquisition costs adjusted for income taxes
on such amounts.
(B) Effective December 31, 1994, Old AML merged into Central Life; these amounts
are costs related to the merger and include early retirement and severance
costs, legal, consulting, postage and printing costs and costs associated
with the establishment of a charitable trust.

(C) Represents the mutual life insurance company equity add-on tax, which is
applicable only to mutual life insurance companies and which the Company
believes will not be applicable to the Company on an ongoing basis due to
AmerUs Life's conversion into a stock company.

(D) Represents costs directly related to the Reorganization consisting primarily
of printing, postage, legal and consulting costs. All of the 1995 costs were
incurred in the second half of 1995.

(E) As of January 1, 1993, the Company adopted SFAS 106, pursuant to which the
cost of certain post-retirement benefits must be recognized on an accrual
basis as employees perform services to earn such benefits. The Company's
transition obligation as of January 1, 1993 amounted to approximately $3.2
million, net of income tax benefits, and was recorded as a cumulative effect
adjustment to net income.

(F) Represents a curtailment gain resulting from the freezing of the Company's
defined benefit pension plans as of December 31, 1995.

42
<PAGE>
RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

A summary of the Company's revenues follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
------------------------
1996 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 113,347 $ 106,251
Immediate annuity and supplementary contract premiums....................... 8,097 10,440
Other premiums.............................................................. 1,898 4,640
----------- -----------

Total insurance premiums.................................................. 123,342 121,331

Universal life product charges.............................................. 28,841 29,178
Annuity product charges..................................................... 431 330
----------- -----------

Total product charges..................................................... 29,272 29,508

Net investment income....................................................... 143,888 141,267
Realized gains (losses) on investments...................................... 64,409 24,150
Other revenues.............................................................. 1,330 251
----------- -----------

Total revenues............................................................ $ 362,241 $ 316,507
----------- -----------
----------- -----------
</TABLE>

Insurance premiums increased $2.0 million to $123.3 million in the six
months ended June 30, 1996 compared to $121.3 million in the six months ended
June 30, 1995. Traditional life insurance premiums increased $7.1 million due to
continued growth in renewal premiums. Immediate annuity deposits and
SUPPLEMENTARY CONTRACT premiums were $2.3 million lower in the first half of
1996 than for the same period in 1995 due to decreased immediate annuity sales.
Other premiums were $2.7 million lower in the six months ended June 30, 1996
than in the six months ended June 30, 1995 primarily due to the Company's exit
from several group life and long-term disability reinsurance pools in the second
half of 1995, as part of management's continuing review of insurance products'
profitability.

Universal life product charges were $0.3 million lower in the first half of
1996 compared to the first half of 1995 primarily due to increased reinsurance
costs relative to the increase in COST OF INSURANCE charges for the 1996 period.

Net investment income increased by $2.6 million, or 1.9%, to $143.9 million
in the six months ended June 30, 1996 as compared to $141.3 million in the six
months ended June 30, 1995. The increase was attributable to an increase in
average invested assets. Average invested assets increased by $166.2 million to
$3,894.6 million during the first half of 1996. The effective yield on average
invested assets was 7.85% in the first half of 1995, compared to 7.86% in the
first half of 1996.

Realized gains on investments were $64.4 million in the six months ended
June 30, 1996 compared to $24.1 million in the six months ended June 30, 1995.
The increase of $40.3 million resulted primarily from increased sales of common
stock, reflecting the Company's decision to reduce its exposure to equity
securities.

Other revenues increased by $1.0 million in the six months ended June 30,
1996 compared to the six months ended June 30, 1995, primarily due to proceeds
from a favorable litigation settlement.

43
<PAGE>
A summary of the Company's policyowner benefits follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
------------------------
1996 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.................................................... $ 19,664 $ 17,080
Change in liability for future policy benefits and other policy
benefits......................................................... 79,670 74,425
----------- -----------

Total traditional life insurance benefits....................... 99,334 91,505

Universal life insurance
Death benefits in excess of cash value............................ 8,896 8,660
Interest credited to policyowner account balances................. 24,378 23,077
Other policy benefits............................................. 2,468 3,581
----------- -----------

Total universal life insurance benefits......................... 35,742 35,318

Annuities
Interest credited to deferred annuity account balances............ 35,712 38,181
Other annuity benefits............................................ 16,234 18,168
----------- -----------

Total annuity benefits.......................................... 51,946 56,349

Miscellaneous benefits.............................................. 2,306 5,079
----------- -----------

Total policyowner benefits...................................... $ 189,328 $ 188,251
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits increased by $1.1 million from the first half of
1995 to $189.3 million in the first half of 1996. Traditional life benefits
increased $7.8 million primarily due to the growth in the amount of such
business in force and less favorable mortality experience. Universal life
benefits increased $0.4 million primarily due to increased interest credited to
policyowner account balances. While the weighted average CREDITING RATE for the
Company's universal life liabilities decreased 15 basis points from 6.51% in the
six months ended June 30, 1995 to 6.36% in the six months ended June 30, 1996,
the Company's average liabilities increased $43.2 million, or 5.7%, from the
first half of 1995 to the first half of 1996, resulting in the increased
credited amounts in the 1996 period.

Annuity benefits decreased $4.4 million in the six month period ended June
30, 1996 to $51.9 million compared to $56.3 million in the six months ended June
30, 1995. Such benefits decreased due to reduced interest credited to
policyowner account balances and decreased other annuity benefits. The weighted
average crediting rate for the Company's individual deferred annuity liabilities
decreased 92 basis points to 5.51% in the six months ended June 30, 1996
compared to 6.43% in the six months ended June 30, 1995. The Company's average
annuity liabilities decreased $45.7 million, or 3.5%, from the first half of
1995 to the first half of 1996, also contributing to the decrease in interest
credited amounts in the 1996 period. The decrease in other annuity benefits was
the result of reduced immediate annuity sales in 1996.

The decrease in miscellaneous benefits of $2.8 million to $2.3 million in
the six months ended June 30, 1996 compared to $5.1 million in the six months
ended June 30, 1995 was primarily the result of the Company's exit from several
group life and long-term disability reinsurance pools in the second half of
1995.

44
<PAGE>
A summary of the Company's expenses follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1996 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals............................................. $ 3,840 $ 5,331
Other underwriting, acquisition and insurance expenses, net of deferrals......... 24,378 18,824
Amortization of deferred policy acquisition costs................................ 26,823 25,247
--------- ---------
Total expenses............................................................... $ 55,041 $ 49,402
--------- ---------
--------- ---------
</TABLE>

Commission expense, net of deferrals, decreased $1.5 million to $3.8 million
for the six months ended June 30, 1996, primarily due to a decrease in gross
commission expense of $2.8 million from 1995 to 1996 as a result of lower sales
levels, lower annuity rollovers and the conversion of new annuity sales to the
Ameritas Joint Venture in May, 1996. Other underwriting, acquisition and
insurance expenses, net of deferrals, increased by $5.6 million, or 29.5%, to
$24.4 million in the six months ended June 30, 1996. The increase in expenses in
the first half of 1996 was primarily due to increased costs related to long-term
incentive plans, the Reorganization, the Ameritas Joint Venture, settlements and
associated legal fees and higher premium taxes.

The amortization of deferred policy acquisition costs increased by $1.6
million in the first half of 1996 to $26.8 million compared to $25.2 million in
the first half of 1995. The increase in amortization in the first half of 1996
was primarily due to higher gross profits in the first half of 1996.

Dividends to policyowners increased by $2.3 million, or 9.8%, to $26.3
million in the six months ended June 30, 1996 compared to $24.0 million in the
six months ended June 30, 1995. The growth in dividends was primarily the result
of the growth and aging of the in-force policies. Traditional life reserves grew
8.0% from the six months ended June 30, 1995 to $1.16 billion in the six months
ended June 30, 1996. The weighted average dividend rate credited to these
policies was 7.14% for both 1996 and 1995.

Income before income taxes increased by $36.6 million, or 66.8%, to $91.5
million in the six months ended June 30, 1996 compared to $54.9 million in the
six months ended June 30, 1995. The increase resulted primarily from the
increase of $40.3 million in realized gains on investments.

Income tax expense increased by $12.7 million for the six months ended June
30, 1996 to $33.6 million as compared to $20.9 million for the six months ended
June 30, 1995. The increased income taxes for the six months ended June 30, 1996
were the result of the higher pre-tax income discussed above and a $4.4 million
provision for the equity add-on tax in the first half of 1996 partially offset
by $2.2 million of tax credits. The effective income tax rate for the first half
of 1996 was 36.7% and for the first half of 1995 was 38.1%.

Net income increased by $23.9 million in the six months ended June 30, 1996
to $57.9 million from $34.0 million in the six months ended June 30, 1995. This
increase resulted from the increases in pre-tax income discussed above.

45
<PAGE>
1995 COMPARED TO 1994

A summary of the Company's revenues follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 219,732 $ 209,447
Immediate annuity and supplementary contract premiums....................... 17,659 16,680
Other premiums.............................................................. 6,696 11,785
----------- -----------

Total insurance premiums.................................................. 244,087 237,912
Universal life product charges.............................................. 56,763 55,815
Annuity product charges..................................................... 607 547
----------- -----------

Total product charges..................................................... 57,370 56,362
Net investment income....................................................... 285,244 275,691
Realized gains (losses) on investments...................................... 51,387 (19,930)
Other revenues.............................................................. 5,390 2,391
----------- -----------

Total revenues............................................................ $ 643,478 $ 552,426
----------- -----------
----------- -----------
</TABLE>

Insurance premiums increased $6.2 million to $244.1 million in 1995 compared
to $237.9 million in 1994. Traditional life insurance premiums increased $10.3
million as a result of continued growth in renewal premiums. Immediate annuity
deposits and supplementary contract premiums were $1.0 million greater in 1995
than 1994 due to increased immediate annuity sales. Other premiums were $5.1
million lower in 1995 than in 1994 primarily due to the Company's exit from
several group life and long-term disability reinsurance pools in 1995, as part
of management's continuing review of insurance products' profitability.

Universal life product charges were $0.9 million higher in 1995 compared to
1994 primarily due to increased cost of insurance charges as a result of the
normal aging of that block of business.

Net investment income increased by $9.5 million, or 3.5%, to $285.2 million
in 1995 as compared to $275.7 million in 1994. The increase was attributable to
an increase in average invested assets partially offset by a decline in the
effective yield on average invested assets. Average invested assets increased by
$162.9 million to $3,728.4 million during 1995. The effective yield on average
invested assets decreased from 7.90% in 1994 to 7.84% in 1995 reflecting a
reduction in interest income on both bonds and commercial mortgages as a result
of lower market interest rates on new investments.

Realized gains on investments were $51.4 million in 1995 compared to
realized losses of $19.9 million in 1994. The increase of $71.3 million in 1995
resulted primarily from the combination of increased gains of $32.5 million over
1994 amounts from the sale of common stock and a gain of $9.4 million in 1995
compared to a loss of $25.5 million in 1994 from sales of fixed maturity
securities. Of the losses incurred in 1994, $21.1 million were incurred in
connection with sales of fixed maturity securities which resulted from a planned
investment strategy to increase after-tax investment yields in future periods by
disposing of selected fixed maturity securities.

Other revenues increased in 1995 by $3.0 million from 1994 levels, primarily
due to a gain of $3.1 million which resulted from the curtailment of the
Company's defined benefit pension plans, effective December 31, 1995. See Note 7
to the Consolidated Financial Statements.

46
<PAGE>
A summary of the Company's policyowner benefits follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.............................................................. $ 32,196 $ 30,044
Change in liability for future policy benefits and other policy benefits.... 152,742 149,283
----------- -----------

Total traditional life insurance benefits................................. 184,938 179,327

Universal life insurance
Death benefits in excess of cash value...................................... 17,098 15,165
Interest credited to policyowner account balances........................... 45,240 42,095
Other policy benefits....................................................... 5,214 7,237
----------- -----------

Total universal life insurance benefits................................... 67,552 64,497

Annuities
Interest credited to deferred annuity account balances...................... 78,120 77,980
Other annuity benefits...................................................... 35,582 34,918
----------- -----------

Total annuity benefits.................................................... 113,702 112,898

Miscellaneous benefits........................................................ 8,428 13,174
----------- -----------

Total policyowner benefits................................................ $ 374,620 $ 369,896
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits increased $4.7 million from 1994 to $374.6
million in 1995. Traditional life benefits increased $5.6 million due primarily
to increased mortality costs and increased liabilities for future policy
benefits, in each case associated with the growth in the amount of such business
in force. Universal life benefits increased $3.1 million primarily due to
increased interest credited to policyowner account balances. The weighted
average crediting rate for the Company's universal life liabilities increased 23
basis points from 6.44% in 1994 to 6.67% in 1995, and the Company's average
liabilities increased $41.9 million, or 5.8%, from 1994 to 1995, resulting in
the increased credited amounts in 1995.

Annuity benefits increased $0.8 million in 1995 to $113.7 million compared
to $112.9 million in 1994. Such benefits increased due to increased interest
credited to policyowner account balances and increased other annuity benefits.
While the weighted average crediting rate for the Company's individual deferred
annuity liabilities decreased 25 basis points to 6.16% in 1995 compared to 6.41%
in 1994, the Company's average liabilities increased $32.1 million, or 2.5%,
from 1994 to 1995, resulting in the increased interest credited amounts in 1995.
The increased other annuity benefits were the result of continued growth in the
immediate annuity and supplementary contract business in force.

The decrease in miscellaneous benefits of $4.8 million to $8.4 million in
1995 compared to $13.2 million in 1994 was primarily the result of the Company's
exit from several group life and long-term disability reinsurance pools in 1995.

47
<PAGE>
A summary of the Company's expenses follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals.......................................... $ 10,448 $ 9,451
Other underwriting, acquisition and insurance expenses, net of deferrals...... 48,207 59,153
Amortization of deferred policy acquisition costs............................. 50,239 42,756
----------- -----------
Total expenses............................................................ $ 108,894 $ 111,360
----------- -----------
----------- -----------
</TABLE>

Commission expense, net of deferrals, increased $1.0 million, or 10.5%, in
1995 to $10.4 million, primarily as a result of the integration of the product
lines of Central Life and Old AML and an increase in gross commissions of $3.0
million as a result of increased annuity sales in 1995. Other underwriting,
acquisition and insurance expenses, net of deferrals, decreased in 1995 by $10.9
million, or 18.5%, to $48.2 million. 1995 was the first year of the consolidated
operations of Central Life and Old AML. As a result of the combination,
approximately $7.8 million of cost reductions were realized in 1995 from 1994
combined levels, excluding the merger-related expenses described below. These
reductions in 1995 were partially offset by increased legal and settlement costs
of $1.1 million, higher incentive compensation of $1.0 million and $2.2 million
of expenses related to the investigation and review of alternate capital
structures, including implementing the Reorganization. Included in 1994 expenses
were approximately $10.0 million of expenses related to the merger of the two
companies compared to $2.2 million of merger-related costs in 1995.

The amortization of deferred policy acquisition costs increased by $7.4
million to $50.2 million in 1995 compared to $42.8 million in 1994. The increase
in amortization in 1995 was primarily due to higher realized gains and gross
profits in 1995 than in 1994.

Dividends to policyowners increased by $4.4 million, or 9.7%, to $49.4
million in 1995 compared to $45.0 million in 1994. The growth in dividends was
primarily the result of the growth and aging of the in-force policies.
Traditional life reserves grew 8.4% from 1994 to $1.12 billion in 1995. The
weighted average dividend rate credited to these policies was 7.14% for 1995 and
1994.

Income before income taxes increased by $84.5 million, or 323%, to $110.6
million in 1995 compared to $26.1 million in 1994. The increase resulted
primarily from the $9.5 million increase in net investment income, net realized
gains on investments of $51.4 million in 1995 as compared to net realized losses
on investments of $19.9 million in 1994, and reduced expenses, partially offset
by higher dividends to policyowners.

Income tax expense increased by $21.7 million to $41.2 million in 1995 as
compared to $19.5 million in 1994. The increased 1995 income taxes were the
result of the higher pre-tax income discussed above. The effective income tax
rate for 1995 was 37.3% and for 1994 was 74.5%. In 1994, American Mutual Life
was subject to the equity add-on tax which resulted in an additional $9.6
million of current income tax expense.

Net income increased by $62.8 million in 1995 to $69.4 million from $6.6
million in 1994. This increase resulted from the increases in pre-tax income
discussed above.

48
<PAGE>
1994 COMPARED TO 1993

A summary of the Company's revenues follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 209,447 $ 198,079
Immediate annuity and supplementary contract premiums....................... 16,680 16,737
Other premiums.............................................................. 11,785 11,544
----------- -----------

Total insurance premiums.................................................. 237,912 226,360

Universal life product charges.............................................. 55,815 56,928
Annuity product charges..................................................... 547 545
----------- -----------

Total product charges..................................................... 56,362 57,473

Net investment income....................................................... 275,691 269,854
Realized gains (losses) on investments...................................... (19,930) 15,460
Other revenues.............................................................. 2,391 2,498
----------- -----------

Total revenues............................................................ $ 552,426 $ 571,645
----------- -----------
----------- -----------
</TABLE>

Insurance premiums increased $11.5 million to $237.9 million in 1994
compared to $226.4 million in 1993. Traditional life insurance premiums
increased $11.4 million primarily as a result of continued growth in renewal
premiums.

Universal life product charges were $1.1 million lower in 1994 than in 1993
primarily due to a decrease in cost of insurance charges by the Company in its
universal life product line in 1994.

Net investment income increased by $5.8 million, or 2.2%, to $275.7 million
in 1994 as compared to $269.9 million in 1993. The increase was attributable to
an increase in average invested assets partially offset by a decline in the
effective yield on average invested assets. Average invested assets increased by
$108.5 million to $3,565.5 million during 1994. The effective yield on average
invested assets decreased from 8.08% in 1993 to 7.90% in 1994, primarily
reflecting lower reinvestment rates in late 1993 and throughout 1994.

Realized losses on investments were $19.9 million in 1994 compared to gains
of $15.5 million in 1993. The realized losses in 1994 resulted in part from a
planned investment strategy to increase after-tax investment yields in future
periods by disposing of selected fixed maturity securities that generated losses
of $21.1 million in 1994.

49
<PAGE>
A summary of the Company's policyowner benefits follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.............................................................. $ 30,044 $ 28,516
Change in liability for future policy benefits and other policy benefits.... 149,283 143,659
----------- -----------

Total traditional life insurance benefits................................. 179,327 172,175

Universal life insurance
Death benefits in excess of cash value...................................... 15,165 13,270
Interest credited to policyowner account balances........................... 42,095 40,060
Other policy benefits....................................................... 7,237 7,007
----------- -----------

Total universal life insurance benefits................................... 64,497 60,337

Annuities
Interest credited to deferred annuity account balances...................... 77,980 82,314
Other annuity benefits...................................................... 34,918 38,001
----------- -----------

Total annuity benefits.................................................... 112,898 120,315

Miscellaneous benefits........................................................ 13,174 11,446
----------- -----------

Total policyowner benefits................................................ $ 369,896 $ 364,273
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits increased by $5.6 million from 1993 to $369.9
million in 1994. Traditional life benefits increased $7.2 million primarily due
to increased mortality costs and increased liabilities for future policy
benefits, in each case associated with the growth in the amount of such business
in force. Universal life benefits increased $4.2 million due to increased
mortality costs and increased interest credited to policyowner account balances
resulting from the growth in the amount of such business in force. While the
weighted average crediting rate for the Company's universal life liabilities
decreased 15 basis points from 6.59% in 1993 to 6.44% in 1994, the Company's
average liabilities increased $43.8 million, or 6.5% ,from 1993 to 1994,
resulting in the increased credited amounts in 1994.

Annuity benefits decreased $7.4 million in 1994 to $112.9 million compared
to $120.3 million in 1993. Such benefits decreased due to reduced interest
credited to policyowner account balances and decreased other annuity benefits.
While the Company's average annuity liabilities increased $88.2 million or 7.4%
for these products from 1993 to 1994, this was more than offset by the reduction
in the weighted average crediting rate on these products of 54 basis points from
6.95% in 1993 to 6.41% in 1994, resulting in the decreased interest credited
amounts in 1994. The decrease in other annuity benefits was the result of a
change in valuation basis on structured settlement contracts which increased
reserves in 1993, partially offset by the growth of immediate annuity and
supplementary contract business in force in 1994.

The increase in miscellaneous benefits of $1.7 million was primarily due to
a reduction of reserves in the Company's group accident and health business in
1993.

50
<PAGE>
A summary of the Company's expenses follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals.......................................... $ 9,451 $ 9,239
Other underwriting, acquisition and insurance expenses, net of deferrals...... 59,153 49,398
Amortization of deferred policy acquisition costs............................. 42,756 47,441
----------- -----------
Total expenses............................................................ $ 111,360 $ 106,078
----------- -----------
----------- -----------
</TABLE>

Commission expense, net of deferrals, increased $0.2 million to $9.4 million
in 1994 as compared to $9.2 million in 1993. Other underwriting, acquisition and
insurance expenses, net of deferrals, increased in 1994 by $9.8 million, or
19.7%, to $59.2 million, primarily due to approximately $10.0 million of merger-
related expenses incurred in 1994 in connection with the merger of Central Life
and Old AML.

The amortization of deferred policy acquisition costs decreased by $4.6
million in 1994 to $42.8 million compared to $47.4 million in 1993. The change
in amortization was primarily the result of the combination of decreased
amortization due to realized losses in 1994 and higher amortization in 1993 due
to changes in assumptions as to future profitability resulting from an expected
decrease in cost of insurance charges in the universal life product line, net of
an expected improvement in mortality experience.

Dividends to policyowners decreased by $0.5 million, or 1.1% to $45.0
million in 1994 compared to $45.5 million in 1993. The decrease in dividends was
primarily the result of a dividend scale reduction in 1994. The weighted average
dividend rate credited to these policies was 7.14% in 1994 compared to 7.34% in
1993. Traditional life reserves grew 9.3% from 1993 to $1.03 billion in 1994.

Income before income taxes and before the cumulative effect of a change in
accounting principles decreased by $29.7 million, or 53.1%, to $26.1 million in
1994 compared to $55.8 million in 1993. The decrease resulted primarily from net
realized losses on investments of $19.9 million in 1994 as compared to $15.5
million in net realized gains on investments in 1993 and an increase of $9.8
million in underwriting, acquisition and insurance expenses, net of deferrals,
partially offset by higher net investment income, lower amortization of deferred
policy acquisition costs and lower crediting rates on all product lines.

Income tax expense decreased by $1.9 million from 1993 to 1994. The
decreased 1994 income taxes were the result of the lower pre-tax income
discussed above, partially offset by the equity add-on tax in 1994. The
effective income tax rate for 1994, adjusted for the equity add-on tax, was
identical to the 1993 rate of 38%. In 1994, American Mutual Life was subject to
the equity add-on tax which resulted in an additional $9.6 million of current
income tax expense. The 1993 equity add-on tax was zero.

As of January 1, 1993, the Company adopted SFAS 106, pursuant to which the
cost of certain post-retirement benefits must be recognized on an accrual basis
as employees perform services to earn such benefits. The Company's transition
obligation as of January 1, 1993 amounted to approximately $3.2 million, net of
income tax benefits, and was recorded as a cumulative effect adjustment to net
income.

Net income decreased by $24.6 million in 1994 to $6.6 million compared to
$31.2 million in 1993. The primary reasons for the decrease were investment
losses, merger-related costs and the equity add-on tax in 1994.

LIQUIDITY AND CAPITAL RESOURCES

THE COMPANY

The Company's cash flow from operations will consist of dividends from
subsidiaries, if declared and paid, interest income on loans and advances to its
subsidiaries (including a surplus note issued to

51
<PAGE>
the Company by AmerUs Life), investment income on assets held by the Company and
fees which the Company will charge AmerUs Group, AmerUs Life and certain other
of its affiliates for management services, offset by the expenses incurred for
debt service, salaries and other expenses.

The Company intends to rely primarily on dividends and interest income from
AmerUs Life to make any dividend payments to its shareholders. The payment of
dividends by AmerUs Life to the Company is regulated under Iowa law. Under Iowa
law, AmerUs Life may pay dividends only from the earned surplus arising from its
business and must receive the prior approval of the Iowa Commissioner to pay a
dividend, if such dividend would exceed certain statutory limitations. The
current statutory limitation is the greater of (i) 10% of AmerUs Life's capital
and surplus as of the preceding year end or (ii) the net gain from operations
for the previous calendar year. Iowa law gives the Iowa Commissioner broad
discretion to disapprove requests for dividends in excess of these limits.
During 1996, the maximum amount that would have been legally available for
distribution to the Company, absent the Distribution, without further regulatory
approval would have been approximately $40 million. However, as a result of the
Distribution, AmerUs Life will not be able to pay dividends to the Company in
the 12-month period following the Distribution without the prior consent of the
Iowa Commissioner. See "Supervision and Regulation."

Immediately following the Distribution, the Company intends to borrow $175
million, including $50 million in term debt and $125 million under a revolving
line of credit, pursuant to the Bank Credit Facility. A substantial portion of
the aggregate proceeds of the Offerings and the Preferred Offering will be used
to repay debt under the revolving credit portion of the Bank Credit Facility.
Following such repayment, the Company would have significant borrowing capacity
under its revolving line of credit.

The Company may from time to time review potential acquisition
opportunities. The Company anticipates that funding for any such acquisition may
be provided from available cash resources or from debt or equity financing. As
of June 30, 1996 the Company had no material commitments for capital
expenditures.

AMERUS LIFE

AmerUs Life's cash inflows consist primarily of premium income, deposits to
policyowner account balances, income from investments, sales, maturities and
calls of investments and repayments of investment principal. Cash outflows are
primarily related to withdrawals of policyowner account balances, investment
purchases, payment of policy acquisition costs, payment of policyowner benefits,
income taxes and current operating expenses. Life insurance companies generally
produce a positive cash flow from operations, as measured by the amount by which
cash inflows are adequate to meet benefit obligations to policyowners and normal
operating expenses as they are incurred. The remaining cash flow is generally
used to increase the asset base to provide funds to meet the need for future
policy benefit payments and for writing new business.

Management anticipates that funds to meet its short-term and long-term
capital expenditures, cash dividends to shareholders and operating cash needs
will come from existing capital and internally generated funds. Management
believes that the current level of cash and available-for-sale and short-term
securities, combined with expected net cash inflows from operations, maturities
of fixed maturity investments, principal payments on mortgage-backed securities
and its insurance products, will be adequate to meet AmerUs Life's anticipated
short-term cash obligations.

AmerUs Life generated cash flows from operating activities of $52.2 million,
$202.0 million, $172.4 million and $173.6 million, for the six months ended June
30, 1996 and for the years ended December 31, 1995, 1994 and 1993, respectively.
Excess operating cash flows were primarily used to increase AmerUs Life's fixed
maturity investment portfolio.

Matching the investment portfolio maturities to the cash flow demands of the
type of insurance being provided is an important consideration for each type of
life insurance product and annuity. AmerUs Life continuously monitors benefits
and surrenders to provide projections of future cash requirements. As part of
this monitoring process, AmerUs Life performs cash flow testing of its assets
and liabilities under various scenarios to evaluate the adequacy of reserves. In
developing its investment

52
<PAGE>
strategy, AmerUs Life establishes a level of cash and securities which, combined
with expected net cash inflows from operations, maturities of fixed maturity
investments and principal payments on mortgage-backed securities, are believed
adequate to meet anticipated short-term and long-term benefit and expense
payment obligations. There can be no assurance that future experience regarding
benefits and surrenders will be similar to historic experience since withdrawal
and surrender levels are influenced by such factors as the interest rate
environment and AmerUs Life's claims-paying and financial strength ratings. See
"Risk Factors--Exposure to Withdrawals and Surrenders."

AmerUs Life takes into account asset-liability management considerations.
Contract terms for AmerUs Life's INTEREST-SENSITIVE PRODUCTS include SURRENDER
AND WITHDRAWAL provisions which mitigate the risk of losses due to early
withdrawals. These provisions generally do one or more of the following: limit
the amount of penalty-free withdrawals, limit the circumstances under which
withdrawals are permitted, or assess a surrender charge or market value
adjustment relating to the underlying assets. The following table summarizes
statutory liabilities for interest-sensitive life products and annuities by
their contractual withdrawal provisions at December 31, 1995 (dollars in
millions):

<TABLE>
<S> <C> <C>
Not subject to discretionary withdrawal..................... $ 231
Subject to discretionary withdrawal with adjustments:
Specified surrender charges (A)........................... 867
Market value adjustments.................................. 413
---------
Subtotal................................................ 1,280
Subject to discretionary withdrawal without adjustments..... 716
---------
Total................................................... $ 2,227
---------
---------
</TABLE>

- --------------
(A) Includes $255 million of statutory liabilities with a contractual surrender
charge of less than five percent of the account balance.

Through its membership in the Federal Home Loan Bank of Des Moines, AmerUs
Life is eligible to borrow on a line of credit available to provide it
additional liquidity. The line of credit, the amount of which is re-set
annually, is based on the amount of capital stock of the Federal Home Loan Bank
of Des Moines owned by AmerUs Life, which supported a borrowing capacity of $70
million as of December 31, 1995. Interest is payable at a current rate at the
time of any advance. As of June 30, 1996, AmerUs Life had a $25 million open
secured line of credit and there were no borrowings outstanding.

AmerUs Life may also obtain liquidity through sales of investments or
borrowings collateralized by its investment portfolio. AmerUs Life's investment
portfolio as of June 30, 1996 had a carrying value of $3.8 billion. As of June
30, 1996, fixed maturity securities were $3.1 billion, or 81.0%, of invested
assets, with public and private fixed maturity securities constituting $2.7
billion, or 88.7%, and $348.6 million, or 11.3%, of total fixed maturity
securities, respectively. See "Business--Investment Portfolio."

EFFECTS OF INFLATION AND INTEREST RATE CHANGES

The Company does not believe that inflation has had a material effect on its
consolidated results of operations.

Interest rate changes may have temporary effects on the sale and
profitability of the annuities and life insurance products offered by the
Company. For example, if interest rates rise, competing investments (such as
annuities or life insurance products offered by the Company's competitors,
certificates of deposit, mutual funds, and similar instruments) may become more
attractive to potential purchasers of the Company's products until the Company
increases the interest rate credited to owners of its annuities and life
insurance products. In contrast, as interest rates fall, the Company attempts to
adjust its credited rates to compensate for the corresponding decline in
reinvestment rates. The Company monitors interest rates and sells annuities and
life insurance policies that permit flexible responses to interest rate

53
<PAGE>
changes as part of the Company's management of interest spreads. However, the
profitability of the Company's products is not based solely upon interest rate
spreads but also on persistency, mortality and expenses.

The Company manages its investment portfolio in part to reduce its exposure
to interest rate fluctuations. In general, the market value of the Company's
fixed maturity portfolio increases or decreases in an inverse relationship with
fluctuations in interest rates, and the Company's net investment income
increases or decreases in a direct relationship with interest rate changes.

Although all of its assets support all of its liabilities, the Company has
developed an asset/liability management approach with separate investment
portfolios for major product lines such as traditional life, universal life and
annuities. Investment policies and strategies have been established based on the
specific characteristics of each product line. The portfolio investment policies
and strategies establish asset duration, quality and other guidelines. The
Company utilizes analytical systems to establish an optimal asset mix for each
line of business. The Company seeks to manage the asset/liability mismatch and
the associated interest rate risk through active management of the investment
portfolio. Financial, actuarial, investment, product development and product
marketing professionals work together throughout the product development,
introduction and management phases to jointly develop and implement product
features, initial and renewal crediting strategies, and investment strategies
based on extensive modeling of a variety of factors under a number of interest
rate scenarios.

In force reserves and the assets allocated to each segment are modeled on a
regular basis to analyze projected cash flows under a variety of economic
scenarios. The result of this modeling is used to modify asset allocation,
investment portfolio duration and CONVEXITY and renewal crediting strategies.
The Company does invest in collateralized mortgage obligations as part of its
basic portfolio strategy, but uses other types of derivatives only as a hedge
against the effects of interest rate fluctuations or to synthetically alter the
investment characteristics of specific assets. For a further discussion and
disclosure of the nature and extent of the Company's use of derivatives, see
Note 13 to the Consolidated Financial Statements.

FEDERAL INCOME TAX MATTERS

For periods prior to the Offerings, the Company and its subsidiaries filed
as part of a consolidated United States federal income tax return with AMHC and
its subsidiaries. For periods after the Offerings, the Company and its
subsidiaries will not file as part of a consolidated United States federal
income tax return with AMHC. Further, the Company and its subsidiary AmerUs Life
will not be eligible to file a consolidated United States federal income tax
return for five years.

EMERGING ACCOUNTING MATTERS

SFAS NO. 121

In March 1995, the Financial Accounting Standards Board issued SFAS No. 121,
"Accounting for the Impairment of Long Lived Assets and Long Lived Assets to be
Disposed of." This standard establishes criteria for the identification and
recognition of the impairment of certain assets to be held and used in an
entity's business. The statement does not apply to financial instruments,
deferred income tax assets or intangibles such as deferred policy acquisition
costs and value of insurance IN FORCE acquired. It does, however, apply to
assets such as property and equipment and related goodwill. SFAS No. 121 is
effective for the Company's financial statements after December 31, 1995. While
certain of the Company's assets are subject to the provisions of SFAS No. 121,
management believes the standard will have no material effect on the Company's
consolidated financial statements.

SFAS NO. 125

In June 1996, the FASB issued Statement No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
125 provides consistent accounting standards for securitizations and other
transfers of financial assets, determines when financial assets (liabilities)
should be considered sold (settled) and removed from the balance sheet, and
determines when related revenues and expenses should be recognized. FASB
Statement No. 125 is effective for

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<PAGE>
transfers and servicing of financial assets and extinguishments of liabilities
occurring after December 31, 1996. This statement will be applicable to the
Company, however, management believes that it will have no material effect on
the Company's consolidated financial statements.

STATUTORY ACCOUNTING CODIFICATION

The NAIC currently is in the process of codifying statutory accounting
practices, the result of which is expected to constitute the only source of
"prescribed" statutory accounting practices. Accordingly, that project, which is
not expected to be completed before the end of 1997, will likely change certain
statutory accounting practices. The codification may result in changes to the
permitted or prescribed accounting practices that the Company's insurance
subsidiaries use to prepare their statutory-basis financial statements.

BUSINESS

GENERAL

The Company is engaged in the business of marketing, underwriting and
distributing a broad range of individual life insurance and annuity products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of whole life, universal life and
term life insurance policies and fixed annuities. In addition, on April 1, 1996
the Company acquired a 34% interest in a variable life insurance and annuity
company through a joint venture arrangement (the "Ameritas Joint Venture") with
Ameritas Life Insurance Corp. ("Ameritas"). The Company's distribution systems
now market fixed annuities issued by AVLIC and have begun to sell AVLIC's
variable life insurance and variable annuity products. The Company has a history
of competitive product performance and, as a result, is consistently ranked by
A.M. Best among industry leaders in delivering low-cost products to its
customers.

The Company's subsidiary, AmerUs Life, was originally incorporated in 1896
as a mutual insurance company under the name Central Life Assurance Society of
the United States. Its name was changed to American Mutual Life Insurance
Company in 1994 following the merger of Old AML into Central Life. On June 30,
1996, American Mutual Life was converted into a stock life insurance company
pursuant to the Plan and its name was changed to AmerUs Life. As of June 30,
1996, AmerUs Life had approximately 423,000 life insurance policies and annuity
contracts outstanding and individual life insurance in force, net of
reinsurance, of approximately $26.2 billion. As of June 30, 1996, the Company
had total assets of $4.2 billion and total shareholders' equity of $375 million
(prior to the Offerings, after giving effect to the Capital Contribution).

The Company's target markets are individuals in the middle and upper income
brackets and small businesses. Its geographic focus is national in scope (except
for Connecticut, Maine, New Hampshire, New York and Vermont, in which the
Company is not licensed to do business), and it primarily serves suburban and
rural areas. The Company distributes its products primarily through a
combination of career general agency and personal producing general agency
("PPGA") distribution systems, as well as a network of independent brokers. The
career general agency system consists of a network of 33 career general
agencies, with approximately 525 career agents. The PPGA system is comprised of
approximately 450 PPGAs, with approximately 1,000 agents. Variable life
insurance products and the fixed and variable annuities offered by the Ameritas
Joint Venture are marketed through the Company's distribution systems and the
distribution systems of Ameritas and AVLIC, which consist of approximately 250
agents and 450 independent broker-dealers (with approximately 7,500 registered
representatives), respectively.

AmerUs Life's claims-paying ability is rated "AA-" (Very high) by Duff &
Phelps and "A" (Good) by Standard & Poor's. AmerUs Life's financial strength is
rated "A" (Excellent) by A.M. Best and "A2" (Good) by Moody's. See "Risk
Factors--Importance of Ratings."

BUSINESS STRATEGY

The Company's business strategy to achieve earnings growth and increase
shareholder value is focused on managing certain operating fundamentals where
the Company's results have historically

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compared favorably to the industry. The Company intends to utilize these
operating strengths to differentiate its products by maintaining its position
and reputation as a low-cost producer that provides high-value products to its
life insurance and annuity customers, while also providing superior service to
both agents and customers. The Company believes it is well positioned to compete
effectively based upon a number of strengths including its strong operating
performance, customer-driven product offerings, productive and diversified
distribution systems, sophisticated asset/liability management capabilities and
a customer service orientation. In addition, the Company intends to continue to
seek new business opportunities through mergers, acquisitions and strategic
alliances. From 1980 through 1995, as a result of mergers and acquisitions, as
well as through internal growth, the Company sustained a compound annual growth
rate (on a statutory basis) of 11.8% in premium income, of 13.2% in assets, and
of 12.6% in surplus and asset valuation reserve, versus 6.8%, 10.4% and 8.2%,
respectively, for the industry as a whole. (Source for industry growth rates:
A.M. Best)

STRONG OPERATING PERFORMANCE

The Company believes that its operating performance is significantly
impacted by four basic elements: (i) mortality, (ii) persistency, (iii)
operating expenses, and (iv) investment yield. Management specifically focuses
on these principal elements, as well as other factors, to generate a strong
operating performance, thereby enhancing shareholder value and allowing the
Company to maintain its strong competitive position.

The Company believes its conservative risk selection practices, its
disciplined field underwriting and its focus on maintaining a suburban and rural
customer base have resulted in the Company realizing favorable mortality
experience for the last several years compared with others in the life insurance
industry. See "--Insurance Underwriting." The Company fully underwrites each
application and has no group underwriting or guaranteed issue business.

The Company has consistently achieved higher persistency on its life
insurance products (i.e., lower lapse rates) than the industry averages. See
"--Products." This has resulted in a higher level of renewal premiums and, as a
result, a larger revenue base over which to amortize acquisition costs. This
higher persistency has been achieved by providing incentives to agents by, among
other things, grading production bonuses by actual persistency, paying
persistency bonuses, awarding recognition for both career agency and career
agent persistency achievements, and monitoring agency persistency on a monthly
basis. Also, the Company believes that its favorable career agent retention rate
has contributed to the higher persistency rates it has achieved.

The Company has aggressively managed its cost structure, reducing general
insurance expenses by $7.8 million, or 16.6%, in 1995 compared to 1994
(excluding certain non-recurring expenses). This reduction reflects, among other
things, efficiencies realized from the merger of Old AML into Central Life at
the beginning of 1995. Additional cost reductions are expected to be realized as
product lines of the two companies are further integrated and the technology
applications of Central Life are applied to all of the Old AML business. Other
factors contributing to the Company's lower cost structure include: (i) a flat
organizational structure which allows the Company to be responsive to changing
business conditions; (ii) the location of the Company in a geographic area which
provides lower cost operations than found in many other areas of the country;
(iii) a well-trained, experienced workforce; and (iv) efficient use of
technology.

The Company's distribution systems are compensated almost entirely on a
variable-cost basis, which provides flexibility in managing distribution costs
and has allowed the Company to maintain acquisition costs which management
believes to be lower than many other companies in the industry. The Company also
focuses on reducing acquisition costs. For example, the Company reduced life
insurance acquisition costs in its career general agency system by approximately
9% from 1992 through 1995.

The Company has maintained portfolio yields which have generally exceeded
the life insurance industry averages, while substantially reducing exposure to
higher risk assets such as mortgages and real estate over the last several
years. As of June 30, 1996, mortgages were 7.3% of invested assets and

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<PAGE>
real estate acquired in foreclosure was 0.6% (6.4% and 0.6%, respectively, after
giving effect to the Capital Contribution). At the same time, overall credit
quality of invested assets has been substantially improved. These results have
been achieved in part by a more systematic and sophisticated investment
strategy, recruitment and development of experienced investment professionals,
enhanced systems technology and reduced investment expenses. Attractive
risk-adjusted yields on its investments have enabled the Company to offer
competitive pricing on its products and to attract and retain business, while
maintaining the Company's profitability.

COMPETITIVE PRODUCT OFFERINGS WHICH MEET DEMANDS OF CUSTOMERS

The Company's business strategy emphasizes the development of products which
meet the demands of its customers. The Company's products have a long history of
being very competitive within the industry, as measured by data compiled and
published by A.M. Best. The Company's participating whole life insurance
products have consistently ranked among the top ten based on 10 and 20 year
interest adjusted surrender cost indices, and its universal life insurance
products have consistently ranked among the top quartile based on 5 and 10 year
cash values. The Company's fixed annuity products are also highly competitive in
the industry, having ranked among the top ten in surveys measuring account and
cash values of single premium deferred annuity products. See "--Products."

The Company continuously monitors the marketplace to identify and develop
new products and improve existing products. For example, in 1989, the Company
introduced a life insurance product which combined permanent whole life
insurance, increasing paid-up additions and decreasing term life insurance.
These flexible life insurance products can be tailored to meet the life
insurance needs of the customer at a premium level which is attractive to the
customer. These products were substantially enhanced with additional features in
1994, and generated over 20% of total new annualized life premiums in 1995.

Recent product development activity has been done on an integrated basis,
using a team approach involving the Company's distribution, investment and
asset/liability management units. In 1993, the Company used this approach to
develop a new series of deferred annuities with more attractive features and
pricing. These new products were substantially responsible for an increase in
annuity sales from $57.2 million in 1992 to $191.5 million in 1995. In 1996, the
Company's distribution systems began offering, through the Ameritas Joint
Venture, variable life insurance and variable annuities issued by AVLIC. These
products enable the policyowner to share in the investment experience of a
SEPARATE ACCOUNT. These additional products expand the product portfolio
available to producers in the career general agency and PPGA systems and provide
the Company with immediate access to one of the fastest-growing business
segments within the life insurance and annuity business.

The Company also continuously reviews its product lines to eliminate low
volume products and augment its existing products to increase sales of such
products. In addition, the Company regularly reviews the pricing of its
products. Where the Company has decided not to manufacture a line of products it
has made arrangements in selected cases to sell products of other companies.
This practice provides producers with a broader line of competitive products
while enabling the Company to focus on its core lines of business.

PRODUCTIVE AND DIVERSIFIED DISTRIBUTION SYSTEMS

One of the Company's strategies for growth is to make its distribution
systems more productive and diversified. Prior to the merger of Old AML into
Central Life, the Company's distribution system consisted primarily of its
career general agency system. With the merger, the Company added the PPGA
distribution system of Old AML. The Company successfully rationalized the
overlapping career general agency distribution system and the PPGA distribution
system, leaving existing agencies and agents in place in their existing systems
and dividing the country along geographic lines for new recruiting of career
general agencies and PPGAs. The Ameritas Joint Venture provides access to a
network of approximately 450 independent broker/dealers (with approximately
7,500 registered representatives) and the Ameritas agency distribution systems.

57
<PAGE>
The Company has recently added two additional regional vice presidents to
strengthen its distribution systems management and increase recruiting of new
general agents and agents. The Company believes it will be able to recruit both
inexperienced and experienced producers by providing a broad range of
competitive products, including the newly added variable life insurance and
variable annuity products, and by offering strong marketing and administrative
support services and competitive compensation. The Company's variable cost-based
compensation systems, which include bonus opportunities based on production and
persistency, are designed to attract and reward producers who sell increasing
amounts of persisting business.

SOPHISTICATED ASSET/LIABILITY MANAGEMENT

The Company has developed a sophisticated approach to asset/liability
management. The investment unit and the asset/liability management unit work
together closely to identify investments which provide maximum returns
consistent with acceptable risk levels and liability durations. The asset
portfolio is segmented by liability type, with tailored investment strategies
for specific product lines. The Company has the ability to continuously model
the actual results of its investment portfolio against expected results in order
to identify changing market conditions early and, where appropriate, exit
existing investments and shift to new investments which better meet the
Company's investment objectives.

CUSTOMER SERVICE ORIENTATION

As part of a strategy to provide better service to agents and customers, the
Company continues to invest in advanced customer service systems and technology
to support these functions. In addition to improving the level of service, these
investments have also reduced administration costs. The Company developed and
installed an imaging system in its new business processing unit in 1991 and is
currently developing and installing a second generation imaging system in both
the new business and in force business units. During the past five years,
numerous enhancements have been added to the original imaging system to
facilitate more efficient and accurate processing of new business. The new
imaging system will incorporate all of these and additional enhancements
developed from the experience gained in using the original system. The immediate
on-line availability to any service representative of policy-related
correspondence and documents enables the Company to provide fast, comprehensive
service to inquiries by policyowners and agents. Along with easy access to data,
work flow and other management tools provided by the system have resulted in
improved productivity.

MERGERS, ACQUISITIONS AND STRATEGIC ALLIANCES

Consistent with increased merger and acquisition activity in the life
insurance industry, management believes that mergers, acquisitions and strategic
alliances will be necessary to more fully utilize the Company's distribution and
administrative capacity and to obtain improved economies of scale and a lower
cost structure.

The mutual holding company structure provides the Company with access to the
capital markets, creating the flexibility to selectively pursue acquisitions of
stock insurance companies and to continue to, pursue mergers (through AMHC) with
mutual insurance companies. Based on the Company's success in identifying and
effectively implementing mergers, acquisitions and strategic alliances,
management intends to actively and selectively participate in such transactions
in the future as a means to further enhance shareholder value.

The Company has historically pursued mergers, acquisitions and strategic
alliances with the goals of improving its position in existing market segments
or entering desirable new market segments. Notable recent activities include the
combination by merger of Old AML into Central Life in 1994, and the Ameritas
Joint Venture which was completed in April, 1996. As part of the merger of Old
AML into Central Life in December, 1994, management was able to: (i)
substantially integrate the administrative operations of the two companies
within a four-month period in late 1994 and achieve a $7.8 million, or 16.6%,
expense reduction (excluding certain non-recurring expenses) in 1995 with
minimal disruption to policyowners and agents and without a reduction in the
quality or quantity of services offered; (ii) successfully rationalize the
different distribution systems existing after the merger with no loss of
production; and (iii) consolidate the product lines of Old AML and Central Life
into one integrated line of products by selecting the best products from each
portfolio and making them available through both the career general agency and
PPGA systems.

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The Ameritas Joint Venture is an important part of the Company's overall
strategic plan to continue to identify profitable insurance products and to
achieve growth. The strategic alliance with Ameritas benefited the Company by
providing it with immediate access to a line of existing variable life insurance
and variable annuity products and a share in an already-established business,
thereby avoiding the time and cost associated with developing a new product
line.

AMERITAS JOINT VENTURE

The Company's partner in the Ameritas Joint Venture is Ameritas Life
Insurance Corp., a Nebraska mutual life insurance company which has been in
existence for more than 100 years. Ameritas is licensed to conduct business in
all states except New York and the District of Columbia, and had approximately
250 agents as of December 31, 1995. On a statutory basis, Ameritas had $1.7
billion in assets, $7.7 billion of insurance in force and $246.6 million in
policyowners' surplus as of June 30, 1996. Ameritas currently has claims-paying
ability or financial strength ratings of "AA" (Excellent) by Standard & Poor's
and "A+" (Superior) by A.M. Best.

The Company participates in the Ameritas Joint Venture through AmerUs Life's
34% ownership interest in AMAL Corporation, a Nebraska corporation ("AMAL").
AMAL's operations are conducted through AVLIC and Ameritas Investment Corp., a
registered broker-dealer ("AIC"), its two wholly-owned subsidiaries, which have
been in business since 1983. AVLIC is licensed to conduct business in 46 states
and the District of Columbia and currently markets its products and those of AIC
through approximately 450 independent broker-dealers (with approximately 7,500
registered representatives) and the Ameritas distribution system. AIC is a
registered broker/dealer which is licensed to do business in 49 states. As of
June 30, 1996, AMAL had total consolidated assets of $967.8 million and total
consolidated shareholders' equity of $52.8 million on a GAAP basis. AVLIC had
$2.6 billion of insurance in force and $48.6 million in surplus as of June
30,1996, on a statutory basis.

AmerUs Life contributed $20.4 million in cash and substantially all of its
new fixed annuity production, as well as other consideration, for its interest
in AMAL. Under the terms of the Joint Venture Agreement, AmerUs Life has an
option to purchase an additional 5% to 15% of AMAL (the "Option") if certain
premium growth targets are met. The Option is exercisable in three portions,
each of which would permit AmerUs Life to acquire the number of newly-authorized
shares that would increase its equity ownership by 5%. Each portion of the
Option is exercisable at specified exercise prices set forth in the Joint
Venture Agreement.

Management of the Ameritas Joint Venture is shared between AmerUs Life and
Ameritas. Each has equal membership on the board of directors of AMAL, AVLIC and
AIC.

The Joint Venture Agreement provides that certain conditions may trigger
buy-sell provisions of the Joint Venture Agreement in the event of certain
disputes between the parties. In addition, such buy-sell provisions may be
triggered by a transaction involving a "change of control" as defined in the
Joint Venture Agreement.

The Company and Ameritas each have guaranteed the obligations of AVLIC. The
guarantee of each party is joint and several, and will remain in effect until
certain financial conditions are met.

PRODUCTS

The Company offers a diverse line of individual life insurance products
which are tailored to its markets and distributed primarily through its career
general agency and PPGA distribution systems. In addition, the Company is a
party to the Ameritas Joint Venture, which offers fixed and variable annuity and
variable life insurance products. As a result of superior operating
fundamentals, including mortality, persistency, operating expenses and
investment yield, the Company has had a long history of providing high-value,
low-cost products to its customers, while operating profitably. Moreover, the
Company continuously reviews and updates its product portfolio in order to
continue offering a broad range of products at competitive performance levels.

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INDIVIDUAL LIFE INSURANCE AND FIXED ANNUITY PRODUCTS

The Company offers a broad line of individual traditional life and universal
life insurance products. Traditional life insurance has accounted for
approximately 60% to 75% of the Company's total individual life insurance
premiums for the last five years and universal life insurance has accounted for
approximately 25% to 40% of its total individual life insurance premiums for the
same time period. In addition, the Company has historically offered a broad line
of fixed annuity products.

The following table sets forth information regarding the Company's sales
activity by product:

SALES ACTIVITY BY PRODUCT -- STATUTORY BASIS

- ------------------
(A) Direct FIRST YEAR ANNUALIZED PREMIUMS.

(B) Direct first year and single collected premiums.

(C) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

TRADITIONAL LIFE INSURANCE PRODUCTS. The Company's traditional life
insurance products have a long history of being highly competitive within the
industry. The Company is the only participant in the industry to have had its
participating whole life insurance products ranked among the top ten in annual
surveys prepared by A.M. Best for each of the years 1976 through 1995. (Source:
Best's Review, Rankings of 10- and 20-year Interest Adjusted Surrender Cost
Index, 1976-1995). Management believes that such surveys provide a gauge for
measuring product performance based upon operating fundamentals, including
mortality, persistency, operating expenses and investment yield, and that the
consistent high rankings of the Company's traditional life insurance products in
such surveys reflect the Company's status within the industry as a provider of
high-value products to its customers.

The Company's traditional life insurance products include participating
whole life and term life insurance products. PARTICIPATING WHOLE LIFE INSURANCE
is designed to provide benefits for the life of the insured. This product
generally provides for level premiums and a level death benefit and requires
payments in excess of the mortality cost in earlier years to offset increasing
mortality costs in later years. The Company also offers a SECOND TO DIE WHOLE
LIFE INSURANCE product which insures two lives and provides benefits upon the
death of the second insured. The Company targets its second to die products
primarily to potential customers seeking to achieve estate planning goals.

The Company also offers a portfolio of term life insurance policies that
provide life insurance protection for a specific time period (which generally
can be renewed at an increased premium). Such policies are mortality-based and
offer no cash accumulation feature. The Company currently is substantially
revising its term life insurance portfolio, which is expected to be introduced
in late 1996 or early 1997.

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Since 1989, the Company has offered a flexible life insurance product, which
is a combination of permanent participating whole life insurance, increasing
paid-up additions and decreasing term insurance coverage. In 1994, the Company
began offering an enhanced version of this product. These products give
policyowners additional flexibility in designing an appropriate combination of
permanent and term life insurance coverages to meet their specific needs at
varying premium levels.

For the year ended December 31, 1995, sales of participating whole life and
term life insurance products represented 66% and 9% of first year ANNUALIZED
PREMIUMS, respectively, for all individual life insurance products.

UNIVERSAL LIFE INSURANCE PRODUCTS. The Company has maintained consistently
competitive universal life products. Based on annual surveys by A.M. Best
measuring account and cash values of universal life products, the Company's
products have consistently ranked in the top half of all companies included in
the survey with respect to account values and has ranked in the top quarter of
all companies included in the survey with respect to cash values. (Source:
Best's Review, Rankings of 5-year Account and Cash Values, 1991-1995; Rankings
of 10-year Account and Cash Values, 1993-1995, with 1993 the initial year of the
survey of 10-year values).

The Company's universal life insurance products provide benefits for the
life of the insured. Within limits established by the Company and state
regulations, policyowners may vary the premiums and the amount of the policy's
death benefit as long as there are sufficient policy funds available to cover
all policy charges for the coming period. The weighted average crediting rate
for the Company's universal life insurance liabilities was 6.67% for the year
1995 and 6.36% for the six months ended June 30, 1996.

For the year ended December 31, 1995, sales of universal life insurance
products represented 25% of first year annualized premiums for all individual
life insurance products.

FIXED ANNUITY PRODUCTS. Historically, the Company has offered a broad
portfolio of fixed annuity products. Annuities provide for the payment of
periodic benefits for a specified time period. Benefits may commence immediately
or may be deferred to a future date. Fixed annuities generally are backed by a
general investment account and credited with a rate of return that is
periodically reset.

The Company's fixed annuity products are also highly competitive within the
industry. The Company's single premium deferred annuity products were ranked
among the industry leaders in annual surveys by A.M. Best for 1991 through 1995
measuring account and cash values of single premium deferred annuity products of
participants in the industry. (Source: Best's Review, Rankings of 5- and 10-year
Account Values and 5- and 10-year Cash Values, 1991-1995).

From September 1993 until the commencement of the Ameritas Joint Venture,
the majority of the Company's fixed annuity sales consisted of its Advantage
Series of deferred annuities. The Advantage Series consists of three products
comprised of two book value annuities, which are fixed annuities, and one market
value adjusted annuity, which is a fixed annuity with a market adjustment
feature. Both book value annuities have a first year interest rate guarantee.
One of the book value annuities also provides a bonus interest rate for the
first year. The market value adjusted annuity has a first year interest rate
guarantee and also provides a bonus interest rate for the first year. In 1995,
the Advantage Series accounted for over $163 million in premiums, which
represented approximately 85% of the Company's total fixed annuity production
for the year.

AMERITAS JOINT VENTURE PRODUCTS

On April 1, 1996, the Company commenced the Ameritas Joint Venture with
Ameritas, through which the Company's distribution systems now offer AVLIC's
fixed annuity products and have begun to offer AVLIC's variable life insurance
and annuity products. The fixed annuities currently offered by the Ameritas
Joint Venture are substantially similar to the Company's Advantage Series
products. The Company's investment in the Ameritas Joint Venture affords the
Company access to a line of existing variable life insurance and variable
annuity products while providing a lower-cost entry into an established
business, thereby eliminating significant start-up costs and allowing for
immediate potential earnings. See "--Ameritas Joint Venture."

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The Ameritas Joint Venture offers, through AVLIC, flexible premium and
single premium variable universal life insurance products and variable
annuities. Variable products provide for allocation of funds to a GENERAL
ACCOUNT or to one or more separate accounts under which the owner bears the
investment risk. Through AVLIC's fund managers, which include Fidelity
Management and Research Company, Fred Alger Management, Inc. and Massachusetts
Financial Services Company, owners of variable annuities and life insurance
policies are able to choose from a range of investment funds offered by each
manager. In the future, AVLIC may also sell low load life insurance products,
which have a lower commission rate, and may acquire other companies or business
lines in appropriate circumstances.

Under the terms of the Joint Venture Agreement governing the Ameritas Joint
Venture, the Company and Ameritas will write a substantial portion of their new
single and flexible premium deferred fixed annuities and variable annuities and
variable life insurance through the Ameritas Joint Venture (provided that the
Company has retained the right to continue to issue business to its fixed
annuity customers in existence prior to the effective date of the Joint Venture
Agreement). In connection with executing the Joint Venture Agreement, the
parties also entered into a Management and Administrative Service Agreement
which was effective as of April 1, 1996 (the "Service Agreement"), pursuant to
which the parties agreed that all product development, administration and
investment management services relating to the fixed annuity products offered by
the Ameritas Joint Venture will be performed by the Company, and all such
functions relating to the variable life insurance and variable annuity products
offered by the Ameritas Joint Venture will be performed by Ameritas. Ameritas
also provides certain other administrative services to the Ameritas Joint
Venture under the Service Agreement.

The variable life insurance products and the fixed and variable annuities
offered by the Ameritas Joint Venture are distributed through the Company's
career general agency and PPGA distribution systems, as well as through the
distribution systems of Ameritas and AVLIC. See "--Ameritas Joint Venture" and
"Certain Transactions and Relationships."

In response to customer demand, the Company is developing an equity index
annuity which it anticipates will be offered through the Ameritas Joint Venture
beginning in the Fall of 1996. An equity index annuity provides a baseline fixed
rate of return in addition to the possibility of sharing in a portion of the
appreciation realized from an investment in an indexed investment fund, such as
the S&P 500 stock index.

SPONSORED PRODUCTS

The Company also derives fee income from the sale of various sponsored
products through its career general agency and PPGA distribution systems under
co-marketing arrangements with leading insurance providers for such products.
Such sponsored products include individual long-term disability and group life,
health and dental insurance products. In addition, the Company's career general
agency and PPGA distribution systems sell certificates of deposit issued by
AmerUs Bank, from which the Company obtains additional fee income.

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The following table sets forth the Company's collected premiums for the
periods indicated:

COLLECTED PREMIUMS BY PRODUCT -- STATUTORY BASIS

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Direct individual life premiums collected:
Traditional life:
First year & single...................... $ 34,427 $ 33,101 $ 70,786 $ 71,830 $ 71,267 $ 61,720 $ 58,512
Renewal.................................. 81,721 76,200 153,299 143,048 130,223 119,108 108,698
--------- --------- --------- --------- --------- --------- ---------
Total................................ $ 116,148 $ 109,301 $ 224,085 $ 214,878 $ 201,490 $ 180,828 $ 167,210
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Universal Life:
First year & single...................... $ 7,549 $ 5,901 $ 15,451 $ 10,224 $ 10,939 $ 17,235 $ 26,369
Renewal.................................. 38,446 39,175 77,151 80,338 83,372 84,405 80,114
--------- --------- --------- --------- --------- --------- ---------
Total................................ $ 45,995 $ 45,076 $ 92,602 $ 90,562 $ 94,311 $ 101,640 $ 106,483
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total direct life...................... $ 162,143 $ 154,377 $ 316,687 $ 305,440 $ 295,801 $ 282,468 $ 273,693
Reinsurance assumed........................ 757 702 1,337 1,114 1,154 988 1,178
Reinsurance ceded.......................... (6,579) (6,742) (13,795) (13,477) (15,020) (14,903) (14,776)
--------- --------- --------- --------- --------- --------- ---------
Total individual life, net of
reinsurance............................... $ 156,321 $ 148,337 $ 304,229 $ 293,077 $ 281,935 $ 268,553 $ 260,095
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Direct annuity premiums collected:
Individual (A)........................... $ 54,568 $ 110,847 $ 197,959 $ 189,097 $ 91,745 $ 66,750 $ 110,080
Group.................................... 50 567 (665) 2,580 1,726 766 867
--------- --------- --------- --------- --------- --------- ---------
Total annuities........................ 54,618 111,414 197,294 191,677 93,471 67,516 110,947
Reinsurance ceded.......................... (345) (611) (853) (1,123) (1,147) (1,393) (1,467)
--------- --------- --------- --------- --------- --------- ---------
Total annuities, net of reinsurance........ $ 54,273 $ 110,803 $ 196,441 $ 190,554 $ 92,324 $ 66,123 $ 109,480
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total group life, net of reinsurance (B)... $ 1,543 $ 1,348 $ 6,634 $ 10,436 $ 9,669 $ 8,367 $ 8,287
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total accident & health, net of reinsurance
(C)....................................... $ 102 $ 124 $ 264 $ 387 $ 459 $ 607 $ 4,410
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total collected premiums, net of
reinsurance............................... $ 212,239 $ 260,612 $ 507,568 $ 494,454 $ 384,387 $ 343,650 $ 382,272
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>

- ------------------
(A) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

(B) The Company sold substantially all of its group life business as of July 1,
1996 and is no longer actively marketing this line of business.

(C) The Company sold substantially all of its accident and health business in
1991 and is no longer actively marketing this line of business.

63
<PAGE>
The following table sets forth information regarding life insurance and
annuities in force for each date presented:

LIFE INSURANCE AND ANNUITIES IN FORCE

<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
JUNE 30, ---------------------------------------------------------------
1996 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Individual life insurance:
Traditional
Number of policies............... 252,341 253,656 259,229 262,243 264,683 274,090
GAAP life reserves............... $ 1,164,065 $ 1,120,799 $ 1,033,909 $ 945,763 $ 846,661 $ 779,594
Face amounts..................... $16,654,000 $16,600,000 $15,871,000 $15,201,000 $14,094,000 $13,813,000
Universal life
Number of policies............... 117,985 121,619 124,225 127,658 131,196 129,429
GAAP life reserves............... $ 805,049 $ 784,363 $ 740,638 $ 700,556 $ 653,038 $ 596,721
Face amounts..................... $12,221,000 $12,211,000 $12,631,000 $12,744,000 $13,244,000 $12,607,000
Total individual life
Number of policies............... 370,326 375,275 383,454 389,901 395,879 403,519
GAAP life reserves............... $ 1,969,114 $ 1,905,162 $ 1,774,547 $ 1,646,319 $ 1,499,699 $ 1,376,315
Face amounts..................... $28,875,000 $28,811,000 $28,502,000 $27,945,000 $27,338,000 $26,420,000
Annuities (A):
Number of policies............... 51,926 56,054 52,616 50,322 44,177 42,372
GAAP reserves.................... $ 1,256,230 $ 1,327,176 $ 1,337,395 $ 1,260,775 $ 1,157,313 $ 1,105,157
Group life insurance (B):
Number of lives.................. 33,107 32,724 29,592 27,013 28,238 31,481
Face amounts..................... $ 872,000 $ 829,000 $ 741,000 $ 834,000 $ 846,000 $ 1,467,000
</TABLE>

- ------------------
(A) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

(B) The Company sold substantially all of its group life business as of July 1,
1996 and is no longer actively marketing this line of business.

The Company has experienced higher persistency for its insurance products
(i.e., lower lapse rates) than industry averages. The ability to achieve higher
persistency results in lower unit costs. The following table illustrates lapse
rates on individual life insurance products for the Company and for stock and
mutual life insurance companies for the years ended December 31, 1991 through
1995:

INDIVIDUAL LIFE INSURANCE LAPSE RATIOS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Mutual life companies (A)............................................. 7.4% 7.4% 9.8% 8.5%
Stock life companies (A).............................................. 9.3 8.8 9.9 9.9
Total life insurance industry (A)................................... 8.6 8.3 9.8 9.4
Company............................................................... 7.2 7.1 6.9 6.9

1991
-----------
<S> <C>
Mutual life companies (A)............................................. 8.8%
Stock life companies (A).............................................. 10.7
Total life insurance industry (A)................................... 10.1
Company............................................................... 6.9
</TABLE>

- --------------
(A) Source: A.M. Best individual life lapse ratios (median values).

DISTRIBUTION

The Company markets its insurance products on a national basis primarily
through a career general agency system, a PPGA system, independent insurance
brokers and certain of the Company's affiliates. The Company employs ten
Regional Vice Presidents who are responsible for supervising the career general
agencies and/or PPGA agents within their assigned geographic regions.

64
<PAGE>
The following table illustrates sales activity of the Company's three
principal distribution sources for the six months ended June 30, 1996 and the
year ended December 31, 1995:

SALES ACTIVITY BY DISTRIBUTION SOURCE -- STATUTORY BASIS

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
-------------------------- -------------------
(IN THOUSANDS)
<S> <C> <C>
Career General Agency System:
Traditional life insurance (A)................................. $ 6,848 $ 14,754
Universal life insurance....................................... 2,987 6,767
Individual annuity (B)......................................... 36,384 152,190
-------- ----------
Subtotal..................................................... $ 46,219 $ 173,711
-------- ----------
-------- ----------
PPGA System:
Traditional life insurance (A)................................. 3,461 8,761
Universal life insurance....................................... 690 1,121
Individual annuity (B)......................................... 9,759 26,615
-------- ----------
Subtotal..................................................... $ 13,910 $ 36,497
-------- ----------
-------- ----------
Sales through Affiliates:
Traditional life insurance (A)................................. 8 59
Universal life insurance....................................... 50 184
Individual annuity (B)......................................... 3,394 12,669
-------- ----------
Subtotal..................................................... $ 3,452 $ 12,912
-------- ----------
-------- ----------
Total Sales:
Traditional life insurance (A)................................. 10,317 23,574
Universal life insurance....................................... 3,727 8,072
Individual annuity (B)......................................... 49,537 191,474
-------- ----------
Total (A)(B)................................................. $ 63,581 $ 223,120
-------- ----------
-------- ----------
</TABLE>

- --------------
(A) Amounts for traditional and universal life insurance reflect direct first
year annualized premiums. Amounts for annuities reflect direct first year
and single collected premiums.

(B) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

CAREER GENERAL AGENCY SYSTEM AND BROKERS

Under the career general agency system, the Company enters into a
contractual arrangement with the career general agent for the sale of insurance
products by the career agents and brokers assigned to the career general agent's
agency. The career general agents are primarily compensated by an overwriting
commission on the first year commissions paid to career agents and brokers in
the career general agent's agency and by renewal commissions on premiums
subsequently collected on that business.

The career general agents are independent contractors and are generally
responsible for the expenses of operating their agencies, including office and
overhead expenses and the recruiting, selection, contracting, training and
development of career agents and brokers in their agency. Currently, the Company
has 33 career general agencies in 20 states, through which approximately 525
career agents sell the Company's products. While career agents in the career
general agency system are non-exclusive, the Company believes most agents use
the Company's products for a majority of their new business of the type of
products offered by the Company. No single career general agency accounts for
more than 10% of the total first year commissions paid by the Company.

65
<PAGE>
Career agents are also independent contractors and are primarily compensated
by commissions on first year and renewal premiums collected on business written
by them. In addition, career agents can earn bonus commissions, graded by
production and persistency on their business.

The Company believes the quality of the agents in its career general agency
system is competitive with that of other life insurance companies. The Company's
retention of its career general agency sales force has historically been above
the average retention rates of other companies in the industry. The Company
attributes its success in attracting and retaining qualified agents to the high
quality of its products, its marketing support and administrative services and
its competitive compensation structure. The Company also provides career general
agents with various screening tools which enable the general agents to screen
career agent applicants to eliminate those who may not be qualified.

The Company also sells its products through a network of approximately 1,650
insurance brokers in all jurisdictions in which the Company is licensed to sell
insurance. Brokers are independent contractors who sell a variety of insurance
products issued by various companies. Brokers operate through the career general
agency system but are compensated under a commission structure which is separate
from those used for career agents and in the PPGA system.

PERSONAL PRODUCING GENERAL AGENCY SYSTEM

Under the PPGA system, the Company contracts primarily with individuals who
are experienced individual agents or head a small group of experienced
individual agents. These individuals are independent contractors and are
responsible for all of their own expenses. These individuals often sell products
for other insurance companies, and may offer selected products of the Company
rather than the Company's full line of insurance products.

PPGAs are compensated by commissions on first year and renewal premiums
collected on business written by themselves and the agents in their units. In
addition to a base commission, PPGAs may earn bonus commissions on their
business, graded by production and persistency.

DISTRIBUTIONS THROUGH AFFILIATES

The Company also sells its products through certain of its affiliated
companies. The Company has arrangements with AmerUs Investments, Inc. ("AmerUs
Investments"), a wholly-owned subsidiary of AmerUs Bank, to market products of
the Company. The Company has entered into an agreement with AmerUs Investments
pursuant to which the Company and AVLIC pay AmerUs Investments fees in the form
of commissions in exchange for generating sales of such products. Persons
selling the Company's products under this arrangement are employees of AmerUs
Investments and are paid a regular salary in addition to being eligible for
commissions under a commission structure (which is distinct from the structure
used under the Company's career general agency and PPGA systems). See "Certain
Transactions and Relationships--Sale of Insurance Policies."

AVLIC has a separate arrangement with AmerUs Investments pursuant to which
AmerUs Investments sells variable and fixed annuities and variable life
insurance products.

MARKETING SUPPORT SERVICES

The Company also supports its distribution systems with a trained staff of
marketing and other professionals who provide the career general agency and PPGA
systems with a wide range of services in support of the sale of the Company's
products. In addition to providing information about the products offered by the
Company, these professionals are able to offer detailed advice on business
insurance, financial and estate planning and other advanced underwriting
services.

The Company also provides its agents in both the career general agency and
PPGA systems with insurance industry information support services and computer
technology. For example, an advanced illustration and sales presentation
computer software package is provided to agents to assist them in

66
<PAGE>
their selling efforts. In addition, the Company's agents use computer technology
to individualize marketing and product use information at the point of sale to
better service policyowners and potential policyowners. The Company supports
these systems with in-house computer professionals to assist agents with
software and systems questions relating to its computer-assisted marketing
tools.

The Company conducts an intensive annual educational conference as part of
its continuing efforts to educate and train agents and to market the Company's
products. The conference is generally well-attended by the Company's agents and
other interested persons who are not affiliated with the Company.

INSURANCE UNDERWRITING

The Company follows detailed, uniform underwriting practices and procedures
in its insurance business which are designed to assess risks before issuing
coverage to qualified applicants. The Company has professional underwriters who
evaluate policy applications on the basis of information provided by applicants
and others. As demonstrated by the following table, the Company's underwriting
standards produced mortality results which are generally more favorable than the
assumptions used in its product pricing, which are based upon industry
guidelines:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Ratio of actual mortality to pricing mortality (A)(B)............ 81.2% 90.5% 86.4% 88.8% 94.7%
</TABLE>

- --------------
(A) Results illustrated for 1991-1993 are for Central Life only.

(B) Pricing mortality is established at a level below the 1975-1980 Basic Table,
an experience mortality table widely used in the industry as a basis of
mortality.

Management also believes that its actual mortality results compare favorably
to those of others in the industry. The Company believes that its favorable
mortality results are attributable to, among other things, the geographic
location of its customer base in rural and suburban areas (as opposed to urban
areas), the higher-income profile of its customer base and its consistent
application of appropriate underwriting criteria to the processing of new
customer applications.

RESERVES

In accordance with applicable insurance regulations, the Company records as
liabilities in its statutory financial statements actuarially determined
reserves that are calculated to meet future obligations of its in force life
insurance and annuity contracts. The reserves are based on actuarially
recognized methods using prescribed MORBIDITY and mortality tables and interest
rates. Reserves include UNEARNED PREMIUMS, premium deposits, claims that have
been reported but are not yet paid, claims that have been incurred but have not
been reported, and claims in the process of settlement. The Company's reserves
comply with state insurance department statutory requirements.

The reserves for future policy benefits reflected in the Consolidated
Financial Statements are calculated in accordance with GAAP. The liability for
future policy benefits for traditional life insurance is computed using a net
level method, including assumptions as to investment yields, mortality,
morbidity, withdrawals, and other assumptions based on experience, modified as
necessary to give effect to anticipated trends. Benefit reserves for traditional
limited-payment life insurance policies include the deferred portion of the
premiums received during the premium-paying period. Deferred premiums are
recognized as income over the life of the policies. Policy benefit claims are
charged to expense in the period that the claims are incurred. All
insurance-related benefits, losses and expenses are reported net of reinsurance.

Future policy benefit reserves for universal life insurance and investment
products are computed under a retrospective deposit method and represent policy
account balances before applicable surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the period in
excess of related policy account balances.

67
<PAGE>
REINSURANCE

In accordance with industry practices, the Company reinsures portions of its
life insurance and disability income exposure, generally with unaffiliated
insurance companies under traditional indemnity reinsurance agreements.
Reinsurance arrangements entered into with unaffiliated insurance companies are
in accordance with standard reinsurance practices within the industry. As of
December 31, 1995, the Company had reinsurance arrangements in place for life
insurance having a face amount of approximately $2.9 billion with 20
unaffiliated reinsurers. All of the companies with which the Company had life
reinsurance arrangements as of such date were rated "A-" or better by A.M. Best.
The Company's largest life reinsurance relationship as of December 31, 1995 was
with RGA Reinsurance Company with life reinsurance in the face amount of
approximately $1 billion. As of December 31, 1995, the Company's top five
reinsurers (by face amount reinsured) constituted approximately 80% of the total
face amount reinsured by the Company as of such date. Of the top five
reinsurers, four were rated "A+" and the other was rated "A" by A.M. Best as of
December 31, 1995.

The Company enters into indemnity reinsurance arrangements to assist in
diversifying its risks and to limit the maximum loss on risks that exceed the
Company's policy retention limits. The Company's present maximum retention limit
for life insurance policies is $1,000,000 per life insured. Indemnity
reinsurance does not fully discharge the Company's obligation to pay claims on
the reinsured business. The Company as the CEDING insurer remains responsible
for policy claims to the extent the reinsurer fails to pay such claims. The
Company annually monitors the creditworthiness of its primary reinsurers, and
has experienced no material reinsurance recoverability problems in recent years.

INVESTMENT PORTFOLIO

GENERAL

The Company maintains a diversified portfolio of investments which is
supervised by an experienced in-house staff of investment professionals. The
Company employs sophisticated asset management techniques in order to achieve
competitive yields, while maintaining risk at acceptable levels. The asset
portfolio is segmented by liability type, with tailored investment strategies
for specific product lines. Investment policies and significant individual
investments are subject to approval by the Investment Committee of the Board of
Directors of AmerUs Life. Management regularly monitors individual assets and
asset groups, in addition to monitoring the overall asset mix. In addition, the
Investment Committee reviews investment guidelines and monitors internal
controls.

INVESTMENT STRATEGY

The Company's investment philosophy is to employ an integrated
asset/liability management approach with separate investment portfolios for
specific product lines, such as traditional life, universal life and annuities,
to generate attractive risk-adjusted returns on capital. Essential to this
philosophy is coordinating investments in the investment portfolio with product
strategies, focusing on risk-adjusted returns and identifying and evaluating
associated business risks.

The Company's asset/liability management approach utilizes separate
investment portfolios for specific product lines, such as traditional life,
universal life and annuities. Investment policies and strategies have been
established based on the specific characteristics of each product line. The
portfolio investment policies and strategies establish asset duration, quality
and other guidelines. The Company utilizes analytical systems to establish an
optimal asset mix for each line of business. The Company seeks to manage the
asset/liability mismatch and the associated interest rate risk through active
management of the investment portfolio. Financial, actuarial, investment,
product development and product marketing professionals work together throughout
the product development, introduction and management phases to jointly develop
and implement product features, initial and renewal crediting strategies, and
investment strategies based on extensive modeling of a variety of factors under
a number of interest rate scenarios.

68
<PAGE>
In force reserves and the assets allocated to each segment are modeled to
analyze projected cash flows under a variety of economic scenarios. The result
of this modeling is used to modify asset allocation, investment portfolio
duration and convexity and renewal crediting strategies. The Company invests in
collateralized mortgage obligations ("CMOs") as part of its basic portfolio
strategy, but uses other types of derivatives only as a hedge against the
effects of interest rate fluctuations or to synthetically alter the investment
characteristics of specific assets. For example, the Company uses interest rate
swaps and caps to reduce its exposure to changes in interest rates and to manage
duration mismatches.

The Company seeks to manage the relationship between risk and expected
return to maintain a prudent balance between the two. Like others in the
industry, the Company is exposed to various potential sources of investment risk
including: credit risk relating to the uncertainty attached to the timing and
amount of principal and interest payments, interest rate risk relating to the
economic effects of changing interest rates, real estate risk relating to
changes in property value due to local economic and demographic conditions, and
liquidity risk relating to holding assets for which there is no active secondary
market. The Company manages credit risk principally by careful analysis of the
creditworthiness of each issuer, diversification of its holdings and prudent
asset allocation. It manages interest rate risk through sophisticated
asset/liability management techniques, including the selective use of derivative
instruments. It manages real estate risk principally by geographic and
demographic diversification, careful periodic monitoring of local economic and
other conditions and by limiting loan to value rates to acceptable levels. The
Company manages liquidity risk principally by asset allocation and by
maintaining various credit facilities and a portfolio of public, investment
grade securities in an amount not less than 50% of the total invested assets.

The objective of the Company's mortgage backed securities ("MBS")
investments is to provide incremental return, while maintaining reasonable
liquidity and cash flow stability. Each MBS is evaluated to determine its
interest rate sensitivity and average life variability. In general, the Company
seeks investments which provide improved cash flow stability through either
implicit or explicit prepayment protection. Investments with implicit prepayment
protection can take the form of pass-throughs or CMOs backed by seasoned pools
of loans which have already had ample opportunity to refinance but have failed
to do so. Explicit prepayment protection can take the form of prepayment
lockouts, yield maintenance provisions or prepayment penalties, which are common
features of multifamily MBS, commercial MBS and FHA-insured project loans. The
Company has established specific investment guidelines for the management of
MBS. As a general policy, the Company does not invest in interest-only and
principal-only or other similar leveraged derivative mortgage instruments.

The Company has improved the quality of its investment portfolio in recent
years in a number of respects. The Company has reduced real estate-related
assets (defined as real estate loans and real estate equity investments) as a
percentage of total invested assets from previous levels. Real estate related
assets, which totaled 19.2% of invested assets as of December 31, 1993, were
reduced to 14.5% of invested assets as of December 31, 1994, to 10.2% of total
invested assets as of December 31, 1995 and to 8.4% (6.6% after giving effect to
the Capital Contribution) of invested assets as of June 30, 1996. The Company's
problem loan ratio (defined as aggregate delinquent, in process of foreclosure
and restructured mortgage loans) also decreased from 21.3% as of December 31,
1994 to 9.4% as of December 31, 1995, and to 7.6% (6.8% after giving effect to
the Capital Contribution) as of June 30, 1996.

The Company in recent years has also reduced its exposure to higher risk
fixed maturity securities and common stock. The Company's percentage of higher
risk fixed maturity assets (defined as assets categorized in NAIC designations
3-6) was approximately 5.4% of total invested assets as of June 30, 1996, as
compared to 5.3% as of December 31, 1995 and 6.9% as of December 31, 1994. In
addition, the Company decreased its common stock holdings to 0.4% of total
invested assets as of June 30, 1996, down from 2.1% as of December 31, 1995 and
3.7% as of December 31, 1994.

69
<PAGE>
INVESTMENT MONITORING AND VALUATION

As part of the Company's investment management process, it regularly
monitors its invested assets. Fixed maturity securities are reviewed upon
receipt of the obligor's financial statements, generally on a quarterly basis,
for financial performance and historical compliance with financial covenants.
Generally, the Company reviews its commercial mortgage loan and equity real
estate portfolios on a monthly basis and identifies all commercial mortgage
loans and equity real estate which cause management to conclude that such loans
or investments require increased management attention due to payment
delinquencies. Detailed property analyses and property valuations are performed
annually for each commercial mortgage loan. The Company generally requires
borrowers to submit their financial statements for annual review.

The Company has policies and procedures which management believes value
invested assets fairly and consistently. As a result of the implementation of
SFAS 115 as of December 31, 1993, certain fixed maturity securities are
classified as available-for-sale, and therefore are carried at fair value in the
Company's Consolidated Financial Statements. Public and private fixed maturity
securities are carried principally at fair value, which is based on quoted
market prices or dealer quotes. If a quoted market price is unavailable, fair
value is estimated using values obtained from independent pricing services. In
the case of private placements, if quotes are unavailable price is estimated by
discounting expected future cash flows using a current market rate applicable to
the yield, credit quality and maturity of the investments.

Equity securities are carried principally at fair value, based on quoted
market prices. To value performing fixed interest rate mortgage loans, the
estimated net cash flows to maturity are discounted to derive an estimated
market value. The discount rate used is based on the individual loan's remaining
weighted average life and a basis point spread over the United States Treasury
yield curve at the date of valuation. Performing variable rate commercial loans
and residential loans are valued at par. Restructured, foreclosed or delinquent
loans, as well as loans to affiliates, are valued primarily at the lower of the
estimated net cash flows to maturity discounted at a market rate of interest, or
the current outstanding principal balance. Equity real estate is carried at
depreciated cost, or amortized cost for capital leases, less valuation
allowances. Equity real estate acquired in satisfaction of debt is valued at the
lower of cost or estimated fair value at the date of acquisition and is
periodically revalued. Valuation allowances for other than temporary impairments
in value are netted against the asset categories to which they apply, and
additions to valuation allowances are included in total investment results.

INVESTED ASSETS

The Company maintains a diversified portfolio of investments, including
public and private fixed maturity securities, commercial mortgage loans and
equity real estate. The Company's objective is to maintain a high-quality,
diversified fixed maturity securities portfolio that produces a yield and total
return that supports the various product line liabilities and the Company's
earnings goals.

As a result of establishing the Closed Block on June 30, 1996, the Company
allocated certain assets from its investment portfolio to the Closed Block. See
"The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries--Establishment and Operation of the Closed Block." The following
table summarizes consolidated invested assets by asset category as of June 30,
1996 and as of December 31, 1995, 1994 and 1993, and sets forth the allocation
of such assets between the Closed Block and the general account. The remaining
information in this Prospectus relating to the Company's investment portfolio
presents information about the investment portfolio on a combined basis
(including invested assets in both the Closed Block and the general account).

70
<PAGE>
CONSOLIDATED INVESTED ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, 1996 ------------------------------------------------
-------------------------------------------------
CARRYING CARRYING 1995 1994
VALUE VALUE-- COMBINED ----------------------- -----------------------
CLOSED GENERAL CARRYING CARRYING CARRYING
BLOCK ACCOUNT VALUE % OF TOTAL VALUE % OF TOTAL VALUE % OF TOTAL
----------- ----------- ----------- ---------- ----------- ---------- ----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed maturity
securities:
Public.............. $ 585.9 $ 2,162.3 $ 2,748.2 71.9% $ 2,717.7 68.5% $ 2,056.4 58.9%
Private............. 184.0 164.6 348.6 9.1 424.4 10.7 510.3 14.6
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Subtotal 769.9 2,326.9 3,096.8 81.0 3,142.1 79.2 2,566.7 73.5
Equity securities..... -- 90.4 90.4 2.4 109.7 2.8 178.8 5.1
Mortgage loans........ -- 278.3 278.3 7.3 353.6 8.9 447.7 12.8
Policy loans.......... 162.1 63.6 225.7 5.9 220.0 5.6 209.5 6.0
Real estate:
Investments......... -- 18.8 18.8 0.5 20.2 0.5 29.4 0.9
Foreclosures........ -- 25.3 25.3 0.6 31.9 0.8 28.8 0.8
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Subtotal.......... -- 44.1 44.1 1.1 52.1 1.3 58.2 1.7
Other invested
assets............... -- 65.6 65.6 1.7 48.1 1.2 22.3 0.6
Short-term
investments.......... -- 23.2 23.2 0.6 39.4 1.0 8.5 0.3
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Total invested
assets............... $ 932.0 $ 2,892.1 $ 3,824.1 100.0% $ 3,965.0 100.0% $ 3,491.7 100.0%
----------- ----------- ----------- ----- ----------- ----- ----------- -----
----------- ----------- ----------- ----- ----------- ----- ----------- -----

1993
-----------------------
CARRYING
VALUE % OF TOTAL
----------- ----------

<S> <C> <C>
Fixed maturity
securities:
Public.............. $ 2,015.8 55.4%
Private............. 516.6 14.2
----------- -----
Subtotal 2,532.4 69.6
Equity securities..... 174.4 4.8
Mortgage loans........ 652.2 17.9
Policy loans.......... 197.1 5.4
Real estate:
Investments......... 14.2 0.4
Foreclosures........ 32.6 0.9
----------- -----
Subtotal.......... 46.8 1.3
Other invested
assets............... 14.8 0.4
Short-term
investments.......... 21.8 0.6
----------- -----
Total invested
assets............... $ 3,639.5 100.0%
----------- -----
----------- -----
</TABLE>

FIXED MATURITY SECURITIES. The fixed maturity securities portfolio consists
primarily of investment grade corporate fixed maturity securities, high-quality
MBS and United States government and agency obligations. As of June 30, 1996,
fixed maturity securities were $3,096.8 million, or 81.0% of the carrying value
of invested assets with public and private fixed maturity securities
constituting $2,748.2 million, or 88.7%, and $348.6 million, or 11.3%, of total
fixed maturity securities, respectively.

The following table summarizes the composition of the fixed maturity
securities by category as of June 30, 1996 and December 31, 1995:

COMPOSITION OF FIXED MATURITY SECURITIES

<TABLE>
<CAPTION>
JUNE 30, 1996 DECEMBER 31, 1995
------------------------ ------------------------
CARRYING CARRYING
VALUE % OF TOTAL VALUE % OF TOTAL
---------- ------------ ---------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
U.S. government/agencies........................................ $ 67.8 2.2% $ 67.2 2.1%
State and political subdivisions................................ -- -- 1.7 0.1
Foreign governments............................................. 26.2 0.8 22.4 0.7
Corporate....................................................... 1,900.5 61.4 2,131.8 67.8
MBS:
U.S. government/agencies.................................... 706.6 22.8 686.8 21.9
Non-government/agencies..................................... 395.7 12.8 232.2 7.4
---------- ----- ---------- -----
Subtotal-MBS................................................ 1,102.3 35.6 919.0 29.3
---------- ----- ---------- -----
Total........................................................... $ 3,096.8 100.0% $ 3,142.1 100.0%
---------- ----- ---------- -----
---------- ----- ---------- -----
</TABLE>

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<PAGE>
The following table summarizes corporate fixed maturity securities by
industry of the issuers:

COMPOSITION OF CORPORATE
FIXED MATURITY SECURITIES BY INDUSTRY

<TABLE>
<CAPTION>
% OF CORPORATE
JUNE 30, 1996 FIXED MATURITY
CLASSIFICATION CARRYING VALUE SECURITIES
- --------------------------------------------------------------------------------- -------------- -----------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Utilities........................................................................ $ 337.8 17.8%
Nondepository credit institutions................................................ 211.3 11.1
Depository institutions.......................................................... 204.2 10.7
Petroleum refining and related industries........................................ 106.8 5.6
Chemicals and related products................................................... 100.8 5.3
Air transportation............................................................... 92.1 4.8
Electrical and other electrical equipment (excluding computers).................. 76.0 4.0
General merchandise stores....................................................... 58.0 3.1
Industrial, commercial machinery and computer equipment.......................... 54.4 2.9
Oil and gas...................................................................... 53.5 2.8
Other............................................................................ 605.6 31.9
-------------- -----
Total........................................................................ $ 1,900.5 100.0%
-------------- -----
-------------- -----
</TABLE>

The following table summarizes fixed maturity securities by remaining
maturity as of June 30, 1996:

REMAINING MATURITY OF FIXED MATURITY SECURITIES

<TABLE>
<CAPTION>
JUNE 30, 1996
------------------------
CARRYING
VALUE % OF TOTAL
---------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Due:
In one year or less (1996)......................................... $ 19.5 0.7%
One to five years (1997-2001)...................................... 481.5 15.5
Five to 10 years (2002-2006)....................................... 997.9 32.2
10 to 20 years (2007-2016)......................................... 365.3 11.8
Over 20 years (2017 and after)..................................... 130.3 4.2
---------- -----
Subtotal......................................................... 1,994.5 64.4
MBS................................................................ 1,102.3 35.6
---------- -----
Total.......................................................... $ 3,096.8 100.0%
---------- -----
---------- -----
</TABLE>

The Company's portfolio of investment grade fixed maturity securities is
diversified by number and type of issuer. As of June 30, 1996, investment grade
fixed maturity securities included the securities of over 621 issuers, with 970
different issues of securities. No issuer represents more than 2.2% of
investment grade fixed maturity securities.

Below-investment grade fixed maturity securities as of June 30, 1996
included the securities of 55 issuers representing 5.4% of total invested
assets, with the largest being a $10 million investment.

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<PAGE>
As of June 30, 1996, 75.6% of total invested assets were investment grade
fixed maturity securities. The following table sets forth the credit quality, by
NAIC designation and Standard & Poor's rating equivalents, of fixed maturity
securities as of June 30, 1996:

FIXED MATURITY SECURITIES BY NAIC DESIGNATION

<TABLE>
<CAPTION>
JUNE 30, 1996
--------------------------------------------------------------------------
PUBLIC PRIVATE TOTAL
----------------------- ------------------------ -----------------------
NAIC STANDARD & POOR'S CARRYING CARRYING CARRYING
DESIGNATION EQUIVALENT DESIGNATION VALUE % OF TOTAL VALUE % OF TOTAL VALUE % OF TOTAL
- ------------ ------------------------------ ---------- ----------- ----------- ----------- ---------- -----------
(DOLLARS IN MILLIONS)
<C> <S> <C> <C> <C> <C> <C> <C>
1 A- or Higher.................. $ 1,778.8 64.7% $ 48.1 13.8% $ 1,826.9 59.0%
2 BBB- to BBB+.................. 809.2 29.5 254.6 73.0 1,063.8 34.3
---------- ----- ----------- ----- ---------- -----
Total investment grade........ 2,588.0 94.2 302.7 86.8 2,890.7 93.3
---------- ----- ----------- ----- ---------- -----
3 BB to BB+..................... 107.2 3.9 33.1 9.5 140.3 4.5
4 B............................. 53.0 1.9 10.5 3.0 63.5 2.1
5 CCC or lower.................. -- -- 0.1 0.0 0.1 0.0
6 In or near default............ -- -- 2.2 0.7 2.2 0.1
---------- ----- ----------- ----- ---------- -----
Total below investment
grade........................ 160.2 5.8 45.9 13.2 206.1 6.7
---------- ----- ----------- ----- ---------- -----
Total......................... $ 2,748.2 100.0% $ 348.6 100.0% $ 3,096.8 100.0%
---------- ----- ----------- ----- ---------- -----
---------- ----- ----------- ----- ---------- -----
</TABLE>

MBS comprise a core position within the Company's fixed maturity securities
investments. MBS investments include residential and commercial MBS. As of June
30, 1996, MBS were $1,102.3 million or 28.8%, of total invested assets of which
$706.6 million, or 64.1% of MBS were guaranteed by the United States government
or an agency of the United States government. Other MBS were $395.7 million, or
35.9%, of MBS as of June 30, 1996. Management believes that the quality of
assets in the MBS portfolio is generally high, with 86.1% of such assets
representing agency backed or "AAA" rated securities.

The Company uses interest rate swaps and caps to reduce its exposure to
changes in interest rates and to manage duration mismatches. Although the
Company is subject to the risk that counterparties will fail to perform, credit
standings of counterparties are monitored regularly. The Company's policy is to
contract only with counterparties that are rated "AA" or higher; accordingly, it
is expected that counterparties will be able to satisfy their obligations under
such contracts. The Company is also subject to the risk associated with changes
in the value of contracts. However, such adverse changes in value generally are
offset by changes in the value of the items being hedged. The notional principal
amounts of the swaps and caps, which represent the extent of the Company's
involvement in such contracts but not the risk of loss, at June 30, 1996
amounted to $900.0 million. The swaps had a carrying value and a fair value
which amounted to a net receivable position of $5.9 million at June 30, 1996.
The carrying value and fair value of interest rate caps and swaptions amounted
to $10.6 million and $11.0 million, respectively, and are reflected as "other
investments" on the Company's consolidated financial statements as of June 30,
1996. The net amount payable or receivable from interest rate swaps and caps is
accrued as an adjustment to interest income.

MORTGAGE LOANS. As of June 30, 1996, mortgage loans in the investment
portfolio were $278.3 million, or 7.3% of the aggregate carrying value of
invested assets ($243.3 million, or 6.4%, after giving effect to the Capital
Contribution). Of the June 30, 1996 amount, commercial mortgage loans were
98.7%, and residential mortgage loans were 1.3%.

In the last two years, the Company has significantly reduced its mortgage
loan investments as a percentage of its invested assets through sales of certain
mortgage loan assets; decreased originations of new loans and write-downs of
delinquent loans. As of December 31, 1993, mortgage loans totaled $652.2
million, or 17.9% of invested assets. By December 31, 1995, such investments
totaled $353.6 million, or 8.9% of invested assets and by June 30, 1996 such
investments totaled $278.3 million, or 7.3%

73
<PAGE>
of invested assets. Commercial mortgage loans consist primarily of fixed-rate
mortgage loans on complete properties. As of June 30, 1996, the Company held 168
individual commercial mortgage loans having an average interest rate, maturity
and balance of 9.2%, 70 months and $1.7 million, respectively.

The following table sets forth additions, reductions from payments and other
charges, foreclosures and miscellaneous adjustments to the mortgage loan
portfolio based on unpaid principal balances for the six-month periods ended
June 30, 1996 and 1995 and for the years ended December 31, 1995, 1994 and 1993:

MORTGAGE LOAN ASSET FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30, YEAR ENDED DECEMBER 31,
------------------------ -------------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Commercial mortgage loans:
Beginning balance................................ $ 379.4 $ 504.0 $ 504.0 $ 723.6 $ 733.3
Plus: Additions.................................. 5.3 19.7 39.9 75.3 73.1
Less: Payments and other credits................. 41.4 38.4 134.9 123.3 73.1
Foreclosed properties....................... 6.2 9.5 18.0 14.0 9.7
Sales....................................... 47.2 -- 11.6 157.6 --
----------- ----------- ----------- ----------- -----------
Ending balance................................... 289.9 475.8 379.4 504.0 723.6
Residential mortgage loans......................... 3.7 6.4 4.3 9.2 8.8
----------- ----------- ----------- ----------- -----------
293.6 482.2 383.7 513.2 732.4
Valuation allowance for mortgage loan losses....... 15.3 60.0 30.1 65.5 80.2
----------- ----------- ----------- ----------- -----------
Total mortgage loans on real estate................ $ 278.3 $ 422.2 $ 353.6 $ 447.7 $ 652.2
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Valuation allowance as percentage of mortgage
loans............................................. 5.2% 12.4% 7.8% 12.8% 11.0%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

Substantially all of the new commercial mortgage loans were originated by
the Company through mortgage loan correspondents with whom the Company had an
ongoing relationship at the time such mortgage loans were originated. The
Company is not originating new commercial mortgage loans although it is renewing
existing loans in its portfolio in selected cases. The Company annually
estimates the current loan-to-value ratios of its commercial mortgage loans
based on an analysis of the operating statements of each mortgaged property.

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<PAGE>
The following table sets forth the maturity and principal repayment schedule
for the commercial mortgage loan portfolio as of June 30, 1996:

COMMERCIAL MORTGAGE LOAN SCHEDULED
PRINCIPAL REPAYMENTS

<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------------------------------------------------
MATURITY PAYMENTS ALL OTHER LOAN ANNUAL
YEAR ON BALLOON LOANS PAYMENTS TOTAL % OF TOTAL
- ------------------------------------------- ------------------- ----------------- --------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
1996....................................... $ 52.8 $ 9.1 $ 61.9 21.4%
1997....................................... 50.2 8.0 58.2 20.1
1998....................................... 8.5 7.1 15.6 5.4
1999....................................... 17.4 7.1 24.5 8.4
2000-2015.................................. 84.1 45.6 129.7 44.7
------- ----- --------- -----
Total...................................... $ 213.0 $ 76.9 $ 289.9 100.0%
------- ----- --------- -----
------- ----- --------- -----
</TABLE>

As of June 30, 1996, only $8.7 million, or 3.0% ($5.6 million, or 2.3%,
after giving effect to the Capital Contribution), of the Company's loan
portfolio (as measured by principal balance) was classified as delinquent or in
foreclosure. As of the same date, only $13.4 million, or 4.6% ($10.9 million, or
4.5%, after giving effect to the Capital Contribution), of the Company's loan
portfolio (as measured by principal balance) was classified as restructured. For
the first six months of 1996, the Company's foreclosures were approximately
$300,000 (as measured by principal balance).

In November 1994, in a transaction approved by the Iowa Commissioner, the
Company securitized a pool of 89 fixed rate commercial/multifamily mortgage
loans with a then outstanding aggregate principal balance of approximately $158
million. The Company sold these mortgage loans to a trust. Several classes of
Commercial/Multifamily Mortgage Pass-Through Certificates, Series 1994-1 (the
"Certificates") representing undivided beneficial ownership interests in the
trust were then issued and sold in a private placement. The Company retained a
residual interest in the trust which had a carrying value as of June 30, 1996 of
$3.7 million. The primary purpose of this securitization was to convert the
mortgage loans into cash, which could then be reinvested, and fixed maturity
securities so as to enhance the Company's liquidity, overall investment quality
and long-term economic value.

EQUITY REAL ESTATE. In recent years the Company has significantly reduced
its equity real estate portfolio. As of June 30, 1996, investment real estate
consisted of 22 properties located in eight states. The carrying value of
investment real estate as of June 30, 1996 was $18.8 million ($1.9 million after
giving effect to the Capital Contribution). As of June 30, 1996, the Company's
rental properties were 89% occupied by third parties or by the Company.

OTHER. The Company held $225.7 million of policy loans on individual
insurance products as of June 30, 1996. Of these policy loans, 71.8% were on
traditional life policies and 28.2% were on universal life policies and
annuities. Policy loans are permitted to the extent of a policy's contractual
limits and are fully collateralized by policy cash values. Loan rates are fixed
in the contracts and range from 5.2% to 8.0%.

As of June 30, 1996, the Company held equity securities of $90.4 million
(primarily preferred stock). The largest holding of equity securities had a
carrying value of $12.2 million as of June 30, 1996.

The Company held $88.8 million of other invested assets (including
short-term investments) on June 30, 1996. Other invested assets included various
joint venture investments, financial instruments and goodwill booked in
connection with the Company's investment in the Ameritas Joint Venture. See Note
13 to "Consolidated Financial Statements."

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<PAGE>
COMPETITION

The Company operates in a highly competitive industry. Numerous life
insurance companies and other entities, including banks and other financial
institutions, compete with the Company, many of which have greater financial and
other resources as compared to the Company. The Company believes that the
principal competitive factors in the sale of insurance products are product
features, price, commission structure, perceived stability of the insurer,
claims-paying ratings, value-added service and name recognition. Many other
companies are capable of competing for sales in the Company's target markets
(including companies that do not presently compete in such markets). The
Company's ability to compete for sales is dependent upon its ability to address
the competitive factors described above.

In addition to competing for sales, the Company competes for qualified
agents and brokers to distribute its products. Strong competition exists among
insurance companies for agents and brokers with demonstrated ability. Management
believes that the bases of competition for the services of such agents and
brokers are commission structure, support services, prior relationships and the
strength of an insurer's products. Although the Company believes that it has
good relationships with its agents and brokers, its ability to compete will
depend on its continued ability to attract and retain qualified persons.

FEDERAL INCOME TAX CONSIDERATIONS

Certain of the life insurance products and annuities marketed and issued by
AmerUs Life and the Ameritas Joint Venture enjoy income tax advantages as
compared to other savings investments, such as certificates of deposit and
taxable bonds. One important tax advantage is the deferral of income taxation on
any increases in the contract values during the accumulation phase of the life
insurance and annuities in contrast to the current taxation of all earnings on
many other savings and investment products. In the event that the federal income
tax laws are changed so that accumulated earnings on these life insurance
policies and annuities do not enjoy the tax deferral described above, or so that
additional savings and investment products achieve similar tax deferral status,
or so that tax rates are significantly lower so that the policyowner's or
annuitant's ability to defer income tax on policy or annuity earnings is no
longer a significant factor for the policyowner, consumer demand for the
affected products could decline materially. From time to time, Congress has
considered proposals to revise or eliminate this tax deferral. There is no such
proposal currently pending in Congress, nor has the current administration
announced any consideration of any such proposal. If legislation were enacted to
eliminate the tax advantages of life insurance policies and annuities, such a
change could have an adverse effect on the ability of the Company to sell those
products.

EMPLOYEES

As of June 30, 1996, the Company had 405 full-time employees. None of the
Company's employees are covered by a collective bargaining agreement and the
Company believes that its relations with employees are satisfactory.

Certain employees of the Company also provide services to other affiliated
entities, including affiliates not directly owned by the Company. See "Certain
Transactions and Relationships."

SUBSIDIARIES

The Company was formed in August, 1996 in connection with the
Reorganization. See "The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries." AmerUs Life has three wholly-owned subsidiaries: CLA
Assurance Company, an Iowa life insurance company, Centralife Annuity Services,
Inc., an Arizona corporation, and American Vanguard Life Insurance Company, an
Iowa life insurance company. In addition, AmerUs Life currently owns a 34%
interest in AMAL Corporation, through whose wholly-owned subsidiaries the
Ameritas Joint Venture operates. See "--Ameritas Joint Venture."

LEGAL PROCEEDINGS

The Company is involved in various legal actions from time to time arising
from the ordinary course of its business. As of the date hereof, the Company
does not believe that any such legal actions will have a material adverse effect
upon its operations or financial condition.

76
<PAGE>
AmerUs Life is a defendant in a class action lawsuit which was brought on
August 31, 1995 in the District Court for Travis County, Texas. The complaint,
which seeks unspecified damages, was filed by former policyowners on behalf of
themselves and all similarly situated persons who purchased individual life
insurance policies which were underwritten and sold by AmerUs Life within Texas
and which were based upon uniform sales presentations and policy illustrations
from and after the mid-1980s using a "vanishing premium" concept. AmerUs Life
has denied the allegations contained in such complaint, including the existence
of a legitimate class. The litigation is in the discovery stage and a hearing on
certification of the class has not yet been held. The litigation is being
vigorously defended by AmerUs Life. The parties have engaged in court-ordered
mediation with respect to this action.

A class action lawsuit was also filed in June 1996 in the United States
District Court for the Northern District of California. The complaint alleges
that AmerUs Life improperly passed an increase in its corporate income taxes
(known as the deferred acquisition cost, or DAC, tax) through to policyowners in
breach of the terms of certain of its life and annuity policies. The plaintiff,
an insured under a universal life policy issued by Central Life, seeks
unspecified damages and injunctive relief on behalf of himself and all
policyowners of AmerUs Life with universal life, term and "blended" life
insurance policies and annuities. AmerUs Life has denied the allegations
contained in such complaint, including the existence of a legitimate class. The
litigation is in the early discovery stage and a hearing on certification of the
class has not yet been held. The litigation is being vigorously defended by
AmerUs Life.

PROPERTIES

The Company's principal business operations are conducted from two
locations. The Company's executive offices consist of approximately 20,000
square feet located at 418 Sixth Avenue, Des Moines, Iowa. AmerUs Life's
executive offices consist of approximately 125,000 square feet located at 611
Fifth Avenue, Des Moines, Iowa. The Company and AmerUs Life will both lease
their executive offices from API after the Capital Contribution has been
effected, as both properties will be part of the Capital Contribution. See
"Certain Transactions and Relationships."

77
<PAGE>
SUPERVISION AND REGULATION

REGULATION OF THE COMPANY AND AMHC

A mutual insurance holding company is subject to regulation at a level
substantially equal to that of an Iowa domestic insurance company, and is
governed by statutory and regulatory requirements which are identical to, or
which parallel, the regulatory requirements imposed upon Iowa domestic insurance
companies. The Iowa Commissioner has jurisdiction over an intermediate holding
company, such as the Company, as if it were a mutual insurance holding company.

AMHC and the Company are each subject to the Iowa Insurer Supervision,
Rehabilitation and Liquidation Act, Iowa Code Chapter 507C. In addition, AMHC
and the Company are subject to the provisions of the Iowa Insurance Holding
Company Systems Act in the same manner and to the same extent as domestic
insurance companies. In addition, the assets of AMHC and the Company are
available to satisfy claims of policyowners, in the same manner as a domestic
insurance company in the event the Iowa Commissioner initiates a proceeding
under Chapter 507C.

AMHC and the Company may not merge with, be acquired by or acquire another
entity without approval of the Iowa Commissioner. In addition, in the case of a
merger or consolidation, separate approval by the Iowa Attorney General is
required. The statutory provisions applicable to the demutualization of a
domestic mutual life insurance company are applicable to the demutualization of
a mutual insurance holding company. In addition, no person may acquire or make
an offer to acquire voting stock in the Company if such acquisition would result
in such person's obtaining control over the Company. Generally, any person who,
directly or indirectly, owns, controls, holds with the power to vote, or holds
proxies representing 10% or more of the Company's voting securities (consisting
of both Class A Common Stock and Class B Common Stock) is deemed to have
control.

Under rules adopted by the Iowa Commissioner, AMHC is required to provide to
the Iowa Division of Insurance an annual report containing historical and
prospective information, including financial statements, an investment plan
covering all assets, any intention it has of borrowing money and information
regarding any "closed block" formed as part of a reorganization.

In addition to rules establishing the terms and conditions pursuant to which
the Iowa Commissioner will approve the sale of stock of an intermediate
insurance holding company or a subsidiary stock insurance company resulting from
a reorganization pursuant to Iowa law, the Iowa Commissioner has adopted rules
that also limit the activities and affiliations that are permissible for mutual
insurance holding companies. Under such rules, among other things, (i) at least
50 percent of the GAAP net worth of the mutual insurance holding company must be
invested in insurance company subsidiaries; (ii) a mutual insurance holding
company may not pay any policy credit, dividend or other distribution to any
policyowner member unless such payment has been approved by the Iowa
Commissioner; and (iii) a mutual insurance holding company must obtain the
approval of the Iowa Commissioner for any merger or acquisition (if at any time
it acquires or plans to acquire more than 50 percent of a stock insurance
company, a mutual insurance holding company must submit to the Iowa Commissioner
a plan describing any membership interests of policyowners).

The Iowa Commissioner also has proposed rules which would require prior
approval by the Iowa Commissioner of the issuance of stock by the Company.
Pursuant to such proposed rules, the Company intends to file an application with
the Iowa Commissioner seeking approval for the Offerings, which approval must be
obtained prior to consummation of the Offerings. Under the proposed rules, the
Company would be required to give notice to the Iowa Commissioner prior to any
subsequent public or private common stock offering.

Shares of the capital stock of the Company which carry the right to cast a
majority of the votes entitled to be cast by all of the outstanding shares of
the Company are required by Iowa law to at all times be owned, directly or
indirectly, by AMHC and may not be conveyed, transferred, assigned, pledged,
subjected to a security interest or lien, encumbered, or otherwise hypothecated
or alienated by AMHC or any intermediate holding company. Any conveyance,
transfer, assignment, pledge, security interest,

78
<PAGE>
lien, encumbrance or hypothecation or alienation by AMHC, or any intermediate
holding company, in or on such shares shall be deemed void in inverse
chronological order of the date of such transaction to the extent necessary to
give the mutual insurance holding company unencumbered direct or indirect
ownership of shares representing a majority of the votes entitled to be cast by
all of the outstanding shares of the Company.

REGULATION OF AMERUS LIFE

The Company will rely primarily on dividends and interest income from AmerUs
Life to make any dividend payments to its shareholders. The ability of AmerUs
Life to pay dividends to the Company is limited by law to earned profits
(statutory unassigned surplus) as of the date the dividend is paid, as
determined in accordance with accounting practices prescribed or permitted by
the insurance regulatory authorities of the State of Iowa. In addition, under
the Iowa Insurance Holding Company Systems Act, AmerUs Life may not pay an
"extraordinary" dividend without prior notice to and approval by the Iowa
Commissioner. An "extraordinary" dividend is defined under the Iowa Holding
Company Systems Act as any dividend or distribution of cash or other property
whose fair market value, together with that of other dividends or distributions
made within the preceding 12 months exceeds the greater of (i) 10% of
policyowners' surplus (total statutory capital stock and STATUTORY SURPLUS) as
of December 31 of the preceding year, or (ii) the statutory net gain from
operations of the insurer for the 12 month period ending the December 31 of the
preceding year. Iowa law gives the Iowa Commissioner broad discretion to
disapprove requests for dividends in excess of these limits. Based on this
limitation and 1995 statutory results, AmerUs Life would be able to pay
approximately $40 million in dividends to the Company in 1996 without obtaining
the Iowa Commissioner's approval. However, as a result of the Distribution,
AmerUs Life will not be able to pay any additional dividends to the Company in
the 12-month period following the Distribution without the prior consent of the
Iowa Commissioner.

AmerUs Life and its subsidiaries are subject to regulation and supervision
by the states in which they transact business. State insurance laws generally
establish supervisory agencies with broad administrative and supervisory powers
related to granting and revoking licenses, transacting business, establishing
guaranty fund associations, licensing agents, approving policy forms, regulating
premium rates for some lines of business, establishing reserve requirements,
prescribing the form and content of required financial statements and reports,
determining the reasonableness and adequacy of statutory capital and surplus,
and regulating the type and amount of investments permitted.

Every state in which AmerUs Life is licensed administers a guaranty fund,
which provides for assessments of licensed insurers for the protection of
policyowners of insolvent insurance companies. There has been an increase in the
number of insurance companies that are under supervision which has resulted in
an increase in the amount of assessments to cover losses to policyowners of such
companies. Assessments can be partially recovered through a reduction in future
premium taxes in some states. In these situations, the assessments are generally
capitalized and amortized against future reductions in premium taxes. Net
assessment expenses for AmerUs Life amounted to $0.3 million for the first six
months of 1996, $0.4 million in 1995, $1.2 million in 1994 and $3.3 million in
1993. Management cannot reasonably predict the amount of future assessments, if
any.

Ethical sales practices and compliance with applicable laws and regulations
relevant to the life insurance industry have been a continuing focus of the
Company's support efforts. The Company has a continuing education program
focusing on ethical practices which is being provided to all agents. A program
is currently being implemented to further formalize the Company's current
practices and standards in the compliance and market conduct areas.

Recently, the insurance regulatory framework has been placed under increased
scrutiny by various states, the federal government and the NAIC. Various states
have considered or enacted legislation which changes, and in many cases
increases, the state's authority to regulate insurance companies. Although
legislation has been under consideration for several years in Congress which, if
enacted, would result in the federal government assuming some role in the
regulation of insurance companies, management does not expect the current
Congress to enact federal insurance regulation. The NAIC, in

79
<PAGE>
conjunction with state regulators, has been reviewing existing insurance laws
and regulations. The NAIC recently approved and recommended to the states for
adoption and implementation several regulatory initiatives designed to reduce
the risk of insurance company insolvencies. Through the NAIC accreditation
program, these recommendations for state legislation have taken on an increased
significance. Two such initiatives are risk-based capital standards ("RBC")
which have been adopted by the NAIC, and a model investment law which is
currently under consideration.

The RBC standards for life insurance companies were adopted by the NAIC in
1992 and require insurance companies to calculate and report for statutory basis
financial statements information under a risk-based capital formula. The formula
is embodied in the NAIC Model Act, which has been adopted by many states,
including Iowa. RBC requirements are intended to allow insurance regulators to
identify at an early stage inadequately capitalized insurance companies based
upon the types and mixtures of risks inherent in such companies' operations. The
formula includes components for asset risk, liability risk, interest rate
exposure and other factors.

The RBC requirements are intended to be used by insurance regulators as an
early warning tool to identify deteriorating or weakly capitalized companies for
the purpose of initiating regulatory actions. They are not designed as a ranking
mechanism for adequately capitalized companies. In addition, the formula defines
a new minimum capital standard which supplements the low, fixed minimum capital
and surplus requirements previously implemented on a state-by-state basis.

The Iowa RBC requirements categorize insurance companies according to the
extent to which they meet or exceed certain RBC thresholds. The law requires
increasing degrees of regulatory oversight and intervention based on the level
of an insurance company's authorized control level RBC as its RBC declines.
These degrees of regulatory action are triggered by the RBC level of an
insurance company as follows:(i) a "Company Action Level Event" (requiring the
insurance company to inform and obtain approval from the Director of a
comprehensive financial plan for increasing its RBC), which would occur if,
among other things, an insurance company's RBC falls below 200% of its
authorized control level RBC, or if an insurance company's RBC falls below 250%
of its authorized control level RBC and has a negative trend; (ii) a "Regulatory
Action Level Event" (resulting in, in addition to the requirement of a financial
plan, regulatory actions including examination of an insurance company's assets,
liabilities and operations followed by an order specifying such corrective
actions as the Director determines to be appropriate), which would occur if,
among other things, an insurance company's RBC falls below 150% of its
authorized control level RBC; (iii) an "Authorized Control Level Event"
(resulting in, in addition to the regulatory actions above, such actions as are
necessary to cause an insurance company to be placed under regulatory control in
a rehabilitation or liquidation proceeding if deemed to be in the best interests
of policyowners, creditors and the public), which would occur if, among other
things, an insurance company's RBC falls below 100% of its authorized control
level RBC; and (iv) a "Mandatory Control Level Event" (resulting in, on a
mandatory basis, such actions as are necessary to cause an insurance company to
be placed under regulatory control in a rehabilitation or liquidation
proceeding), which would occur if, among other things, an insurance company's
RBC falls below 70% of its authorized control level RBC.

As of June 30, 1996, AmerUs Life's RBC levels were significantly in excess
of RBC thresholds. Management believes that the RBC levels will be significantly
in excess of RBC thresholds as of the closing of the Offerings. As a result, the
RBC requirements are not expected to have an impact upon AmerUs Life's
operations, financial condition or operating results.

Approximately once every three to five years, as part of their routine
regulatory oversight process, state insurance departments conduct detailed
examinations of the books, records and accounts of insurance companies domiciled
in their states. Such examinations are generally conducted in cooperation with
the departments of two or three other states, under guidelines promulgated by
the NAIC. AmerUs Life was last examined by the Iowa Commissioner as of December
31, 1993. No material issues were raised by the Iowa Commissioner in such
examination.

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<PAGE>
A committee of the NAIC is developing model legislation to govern insurance
company investments. Several discussion drafts have been released over the past
two to three years. However, implementation of any investment model law is not
anticipated in the foreseeable future. Management believes that if the current
discussion draft were adopted without modification it would not have a material
impact on the Company.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning the current
directors and executive officers of the Company and AmerUs Life.

<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY AND AMERUS LIFE
- ------------------------------ --- ---------------------------------------------------------------------------
<S> <C> <C>
John R. Albers 65 Director
Roger K. Brooks 59 Director, Chairman, President and Chief Executive Officer of the Company
and Chairman of AmerUs Life
Malcolm Candlish 61 Director
D T Doan 64 Director and Vice Chairman of the Company and President of AmerUs Life
Thomas F. Gaffney 51 Director
Sam C. Kalainov 66 Director
John W. Norris, Jr. 60 Director
Jack C. Pester 61 Director
John A. Wing 61 Director
Thomas C. Godlasky 41 Executive Vice President and Chief Investment Officer of the Company and
AmerUs Life
Michael E. Sproule 49 Executive Vice President and Chief Financial Officer of the Company and
AmerUs Life
Victor N. Daley 53 Senior Vice President and Chief Human Resources Officer of the Company and
AmerUs Life
Michael G. Fraizer 46 Senior Vice President and Controller/Treasurer of the Company and AmerUs
Life
</TABLE>

Set forth below with respect to each of the directors and executive officers
of the Company and AmerUs Life is a description of such individual's business
experience, principal occupation and employment during at least the last five
years:

John R. Albers served as a director of American Mutual Life from November
1983 to June 1996. Since April 1996 Mr. Albers has served as a director of AMAL.
Mr. Albers is President and CEO of Fairfield Enterprises, Inc., Dallas Texas.
From August 1988 to April 1995, Mr. Albers was the Chairman, CEO & President of
Dr. Pepper/Seven-Up Companies, Dallas, Texas. From July 1995 to the present, Mr.
Albers has served as a director of First Alert, Inc., Aurora, Illinois.

Roger K. Brooks served as a director of American Mutual Life from February
1971 to June 1996. Mr. Brooks was the Chief Executive Officer of American Mutual
Life from December 1994 to June 1996, and prior thereto was the Chairman and
Chief Executive Officer of American Mutual Life. Since April 1996 Mr. Brooks has
served as a director of AMAL.

Malcolm Candlish served as a director of American Mutual Life from February
1987 to June 1996. Since December 1992 Mr. Candlish has been the Chairman and
Chief Executive Officer and, since

81
<PAGE>
May 1996 also the President, of First Alert, Inc., Aurora, Illinois. From 1989
to 1992, Mr. Candlish was the Chairman and Chief Executive Officer of Sealy,
Inc., Cleveland, Ohio. Since 1991 Mr. Candlish has served as a director of Black
& Decker Corporation, Towson, Maryland.

D T Doan served as a director and Vice Chairman of American Mutual Life from
December 1994 to June 1996. From October 1995 until June 1996, Mr. Doan was
President--Insurance Operations of American Mutual Life. Mr. Doan held the same
position from August 1992 to January 1995. From August 1987 to August 1992, Mr.
Doan was Executive Vice President--Corporate of American Mutual Life. Since
April 1996 Mr. Doan has served as a director of AMAL, AVLIC and AIC. Since April
1996, Mr. Doan has served as Executive Vice President of AMAL and AVLIC and
Senior Vice President of AIC.

Thomas F. Gaffney served as a director of American Mutual Life from November
1983 to June 1996. Mr. Gaffney is a private investor who lives in Tierra Verde,
Florida. From 1987 to 1990, Mr. Gaffney was the Chairman of Oxford Investment
Group, Bloomfield Hills, Michigan.

Sam C. Kalainov served as a director of American Mutual Life from December
1994 to June 1996. Mr. Kalainov was the Chairman of American Mutual Life from
December 1994 until June 1996 and Chairman of AmerUs Life from July 1996 until
September 1996. From 1982 to December 1994, Mr. Kalainov was a director,
Chairman and Chief Executive Officer of Old AML.

John W. Norris, Jr. served as a director of American Mutual Life from
November 1974 to June 1996. Mr. Norris is Chairman and CEO of Lennox
International, Inc., Dallas, Texas. Mr. Norris has also served as a director of
Atmos Energy Corporation, Dallas, Texas since August 1987.

Jack C. Pester served as a director of American Mutual Life from December
1994 to June 1996. From May 1981 to December 1994, Mr. Pester was a director of
Old AML. Mr. Pester is a Senior Vice President of The Coastal Corporation,
Houston, Texas. Since August 1994 Mr. Pester has also served as a director of
KFX, Inc., Denver, Colorado.

John A. Wing served as a director of American Mutual Life from May 1991 to
June 1996. Mr. Wing is Chairman and Chief Executive Officer of The Chicago
Corporation, Chicago, Illinois.

Thomas C. Godlasky was Executive Vice President and Chief Investment Officer
of American Mutual Life from January 1995 to June 1996. From February 1988 to
January 1995, he was Manager of the Fixed Income and Derivatives Department of
Providian Corporation, Louisville, Kentucky. Since April 1996, Mr. Godlasky has
served as a director of AVLIC and AIC.

Michael E. Sproule was Executive Vice President and Chief Financial Officer
of American Mutual from August 1992 to June 1996. From January 1991 through July
1992, he was Executive Vice President and Chief Financial Officer of ICH
Corporation, Louisville, Kentucky and from January 1988 to December 1990, he was
a Consultant with Tillinghast, New York, New York. Since April 1996, Mr. Sproule
has served as a director of AVLIC and AIC.

Victor N. Daley was Senior Vice President and Chief Human Resources Officer
of American Mutual Life from September 1995 to June 1996. From April 1989 to
September 1995 Mr. Daley was Senior Vice President and Chief Administrative
Officer of Royal Insurance, Charlotte, North Carolina.

Michael G. Fraizer was Senior Vice President and Controller/Treasurer of
American Mutual Life from January 1993 to June 1996. From April 1991 to January
1993, Mr. Fraizer was Senior Vice President and Chief Financial Officer of Iowa
Realty Co., Inc. and from April 1977 to April 1991, he was a Partner with
McGladrey & Pullen, Des Moines, Iowa.

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<PAGE>
BOARD OF DIRECTORS OF THE COMPANY

The business of the Company is managed under the direction of the Company's
Board of Directors. The Board of Directors is presently composed of nine
directors and the Company intends to add two additional outside directors after
completion of the Offerings. The Board is divided into three classes. Messrs.
Candlish, Kalainov and Norris are in Class I, which class will stand for
election at the annual meeting of shareholders to be held in 1997. Messrs.
Albers, Doan and Gaffney are in Class II, which class will stand for election at
the annual meeting of shareholders to be held in 1998. Messrs. Brooks, Pester
and Wing are in Class III, which class will stand for election at the annual
meeting of shareholders to be held in 1999.

Consistent with proposed regulations recently promulgated by the Iowa
Commissioner, at least three of the Company's outside directors will not be
directors of AMHC or any of AMHC's subsidiaries. In addition, at least two of
the Company's outside directors will have had no previous affiliation with the
Company. The Company's independent directors will review any intercompany
transactions involving potential conflicts of interest between the Company and
AMHC and its subsidiaries.

The Company's Board of Directors has also established an Executive Committee
which will consist of between three and five members of the Board and will be
chaired by Mr. Brooks. The Executive Committee exercises the power and authority
of the Directors in all matters that do not require action by the entire Board
of Directors. The members of the Executive Committee will be appointed prior to
the Offerings.

The Company's Board of Directors has also established an Audit Committee and
a Human Resources Committee. The Audit Committee recommends the firm to be
appointed as independent accountants to audit financial statements and to
perform services related to the audit, reviews the scope and results of the
audit with the independent accountants, reviews with management and the
independent accountants the Company's year-end operating results and considers
the adequacy of the Company's internal accounting procedures. The Audit
Committee will consist of three members of the Board who will be appointed prior
to the Offerings. The Human Resources Committee reviews and recommends the
compensation arrangements for all executive officers, approves such arrangements
for other senior level employees, and takes such actions as may be required in
connection with certain compensation and incentive plans of the Company. The
Human Resources Committee consists of Messrs. Albers, Candlish and Norris, each
of whom qualifies as a Non-Employee Director, as such term is used in Rule 16b-3
promulgated under the Securities Exchange Act of 1934.

BOARD OF DIRECTORS OF AMERUS LIFE

The Board of Directors of AmerUs Life is presently composed of the same nine
directors as the Company.

COMPENSATION OF DIRECTORS

Compensation for all non-employee directors is $ per meeting of the
Board of Directors of the Company, $ per meeting of the Board of Directors
of AmerUs Life and $ per meeting of a committee of the Board of Directors
of the Company. Directors who are officers or employees of the Company or any
affiliate of the Company receive no compensation for serving as directors. All
directors are reimbursed for out-of-pocket expenses incurred in connection with
attendance at any meeting of the Board of Directors or committee of the Board of
Directors of the Company or AmerUs Life.

Directors are also eligible to participate in the Company's Non-Employee
Director Stock Plan, which the Company's Board of Directors approved on
September 15, 1996. See "Management Compensation--Compensation Pursuant to Stock
Plans of the Company."

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<PAGE>
MANAGEMENT COMPENSATION

EXECUTIVE OFFICER COMPENSATION

Since the formation of the Company, none of the executive officers has
received any compensation from the Company. All compensation received, earned or
accrued by such executive officers has been from AmerUs Life.

The following summary compensation table sets forth certain information
concerning compensation for services rendered in all capacities awarded or paid
by the Company (including compensation paid by AmerUs Life) to its Chief
Executive Officer and the other named executive officers (the "Named Executive
Officers") during the year ended December 31, 1995:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------- LTIP ALL OTHER
SALARY BONUS(A) PAYOUTS(B) COMPENSATION(C)
NAME AND PRINCIPAL POSITION FISCAL YEAR $ $ $ $
- ------------------------------------------------- ----------- --------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks
Chairman, President and Chief Executive Officer
of the Company and Chairman of AmerUs Life 1995 440,000 300,000 352,000
D T Doan
Vice Chairman of the Company and President of
AmerUs Life 1995 275,000 132,500 137,600
Thomas C. Godlasky
Executive Vice President and Chief Investment
Officer of the Company and AmerUs Life 1995 239,600 125,000 204,000(D)
Michael E. Sproule
Executive Vice President and Chief Financial
Officer of the Company and AmerUs Life 1995 250,000 200,000 125,000
Sam C. Kalainov
Former Chairman (E) 1995 440,000 300,000 352,000
</TABLE>

- ------------------
(A) Pursuant to the Management Incentive Plan.

(B) Long term incentive compensation pursuant to the Performance Share Plan (the
"LTIP"). LTIP payouts indicated were earned in 1995 and are payable in 1996.

(D) The amount shown reflects payment of a $204,000 sign-on bonus of which a
pro-rata portion is repayable in the event of termination during the initial
36 months of employment.

(E) Mr. Kalainov served as Chairman of AmerUs Life until September 1996. In
August 1996, Mr. Kalainov became Chairman of AMHC and AmerUs Group. Mr.
Kalainov is no longer an officer of the Company.

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<PAGE>
COMPENSATION PURSUANT TO STOCK PLANS OF THE COMPANY

STOCK INCENTIVE PLAN

On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Holdings, Inc. Stock Incentive Plan (the "Stock Plan" or the "Plan"). The
purpose of the Stock Plan is to enable the Company to attract and retain
employees who will contribute to the Company's long-term success by enabling
such employees to participate in the long-term success and growth of the Company
through an equity interest in the Company.

The Stock Plan provides for the grant of options (including incentive stock
options and non-qualified stock options), stock appreciation rights and
restricted stock awards. To date, no options or other awards have been granted
under the Stock Plan. In addition, consistent with proposed rules recently
promulgated by the Iowa Commissioner, no options or awards will be granted by
the Company during the six-month period following the closing of the Offerings.

The summary of the Stock Plan which appears below is qualified in its
entirety by reference to the full text of such Plan.

TYPES OF AWARDS. The Stock Plan provides for the grant of any or all of the
following types of awards: (1) stock options, including incentive stock options
and non-qualified stock options; (2) stock appreciation rights; and (3)
restricted stock. Awards may be granted in combination as determined by the
Human Resources Committees of the Board of Directors (the "Committee"). The
initial grant will be in the form of Non-Qualified Stock Options.

TERM. The Company anticipates that the Stock Plan will be approved by the
Company's sole shareholder and become effective prior to the closing of the
Offerings. The Stock Plan will terminate ten years after its effective date (the
"Termination Date"). No awards shall be granted pursuant to the Plan after the
Termination Date, but awards granted prior thereto may extend beyond such time.
The Board of Directors may terminate the Plan prior to the Termination Date,
however, termination of the Plan will not affect awards made prior to
termination.

ELIGIBILITY. Officers and other key and high potential employees of the
Company, its affiliates and its subsidiaries (but excluding members of the
Committee and any person who serves only as a director) who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Company are eligible to be granted stock options, stock appreciation rights,
or restricted stock awards. The options and participants under the Plan will be
selected from time to time by the Committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares covered by each award or grant.

SHARES SUBJECT TO THE STOCK PLAN. The total number of shares of Class A
Common Stock reserved and available for distribution under the Stock Plan shall
be 1.4 million. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Class A Common Stock that
have been optioned cease to be subject to option, or if any shares subject to
Restricted Stock Award granted hereunder are forfeited or such awards otherwise
terminate, such shares shall again be available for distribution in connection
with future awards under the Plan. The maximum total number of shares subject to
awards which may be granted under the Plan in any one year will be 700,000, and
the maximum number of shares subject to awards which may be granted under the
Plan to any individual in any one year is 230,000 (in both cases, subject to
appropriate adjustments to reflect changes in capitalization of the Company).

STOCK OPTIONS. The Committee is authorized to determine the terms and
conditions of all option grants, subject to the limitations that the option
price per share may not be less than the fair market value of a share of the
Company's common stock on the date of grant and the term of an option may not be
longer than ten (10) years. Payment of the option price may be made in any
manner specified by the Committee (which may include cash or common stock of the
Company, or by "cashless exercise").

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<PAGE>
STOCK APPRECIATION RIGHTS ("SARS"). The Committee is authorized to grant
SARs in tandem with options under the Stock Plan. A SAR can be exercised only to
the extent the options with respect to which it is granted is not exercised, and
is subject to the same terms and conditions as the option to which it relates.
Upon exercise of a SAR, the holder will be entitled to receive, for each share
with respect to which the SAR is exercised, an amount (the "appreciation") equal
to the difference between the option price of the related option and the fair
market value of a share of common stock of the Company on the date of exercise
of the SAR. The appreciation will be payable in cash or Class A Common Stock, at
the discretion of the Committee.

RESTRICTED STOCK. The Committee is authorized to award restricted stock
under the Stock Plan subject to the terms and conditions as the Committee may
determine. The Committee has the authority to determine the number of shares of
restricted stock to be awarded, the price, if any, to be paid by the recipient
of the restricted stock, and the date or dates on which the restricted stock
will vest. The vesting of restricted stock may be conditioned upon the
completion of a specific period of service with the Company, upon the attainment
of specified performance goals, or upon such other criteria as the Committee may
determine. The Stock Plan gives the Committee discretion to make loans to the
recipients for the purchase price of restricted stock and to accelerate the
vesting of restricted stock on a case by case basis at any time.

FEDERAL INCOME TAX ASPECTS. The following is a brief summary of the Federal
income tax consequences of awards made under the Stock Plan. This summary does
not describe state, local or foreign tax consequences. The information contained
in this section is based on present law and regulations, which are subject to be
changed prospectively or retroactively.

The optionee will recognize no taxable income upon the grant or exercise of
an incentive stock option (as defined under the Plan), and the Company will not
be entitled to any deduction. Upon a disposition of the shares after the later
of two years from the date of grant and one year from the date of exercise, the
participant will recognize long-term capital gain or loss equal to the
difference, if any, between the amount realized and the exercise price. The
excess, if any, of the fair market value of the shares of Class A Common Stock
on the date of exercise of the Incentive Stock Option over the exercise price
may be subject to alternative minimum tax. In such circumstances, no deduction
will be allowed to the Company for Federal income tax purposes.

If Class A Common Stock acquired upon the exercise of an Incentive Stock
Option is disposed of prior to the expiration of the holding periods described
above, (i) the optionee will recognize ordinary compensation income in the
taxable year of disposition in an amount equal to the excess, if any, of the
lesser of the fair market value of the shares on the date of exercise and the
amount realized on the disposition of the shares, over the exercise price paid
for such shares; and (ii) the Company will be entitled to a corresponding
deduction.

With respect to Non-Qualified Options (as defined under the Plan) (i) upon
grant of the option, the optionee will recognize no income; and (ii) upon
exercise of the option, the optionee will recognize ordinary compensation income
in an amount equal to the excess, if any, of the fair market value of the shares
on the date of exercise over the exercise price, and the Company will be
entitled to a corresponding deduction. On the disposition of the shares, the
optionee will recognize gain or loss equal to the amount realized and the sum of
the exercise price and the ordinary compensation income realized. Such gain or
loss will be treated as either short-term or long-term capital gain or loss,
depending upon the length of time that the optionee has held the shares.

An optionee recognizes no taxable income upon the grant of a SAR, and the
Company is not entitled to a deduction. An optionee will recognize ordinary
income, and the Company will be entitled to a deduction at the time of exercise
equal to the cash or fair market value of common stock payable upon such
exercise.

The grant of Restricted Stock (as defined under the Plan) under the Stock
Plan will not result in income for the grantee or in a deduction for the
Company, assuming the shares transferred are subject

86
<PAGE>
to a "substantial risk of forfeiture" as intended by the Company. If there are
no such restrictions, the grantee would recognize ordinary income upon receipt
of shares. Dividends paid to the grantee while the stock remains subject to
restriction will be treated as compensation for Federal income tax purposes. At
the time the restrictions lapse, the grantee will recognize ordinary income, and
the Company will be entitled to a deduction measured by the fair market value of
the shares at the time of lapse. However, an optionee may elect to recognize
income measured by the fair market value of the shares at the time of grant and
the Company will be entitled to a corresponding deduction.

Awards paid to certain executive officers may be subject to the limitations
under Section 162(m) of the Internal Revenue Code that prohibit the deduction of
certain compensation paid in excess of $1,000,000 in any taxable year. The
application of such section to awards made under plans adopted and approved
prior to the time at which a company's stock becomes publicly traded is not
clear. The Company believes that compensation payable pursuant to options
granted under the Stock Plan should not be limited as to deductibility by reason
of Section 162(m) and that compensation payable in respect of other awards may
fail to be deductible for Federal income tax purposes unless such awards qualify
for certain exemptive relief that may be available for grants made prior to the
first meeting of shareholders of the Company at which directors are elected in
1999.

NON-EMPLOYEE DIRECTOR STOCK PLAN

On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Non-Employee Director Stock Plan (the "Director Plan"). The Company
anticipates the Director Plan will be approved by the Company's sole shareholder
and become effective prior to the closing of the Offerings. The purpose of the
Director Plan is to provide stock-based compensation to eligible Directors of
the Company in order to encourage a high level of Director performance and to
provide Directors with a proprietary interest in the Company's success.

The Director Plan provides for grants of restricted shares of the Company's
Class A Common Stock ("Restricted Shares") and for the grant of options. To
date, no Restricted Shares or options have been granted. In addition, consistent
with proposed rules recently promulgated by the Iowa Commissioner, no Restricted
Shares or options will be granted under the Director Plan during the six-month
period following the closing of the Offerings.

The Director Plan is administered by the Committee. The total number of
shares of Class A Common Stock reserved and available for distribution under the
Director Plan shall be 150,000. Such shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.

Each Non-Employee Director of the Company is eligible to participate in the
Director Plan. A "Non-Employee Director" for this purpose means Directors who
are not officers for purposes of Section 16 of the Exchange Act or otherwise
employed, or a consultant to, the Company or any of its affiliates, and who is
an outside director under Section 1.162-27(e)(3) of the regulations promulgated
under the Code.

STOCK OPTIONS. Beginning January 1, 1998, options covering 2,500 shares of
Class A Common Stock of the Company shall be granted to each Non-Employee
Director automatically on the first day of each calendar year in which the Class
A Common Stock is publicly traded on the NASDAQ National Market. Options granted
under the Director Plan shall be evidenced by a written agreement in such form
as the Committee shall from time to time approve. The option price per share of
Class A Common Stock purchasable under an option shall be 100% of the fair
market value of the Class A Common Stock on the date of the grant of the option.
Each option shall be exercisable for a term of ten (10) years from the date such
option is granted. Options will not become exercisable until the expiration of
twelve (12) months from the date of the grant of the option.

RESTRICTED STOCK AWARDS. Each Non-Employee Director may elect, pursuant to
a written irrevocable election, to receive Restricted Stock in lieu of part or
all of such Non-Employee Director's director fees. The number of shares of
Restricted Stock granted to a Non-Employee Director pursuant to such

87
<PAGE>
election shall be equal to the dollar amount of director fees which the
Non-Employee Director has elected not to receive, divided by seventy-five
percent (75%) of the fair market value of the Class A Common Stock as of the
date of payment.

Generally, a Non-Employee will not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock awarded under the Director Plan for a period
of two (2) years following the effective date of the Restricted Stock Agreement
pursuant to which such shares of Restricted Stock are awarded.

FEDERAL INCOME TAX ASPECTS. Federal income tax consequences of options and
Restricted Stock granted under the Director Plan are the same as those described
with respect to Non-Qualified Options and Restricted Stock under the Stock
Incentive Plan.

COMPENSATION PURSUANT TO AMERUS LIFE PLANS

MANAGEMENT INCENTIVE PLAN

AmerUs Life sponsors a Management Incentive Plan ("MIP") for officers and
key management employees of the Company and its subsidiaries. On an annual
basis, AmerUs Life establishes various and distinct goals for its executives and
key managers. Goals generally relate to objectives such as increased revenue,
expense levels and earnings. Attainment of individual and AmerUs Life goals can
generate payment of cash bonuses ranging from 15% to 70% of an executive's base
salary. Payment of these annual incentives is approved by the Board of Directors
and made in a separate lump-sum on or before the end of February of the ensuing
year.

LONG-TERM INCENTIVE COMPENSATION PLAN

AmerUs Life established a long-term incentive compensation Performance Share
Plan effective January 1, 1995 (the "LTIP"). Under the LTIP, the Human Resources
Committee of the Company's Board of Directors has the authority to grant
Performance Shares to eligible employees on such dates as the Human Resources
Committee shall determine. The LTIP will be integrated with the Stock Plan such
that long term compensation earned in connection with services provided to the
Company will be paid through the Stock Plan.

The Human Resources Committee determines the terms and conditions of the
Performance Share awards consistent with the LTIP. Each Performance Share has a
notional value of $100 and a maximum value of $200 at the end of the three-year
performance cycle to which the Performance Share relates (the "Performance
Cycle"). Performance goals are measured by the cumulative growth in AmerUs
Life's consolidated adjusted GAAP net worth ("Adjusted GAAP Value"), as
determined annually by the Human Resources Committee, and are set at a range of
levels for a given Performance Cycle. Goals are set to establish the level of
increase in Adjusted GAAP Value in the Performance Cycle that is required in
order for the value of the Performance Shares to reach its maximum level of $200
at the end of such Performance Cycle. Threshold levels are also set to establish
the level of increase in Adjusted GAAP Value in the Performance Cycle that is
required in order for the Performance Shares to maintain a value of $50 at the
end of such cycle. If threshold levels are not met, the Performance Shares will
have no value at the end of the Performance Cycle. Performance goals for a given
Performance Cycle under the LTIP are established at the time Performance Shares
are granted.

The first Performance Shares were awarded under the LTIP on January 1, 1995.
On such date, Performance Shares relating to three Performance Cycles were
awarded, one relating to the first full three-year Performance Cycle ending on
December 31, 1997, and the other two relating to two transitional one- and
two-year Performance Cycles ending on December 31, 1995 and December 31, 1996,
respectively. Performance Shares were also awarded on January 1, 1996 for the
three-year Performance Cycle ending on December 31, 1998.

The various performance goals set for the Performance Shares awarded on
January 1, 1995 and January 1, 1996 ranged from a minimum of 8% Adjusted GAAP
Value to 16% Adjusted GAAP Value. The

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<PAGE>
increases in Adjusted GAAP Value necessary for the Performance Shares to reach
their maximum value for the Performance Cycles ending December 31, 1996, 1997
and 1998 are 15%, 16% and 16%, respectively.

LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF NON-STOCK
SHARES, PERFORMANCE OR PRICE-BASED PLANS
UNITS OR OTHER PERIOD -----------------------------------
OTHER RIGHTS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
(#) OR PAYOUT ($) ($) ($)
------------- ---------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks 1,760 1/95 - 12/95 88,000 176,000 352,000
2,640 1/95 - 12/96 132,000 264,000 528,000
3,520 1/95 - 12/97 176,000 352,000 704,000
D T Doan 688 1/95 - 12/95 34,400 68,800 137,600
1,031 1/95 - 12/96 51,550 103,100 206,200
1,375 1/95 - 12/97 68,750 137,500 275,000
Thomas C. Godlasky 625 1/95 - 12/95 31,250 62,500 125,000
938 1/95 - 12/96 46,900 93,800 187,600
1,250 1/95 - 12/97 62,500 125,000 250,000
Michael E. Sproule 625 1/95 - 12/95 31,250 62,500 125,000
938 1/95 - 12/96 46,900 93,800 187,600
1,250 1/95 - 12/97 62,500 125,000 250,000
Sam C. Kalainov 1,760 1/95 - 12/95 88,000 176,000 352,000
2,640 1/95 - 12/96 132,000 264,000 528,000
3,520 1/95 - 12/97 176,000 352,000 704,000
</TABLE>

SAVINGS AND PROFIT SHARING PLANS

Each of the Named Executive Officers participates in the All*AmerUs Savings
& Retirement Plan for Employees of American Mutual Life (the "Savings &
Retirement Plan"), a profit sharing plan containing a qualified cash or deferred
arrangement and the All*AmerUs Supplemental Executive Retirement Plan (the
"Supplemental Plan"). Each of the Named Executive Officers also has a frozen
benefit under either the American Mutual Life Insurance Company Employees'
Pension Plan (the "AML Employees' Frozen Pension Plan") or the American Mutual
Life Insurance (formerly Central Life Assurance) Company Pension Plan (the "AML
(formerly Central Life) Frozen Pension Plan") (the AML Employees' Frozen Pension
Plan and the AML (formerly Central Life) Frozen Pension Plan are hereinafter
sometimes collectively referred to as the "Frozen Pension Plans"). Certain of
the Named Executive Officers additionally have a frozen benefit under the
American Mutual Life Insurance Company Supplemental Executive Retirement Plan
(the "AML Frozen SERP").

SAVINGS & RETIREMENT PLAN

Prior to December 31, 1995, the Company maintained three separate defined
contribution plans for eligible employees (collectively the "AmerUs Life Former
Savings Plans"). Contributions under the AmerUs Life Former Savings Plans ceased
as of December 31, 1995 and effective January 1, 1996, the AmerUs Life Former
Savings Plans were merged into the Savings & Retirement Plan. The Company's and
API's aggregate contributions to the AmerUs Life Former Savings Plans were
approximately $568,943 in 1995.

The Savings & Retirement Plan is intended to be qualified under Sections
401(a) and 501(a) of the Internal Revenue Code (the "Code") and is administered
by the AmerUs Life Benefit and Pension Committee (the "Committee"), whose
members are appointed by the Board of Directors of AmerUs Life. The Committee is
responsible for interpreting the Savings & Retirement Plan, making certain
amendments thereto and adopting rules and regulations reasonably necessary or
advisable to implement and

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administer the plan. The Savings & Retirement Plan allows for elective employee
before-tax contributions, a set level of basic and matching contributions to be
made by AmerUs Life and API, a discretionary level of profit-sharing
contributions and an individually-determined supplemental contribution, if
applicable.

Employee contributions are governed by Code Section 401(k). Participants may
elect to make before-tax contributions to the Savings & Retirement Plan that are
at least 1% and not more than 15% of the participant's compensation. The
Committee may reduce, suspend or refund the contribution of a "highly
compensated member" (as defined in the Savings & Retirement Plan) in order to
ensure compliance with the nondiscrimination tests set forth in the Savings &
Retirement Plan.

AmerUs Life will contribute 4% of each eligible participating employee's
compensation as of the end of a plan year in accordance with the provisions of
the Savings & Retirement Plan ("Basic Contributions"). In addition, AmerUs Life
will make a matching contribution of 125% of an employee's before-tax
contribution, up to a maximum of 4% of an employee's compensation ("Matching
Contributions").

AmerUs Life may also contribute, on behalf of each participating employee
who was, as of December 31, 1995, an active participant in either Frozen Pension
Plan, a certain percentage of such employee's compensation ("Interim Benefit
Supplement"), in order to make up any shortfall between the amount to which such
employee would have been entitled under either of the Frozen Pension Plans as
compared to such employee's projected benefits under the Savings & Retirement
Plan. The amount of the Interim Benefit Supplement made on behalf of any
eligible employee is reduced by any profit sharing contribution allocated to
such employee under the Savings & Retirement Plan.

The Savings & Retirement Plan is generally available to all full-time
employees of AmerUs Life. An employee's compensation, for purposes of
contributions based thereon, consists of an employee's W-2 compensation with
certain adjustments. All contributions made by AmerUs Life are made to the
participants' individual accounts and the Basic Contributions, Matching
Contributions, Profit-Sharing Contributions and the Interim Benefit Supplement
are subject to forfeiture until fully vested under the Savings & Retirement
Plan's vesting schedule. The amount of before-tax contributions made by a
participant and contributions made by AmerUs Life are limited by the Code. In
the event the Committee determines that such limits are exceeded, it shall cause
any such excess contributions to be distributed, forfeited or placed in the
non-qualified Supplemental Plan in accordance with the terms of the Savings &
Retirement Plan and the Supplemental Plan. A distribution from the vested
portion of an employee's account is generally payable upon retirement at or
after normal retirement age (age 65) or upon other termination of employment.
AmerUs Life may terminate or amend the Savings & Retirement Plan, the
Supplemental Plan, or completely discontinue contributions, at any time it may
deem advisable.

SUPPLEMENTAL PLAN

AmerUs Life has adopted, effective January 1, 1996, the Supplemental Plan.
Certain employees whose benefits under the Savings & Retirement Plan are limited
by the provisions of Section 401(a)(17) of the Code and for whom compensation is
deferred, are eligible to participate in such plan. The Supplemental Plan is not
intended to meet the qualification requirements of Section 401 of the Code, and
no cash or funds shall be set aside or otherwise segregated for the payment of
benefits under such plan until such time as benefits are actually paid.

FROZEN PENSION PLANS

Prior to January 1, 1996, American Mutual Life maintained the Frozen Pension
Plans, which were qualified under Section 401(a) of the Code. The benefits under
both such plans were curtailed as of December 31, 1995 and the Frozen Pension
Plans were merged into the surviving American Mutual Life Insurance Company
Pension Plan (the "Surviving AML Pension Plan"). Retirement benefits under the
predecessor AML Employees' Frozen Pension Plan were based primarily on an
employees' years of service and compensation during the highest five consecutive
plan years of employment or the last 60 months, if greater, as of December 31,
1995; retirement benefits under the predecessor AML (formerly

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Central Life) Frozen Pension Plan were based primarily on an employees' years of
service and career compensation as of December 31, 1995. All employees' frozen
accrued benefits as of December 31, 1995 are fully vested.

Prior to January 1, 1996, American Mutual Life also maintained the AML
Frozen SERP and the Central Life Frozen SERP, which were similar in operation to
the Supplemental Plan currently in effect. The benefits under these plan were
also curtailed as of December 31, 1995.

The following table sets forth the frozen accrued monthly benefits payable
as a straight life annuity to each of the Named Executive Officers under the
Surviving AML Pension Plan, including the AML Frozen SERP, assuming retirement
at age 65 (current normal retirement age):

<TABLE>
<CAPTION>
PENSION TABLE
FROZEN ACCRUED BENEFITS UNDER THE
SURVIVING AML PENSION PLAN INCLUDING THE FROZEN SERP
- ----------------------------------------------------------------------------------------------
NAME MONTHLY BENEFITS
- --------------------------------------------------------------------------- -----------------
<S> <C>
Roger K. Brooks............................................................ $ 27,550
D T Doan................................................................... 15,640
Thomas C. Godlasky......................................................... 321
Michael E. Sproule......................................................... 1,360
Sam C. Kalainov............................................................ 34,261(1)
</TABLE>

- --------------
(1) Included in this amount is $9,148 in monthly benefits due under the terms of
an Employment Agreement, dated February 1, 1995, between American Mutual
Life and Sam C. Kalainov. See
"--Employment Agreement."

EMPLOYMENT AGREEMENT

AmerUs Life entered into an employment agreement (the "Employment
Agreement") with Mr. Kalainov, dated February 1, 1995, under which he serves as
the Chairman of the Board of Directors of AmerUs Life and Chairman of AmerUs
Life's Charitable Foundation (the "Foundation"). The term of the Employment
Agreement continues until May 15, 2000, but may expire earlier if Mr. Brooks
ceases to perform the duties of Chief Executive Officer ("CEO") of AmerUs Life.
If Mr. Kalainov's service as Chairman terminates prior to May 15, 2000, AmerUs
Life is required to execute a consulting contract with him pursuant to which,
among other things, AmerUs Life is obligated to pay the difference between the
benefits Mr. Kalainov receives under AmerUs Life's pension plans and the sum of
his base salary plus incentive compensation for the preceding 12 months. The
Employment Agreement provides that Mr. Kalainov will serve as Chairman of the
Foundation until May 15, 2000.

Pursuant to the Employment Agreement, Mr. Kalainov receives the annual
salary and incentive compensation described in the Summary Compensation Table.
Mr. Kalainov participates in AmerUs Life's employee benefit plan (the "Benefit
Plan") and is also entitled to certain perquisites and other incidental
expenses. Mr. Kalainov is also entitled to certain retirement benefits and
health insurance coverage upon his retirement. It is anticipated that prior to
the consummation of the Offerings, Mr. Kalainov will enter into an employment
agreement with AMHC and his existing employment agreement with AmerUs Life will
be terminated and will no longer be an obligation of AmerUs Life or the Company.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Articles of Incorporation provide that the Company shall
indemnify its directors to the fullest extent possible under the IBCA. The
Company's Bylaws extend the same indemnity to its officers. The Articles of
Incorporation provide that no director shall be liable to the Company or its
shareholders for monetary damages for breach of the individual's fiduciary duty
as a director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for any transaction in which the director derived an improper
personal benefit, or (iv) under the IBCA provisions relating to improper
distributions. The Company has also entered into indemnification agreements with
its directors and executive officers with respect to liabilities arising out of
certain matters, including matters arising under the Securities Act.

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CERTAIN TRANSACTIONS AND RELATIONSHIPS

THE FOLLOWING SUMMARIES OF THE INTERCOMPANY AGREEMENT AND OTHER AGREEMENTS
IDENTIFIED DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO SUCH AGREEMENTS. A COPY OF THE INTERCOMPANY AGREEMENT AND THE OTHER
AGREEMENTS IDENTIFIED BELOW HAVE BEEN FILED AS EXHIBITS TO THE REGISTRATION
STATEMENT OF WHICH THIS PROSPECTUS IS A PART. AS USED HEREIN, "AMERUS AFFILIATED
GROUP" MEANS AMHC AND ITS DIRECT AND INDIRECT SUBSIDIARIES NOW OR HEREAFTER
EXISTING, OTHER THAN THE COMPANY AND ITS SUBSIDIARIES. CAPITALIZED TERMS USED
BUT NOT DEFINED HEREIN HAVE THE MEANINGS GIVEN TO THEM IN SUCH AGREEMENTS.

AmerUs Life is a wholly-owned direct subsidiary of the Company. The Company
is a direct subsidiary of AmerUs Group, which in turn is a wholly-owned direct
subsidiary of AMHC. As a result of such ownership, AMHC, AmerUs Group, the other
subsidiaries of AmerUs Group and the Company and its subsidiaries, including
AmerUs Life, have a variety of relationships, certain of which are summarized
below. Management believes that the terms of the agreements described herein are
on a basis no less favorable than could be obtained from unaffiliated third
parties.

OWNERSHIP OF VOTING INTERESTS OF THE COMPANY

As a result of the Reorganization of the Company and its affiliates into a
mutual insurance holding company structure, AMHC is required by Iowa law to own,
directly or indirectly through one or more intermediate holding companies,
shares of capital stock of the Company which carry the right to cast a majority
of the votes entitled to be cast by all of the outstanding shares of the capital
stock at a shareholders' meeting of the Company. See "Supervision and
Regulation--Regulation of the Company and AMHC." In compliance with this
requirement, all of the issued and outstanding shares of the Company's Class B
Common Stock are owned by AmerUs Group, a wholly-owned subsidiary of AMHC and
the Company's immediate parent. Such ownership will continue after the closing
of this Offering. Additionally, the Company's Articles of Incorporation provide
that no shares of its Class B Common Stock may be owned by any person other than
AMHC, a subsidiary of AMHC or another mutual insurance holding company or
intermediate holding company as expressly authorized by Iowa law or by the Iowa
Commissioner. See "Ownership of Common Stock--Ownership of Class B Common
Stock." Any proposed amendments to such provisions of the Company's Articles of
Incorporation are subject to approval by the Iowa Commissioner and the Iowa
Attorney General.

AMHC'S POLICY WITH RESPECT TO CORPORATE OPPORTUNITIES

The Company has been advised that AMHC has adopted a general policy with
respect to certain corporate opportunities presented to AMHC. The implementation
of such policy in any situation is expressly subject to any applicable
regulatory, tax, contractual or legal restrictions as well as issues as to
feasibility. Pursuant to such policy, so long as AMHC directly or indirectly
owns at least 50.1% of the voting power of the outstanding common stock of the
Company (the "Voting Control Period"), AMHC intends to first offer to the
Company any corporate opportunity relating to the acquisition of any stock life
insurance company or any company (other than a mutual insurance holding company)
primarily engaged in owning a stock life insurance company. During the Voting
Control Period, AMHC also intends to first offer to the Company any corporate
opportunity primarily relating to a joint venture, partnership, or similar
affiliation in the life insurance or annuity industry. During the Voting Control
Period, in the event that AMHC merges with a mutual insurance holding company
owning a stock life insurance company or a mutual insurance company is
reorganized pursuant to Chapter 521A of the Iowa Code into a stock life
insurance company subsidiary of AMHC, AMHC intends, if the other party to the
transaction agrees, to offer the Company the corporate opportunity to combine
such acquired company with the Company or a subsidiary thereof in exchange for
appropriate consideration.

Any combination would be on terms which are approved by a majority of the
independent directors of AMHC and the Company and set forth in a written
agreement between the parties. However, neither AMHC nor the Company is
obligated to take any action which is not consistent with their respective
fiduciary duties or applicable contractual, regulatory, tax or legal
requirements. Moreover, the results of negotiations with parties interested in a
potential transaction or other factors, such as feasibility or a

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desire to maintain the separate identities and assets of two insurers, may
result in AMHC not presenting a potential transaction to the Company or a
company acquired by AMHC not being combined with the Company or a subsidiary
thereof.

Under AMHC's policy, a corporate opportunity is considered to be a business
opportunity in the life insurance and annuity business known to AMHC which the
Company is legally and financially able to undertake, is of practical advantage
to the Company and is one in which the Company has an interest or a reasonable
expectancy. If the Company does not choose to pursue a corporate opportunity
within a reasonable period after such opportunity is first presented to it, AMHC
would not intend to afford the Company any further opportunity with respect to
such potential transaction.

INTERCOMPANY AGREEMENT

AMHC, AmerUs Group and the Company have entered into an Intercompany
Agreement dated as of September 15, 1996 (the "Intercompany Agreement"), certain
provisions of which are summarized below.

LICENSE TO USE THE AMERUS NAME AND CERTAIN TRADEMARKS

Pursuant to the Intercompany Agreement, AmerUs Group and certain members of
the AmerUs Affiliated Group have granted to the Company and certain of its
subsidiaries, a non-exclusive, revocable license to use the AmerUs name and
certain trademarks (collectively, the "Trademarks") solely in connection with
the Company's life insurance business and activities related to such life
insurance business. The Intercompany Agreement provides, among other things,
that subject to AmerUs Group's ability to revoke the license in the
circumstances described below and subject to regulatory approval, within a
specified time from the date on which the AmerUs Affiliated Group ceases to
control more than 50% of the combined voting power of the outstanding Common
Stock (the "License Trigger Date"), if the Company's name or any of its
subsidiaries' names at such time includes the "AmerUs" name, the Company and
such subsidiaries will be required to change their names and will be required to
discontinue the use of certain related marks. Following the License Trigger
Date, the Company and its subsidiaries will continue to have the right to use
the AmerUs name in connection with the identification of insurance products for
an initial five-year period with an option to renew for an additional five
years, for which the Company will pay a nominal annual fee to AmerUs Group until
such time as the Company and its subsidiaries completely discontinue use of the
"AmerUs" name. In addition, the Intercompany Agreement provides that the Company
and its subsidiaries will not, without the prior written consent of AmerUs
Group, take any action with respect to (i) any litigation or proceeding
involving the Trademarks, (ii) any change in the Company names, logos and other
identifications that might reasonably be expected to affect the Trademarks or
(iii) any advertising campaigns or strategies that use the Trademarks or that
refer to any member of the AmerUs Affiliated Group. AmerUs Group has the right
to revoke the license under certain circumstances relating to advertising,
promotion or use of the Trademarks in a manner contrary to AmerUs Group
guidelines. In addition, AmerUs Group can revoke any of the Company's
subsidiaries' use of the license if there is a change of control of any such
subsidiary of the Company that is licensed to use the Trademarks. A revocation
by AmerUs Group of the license to use the Trademarks could have a material
adverse effect on the Company's ability to conduct its business.

INDEMNIFICATION

The Intercompany Agreement provides that the Company will indemnify each
member of the AmerUs Affiliated Group and each of their respective officers,
directors, employees and agents (collectively, the "Indemnitees") against losses
based on, arising out of or resulting from (i) the use of the Trademarks by the
Company or its subsidiaries, (ii) the ownership or the operation of the assets
or properties, and the operation or conduct of the business, of the Company or
its subsidiaries, (iii) any other activities of the Company or its subsidiaries,
(iv) any other acts or omissions by the Company or its subsidiaries arising out
of performance of the Intercompany Agreement and certain other agreements, (v)
any guaranty, keep well, net worth or financial condition maintenance agreement
of or by any member of the AmerUs Affiliated Group provided to any parties with
respect to any actual or contingent obligation of the Company or its
subsidiaries, (vi) any breach by the Company of the Intercompany

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Agreement, and (vii) certain other matters. In addition, the Company has agreed
to indemnify the Indemnitees against certain civil liabilities, including
liabilities under the Securities Act, relating to misstatements in or omissions
from the Registration Statement of which this Prospectus forms a part and any
other registration statement that the Company files under the Securities Act
(other than misstatements or omissions made in reliance on information relating
to and furnished by any member of the AmerUs Affiliated Group for use in the
preparation thereof, against which AMHC has agreed to indemnify the Company).
AMHC has also agreed to indemnify the Company and its subsidiaries and each of
their respective officers, directors, employees and agents against losses based
on, arising out of or resulting from (i) any breach by the AmerUs Affiliated
Group of the Intercompany Agreement, (ii) the ownership or the operation of the
assets or properties, and the operation or conduct of the business of any member
of the AmerUs Affiliated Group, (iii) certain third party claims relating to the
Trademarks and (iv) certain other specifically identified matters.

AMHC CONSENT TO CERTAIN EVENTS

The Intercompany Agreement provides that until the date on which the members
of the AmerUs Affiliated Group cease to control at least 50.1% of the combined
voting power of the outstanding Common Stock of the Company (the "Trigger
Date"), the prior written consent of AMHC will be required for: (i) any
consolidation or merger of the Company or any of its subsidiaries with any
person (other than certain transactions involving wholly owned subsidiaries);
(ii) any sale, lease, exchange or other disposition or any acquisition by the
Company or any of its subsidiaries (other than transactions to which the Company
and its wholly owned subsidiaries are the only parties), or any series of
related dispositions or acquisitions, involving consideration in excess of $20
million; (iii) any change in the authorized capital stock of the Company or the
creation of any class or series of capital stock of the Company, (iv) any
issuance by the Company or any subsidiary of the Company of any equity
securities or equity derivative securities, except (a) up to three million
shares of Common Stock pursuant to employee and director stock option, profit
sharing and other benefit plans of the Company and its subsidiaries, (b) the
issuance of Preferred Stock which is not convertible or exchangeable into Common
Stock and which only has voting rights required by law, (c) the issuance of
shares of capital stock of a wholly owned subsidiary of the Company and (d)
pursuant to the Transactions (defined as the Offerings and any corporate
reorganization or transaction undertaken in connection with the Offerings to
which the Company or any of its subsidiaries is a party); (v) the dissolution of
the Company; (vi) transactions or a series of related transactions with
affiliates of the Company (other than members of the AmerUs Affiliated Group)
involving consideration in excess of $10 million, other than (a) the
Transactions, (b) transactions on terms substantially the same as or more
favorable to the Company than those that would be available from an unaffiliated
third party and (c) transactions between or among any of the Company and its
wholly owned subsidiaries; and (vii) any corporate action by the Company which
would cause the Company or AmerUs Life to violate the requirements of Section
521A.14 of the Iowa Insurance Code (relating to mutual insurance holding
companies).

REGISTRATION RIGHTS

The Company has granted to the AmerUs Affiliated Group certain demand and
"piggyback" registration rights with respect to shares of Common Stock owned by
it. The AmerUs Affiliated Group has the right to request up to two demand
registrations in each calendar year. The AmerUs Affiliated Group also has the
right, which it may exercise at any time and from time to time, to include the
shares of Common Stock held by it in certain other registrations of common
equity securities of the Company initiated by the Company on its own behalf or
on behalf of any shareholder of the Company. Such registration rights are
transferable by the AmerUs Affiliated Group provided that such transferee is (i)
a member of the AmerUs Affiliated Group or (ii) an institutional accredited
investor (as defined under Rule 501(a) promulgated under the Securities Act)
permitted to acquire such registrable shares under applicable law. The Company
has agreed to pay all costs and expenses in connection with each such
registration, except underwriting discounts, commissions and legal fees of the
AmerUs Affiliated Group applicable to the shares of Common Stock sold by the
AmerUs Affiliated Group. The Intercompany

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Agreement contains customary terms and provisions with respect to, among other
things, registration procedures and certain rights to indemnification granted by
parties thereunder in connection with the registration of Common Stock on behalf
of the AmerUs Affiliated Group.

REIMBURSEMENT AGREEMENTS

The Company has agreed to pay all costs and expenses incurred in connection
with the Company's formation, the Transactions and all related transactions,
except as otherwise described in this Prospectus.

EQUITY PURCHASE RIGHTS

The Company has agreed that, to the extent permitted by Nasdaq National
Market, Inc. so long as the Company is listed on the Nasdaq National Market, and
so long as the AmerUs Affiliated Group controls at least 50.1% of the combined
voting power of the outstanding Common Stock of the Company, the AmerUs
Affiliated Group may purchase its pro rata share (based on its then current
percentage equity interest in the Company) of any voting equity security issued
by the Company (excluding any such securities offered in connection with
employee and director stock option or other benefit plans, dividend reinvestment
plans and other offerings other than for cash).

CERTAIN BUSINESS RELATIONSHIPS

The Company has agreed that all distribution arrangements in effect as of
September 15, 1996 pursuant to which members of the AmerUs Affiliated Group
distribute insurance products of the Company or its subsidiaries shall continue
until such time as the members of the AmerUs Affiliated Group cease to control
at least 50.1% of the combined voting power of the outstanding Common Stock.

MANAGEMENT SERVICES

Until the Trigger Date, the Company has agreed to provide to the AmerUs
Affiliated Group certain management and administrative services, including: (i)
general management services and (ii) assistance in matters relating to
operations, strategy and business planning. In connection with such services the
Company will be subject to the exclusive authority of the Board of Directors of
AMHC or the AmerUs Affiliated Group member for which such services are
performed. AmerUs Group will pay the Company $2.0 million per year in
consideration for such services, commencing after the Distribution.

TAX ALLOCATION AGREEMENT

The Company and AMHC have entered into an agreement relating to the
allocation of Federal and state income tax liabilities attributable to periods
before and after the Offerings (the "Tax Allocation Agreement"). Under the Tax
Allocation Agreement, the Company will be responsible for all income tax
liabilities that are attributable to the net income of the Company and its
subsidiaries under applicable Federal and state tax laws. The Company will have
no responsibility for income tax liabilities attributable to AMHC and its
wholly-owned subsidiaries under such laws, including any liabilities that may
have arisen while such subsidiaries were wholly-owned subsidiaries of AmerUs
Life. If and to the extent that losses of AMHC and its wholly-owned subsidiaries
are applied to reduce the Federal or state income taxes attributable to the net
income of the Company, the Company will be required to make a payment to AMHC
equal to such tax reduction. Conversely, if and to the extent that losses of the
Company are applied to reduce the Federal or state income tax liability
attributable to the net income of AMHC and its wholly-owned subsidiaries for any
year, AMHC will be required to make a payment to the Company equal to such tax
reduction. It is not anticipated that the Federal or state income tax liability
of the Company or its subsidiaries will be determined on a consolidated or
combined basis with that of AMHC or any of its wholly-owned subsidiaries for any
period after the Offerings.

AGREEMENTS INVOLVING REAL ESTATE

AmerUs Life has entered into asset and property management contracts with
API. Pursuant to such agreements, API provides asset and property management
services to AmerUs Life with respect to certain real estate owned by AmerUs
Life. The total expenses incurred by AmerUs Life pursuant to such agreements
equaled approximately $1,422,000 and $579,000 for the year ended December 31,
1995 and the six months ended June 30, 1996, respectively.

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AmerUs Life, as lessor, has entered into leases of business property with
various members of the AmerUs Affiliated Group. These leases have varying terms
which call for combined monthly rentals of $36,000. These leases will be
assigned to API at the time the Capital Contribution is made, as the properties
to which they relate are to be included in the properties which will be
distributed as part of the Capital Contribution.

Total rental income earned by the Company under all agreements with members
of the AmerUs Affiliated Group was approximately $32,000 and $219,000 for the
year ended December 31, 1995 and the six months ended June 30, 1996,
respectively.

The Company will enter into lease agreements with API at the time of the
Capital Contribution because the facilities occupied by the Company as its
executive and home offices will be transferred to API as part of the Capital
Contribution. It is expected that the lease agreements will require monthly
payments of $82,000 on a net basis for a period of 5 years. API is in the
process of acquiring real estate which is intended to be the combined executive
and home office locations of the Company. If the purchase is completed, it is
the Company's intention to relocate to such facilities and enter into lease
agreements with API with respect to such facilities which will replace the
Company's then-existing leases with API.

During 1995, AmerUs Life paid rentals to AmerUs Bank of $48,000 and $24,000
for the year ended December 31, 1995 and the six months ended June 30, 1996,
respectively, under the terms of a lease agreement which expired in 1996.

AmerUs Life has entered into various limited partnership agreements in which
API or an affiliate serves as general partner. AmerUs Life sold several of these
partnership interests to newly formed partnerships in which API has an interest.
Total proceeds from these sales were $10,956,600 and $1,638,000 in the year
ended December 31, 1995 and in the six months ended June 30, 1996, respectively.
After such sales, AmerUs Life purchased a 9.75% limited partnership interest in
one of the newly formed partnerships for $2,160,000, of which $1,026,000 had
been contributed as of June 30, 1996. In addition, AmerUs Life agreed to make
loans to the newly formed partnerships in the aggregate amount of up to
$18,600,000, of which $7,100,000 was outstanding as of June 30, 1996.

AmerUs Life has also entered into agreements with various partnerships in
which API has an interest pursuant to which AmerUs Life is obligated to make
future capital contribution to such partnerships in an amount not to exceed
$5,830,000.

As of June 30, 1996, AmerUs Life had a total investment of $13,725,000 in
various partnerships in which API had an interest.

AmerUs Life sold certain limited partnership interests to API at their
carrying value of $1,697,000 in 1995.

LOAN SERVICING AGREEMENTS

AmerUs Life has entered into various loan servicing agreements with various
members of the AmerUs Affiliated Group. The total expenses incurred by AmerUs
Life for such services was approximately $1,533,000 and $1,009,000 for the year
ended December 31, 1995 and the six months ended June 30, 1996, respectively.

AmerUs Life has also entered into various loan servicing agreements with
AmerUs Bank. Pursuant to such agreements, AmerUs Life services certain
nonresidential mortgage loans on behalf of AmerUs Bank. The total revenues
earned by AmerUs Life for such services were approximately $30,000 and $14,000
for the year ended December 31, 1995 and the six months ended June 30, 1996,
respectively.

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OTHER SERVICE AGREEMENTS

AmerUs Life has entered into various miscellaneous services agreements with
members of the AmerUs Affiliated Group. Pursuant to such agreements, AmerUs Life
provides certain communications, tax, law department, accounting department,
internal audit, administrative and data processing services to such other
parties to the agreements, as requested. The aggregate revenues earned for
services performed by AmerUs Life in accordance with such agreements were
approximately $6,604,000 and $2,974,000 for the year ended December 31, 1995 and
the six months ended June 30, 1996, respectively.

PURCHASE OF LOANS AND SECURITIZATION

AmerUs Life has entered into a purchase agreement with AmerUs Bank, dated as
of June 28, 1996, pursuant to which AmerUs Life acquired an HEL Asset-Backed
Class A Note (the "Note") and Class R Certificate Series 1996-1 (the
"Certificate"). The Note had a face amount of $43,715,845 and pays interest at
the rate of 8.35% per annum. The Certificate has a face amount of $3,039,069 and
pays interest at the rate of 16.81% per annum. The Note and Certificate are
backed by the assets of the AB Home Equity Loan Trust (the "AB Trust"), which
consist of approximately $47 million of second mortgage loans. Pursuant to a
Pooling and Servicing Agreement, dated as of June 28, 1996 (the "Pooling and
Servicing Agreement"), between AmerUs Bank and Boatmen's Trust Company
("Boatmen's"), and a Transfer Agreement, dated as of June 28, 1996, between
AmerUs Bank and Boatmen's, as trustee of the AB Trust, the AB Trust acquired
such loans from AmerUs Bank, and paid a purchase price of $46,754,914, the par
value of the loans. Under the Pooling and Servicing Agreement AmerUs Bank acts
as the servicer of the loans and receives a servicing fee equivalent to the
amount of all interest collected on the loans in excess of 8.9%.

SALE OF INSURANCE POLICIES

AmerUs Life has entered into an agreement, dated January 1, 1995, with
AmerUs Investments, Inc. ("AmerUs Investments"), a wholly-owned subsidiary of
AmerUs Bank, to market products of AmerUs Life. Pursuant to this agreement,
AmerUs Life pays AmerUs Bank fees in the form of commissions in exchange for
generating sales of such products. Total commissions paid to AmerUs Investments
were $1,259,000 and $147,000 for the year ended December 31, 1995 and six months
ended June 30, 1996, respectively.

The Company has also entered into certain Affiliated Agent Contracts with
employees of AmerUs Investments (the "Affiliated Agents") to solicit, sell and
service AmerUs Life insurance products and has also entered into a Servicing
Agreement, dated March 1, 1992, with AmerUs Investments pursuant to which AmerUs
Investments agreed to service the business sold by any Affiliated Agent and
otherwise supervise its employees who are Affiliated Agents.

CAPITAL CONTRIBUTION

Prior to the Distribution, AmerUs Life will make the Capital Contribution to
AFS. It is anticipated that the Capital Contribution will consist of (i)
commercial mortgages, real estate and fixed maturity securities having a net
carrying value of approximately $79 million and (ii) a surplus note in the face
amount of $50 million. Following the Capital Contribution and prior to the
Offerings, AmerUs Life will cause its Non-Life Insurance Subsidiaries (including
AFS) to be distributed to AmerUs Group pursuant to the Distribution. The
Distribution will effectively separate AMHC's non-life insurance businesses from
the life insurance businesses owned by the Company, such that the companies
engaged in non-life insurance businesses will no longer be subsidiaries of the
Company. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries."

From time to time AmerUs Life has made capital contributions to Lartnec
Investment Co. ("Lartnec"). Lartnec had previously been a subsidiary of AmerUs
Life and AFS had been a subsidiary of Lartnec. Prior to the Distribution,
Lartnec was merged downstream into AFS, and pursuant to the Distribution AFS was
distributed to AmerUs Group, thereby becoming a sister corporation to AmerUs

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Life. In 1995, AmerUs Life made capital contributions to Lartnec in the
approximate aggregate amount of $41,156,000. In 1996, prior to the Distribution,
AmerUs Life made additional capital contributions to Lartnec in the approximate
total amount of $4,563,000.

LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP

AmerUs Life has provided financing to members of the AmerUs Affiliated Group
or their affiliates for various purposes. The outstanding balance of all such
financings was $63.9 million and $64.6 million as of December 31, 1995 and June
30, 1996 respectively. AmerUs Life recorded interest income of $6.0 million and
$3.3 million for the year ended December 31, 1995 and the six months ended June
30, 1996, respectively. After giving effect to the Capital Contribution, the
amounts for such periods would have been $48.9 million and $49.7 million,
respectively.

AmerUs Life has also pledged investment securities as collateral for
indebtedness of the AmerUs Affiliated Group. AmerUs Life will be released from
this collateral agreement under the terms of the new Bank Credit Facility. The
value of the collateral pledged was $112.4 million and $113.3 million as of
December 31, 1995 and June 30, 1996, respectively. The pledges will be released
upon the effectiveness of the Bank Credit Facility.

In addition, AmerUs Life guaranteed various borrowings of members of the
AmerUs Affiliated Group with outstanding balances of approximately $7.3 million
and $7.2 million at December 31, 1995 and June 30, 1996, respectively.

AmerUs Life has outstanding loan commitments to various partnerships in
which API has an interest. At June 30, 1996, the outstanding loan commitments
were approximately $4,000,000.

OWNERSHIP OF COMMON STOCK

OWNERSHIP OF CLASS A COMMON STOCK

Immediately prior to the Offerings there will be million issued and
outstanding shares of Class A Common Stock, all of which will be owned by AmerUs
Group. Other than such shares, as of the date of this Prospectus no shares of
Class A Common Stock were beneficially owned by any person, including any
director or officer of the Company or AmerUs Life.

OWNERSHIP OF CLASS B COMMON STOCK

Immediately prior to the Offerings, there will be five million issued and
outstanding shares of Class B Common Stock, all of which will be owned by AmerUs
Group. Pursuant to the Company's Articles of Incorporation, no shares of Class B
Common Stock may be owned by any person other than AMHC, a subsidiary of AMHC or
another mutual insurance holding company or intermediate holding company as
authorized by applicable law.

CLASS A COMMON STOCK SUBSCRIPTIONS BY MANAGEMENT

Directors and officers of the Company may subscribe for Shares in the
Subscription Offering if they are Subscription Policyowners. The terms pursuant
to which directors and officers of the Company may obtain Shares in the
Subscription Offering are identical to the terms for other Subscription
Policyowners. In addition, directors and officers as a group would be limited
under rules recently proposed by the Iowa Commissioner to purchasing no more
than five percent of the shares offered in any offering of Common Stock made by
the Company.

DESCRIPTION OF THE CAPITAL STOCK

The following description does not purport to be complete and is qualified
in its entirety by reference to the Company's Articles of Incorporation, a copy
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.

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GENERAL

The Company is authorized to issue 75 million shares of Class A Common
Stock, no par value, and 50 million shares of Class B Common Stock, no par
value. 1.4 million and 150,000 shares of Class A Common Stock are reserved for
issuance under options granted or available for grant under the Stock Option
Plan and Director Plan, respectively, subject to the completion of the
Offerings, and shares of Class A Common Stock are reserved for issuance
upon conversion of Class B Common Stock. The Company is also authorized to issue
shares of preferred stock on such terms as determined by the Company Board of
Directors (the "Preferred Stock"). See "--Preferred Stock."

The Class B Common Stock (or any interest therein) may only be owned by
AMHC, a subsidiary of AMHC or a mutual insurance holding company or intermediate
holding company which is expressly authorized by applicable law to own or have a
beneficial interest in the Class B Common Stock (a "Permitted Class B Holder").
Under current Iowa law, the shares of Class B Common Stock shall at all times
carry the right to cast at least a majority of the votes of the outstanding
shares of the capital stock of the Company.

The Articles of Incorporation provide that the number of outstanding shares
of Class A Common Stock (excluding shares of Class A Common Stock owned by AMHC
or another Permitted Class B Holder) shall not at any time exceed the number of
outstanding shares of Class B Common Stock plus the shares of Class A Common
Stock owned by AMHC or another Permitted Class B Holder by a ratio of more than
three to one.

Following the closing of the Offerings, assuming that the underwriters in
the Public Offering do not exercise their over-allotment option, there will be
million shares of Class A Common Stock outstanding. At such time, AmerUs Group
will own million shares of the Class A Common Stock ( % of the
outstanding shares of Class A Common Stock) and five million shares of Class B
Common Stock (100% of the outstanding shares of Class B Common Stock). AmerUs
Group's ownership of Class A Common Stock and Class B Common Stock will provide
it with % of the voting power of the Common Stock and % of the economic
value of the Company (assuming that the underwriters in the Public Offering do
not exercise their over-allotment option).

COMMON STOCK

Each share of Class A Common Stock will entitle its holder to one vote per
share on all matters upon which shareholders are entitled to vote (including
election of directors, mergers, sales of assets, dissolution and amendments to
the Articles of Incorporation). Each share of Class B Common Stock will entitle
its holder to one vote per share on all such matters except that, if on the
record date for determining shares eligible to vote, the number of outstanding
shares of Class A Common Stock (excluding shares of Class A Common Stock owned
by a Permitted Class B Holder) and any outstanding shares of Preferred Stock
having voting rights, if any, (excluding shares of Preferred Stock owned by a
Permitted Class B Holder) equals or exceeds the number of outstanding shares of
Class B Common Stock plus the outstanding shares of Class A Common Stock owned
by a Permitted Class B Holder, the voting rights for each share of Class B
Common Stock shall be equal to the number of shares of Class A Common Stock
(excluding shares of Class A Common Stock owned by a Permitted Class B Holder)
and Preferred Stock having voting rights, if any, then outstanding (excluding
shares of Preferred Stock owned by a Permitted Class B Holder) plus one divided
by the number of outstanding shares of Class B Common Stock. Accordingly, even
if the number of outstanding shares of Class A Common Stock (excluding shares of
Class A Common Stock owned by a Permitted Class B Holder) exceeds the number of
outstanding shares of Class B Stock, the Permitted Class B Holder will always
have a majority of the votes.

Both classes of Common Stock will generally vote together as a single class
on all matters; however, the holders of Class A Common Stock and the holders of
Class B Common Stock will vote separately as a class with respect to certain
matters for which class voting is required under Iowa law, including (i)
approval of proposed amendments to the Company's Articles of Incorporation that,
among other things, would alter the designation, rights, preferences or
limitations of all or part of the shares of their

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respective class, increase or decrease the aggregate number of authorized shares
of such class, effect an exchange or reclassification or create a right of
exchange of all or part of the shares of one class into shares of another class,
create a new class of shares or increase the rights, preferences, or number of
authorized shares of any existing class so that it would have rights or
preferences with respect to distribution or to dissolution that are prior,
superior, or substantially equal to, the shares of such class, provided that the
Class A Common Stock and Class B Common Stock are not affected by such amendment
in the same or a substantially similar way; (ii) approval of a proposed plan of
merger or consolidation if such plan contains any provisions which, if contained
in a proposed amendment to the Articles of Incorporation, would entitle such
class of shares to vote as a class (with certain limited exceptions for
shareholders of the surviving corporation); and (iii) approval of a plan of
share exchange (to be voted upon by each class included in the exchange).

There is no provision in the Company's Articles of Incorporation permitting
cumulative voting in the election of directors.

No cash dividends may be declared in any fiscal year on the Class B Common
Stock until and unless a cash dividend has been declared on the Class A Common
Stock. Any cash dividends will be declared and paid equally on both classes of
Common Stock.

The classes of Common Stock will rank equally and have equal rights with
respect to distributions other than cash dividends and all other rights,
including distributions upon liquidation of the Company. However, in the case of
dividends or other distributions payable on the Common Stock in shares of such
stock, including distributions pursuant to stock splits or stock dividends, only
Class A Common Stock will be distributed with respect to Class A Common Stock
and only Class B Common Stock will be distributed with respect to Class B Common
Stock. In no event will either class of Common Stock be split, divided or
combined unless the other is split, divided or combined equally.

So long as the number of outstanding shares of Class A Common Stock
(excluding shares of Class A Common Stock owned by a Permitted Class B Holder)
does not exceed the number of outstanding shares of Class B Common Stock plus
the shares of Class A Common Stock owned by AMHC or another Permitted Class B
Holder by a ratio of more than three to one, the Class B Common Stock will be
convertible at all times into Class A Common Stock on a share-for-share basis by
surrender of certificates to the transfer agent for the Company. Such conversion
will be without cost to the shareholder, except for any transfer taxes which may
be payable if certificates for Class A Common Stock are issued in a name other
than the one in which the surrendered certificate is registered. Therefore,
shareholders who subsequently desire to sell some or all of their shares of
Class B Common Stock may convert those shares into an equal number of shares of
Class A Common Stock and sell the shares of Class A Common Stock in the public
market. The Company will be required to reserve shares of Class A Common Stock
sufficient for issuance upon conversion of Class B Common Stock. All shares of
Class B Common Stock surrendered upon conversion will have the status of
authorized but unissued shares of Class B Common Stock.

The Articles of Incorporation provide that a Permitted Class B Holder has
the preemptive right to purchase Common Stock to the extent necessary to
maintain the ratio of Class A Common Stock to Class B Common Stock set forth in
the preceding paragraph. The Intercompany Agreement also affords the AmerUs
Affiliated Group certain equity purchase rights. See "Certain Transactions and
Relationships--Intercompany Agreement."

In the event that AMHC (or any successor mutual insurance holding company)
is demutualized and is converted into a stock company pursuant to Iowa law, then
immediately upon such conversion each share of the Class B Common Stock shall
automatically be converted into one share of Class A Common Stock. AMHC has no
present plans to demutualize.

A Permitted Class B Holder may pledge, subject to a security interest or
lien, encumber, or otherwise hypothecate shares of Class B Common Stock in
excess of the number of shares of Class B Common Stock which carry the right to
cast at least a majority of the votes of the outstanding shares of

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capital stock of the Company having voting rights. However, except for a
transfer to a Permitted Class B Holder, a conversion of Class B Common Stock
into Class A Common Stock and except as described in the preceding sentence, no
shares of Class B Common Stock may be conveyed, pledged or otherwise
transferred. Any conveyance, transfer, assignment, pledge, security interest,
lien, encumbrance or hypothecation or alienation by AMHC or any intermediate
holding company, in or on the majority of the voting shares of AmerUs Life shall
be deemed void in inverse chronological order from the date of such transaction
to the extent necessary to give AMHC unencumbered direct or indirect ownership
of a majority of such voting shares.

PREFERRED STOCK

The Board of Directors of the Company is authorized, subject to any
limitations prescribed by law, from time to time to issue up to an aggregate of
20 million shares of Preferred Stock in one or more series, each of such series
to have such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other special
rights, and such qualifications, limitations or restrictions thereof, as shall
be determined by the Board of Directors in a resolution or resolutions providing
for the issue of such Preferred Stock; provided, however, that no Preferred
Stock may have more than one vote per share. Thus, any series may, if so
determined by the Board of Directors, have full voting rights with the Class A
Common Stock or superior or limited voting rights, be convertible into Class A
Common Stock or another security of the Company, and have such other relative
rights, preferences and limitations as the Company's Board of Directors shall
determine; provided, however, that no Preferred Stock may have more than one
vote per share. As a result, any class or series of Preferred Stock could have
rights which would adversely affect the rights of the holders of the Class A
Common Stock. The shares of any class or series of Preferred Stock need not be
identical. The issuance of a new series of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions or other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or discouraging a third party from acquiring, a majority
of the outstanding voting stock of the Company.

INDEMNIFICATION AND LIMITATION OF LIABILITY

The Company's Articles of Incorporation provide that no director of the
Company shall be liable to the Company or its shareholders for monetary damages
for any breach of fiduciary duty as a director, except to the extent otherwise
required by the Iowa Business Corporation Act (the "IBCA"). This provision does
not prevent shareholders from obtaining injunctive or other equitable relief
against directors nor does it shield directors from liability under Federal or
state securities laws. In addition, the Articles of Incorporation provide that
the Company shall, to the maximum extent permitted by law, indemnify any person
who incurs any loss by reason of the fact that he is or was or has agreed to be
a director or officer of the Company or while a director or officer of the
Company is or was serving at the request of the Company as a director, officer,
partner, trustee, employee or agent of any corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, subject to such person having met the standards of conduct
required for such indemnification under Iowa law.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Class A Common Stock is
.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION
AND BYLAWS OF THE COMPANY

The following discussion is a summary of certain provisions of the Articles
of Incorporation (the "Articles of Incorporation") and Bylaws of the Company
relating to shareholder voting rights, advance notice requirements and other
provisions which may be deemed to have an "anti-takeover" effect. In addition to
these provisions, regulatory restrictions on dispositions of Common Stock by the
Company's parent corporation as well as the inability of the holders of the
Class A Common Stock to elect a majority of the Company's Board of Directors may
also deter attempts to effect, or prevent the consummation of,

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a change in control of the Company. See "Description of the Capital Stock."
These and other provisions affect shareholder rights and should be given careful
attention. The following description of certain of these provisions is
necessarily general and is qualified in its entirety by reference to the
Articles of Incorporation and Bylaws, copies of which are included as exhibits
to the Registration Statement of which this Prospectus is a part.

ISSUANCE OF CLASS A COMMON STOCK, PREFERRED STOCK AND OTHER RIGHTS

The Company believes that its ability to issue, by action of a majority of
the Company's entire Board of Directors, and without shareholder consent, the
authorized but unissued shares of Class A Common Stock, shares of Preferred
Stock and other rights will provide the Company with the flexibility necessary
to meet its future needs without experiencing the time delay of having to seek
shareholder approval. Unissued shares of Class A Common Stock and Preferred
Stock will be issuable from time to time for any corporate purpose, including,
without limitation, stock splits, stock dividends, employee benefit and
compensation plans, acquisition and public or private sales for cash as a means
of raising capital. It is possible that the Company's Board of Directors might
use its authority (subject to the restrictions referred to above) to issue Class
A Common Stock, Preferred Stock or other rights in a way which could deter or
impede the completion of a tender offer or other attempt to gain control of the
Company of which the Company's Board of Directors does not approve. The Company
does not have any predetermined plans or commitments to use its authority to
effect any such issuance, but reserves the right to take any action in the
future which the Company's Board of Directors deems to be in the best interests
of the shareholders and the Company under the circumstances.

It is not possible to state the actual effect of any issuance of Preferred
Stock upon the rights of holders of Class A Common Stock because the Company's
Board of Directors has not determined any issuance price or prices, terms or
rights relating to Preferred Stock. However, such effects might include (i)
restrictions on Class A Common Stock dividends if Preferred Stock dividends have
not been paid; (ii) dilution of the voting power and equity interest of existing
holders of Class A Common Stock to the extent that any Preferred Stock series
has voting rights or would acquire voting rights upon the occurrence of certain
events (such as the failure to pay dividends for a specified period) or that any
Preferred Stock series is convertible into Class A Common Stock; and (iii)
current holders of Class A Common Stock not being entitled to share in the
Company's assets upon liquidation, dissolution or winding-up until satisfaction
of any liquidation preferences granted to any series of Preferred Stock.

BOARD OF DIRECTORS

The Articles of Incorporation provide that the number of Company directors
will be determined pursuant to the Bylaws, but will not be less than seven or
more than 21 directors (subject to the rights of the holders of any series of
Preferred Stock). The Bylaws provide that the exact number of directors will be
determined from time to time by the affirmative vote of a majority of the
Company's entire Board of Directors. At any meeting of the Company's Board of
Directors, a majority of the Company's entire Board of Directors will constitute
a quorum for the transaction of business, and subject to certain exceptions, at
any meeting at which a quorum is present the affirmative vote of a majority of
the directors present will constitute the act of the Company's Board of
Directors. The Company's Board of Directors will be divided into three classes,
designated Classes I, II and III, which will be as nearly equal in number as
possible. Directors of Class I will hold office for a term expiring at the
annual meeting of shareholders to be held in 1997, directors of Class II will
hold office for a term expiring at the annual meeting of shareholders to be held
in 1998 and directors of Class III will be elected to hold office for a term
expiring at the annual meeting of shareholders to be held in 1999. At each
annual meeting of shareholders following such initial classification and
election, the respective successors of each class shall be elected for
three-year terms, and each director will hold office until such annual meeting
and until his or her successor is elected and qualified, unless the director
dies, resigns, is disqualified or is removed from office. Thus, approximately
two-thirds of the members of the Board of Directors at any time will have had
prior board experience. With such a staggered Board of Directors, at least two
annual meetings will normally be required to effect a change in the composition
of a majority of the Board of Directors.

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Under the IBCA and the Company's Articles of Incorporation, and subject to
the rights of the holders of any series of Preferred Stock, a majority of the
Board of Directors though less than a quorum, or the sole remaining director,
may fill vacancies on the Board of Directors or newly created directorships
resulting from any increase in the authorized number of directors. The Articles
of Incorporation provide that the election of directors need not be by written
ballot unless the Bylaws so provide. The Bylaws do not require the use of such a
written ballot. The Bylaws provide that the holders of a majority of shares then
entitled to vote if an election of directors were held may remove any director
or the entire Board of Directors, with or without cause.

LIMITATIONS ON CALLING SPECIAL MEETINGS OF SHAREHOLDERS

Under Iowa law, special meetings of shareholders may be called by the Board
of Directors or by such other persons as may be authorized by the articles of
incorporation or the bylaws. In the case of the Company, the Bylaws provide that
special meetings may be called by the Chairman, the President, the Company's
Board of Directors pursuant to a resolution adopted by not less than a majority
of the total number of directors or at the request of the holders of not less
than 25% of the combined voting power of the then outstanding stock of the
Company entitled to vote generally in the election of directors. The notice for
a special meeting must set forth the purpose or purposes of the meeting, and,
except as otherwise required by law or the Articles of Incorporation, no
business will be transacted at any special meeting of shareholders other than
the items of business stated in the notice.

ADVANCE NOTICE REQUIREMENTS

The Bylaws establish advance notice procedures with regard to (i) the
nomination, other than by or at the direction of the Company's Board of
Directors, of candidates for election to the Company's Board of Directors (the
"Nomination Provision") and (ii) certain business to be brought before an annual
meeting of shareholders of the Company (the "Business Provision").

The Nomination Provision, by requiring advance notice of nominations by
shareholders, affords the Company's Board of Directors a meaningful opportunity
to consider the qualifications of the proposed nominees and, to the extent
deemed necessary or desirable by the Company's Board of Directors, to inform
shareholders about such qualifications.

The Business Provision, by requiring advance notice of business proposed to
be brought before an annual meeting, provides a more orderly procedure for
conducting annual meetings of shareholders and provides the Company's Board of
Directors with a meaningful opportunity prior to the meeting to inform
shareholders, to the extent deemed necessary or desirable by the Company's Board
of Directors, of any business proposed to be conducted at such meeting, together
with any recommendation of the Company's Board of Directors. The Business
Provision does not affect the right of shareholders to make shareholder
proposals for inclusion in proxy statements for the Company's annual meetings of
shareholders pursuant to the rules of the Commission. In addition, neither the
Nomination Provision nor the Business Provision will prevent any shareholder or
shareholders holding at least 25% of the shares entitled to vote on a particular
matter from requesting a special meeting with respect to such matter as
described above in "--Limitations on Calling Special Meetings of Shareholders."

Although these Bylaw provisions do not give the Company's Board of Directors
any power to approve or disapprove of shareholder nominations for the election
of directors or of any other business desired by shareholders to be conducted at
an annual meeting, they may make it difficult for a third party to conduct a
solicitation of proxies to elect its own slate of directors or otherwise attempt
to obtain control of the Company, even if such a solicitation or attempt might
be beneficial to the Company and its shareholders.

AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

Except to the extent the Articles of Incorporation or Bylaws otherwise
provide, the Company's Board of Directors may, upon the affirmative vote of a
majority of the entire Board, amend or repeal any Bylaw. The Articles of
Incorporation may be amended with the affirmative vote of the holders of a
majority of the outstanding voting securities of the Company having the right to
vote generally in the election of

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directors; PROVIDED, that any proposed amendment to the Articles of
Incorporation which would alter the required ratio of outstanding shares of
Class A Common Stock to outstanding shares of Class B Common Stock would require
the approval of a majority of the outstanding shares of Class A Common Stock
(excluding shares owned by the Permitted Class B Holders). Under Iowa law,
certain proposed amendments to the Articles of Incorporation which adversely
affect the rights of a particular class of stock must be approved by a majority
of such class.

STATE STATUTORY PROVISIONS

Any merger or acquisition of the Company by another entity or the
acquisition or attempted acquisition of more than 10% of the stock of the
Company is subject to regulatory approval by the Iowa Commissioner. See
"Supervision and Regulation--Regulation of the Company and AMHC. 11

Section 490.1108 of the IBCA provides that in considering acquisition
proposals, directors may consider, in addition to the consideration of the
effects of any action on shareholders, the effects on the company's employees,
suppliers, creditors, customers and the communities in which it operates, as
well as the long-term and short-term interests of the company. Consideration of
any or all community interest factors is not a violation of the business
judgment rule, even if the directors reasonably determine that effects on a
community or other factors outweigh the financial or other benefits to the
company or a shareholder or group of shareholders. Section 490.624A of the IBCA
also includes authorization of "poison pills" which include, without limitation,
terms and conditions of stock rights or options issued by a corporation that
preclude or limit the exercise, transfer or receipt of stock rights by persons
owning or offering to acquire a specified number or percentage of a
corporation's outstanding shares. Unlike most states, Iowa does not presently
have a "business combination" law prohibiting business combinations with a
shareholder who holds over a specified percentage of stock for less than a
specified period after crossing the threshold.

The foregoing provisions of state law could have the effect of delaying,
deferring or preventing a change in control of the Company if the Board of
Directors determines that a change of control is not in the best interests of
the Company, its shareholders and other constituencies. In addition, the
regulatory restrictions on the acquisition of securities of the Company may also
deter attempts to effect, or prevent the consummation of, a change in control of
the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings, the Company will have million shares of
Class A Common Stock outstanding (assuming that the underwriters in the Public
Offering do not exercise their over-allotment option). All shares sold in the
Offerings will be freely tradeable without restriction or further registration
under the Securities Act. However, the shares of Class A Common Stock and Class
B Common Stock owned by AmerUs Group will constitute "restricted securities"
within the meaning of Rule 144 promulgated under the Securities Act. Such shares
will not be eligible for sale under Rule 144 until two years after the date of
their issuance. Thereafter, such shares will be subject to the volume and timing
requirements of Rule 144.

All officers and directors of the Company and its affiliates who purchase
shares of Class A Common Stock pursuant to the Subscription Offering would be
required, pursuant to proposed rules of the Iowa Commissioner, to refrain from
offering, selling, contracting to sell or otherwise disposing of such shares for
a period of 180 days following the date of purchase. In addition, AmerUs Group,
the Company and their officers and directors have agreed with the underwriters
not to sell any Common Stock for 180 days from the date of the Public Offering
prospectus without the prior written consent of Goldman, Sachs & Co.

Pursuant to the Intercompany Agreement, the Company has granted AmerUs Group
the right to require the Company to register shares of its stock under the
Securities Act. See "Certain Transactions and Relationships--Intercompany
Agreement."

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PLAN OF DISTRIBUTION

The Company is offering up to million shares of Class A Common Stock
in the Subscription Offering. The Chicago Corporation, a registered
broker-dealer, is acting as the Company's Subscription Agent in connection with
the solicitation of subscriptions in the Subscription Offering and with offers
and sales of the Shares. The Company reserves the right to terminate the
Subscription Offering at any time in its sole discretion and to reject any
subscription that is improperly completed, unsigned, or not accompanied by a
check or money order for the purchase price. Subscriptions that are received
after the Subscription Expiration Date will be rejected. See "The Subscription
Offering."

The minimum and maximum number of Shares which may be subscribed for are 100
and 5,000 Shares, respectively. Any subscription funds received will be held in
escrow by , as Transfer and Escrow Agent pending the closing of the
Subscription Offering. The Subscription Offering is not contingent on the
Company receiving a minimum number of subscriptions, nor is it contingent on the
consummation of the Public Offering. The period during which subscriptions will
be accepted will end on the Subscription Expiration Date.

The Public Offering Price per share of Class A Common Stock in the Public
Offering will be negotiated among the Company and Goldman, Sachs & Co.,
Donaldson, Lufkin & Jenrette Securities Corporation, Salomon Brothers Inc and
The Chicago Corporation, as representatives of the underwriters in the Public
Offering. Among the factors expected to be considered in determining the Public
Offering Price, in addition to prevailing market conditions, will be the
Company's historical performance, an estimate of the business potential and the
earnings prospects of the Company, an assessment of the Company's management and
the consideration of the above factors in relation to market valuation of
companies in related businesses.

In consideration for the provision of certain advisory services and for
acting as the Company's Subscription Agent, the Company has agreed to pay The
Chicago Corporation a fee of $25,000, subject to upward adjustment under certain
conditions to a maximum of $90,000. The Company has also agreed to reimburse The
Chicago Corporation for its reasonable costs and expenses and to indemnify it
against certain liabilities, including liabilities under the Securities Act and
the Exchange Act. John A. Wing, a Director of the Company, is Chairman of The
Chicago Corporation.

Goldman, Sachs & Co. and The Chicago Corporation have each from time to time
performed investment banking services for the Company and have received fees in
connection with such services.

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by James A. Smallenberger, Esq., Senior Vice
President and Secretary of the Company, and Sidley & Austin, Chicago, Illinois.
Sidley & Austin will rely as to matters governed by the laws of the State of
Iowa upon the opinion of James A. Smallenberger, Esq.

EXPERTS

The Consolidated Financial Statements and Schedules of the Company as of
December 31, 1995 and 1994 and for each of the years in the three-year period
ended December 31, 1995, have been included herein and in the Registration
Statement in reliance upon the reports of KPMG Peat Marwick LLP, independent
auditors, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

105
<PAGE>
GLOSSARY OF CERTAIN INSURANCE AND
OTHER DEFINED TERMS

THE FOLLOWING GLOSSARY INCLUDES DEFINITIONS OF CERTAIN INSURANCE AND OTHER
DEFINED TERMS.

<TABLE>
<S> <C>
ACQUISITION COSTS............................ Costs including commissions, policy issue and
underwriting costs, and other costs incurred
to acquire or renew traditional life
insurance, universal life insurance and
annuity products.
AFFILIATE.................................... With respect to any person, any other Person
which directly or indirectly controls, is
controlled by or is under common control with
such Person.
A.M. BEST.................................... A.M. Best Company, Inc. A.M. Best financial
condition ratings are opinions of an
insurance company's financial strength,
operating performance and ability to meet its
obligations to policyowners. Such ratings are
based upon a comprehensive review of a
company's financial performance, which is
supplemented by certain data, including
responses to A.M. Best's questionnaires,
quarterly NAIC filings, state insurance
department examination reports, loss reserve
reports, annual reports and reports filed
with state insurance departments. A.M. Best
undertakes a quantitative evaluation based on
profitability, leverage and liquidity and a
qualitative evaluation based upon the
composition of a company's book of business
or spread of risk, the amount,
appropriateness and soundness of reinsurance,
the quality, diversification and estimated
market value of its assets, the adequacy of
its loss reserves and policyowners' surplus
and the experience and competence of its
management. A.M. Best Company, Inc. uses the
following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
A++ and A+ Superior
A and A- Excellent
B++ and B+ Very Good
B and B- Adequate
C++ and C+ Fair
C and C- Marginal
D Very Vulnerable
E Under State Supervision
F In Liquidation
</TABLE>

<TABLE>
<S> <C>
ANNUALIZED PREMIUM........................... The expected premium payment for a 12-month
period for each policy, excluding single
premium policies. Actual premium payments may
be higher or lower than annualized premiums.
ANNUITY...................................... A contract that pays a periodic income
benefit for the life of a person (the
annuitant), the lives of two or more persons
or a specific period of time.
</TABLE>

106
<PAGE>
<TABLE>
<S> <C>
ASSET VALUATION RESERVE OR AVR............... The asset valuation reserve adopted by the
NAIC in December 1991 to replace the MSVR.
AVR appears as a liability on a life
insurer's statutory financial statements
beginning with the insurer's statutory
financial statements for 1992. AVR
establishes STATUTORY RESERVES for debt
securities, preferred stocks, common stock,
mortgage loans, equity real estate and joint
ventures and other invested assets. AVR
generally captures all realized and
unrealized gains and losses on such assets,
other than those resulting from changes in
interest rates. AVR has no effect on
financial statements prepared in conformity
with GAAP.
CAREER GENERAL AGENTS........................ Individuals who are in charge of an insurance
agency. They are independent contractors, who
are responsible for recruiting, training and
developing new agents in addition to
supervising experienced agents in their
agency; however, they may personally sell new
business. Career General Agents are paid
based on the business produced by their
agency and are also paid allowances to cover
their agency expenses and additional amounts
to compensate them for recruiting, training
and developing new agents.
CAREER GENERAL AGENCY SYSTEM................. The network of career general agencies
through which the Company distributes its
insurance and annuity products.
CEDING....................................... The reinsuring of all or a portion of an
insurer's risk with another insurer.
CLOSED BLOCK................................. The closed block of participating business to
be established, as of the Effective Date, by
AmerUs Life for the exclusive benefit of the
policies included therein.
CLOSED BLOCK BUSINESS........................ The policies within the classes specified in
the Plan (which policy classes constitute all
of the classes of individual traditional life
insurance policies and all universal life
insurance policies for which AmerUs Life had
a dividend scale in effect prior to the
Reorganization), but only to the extent such
policies are in force on the Effective Date.
CONVEXITY.................................... A measure of the shape of the price/yield
curve. Convexity explains the difference
between the prices estimated by standard
duration and the actual market prices of a
security resulting from a change in
market-required yield.
COST OF INSURANCE............................ The mortality charges assessed against
universal life insurance policies.
</TABLE>

107
<PAGE>
<TABLE>
<S> <C>
CREDITING RATES.............................. Interest rates applied to life insurance
policies and annuity contracts, whether
contractually guaranteed or currently
declared for a specified period.
DEFERRED FIXED ANNUITY....................... A fixed annuity that has a deferred or
accumulation period from the time of premium
payment(s) to the payout of a periodic income
benefit.
DIFFERENTIAL EARNINGS AMOUNT................. The amount of additional income which is
imputed to a mutual life insurance company
under Section 809 of the Internal Revenue
Code based on a comparison of the current
one-year average of mutual life insurance
company earnings rates with an adjusted
average of stock life insurance company
earnings rates for the previous three years.
The tax resulting from this additional income
is referred to as the "equity add-on tax."
DIVIDEND SCALE............................... The actuarial formula used by life insurance
companies to determine amounts payable as
dividends on participating policies based on
experience factors relating to, among other
things, investment results, mortality, lapse
rates, expenses and policy loan interest and
utilization rates.
DUFF & PHELPS................................ Duff & Phelps Credit Rating Co. Duff &
Phelp's claims-paying ability ratings are
opinions of an operating insurance company's
future ability to pay its policy and contract
obligations in a timely fashion. Duff &
Phelps claims-paying ability ratings are
based on certain qualitative and quantitative
factors including, among other factors, the
economic fundamentals of the company's
principal lines of business, the company's
competitive position and asset and liability
management practices. Duff & Phelps Credit
Rating Co. uses the following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
AAA Highest claims-paying
ability
AA+, AA and AA- Very high claims-paying
ability
A+, A and A- High claims-paying
ability
BBB+, BBB Adequate claims-paying
and BBB- ability
BB+, BB and BB- Uncertain claims-paying
ability
B+, B and B- Possessing risk that
policyowners and
contractholders will
not be paid when due
</TABLE>

108
<PAGE>
<TABLE>
<S> <C> <C>
CCC+, CCC and Substantial risk that
CCC- policyowners and
contractholders will
not be paid when due
DD Company is under order
of liquidation
</TABLE>

<TABLE>
<S> <C>
EQUITY ADD-ON TAX (OR DIFFERENTIAL EARNINGS
TAX)........................................ The tax resulting from the differential
earnings amount, which is the amount of
additional income imputed to a mutual life
insurance company under Section 809 of the
Internal Revenue Code based on a comparison
of the current one-year average of mutual
life insurance company earnings rates with an
adjusted average of stock life insurance
company earnings rates from the previous
three years.
FIRST YEAR ANNUALIZED PREMIUMS............... The expected premium payment for the first
policy year for each policy, excluding single
premium policies. Actual premium payments may
be higher or lower than first year annualized
premiums. This is a common insurance industry
measurement of sales achievement.
FIXED ANNUITY................................ Contract that guarantees that a specific sum
of money will be paid in the future, usually
as monthly income, to an annuitant. The
dollar amount paid to the annuitant will not
fluctuate regardless of adverse changes in
the insurance company's mortality experience,
investment return and expenses.
GAAP......................................... United States generally accepted accounting
principles for life insurance companies.
GENERAL ACCOUNT.............................. All investment accounts maintained by an
insurer, other than the separate accounts.
IMR.......................................... The interest maintenance reserve adopted by
the NAIC in December 1991. IMR appears as a
liability on a life insurer's statutory
financial statements beginning with the
insurer's statutory financial statements for
1992 and applies to all types of fixed income
investments (bonds, preferred stock,
mortgage-backed securities and mortgage
loans). IMR captures the net gains or losses
arising from changes in the overall level of
interest rates which are realized upon the
sale of such investments, and IMR amortizes
these net realized gains into income over the
remaining life of each investment sold. IMR
has no effect on financial statements
prepared in conformity with GAAP.
IN FORCE..................................... A life insurance policy or annuity contract
that has not expired.
</TABLE>

109
<PAGE>
<TABLE>
<S> <C>
INTEREST-SENSITIVE PRODUCTS.................. Insurance and annuity products for which
interest in excess of guaranteed levels is
credited to the policy.
MEMBER....................................... A person having rights or interests arising
under AMHC's articles of incorporation or
otherwise by law in respect of each insurance
policy or annuity contract of AmerUs Life,
including, but not limited to, any right to
vote.
MOODY'S...................................... Moody's Investors Service, Inc. Moody's
financial strength ratings are opinions of an
operating insurance company's ability to
discharge senior policyowner claims and
obligations pursuant to its insurance
policies. Moody's financial strength ratings
are based on information provided by the
company and federal and state regulators.
Moody's Investors Service, Inc. uses the
following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
Aaa Exceptional
Aa1, Aa2 and Aa3 Excellent
A1, A2 and A3 Good
Baa1, Baa2 and Adequate
Baa3
Ba1, Ba2 and Ba3 Questionable
B1, B2 and B3 Poor
Caa Very poor
Ca Extremely poor
C Lowest
</TABLE>

<TABLE>
<S> <C>
MORBIDITY.................................... The relative incidence of disability or
sickness due to disease or physical
impairment.
MORTALITY.................................... The relative incidence of death of life
insureds or annuitants.
MSVR......................................... Mandatory securities valuation reserve
required prior to 1992 statutory financial
statements by state insurance regulatory
authorities. MSVR was established as a
liability on a life insurer's statutory
financial statements and was intended to
absorb realized and unrealized gains and
losses sustained from time to time on a
portion of an insurer's general account debt
securities and preferred stock portfolios.
MSVR had no effect on financial statements
prepared in conformity with GAAP. The MSVR
was replaced by the AVR and IMR effective
with respect to an insurer's statutory
financial statements for 1992.
</TABLE>

<TABLE>
<S> <C>
NAIC......................................... The National Association of Insurance
Commissioners, an association of the chief
insurance supervisory officials of each
state, territory and insular possession of
the United States.
</TABLE>

110
<PAGE>
<TABLE>
<S> <C>
NET LEVEL METHOD............................. Reserve method used for traditional life
insurance. Such method defines the reserve as
the excess of the present value of future
guaranteed benefits over the present value of
future net premiums.
PARTICIPATING WHOLE LIFE POLICIES OR
PARTICIPATING WHOLE LIFE INSURANCE.......... Whole life policies or insurance under which
the owner thereof is eligible to share in the
earnings of the insurer through dividends.
PERSISTENCY.................................. The percentage of life insurance policies or
annuity contracts remaining in force from
period to period.
PERSONAL PRODUCING GENERAL AGENTS OR PPGAS... Independent agents who sell products directly
to the consumer and write business directly
with insurance companies and who are
compensated primarily for personal
production.
PPGA SYSTEM.................................. The network of PPGAs through which the
Company distributes its insurance and annuity
products.
PLAN......................................... The Plan of Reorganization of American Mutual
Life, including all schedules and exhibits
thereto, pursuant to which American Mutual
Life reorganized into a mutual insurance
holding company structure, as such Plan may
be amended from time to time.
POLICY....................................... Generally, a life insurance policy
(including, without limitation, a pure
endowment contract) or annuity contract
issued by the Company.
PREMIUM...................................... Payments and considerations received on
insurance policies and annuity contracts
issued or reinsured by an insurance company.
Under GAAP, premiums on universal life and
deferred annuity contracts are not accounted
for as revenues.
REINSURANCE.................................. The practice whereby one party, called the
reinsurer or assuming company, in
consideration of a premium paid to such
party, agrees to indemnify another party,
called the ceding company or primary insurer,
for risks underwritten by the ceding company.
Reinsurance provides a primary insurer with
three major benefits: it reduces net
liability on individual risks; it helps to
protect against catastrophic losses; and it
helps to maintain acceptable surplus and
reserve ratios. Reinsurance provides a
primary insurer with additional underwriting
capacity in that the primary insurer can
accept larger risks and can expand the volume
of business it writes without increasing its
capital base. The ceding company remains
liable on its obligations under the policies
reinsured if the reinsurer fails to pay
claims on a reinsured policy.
</TABLE>

111
<PAGE>
<TABLE>
<S> <C>
RESERVES..................................... Liabilities established by insurers to
reflect the estimated discounted present
value of costs of claims, payments or
contract liabilities and the related expenses
that the insurer will ultimately be required
to pay in respect of insurance or annuities
it has written.
RISK-BASED CAPITAL REQUIREMENTS OR RBC....... Regulatory and rating agency targeted surplus
based on the relationship of statutory
surplus, with certain adjustments, to the sum
of stated percentages of each element of a
specified list of company risk exposures.
SFAS......................................... Statement of Financial Accounting Standards.
SECOND TO DIE WHOLE LIFE INSURANCE........... A whole life policy in which two persons are
named as insureds. The death benefit is paid
upon the death of the second to die of the
two insureds.
SEPARATE ACCOUNTS............................ Investment accounts maintained by an insurer
to which funds have been allocated for
certain policies under provisions of relevant
state law. The investments in each separate
account are maintained separately from those
in other separate accounts and the general
account. The investment results of the
separate account assets are passed through
directly to the separate account
policyowners, so that an insurer derives
management and other fees from, but bears no
investment risk on, these assets, except the
risk on a small number of products that
returns on separate assets will not meet the
relatively low minimum rate guaranteed on
these products.
SINGLE-PREMIUM LIFE INSURANCE................ A life insurance policy which requires a
single payment of the premium.
SINGLE-PREMIUM VARIABLE ANNUITIES............ A variable annuity contract which requires a
single payment of the premium.
STANDARD & POOR'S............................ Standard & Poor's Ratings Group. Standard &
Poor's claims-paying ability ratings are
opinions of an operating insurance company's
financial ability to meet its obligations
under its insurance policies. Standard &
Poor's claims-paying ability ratings are
based on current information provided by the
subject insurance company and other reliable
sources. Standard & Poor's Rating Group uses
the following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
AAA Superior
AA+, AA and AA- Excellent financial
security
A+, A and A- Good financial security
BBB+, BBB Adequate
and BBB-
BB+, Bb and BB- Financial security may
be adequate
</TABLE>

112
<PAGE>
<TABLE>
<S> <C> <C>
B+, B and B- Vulnerable
CCC Extremely vulnerable
R Regulatory actions
BBBq, Bbq and Bq Qualified solvency
ratings
</TABLE>

<TABLE>
<S> <C>
STATUTORY ACCOUNTING PRACTICES............... Accounting practices prescribed or permitted
by the Iowa Department of Insurance.
STATUTORY RESERVES........................... Monetary amounts established by state
insurance law that an insurer must have
available to provide for future obligations
with respect to all policies. Statutory
reserves are liabilities on the balance sheet
of financial statements prepared in
conformity with Statutory Accounting
Practices.
STATUTORY SURPLUS............................ The excess of statutory admitted assets over
statutory liabilities as shown on an
insurer's statutory financial statements.
SURRENDERS AND WITHDRAWALS................... Relinquishment of life insurance policies and
annuity contracts for their entire net cash
surrender values and withdrawals of a portion
of such values.
SUPPLEMENTARY CONTRACT....................... An agreement by an insurer to retain the lump
sum payable under an insurance policy and to
make payments in accordance with the
settlement option chosen.
TERM LIFE INSURANCE.......................... Insurance protection during a certain number
of years but expiring without policy cash
value if the insured survives the stated
period.
TRADITIONAL LIFE INSURANCE................... Consists of whole life insurance and term
life insurance.
UNDERWRITING................................. The insurer's process of examining, accepting
or rejecting insurance risks, and classifying
those accepted, in order to charge the
appropriate premium for each accepted risk.
UNEARNED PREMIUM............................. The portion of an insurance premium paid
other than that which has paid for the
insurance protection already provided on a
policy.
UNIVERSAL LIFE INSURANCE..................... A form of life insurance where an insurance
account is maintained for each insurance
policy. Premiums, net of specified expenses,
are credited to the account, as is interest,
generally at a rate determined from time to
time by the insurer. Specific charges are
made against the account for the cost of
insurance protection and for the insurer's
expenses. The universal life form allows
considerable flexibility as to the amount and
timing of premium payments and for the level
of death benefits provided.
VARIABLE ANNUITY............................. Annuity in which premium payments are used to
purchase accumulation units. The value of a
unit
</TABLE>

113
<PAGE>
<TABLE>
<S> <C>
fluctuates in accordance with the investment
experience of a separate account; variable
annuity contracts typically include a general
account guaranteed interest investment
option. At the time of the payment of
benefits to the annuitant, the annuitant can
generally elect from a number of payment
options which provide either fixed or
variable benefit payments.
WHOLE LIFE INSURANCE OR WHOLE LIFE Insurance that may be kept in force for a
POLICIES.................................... person's entire life by paying one or more
premiums. It is paid for in one of three
different ways: (i) ordinary life insurance
(premiums are payable as long as the insured
lives), (ii) limited payment life insurance
(premiums are payable over a specified number
of years), and (iii) single premium life
insurance (a lump sum amount paid at the
inception of the policy). The insurance
policy pays a benefit (contractual amount
adjusted for items such as policy loans and
dividends, if any) at the death of the
insured. Whole life insurance also builds up
cash values.
</TABLE>

114
<PAGE>
AMERUS LIFE HOLDINGS, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Independent Auditors' Report............................................................................... F-2
Consolidated Balance Sheets as of June 30, 1996 (unaudited) and December 31, 1995 and 1994................. F-3
Consolidated Income Statements for the six months ended June 30, 1996 and 1995 (unaudited) and the years
ended December 31, 1995, 1994 and 1993.................................................................... F-4
Consolidated Statements of Policyowners' Equity for the six months ended June 30, 1996 (unaudited) and the
years ended December 31, 1995, 1994 and 1993.............................................................. F-5
Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 1995 (unaudited) and the
years ended December 31, 1995, 1994 and 1993.............................................................. F-6
Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>

F-1
<PAGE>
WHEN THE TRANSACTION REFERRED TO IN NOTE 1 OF NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS HAS BEEN CONSUMMATED, WE WILL BE ABLE TO RENDER THE
FOLLOWING REPORT.

KPMG PEAT MARWICK LLP

INDEPENDENT AUDITORS' REPORT

The Board of Directors
AmerUs Life Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of AmerUs Life
Holdings, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, policyowners' equity, and cash flows
for each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of AmerUs Life
Holdings, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1995, in conformity with generally accepted
accounting principles.

As discussed in note 1 to the consolidated financial statements, the Company
implemented the provisions of the Statement of Financial Accounting Standards
(SFAS) No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises
and by Insurance Enterprises for Certain Long-Duration Participating Contracts,"
and in 1993 the Company implemented the provisions of SFAS 106, "Employers
Accounting for Postretirement Benefits Other Than Pensions," and SFAS 115,
"Accounting for Certain Investments in Debt and Equity Securities. Also, as
discussed in note 1 to the consolidated financial statements, the Company has
restated its consolidated financial statements to reflect the spin-off of a
wholly owned subsidiary, which resulted in a change in the subsidiaries
comprising the consolidated financial statements.

Des Moines, Iowa
July 1, 1996, except as to note 1,
which is as of October , 1996

F-2
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
JUNE 30, JUNE 30, ---------- ----------
1996 1996
PRO FORMA ------------
AS ADJUSTED
FOR THE (UNAUDITED)
CAPITAL
CONTRIBUTION
(NOTE 15)
------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Investments (notes 2 and 5):
Securities available-for-sale at fair value:
Fixed maturity securities (amortized cost 1995--$2,951,249
and
1994--$2,663,985).......................................... $2,322,223 $2,326,904 $3,142,096 $2,566,768
Equity securities (cost 1995--$52,869 and 1994--$112,992)... 89,760 90,438 109,675 178,770
Short-term investments...................................... 23,163 23,163 39,353 8,529
Mortgage loans on real estate (notes 3 and 5)................. 243,323 278,328 353,597 447,663
Real estate................................................... 1,861 44,085 52,199 58,164
Policy loans.................................................. 63,586 63,586 220,044 209,512
Other investments............................................. 60,378 65,602 48,064 22,256
Closed block investments...................................... 932,014 932,014 -- --
------------ ------------ ---------- ----------
Total investments......................................... 3,736,308 3,824,120 3,965,028 3,491,662
Cash............................................................ -- -- 4,620 23,382
Accrued investment income....................................... 35,796 35,746 49,226 50,711
Premiums and fees receivable.................................... -- -- 6,908 6,220
Reinsurance receivables......................................... -- -- 1,392 1,169
Deferred policy acquisition costs (note 4)...................... 128,820 128,820 267,711 404,361
Deferred income taxes........................................... 3,600 3,600 -- --
Property and equipment (less accumulated depreciation 1995--
$19,229 and 1994--$20,133)..................................... 13,553 13,553 13,502 13,979
Other assets.................................................... 39,567 39,567 63,559 45,467
Closed block assets............................................. 228,574 228,574 -- --
------------ ------------ ---------- ----------
Total assets.............................................. $4,186,168 $4,273,980 $4,371,946 $4,036,951
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
LIABILITIES AND POLICYOWNERS' EQUITY
Liabilities:
Policy reserves and policyowner funds:
Future life and annuity policy benefits..................... $2,097,994 $2,097,994 $3,435,505 $3,309,529
Policyowner funds........................................... -- -- 56,474 51,464
------------ ------------ ---------- ----------
2,097,994 2,097,994 3,491,979 3,360,993
Checks drawn in excess of bank balances....................... 10,590 10,590 -- --
Accrued expenses.............................................. 9,588 9,588 11,100 15,677
Dividends payable to policyowners............................. -- -- 129,558 126,041
Policy and contract claims.................................... 12,828 12,828 16,617 9,803
Income taxes payable.......................................... 33,625 33,625 18,760 15,462
Deferred income taxes (note 6)................................ -- -- 48,623 1,482
Other liabilities............................................. 64,281 64,281 78,939 51,213
Long-term debt (note 5)....................................... 70,487 29,299 36,461 37,957
Closed block liabilities...................................... 1,511,766 1,511,766 -- --
------------ ------------ ---------- ----------
Total liabilities......................................... 3,811,159 3,769,921 3,832,037 3,618,628
------------ ------------ ---------- ----------
Policyowners' equity (note 11):
Unrealized appreciation of available-for-sale securities (note
2)........................................................... 19,456 19,456 108,714 15,320
Policyowners' surplus......................................... 355,553 484,553 431,195 403,003
------------ ------------ ---------- ----------
Total policyowners' equity................................ 375,009 504,009 539,909 418,323
------------ ------------ ---------- ----------
Commitments and contingencies (note 10)
Total liabilities and policyowners' equity................ $4,186,168 $4,273,980 $4,371,946 $4,036,951
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
SIX MONTHS ENDED JUNE 30, ----------- ----------- -----------
--------------------------
1996
------------ 1995
(UNAUDITED) ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Insurance premiums............................ $ 123,342 $ 121,331 $ 244,087 $ 237,912 $ 226,360
Universal life and annuity product charges.... 29,272 29,508 57,370 56,362 57,473
Net investment income (note 2)................ 143,888 141,267 285,244 275,691 269,854
Realized gains (losses) on investments (note
2)........................................... 64,409 24,150 51,387 (19,930) 15,460
Other......................................... 1,330 251 5,390 2,391 2,498
------------ ------------ ----------- ----------- -----------
362,241 316,507 643,478 552,426 571,645
------------ ------------ ----------- ----------- -----------
Benefits and expenses:
Policyowner benefits.......................... 189,328 188,251 374,620 369,896 364,273
Underwriting, acquisition, and insurance
expenses..................................... 28,218 24,155 58,655 68,604 58,637
Amortization of deferred policy acquisition
costs (note 4)............................... 26,823 25,247 50,239 42,756 47,441
Dividends to policyowners..................... 26,324 23,964 49,414 45,039 45,519
------------ ------------ ----------- ----------- -----------
270,693 261,617 532,928 526,295 515,870
------------ ------------ ----------- ----------- -----------
Income before income taxes and cumulative
effect of change in accounting
principles............................... 91,548 54,890 110,550 26,131 55,775
Income tax expense (note 6)................... 33,627 20,888 41,202 19,464 21,352
------------ ------------ ----------- ----------- -----------
Income before cumulative effect of change in
accounting principles........................ 57,921 34,002 69,348 6,667 34,423
Cumulative effect of change in accounting
principle, net of tax (note 7)............... -- -- -- -- (3,214)
------------ ------------ ----------- ----------- -----------
Net income................................ $ 57,921 $ 34,002 $ 69,348 $ 6,667 $ 31,209
------------ ------------ ----------- ----------- -----------
------------ ------------ ----------- ----------- -----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF POLICYOWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
AND SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
(DEPRECIATION)
OF AVAILABLE-
FOR-SALE TOTAL
SECURITIES POLICYOWNERS' POLICYOWNERS'
(NOTE 2) SURPLUS EQUITY
-------------- -------------- --------------
<S> <C> <C> <C>
Balance at January 1, 1993............................................ $ 50,768 $ 370,399 $ 421,167
Net income............................................................ -- 31,209 31,209
Net unrealized appreciation........................................... 8,058 -- 8,058
Dividend to American Mutual Holding Company (note 11)................. -- (310) (310)
Cumulative effect of change in accounting for investments (note 2).... 45,755 -- 45,755
-------------- -------------- --------------
Balance at December 31, 1993.......................................... 104,581 401,298 505,879
Net income............................................................ -- 6,667 6,667
Net unrealized depreciation........................................... (89,261) -- (89,261)
Dividend to American Mutual Holding Company (note 11)................. -- (4,962) (4,962)
-------------- -------------- --------------
Balance at December 31, 1994.......................................... 15,320 403,003 418,323
Net income............................................................ -- 69,348 69,348
Net unrealized appreciation........................................... 93,394 -- 93,394
Dividend to American Mutual Holding Company (note 11)................. -- (41,156) (41,156)
-------------- -------------- --------------
Balance at December 31, 1995.......................................... 108,714 431,195 539,909
Net income (unaudited)................................................ -- 57,921 57,921
Net unrealized depreciation (unaudited)............................... (89,258) -- (89,258)
Dividend to American Mutual Holding Company (unaudited)............... -- (4,563) (4,563)
-------------- -------------- --------------
Balance at June 30, 1996 (unaudited).................................. $ 19,456 $ 484,553 $ 504,009
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
SIX MONTHS ENDED JUNE 30, --------- --------- ---------
--------------------------
1996
------------ 1995
(UNAUDITED) ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................................... $ 57,921 $ 34,002 $ 69,348 $ 6,667 $ 31,209
Adjustments to reconcile net income to net cash provided
by operating activities:
Policyowner assessments on universal life and annuity
products.............................................. (29,272) (29,508) (57,370) (56,362) (57,473)
Interest credited to policyowner account balances...... 60,090 61,258 123,360 120,075 122,375
Realized investment (gains) losses..................... (64,409) (24,150) (51,387) 19,930 (15,460)
Change in:
Accrued investment income............................ 3,616 2,054 1,485 (1,250) 1,004
Reinsurance CEDED receivables........................ 192 684 (223) 666 (1,473)
Deferred policy acquisition costs.................... 565 (2,402) (7,491) (11,682) (1,259)
Liabilities for future policy benefits............... 31,652 36,784 94,856 94,862 111,619
Policy and contract claims and other policyowner
funds............................................... (3,789) 3,030 6,814 (2,828) 4,390
Income taxes:
Current............................................ 14,865 15,106 3,298 6,727 (14,619)
Deferred........................................... (4,224) (9,076) (3,105) 2,602 (10,034)
Other, net............................................. (15,012) 17,536 22,437 (7,057) 3,366
------------ ------------ --------- --------- ---------
Net cash provided by operating activities.............. 52,195 105,318 202,022 172,350 173,645
------------ ------------ --------- --------- ---------
Cash flows from investing activities:
Purchase of fixed maturities available for sale.......... (765,036) (726,063) (887,971) (886,236) (817,520)
Maturities, calls, and principal reductions of fixed
maturities available for sale........................... 686,987 606,086 582,980 591,965 650,108
Purchase of equity securities............................ (66,921) (54,112) (117,345) (69,813) (846,038)
Proceeds from sale of equity securities.................. 84,982 73,841 178,115 48,117 825,223
Proceeds from repayment and sale of mortgage loans....... 62,248 16,068 112,484 234,722 61,131
Purchase of mortgage loans............................... -- -- (37,328) (78,830) (73,704)
Purchase of real estate and other invested assets........ -- -- (28,490) (31,515) (3,825)
Proceeds from sale of real estate and other invested
assets.................................................. 7,240 1,166 31,484 18,806 2,822
Change in policy loans, net.............................. (5,675) (5,983) (10,532) (12,364) (7,498)
Tax on capital gains..................................... -- (188) (16,524) 5,136 (8,817)
Other assets, net........................................ 16,146 19,730 44,855 45,150 25,974
------------ ------------ --------- --------- ---------
Net cash provided by (used in) investing activities.... 19,971 (69,455) (148,272) (134,862) (192,144)
------------ ------------ --------- --------- ---------
Cash flows from financing activities:
Change in checks drawn in excess of bank balances........ 10,590 -- -- -- --
Deposits to policyowner account balances................. 91,918 144,945 272,431 260,172 169,118
Withdrawals from policyowner account balances............ (167,569) (147,540) (302,291) (208,313) (175,246)
Change in borrowed money, net............................ (7,162) (4,887) (1,496) (71,708) 20,974
Dividends to American Mutual Holding Company............. (4,563) (27,777) (41,156) (4,962) (310)
------------ ------------ --------- --------- ---------
Net cash (used in) provided by financing activities.... (76,786) (35,259) (72,512) (24,811) 14,536
------------ ------------ --------- --------- ---------
Net (decrease) increase in cash........................ (4,620) 604 (18,762) 12,677 (3,963)
Cash at beginning of year.................................. 4,620 23,382 23,382 10,705 14,668
------------ ------------ --------- --------- ---------
Cash at end of year........................................ $ -- $ 23,986 $ 4,620 $ 23,382 $ 10,705
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
Supplemental disclosure of cash activities:
Interest paid............................................ $ 400 $ 236 $ 684 $ 1,724 $ 331
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
Income taxes paid........................................ $ 35,000 $ 21,300 $ 51,900 $ 14,630 $ 45,172
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

AmerUs Life Holdings, Inc.'s (the Company) operations consist primarily of
marketing, underwriting, and distributing life insurance, annuities, and related
products to individuals throughout the United States. The Company's products are
sold through a career general agency system and a personal producing general
agency system. The life insurance and annuity operations are the Company's only
business segment.

ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The Company was formed on August 1, 1996 in conjunction with a plan of
reorganization (the Reorganization) of the former American Mutual Life Insurance
Company (American Mutual Life). Pursuant to the Reorganization which became
effective on June 30, 1996 (the Effective Date), American Mutual Life was
converted to a mutual insurance holding company structure whereby American
Mutual Holding Company (AMHC), a mutual insurance holding company, was formed.
Additionally, American Mutual Life was converted to a stock life insurance
company and renamed AmerUs Life Insurance Company (AmerUs Life). All of the
initial shares of capital stock of AmerUs Life were issued to AMHC.
Subsequently, AMHC transferred all of the shares of AmerUs Life to the Company
in exchange for all of the initial shares of the Company.

American Mutual Life was previously known as Central Life Assurance Company.
American Mutual Life Insurance Company merged with and into Central Life
Assurance Company on December 31, 1994, with Central Life Assurance Company as
the surviving company existing under the name American Mutual Life Insurance
Company. The accompanying consolidated financial statements present the pooling
of interests of both companies.

In connection with the Reorganization of American Mutual Life into a mutual
insurance holding company structure, the nonlife insurance operations of
American Mutual Life (AmerUs Financial Services (AFS), formerly Lartnec
Investment Company), will be spun off and become a sister corporation to the
Company, also wholly owned by AMHC, prior to the effective date of the
subscription offering of common stock. The purpose of the spin-off, which is
planned by the Company during the fourth quarter of 1996, is to remove the
nonlife insurance operations from the Company. The accounts and operations of
AFS and its wholly owned subsidiaries are not included in the Company's
consolidated financial statements. All name references in the accompanying
consolidated financial statements and the notes thereto have been changed to
reflect the Reorganization. The effect of the change in the reporting entity was
to decrease (increase) net income by AFS' net income (loss) of $10,539,000,
($101,000), and $6,055,000 in 1995, 1994, and 1993, respectively.

The accompanying consolidated financial statements include only the accounts
and operations, after intercompany eliminations, of AmerUs Life Holdings, Inc.
and its wholly owned subsidiaries, principally, AmerUs Life Insurance Company
and American Vanguard Life Insurance Company (American Vanguard Life).

The Reorganization contained an arrangement, known as a closed block, to
provide for dividends on policies that were in force on the Effective Date and
were within the classes of individual policies for which the Company had a
dividend scale in effect at the time of the Reorganization. The closed block was
designed to give reasonable assurance to owners of affected policies that assets
will be available to support such policies, including maintaining dividend
scales in effect at the time of the Reorganization, if the experience underlying
such scales continues. The assets, including revenue therefrom, allocated to the
closed block will accrue solely to the benefit of the owners of policies
included in the block until the block is no longer in effect. The Company will
not be required to support the payment of dividends on closed block policies
from its general funds.

F-7
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company and its
wholly owned subsidiaries have been prepared in conformity with GAAP which, as
to the insurance company subsidiaries, differ from statutory accounting
practices prescribed or permitted by regulatory authorities.

The insurance company subsidiaries have adopted SFAS 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts." SFAS 120 permits stock life
insurance companies to apply the provisions of the American Institute of
Certified Public Accountant's Statement of Position 95-1, "Accounting for
Certain Insurance Activities of Mutual Life Insurance Enterprises," to
participating life insurance contracts that meet the conditions in SFAS 120. The
accompanying consolidated financial statements have been restated for the
effects of implementing SFAS 120.

INTERIM FINANCIAL INFORMATION

The consolidated financial statements as of June 30, 1996, and for the
six-month periods ended June 30, 1996 and 1995, and related disclosures in these
notes have not been audited. The interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and notes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals unless
noted otherwise herein) considered necessary for a fair presentation have been
included. Operating results for the six-month period ended June 30, 1996, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1996.

Summarized financial information of the closed block as of June 30, 1996, is
as follows (in thousands):

<TABLE>
<CAPTION>
(UNAUDITED)
-------------
<S> <C>
Assets:
Fixed maturities, at fair value.............................................. $ 769,881
Policy loans................................................................. 162,133
Accrued investment income.................................................... 9,864
Other assets................................................................. 16,475
Deferred acquisition costs................................................... 202,235
-------------
Total assets............................................................... $ 1,160,588
-------------
-------------
Liabilities:
Future life and annuity policy benefits...................................... $ 1,320,136
Policyowner funds............................................................ 60,638
Dividends payable to policyowners............................................ 130,992
-------------
Total liabilities.......................................................... $ 1,511,766
-------------
-------------
</TABLE>

F-8
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS

Investments in fixed maturity and equity securities that are to be held for
indefinite periods of time are reported as securities available for sale.
Securities available for sale are reported in the accompanying consolidated
financial statements at fair value. Any valuation changes resulting from changes
in the fair value of these securities are reflected as a component of
policyowners' equity. These unrealized gains or losses in policyowners' equity
are reported net of taxes and adjustments to deferred policy acquisition costs.

Premiums and discounts on fixed maturity securities are amortized or
accreted over the life of the related security as an adjustment to yield using
the effective interest method. Realized gains and losses are included in
earnings and are determined using the specific identification method. The
carrying value of investments is reduced to its estimated realizable value if a
decline in fair value is considered other than temporary with such reduction
charged to earnings.

Mortgage loans on real estate and other long-term investments are stated at
cost less amortized discounts and allowances for possible losses. Policy loans
are stated at their aggregate unpaid balances. Real estate acquired by
foreclosure is stated at the lower of cost or fair value less estimated costs to
sell.

Investments in real estate and mortgage loans on real estate are considered
impaired when the Company determines that collection of all amounts due under
the contractual terms is doubtful or carrying values exceed fair values. The
Company adjusts real estate and mortgage loans on real estate to their estimated
net realizable value at the point at which it determines an impairment is other
than temporary. In addition, the Company has established a valuation allowance
for mortgage loans on real estate and other invested assets. Valuation
allowances for other than temporary impairments in value are netted against the
asset categories to which they apply, and additions to valuation allowances are
included in total investment results.

INTEREST RATE SWAPS AND CAPS

The Company uses interest rate swaps and caps as part of its overall
interest rate risk management strategy for certain life insurance and annuity
products. Gains and losses on those instruments are included in the carrying
value of the underlying hedged investments, or anticipated investment
transactions, and are amortized over the remaining lives of the hedged
investments as adjustments to investment income. Any unamortized gains or losses
are recognized when the underlying investments are sold.

Interest rate swap contracts are used to convert the interest rate
characteristics (fixed or variable) of certain investments to match those of the
related insurance liabilities that the investments are supporting. The net
interest effect of such swap transactions is reported as an adjustment of
interest income as incurred.

Interest rate caps are used to limit the effects of changing interest rates
on yields of variable rate or short-term assets or liabilities. The initial cost
of any such agreement is amortized to other expense over the life of the
agreement. Periodic payments that are receivable as a result of the agreements
are accrued as an adjustment of interest income or benefits from the hedged
item.

POLICY ACQUISITION COSTS

Certain commissions, policy issue and underwriting costs, and other variable
costs incurred to acquire or renew traditional life insurance, universal life
insurance, and annuity products have been deferred. The amortization method of
deferred policy acquisition costs for traditional life insurance products is
different, dependent upon whether the contract is participating or
non-participating. Participating contracts are those which are expected to pay
dividends to policyowners in proportion to their

F-9
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
relative contribution to the Company's surplus. Deferred policy acquisition
costs for participating traditional life insurance are being amortized over the
life of the policies generally in proportion to the present value of estimated
gross margins. Non-participating traditional life insurance deferred policy
acquisition costs are being amortized over the premium-paying period of the
related policies in proportion to the ratio of annual premium revenues to total
anticipated premium revenues using assumptions consistent with those used in
computing policy benefit reserves. For universal life insurance and annuity
products, deferred policy acquisition costs are being amortized generally in
proportion to the present value of estimated gross margins from surrender
charges and investment, mortality, and expense margins. The amortization for
participating traditional life, universal life, and annuity products is adjusted
retrospectively when current or estimated future gross profits or margins on the
underlying policies vary from previous estimates. Deferred policy acquisition
costs are adjusted for the impact on estimated gross profits of net unrealized
gains and losses on securities.

RECOGNITION OF REVENUES

Premiums for traditional life insurance products (including those products
with fixed and guaranteed premiums and benefits and which consist principally of
whole life insurance policies, limited-payment life insurance policies, and
certain annuities with life contingencies) are recognized as revenues when due.
Amounts received as payments for universal life insurance policies and for
annuity products (including deferred annuities and annuities without life
contingencies) are not recorded as premium revenue. Revenues for such contracts
consist of policy charges for the COST OF INSURANCE, policy administration
charges, and surrender charges assessed against policyowner account balances
during the period. All insurance-related revenue is reported net of reinsurance
ceded.

FUTURE POLICY BENEFITS

The liability for future policy benefits for traditional life insurance is
computed using the NET LEVEL METHOD, utilizing statutory interest and mortality
assumptions. Reserve interest assumptions range from 2.00 percent to 7.25
percent. The weighted average assumed interest rate for all traditional life
policy reserves was 4.20 percent in 1995, 4.10 percent in 1994, and 4.00 percent
in 1993. Policy benefit claims are charged to expense in the period that the
claims are incurred. All insurance-related benefits, losses, and expenses are
reported net of reinsurance ceded.

Future policy benefit reserves for universal life insurance and annuity
products are computed under a retrospective deposit method and represent policy
account balances before applicable surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the period in
excess of related policy account balances. The weighted average interest
crediting rate for universal life products was 6.67 percent in 1995, 6.44
percent in 1994, and 6.59 percent in 1993. The weighted average interest
crediting rate for annuity products was 6.16 percent in 1995, 6.41 percent in
1994, and 6.95 percent in 1993.

PARTICIPATING POLICIES

Participating policies entitle the policyowners to receive dividends based
on actual interest, mortality, morbidity, and expense experience for the related
policies. These dividends are distributed to the policyowners through an annual
dividend using current dividend scales which are approved by the board of
directors. Nearly 100 percent of traditional life policies are currently paying
dividends and traditional life policies represent 68 percent of the Company's
individual life policies in force.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost and is depreciated principally
under the straight-line method.

F-10
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GUARANTY FUND ASSESSMENTS

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of policyowners and claimants in the event of insolvency of
other life insurance companies. As of December 31, 1995, the Company has accrued
for the gross amount of guaranty fund assessments for known insolvencies net of
estimated recoveries of premium tax offsets.

BENEFIT PLAN COSTS

The Company recognizes pension costs for its defined benefit plans in
accordance with SFAS 87, "Employers' Accounting for Pensions." Pension costs are
funded according to regulations provided under the Internal Revenue Code.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Under SFAS 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," the cost of postretirement benefits must be recognized on an
accrual basis as employees perform services to earn the benefits. The Company
adopted SFAS 106 as of January 1, 1993. Prior to 1993, the cost of retiree
health care and life insurance benefits was recognized as an expense when paid.

INCOME TAXES

The Company and its subsidiaries, with the exception of American Vanguard
Life, file a consolidated federal income tax return with AFS and its
subsidiaries. The separate return method is used to compute the Company's
provision for federal income taxes. Deferred income tax assets and liabilities
are determined based on differences among the financial reporting and tax bases
of assets and liabilities and are measured using the enacted tax rates and laws.

PENDING ACCOUNTING STANDARDS

In March 1995, the Financial Accounting Standards Board issued SFAS 121
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to
Be Disposed Of." This statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable and an impairment loss must be recognized.

SFAS 121 is effective for the Company commencing January 1, 1996. The
Company believes that the adoption of this statement in 1996 will have an
immaterial impact on its results of operations, financial condition, and
liquidity.

BUSINESS RISKS

The Company operates in a business environment which is subject to various
risks and uncertainties. Such risks and uncertainties include interest rate
risk, legal and regulatory changes, and default risk.

Interest rate risk is the potential for interest rates to change, which can
cause fluctuations in the value of investments. To the extent that fluctuations
in interest rates cause the duration of assets and liabilities to differ, the
Company may have to sell assets prior to their maturity and realize losses.
Interest rate exposure for the investment portfolio is managed through
asset/liability management techniques which attempt to match the duration of the
assets with the estimated duration of the liabilities. The Company also utilizes
derivative investment contracts to manage interest rate risk.

The potential also exists for changes in the legal or regulatory environment
in which the Company operates, which can create additional costs and expenses
not anticipated by the Company in pricing its products. In other words,
regulatory initiatives or new legal theories may create costs for the Company
beyond those recorded in the financial statements. The Company mitigates this
risk by operating in a

F-11
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
geographically disperse area, which reduces its exposure to any single
jurisdiction, closely monitoring the regulatory environment to anticipate
changes, and by using underwriting practices which identify and minimize the
potential adverse impact of this risk.

Default risk is the risk that issuers of securities owned by the Company may
default or that other parties, including reinsurers, may not be able to pay
amounts due the Company. The Company minimizes this risk by adhering to a
conservative investment strategy, maintaining sound reinsurance and credit and
collection policies, and providing allowances or reserves for any amounts deemed
uncollectible.

(2) INVESTMENTS
On December 31, 1993, the Company adopted SFAS 115, "Accounting for Certain
Investments in Debt and Equity Securities," which expands the use of fair value
accounting for those securities that a company does not have positive intent and
ability to hold to maturity. Implementation of SFAS 115 increased policyowners'
equity by $45.8 million, which reflected the unrealized appreciation of fixed
maturity securities available for sale, net of related deferred policy
acquisition costs and deferred taxes.

The Company's investments are classified as available-for-sale securities
and are summarized as follows:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------- ----------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Available-for-sale securities at
December 31, 1995:
Fixed maturity securities:
Corporate bonds.................. $ 1,977,567 $ 160,486 $ 6,208 $ 2,131,845
U.S. government bonds............ 65,513 1,652 -- 67,165
Foreign government bonds......... 20,149 2,267 -- 22,416
Mortgage-backed bonds............ 886,470 33,837 1,323 918,984
State and municipal bonds........ 1,550 136 -- 1,686
------------- ----------- ----------- -------------
$ 2,951,249 $ 198,378 $ 7,531 $ 3,142,096
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Equity securities.................. $ 52,869 $ 57,380 $ 574 $ 109,675
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Short-term investments............. $ 39,276 $ 77 $ -- $ 39,353
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
</TABLE>

F-12
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------- ----------- ----------- -------------
(IN THOUSANDS)
Available-for-sale securities at
December 31, 1994:
<S> <C> <C> <C> <C>
Fixed maturity securities:
Corporate bonds.................. $ 1,754,413 $ 19,003 $ 73,277 $ 1,700,139
U.S. government bonds............ 47,682 44 390 47,336
Foreign government bonds......... 12,147 80 226 12,001
Mortgage-backed bonds............ 847,390 4,945 47,272 805,063
State and municipal bonds........ 2,353 10 134 2,229
------------- ----------- ----------- -------------
$ 2,663,985 $ 24,082 $ 121,299 $ 2,566,768
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Equity securities.................. $ 112,992 $ 70,578 $ 4,800 $ 178,770
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Short-term investments............. $ 8,529 $ -- $ -- $ 8,529
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
</TABLE>

The amortized cost and estimated fair value of investments in fixed maturity
securities at December 31, 1995, are summarized by stated maturity as follows:

<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE
----------------------------
AMORTIZED
COST FAIR VALUE
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Maturity:
Due in 1996................................................... $ 36,689 $ 36,955
Due in 1997 - 2001............................................ 408,834 432,572
Due in 2002 - 2006............................................ 1,149,125 1,235,078
Due after 2006................................................ 470,131 518,507
Mortgage-backed securities...................................... 886,470 918,984
------------- -------------
$ 2,951,249 $ 3,142,096
------------- -------------
------------- -------------
</TABLE>

The foregoing data is based on the stated maturities of the securities.
Actual maturities will differ for some securities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.

The ratings of the Company's fixed maturity securities at December 31, 1995,
using Standard & Poors rating service, are summarized as follows (in thousands):

<TABLE>
<CAPTION>
Treasuries and AAA............................................. $ 983,804
<S> <C>
AA............................................................. 51,439
A.............................................................. 597,502
BBB............................................................ 1,313,014
BB............................................................. 167,366
Less than BB................................................... 28,971
----------
$3,142,096
----------
----------
</TABLE>

The Company's investment in non-income producing fixed maturity securities
and real estate was $9.7 million as of December 31, 1995.

F-13
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
Major categories of investment income are summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Fixed maturity securities.............................. $ 231,208 $ 206,346 $ 201,203
Equity securities...................................... 6,311 7,821 5,834
Mortgage loans on real estate.......................... 33,738 55,181 57,031
Real estate............................................ 9,729 9,907 6,708
Policy loans........................................... 14,043 12,745 12,572
Other.................................................. 5,211 2,329 722
----------- ----------- -----------
Gross investment income............................ 300,240 294,329 284,070
Investment expenses.................................... 14,996 18,638 14,216
----------- ----------- -----------
Net investment income.............................. $ 285,244 $ 275,691 $ 269,854
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

Investment expenses include depreciation on real estate of $2.9 million,
$2.0 million and $2.0 million in 1995, 1994, and 1993, respectively.

Realized gains and losses on investments and provisions for losses are
summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
--------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities:
Gross realized gains.................................. $ 18,652 $ 10,879 $ 18,679
Gross realized losses................................. (9,240) (36,423) (6,809)
Equity securities:
Gross realized gains.................................. 45,419 14,746 10,095
Gross realized losses................................. (3,634) (5,181) (2,887)
Other investments......................................... 812 (2,744) (642)
Net provision for losses--mortgage loans on real estate... (622) (1,207) (2,976)
--------- ---------- ---------
$ 51,387 $ (19,930) $ 15,460
--------- ---------- ---------
--------- ---------- ---------
</TABLE>

The unrealized appreciation (depreciation) on invested assets available for
sale is reported as a separate component of policyowners' equity, reduced by
adjustments to deferred acquisition costs and a provision for deferred income
taxes.

A summary of the components of the net unrealized appreciation
(depreciation) on invested assets carried at fair value (in thousands) is as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1995 1994 1993
----------- ---------- -----------
<S> <C> <C> <C>
Unrealized appreciation (depreciation):
Fixed maturity securities............................ $ 190,847 $ (97,217) $ 153,744
Equity securities.................................... 56,806 65,778 87,247
Short-term investments............................... 77 -- --
Other investments...................................... 6,335 (2,277) 211
Deferred policy acquisition costs...................... (88,039) 56,102 (81,492)
Deferred income taxes.................................. (57,312) (7,066) (55,129)
----------- ---------- -----------
$ 108,714 $ 15,320 $ 104,581
----------- ---------- -----------
----------- ---------- -----------
</TABLE>

F-14
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
The change in unrealized appreciation (depreciation) on fixed maturity
securities was $288 million, ($251) million, and $154 million in 1995, 1994 and
1993, respectively; the corresponding amounts for equity securities were ($9)
million, ($21) million, and $11 million.

At December 31, 1995 and 1994, investments in fixed maturity securities with
a carrying amount of $2.4 million and $2.3 million, respectively, were on
deposit with state insurance departments to satisfy regulatory requirements.

No investment in any person or its affiliates exceeded 10 percent of
policyowners' equity at December 31, 1995.

(3) MORTGAGE LOANS ON REAL ESTATE
Mortgage loans on real estate consist almost entirely of commercial mortgage
loan investments, substantially all of which are made on a full recourse basis
and consist primarily of fixed-rate first mortgages on completed properties. The
following table sets forth additions, reductions from payments, and other
charges and foreclosures related to the mortgage loan portfolio (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
Commercial loans:
Beginning balance................................................. $ 504,034 $ 723,602
Additions......................................................... 39,933 75,275
Payments and miscellaneous charges................................ (146,496) (280,871)
Foreclosed properties............................................. (18,057) (13,972)
------------ ------------
Ending balance.................................................... 379,414 504,034
Residential and other mortgage loans.............................. 4,250 9,178
Valuation allowance............................................... (30,067) (65,549)
------------ ------------
Total mortgage loans.......................................... $ 353,597 $ 447,663
------------ ------------
------------ ------------
</TABLE>

The Company manages its credit risk associated with these loans by
diversifying its mortgage portfolio by property type and geographic location and
by seeking favorable loan to value ratios on secured properties. The portfolio
credit risk for mortgage loans was concentrated in the following geographic
regions (dollar amounts in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------
1995 1994
------------------------ ------------------------
NUMBER AMOUNT NUMBER AMOUNT
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Commercial:
California................................... 31 $ 69,946 42 $ 90,482
Florida...................................... 6 21,964 9 28,677
Iowa......................................... 56 95,837 66 108,944
Kansas....................................... 14 29,249 16 39,643
Texas........................................ 9 28,053 14 59,233
Washington................................... 8 15,172 10 28,949
Other........................................ 88 119,193 109 148,106
Residential.................................... 95 4,250 196 9,178
Valuation allowance............................ -- (30,067) -- (65,549)
--- ----------- --- -----------
307 $ 353,597 462 $ 447,663
--- ----------- --- -----------
--- ----------- --- -----------
</TABLE>

F-15
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3) MORTGAGE LOANS ON REAL ESTATE (CONTINUED)
At December 31, 1995, the Company's investment in mortgage loans included
$77.4 million in loans that are considered to be impaired, for which the related
allowance for credit losses is $16.9 million. The average recorded investment in
impaired loans during the year ended December 31, 1995, was $86.9 million. For
the year ended December 31, 1995, the Company recorded $6.9 million in interest
income on those impaired loans.

No mortgage loan on any one individual property exceeds $14 million at
December 31, 1995.

Provisions for losses are summarized as follows :

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year............................. $ 65,549 $ 80,220 $ 81,040
---------- ---------- ---------
Provisions for losses - mortgage loans................... 622 1,207 2,976
Provision on mortgages sold/transferred to real estate... (36,104) (15,878) (3,796)
---------- ---------- ---------
Net decrease for year.................................. (35,482) (14,671) (820)
---------- ---------- ---------
Balance at end of year................................... $ 30,067 $ 65,549 $ 80,220
---------- ---------- ---------
---------- ---------- ---------
</TABLE>

(4) DEFERRED POLICY ACQUISITION COSTS
A summary of the policy acquisition costs deferred and amortized are as
follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year.......................... $ 404,361 $ 255,085 $ 335,318
Policy acquisition costs deferred..................... 57,730 54,438 48,700
Policy acquisition costs amortized.................... (50,239) (42,756) (47,441)
Change in unrealized (gain) loss on available-for-sale
securities........................................... (144,141) 137,594 (81,492)
------------ ----------- -----------
Balance at end of year................................ $ 267,711 $ 404,361 $ 255,085
------------ ----------- -----------
------------ ----------- -----------
</TABLE>

The components of the deferred policy acquisition costs are as follows (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Universal life insurance and annuity products.......... $ 144,262 $ 224,078 $ 151,038
Participating traditional life insurance............... 103,250 160,780 86,132
Non-participating traditional life insurance........... 20,199 19,503 17,915
----------- ----------- -----------
$ 267,711 $ 404,361 $ 255,085
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

Commissions represent over 85 percent of policy acquisition costs deferred.

F-16
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(5) DEBT
Debt at December 31, 1995 and 1994, consists of the following (in
thousands):

<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Short-term:
Line of credit with Federal Home Loan Bank - interest is paid at a rate of
5.70% at December 31,1995.The agreement provides for maximum borrowings of
$50,000,000. The Company has assigned all Federal Home Loan Bank stock and has
assigned other securities as collateral on the line of credit................. $ -- $ 3,665
Long-term:
The Iowa Housing Finance Authority variable rate (5.35% at December 31,1995)
demand Multi-Family Housing Bond Series 1985-A................................ 8,813 8,948
Federal Home Loan Bank community investment long-term advances with a weighted
average interest rate of 6.54% at December 31, 1995 maturing at various dates
through July 2010............................................................. 11,765 --
The Housing and Redevelopment Authority of the City of St. Paul, Minnesota,
demand rental housing development revenue bonds Series 1985-A were repaid in
1995.......................................................................... -- 3,884
Class A certificate holders of 1988-1 REMIC with a weighted average interest
rate of 9% at December 31, 1995............................................... 15,883 21,268
Other............................................................................ -- 192
--------- ---------
$ 36,461 $ 37,957
--------- ---------
--------- ---------
</TABLE>

Maturities of long-term debt are as follows for each of the five years
ending December 31:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Year ending December 31:
1996.......................................................................... $ 16,136
1997.......................................................................... 8,911
1998.......................................................................... 202
1999.......................................................................... 216
2000.......................................................................... 232
Thereafter.................................................................... 10,764
--------------
$ 36,461
--------------
--------------
</TABLE>

At December 31, 1995, the carrying value of the securities assigned to the
Federal Home Loan Bank as collateral on the line of credit and long-term
advances totaled $27 million. The bonds are collateralized by certain mortgage
loans held by the Company with a carrying value of $12 million at December 31,
1995.

Interest paid totaled $.6 million, $1.7 million and $.3 million in 1995,
1994, and 1993, respectively.

F-17
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6) FEDERAL INCOME TAXES
Comprehensive federal income tax expense is summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Income tax expense on:
Operations......................................................... $ 41,202 $ 19,464 $ 21,352
Unrealized holding gains (losses) on available-for-sale
securities........................................................ 50,246 48,063 (28,975)
Accounting change for postretirement benefits...................... -- -- (1,731)
--------- --------- ---------
$ 91,448 $ 67,527 $ (9,354)
--------- --------- ---------
--------- --------- ---------
</TABLE>

The effective income tax rate on pre-tax income before cumulative effect of
changes in accounting principles is higher than the prevailing corporate federal
income tax rate and is summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Corporate federal income tax rate...................................... 35.00% 35.00% 35.00%
Differential earnings amount........................................... -- 36.68 --
Tax-exempt investment income........................................... (.24) (1.66) (.59)
Cumulative effect of tax rate change................................... -- -- 1.57
Merger expenses........................................................ .48 2.29 --
Other items, net....................................................... 2.03 2.18 2.30
----- ----- -----
Effective tax rate................................................. 37.27% 74.49% 38.28%
----- ----- -----
----- ----- -----
</TABLE>

The differential earnings amount is an equity add-on tax which mutual life
insurance companies are required to pay. The amount is determined annually and
is calculated by comparing the earnings rate of mutual life insurance companies
and certain stock life insurance companies. In certain years, such as 1993 and
1995, the calculations have resulted in negative adjustments with no additional
tax amount to be paid.

The Company's federal income tax expense (benefit) is summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current............................................................. $ 44,307 $ 16,862 $ 31,386
Deferred............................................................ (3,105) 2,602 (10,034)
--------- --------- ----------
Total federal income tax expense................................ $ 41,202 $ 19,464 $ 21,352
--------- --------- ----------
--------- --------- ----------
</TABLE>

F-18
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6) FEDERAL INCOME TAXES (CONTINUED)
The significant components of net deferred income tax assets and liabilities
are summarized as follows:

<TABLE>
<CAPTION>
1995 1994
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Deferred income tax assets:
Policy reserves and policyholder funds.................................... $ 106,813 $ 101,509
Policy acquisition costs capitalized for tax.............................. 26,588 21,208
Net unrealized depreciation on available-for-sale securities.............. -- 11,801
Deferred policy acquisition costs related to unrealized appreciation...... 30,813 --
Deferred compensation..................................................... 10,134 7,109
Other..................................................................... 23,344 31,422
------------ ------------
Total gross deferred income tax assets.................................. 197,692 173,049
Deferred income tax liabilities:
Deferred policy acquisition costs......................................... (124,513) (121,891)
Net unrealized appreciation on available-for-sale securities.............. (88,922) --
Deferred policy acquisition costs related to unrealized depreciation...... -- (19,636)
Reinsurance receivable.................................................... (23,403) (22,838)
Other..................................................................... (9,477) (10,166)
------------ ------------
Total gross deferred tax liability...................................... (246,315) (174,531)
------------ ------------
Net deferred income tax liability....................................... $ (48,623) $ (1,482)
------------ ------------
------------ ------------
</TABLE>

The Company is required to establish a "valuation allowance" for any portion
of the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that it will realize the
benefit of the net deferred tax asset, and, therefore, no such valuation
allowance has been established.

Federal income tax returns for the Company for years through 1987 are closed
to further assessment of taxes. Examinations of federal income tax returns for
1988 and 1989 have been made by the Internal Revenue Service. The Internal
Revenue Service is examining federal income tax returns of the Company for 1990
through 1992. Management believes adequate provisions have been made for any
additional taxes which may become due with respect to open years.

Income taxes paid by the Company totaled $51.9 million, $14.6 million, and
$45.2 million in 1995, 1994, and 1993, respectively.

(7) DEFINED BENEFIT PENSION PLANS
The Company has defined benefit pension plans which cover substantially all
of the Company's employees, as well as employees of certain companies directly
or indirectly owned by the Company, including AFS and its subsidiaries. The
plans provide for benefits based upon years of service and the

F-19
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)
employee's compensation. Information for the Company's portion of the plans'
funded status is not available. The following information presents the plans'
funded status and pension cost, based upon measurement dates of December 31,
1995 and 1994 (prior to revaluation for curtailment of the plans):

<TABLE>
<CAPTION>
1995 1994
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Actuarial present value of accumulated benefit obligation, including
vested benefits of $45,505 and $37,331 in 1995 and 1994,
respectively........................................................ $ (45,505) $ (38,750)
---------- ----------
---------- ----------
Projected benefit obligation for service rendered to date-- includes
effect of increase in compensation levels........................... $ (45,505) $ (45,697)
Plans' assets at fair value, primarily consisting of mutual funds and
certificates of deposit............................................. 52,592 47,017
---------- ----------
Plans' assets in excess of projected benefit obligations............. 7,087 1,320
Unrecognized (gain) loss from actual experience difference from
assumed and effects of changes in assumptions....................... (2,745) 376
Unrecognized prior service cost...................................... -- (1,473)
Net unrecognized obligation at January 1, 1988 and 1987, being
amortized over 15 years............................................. -- 54
---------- ----------
Prepaid pension cost................................................. $ 4,342 $ 277
---------- ----------
---------- ----------
</TABLE>

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost--benefits earned during year................... $ 1,768 $ 2,325 $ 2,058
Interest cost on projected benefit obligation............... 3,609 3,282 3,155
Actual return on plan assets................................ (3,729) (3,632) (3,769)
Net amortization and deferral............................... (114) (37) 391
Special termination benefits due to early retirement........ -- 1,597 993
--------- --------- ---------
Defined benefit pension cost............................ $ 1,534 $ 3,535 $ 2,828
--------- --------- ---------
--------- --------- ---------
Company's portion of net pension cost....................... $ 696 $ 2,578 $ 1,267
--------- --------- ---------
--------- --------- ---------
</TABLE>

The weighted average discount rate was 7.25 percent, 8.00 percent, and 7.45
percent in 1995, 1994, and 1993, respectively. The rate of increase in future
compensation levels was 5.50 percent, 5.00 percent, and 6.9 percent in 1995,
1994, and 1993, respectively. The expected long-term rate of return on assets
was 8.00 percent, 7.50 percent, and 7.60 percent in 1995, 1994, and 1993,
respectively.

During 1993, the Company offered an early retirement plan to qualifying
employees based on age and years of service. The Company's portion of the loss
recognized for the years ending December 31, 1994 and 1993, from the curtailment
and special termination benefits for the plan was approximately $1.6 million and
$.4 million, respectively.

The Company has frozen the defined benefit pension plans effective December
31, 1995, and has recognized their portion of a curtailment gain amounting to
$6.2 million, or $3.1 million after federal excise taxes, as other revenues.
Effective January 1, 1996, the defined benefit pension plans have been replaced
by a defined contribution savings and retirement plan which also replaces the
Company's defined contribution pension plans.

F-20
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)
DEFINED CONTRIBUTION PENSION PLANS

The Company has three defined contribution 401(k) plans which cover
substantially all employees. The Company's total contribution under the plans
amounted to $.4 million, $.6 million, and $.7 million for the years ended
December 31, 1995, 1994, and 1993, respectively. Effective January 1, 1996, the
defined contribution 401(k) plans together with the defined benefit pension
plans have been replaced by a single defined contribution savings and retirement
plan.

NONQUALIFIED PENSION PLAN

The Company also has a nonqualified pension plan covering substantially all
of its career and general agents. Accumulated benefits of the plan are unfunded
and have been included in other liabilities at December 31, 1995 and 1994,
amounting to $13.6 million and $10.9 million, respectively.

POSTRETIREMENT PLANS

The Company has postretirement benefit plans to provide certain eligible
participants and dependents with certain medical, dental, and life insurance
benefits. As discussed in note 1, the Company adopted SFAS 106 as of January 1,
1993. The Company's transition obligation as of January 1, 1993, amounted to
$3.2 million, net of income tax benefits of $1.7 million, and was recorded as a
cumulative effect adjustment to income. The Company's plan for medical and life
insurance benefits is combined with that of the subsidiaries of AMHC.
Information for the Company's individual funded status is not available. The
following information is presented on a combined plan basis accompanied by the
Company's portion of the net periodic postretirement benefit expense and sets
forth the combined postretirement benefit plans' funded status at December 31,
1995 and 1994:

<TABLE>
<CAPTION>
1995 1994
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Fully eligible active plan participants................................ $ 491 $ 425
Other active plan participants......................................... 1,716 1,724
Retirees............................................................... 6,121 5,481
--------- ---------
Accumulated postretirement benefit obligation............................ 8,328 7,630
Unrecognized prior service cost.......................................... (27) --
Unrecognized (loss) gain................................................. (167) 124
--------- ---------
Accrued postretirement benefit cost...................................... $ 8,134 $ 7,754
--------- ---------
--------- ---------
</TABLE>

Net periodic postretirement benefit expense for 1995, 1994, and 1993
included the following components:

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost....................................................... $ 248 $ 268 $ 153
Interest cost...................................................... 586 521 373
Net amortization and deferral...................................... 5 19 --
Curtailment and special termination benefits....................... -- -- 613
--------- --------- ---------
Net periodic postretirement benefit expense.................... $ 839 $ 808 $ 1,139
--------- --------- ---------
--------- --------- ---------
Company's portion of net periodic postretirement benefit expense... $ 639 $ 426 $ 727
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-21
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)
The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e., health care cost trend rate) for the medical and
dental plan is approximately 9.00 percent, 9.50 percent, and 10.00 percent for
1995, 1994, and 1993, respectively, and is assumed to decrease gradually to 5.50
percent over nine years and remain at that level thereafter. The health care
cost trend rate assumption has a significant effect on the amounts reported. For
example, increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation for the medical plan as of December 31, 1995 and 1994, by 7.70
percent and 4.50 percent, respectively, and the aggregate of the service and
interest cost components of net periodic postretirement benefit expense for
1995, 1994, and 1993 by $.06 million, $.02 million, and $.03 million,
respectively, on a combined basis. The weighted-average discount rate used in
determining the accumulated postretirement benefit obligation was 7.25 percent,
8.00 percent, and 7.57 percent as of December 31, 1995, 1994, and 1993,
respectively.

(8) RELATED PARTY TRANSACTIONS
The Company has financed approximately $7.4 million at December 31, 1995, of
indebtedness of a subsidiary of AFS, receiving interest in the amount of $.8
million in both in 1995 and 1994. The Company pledged bonds and securities with
a carrying value of $107 million at December 31, 1995, as collateral for
affiliates' indebtedness, including the collateral pledged for the credit
arrangements discussed in note 5.

The following summarizes transactions of the Company with AFS and its
subsidiaries in 1995, 1994, and 1993:

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Capital contributions...................................... $ 41,157 $ 4,959 $ 310
Management, administrative, data processing, and other
services fees charged to certain subsidiaries of AFS...... 9,164 8,162 7,500
Investments in bonds and accrued interest in AFS and
subsidiaries as of December 31............................ 12,868 17,242 20,813
Investments in mortgage loans from joint ventures in which
a subsidiary of AFS has a partnership interest at December
31........................................................ 16,275 30,775 40,500
Payable to a subsidiary of AFS for purchase of commercial
mortgage loans at December 31............................. 6,520 -- --
Transfer of partnership interests in certain joint ventures
to a subsidiary of AFS.................................... 1,697 -- --
Real estate management fees charged by a subsidiary of
AFS....................................................... 2,555 1,301 1,811
</TABLE>

(9) REINSURANCE
At December 31, 1995, the Company's maximum retention limit for acceptance
of risk on life insurance was $1 million. Retention limits for certain policies
issued prior to July 1, 1985, was $125,000 and for certain policies issued after
June 30, 1985, and before December 1, 1994, was $250,000. There are reinsurance
agreements with various companies whereby insurance in excess of these retention
limits are reinsured. Insurance in-force ceded to nonaffiliated companies under
risk sharing arrangements at December 31, 1995, 1994, and 1993, totaled
approximately $2,916 million, $3,265 million, and $3,247 million, respectively.

F-22
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(9) REINSURANCE (CONTINUED)
Total life premiums ceded amounted to $14.2 million, $13.7 million, and
$15.3 million in 1995, 1994, and 1993, respectively. Total life premiums assumed
amounted to $4.9 million, $7.9 million, and $8.5 million, respectively.

To the extent that reinsuring companies are unable to meet obligations under
these agreements, the Company remains liable. To limit the possibility of such
losses, the Company evaluates the financial condition of its reinsurers and
monitors concentration of credit risk.

(10) COMMITMENTS AND CONTINGENCIES
AFS and its subsidiaries have various credit lines and arrangements totaling
$94 million at December 31, 1995. Approximately $92 million was outstanding
under these agreements at December 31, 1995, which are collateralized by Company
investments of approximately $107 million.

The Company guarantees the payment of 60 percent of a pool of mortgage loans
and the related interest, previously sold to an unrelated party. The outstanding
balance of such mortgage losses subject to this repayment guarantee at December
31, 1995, was approximately $13 million.

The Company is party to financial instruments in the normal course of
business to meet the financing needs of its customers having risk exposure not
reflected in the balance sheet. These financial instruments include commitments
to extend credit and standby letters of credit. Commitments to extend credit are
agreements to lend to customers. Commitments generally have fixed expiration
dates and may require payment of a fee. Since many commitments expire without
being drawn upon, the total amount of commitments does not necessarily represent
future cash requirements. At December 31, 1995, outstanding commitments to
extend credit totaled approximately $6 million.

AmerUs Life is a defendant in a class action lawsuit which was brought on
August 31, 1995 in the District Court for Travis County, Texas. The complaint,
which seeks unspecified damages, was filed by former policyowners on behalf of
themselves and all similarly situated persons who purchased individual life
insurance policies which were underwritten and sold by AmerUs Life within Texas
and which were based upon uniform sales presentations and policy illustrations
from and after the mid-1980s using a "vanishing premium" concept. AmerUs Life
has denied the allegations contained in such complaint, including the existence
of a legitimate class. The litigation is in the discovery stage and a hearing on
certification of the class has not yet been held. The litigation is being
vigorously defended by AmerUs Life. The parties have engaged in court-ordered
mediation with respect to this action.

A class action lawsuit also was filed in June 1996 in the United States
District Court for the Northern District of California. The complaint alleges
that AmerUs Life improperly passed an increase in its corporate income taxes
(known as the deferred acquisition cost, or DAC, tax) through to policyowners in
breach of the terms of its life (other than traditional whole life) and annuity
policies. The plaintiff, an insured under a universal life policy issued by
Central Life, seeks unspecified damages and injunctive relief on behalf of
himself and all policyowners of AmerUs Life with universal life, term and
"blended" life insurance policies and annuities. AmerUs Life has denied the
allegations contained in such complaint, including the existence of a legitimate
class. The litigation is in the early discovery stage and a hearing on
certification of the class has not yet been held. The litigation is being
vigorously defended by AmerUs Life.

In the ordinary course of business, the Company and subsidiaries are also
engaged in certain other litigation, none of which management believes is
material.

F-23
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(11) POLICYOWNERS' EQUITY
Generally, the policyowners' surplus of the Company's insurance subsidiaries
available for distribution to the Company are limited to the amounts that the
insurance subsidiaries' net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements; however,
payments of such amounts as dividends may be subject to approval by regulatory
authorities. In 1996, the Company's insurance subsidiaries could distribute
approximately $40 million in the form of dividends to the Company without prior
approval of such regulatory authorities. However, as a result of the spin off,
the Company will not be able to pay additional dividends in the 12-month period
following the spin off of AFS without the prior approval of the Iowa
Commissioner.

The Company made additional contributions to AFS amounting to $41 million,
$5 million, and $.3 million in 1995, 1994, and 1993, respectively, which have
been considered dividends to AMHC as a result of the spin-off of AFS.

(12) STATUTORY ACCOUNTING PRACTICES
The Company's statutory net income was $49.3 million, $20.8 million and
$28.2 million for 1995, 1994, and 1993, respectively.

The Company's statutory surplus and capital was $155.1 million and $183.6
million at December 31, 1995 and 1994, respectively.

The Company's insurance subsidiaries are domiciled in Iowa and prepare their
statutory-basis financial statements in accordance with accounting practices
prescribed or permitted by the Iowa Department of Commerce (Iowa Department).
Prescribed statutory accounting practices include state laws, regulations, and
general administrative rules, as well as a variety of publications of the
National Association of Insurance Commissioners (NAIC). Permitted statutory
accounting practices encompass all accounting practices that are not prescribed;
such practices may differ from state to state, may differ from company to
company within a state, and may change in the future. The NAIC currently is in
the process of codifying statutory accounting practices, the result of which is
expected to constitute the only source of prescribed statutory accounting
practices. Accordingly, that project, which is expected to be completed in 1997,
will likely change, to some extent, prescribed statutory accounting practices
and may result in changes to the accounting practices that insurance enterprises
use to prepare their statutory financial statements.

The Company does not utilize any permitted practices in the preparation of
its statutory-basis financial statements which would have a material impact on
statutory surplus.

The Iowa Department imposes minimum risk-based capital requirements on
insurance enterprises that were developed by the National Association of
Insurance Commissioners (NAIC). The formulas for determining the amount of
risk-based capital (RBC) specify various weighting factors that are applied to
financial balances or various levels or activity based on the perceived degree
of risk. Regulatory compliance is determined by a ratio (the Ratio) of the
enterprise's regulatory total adjusted capital, as defined by the NAIC, to its
authorized control level, RBC, as defined by the NAIC. Enterprises below
specific trigger points or ratios are classified within certain levels, each of
which requires specified corrective action.

Each of the Company's insurance subsidiaries has a Ratio that is at least
400 percent of the minimum RBC requirements; accordingly, the Company's
subsidiaries meet the RBC requirements.

(13) FINANCIAL INSTRUMENTS
The Company utilizes a variety of off-balance-sheet financial instruments as
part of its efforts to hedge and manage fluctuations in the market value of its
portfolio of available-for-sale securities, attributable to changes in general
interest rate levels, and to manage duration mismatch of assets and

F-24
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) FINANCIAL INSTRUMENTS (CONTINUED)
liabilities. Those instruments include interest rate exchange agreements (swaps
and caps) and involve elements of credit and market risks in excess of the
amounts recognized in the accompanying financial statements at a given point in
time. The contract or notional amounts of those instruments reflect the extent
of involvement in the various types of financial instruments.

The Company's exposure to credit risk is the risk of loss from a
counterparty failing to perform according to the terms of the contract. That
exposure includes settlement risk (i.e., the risk that the counterparty defaults
after the Company has delivered funds or securities under terms of the contract)
that would result in an accounting loss and replacement cost risk (i.e., the
cost to replace the contract at current market rates should the counterparty
default prior to settlement date). To limit exposure associated with
counterparty nonperformance on interest rate exchange agreements, the Company
enters into master netting agreements with its counterparties.

The credit risk on all financial instruments, whether on or off the balance
sheet, is controlled through an on-going credit review, approval, and monitoring
process. The Company determines, on an individual counterparty basis, the need
for collateral or other security to support financial instruments with credit
risk and establishes individual and aggregate counterparty exposure limits.

At December 31, 1995, the Company's outstanding derivative positions shown
in notional or contract amounts, along with their carrying value and estimated
fair values, are summarized as follows:

<TABLE>
<CAPTION>
NOTIONAL CARRYING FAIR
AMOUNT VALUE VALUE
----------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest rate caps................................................. $ 450,000 $ 4,112 $ 4,110
Received fixed..................................................... 150,000 11,887 11,887
Pay fixed.......................................................... 150,000 (3,392) (3,392)
----------- --------- ---------
$ 750,000 $ 12,607 $ 12,605
----------- --------- ---------
----------- --------- ---------
</TABLE>

There were no material derivative positions at December 31, 1994.

INTEREST RATE EXCHANGE AGREEMENTS

The Company enters into interest rate exchange agreements to reduce and
manage interest rate risk associated with individual assets and liabilities and
its overall aggregate portfolio. The interest rate swap agreements, which expire
in 1999, generally involve the exchange of fixed and floating rate interest
payments, without an exchange of the underlying principal. The interest rate cap
agreements, which expire between 1996 and 2000, involve the payment of a maximum
fixed interest rate when an indexed rate exceeds that fixed rate. The amounts to
be received or paid pursuant to those agreements are accrued and recognized in
the accompanying consolidated statements of income through an adjustment to
investment income over the life of the agreements. The net effect on income from
amortization and interest paid or received was an increase of $1.5 million for
1995. There were no material effects in 1994 and 1993. Gains or losses realized
on closed or terminated agreements accounted for as hedges are deferred and
amortized to investment income on a constant yield basis over the shorter of the
life of the agreements or the expected remaining life of the underlying assets
or liabilities. There were no net deferred gains on interest rate exchange
agreements as of December 31, 1995, 1994, and 1993.

F-25
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) FINANCIAL INSTRUMENTS (CONTINUED)
The following table shows unrealized gains and losses on derivative
positions.

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------------------------------------------
TOTAL NET
NOTIONAL UNREALIZED UNREALIZED UNREALIZED
VALUE GAINS LOSSES GAINS (LOSSES)
----------- ----------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Received fixed.................................. $ 150,000 $ 11,887 $ -- $ 11,887
Pay fixed....................................... 150,000 -- 3,392 (3,392)
Interest rate caps.............................. 450,000 183 2,518 (2,335)
----------- ----------- ----------- --------------
$ 750,000 $ 12,070 $ 5,910 $ 6,160
----------- ----------- ----------- --------------
----------- ----------- ----------- --------------
</TABLE>

The Company is exposed to credit loss in the event of nonperformance by
counterparties on interest rate cap and interest rate swap agreements. The
Company does not anticipate nonperformance by any of these counterparties. The
credit risk associated with such agreements is minimized by purchasing such
agreements from financial institutions with long-standing, superior performance
records. The amount of such exposure is essentially their replacement cost,
which is approximated by the unrealized gains in such contracts.

The Company has no current exposure to the counterparty when a contract
contains an unrealized loss.

MATURITY SCHEDULE BY YEAR FOR DERIVATIVE PRODUCTS

<TABLE>
<CAPTION>
1996 1997 1998 1999 2000
--------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Receive fixed swaps:
Notional amount (in thousands).......... $ 150,000
Weighted average:
Receive rate............................ 7.86% 7.86% 7.86% 7.86%
Pay rate................................ 5.45% 5.06% 5.59% 5.89%
Pay fixed swaps
Notional amount (in thousands).......... $ 150,000
Weighted average:
Receive rate............................ 5.51% 5.06% 5.61% 5.89%
Pay rate................................ 6.23% 6.23% 6.23% 6.23%
Total weighted average rates on swaps:
Receive rate............................ 6.68% 6.46% 6.73% 6.87%
Pay rate................................ 5.84% 5.64% 5.91% 6.06%
Interest rate caps
Notional amount (in thousands).......... $ 25,000 $ 25,000 $ 25,000 $ 150,000 $ 300,000
Total notional value of swaps and caps (in
thousands)............................... $ 25,000 $ 25,000 $ 25,000 $ 450,000 $ 300,000
</TABLE>

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS 107, "Disclosures about Fair Values of Financial Instruments," requires
disclosures of fair value information about financial instruments, whether
recognized or not recognized in a company's balance sheet, for which it is
practicable to estimate that value. In cases where quoted market prices are not
available, fair values are based on estimates using discounted cash flow or
other valuation techniques. Those techniques are significantly affected by the
assumptions used, including the discount rates and estimates of the amount and
timing of future cash flows. SFAS 107 excludes certain insurance liabilities and
other non-financial instruments from its disclosure requirements. The fair value
amounts

F-26
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
presented herein do not include an amount for the value associated with customer
or agent relationships, the expected interest margin (interest earnings over
interest credited) to be earned in the future on investment-type products, or
other intangible items. Accordingly, the aggregate fair value amounts presented
herein do not necessarily represent the underlying value of the Company;
likewise, care should be exercised in deriving conclusions about the Company's
business or financial condition based on the fair value information presented
herein.

The Company closely monitors the level of its insurance liabilities, the
level of interest rates credited to its interest sensitive products, and the
assumed interest margin provided for within the pricing structure of its other
products. Those amounts are taken into consideration in the Company's overall
management of interest rate risk that attempts to minimize exposure to changing
interest rates through the matching of investment maturities with amounts
expected to be due under insurance contracts. As such, the Company believes that
it has reduced the volatility inherent in its fair value adjusted policyowners'
equity, although such volatility will not be reduced completely. The Company has
used discount rates in the determination of fair values for its liabilities that
are consistent with market yields for related assets. The use of the asset
market yield is consistent with management's opinion that the risks inherent in
the Company's asset and liability portfolios are similar, and the fact that fair
values for both assets and liabilities generally will react in much the same
manner during periods of interest rate changes. However, that assumption might
not result in fair values that are consistent with values obtained through an
actuarial appraisal of the Company's business or values that might arise in a
negotiated transaction.

The presentation on the following page reflects fair values for those
instruments specifically covered by SFAS 107, along with fair value amounts for
those traditional insurance liabilities for which disclosure is permitted but
not required; the fair values for all other assets and liabilities have been
reported at their carrying amounts.

VALUATION METHODS AND ASSUMPTIONS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash, short-term investments, policy loans, accrued investment income:
the carrying amounts for these instruments approximate their fair
values.

Fixed maturities and equity securities: fair values for bonds are based
on quoted market prices or dealer quotes. If a quoted market price is
not available, fair value is estimated using values obtained from
independent pricing services or, in the case of private placements, are
estimated by discounting expected future cash flows using a current
market rate applicable to the yield, credit quality, and maturity of the
investments. The fair values for preferred and common stocks are based
on quoted market prices.

Mortgage loans on real estate: for all performing fixed interest rate
loans, the estimated net cash flows to maturity were discounted to
derive an estimated market value. The discount rate used was based on
the individual loan's remaining weighted average life and a basis point
spread over the December 31, 1995, United States treasury yield curve.
Performing variable rate commercial loans and residential loans were
valued at the current outstanding balance. Loans which have been
restructured, are in foreclosure, are significantly delinquent, or are
to affiliates were valued primarily at the lower of the estimated net
cash flows to maturity discounted at a market rate of interest or the
current outstanding principal balance.

Hedging instruments: fair values for derivative securities are based on
pricing models or formulas using current assumptions and are classified
as other assets or other liabilities.

F-27
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
Policy reserves: fair values of the Company's liabilities under
contracts not involving significant mortality or morbidity risks
(principally, annuities) are stated at the cost the Company would incur
to extinguish the liability; i.e., the cash surrender value.

Long-term debt: fair values for long-term debt are estimated using
discounted cash flow analysis based on the Company's current incremental
borrowing rate for similar types of borrowing arrangements.

The carrying amounts of other financial assets, dividends payable to
policyowners, and policy reserves including significant mortality or morbidity
risks approximate their fair values.

The estimated fair values of the Company's significant financial instruments
at December 31, 1995 and 1994, are as follows:

<TABLE>
<CAPTION>
1995 1994
---------------------------- ----------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
------------- ------------- ------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Financial assets:
Securities available-for-sale:
Fixed maturity......................... $ 3,142,096 $ 3,142,096 $ 2,566,768 $ 2,566,768
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Equity securities...................... $ 109,675 $ 109,675 $ 178,770 $ 178,770
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Short-term investments................. $ 39,353 $ 39,353 $ 8,529 $ 8,529
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Mortgage loans on real estate............ $ 353,597 $ 369,706 $ 447,663 $ 431,812
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Interest rate caps....................... $ 6,445 $ 4,110 $ 3,648 $ 3,626
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Financial liabilities--policy reserves for
annuities................................. $ 1,524,801 $ 1,493,847 $ 1,575,131 $ 1,543,129
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Long-term debt............................. $ 36,461 $ 36,461 $ 34,292 $ 34,292
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Unrecognized financial instruments--
interest rate swaps:
Net receivable position................ $ -- $ 11,887 $ -- $ --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net payable position................... $ -- $ (3,392) $ -- $ (1,819)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

F-28
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(15) UNAUDITED PRO FORMA ADJUSTMENT FOR THE CAPITAL CONTRIBUTION
The Company plans to make a capital contribution to AFS of certain assets
and liabilities having a net book value of $129.0 million prior to the
subscription offering of Class A Common Stock in the offerings as follows:

<TABLE>
<CAPTION>
PRO FORMA PRO FORMA JUNE 30,
AS ADJUSTED ADJUSTMENT FOR 1996
FOR THE THE CAPITAL -------------
CAPITAL CONTRIBUTION
CONTRIBUTION -------------- (UNAUDITED)
-------------- (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C>
Fixed maturity securities......................................... $ 2,322,223 $ (4,681) $ 2,326,904
-------------- -------------- -------------
-------------- -------------- -------------
Equity securities................................................. $ 89,760 $ (678) $ 90,438
-------------- -------------- -------------
-------------- -------------- -------------
Mortgage loans on real estate..................................... $ 243,323 $ (35,005) $ 278,328
-------------- -------------- -------------
-------------- -------------- -------------
Real estate....................................................... $ 1,861 $ (42,224) $ 44,085
-------------- -------------- -------------
-------------- -------------- -------------
Other Investments................................................. $ 60,378 $ (5,224) $ 65,602
-------------- -------------- -------------
-------------- -------------- -------------
Long-term debt.................................................... $ 70,487 $ (41,188) $ 29,299
-------------- -------------- -------------
-------------- -------------- -------------
Policyowners' surplus............................................. $ 355,553 $ 129,000 $ 484,553
-------------- -------------- -------------
-------------- -------------- -------------
</TABLE>

F-29
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO ITS DATE.
----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.............................. 2
Prospectus Summary................................. 4
Risk Factors....................................... 14
The Company........................................ 19
The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries............................ 19
The Subscription Offering.......................... 24
The Public Offering................................ 26
The Preferred Offering............................. 27
Use of Proceeds.................................... 28
Market for Common Stock............................ 28
Dividend Policy.................................... 28
Capitalization..................................... 29
Selected Consolidated Financial and Operating
Data.............................................. 30
Unaudited Pro Forma Condensed Consolidated
Financial Statements.............................. 32
Management's Discussion and Analysis of Results of
Operations and Financial Condition................ 40
Business........................................... 55
Supervision and Regulation......................... 78
Management......................................... 81
Management Compensation............................ 84
Certain Transactions and Relationships............. 92
Ownership of Common Stock.......................... 98
Description of the Capital Stock................... 98
Certain Provisions of the Articles of Incorporation
and Bylaws of the Company......................... 101
Shares Eligible for Future Sale.................... 104
Plan of Distribution............................... 105
Legal Matters...................................... 105
Experts............................................ 105
Glossary of Certain Insurance and Other Defined
Terms............................................. 106
Index to Financial Statements...................... F-1
</TABLE>

--------------

THROUGH AND INCLUDING , 1996 (THE 25TH DAY AFTER THE DATE OF
THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON
STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

AMERUS LIFE HOLDINGS, INC.

CLASS A COMMON STOCK
(NO PAR VALUE)

---------------------

PROSPECTUS

---------------------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses payable by the Company in connection with the sale of the Class
A Common Stock offered hereby are set forth below. All such amounts (other than
the SEC registration fee and Nasdaq National Market fee) are estimated.

<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C>
SEC registration fee............................................................. $ 39,656
NASD filing fee.................................................................. 12,000
Nasdaq National Market entry fee................................................. 50,000
Printing and engraving expenses.................................................. *
Legal fees and expenses.......................................................... *
Accounting fees and expenses..................................................... *
Blue Sky fees and expenses (including legal fees and expenses)................... *
Transfer and Escrow Agent fees and expenses...................................... *
Subscription Agent fees and expenses............................................. 25,000
Miscellaneous.................................................................... *
-----------
Total.......................................................................... $ *
-----------
-----------
</TABLE>

- --------------
*To be supplied by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Sections 851 and 856 of the Iowa Business Corporation Act ("IBCA") provide
that a corporation has the power to indemnify its directors and officers against
liabilities and expenses incurred by reason of such person serving in the
capacity of director or officer, if such person has acted in good faith and in a
manner reasonably believed by the individual to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe the individual's conduct was unlawful. The
foregoing indemnity provisions notwithstanding, in the case of actions brought
by or in the right of the corporation, no indemnification shall be made to such
director or officer with respect to any matter as to which such individual has
been adjudged to be liable to the corporation unless, and only to the extent
that, a court determines that indemnification is proper under the circumstances.

The Company maintains a directors' and officers' liability insurance policy
to insure against losses arising from claims made against its directors and
officers, subject to the limitations and conditions as set forth in the
policies. In adition, the Company has entered into indemnification agreements
with its directors and certain of its executive officers providing for the
indemnification of such persons as permitted by the Company's Articles of
Incorporation and Iowa law.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On , 1996 the Company issued million shares of Class A
Common Stock and 5,000,000 shares of Class B Common Stock to AmerUS Group. See
"The Reorganization and Distribution of the Non-Life Insurance Subsidiaries."
The initial issuance of such shares was made in reliance

II-1
<PAGE>
upon exemptions from the registration provisions of the Securities Act set forth
in Section 3(a)(11) and Section 4(2) thereof (including the rules and
regulations promulgated thereunder) relative to, respectively, intrastate sales
by an issuer and sales not involving a public offering. No underwriters were
involved in the initial issuance of shares described in this paragraph.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS:

II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
10.18 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.19 Management Contract, dated January 1, 1995, between American Mutual Life Insurance Company and
Central Properties, Inc. (now AmerUs Properties, Inc.)
10.20 Management Contract, dated July 1, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
*10.21 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.22 Management Contract, dated May 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.23 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.24 Management Contract, dated January 4, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.25 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.26 Lease - Business Property, dated December 1, 1995, between American Mutual Life Insurance Company and
AmerUs Leasing
10.27 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.28 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.29 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.30 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.31 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
*10.32 Assumption and Amendment of Lease Agreement, dated as of November 27, 1993 among Central Life
Assurance Company, Midland Savings Bank FSB (now AmerUs Bank) and Midland Financial Mortgages, Inc.
(now AmerUs Mortgage, Inc.)
10.33 Form of Indemnification Agreement executed with directors and certain officers
*10.34 Amended and Restated Agreement and Certificate of Limited Partnership of CPI Housing Partners I,
L.P., dated as of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance
Company and American Mutual Affordable Housing Partners, L.P.
*10.35 Amended and Restated Agreement of Limited Partnership of American Mutual Affordable Housing Partners,
L.P., dated as of September 1, 1995, among GrA Partners Joint Venture, AmerUs Properties, Inc.,
American Mutual Life Insurance Company, NCC Polar Company and NCC Orion Company
*10.36 Amended and Restated Agreement and Certificate of Limited Partnership of 65th & Vista, L.P., dated as
of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
*10.37 Amended and Restated Agreement and Certificate of Limited Partnership of 60th & Vista, L.P., dated as
of September 1, 1995, among I.R.F.B. Joint Venture, American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
</TABLE>

II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
*10.38 Certificate of Limited Partnership and Limited Partnership Agreement of CPI Housing Partners II,
L.P., dated March 27, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.) and
American Mutual Life Insurance Company
*10.39 Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners III,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
*10.40 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners IV,
L.P., dated as of June , 1995, between AmerUs Properties, Inc. and American Mutual Life Insurance
Company
*10.41 Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners V,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
*10.42 Amended and Restated Agreement and Certificate of Limited Partnership of API-Chimney Ridge Partners,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.43 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners VI,
L.P., dated as of October 10, 1995, between AmerUs Properties, Inc. and American Mutual Life
Insurance Company
*10.44 Certificate of Limited Partnership and Limited Partnership Agreement of 86th & Meredith Associates,
L.P., dated as of February 14, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and American Mutual Life Insurance Company
10.45 Certificate of Limited Partnership and Limited Partnership Agreement of Altoona Meadows Investors,
L.P., dated as of February 22, 1995, between KPI Investments, Inc. and Dennis Galeazzi
10.46 First Amendment to the Certificate of Limited Partnership and Limited Partnership Agreement of
Altoona Meadows Investors, L.P., dated as of September 28, 1995, between KPI Investments, Inc. and
American Mutual Life Insurance Company
10.47 Loan Servicing Agreement, dated August 1, 1990, between Central Life Assurance Company and Midland
Financial Mortgages, Inc. (now AmerUs Mortgage), filed as Exhibit 10.30 to Central Resource Group,
Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June 4, 1992
10.48 Construction Loan Servicing Agreement, dated November 20, 1995, between American Mutual Life
Insurance Company and AmerUs Properties, Inc.
*10.49 Servicing Agreement, dated March 1996, between American Mutual Life Insurance Company and AmerUs
Properties, Inc.
10.50 Loan Servicing Agreement, dated September 1, 1994, between Central Life Assurance Company and Midland
Savings Bank, FSB (now AmerUs Bank)
10.51 Miscellaneous Services Agreement, dated as of January 1, 1996, among American Mutual Life Insurance
Company, AmerUs Group Co., AmerUs Bank, AmerUs Mortgage, Inc., Iowa Realty Company, Inc., Midland
Homes, Inc., Iowa Title Company, AmerUs Insurance, Inc., and AmerUs Finance Inc.
10.52 Amendment to Service Agreement, dated as of May 1, 1996, between American Mutual Life Insurance
Company and AmerUs Bank
</TABLE>

II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
10.53 Data Processing Service Agreement, dated November 1, 1989, between Central Life Assurance Company and
Midland Financial Savings and Loan Association (now AmerUs Bank), filed as Exhibit 10.29 to Central
Resource Group, Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June
4, 1992
10.54 First Amendment to Data Processing Service Agreement, dated as of September 30, 1990, between Central
Life Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.55 Second Amendment to Data Processing Service Agreement, dated as of May 1, 1991, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.56 Third Amendment to Data Processing Service Agreement, dated as of October 1, 1991, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.57 Fourth Amendment to Data Processing Service Agreement, dated as of January 2, 1992, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.58 Fifth Amendment to Data Processing Service Agreement, dated as of July 1, 1993, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.59 Sixth Amendment to Data Processing Service Agreement, dated as of September 1, 1995, between American
Mutual Insurance Company and AmerUs Bank
10.60 Seventh Amendment to Data Processing Service Agreement, dated as of January 1, 1996, between American
Mutual Life Insurance Company and AmerUs Bank
*10.61 Data Processing Support Services Agreement, dated as of July 1, 1993, between Central Life Assurance
Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.62 Miscellaneous Services Agreement, dated as of February 5, 1992, between Central Life Assurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.63 Investment Management Agreement, dated as of August 15, 1992, between Central Life Assurance Company
and Midland Savings Bank FSB (now AmerUs Bank)
10.64 Disbursement Services Agreement, dated as of April 15, 1995, between American Mutual Life Insurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.65 Purchase Agreement, dated as of June 28, 1996, between AmerUs Life Insurance Company and AmerUs Bank
10.66 Brokerage Contract dated January 1, 1995, among American Mutual Life Insurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.67 Servicing Agreement, dated March 1, 1992, between Central Life Assurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
*10.68 Tax Allocation Agreement dated , 1996
*10.69 Automatic and Facultative YRT Agreement, dated as of January 1, 1994, between Central Life Assurance
Company and Saint Louis Reinsurance Company
*10.70 Automatic Reinsurance Agreement, dated as of January 1, 1983, between Central Life Assurance Company
and General American Life Insurance Company, including an Amendment thereto dated as of January 1,
1993
21.1 List of Subsidiaries
23.1 Consent of KPMG Peat Marwick LLP
*23.2 Consent of James A. Smallenberger (to be included in Exhibit 5.1)
24.1 Powers of Attorney
</TABLE>

II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
27.1 Financial Data Schedule
*99.1 Form of Subscription Order Form for Subscription Policyowners in the Subscription Offering
*99.2 Form of Question and Answer Supplement to be delivered to Subscription Policyowners in the
Subscription Offering
</TABLE>

- --------------
*To be filed by amendment

(b)FINANCIAL STATEMENT SCHEDULES:

Report of Independent Auditors on Schedules
Schedule I -- Summary of Investments (Other than Investments in Related
Parties)
Schedule III -- Supplementary Insurance Information
Schedule IV -- Reinsurance
Schedule V -- Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of a registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

In the event the Public Offering is completed, the undersigned hereby
undertakes to provide to the underwriters at the closing specified in the
underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.

II-6
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Des Moines, Iowa on
September 18, 1996.

AMERUS LIFE HOLDINGS, INC.

By: /s/ ROGER K. BROOKS

--------------------------------------
Roger K. Brooks
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on September 18, 1996 by the following
persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
- ------------------------------------------------------ ---------------------------------------------------------

<C> <S>
/s/ ROGER K. BROOKS
------------------------------------------- Chairman, President and Chief Executive Officer
Roger K. Brooks (principal executive officer) and Director

/s/ MICHAEL E. SPROULE
------------------------------------------- Executive Vice President and Chief Financial Officer
Michael E. Sproule (principal financial officer)

/s/ MICHAEL G. FRAIZER
------------------------------------------- Senior Vice President and Controller/Treasurer (principal
Michael G. Fraizer accounting officer)

*
------------------------------------------- Director
John R. Albers

*
------------------------------------------- Director
Malcolm Candlish
</TABLE>

II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
- ------------------------------------------------------ ---------------------------------------------------------

<C> <S>
/s/ D T DOAN
------------------------------------------- Director
D T Doan

*
------------------------------------------- Director
Thomas F. Gaffney

/s/ SAM C. KALAINOV
------------------------------------------- Director
Sam C. Kalainov

*
------------------------------------------- Director
John W. Norris, Jr.

------------------------------------------- Director
Jack C. Pester

*
------------------------------------------- Director
John A. Wing

* By: /s/ JAMES A. SMALLENBERGER
-------------------------------------------
James A. Smallenberger
(ATTORNEY IN FACT)
</TABLE>

II-8
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Subscription Agency Agreement
2.1 Plan of Reorganization dated October 27, 1995
3.1 Articles of Incorporation of the Company
3.2 Bylaws of the Company
3.3 Proposed Amended and Restated Articles of Incorporation of the Company
*4.1 Form of Certificate for shares of Class A Common Stock
*5.1 Opinion of James A. Smallenberger, Esq.
*10.1 Form of Intercompany Agreement dated as of September , 1996, among American Mutual Holding Company,
AmerUs Group Co. and the Company
*10.2 Amended and Restated Joint Venture Agreement, dated as of , 1996, between American Mutual
Insurance Company and Ameritas Life Insurance Corp.
*10.3 Management and Administrative Service Agreement, dated as of April 1, 1996, among American Mutual
Life Insurance Company, Ameritas Variable Life Insurance Company and Ameritas Life Insurance Corp.
10.4 Agreement and Plan of Merger, dated as of August 24, 1994, among Central Life Assurance Company and
American Mutual Life Insurance Company
10.5 Line of Credit Application and Approval, dated February 28, 1996 and April 22, 1996, respectively,
between American Mutual Life Insurance Company and Federal Home Loan Bank of Des Moines
10.6 All*AmerUs Supplemental Executive Retirement Plan, effective January 1, 1996
10.7 American Mutual Life Insurance Company Supplemental Pension Plan (which was curtailed as of December
31, 1995)
*10.8 Central Life Assurance Company Supplemental Pension Plan (which was curtailed as of December 31,
1995)
*10.9 Management Incentive Plan
*10.10 AmerUs Life Insurance Company Performance Share Plan
10.11 AmerUs Life Stock Incentive Plan
10.12 Employment Agreement, dated February 1, 1995, between American Mutual Life Insurance Company and Sam
C. Kalainov
10.13 AmerUs Life Non-Employee Director Stock Plan
10.14 Modification of Real Estate Contract, dated as of July 1, 1996, between AmerUs Life Insurance Company
and AmerUs Properties, Inc.
10.15 Asset Management and Disposition Agreement, dated January 3, 1995, between American Mutual Life
Insurance Company and Central Properties, Inc. (now AmerUs Properties, Inc.)
*10.16 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.17 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.18 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.19 Management Contract, dated January 1, 1995, between American Mutual Life Insurance Company and
Central Properties, Inc. (now AmerUs Properties, Inc.)
10.20 Management Contract, dated July 1, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
*10.21 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
<C> <S>
10.22 Management Contract, dated May 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.23 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.24 Management Contract, dated January 4, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.25 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.26 Lease - Business Property, dated December 1, 1995, between American Mutual Life Insurance Company and
AmerUs Leasing
10.27 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.28 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.29 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.30 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.31 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
*10.32 Assumption and Amendment of Lease Agreement, dated as of November 27, 1993 among Central Life
Assurance Company, Midland Savings Bank FSB (now AmerUs Bank) and Midland Financial Mortgages, Inc.
(now AmerUs Mortgage, Inc.)
10.33 Form of Indemnification Agreement executed with directors and certain officers
*10.34 Amended and Restated Agreement and Certificate of Limited Partnership of CPI Housing Partners I,
L.P., dated as of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance
Company and American Mutual Affordable Housing Partners, L.P.
*10.35 Amended and Restated Agreement of Limited Partnership of American Mutual Affordable Housing Partners,
L.P., dated as of September 1, 1995, among GrA Partners Joint Venture, AmerUs Properties, Inc.,
American Mutual Life Insurance Company, NCC Polar Company and NCC Orion Company
*10.36 Amended and Restated Agreement and Certificate of Limited Partnership of 65th & Vista, L.P., dated as
of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
*10.37 Amended and Restated Agreement and Certificate of Limited Partnership of 60th & Vista, L.P., dated as
of September 1, 1995, among I.R.F.B. Joint Venture, American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
*10.38 Certificate of Limited Partnership and Limited Partnership Agreement of CPI Housing Partners II,
L.P., dated March 27, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.) and
American Mutual Life Insurance Company
*10.39 Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners III,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
*10.40 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners IV,
L.P., dated as of June , 1995, between AmerUs Properties, Inc. and American Mutual Life Insurance
Company
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
*10.41 Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners V,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
<C> <S>
*10.42 Amended and Restated Agreement and Certificate of Limited Partnership of API-Chimney Ridge Partners,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.43 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners VI,
L.P., dated as of October 10, 1995, between AmerUs Properties, Inc. and American Mutual Life
Insurance Company
*10.44 Certificate of Limited Partnership and Limited Partnership Agreement of 86th & Meredith Associates,
L.P., dated as of February 14, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and American Mutual Life Insurance Company
10.45 Certificate of Limited Partnership and Limited Partnership Agreement of Altoona Meadows Investors,
L.P., dated as of February 22, 1995, between KPI Investments, Inc. and Dennis Galeazzi
10.46 First Amendment to the Certificate of Limited Partnership and Limited Partnership Agreement of
Altoona Meadows Investors, L.P., dated as of September 28, 1995, between KPI Investments, Inc. and
American Mutual Life Insurance Company
10.47 Loan Servicing Agreement, dated August 1, 1990, between Central Life Assurance Company and Midland
Financial Mortgages, Inc. (now AmerUs Mortgage), filed as Exhibit 10.30 to Central Resource Group,
Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June 4, 1992
10.48 Construction Loan Servicing Agreement, dated November 20, 1995, between American Mutual Life
Insurance Company and AmerUs Properties, Inc.
*10.49 Servicing Agreement, dated March , 1996, between American Mutual Life Insurance Company and AmerUs
Properties, Inc.
10.50 Loan Servicing Agreement, dated September 1, 1994, between Central Life Assurance Company and Midland
Savings Bank, FSB (now AmerUs Bank)
10.51 Miscellaneous Services Agreement, dated as of January 1, 1996, among American Mutual Life Insurance
Company, AmerUs Group Co., AmerUs Bank, AmerUs Mortgage, Inc., Iowa Realty Company, Inc., Midland
Homes, Inc., Iowa Title Company, AmerUs Insurance, Inc., and AmerUs Finance Inc.
10.52 Amendment to Service Agreement, dated as of May 1, 1996, between American Mutual Life Insurance
Company and AmerUs Bank
10.53 Data Processing Service Agreement, dated November 1, 1989, between Central Life Assurance Company and
Midland Financial Savings and Loan Association (now AmerUs Bank), filed as Exhibit 10.29 to Central
Resource Group, Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June
4, 1992
10.54 First Amendment to Data Processing Service Agreement, dated as of September 30, 1990, between Central
Life Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.55 Second Amendment to Data Processing Service Agreement, dated as of May 1, 1991, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.56 Third Amendment to Data Processing Service Agreement, dated as of October 1, 1991, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
10.57 Fourth Amendment to Data Processing Service Agreement, dated as of January 2, 1992, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
<C> <S>
10.58 Fifth Amendment to Data Processing Service Agreement, dated as of July 1, 1993, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.59 Sixth Amendment to Data Processing Service Agreement, dated as of September 1, 1995, between American
Mutual Insurance Company and AmerUs Bank
10.60 Seventh Amendment to Data Processing Service Agreement, dated as of January 1, 1996, between American
Mutual Life Insurance Company and AmerUs Bank
*10.61 Data Processing Support Services Agreement, dated as of July 1, 1993, between Central Life Assurance
Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.62 Miscellaneous Services Agreement, dated as of February 5, 1992, between Central Life Assurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.63 Investment Management Agreement, dated as of August 15, 1992, between Central Life Assurance Company
and Midland Savings Bank FSB (now AmerUs Bank)
10.64 Disbursement Services Agreement, dated as of April 15, 1995, between American Mutual Life Insurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.65 Purchase Agreement, dated as of June 28, 1996, between AmerUs Life Insurance Company and AmerUs Bank
10.66 Brokerage Contract dated January 1, 1995, among American Mutual Life Insurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.67 Servicing Agreement, dated March 1, 1992, between Central Life Assurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
*10.68 Tax Allocation Agreement dated , 1996
*10.69 Automatic and Facultative YRT Agreement, dated as of January 1, 1994, between Central Life Assurance
Company and Saint Louis Reinsurance Company
*10.70 Automatic Reinsurance Agreement, dated as of January 1, 1983, between Central Life Assurance Company
and General American Life Insurance Company, including an Amendment thereto dated as of January 1,
1993
21.1 List of Subsidiaries
23.1 Consent of KPMG Peat Marwick LLP
*23.2 Consent of James A. Smallenberger (to be included in Exhibit 5.1)
24.1 Powers of Attorney
27.1 Financial Data Schedule
*99.1 Form of Subscription Order Form for Subscription Policyowners in the Subscription Offering
*99.2 Form of Question and Answer Supplement to be delivered to Subscription Policyowners in the
Subscription Offering
</TABLE>

- --------------
*To be filed by amendment

<PAGE>

5,000,000 Shares (1)

AmerUs Life Holdings, Inc.
Class A Common Stock
(no par value)

SUBSCRIPTION AGENCY AGREEMENT

______________, 1996

The Chicago Corporation
208 South LaSalle Street
Chicago, Illinois 60604

Gentlemen:

SECTION 1. INTRODUCTION. AmerUs Life Holdings, Inc., an Iowa
corporation, (the "Company"), is offering to certain policyowners of AmerUs
Life Insurance Company, an Iowa corporation, ("AmerUs Life") nontransferable
rights to subscribe for up to 5,000,000 shares of the Class A Common Stock,
no par value (the "Class A Common Stock") pursuant to a subscription offering
(the "Subscription Offering") contemplated by a plan of reorganization
approved by the Iowa Commissioner of Insurance (the "Iowa Insurance
Commissioner"). The Company has a total of 125,000,000 shares of authorized
common stock divided into two classes consisting of 75,000,000 shares of
Class A Common Stock, no par value (the "Class A Common Stock"), and
50,000,000 shares of Class B Common Stock, no par value (the "Class B Common
Stock"). The price per share has been fixed at $_____ (the "Purchase
Price"), subject to adjustment as hereinafter provided.

It is acknowledged that the purchase of shares of Class A Common
Stock in the Subscription Offering for each subscriber is subject to a
maximum purchase limitation of 5,000 shares and a minimum purchase limitation
of 100 shares. It is currently the intention of the Company to offer all or
a portion of the Class A Common Stock not subscribed for in the Subscription
Offering to the public in a public offering (the "Public Offering"). If the
price in the public offering (the "Public Offering Price") is less than the
Subscription Price, then the Company shall issue refunds to subscribing
policyowners equal to the amount of such difference

_________________________

(1) Anticipated maximum number of shares to be sold pursuant to the
Subscription Offering.

<PAGE>

multiplied by the number of shares subscribed for. In the event that the
Company determines that the closing of the Subscription Offering shall occur
without a subsequent Public Offering and provided that the Company elects to
proceed with the Subscription Offering, a bona fide determination will be
made by the Company after consultation with its financial advisors of the
price per share at which the Class A Common Stock would trade in the public
market on the closing of the Subscription Offering (the "Revised Subscription
Price"). If the Revised Subscription Price is less than the Subscription
Price, then the Company will issue refunds to subscribing policyowners equal
to the amount of such difference multiplied by the number of shares
subscribed for.

The Company has heretofore prepared and delivered to the Agent
copies of the final Prospectus dated ____________, 1996 included as part of
the Registration Statement (as such term is defined in Section 5(c)) when it
was declared effective by the SEC (the "Prospectus"), except that if the
Prospectus filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the SEC under the Securities Act of 1933 (the "Act") and the
rules and regulations of the SEC thereunder (the "SEC Rules and Regulations")
differs from the Prospectus on file at the time the Registration Statement
initially became effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) from and after the time said
prospectus is filed with or mailed to the SEC for filing. The Prospectus
contains, among other things, information with respect to the Company and the
Class A Common Stock.

The Company desires to retain The Chicago Corporation (the "Agent")
to act as the Company's exclusive subscription agent in connection with the
Subscription Offering. The Company hereby confirms its agreements contained
herein with the Agent with respect to the appointment of the Agent as its
agent to assist in the sale of the Class A Common Stock in the Subscription
Offering.

SECTION 2. APPOINTMENT OF THE AGENT. Subject to the terms and
conditions of this Agreement, the Company hereby appoints the Agent, as its
exclusive Subscription agent, to consult with and advise the Company in
connection with the Subscription Offering, and to solicit subscriptions for
shares of Class A Common Stock in the Subscription Offering. On the basis of
the representations, warranties and agreements herein contained, the Agent
accepts such appointment and agrees to assist the Company in the Subscription
Offering through selling Class A Common Stock on a "best efforts" basis
through the Agent's distribution system and potentially through other NASD
(as such term is hereinafter defined) registered broker/dealers; provided,
however, that the Agent shall not be responsible for obtaining subscriptions
for any specific number of shares of Class A Common Stock and shall not be
obligated to take any action which is inconsistent with any applicable laws,
rules, regulations, decisions or orders. Subscriptions will be offered by

<PAGE>

means of Stock Order Forms. The appointment of the Agent hereunder shall
terminate upon the termination of the Subscription Offering.

The Company hereby agrees and acknowledges that the Agent may
utilize, if deemed appropriate by the Agent, other broker/dealers which are
members of the National Association of Securities Dealers, Inc. (the "NASD").
The Agent hereby agrees that prior to utilizing other broker/dealers, the
Agent will consult with the Company regarding its determination and will not
take any action in this regard which is not approved in writing by the
Company.

The Company hereby further agrees and acknowledges that, having
appointed the Agent hereunder, only personnel employed by the Agent, and such
other personnel as are assigned for specific purposes or services
contemplated by this Agreement to be performed by the Agent, will be involved
in providing the services described herein.

All subscription funds received by the Agent or by other
broker/dealers soliciting subscriptions (if any) shall be promptly
transmitted (either by U.S. Mail or similar type of transmittal) to the
Company's escrow and transfer agent by noon of the following business day.

SECTION 3. FEES. In addition to the expenses specified in
Sections 7 and 8 hereof, as compensation for the Agent's services under this
Agreement, the Company will pay the following fees or expenses to the Agent:

(a) A fee of $25,000 shall be paid upon execution of this
Agreement. In the event that the number of inquiries with respect to
subscriptions or other services required to be rendered by the Agent
significantly exceed what is currently anticipated by the Company and the
Agent, the parties agree to negotiate an increased fee based on the extent of
additional services required, but in no event shall the total fee exceed
$90,000.

(b) In the event the Company wishes to utilize an assisting broker
structure to incorporate selected broker/dealers (employed by the Agent or
another Registered Broker or Dealer) who assist in the subscription or
purchase, the Agent will be paid a fee to be mutually agreed by the Agent and
the Company. Fees in respect of subscriptions or purchases effected with the
assistance of the Registered Representatives employed by a broker/dealer
other than the Agent shall be transmitted by the Agent to such broker/dealer.
The decision to utilize selected broker/dealers will be made jointly by the
Agent and the Company.

<PAGE>

provided that the retention of outside counsel has previously been approved
by the Company.

SECTION 4. CLOSING. In the event that the Subscription Offering
is not consummated for any reason, including but not limited to the inability
to sell the Class A Common Stock during the Subscription and Public Offering
(including any permitted extension thereof), this Agreement shall terminate
and any persons who have subscribed for any of the shares of Class A Common
Stock shall have refunded to them the full amount which has been received
from such person, together with interest, if any, as provided in the
Prospectus relating to the Subscription Offering. In the event of an
over-subscription of the Subscription Offering, the Company shall allocate
the shares to subscribers in accordance with the terms of the Subscription
Offering. The Company hereby agrees that the Agent shall be held harmless
from any liability arising out of any allocation of shares of Class A Common
Stock. A closing shall be held at such place as shall be agreed upon between
the Company and the Agent, as of the close of business on a business day to
be selected by the Company and contemporaneous with the closing of the Public
Offering or at such other time as shall be agreed upon between the Company
and the Agent. The Company shall notify the Agent by telephone, confirmed in
writing, when funds shall have been received for all shares of the Class A
Common Stock purchased in the Subscription Offering. At the closing, the
Company shall deliver to the Agent in next day funds the fees and expenses
due and owing to the Agent as set forth in Sections 3, 7 and 8 hereof, any
certificates required hereby and other documents deemed reasonably necessary
by the Agent shall be executed and delivered to effect the sale of the Class
A Common Stock as contemplated hereby and pursuant to the terms of the
Prospectus. The hour and date upon which the Company shall release for
delivery all shares of Class A Common Stock, in accordance with the terms
hereof, are referred to herein as the "Closing Date."

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the Agent that:

(a) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement and obligation
of the Company except as (i) rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or the public policy
underlying such laws; (ii) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting the enforcement of creditors' rights generally or by general
equity principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law; and (iii) the remedy of specific
enforcement and injunctive and other forms of equitable relief may be subject
to certain equitable defenses and to the

<PAGE>

discretion of the court before which any proceeding therefor may be brought.

(b) As of the Closing Date, the Company will have satisfied the
conditions precedent to its consummation of the Subscription Offering in all
material respects in accordance with the Subscription Offering, all
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Subscription
Offering imposed upon it by the Iowa Insurance Commissioner. The Iowa
Insurance Commissioner has approved the Company's application for the
Subscription Offering and the Public Offering, and such approval remains in
full force and effect.

(c) A Registration Statement on Form S-1 (Registration No. 33- )
with respect to the Subscription Offering has been prepared by the
Company, has been filed with the SEC and has been declared effective by the
SEC. Such Registration Statement, including any documents incorporated by
reference therein and all financial schedules and exhibits thereto, as
amended, including post-effective amendments, is herein called the
"Registration Statement." At the time the Registration Statement became
effective, and at all times subsequent thereto up to the Closing Date, the
Registration Statement and the Prospectus, including any amendments or
supplements thereto, conformed and will conform as to form in all material
respects to the requirements of the Securities Act of 1933, as amended (The
"Act") and the SEC Rules and Regulations, and neither the Registration
Statement nor the Prospectus, including any amendment or supplement thereto,
contained or will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements
in or omissions from any preliminary Prospectus, the Prospectus, the
Registration Statement or any supplement made in reliance upon and in
conformity with information furnished to the Company in writing by the Agent
expressly for use therein. All material contracts, agreements and other
documents described or referred to in the Prospectus to which the Company is
a party, or by which it or its properties are bound or committed are, unless
otherwise disclosed therein, to the knowledge of the Company, in full force
and effect; the descriptions thereof or references thereto are correct in all
material respects; and no material default exists in the due performance or
observance of any material obligations, agreements or other document so
described or referred to therein, unless otherwise disclosed therein.

(d) Neither the SEC, nor any court or other governmental agency or
body has, by order or otherwise, prevented or suspended the use of the
Prospectus or the offer or sale of the shares of

<PAGE>

Class A Common Stock, or, to the best knowledge of the Company, is any such
action threatened.

(e) KPMG Peat Marwick LLP, which has expressed its opinion with
respect to certain of the financial statements and schedules filed as part of
the Prospectus and included in the Registration Statement, has, with respect
to the Company, informed the same that it is an independent certified public
accountants within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants and the published rules
and regulations of the SEC.

(f) The financial statements and schedule(s) of the Company and
notes related thereto included in the Prospectus present fairly the
consolidated financial condition of the Company as of the dates indicated and
the results of operations for the periods specified and comply as to form in
all material respects with the applicable accounting requirements. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved. The tables and any other financial and numerical data in the
Prospectus fairly present in all material respects the information purported
to be shown thereby at the respective dates thereof and for the respective
periods covered thereby and were prepared on a basis consistent with the
audited financial statements of the Company.

(g) Since the respective dates as of which information is given in
the Prospectus, except as may otherwise be stated therein, (i) there has not
been any material adverse change in the condition, financial or otherwise, of
the Company or in the results of operations, earnings, or business affairs of
the Company, whether or not arising from transactions in the ordinary course
of business or (ii) there have not been any material transactions entered
into by the Company other than those in the ordinary course of business.
Neither the Company nor AmerUs Life has any material liability of any kind,
contingent or otherwise, except as set forth in the Prospectus.

(h) The Company is duly incorporated and validly existing as a
corporation in good standing under the laws of the State of Iowa, with full
corporate power and authority to own its properties and conduct its business
as described in the Prospectus; AmerUs Life is duly incorporated and validly
existing as a stock life insurance company in good standing under the laws of
Iowa, with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; the Company and AmerUs
Life have obtained all material licenses, permits and other governmental
authorizations currently required for the conduct of their respective
businesses, except where the failure to do so would not have a material
adverse effect on the businesses, results of operations or general business
affairs of the Company or

<PAGE>

AmerUs Life; all such material licenses, permits and other governmental
authorizations are in full force and effect, and the Company and AmerUs Life
are in all material respects complying therewith. Neither the Company nor
AmerUs Life is required to qualify as a foreign corporation in any
jurisdiction in which the failure to qualify would have a material adverse
impact on the conduct of the Company's or AmerUs Life's business, as
described in the Prospectus.

(i) The shares of Class A Common Stock offered in the Subscription
Offering have been duly and validly authorized for issuance and, when issued
and delivered by the Company against payment of the consideration described
herein, will be duly and validly issued and fully paid and nonassessable; and
the Class A Common Stock conforms in all material respects to the description
thereof contained in the Prospectus. Except as provided in the Prospectus,
there are no preemptive rights or other rights to subscribe or to purchase,
or, except as set forth in the Prospectus, Articles of Incorporation and
bylaws of the Company, any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company's Articles of Incorporation,
Bylaws or other governing documents or any agreement or other instrument to
which the Company is a party or by which it may be bound. Neither the filing
of the Registration Statement nor the offering or sale of the Class A Common
Stock as contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the
registration of any shares of Class A Common Stock. Upon the issuance of the
Class A Common Stock, good title to the Class A Common Stock will be
transferred from the Company to the purchasers thereof against payment
thereof subject to such claims as may be asserted against the purchasers
thereof by third party claimants.

(j) The Company owns, directly or indirectly, all of the issued
and outstanding capital stock of AmerUs Life, the only direct subsidiary of
the Company, free and clear of any lien, charge or encumbrance and there are
no outstanding warrants, rights or options to acquire or instruments
convertible into, or exchangeable for any shares of capital stock or other
equity interest in AmerUs Life.

(k) Neither the Company nor AmerUs Life is in violation of or in
default, and no event has occurred which with notice of lapse of time, or
both, would constitute default on the part of the Company or AmerUs Life in
the performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, lease, loan agreement, mortgage,
note, indenture or other material instrument to which it is a party or by
which it or its assets are bound, which default in any individual case or in
the aggregate would have a material adverse effect on the business, general
business affairs, operations or financial condition of the Company and AmerUs
Life, on a consolidated basis, and the execution

<PAGE>

and delivery of this Agreement, the incurrence of the obligations herein set
forth and the consummation of the transactions herein contemplated will not
conflict with or constitute a breach of, or default under, or result in the
creation of any material lien, charge or encumbrance upon any of the assets
of the Company or AmerUs Life pursuant to the Articles of Incorporation or
Bylaws of the Company or AmerUs Life or any material obligation, agreement,
contract, franchise, license, lease, indenture, note, mortgage, loan
agreement or other material instrument to which any of them is a party or in
which any of them has a beneficial interest in, or by which any of them may
be bound, or materially violate or conflict with any law, administrative
regulation or administrative or court decree. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution and delivery
of this Agreement or the consummation of the transactions contemplated by
this Agreement, except such as has been obtained and except for approval of
the Iowa Insurance Commissioner and the SEC, compliance with the Act, the
state securities laws ("Blue Sky Laws") applicable to the offering of the
Class A Common Stock and the clearance of such offering with the NASD and the
National Association of Securities Dealers Automated Quotation System
("NASDAQ").

(l) The Company and AmerUs Life have good and marketable title to
all their properties and assets material to their respective businesses and
to those properties and assets described in the Prospectus as owned by each
of them, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are individually or in the
aggregate are not materially significant or important in relation to the
business of the Company and AmerUs Life; and all of the leases and subleases
material to the business of the Company and AmerUs Life, including those
described in the Prospectus, are, to the knowledge of the Company, valid and
binding leases and subleases in full force and effect.

(m) The Company and AmerUs Life are neither subject to nor in
material violation of any directive from the Iowa Insurance Commissioner, or
to the Company's knowledge any other governmental authority, to make any
material change in the method of conducting their respective businesses or
affairs; the Company and AmerUs Life have conducted and are conducting their
respective businesses to comply in all material respects with all applicable
statutes and regulations (including, without limitation, all regulations,
decisions, directives and orders of the Iowa Insurance Commissioner) and,
except as set forth in the Prospectus, there is, to the knowledge of the
Company, no charge, investigation, action, suit or proceeding before or by
any court, regulatory authority or governmental agency or body pending or
threatened which may materially and adversely affect the performance of this
Agreement or the consummation of the transactions herein contemplated or
which may result in any material adverse change in the condition

<PAGE>

(financial or otherwise), business or operations of the Company, or which
would materially and adversely affect any of its properties and assets.

(n) The Company has complied or will comply in all material
respects with each and every undertaking or commitment made by it under the
Blue Sky Laws, including, without limitation, each and every undertaking or
commitment made in connection with the Subscription Offering.

SECTION 6. AGREEMENTS OF THE COMPANY. The Company hereby agrees,
with the Agent that:

(a) The Company will use its best efforts to cause the
Registration Statement to be declared effective by the SEC and the
Subscription Offering to be approved by the Iowa Insurance Commissioner. The
Company will promptly notify you: (i) of any request by or the receipt of any
comments from the SEC with respect to the transactions contemplated by this
Agreement; (ii) of any request by or any comments or other communications
received from the SEC, and any request by the SEC for any amendment or
supplement to the Registration Statement or the Prospectus, or for additional
information with respect to the transactions contemplated therein; and (iii)
of the issuance by the SEC or any court or governmental agency or body of any
stop order or other order suspending or enjoining the effectiveness or
approval of the Registration Statement, the Prospectus or of the institution
of any proceedings for that purpose or of any notification of the suspension
of qualification of the Class A Common Stock in any jurisdiction or the
initiation or threatening of any proceeding for that purpose or the threat of
any such action. The Company will make every reasonable effort to prevent
the issuance by the SEC and any court or governmental agency or body of any
stop order or other such order, or request for amendment or additional
information or the commencement of any proceeding and, if any such order,
request or proceeding shall at any time be issued or commenced, to obtain the
lifting thereof, to respond thereto or to obtain the termination thereof at
the earliest possible moment.

(b) The Company will deliver to you, without charge, from time to
time such number of copies of the Prospectus and related documents (as
amended or supplemented), as you may reasonably request. The Company
authorizes the Agent, subject to all requirements of applicable law, to use
the Prospectus (as the same may be amended or supplemented) in connection
with the sale of the Class A Common Stock in the Subscription Offering.

(c) The Company has delivered to you one complete copy (including
exhibits) of its Registration Statement on Form S-1 as originally filed with
the SEC and of each amendment thereto.

(d) During such period as may be required by applicable

<PAGE>

law, the Company will comply, so far as it is able and at its own expense,
with all requirements imposed upon it by the SEC and by the Act, the Exchange
Act and the SEC Rules and Regulations, in each case as from time to time in
effect, so far as necessary to permit the continuance of offers, sales or
dealings in shares of Class A Common Stock during such period in accordance
with the provisions hereof and the Prospectus.

(e) If, at any time during the period when the Prospectus is
required by law to be delivered, any event occurs as a result of which, in
the reasonable opinion of counsel to the Company or the Agent's counsel, the
Prospectus, including any amendments or supplements, would contain an untrue
statement of a material fact, or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
if it is necessary in the reasonable opinion of counsel to the Company or the
Agent's counsel at any time to amend or supplement the Prospectus, including
any amendments or supplements to comply in all material respects with the Act
and all other applicable laws, the Company, will promptly advise you thereof
and will promptly prepare and file with the SEC and any other authority with
jurisdiction an amendment or supplement (in form and substance satisfactory
to your counsel) which will correct such statement or omission or effect such
compliance; the Company will not file any amendment or supplement to the
Registration Statement or to the Prospectus which is material to the Agent or
its counsel without first furnishing a copy to the Agent and its counsel
prior to such filing.

(f) Neither the Company nor AmerUs Life will, prior to the Closing
Date, incur any material liability or obligation, direct or contingent, or
enter into any material transaction, other than in the ordinary course of
business, except as disclosed or contemplated in the Prospectus.

(g) During the period of three years after the date of the
Prospectus, the Company will furnish to you upon request (i) as soon as
practicable after the end of each fiscal year, the annual report of the
Company containing the balance sheet of the Company as of the close of such
fiscal year and corresponding statements of income, stockholders' equity and
changes in financial position for the year then ended, such financial
statements to be certified by independent public accountants; (ii) as soon as
practicable after the end of each fiscal quarter (other than the last quarter
of each fiscal year), an unaudited consolidated balance sheet and statements
of consolidated income, stockholders' equity and changes in financial
position of the Company and its consolidated subsidiaries as at the end of
and for such quarter; (iii) as soon as practicable after mailing to
stockholders, a copy of each proxy statement, financial statement and
periodic and special reports of

<PAGE>

the Company mailed to holders of any class of its securities registered under
Section 12 of the Exchange Act; and (iv) as soon as practicable after the
filing thereof, of each non-confidential report or other statement or
document filed by the Company with the SEC, or with any national securities
exchange or quotation system on which any securities of the Company may be
listed or quoted;

(h) The Company shall promptly prepare and file with the SEC, from
time to time, such reports as may be required to be filed by the SEC Rules
and Regulations, including, without limitation, reports with respect to the
sale of the Class A Common Stock and the application of the proceeds thereof
as may be required in accordance with Rule 463 under the Act.

(i) The Company shall use the net proceeds from the sale of the
Class A Common Stock in the Subscription Offering in the manner set forth in
the Prospectus under the caption "Use of Proceeds."

(j) The Company will promptly take all steps necessary to register
its Class A Common Stock under Section 12(g) of the Exchange Act.

(k) The Company will qualify the Class A Common Stock under the
Blue Sky Laws of such jurisdictions as the Agent and the Company mutually
agree (subject to practicality in terms of cost and to the qualification that
the Company shall not be obligated to file any general consent to service of
process or to qualify to do business in any jurisdiction in which it is not
so qualified). The Company will make such applications, file such consents
to service of process or other documents and furnish such other information
as may be reasonably requested for that purpose and to comply with such laws
so as to permit the continuance of sales and dealings in such jurisdictions
for as long a period as the Agent may reasonably request. The Company will
notify the Agent immediately of, and confirm in writing, the suspension of
qualification of the Class A Common Stock or the threat of such action in any
jurisdiction. In each jurisdiction where any of the Class A Common Stock
shall have been qualified as provided above, the Company will make and file
such statements and reports as are required by, or in the future may be
required by, the laws of such jurisdiction, provided that Agent's counsel so
notifies the Company in writing of such requirement.

SECTION 7. PAYMENT OF EXPENSES OF THE COMPANY. Whether or not the
transactions contemplated hereunder are consummated or this Agreement become
effective or is terminated for any reason, the Company will pay all costs and
expenses incident to the performance of their obligations hereunder,
including, without limiting the generality of the foregoing:

<PAGE>

(a) All fees and expenses of the accountants and counsel of the
Company, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution, including costs of shipping and mailing,
of the Registration Statement and the Prospectus and all amendments and
supplements thereto and other documents in connection with the transactions
contemplated by this Agreement and the Prospectus (including all exhibits and
financial statements) and all agreements and supplements provided for therein
and in this Agreement.

(b) All registration fees and expenses, including without
limitation reasonable legal fees and disbursements of Agent's or Company's
counsel incurred in connection with qualifying or registering all or any part
of the Class A Common Stock for offer and sale under the Blue Sky Laws.

(c) All fees and expenses of the escrow and transfer agent and any
special agents appointed for the transfer of the Class A Common Stock,
preparation, printing, issuance and delivery of the certificates representing
shares of the Class A Common Stock, all stock issue and transfer taxes, if
any, with respect to the sale and delivery of the Class A Common Stock, and
all fees of the NASD.

SECTION 8. REIMBURSEMENT OF AGENT'S EXPENSES. The Company shall
reimburse the Agent for any out-of-pocket expenses incurred by the Agent in
connection with the Subscription Offering or any of the transactions
expressly contemplated hereby, including, without limitation, the fees and
disbursements of its counsel (to the extent retention thereof has been
previously approved by the Company) and as to other out-of-pocket expenses
incurred by the Agent, including without limitation, communication and travel
expenses. The reimbursement provided for in this Section shall be in
addition to all amounts payable to the Agent pursuant to Sections 3 and 10
hereof and shall not be conditioned upon the consummation of the transactions
contemplated hereunder. The Agent shall be reimbursed for all expenses within
five days of receipt by the Company of an itemized bill summarizing such
expenses since the date of the last bill, if any, to the date of the current
bill. To the extent not previously paid, full payment of the Agent's
expenses shall be made in next day funds on the Closing Date provided that
the Company shall have received an itemized bill summarizing any unreimbursed
expenses at least two days before the Closing Date or on such later date if
the Company shall have received an itemized bill summarizing any unreimbursed
expenses at least two days before such date or, if the Subscription Offering
is not completed and is abandoned or terminated for any reason, within five
days of receipt by the Company of a reasonable accounting from the Agent of
its expenses.

SECTION 9. CONDITIONS TO THE OBLIGATIONS OF THE AGENT AND THE
RELEASE OF SHARES. The issuance and sale of the shares of

<PAGE>

Class A Common Stock, the delivery of certificates in respect thereof, and
the obligations of the Agent hereunder shall be subject to the accuracy in
all material respects of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the Closing
Date, to the accuracy in all material respects of the statements of the
officers of the Company made pursuant to the provisions hereof, and to the
performance in all material respects by the Company of the respective
obligations hereunder.

The issuance and sale of the shares of Class A Common Stock, the
delivery of certificates in respect thereof, and the obligations of the Agent
on the Closing Date shall also be subject to the following additional
conditions (which are solely for your benefit), unless waived in writing by
the Agent:

(a) The Registration Statement shall have been declared effective
by the SEC; prior to the Closing Date, no stop order or other order
suspending the offering or the effectiveness of the Registration Statement or
the effectiveness of the Prospectus shall have been issued or proceedings
therefor instituted, initiated or threatened by the SEC, the Iowa Insurance
Commissioner or any court or governmental agency or body. The NASD, upon
review of the terms of this Agreement, shall not have objected to the Agent's
performance of its obligations hereunder or the terms set forth.

(b) The Agent shall have received on the Closing Date certificates
on behalf of the Company, dated as of the Closing Date, signed by the chief
executive officer or the chief financial officer of the Company in form and
substance reasonably satisfactory to the Agent's counsel, to the effect that
the signers of each of such certificates have carefully examined the
Registration Statement and the Prospectus and that, in their opinion, at the
time the Registration Statement and the Prospectus became effective, neither
the Registration Statement nor the Prospectus contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
since the respective effective or approval dates of the Registration
Statement and the Prospectus, no event has occurred which should have been
set forth in an amendment of or supplement to the Registration Statement or
the Prospectus which has not been so set forth; no order has been issued by
the SEC to suspend the offering or the effectiveness of the Prospectus and no
action for such purposes has been instituted or, to the best of its
knowledge, threatened by the SEC; and to the further effect that the Company
has performed all agreements and has satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Date and that all the
representations and warranties contained in Section 5 hereof are true and
correct in all material respects on

<PAGE>

and as of the Closing Date, with the same force and effect as though
expressly made on the Closing Date.

(c) The Class A Common Stock shall have been qualified or be
exempt from qualification under the Blue Sky Laws of such states where the
Class A Common Stock has been offered.

(d) All necessary approvals and consents (including the approval
of the Iowa Insurance Commissioner) to the consummation of the Subscription
Offering have been obtained or provided for.

(e) The Agent shall have received on the Closing Date an opinion
of Sidley & Austin, special counsel for the Company, dated as of the Closing
Date, addressed to you, in form and substance reasonably satisfactory to you.

(f) At the time this Agreement is executed and also on the Closing
Date, there shall be delivered to the Agent a letter addressed to you, from
KPMG Peat Marwick LLP, independent accountants, the first one to be dated the
date of this Agreement, the second one to be dated the Closing Date,
substantially identical in form and substance to the unsigned form of letter
heretofore submitted to and approved by the Agent, and which shall contain
information as of a date within five business days of the date of such letter.

(g) The Agent's counsel shall have been furnished with such
documents as they may reasonably require for the purpose of enabling them to
pass upon the sale of the Class A Common Stock as herein contemplated and
related proceedings and in order to evidence the accuracy or completeness of
any of the representations or warranties or the fulfillment of any of the
conditions herein contained; and all proceedings taken by the Company in
connection with sale of the Class A Common Stock as herein contemplated shall
be reasonably satisfactory in form and substance to the Agent and its counsel.

(h) The representations and warranties of the Company contained
herein shall be true and correct in all material respects on the date of this
Agreement and on and as of the Closing Date; the Company shall have performed
in all material respects all covenants and agreements contained herein to be
performed on its part at or prior to such Closing Date.

(i) The Company or AmerUS Life shall have not have sustained,
since the date of the latest financial statements included in the
Registration Statement, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, that is not set forth in the Prospectus.

<PAGE>

SECTION 10. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company hereby agrees (i) to indemnify and hold harmless
the Agent, each of its directors, officers, other employees and agents and
any person who controls the Agent within the meaning of Section 15 or Section
20(a) of the Exchange Act (the Agent and each person being indemnified
hereinafter called an "Indemnified Party") against any and all losses,
claims, damages or liabilities, joint or several, to which an Indemnified
Party may become subject, under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise; (ii) to
reimburse promptly such Indemnified Party for reasonable legal or other
expenses incurred by such Indemnified Party in connection with investigating
any claims or preparing for or defending any actions, commenced or
threatened, whether or not resulting in any liability; and (iii) to reimburse
promptly such Indemnified Party for any amount paid in settlement of any
claim or action, commenced or threatened, if such settlement is effected with
the written consent of the Company; insofar as such losses, claims, damages,
liabilities, expenses, actions, or settlements, referred to above, arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, Prospectus or any
amendment or supplement thereto, or any application filed under any Blue Sky
Law, or in any other document executed by the Company in connection with or
in contemplation of the transactions contemplated by this Agreement, or in
the information furnished or otherwise made available to the Agent by the
Company, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading or arise out of any action or omission to act
by the Company, its officers, directors, employees or agents, which action is
willful or grossly negligent. The Company shall be responsible for claims,
liabilities, losses, damages or expenses arising from or in connection with
oral misstatements made by the Company which are not based upon information
provided by the Agent in writing or based upon information contained in the
Registration Statement, the Prospectus, any Blue Sky Application or other
information distributed in connection with the Subscription Offering. The
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement
thereto or in any Blue Sky Application in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Agent specifically for use therein or oral misstatements made by the Agent
which are not based upon information provided by the Company or based upon
information contained in the Registration Statement, the Prospectus, any Blue
Sky Application or other information distributed in connection with the
Subscription

<PAGE>

Offering. In the event that the Company advances any amounts alleged to be
due under this Section 10(a) to the Indemnified Party and it is determined by
a court of competent jurisdiction that the Indemnified Party is not entitled
to indemnification hereunder, then the Indemnified Party shall repay to the
Company, without interest, any amounts so advanced. The indemnification
obligations of the Company as provided above are in addition to any
liabilities the Company has under other agreements, under common law or
otherwise. The obligation of indemnity provided for hereunder is effective
immediately in respect of all events prior to or after the date hereof and
shall survive any expiration, termination or the cessation of this Agreement.

(b) The Agent agrees (i) to indemnify and hold harmless the
Company, each of its respective directors and officers and each person who
controls the Company within the meaning of the Act (the Company and each
person being indemnified hereinafter called an "Indemnified Party") against
any and all losses, claims, damages or liabilities, joint or several, to
which an Indemnified Party may become subject, under the Act, the Exchange
Act, or other federal or state statutory law or regulations, at common law or
otherwise; (ii) to reimburse promptly such Indemnified Party for reasonable
legal or other expenses incurred by such Indemnified Party in connection with
investigating any claims or preparing for or defending any actions, commenced
or threatened, whether or not resulting in defending any liability; and (iii)
to reimburse promptly such Indemnified Party for any amount paid in
settlement of any claims or actions, commenced or threatened, if such
settlement is effected with the written consent of the Agent; insofar as such
losses, claims, damages, liabilities, expenses, actions or settlements
referred to above arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus or any amendment or supplement thereto, or any Blue Sky
Application, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or arise out of any
action or omission to act by the Agent, its officers, directors, employees or
agents, which action is willful or grossly negligent, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or in any
Blue Sky Application, in reliance upon and in conformity with written
information furnished to the Company by the Agent specifically for use in the
preparation thereof. In the event that the Agent advances any amounts
alleged to be due under this Section 10(b) to an Indemnified Party and it is
determined by a court of competent jurisdiction that the Indemnified Party is
not entitled to indemnification hereunder, then the Indemnified Party, shall
repay, without interest, any amounts so advanced to the Agent. The
indemnification obligations of the Agent as provided above are in

<PAGE>

addition to any liabilities the Agent may have under other agreements, under
common law or otherwise. The obligation of indemnity provided for hereunder
is effective immediately in respect of all events prior to or after the date
hereof and shall survive any expiration, termination or other cessation of
this Agreement.

(c) Promptly after receipt by an Indemnified Party under this
Section of notice of the commencement of any action, such Indemnified Party
shall, if a claim in respect thereof is to be made against an Indemnified
Party under this Section, notify the indemnifying party in writing of the
commencement thereof. In no case shall an indemnifying party be liable under
this Agreement with respect to any loss, claim, damage, liability, expense,
action or settlement unless the indemnifying party shall have been notified
in writing by the Indemnified Party seeking indemnification, of the assertion
or filing of the claim or action giving rise to such loss, claim, damage,
liability, expense, action or settlement promptly after such Indemnified
Party shall have been advised of, or otherwise shall have received
information as to, the assertion or filing of such claim or action. In case
any such action is brought against any Indemnified Party, and such
Indemnified Party notifies an indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in, and, to the extent
that it or he may wish, jointly with all other Indemnifying Parties,
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party; provided, however, if the defendants
in any such action include both the Indemnified Party and the indemnifying
party and the Indemnified Party shall have reasonably concluded, based upon
advice of its counsel, that there may be legal defenses available to it or he
and/or any other Indemnified Party which are different from or additional to
those available to the indemnifying party, the Indemnified Party shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
Indemnified Party. Upon receipt of notice from the Indemnified Party to the
indemnifying party of its election so to assume the defense of such action,
the indemnifying party will not be liable to such Indemnified Party under
this Section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with defense thereof (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel) unless:

(i) the indemnifying party shall not have employed counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party within a reasonable time after notice or commencement of the action; or

(ii) the indemnifying party has authorized the employment of
counsel at the expense of the indemnifying party.

<PAGE>

(d) If the indemnification provided for in this section is
unavailable to an Indemnified Party in respect of any losses claims, damages
or liabilities referred to therein, then each indemnifying party, in lieu of
indemnifying such Indemnified Party, shall, subject to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities:

(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Agent from the offering of
the Class A Common Stock in the Subscription Offering; or

(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Agent in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities,
as well as any other relevant equitable considerations.

The respective relative benefits received by the Company, and the
Agent shall be deemed to be in such proportion so that the Agent is
responsible for the portion of the losses, claims, damages or liabilities
represented by the percentage that the fee to be paid to the Agent in
connection with the solicitation of subscriptions described in Section 3
hereof bears to the actual Purchase Price per share of the Class A Common
Stock, and the Company is responsible for the remaining portion. The
relative fault of the Company and the Agent shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Company or by the Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages and liabilities referred to above shall be deemed
to include, subject to the limitations set forth in paragraph (d) of this
Section, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.

The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata or per capita allocation or by any other method or allocation which does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section, no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

<PAGE>

SECTION 11. EFFECTIVE DATE. This Agreement shall become effective
immediately.

SECTION 12. TERMINATION. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:

(a) This Agreement may be terminated by the Agent prior to the
Closing Date if, in the Agent's reasonable judgment:

(i) additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon trading in
securities generally or a suspension or limitation in trading in securities
generally has occurred on the New York Stock Exchange or American Stock
Exchange or in the over-the-counter market, or quotations halted generally on
the NASDAQ System, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required by either of
such exchanges or the NASD or by order of the SEC or any other governmental
authority; or the engagement or continued engagement by the United States in
major hostilities or the declaration of a national emergency or war or a
material decline in the price of equity or debt securities if the effect of
such hostilities, national emergency or war or decline, in the Agent's
reasonable judgment, makes it impracticable or inadvisable to proceed with
the Subscription Offering or the delivery of shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus;

(ii) any event shall have occurred or shall exist which makes
untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or the Prospectus or which is not
reflected in the Registration Statement or the Prospectus but should be
reflected therein in order to make the statements or information contained
therein, in light of the circumstances under which they were made, not
misleading in any material respect (unless the Registration Statement or the
Prospectus, as appropriate, is amended or supplemented appropriately in a
timely manner to the satisfaction of the Agent); or

(iii) the Company or AmerUs Life shall have sustained a loss
by fire, flood, accident or other calamity which is materially adverse to the
property, business or financial condition of the Company or AmerUs Life,
whether or not such loss shall have been insured, or there shall have been,
since the respective dates as of which information is given in the
Prospectus, any material adverse change in the business, condition or
business affairs of the Company whether or not arising in the ordinary course
of business, or, which in your reasonable judgment shall render it
inadvisable to proceed with the delivery of the Class A Common Stock in the
Subscription Offering.

<PAGE>

(b) If the Agent elects to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by the Agent by
telephone or telegram, confirmed by letter.

Any termination pursuant to this Section 12 shall be without
liability on the part of you to the Company or on the part of the Company to
the Agent (except for the expenses to be paid or reimbursed by the Company
pursuant to Section 3 or Section 8 hereof and except as to indemnification to
the extent provided in Section 10 hereof).

SECTION 13. REPRESENTATION AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other
statements of the Company and its directors and officers, and of the Agent
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Agent or
Company or any of their respective partners, officers, agents or directors or
any controlling person, as the case may be, and will survive delivery or any
payment for the Class A Common Stock sold hereunder.

SECTION 14. NOTICE. All communications hereunder will be in
writing and, if sent to the Agent will be mailed, delivered or telegraphed
and confirmed to you c/o The Chicago Corporation, 208 South La Salle Street,
Chicago, Illinois 60604; if sent to the Company will be mailed, delivered or
telegraphed and confirmed to the Company at 418 Sixth Avenue, Des Moines,
Iowa 50306.

SECTION 15. SUCCESSORS. This Agreement will inure to the benefit
of and be binding upon the Company and the Agent (including the participating
dealers as provided herein) and their respective successors (other than
pursuant to Section 10). Nothing in this Agreement is intended or shall be
construed to give any person or entity other than the parties hereto and
their successors and other than described in Section 10) any legal or
equitable right, remedy or claim under or in respect of this Agreement.

SECTION 16. PARTIAL UNENFORCEABILITY. If any section, paragraph
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.

SECTION 17. APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Illinois.

SECTION 18. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter hereof
superseding any and all prior or contemporaneous oral or prior written
agreements, proposals,

<PAGE>

letters of intent and understandings, and cannot be modified, changed, waived
or terminated except by a writing which expressly states that it is an
amendment, modification or waiver, refers to this Agreement and is signed by
the party to be charged. No course of conduct or dealing shall be construed
to modify, amend or otherwise affect any of the provisions hereof.

SECTION 19. HEADINGS. Headings on the Sections in this Agreement
are for reference purposes only and shall not be deemed to have any
substantive effect.

SECTION 20. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.

If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement between the Company and the
Agent, all in accordance with its terms.

Very truly yours,

AMERUS LIFE HOLDINGS,INC.

By:______________________

The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.

THE CHICAGO CORPORATION
("Agent")

By:____________________

Title:_________________

<PAGE>

PLAN OF REORGANIZATION

AMERICAN MUTUAL LIFE INSURANCE COMPANY

Under Section 44 of House File 247 as enacted by the
1995 Session of the 76th General Assembly of the State of Iowa
("Section 521A.14")

PREAMBLE

WHEREAS, American Mutual Life Insurance Company (the "Company") is an Iowa
mutual life insurance company organized under Chapters 491 and 508, Code of Iowa
(1995), which has no authorized capital stock; and

WHEREAS, the Company proposes to reorganize pursuant to the provisions of
Section 521A.14 (the "Reorganization"), by forming a mutual insurance holding
company (the "Mutual Holding Company"); by adopting the provisions of the Iowa
Business Corporation Act, Chapter 490, Code of Iowa (1995) ("Chapter 490"); by
restating its Articles of Incorporation pursuant to Chapter 490 to, among other
things, authorize the issuance of capital stock; and by changing its corporate
name to AmerUs Life Insurance Company ("Stock Life Company"); and

WHEREAS, the Reorganization will continue the corporate existence of the
Company without interruption under the name AmerUs Life Insurance Company; and

WHEREAS, upon the Reorganization, all of the shares of the capital stock of
Stock Life Company will be initially issued to the Mutual Holding Company; and

WHEREAS, every Policy (as defined in Article I) which is in force at the
time of the Reorganization shall continue as a Policy of Stock Life Company and
all policy and contract rights of such Policies shall be and remain as they
exist at the time of the Reorganization; and

WHEREAS, each Person (as defined in Article I) that owns a Policy which is
in force at the time of the Reorganization shall upon the Reorganization become
a member of the Mutual Holding Company and their Membership Interests (as
defined in Article I) in the Company shall at such time become Membership
Interests in the Mutual Holding Company and their Membership Interests in the
Company shall at such time be extinguished; and

WHEREAS, pursuant to the Reorganization, it is expected that Mutual Holding
Company will transfer shortly following the Reorganization all of the shares of
the capital stock of Stock Life Company to a newly formed stock holding company
("IHC") in exchange for all of the initial shares of the capital stock of Stock
Life Company;

<PAGE>

WHEREAS, under this proposed structure, the IHC will be an intermediate
stock insurance holding company and the Mutual Holding Company will at all times
retain ownership and control of not less than a majority of the outstanding
voting shares of IHC and directly or indirectly retain ownership and control of
a majority of the outstanding voting shares of the Stock Life Company;

WHEREAS, pursuant to the Reorganization, for dividend purposes only,
certain classes of Policies will be operated as a closed block of business for
the exclusive benefit of the Policies included therein (the "Closed Block") and
assets of the Company will be allocated to the Closed Block which together with
expected revenue from the Closed Block Business (as defined in Article I) are
anticipated to be sufficient to support the Closed Block Business and to
continue dividends and interest credits to the Policies included therein at the
dividend scales and interest credits in effect for 1995 if experience underlying
such scales and credits continues; and

WHEREAS, the Reorganization will enhance the Company's strategic and
financial flexibility by creating a corporate structure that will potentially
enable it to access capital markets which are presently unavailable to the
Company as a mutual insurer, which may thereby facilitate the growth important
to the Company's goal of remaining an effective and competitive insurer in the
future. Access to capital markets includes the potential of a sale of a portion
of the stock of IHC, provided that the Mutual Holding Company will at all times
thereafter retain direct or indirect ownership and control of a majority of the
outstanding voting shares of Stock Life Company; and

WHEREAS, the Board of Directors of the Company believes the Reorganization
to be in the best interests of the Company and fair and equitable to its
policyowners and at a meeting duly called and held on October 27, 1995 (the
"Adoption Date"), approved the Reorganization and adopted the Plan of
Reorganization (as defined in Article I) and authorized and directed the
execution of this Plan of Reorganization providing for the reorganization of the
Company in accordance with the requirements of Section 521A.14, and in
accordance with the terms and subject to the conditions as provided in the Plan
of Reorganization; and

WHEREAS, the Board of Directors of the Company has directed that the Plan
of Reorganization be submitted to the policyowners of the Company for approval
as provided by law and by the Company's Articles of Incorporation and Bylaws;
and

WHEREAS, the Board of Directors of the Company has directed that the Plan
of Reorganization be submitted to the Iowa Commissioner of Insurance
("Commissioner") for approval as provided by law;

All as more particularly provided in Articles I through VI hereafter.

NOW, THEREFORE, this Plan of Reorganization is entered into by the Company.

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<PAGE>

ARTICLE I

Definitions

As used in the Plan of Reorganization and in the Preamble, the following
words or phrases have the following meanings and the following definitions shall
be equally applicable to both the singular and plural forms of any of the terms
herein defined:

"ADOPTION DATE" has the meaning specified in the Preamble.

"ARTICLES" has the meaning specified in Section 2.3.

"ATTORNEY GENERAL" has the meaning specified in Section 2.3.

"CAPITAL STOCK" means the capital stock of the Company.

"CLOSED BLOCK" has the meaning specified in the Preamble.

"CLOSED BLOCK ASSETS" has the meaning specified in Section 5.1(b).

"CLOSED BLOCK BUSINESS" means all Policies within one of the classes of
Policies specified in Schedule I hereto, but only to the extent such Policies
are either (a) In Force on the Effective Date or (b) issued after the Effective
Date pursuant to an application that is complete on its face and that is
received by the Company prior to the Effective Date, together with all required
underwriting information (including all required medical information) and
payment of the full initial premium, provided that any Policy referred to in
this clause (b) is issued as applied for and delivered in accordance with the
terms of the application. "Closed Block Business" also includes any Policy
within one of the classes of Policies specified in Schedule I which is In Force
on the Effective Date as extended term insurance pursuant to a non-forfeiture
provision in such Policy.

"CLOSED BLOCK FINANCIAL STATEMENTS" has the meaning specified in Section
5.2(e).

"CLOSED BLOCK MEMORANDUM" has the meaning specified in Section 5.1.

"CODE" has the meaning specified in Section 3.3(c)(i).

"COMMISSIONER" has the meaning specified in the Preamble.

"COMPANY" has the meaning specified in the Preamble.

"EFFECTIVE DATE" has the meaning specified in Section 3.3.

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<PAGE>

"ELIGIBLE POLICYOWNER" means a Person who is (or, collectively, the Persons
who are) on the Effective Date the Owner of one or more Policies which is then
In Force.

"IHC" has the meaning specified in the Preamble.

"IN FORCE" has the meaning specified in Section 4.3.

"ISSUE DATE" means, with respect to any Policy, the date specified in such
Policy as the date of issue of such Policy.

"MEMBERSHIP INTERESTS" means the rights of a member as a member of the
Company or, upon completion of the Reorganization, of the Mutual Holding Company
to vote as provided for in the respective articles of incorporation and bylaws
of the Company and the Mutual Holding Company and such other rights as are
provided by statute, regulation or order of the Commissioner, but shall not
include any other right expressly conferred by any Policy.

"MUTUAL HOLDING COMPANY" has the meaning specified in the Preamble.

"OWNER" means, with respect to any Policy, the Person or Persons specified
or determined pursuant to Section 4.2.

"PERSON" means an individual, corporation, joint venture, partnership,
association, trust, trustee, unincorporated entity, organization or government
or any department or agency thereof. A person who is the Owner of Policies in
more than one legal capacity (E.G., a trustee under separate trusts) shall be
deemed to be a separate Person in each such capacity.

"PLAN OF REORGANIZATION" means this Plan of Reorganization (including all
Exhibits and Schedules hereto), as it may be amended from time to time in
accordance with Section 6.6.

"POLICY" has the meaning specified in Section 4.1.

"PUBLIC HEARING" has the meaning specified in Section 3.2(a).

"REORGANIZATION" means all of the transactions provided for in the Plan of
Reorganization.

"RESTATED ARTICLES" has the meaning specified in Section 2.6.

"SECTION 521A.14" means Section 44 of House File 247 as enacted by the 1995
Session of the 76th General Assembly of the State of Iowa, and as it may be
amended.

"SPECIAL MEETING" has the meaning specified in Section 3.1(a).

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<PAGE>

"STOCK LIFE COMPANY" has the meaning specified in the Preamble.

"VOTING POLICYOWNER" means a Person who was (or, collectively, the Persons
who were) shown on the records of the Company to be the Owner of one or more
Policies issued or assumed by the Company and in force on September 30, 1995.

ARTICLE II

REORGANIZATION

2.1 THE REORGANIZATION. On the Effective Date and in accordance with the
terms of this Plan of Reorganization and the provisions of Section 521A.14, the
Company shall be reorganized by forming the Mutual Holding Company and
continuing the corporate existence of the Company as a stock life insurance
company without interruption.

2.2 FORMATION OF MUTUAL HOLDING COMPANY. On the Effective Date, with the
Company acting as incorporator, Mutual Holding Company shall be incorporated as
a mutual corporation pursuant to the provisions of Chapter 491, Code of Iowa
(1995) and Section 521A.14. The name of the Mutual Holding Company shall be
"American Mutual Holding Company". On the Effective Date, the Eligible
Policyowners will become members of the Mutual Holding Company and their
Membership Interests in the Company will become Membership Interests in the
Mutual Holding Company and their Membership Interests in the Company will be
extinguished.

2.3 ARTICLES OF INCORPORATION AND BYLAWS OF MUTUAL HOLDING COMPANY. The
articles of incorporation of the Mutual Holding Company shall be as set forth in
the Articles of Incorporation attached hereto as Exhibit "A" (the "Articles"),
subject to the approval of the Commissioner and the Attorney General of Iowa
(the "Attorney General") as provided by Section 521A.14. The bylaws of the
Mutual Holding Company shall be as set forth in the Bylaws attached hereto as
Exhibit "B".

2.4 CONVERSION INTO STOCK LIFE COMPANY. On the Effective Date, the
Company shall, without further act or deed, adopt the provisions of the Iowa
Business Corporation Act, Chapter 490, Code of Iowa (1995), pursuant to the
provisions of Section 490.1701, Code of Iowa (1995); and shall amend and restate
its Articles of Incorporation pursuant to the provisions of Section 490.1007,
Code of Iowa (1995), to become a stock life insurance company authorized to
issue capital stock; and shall change its corporate name to AmerUs Life
Insurance Company. All of the initial shares of the capital stock of Stock Life
Company shall be issued to Mutual Holding Company on the Effective Date.

2.5 CONTINUATION OF CORPORATE EXISTENCE. The corporate existence of the
Company before, on and after the Effective Date shall continue without
interruption from February 18, 1896, its initial date of incorporation, and all
of its rights, privileges, powers, permits and licenses and all of its duties,
liabilities and obligations shall be, remain and continue unaffected.

-5-

<PAGE>

2.6 RESTATED ARTICLES OF INCORPORATION AND BYLAWS OF STOCK LIFE COMPANY.
On the Effective Date, the articles of incorporation of Stock Life Company
shall, without further act or deed, but subject to the approval of the
Commissioner and the Attorney General as provided in Section 508.4, Code of Iowa
(1995), be amended and restated substantially as set forth in the Amended and
Restated Articles of Incorporation attached hereto as Exhibit "C" (the "Restated
Articles"). On the Effective Date, the bylaws of Stock Life Company shall,
without further act or deed, be amended so that the bylaws as amended shall be
as substantially set forth in the Amended and Substituted Bylaws attached hereto
as Exhibit "D".

2.7 CONTINUATION OF POLICIES. On and after the Reorganization, every
Policy which is In Force on the Effective Date shall continue as a Policy of
Stock Life Company and, subject to Section 2.2, all policy and contract rights
of all such Policies shall be and remain as they existed on the Effective Date.

2.8 TRANSFER TO IHC. Shortly following the Reorganization, it is expected
that the Mutual Holding Company will transfer all of the shares of capital stock
of Stock Life Company to IHC in exchange for all the initial shares of the
capital stock of IHC. Under this structure, Mutual Holding Company will at all
times retain direct or indirect ownership and control of a majority of the
outstanding voting shares of the capital stock of Stock Life Company. The
proposed articles of incorporation and bylaws of IHC are attached hereto as
Exhibits "E" and "F", respectively.

2.9 SUBSCRIPTION RIGHTS. It is intended that the policyowners of Stock
Life Company who are also members of the Mutual Holding Company will receive
priority subscription rights to purchase shares of capital stock of IHC or Stock
Life Company, as the case may be, in the event of any initial public offering of
such stock, subject to such conditions as may be imposed by the Commissioner.

ARTICLE III

APPROVAL, CONDITIONS AND EFFECTIVE DATE OF REORGANIZATION

3.1 APPROVAL BY POLICYOWNERS.

(a) POLICYOWNERS MEETING. The Plan of Reorganization is subject to
approval by the Voting Policyowners. The Company shall hold a special
meeting of policyowners (the "Special Meeting"). At such Special Meeting,
the Voting Policyowners shall be entitled to vote on the proposal to
approve the Plan of Reorganization, including the proposal to approve by
resolution the Company's voluntary election to adopt the provisions of
Chapter 490 and the proposal to approve Restated Articles. Each Voting
Policyowner shall be entitled to one vote, irrespective of the number of
Policies owned by such Voting Policyowner. The Plan of Reorganization, the
adoption of the provisions of Chapter 490 and the adoption of the Restated
Articles shall be approved by the Voting Policyowners if a majority of the
votes

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<PAGE>

cast at the Special Meeting are cast FOR the Reorganization.

(b) NOTICE OF SPECIAL MEETING. Notice by the Company of the time and
place of the Special Meeting, in form satisfactory to the Commissioner,
shall be mailed to all Voting Policyowners by first class mail to the
address of each Voting Policyowner as it appears on the records of the
Company not less than twenty (20) nor more than sixty (60) days prior to
the Special Meeting.

(c) CONTENT OF NOTICE. The notice of the Special Meeting shall
include the reason for the Special Meeting and the Plan of Reorganization,
and shall be accompanied by a ballot permitting the Voting Policyowner to
vote FOR or AGAINST the Plan of Reorganization.

3.2 APPROVAL BY COMMISSIONER

(a) PUBLIC HEARING. The Company shall file an application with
the Commissioner for approval of the Plan of Reorganization. The Plan of
Reorganization is subject to approval by the Commissioner, as provided in
Section 521A.14, after a public hearing has been held in accordance with
the provisions of Section 521A.3, Code of Iowa (1995).

(b) NOTICE OF PUBLIC HEARING. Notice by the Company of the time
and place of the Public Hearing, in form satisfactory to the Commissioner,
shall be mailed to all Voting Policyowners by first class mail to the
address of each Voting Policyowner as it appears on the records of the
Company, not less than seven (7) days prior to the Public Hearing, or such
other time as the Commissioner may direct.

3.3 CONDITIONS AND EFFECTIVE DATE. Upon satisfaction of all conditions as
provided in Subsections (a), (b), (c) and (d) of this Section 3.3, the Company
shall file the Articles, the election by the Company to adopt the provisions of
Chapter 490 and the Restated Articles with the Iowa Secretary of State, and the
time and date specified in such Articles and Restated Articles as the time and
effective date thereof shall be the Effective Date of the Reorganization.

(a) POLICYOWNER APPROVAL. The Reorganization shall not become
effective unless the Plan of Reorganization, the election by the Company to
adopt Chapter 490 and the Restated Articles shall have been approved by the
Voting Policyowners as provided in Section 3.1.

(b) REGULATORY APPROVALS. The Reorganization shall not become
effective unless:

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<PAGE>

(i) The Plan of Reorganization shall have been approved by the
Commissioner as provided in Section 3.2 hereof.

(ii) The Articles and the Restated Articles shall have been
approved by the Commissioner and the Attorney General as provided in
Sections 2.3 and 2.6 hereof.

(iii) The Office of Thrift Supervision ("OTS") shall not have
objected to the Reorganization pursuant to OTS regulations or,
alternatively, shall have approved the Reorganization.

(c) TAX CONSIDERATIONS. The Reorganization shall not become effective
unless on or prior to the Effective Date the Company shall have obtained
rulings from the Internal Revenue Service or an opinion of independent tax
counsel substantially to the effect that the conversion of the Company
from a mutual life insurance company into a stock life insurance company
and the exchange of the Membership Interests in the Company for Membership
Interests in the Mutual Holding Company will constitute a tax-free
reorganization, or will otherwise constitute a tax-free transaction for the
parties to the Reorganization.

(d) SECURITIES CONSIDERATIONS. The Reorganization shall not become
effective unless the Company shall have (i) obtained a no action letter
from the Securities and Exchange Commission in form and substance
satisfactory to the Company relating to matters pertaining to the
Securities Act of 1933, the Securities Exchange Act of 1934 and the
Investment Company Act of 1940; and/or (ii) received an opinion of
independent legal counsel in form and substance satisfactory to the Company
with respect to federal and state securities law matters.

ARTICLE IV

POLICY OWNERSHIP AND IN FORCE DATES

4.1 POLICIES. (a) Each life insurance policy (including, without
limitation, a pure endowment contract), annuity contract or accident and health
insurance policy that has been issued or assumed by the Company is deemed to be
a Policy for purposes of this Plan of Reorganization.

(b) The following policies and contracts shall not be deemed to be
Policies for purposes of this Plan of Reorganization:

(i) any certificates issued to an insured pursuant to a group life or
accident and health insurance policy;

(ii) any certificate issued pursuant to a group annuity contract; and

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<PAGE>

(iii) any reinsurance policy assumed on an indemnity basis (but
certificates of assumption constitute Policies if they otherwise fall
within the definition of Policies).

4.2 DETERMINATION OF OWNERSHIP. Unless otherwise stated herein, the Owner
of any Policy as of a given date shall be determined on the basis of the
Company's records as of such date in accordance with the following provisions:

(a) The Owner of a Policy shall be as shown on the Company's
records.

(b) The Owner of a Policy that is a group insurance policy shall be
the Person or Persons specified in the master policy as the policyowner,
unless no policyowner is so specified, in which case the Owner shall be the
Person or Persons to whom or in whose name the master policy shall have
been issued, as shown on the Company's records.

(c) Notwithstanding subsections (a) and (b) of this Section 4.2, the
Owner of a policy that has been assigned to another Person by an assignment
of ownership thereof that is absolute on its face and filed with the
Company in accordance with the provisions of such Policy and the Company's
rules with respect to the assignment of such policy in effect at the time
of such assignment, shall be the assignee of such Policy as shown on the
records of the Company. Unless an assignment satisfies the requirements
specified for such an assignment in this subsection (c), the determination
of the Owner of a Policy shall be made without giving effect to such
attempted assignment.

(d) Except as otherwise set forth in this Article IV, the identity of
the Owner of a Policy shall be determined without giving effect to any
interest of any other Person in such Policy.

(e) In any situation not expressly covered by the foregoing
provisions of this Section 4.2, the policyowner, as reflected on the
records of, and as determined in good faith by, the Company, shall
conclusively be presumed to be the Owner of such Policy for purposes of
this Section 4.2, and the Company shall not be required to examine or
consider any other facts or circumstances.

(f) The mailing address of an Owner as of any date for purposes of
the Plan of Reorganization shall be the Owner's last known address as shown
on the records of the Company as of such date.

4.3 IN FORCE. (a) A Policy shall be deemed to be in force ("In Force")
as of a given date if, as shown on the Company's records, both paragraphs A and
B are met:

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<PAGE>

(A)(i) such Policy has been issued and the status of such Policy
has been changed from pending to in force on the Company's records, or
(ii) in the case of an individual Policy, the Company has received by
such date in respect of such individual Policy an application that is
complete on its face, together with payment of the full initial
premium (unless submission of such premium is precluded by the
Company's underwriting rules), PROVIDED that any such individual
Policy referred to in this clause (ii) was subsequently issued as
applied for and the status of such individual Policy was changed from
pending to in force on the Company's records within 60 days of such
date, and (B) such Policy has not matured by reason of death or
otherwise and has not been surrendered or otherwise terminated;
PROVIDED that a Policy shall be deemed to be In Force after lapse for
nonpayment of premiums until expiration of any applicable grace period
(or other similar period however designated in such Policy) during
which the Policy is in full force for its basic benefits.

(b) A Policy shall not be deemed to be In Force merely because, prior
to the date on which such Policy was issued, insurance coverage may have
been provided by a conditional receipt.

(c) A Policy shall not be deemed to have matured by reason of death
as of any date unless notice of such death has been received by the Company
on or prior to such date, as shown on the Company's records. The date of
the surrender or lapse of a Policy shall be as shown on the Company's
records.

(d) A Policy shall not be deemed to be In Force as of a given date if
the Policy is returned to the Company and all premiums are refunded within
60 days after such date.

(e) The term "In Force" as defined in this Section 4.3 shall not be
applicable to the definition of Voting Policyowner.

ARTICLE V

CLOSED BLOCK

5.1 ESTABLISHMENT OF CLOSED BLOCK. (a) For policyowner dividend purposes
only, the Closed Block shall be operated by the Company as a closed block of
participating business for the exclusive benefit of the Policies included
therein. As set forth in the Closed Block Memorandum attached hereto as Exhibit
"G" (the "Closed Block Memorandum"), assets of the Company will be allocated to
the Closed Block in an amount that produces cash flows which, together with
anticipated revenue from the Closed Block Business, is expected to be sufficient
to support the Closed Block Business including, but not limited to, provisions
for payment of claims and certain expenses and taxes and to provide for
continuation of dividend scales and interest credits in effect for 1995 if the
experience underlying such scales and credits continues and for appropriate
adjustments in such scales

-10-

<PAGE>

and credits if the experience changes.

(b) The Closed Block Memorandum sets forth how certain of the
Company's assets (such assets collectively, the "Closed Block Assets") will
be allocated to the Closed Block as of the Effective Date. Cash and policy
loans, accrued interest and due and deferred premiums will be allocated to
the Closed Block as of the Effective Date as described in the Closed Block
Memorandum. The amount of the Company's assets required to support the
Closed Block as of the Effective Date will be determined as set forth in
the Closed Block Memorandum.

5.2 OPERATION OF CLOSED BLOCK. (a) After the Effective Date, insurance
and investment cash flows from operations of the Closed Block Business, the
Closed Block Assets, the cash allocated to the Closed Block and, as described in
the Closed Block Memorandum, all other assets acquired by or allocated to the
Closed Block shall be received by or withdrawn from the Closed Block in
accordance with the principles set forth in this Subsection 5.2(a).

(i) With respect to insurance cash flows:

(A) Cash premiums, cash repayments of policy loans and policy
loan interest paid in cash on Closed Block Business shall be received
by the Closed Block. Death, surrender, withdrawal and maturity
benefits (including any interest allowed for delayed payment of
benefits) paid in cash, policy loans taken in cash and other income
benefits and dividends paid in cash on Closed Block Business shall be
withdrawn from the Closed Block. Cash payments with respect to
reinsurance on Closed Block Business shall be withdrawn from or
received by the Closed Block.

(B) Cash shall be withdrawn from the Closed Block in the amount
of foreign, state and local premium taxes (including franchise taxes
to the extent measured solely by premiums) paid in cash on premiums
received in respect of Closed Block Business and retaliatory taxes
incurred on premiums received in respect of Closed Block Business in
accordance with the tax allocation procedure described in Appendix A
of the Closed Block Memorandum.

(C) Cash payments shall be received by or withdrawn from the
Closed Block for foreign, federal, state or local taxes in accordance
with the tax sharing procedure described in Appendix A of the Closed
Block Memorandum.

(D) No cash shall be withdrawn from the Closed Block with
respect to expenses, other than as provided in Subsections
5.2(a)(i)(E) and (a)(ii), and the Closed Block shall not be charged
for any such expenses.

-11-

<PAGE>

(E) With respect to Closed Block Business issued after the
Effective Date, cash shall be withdrawn from the Closed Block for
sales commissions and other expenses associated with such business in
accordance with Section III of the Closed Block Memorandum.

(ii) With respect to investment cash flows:

(A) Investment cash flows from operations of the Closed Block
Business shall be received by or withdrawn from the Closed Block.

(B) Cash received on dispositions of investments shall be net of
all reasonable and customary brokerage and other transaction expenses
that are deducted in reporting gross proceeds of such sales in the
Company's Annual Statement to the Commissioner. With respect to any
Closed Block assets that are investments in equity real estate, cash
payments for reasonable and customary operating expenses and taxes (as
reported in such Annual Statement) shall be withdrawn from the Closed
Block.

(C) Cash paid for expenses in acquiring an investment shall be
withdrawn from the Closed Block to the extent included in the cost of
such investment in the Company's Annual Statement to the Commissioner.

(D) Investment management expenses shall not be withdrawn from
or charged to the Closed Block, other than the actuarial present value
of investment management expenses related to policies issued,
increased or otherwise added to the Closed Block after the Effective
Date.

(b) New investments acquired after the Effective Date with Closed
Block cash flows shall be allocated to the Closed Block upon acquisition
and shall be in accordance with the Statement of Investment Objectives and
Policies set forth in the Closed Block Memorandum.

(c) No amounts shall be withdrawn from or received by the Closed
Block for any taxes, including federal, state, local or foreign taxes,
resulting from the operations of the Company or any of its subsidiaries
prior to the Effective Date. No asset valuation reserve or interest
maintenance reserve or any similar reserve, or any increases or decreases
therein shall be charged or credited to the Closed Block, because such
reserves are noncash items. The Company will, however, consider potential
investment defaults in apportioning dividends and interest credits on
Closed Block Business.

-12-

<PAGE>

(d) (i) Dividends on Closed Block Business shall be apportioned by
the Board in accordance with applicable law and the Dividend Principles set
forth in the Agreement and Plan of Merger between American Mutual Life
Insurance Company and Central Life Assurance Company dated August 24, 1994,
and with the objective of minimizing tontine effects and exhausting assets
allocated to the Closed Block with the final payment under the last Policy
contained in the Closed Block.

(ii) Subject to the provisions of clause (i) of this subsection
(d), dividends and interest credits on Closed Block Business shall be
apportioned, and shall be allocated among Policies in the Closed
Block, so as to reflect the underlying experience of the Closed Block,
and the degree to which the various classes of Closed Block Policies
have contributed to such experience.

(e) If the Company chooses in the future to enter into a reinsurance
treaty, other than traditional mortality risk sharing reinsurance treaties,
that involves either insurance risks or assets in the Closed Block, the
financial results of that reinsurance will be charged (credited) to the
Closed Block if and only if the Iowa Commissioner of Insurance (or
successor regulator) shall have approved in advance the basis for such
charges.

(f) (i) The Company shall prepare, on an annual basis, an income
statement, balance sheet, cash flow statement and schedule of investments
for the Closed Block (the "Closed Block Financial Statements"). The Closed
Block Financial Statement shall be prepared in a manner consistent with the
preparation of the financial statements of the Company submitted annually
to the Commissioner.

(ii) The Closed Block Financial Statements shall be reported
annually to the Board, together with a recommendation of the
management of the Company as to dividends on Closed Block Business.
The Closed Block Financial Statements and the Board's dividend
resolution regarding the Closed Block Business shall be reported
annually to the Commissioner.

(iii) The Closed Block shall be subject to the internal and
external audit processes established by the Company for its operations
generally.

(iv) Not less frequently than every three years, the Company
shall retain an independent consulting actuary to review the operation
of the Closed Block and dividend and interest credits determinations
and to report his or her findings to the Board and to the
Commissioner; provided that the first such review shall be made as of
December 31, 1998.

-13-

<PAGE>

(g) The Company may, with the prior approval of the Commissioner,
cease to maintain the Closed Block, upon such terms and conditions as the
Commissioner may approve, but the Policies then constituting the Closed
Block Business shall remain obligations of the Company and dividends on
such Policies shall be apportioned by the Board in accordance with
applicable law.

(h) Except as provided in this Section 5.2, none of the assets,
including the revenue therefrom, allocated to the Closed Block or acquired
by the Closed Block shall revert to the benefit of the stockholders of the
Company.

5.3 GUARANTEED BENEFITS. The Company shall pay all guaranteed benefits
for Closed Block Business in accordance with the terms of the Policies contained
in the Closed Block. The assets allocated to the Closed Block are the Company's
assets and are subject to the same liabilities (in the same priority) as all
assets in the Company's general account.

5.4. INDIVIDUAL ANNUITIES AND SUPPLEMENTARY CONTRACTS. Individual
Annuities and Supplementary Contracts paying dividends that are in force on the
Effective Date shall not be included in the Closed Block but in addition to
receiving benefits in the amounts set forth in any such annuity or contract,
will receive a future dividend rate guarantee that after the Effective Date
shall not be less than the dividend rate in effect on the Effective Date.

ARTICLE VI

ADDITIONAL PROVISIONS

6.1 NO TRANSFER OR EXCHANGE. The Reorganization shall not be construed to
result in any reinsurance or in any real or constructive issuance or exchange of
any insurance policy or contract or any other transfer of any assets, rights or
obligations of the Company.

6.2 DIRECTORS AND OFFICERS. The directors and officers of the Company
prior to the Effective Date shall serve as the directors and officers of the
Stock Life Company, the IHC and the Mutual Holding Company on and after the
Effective Date, until new directors and officers have been duly elected and
qualified pursuant to the articles of incorporation and bylaws of the Stock Life
Company, the IHC and the Mutual Holding Company, respectively.

6.3 COMPENSATION OF OFFICERS, DIRECTORS AND EMPLOYEES. No officer,
director or employee of the Company shall receive any fee or other
consideration, other than their usual salary and compensation, director fees or
consideration as a policyowner in connection with the Plan of Reorganization.
This Section 6.3 shall not prohibit the Company from compensating in cash any
firm with which one of its directors is associated for services rendered by such
firm in connection with the transactions contemplated by the Plan of
Reorganization.

-14-

<PAGE>

6.4 NOTICES. If the Company complies substantially and in good faith with
the requirements of Chapter 521A, Code of Iowa (1995) and Section 521A.14, or
the terms of the Plan of Reorganization with respect to the giving of any
required notice to Voting Policyowners, its failure in any case to give such
notice to any person or persons entitled thereto shall not impair the validity
of the actions and proceedings taken under Chapter 521A, Code of Iowa (1995) and
Section 521A.14, or the Plan of Reorganization or entitle such person to any
injunctive or other equitable relief with respect thereto.

6.5 AMENDMENT OF PLAN OF REORGANIZATION. At any time prior to the
Effective Date, the Company may amend the Plan of Reorganization (including the
Exhibits and Schedules thereto). No amendment made after the Public Hearing or
after approval at the Special Meeting may change the Plan of Reorganization in a
manner that the Commissioner determines is materially adverse to any class of
Eligible Policyowners unless a further hearing is held on the Plan of
Reorganization. Unless the Commissioner specifically requires, the Plan of
Reorganization as amended need not be submitted for reconsideration by Voting
Policyowners if the amendment is made after this Plan of Reorganization has been
approved at the Special Meeting.

6.6 ABANDONMENT OF PLAN. The Board may abandon the Plan at any time prior
to the Effective Date notwithstanding prior approval at the Special Meeting. No
person shall have any rights or claims against the Company or its Board based on
abandonment of the Plan.

6.7 CORRECTIONS. The Company may, until the Effective Date, by an
instrument executed by its Chairman, Chief Executive Officer, Vice Chairman,
President or any Executive Vice President, attested by its Secretary or
Assistant Secretary under the Company's corporate seal and submitted to the
Commissioner, make such modifications as are appropriate to correct errors,
clarify existing items or make additions to correct manifest omissions in the
Plan of Reorganization (including the Exhibits and Schedules). The Company may
in the same manner also make such modifications as may be required by the
Commissioner after the Public Hearing as a condition of approval of the
Reorganization.

6.8 GOVERNING LAW. The terms of the Plan of Reorganization shall be
governed by and construed in accordance with the law of the State of Iowa.

6.9 HEADINGS. Article and section headings contained in the Plan of
Reorganization are for convenience only, and shall not be considered in
construing or interpreting any of the provisions hereof.

6.10 PREAMBLE. The Preamble is a general expression of the concepts of the
Plan of Reorganization. It is not, and shall not be construed to be, a
substantive part of the Plan of Reorganization except for definitions included
therein.

-15-

<PAGE>

IN WITNESS WHEREOF, American Mutual Life Insurance Company, by authority of its
Board of Directors, has caused this Plan of Reorganization to be signed by its
Chairman and its Chief Executive Officer and its corporate seal to be affixed
hereto attested by its Secretary on October 30, 1995.

AMERICAN MUTUAL LIFE INSURANCE COMPANY

[SEAL]

By /s/ Roger K. Brooks
------------------------------
Name: Roger K. Brooks
Title: Chief Executive Officer

ATTEST:

/s/ James A. Smallenberger
- -----------------------------------
Name: James A. Smallenberger
Title: Secretary

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<PAGE>

SUMMARY OF SCHEDULE AND EXHIBITS TO THE
PLAN OF REORGANIZATION

The following descriptions of the Schedule and Exhibits to the Plan are
qualified in their entirety by reference to the complete text of such Schedules
and Exhibits, copies of which are available from American Mutual as described in
the available information section of this Policyowner Information Statement.

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<PAGE>

EXHIBIT A - ARTICLES OF INCORPORATION OF AMERICAN MUTUAL HOLDING COMPANY

Exhibit A sets forth the Articles of Incorporation of AMHC, a copy of which
is attached to this Policyowner Information Statement as Annex D.

-18-

<PAGE>

EXHIBIT B-FORM OF AMENDED AND RESTATED BYLAWS OF
AMERICAN MUTUAL HOLDING COMPANY ("AMHC")

Article I provides, among other things, that meetings of the members of
AMHC will be held in accordance with the Articles of Incorporation. Qualified
Voters (as defined in the Articles of Incorporation) may vote by ballot without
attending the meeting of the members. The person or persons who receive the
highest number of votes cast by Qualified Voters will be elected as AMHC
directors. Any proposed amendment to the Articles of Incorporation or other
matter will be carried or lost in accordance with the majority of votes cast by
Qualified Voters.

Article II provides, among other things, that the AMHC Board will nominate
candidates for director to succeed the AMHC directors whose terms are expiring.
Qualified Voters may also nominate a candidate for director provided the
candidate is designated by Qualified Voters residing in at least seven states
of the United States and numbering in each such state not less than one tenth of
one percent of the Qualified Voters of AMHC.

Article III provides, among other things, that the annual meetings of the
AMHC Board will be held as soon as practicable after each annual meeting of the
AMHC members. Other meetings of the AMHC Board will be called by the Chief
Executive Officer or by a majority of the AMHC Board. A majority of the AMHC
Board will constitute a quorum for the transaction of business. The AMHC Board
or any committee thereof is permitted to act without a meeting, provided that
all members consent to the action in writing and the writing is filed with the
minutes of proceedings of the AMHC Board or such committee.

Article IV provides, among other things, that an Executive Committee
consisting of at least four but not more than six directors and the Chief
Executive Officer will have the power of the AMHC Board in the management of the
business and affairs of AMHC. The AMHC Board may appoint additional Executive
Committee members, and may appoint such other committees as it may see fit.

Article V provides, among other things, that a Chief Executive Officer and
other officers of the AMHC will be elected by the AMHC Board. All officers will
serve until removed by the AMHC Board.

Article VI provides, among other things, that the Chief Executive Officer
will exercise a general supervision and superintendent over all the business
affairs of AMHC.

Article VII provides, among other things, that the Chairman of the Board
will have such powers and duties assigned to him/her by the Bylaws or the AMHC
Board.

Article VIII provides that other officers will have and perform such duties
as are assigned to them by the AMHC Board or the Chief Executive Officer.

-19-

<PAGE>

Article IX provides, among other things, that the AMHC Board authorize any
officer or agent to enter into contracts or execute instruments on behalf of
AMHC.

Article X provides, among other things, the AMHC Board will designate the
banks and other depositories to be used by AMHC.

Article XI provides that the AMHC Board is authorized to adopt, repeal,
alter or amend the AMHC Bylaws at any regular or special meeting of the AMHC
Board.

Article XII provides, among other things, that, subject to certain
exceptions, the directors or officers of AMHC will be indemnified, and that
directors or officers of certain other entities may be indemnified, for expenses
incurred in connection with any civil, criminal, administrative or investigative
action, suit or proceedings brought against them by reason of their service as
such director or officer. To the extent permitted by law, AMHC is allowed to
provide further indemnification to officers. AMHC may purchase and maintain
insurance on behalf of directors and officers of AMHC and of certain other
entities against any liability arising out of their status as director or
officer.

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<PAGE>

EXHIBIT C - AMENDED AND RESTATED ARTICLES OF INCORPORATION OF AMERICAN MUTUAL

Exhibit C sets forth the Amended and Restated Articles of Incorporation of
American Mutual, a copy of which is attached to this Policyowner Information
Statement as Annex E.

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<PAGE>

EXHIBIT D-FORM OF AMENDED AND SUBSTITUTED BYLAWS OF AMERUS LIFE

Article I provides that the principal office of AmerUs Life will be as
provided in the Articles of Incorporation.

Article II provides that the registered agent and office of AmerUs Life are
initially as set forth in the Articles of Incorporation, and may be changed by
the AmerUs Life Board.

Article III provides, among other things, that there will be an annual
meeting of shareholders of AmerUs Life for the elections of directors to the
AmerUs Life Board and for the transaction of other business as may come before
the meeting. A special meeting of shareholders may be called by the Chairman of
the Board, Chief Executive Officer or by the Board of Directors, and will be
called by the Board of Directors at the request the holders of at least ten
percent of all the votes entitled to be cast. Shareholders may vote in person
or by proxy. A majority of the votes entitled to be cast on a matter before the
shareholders will constitute a quorum at a meeting of the shareholders. Each
outstanding share will be entitled to one vote on each matter submitted to a
vote and directors to the AmerUs Life Board will be elected by a majority of the
votes cast.

Article IV provides, among other things, for the qualifications and number
of directors. A majority of the number of directors fixed by Article IV will
constitute a quorum for the transaction of business at any meeting of the AmerUs
Life Board. Any AmerUs Life director may be removed with or without cause at a
meeting of the AmerUs Life shareholders. The annual meeting of the AMHC Board
will be held immediately after the annual meeting of the AmerUs Life
shareholders. Any vacancy in the AmerUs Life Board may be filled by a majority
of the remaining directors. Special meetings of the AmerUs Life Board may be
called by or at the request of the Chairman of the Board, Chief Executive
Officer or one-third of the directors then in office. Dividends may be declared
by the AmerUs Life Board.

Article V provides, among other things, that the AmerUs Life Board will
appoint an Executive Committee consisting of at least five but not more than
seven directors which will have the power of the AmerUs Life Board in the
management of the business and affairs of AmerUs Life. A majority of the AmerUs
Life Board may appoint such other committees, each consisting of two or more
directors. A committee of the Board will not have the power to (a) authorize
distributions by AmerUs Life; (b) approve or propose to AmerUs Life
shareholders action that the law requires be approved by shareholders; (c) fill
vacancies on the AmerUs Life Board or on any of its committees; (d) amend the
Articles of Incorporation of AmerUs Life; (e) adopt, amend or repeal bylaws of
AmerUs Life; (f) approve a plan of merger not requiring shareholder approval;
(g) authorize or approve reacquisition of shares by AmerUs Life, except
according to a formula or method prescribed by the Board; or (h) authorize or
approve the issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a class or
series of shares.

-22-

<PAGE>

Article VI provides, among other things, that the AmerUs Life Board will
elect the officers of AmerUs Life. Any officer or agent elected or appointed by
the AmerUs Life Board may be removed at any time with or without cause by the
AmerUs Life Board.

Artice VII provides, among other things, that shares of AmerUs Life will be
certificated. Shares of AmerUs Life can only be transferred on AmerUs Life's
books and on surrender for cancellation of the certificate for such shares.

Article VIII provides, among other things, for the officers who are
authorized to enter into policy contracts and agency contracts on behalf of
AmerUs Life.

Article IX provides, among other things, for facsimile signatures, the
corporate seal and the shareholders' right to information.

Article X provides, among other things, that, subject to certain
exceptions, the directors or officers of AmerUs Life will be indemnified, and
that directors or officers of certain other entities may be indemnified, for
expenses incurred in connection with any civil, criminal, administrative or
investigative action, suit or proceedings brought against them by reason of
their service as such director or officer. To the extent permitted by law,
AmerUs Life is allowed to provide further indemnification to officers. AmerUs
Life may purchase and maintain insurance on behalf of directors and officers of
AmerUs Life and of certain other entities against any liability arising out of
their status as director or officer.

Article XI provides for emergency bylaws and an emergency executive
committee to become operative in the event of a national emergency.

Article XII provides that, subject to certain exceptions, the AmerUs Life
Bylaws may be amended or repealed by AmerUs Life Board or the shareholders.

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<PAGE>

EXHIBIT E - CLOSED BLOCK MEMORANDUM

The Closed Block Memorandum summarizes the methodology used to determine
the amount of assets required to fund the Closed Block as of December 31, 1995
(the "Closed Block Funding Date") for Policies In Force on the Closed Block
Funding Date, in accordance with Article VII of the Plan. Actuarial models of
insurance cash flows (including premiums, benefits, policy loans, taxes and
dividends) were used to project future cash flows for the expected life of the
Policies included within the Closed Block (the "Closed Block Business" as
specified in Schedule 1) assuming continuation of the experience assumptions
(for example, mortality, persistency, taxes and investment results) deemed to
underlie the dividend scales payable in 1995. For Policies In Force on the
Closed Block Funding Date, administrative and other maintenance expenses,
including renewal commissions, will not be charged to the Closed Block.
However, these expenses will be charged to the Closed Block for policies issued,
reinstated, increased, or otherwise added to the Closed Block after the Funding
Date.

The insurance cash flow models produced, for each time period (for example,
each future year), the amount of cash generated or cash needed. To that amount,
projected cash flows generated from Closed Block assets were added, and federal
income taxes were subtracted. The net cash generated was then assumed to be
reinvested at the interest rate underlying the 1995 dividend scale since this
rate represents the approximate rate of net investment return being earned at
the time the dividend scale was last reviewed. Federal income taxes were
calculated based on the Federal income tax law in effect at the Closed Block
Funding Date.

Based on such projections, an amount of assets for initial Closed Block
funding as of December 31, 1994 for Closed Block Policies In Force on the Closed
Block Funding Date was calculated. This calculation took into account the
requirement that such assets be in an amount which, together with anticipated
revenue from the Closed Block Business, is expected to be reasonably sufficient
in the aggregate to support the cash needed in the projected insurance cash
flows including continuation of the 1995 dividend scales, if the aggregate
experience underlying such scales continues.

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<PAGE>

ARTICLES OF INCORPORATION

AMERUS LIFE HOLDINGS, INC.

TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:

Pursuant to Section 202 of the Iowa Business Corporation Act, Chapter 490,
Code of Iowa (1995), American Mutual Holding Company, a mutual corporation
organized under Chapter 491, 1995 Code of Iowa, acting as incorporator, does
hereby form an intermediate holding company as provided for by Section 521A.14,
1995 Iowa Code Supplement, as amended by House File 2363 of the Acts of the 1996
session of the 76th Iowa General Assembly, and does hereby adopt the following
Articles of Incorporation:

ARTICLE I

The name of the corporation is AmerUs Life Holdings, Inc.

ARTICLE II

The corporation shall have perpetual duration.

ARTICLE III

The purpose for which this corporation is organized is the transaction of
any and all lawful business for which corporations may be organized under the
Iowa Business Corporation Act.

ARTICLE IV

The aggregate number of shares of stock which the corporation is authorized
to issue is ten thousand (10,000) shares of common stock, $1.00 par value.

ARTICLE V

The street address of the initial registered office of the corporation is
418 Sixth Avenue, Des Moines, Iowa 50309 and the name of its initial registered
agent at such address is James A. Smallenberger.

<PAGE>

ARTICLE VI

The name and address of the incorporator is:

American Mutual Holding Company
418 Sixth Avenue
Des Moines, Iowa 50309

ARTICLE VII

The name and addresses of the individuals who are to serve as initial
directors are:

Name Address
---- -------

John R. Albers 3825 Gillon Avenue
Dallas, TX 75205

Wesley H. Boldt 2300 Thornton
Des Moines, IA 50321

Dr. Joseph A. Borgen RR 1 Box 119
St. Charles, IA 50240

Roger K. Brooks 300 Walnut Street
Des Moines, IA 50309

Malcolm Candlish 465 Walls Way
Osprey, FL 34229

D T Doan 670 58th Place
West Des Moines, IA 50266

Thomas F. Gaffney 2091 Oceanview Drive North
Tierra Verde, FL 33715

Sam C. Kalainov 681 50th Street
Des Moines, IA 50312

John W. Norris, Jr. 2100 Lake Park Blvd.
Richardson, TX 75080

Jack C. Pester 11 Auburn Place
West University Place
Houston, TX 77005

John A. Wing 1233 Crain
Evanston, IL 60202

-2-

<PAGE>

ARTICLE VIII

A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for a breach of the director's duty
of loyalty to the corporation or its shareholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) for a transaction from which the director derives an improper
personal benefit; or (iv) under section 490.833 of the Iowa Business Corporation
Act. If the Iowa Business Corporation Act is hereafter amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the corporation, in addition to the limitation on
personal liability provided herein, shall be eliminated or limited to the extent
of such amendment, automatically and without any further action, to the maximum
extent permitted by law. Any repeal or modification of this Article by the
shareholders of the corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability or any other right or
protection of a director of the corporation with respect to any state of facts
existing at or prior to the time of such repeal or modification.

ARTICLE IX

The time of commencement of the existence of the corporation is at the time
of filing the Articles of Incorporation with the Iowa Secretary of State.

Dated this 1st day of July, 1996.

American Mutual Holding Company

By: /s/ Roger K. Brooks
------------------------------------
Roger K. Brooks, President and
Chief Executive Officer

By: /s/ James A. Smallenberger
------------------------------------
James A. Smallenberger, Secretary
STATE OF IOWA )
) SS
COUNTY OF IOWA )

On this 1st day of July, 1996, before me, the undersigned, a Notary
Public in and for said State, personally appeared Roger K. Brooks and James A.
Smallenberger, being by me duly sworn, did say that they are the President and
Chief Executive Officer and Secretary, respectively, of American Mutual Holding
Company, executing the within and foregoing instrument; that said instrument was
signed on behalf of said corporation by authority of its Board of Directors; and
the said President and Chief Executive Officer and Secretary, as such officers,
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation, by it and by them voluntarily executed.
/s/ Julie Lyn Ketterer
-----------------------------------
Notary Public in and for said State

-3-

<PAGE>

CERTIFICATE OF APPROVAL
ATTORNEY GENERAL

Pursuant to provisions of the Iowa Code, the undersigned approves the
Articles of Incorporation of AmerUs Life Holdings, Inc., and finds them in
conformance with the laws of the United States and with the laws and
Constitution of the State of Iowa.

THOMAS J. MILLER
Attorney General of Iowa

7-29-96 /s/ SCOTT M. GALENBECK
- ---------------- -----------------------------------
Date By: SCOTT M. GALENBECK
Assistant Attorney General

CERTIFICATE OF APPROVAL
COMMISSIONER OF INSURANCE

Pursuant to the provisions of the Iowa Code, the undersigned approves the
Articles of Incorporation of AmerUs Life Holdings, Inc.

THERESE M. VAUGHAN
Commissioner of Insurance

8-1-96 /s/ ROBERT L. HOWE
- ---------------- -----------------------------------
Date By: ROBERT L. HOWE
Deputy Commissioner and
Chief Examiner

-4-

<PAGE>

BYLAWS
OF
AMERUS LIFE HOLDINGS, INC.

ARTICLE I

PRINCIPAL OFFICE

Section 1.1. The location of the principal office of the Corporation in
the State of Iowa will be identified in the Corporation's annual report filed
with the Iowa Secretary of State. The Corporation may have such other offices
either within or without the State of Iowa as the business of the Corporation
may from time to time require.

ARTICLE II

REGISTERED OFFICE AND AGENT

Section 2.2. The initial registered agent and office of the Corporation
are set forth in the Articles of Incorporation. The registered agent or
registered office, or both, may be changed by resolution of the Board of
Directors.

ARTICLE III

MEETINGS OF SHAREHOLDERS

Section 3.1. ANNUAL MEETING. The annual meeting of the shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting, shall be held on the first Friday in May of
each year at such place as the Board of Directors shall each year fix, or at
such other place, time and date as the Board of Directors shall fix, which date
shall be within the earlier of the first six (6) months after the end of the
Corporation's fiscal year or fifteen (15) months after the shareholders' last
annual meeting.

Section 3.2. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by law (which for purposes
of these bylaws shall mean as required from time to time by the Iowa Business
Corporation Act or the Articles of Incorporation of the Corporation), may be
called by the Chairman of the Board, Chief Executive Officer or the Board of
Directors, and shall be called by the Board of Directors upon the written
demand, signed, dated and delivered to the Secretary, of the holders of at least
ten percent (10%) of all the votes entitled to be cast on any issue proposed to
be considered at the meeting. Such written demand shall state the purpose or
purposes for which such meeting is to be called. The time, date and place of any
special meeting shall be determined by the Board of Directors, or, at its
direction, by the Chief Executive Officer.
<PAGE>

Section 3.3. NOTICES AND REPORTS TO SHAREHOLDERS.

(a) Notice of the place, date and time of all meetings of shareholders and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called, shall be communicated not fewer than ten (10) days nor more than
sixty (60) days before the date of the meeting to each shareholder entitled to
vote at such meeting. The Board of Directors may establish a record date for the
determination of shareholders entitled to notice, as provided in Section 3.5 of
these bylaws, Notice of adjourned meetings need only be given if required by law
or Section 3.7 of these bylaws.

(b) In the event (i) of the issuance, or the authorization for issuance, of
shares for promissory notes or promises to render services in the future, or
(ii) of any indemnification of or advancement of expenses to a director required
by law to be reported to shareholders, the Corporation shall report the same to
the shareholders with or before the notice of the next shareholders' meeting,
including, in the case of issuance of shares, the number of shares and the
consideration received.

(c) In the event corporate action is taken without a meeting in accordance
with Section 3.12 of these bylaws by less than unanimous written consent, prompt
notice of the taking of such corporate action shall be given to those
shareholders who have not consented in writing.

(d) If notice of proposed corporate action is required by law to be given
to shareholders not entitled to vote and the action is to be taken by consent of
the voting shareholders, the Corporation shall give all shareholders written
notice of the proposed action at least ten (10) days before the action is taken.
The notice must contain or be accompanied by the same material that would have
been required to be sent to shareholders not entitled to vote in a notice of
meeting at which the proposed action would have been submitted to the
shareholders for action,

Section 3.4. WAIVER OF NOTICE.

(a) Any shareholder may waive any notice required by law or these bylaws if
in writing and signed by any shareholder entitled to such notice, whether before
or after the date and time stated in such notice. Such a waiver shall be
equivalent to notice to such shareholder in due time as required by law or these
bylaws. Any such waiver shall be delivered to the Corporation for inclusion in
the minutes or filing with the corporate records.

(b) A shareholder's attendance at a meeting, in person or by proxy, waives
(i) objection to lack of notice or defective notice of such meeting, unless the
shareholder at the beginning of the meeting or promptly upon the shareholder's
arrival objects to holding the meeting or transacting business at the meeting,
and (ii) objection to consideration of a particular matter at the meeting that
is not within the purpose or purposes described in the meeting notice, unless
the shareholder objects to considering the matter when it is presented.

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Section 3.5. RECORD DATE. The Board of Directors may fix, in advance, a
date as the record date for any determination of shareholders for any purpose,
such date in every case to be not more than seventy (70) days prior to the date
on which the particular action or meeting requiring such determination of
shareholders is to be taken or held. If no record date is so fixed for the
determination of shareholders, the close of business on the day before the date
on which the first notice of a shareholders' meeting is communicated to
shareholders or the date on which the Board of Directors authorizes a share
dividend or a distribution (other than one involving a repurchase or
reacquisition of shares), as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof, unless the Board of
Directors selects a new record date or unless a new record date is required by
law.

Section 3.6. SHAREHOLDERS' LIST. After fixing a record date for a meeting,
the Corporation shall prepare an alphabetical list of the names of all
shareholders who are entitled to notice of a shareholders' meeting. The list
must be arranged by voting group and within each voting group by class or series
of shares, and show the address of and number of shares held by each
shareholder. The shareholders' list must be available for inspection by any
shareholder beginning two (2) business days after notice of the meeting is given
for which the list was prepared and continuing through the meeting, at the
Corporation's principal office or at a place identified in the meeting notice in
the city where the meeting will be held. A shareholder, or a shareholder's agent
or attorney, is entitled on written demand to inspect and, subject to the
requirements of law, to copy the list, during regular business hours and at the
person's expense, during the period it is available for inspection. The
Corporation shall make the shareholders' list available at the meeting, and any
shareholder, or a shareholder's agent or attorney, is entitled to inspect the
list at any time during the meeting or any adjournment.

Section 3.7. QUORUM.

(a) At any meeting of the shareholders, a majority of the votes entitled to
be cast on the matter by a voting group constitutes a quorum of that voting
group for action on that matter, unless the representation of a different number
is required by law, and in that case, the representation of the number so
required shall constitute a quorum. If a quorum shall fail to attend any
meeting, the chairperson of the meeting or a majority of the votes present may
adjourn the meeting to another place, date or time.

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(b) When a meeting is adjourned to another place, date or time, notice need
not be given of the adjourned meeting if the place, date and time thereof are
announced at the meeting at which the adjournment is taken; provided, however,
that if the date of any adjourned meeting is more than one hundred twenty (120)
days after the date for which the meeting was originally noticed, or if a new
record date is fixed for the adjourned meeting, notice of the place, date and
time of the adjourned meeting shall be given in conformity with these bylaws. At
any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.

(c) Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment thereof unless a new record date is or must be set for that
adjourned meeting.

Section 3.8. ORGANIZATION.

(a) The Chairman of the Board, or in the absence of the Chairman, the Chief
Executive Officer or in their absence, the President, or in the President's
absence, such person as the Board of Directors may have designated, or, in the
absence of such a person, such person as shall be designated by the holders of a
majority of the votes present at the meeting, shall call meetings of the
shareholders to order and shall act as presiding officer of such meetings.

(b) The Secretary of the Corporation shall act as secretary at all meetings
of the shareholders, but in the absence of the Secretary at any meeting of the
shareholders, the presiding officer may appoint any person to act as secretary
of the meeting.

Section 3.9. VOTING OF SHARES.

(a) Every shareholder entitled to vote may vote in person or by proxy.
Except as provided in subsection (c) or unless otherwise provided by law, each
outstanding share, regardless of class, shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders. Unless otherwise
provided by law, directors shall be elected by a majority of the votes cast by
the shares entitled to vote in the election at a meeting at which a quorum is
present. Shareholders do not have the right to cumulate their votes for
directors unless the Articles of Incorporation so provide.

(b) The shareholders having the right to vote shares at any meeting shall
be only those of record on the stock books of the Corporation, on the record
date fixed by law or pursuant to the provisions of Section 3.5 of these bylaws.

(c) Absent special circumstances, the shares of the Corporation held,
directly or indirectly, by another corporation, are not entitled to vote if a
majority of the shares entitled to vote for the election of directors of such
other corporation is held by the Corporation. The foregoing does not limit the
power of the Corporation to vote any shares held by the Corporation in a
fiduciary capacity.

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(d) Voting by shareholders on any question or in any election may be by
voice vote unless the chairperson of the meeting shall order or any
shareholder shall demand that voting be by ballot. On a vote by ballot, each
ballot shall be signed by the shareholder voting, or in the shareholder's
name by proxy, if there be such proxy, and shall state the number of shares
voted by such shareholder.

(e) If a quorum exists, action on a matter, other than the election of
directors, by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless a
greater number is required by law.

Section 3.10. VOTING BY PROXY OR REPRESENTATIVE.

(a) At all meetings of the shareholders, a shareholder entitled to vote may
vote in person or by proxy appointed in writing, which appointment shall be
effective when received by the secretary of the meeting or other officer, agent
or inspector authorized to tabulate votes. An appointment of a proxy is valid
for eleven (11) months from the date of its execution, unless a longer period is
expressly provided in the appointment form.

(b) Shares held by an administrator, executor, guardian, conservator,
receiver, trustee, pledgee, or another corporation may be voted as provided by
law.

Section 3.11. INSPECTORS. The Board of Directors in advance of any
meeting of shareholders may (but shall not be obligated to) appoint
inspectors to act at such meeting or any adjournment thereof. If inspectors
are not so appointed, the officer or person acting as presiding officer of
any such meeting may, and on the request of any shareholder or the
shareholder's proxy, shall make such appointment. In case any person
appointed as inspector shall fail to appear or act, the vacancy may be filled
by appointment made by the Board of Directors in advance of the meeting, or
at the meeting by the officer or person acting as presiding officer. The
inspectors shall register proxies; determine the number of shares
outstanding, the voting power of each, the shares represented at the meeting,
the existence of a quorum, the authenticity, validity and effect of proxies;
receive votes, ballots, assents or consents; hear and determine all
challenges and questions in any way arising in connection with the vote;
count and tabulate all votes, assents and consents, determine and announce
the result; and do such acts as may appear proper to conduct the election or
vote with fairness to all shareholders. The maximum number of such inspectors
appointed shall be three (3), and no inspector whether appointed by the Board
of Directors or by the officer or person acting as presiding officer need be
a shareholder.

Section 3.12. ACTION WITHOUT MEETING. Except as otherwise set forth in
this Section 3.12, any action required or permitted by law to be taken at a
meeting of the shareholders may be taken without a meeting or vote if one or
more consents in writing setting forth the action taken shall be signed and
dated by the holders of outstanding shares having not less than ninety
percent (90%) of the votes entitled to be cast at a meeting at which all
shares entitled to vote on the action were present and voted, and are
delivered to the Corporation for inclusion in the minutes or filing with the
Corporation's records. Written consents from a sufficient number of
shareholders must be obtained within sixty (60) days from the date of the
earliest dated consent for such consents to be effective to take corporate
action. Provided, however, a director shall not be removed by written
consents unless written consents are obtained from the holders of all the
outstanding shares of the Corporation. If not otherwise fixed by law or in
accordance with these bylaws, the record date for determining shareholders
entitled to take action without a meeting is the date the first shareholder
signs such a written consent.

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Section 3.13. CONDUCT OF BUSINESS, The presiding officer of any meeting of
shareholders shall determine the order of business and procedure at the meeting,
including such regulation of the manner of voting and the conduct of business as
seem to him or her to be in order.

Section 3.14. NEW BUSINESS AND NOMINATIONS.

(a) At any annual or special meeting of the shareholders, only such
business shall be conducted as shall have been brought before the meeting (i)
by or at the direction of the Board of Directors or (ii) by any shareholder
of the Corporation who is entitled to vote with respect thereto and who
complies with the notice procedures set forth in this Section 3.14(a) or in
Section 3.14(b) below with respect to nominations of persons for election as
directors. For business to be properly brought before an annual or a special
meeting by a shareholder, the shareholder must have given a timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered or mailed to and received by the
Secretary of the Corporation at the principal offices of the Corporation not
less than thirty (30) days prior to the date of the annual or special
meeting; provided, however, that, in the event that less than forty (40)
days' notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be
received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the meeting was mailed
or such public disclosure was made. A shareholder's notice to the Secretary
shall set forth as to each matter that such shareholder proposes to bring
before the meeting (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at
the meeting, (ii) the name and address, as they appear on the Corporation's
books, of the shareholder proposing such business, (iii) the class and number
of the Corporation's capital stock that are beneficially owned by such
shareholder and (iv) any material interest of such shareholder in such
business. Notwithstanding anything in these Bylaws to the contrary, no
business shall be brought before or conducted at a meeting except in
accordance with the provisions of this Section 3.14(a) or Section 3.14(b)
below with respect to nominations of persons for election as directors. The
chairman of the meeting shall, if the facts so warrant, determine and declare
to the meeting that business was not properly brought before the meeting in
accordance with the provisions of this Section 3.14(a) and, if he or she
should so determine, he or she shall so declare to the meeting and any such
business so determined to be not properly brought before the meeting shall
not be transacted. This provision shall not prevent the consideration and
approval or disapproval at the meeting of reports of officers, directors and
committees, but, in connection with such reports, no new business shall be
acted upon at such meeting unless stated and filed as herein provided.

(b) Only persons who are nominated in accordance with the procedures set
forth in these Bylaws shall be eligible for election as directors. Nominations
of persons for election to the Board of Directors of the Corporation may be made
at a meeting of shareholders only (i) by or at the direction of the Board of
Directors or (ii) by any shareholder of the Corporation entitled to vote for

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the election of directors at the meeting who complies with the notice
procedures set forth in this Section 3.14(b). Such nominations, other than
those made by or at the direction of the Board of Directors, shall be made by
timely notice in writing to the Secretary of the Corporation. To be timely,
a shareholder's notice shall be delivered or mailed to and received by the
Secretary of the Corporation at the principal executive offices of the
Corporation not less than thirty (30) days prior to the date of the meeting;
provided, however, that, in the event that less than forty (40) days' notice
or prior disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the tenth (10th) day following the day on
which such notice of the date of the meeting was mailed or such public
disclosure was made. Such shareholder's notice shall set forth (i) as to
each person whom such shareholder proposes to nominate for election or
re-election as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); and (ii) as to the shareholder
giving the notice, (x) the name and address, as they appear on the
Corporation's books, of such shareholder and (y) the class and number of
shares of the Corporation's capital stock that are beneficially owned by such
shareholder. At the request of the Board of Directors, any person nominated
by the Board of Directors for election as a director shall furnish to the
Secretary of the Corporation the information required to be set forth in a
shareholder's notice of nomination that pertains to the nominee. No person
shall be eligible for election as a director of the Corporation unless
nominated in accordance with the provisions of this Section 3.14(b). The
chairman of the meeting shall, if the facts so warrant, determine that a
nomination was not made in accordance with such provisions and, if he or she
should so determine, he or she shall so declare to the meeting and the
defective nomination shall be disregarded.

ARTICLE IV

BOARD OF DIRECTORS

Section 4.1. QUALIFICATIONS AND GENERAL POWERS. No director is required to
be an officer or employee or a shareholder of the Corporation or a resident of
the State of Iowa. The business and affairs of the Corporation shall be managed
under the direction of the Board of Directors. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into any contract
or to execute and deliver any instrument in the name and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.

Section 4.2. NUMBER OF DIRECTORS: TENURE; ELECTION.

(a) The number of directors of the Corporation shall be not less than seven
(7) nor more than twenty-one (21), the exact number within such range to be
determined from time to time by resolution of the Board of Directors. The Board
of Directors shall not be authorized to change the range or to change to a fixed
number of directors without the approval of the shareholders.

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(b) The directors of the Corporation, other than those who may be elected
by the holders of any class or series of preferred stock, shall be divided
into three classes, as nearly equal in number as reasonably possible: the
first class, the second class and the third class. Each such director shall
serve for a term ending on the third annual meeting following the annual
meeting of the shareholders at which such director was elected; provided,
however, that the directors first elected to the first class shall serve for
a term ending upon the election of directors at the annual meeting next
following the end of calendar year 1996, the directors first elected to the
second class shall serve for a term ending upon the election of directors at
the annual meeting of the shareholders next following the end of calendar
year 1997, and the directors first elected to the third class shall serve for
a term ending upon the election of directors at the annual meeting of the
shareholders next following the end of calendar year 1998.

(c) At each annual election commencing at the first annual meeting of the
shareholders following the end of the calendar year 1996, the successors to the
class of directors whose term expires at that time shall be elected by the
shareholders to hold office for a term of three years to succeed those directors
whose term expires, so that the term of one class of directors shall expire each
year.

(d) Notwithstanding the requirement that the three classes shall be as
nearly equal in number of directors as reasonably possible, in the event of any
change in the authorized number of directors, each director then continuing to
serve as such shall nevertheless continue as a director of the class of which he
or she is a member until the expiration of his or her current term, or his or
her prior resignation, disqualification, disability or removal. There shall be
no cumulative voting in the election of directors.

Section 4.3. QUORUM AND MANNER OF ACTING. A quorum of the Board of
Directors consists of a majority of the number of directors prescribed in
accordance with Section 4.2. If at any meeting of the board there be less than a
quorum present, a majority of the directors present may adjourn the meeting from
time to time until a quorum shall be present. Notice of any adjourned meeting
need not be given. At all meetings of directors, a quorum being present, the act
of the majority of the directors present at the meeting shall be the act of the
Board of Directors.

Section 4.4. RESIGNATION. Any director of the Corporation may resign at any
time by delivering written notice to the Chairman of the Board, the Board of
Directors, or the Corporation. A resignation is effective when the notice is
delivered unless the notice specifies a later effective date.

Section 4.5. REMOVAL. A director shall be subject to removal, with or
without cause, at a meeting of the shareholders called for that purpose in the
manner prescribed by law.

Section 4.6. VACANCIES. Any vacancy occurring in the Board of Directors
through death, resignation, removal or any other cause, including an increase in
the number of directors, may be filled by the Board of Directors. If the
directors remaining in office constitute fewer than a quorum of the board, they
may fill the vacancy by the affirmative vote of a majority of the remaining
directors.

Section 4.7. COMPENSATION OF DIRECTORS. The directors shall be entitled
to be reimbursed for any expenses paid by them on account of attendance at
any regular or special meeting of the Board of Directors and the Board of
Directors may fix the compensation of directors from time to time by
resolution of the board.

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Section 4.8. PLACE OF MEETINGS, ETC. The Board of Directors may hold its
meetings at such place or places within or without the State of Iowa, as the
board may from time to time determine. A director may participate in any meeting
by any means of communication, including, but not limited to telephone
conference call, by which all directors participating may simultaneously hear
each other during the meeting. A director participating in a meeting by this
means is deemed to be present in person at the meeting,

Section 4.9. ANNUAL MEETING. Immediately after the final adjournment of
each annual meeting of the shareholders for the election of directors, the Board
of Directors shall meet, at the same place where said meeting of shareholders
finally adjourned, for the purpose of organization, the election of officers and
the transaction of other business. Notice of such meeting need not be given.
Such meeting may be held at any other time or place as shall be specified in a
notice given as hereinafter provided for special meetings of the Board of
Directors or in a consent and waiver of notice thereof signed by all the
directors, at which meeting the same matters shall be acted upon as is above
provided.

Section 4.10. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such place and at such times as the Board of Directors shall by
resolution fix and determine from time to time. No notice shall be required for
any such regular meeting of the board.

Section 4.11. SPECIAL MEETINGS: NOTICE.

(a) Special meetings of the Board of Directors shall be held whenever
called by direction of the Chairman of the Board, Chief Executive Officer, or
one-third (1/3) of the directors at the time being in office.

(b) Notice of each such meeting shall be communicated to each director at
least two (2) days before the date on which the meeting is to be held. Each
notice shall state the date, time and place of the meeting. Unless otherwise
stated in the notice thereof, any and all business may be transacted at a
special meeting. At any meeting at which every director shall be present, even
without any notice, any business may be transacted.

Section 4.12. WAIVER OF NOTICE. A director may waive any notice required by
law or these bylaws if in writing and signed by a director entitled to such
notice, whether before or after the date and time stated in such notice. Such a
waiver shall be equivalent to notice in due time as required by these bylaws.
Attendance of a director at or participation in a meeting shall constitute a
waiver of notice of such meeting, unless the director at the beginning of the
meeting or promptly upon arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to action
taken at the meeting.

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Section 4.13. DIRECTOR'S ASSENT PRESUMED. A director who is present at a
meeting of the Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless the
director's dissent shall be entered in the minutes of the meeting or unless the
director shall file a written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered or certified mail to the Secretary immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.

Section 4.14. ORDER OF BUSINESS.

(a) At meetings of the Board of Directors, business shall be transacted in
such order as, from time to time, the Board of Directors may determine by
resolution.

(b) At all meetings of the Board of Directors, the Chairman of the Board
or in his or her absence, the Chief Executive Officer, or in their absence
the President, or in the President's absence the most senior Vice President
present, or otherwise the person designated by the vote of a majority of the
directors present shall preside.

Section 4.15. ACTION WITHOUT MEETING. Any action required or permitted by
law to be taken at any meeting of the Board of Directors may be taken without a
meeting if the action is taken by all the directors and if one or more consents
in writing describing the action so taken shall be signed by each director then
in office and included in the minutes or filed with the corporate records
reflecting the action taken. Action taken under this section is effective when
the last director signs the consent, unless the consent specifies a different
effective date.

Section 4.16. DIVIDENDS. The Board of Directors may authorize and the
Corporation may make distributions to its shareholders in cash or property out
of unreserved surplus, but no distribution may be made if, after giving it
effect, either of the following would result:

(a) The Corporation would not be able to pay its debts as they become due
in the usual course of business; or

(b) The Corporation's total assets would be less than the sum of its total
liabilities plus, unless the Articles of Incorporation permit otherwise, the
amount that would be needed, if the Corporation were to be dissolved at the time
of this distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those receiving the
distribution.

The Board of Directors may base a determination that a distribution is not
prohibited either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances.

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ARTICLE V

THE EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 5.1. EXECUTIVE COMMITTEE. The Board of Directors shall appoint
an Executive Committee of not less than three (3) nor more than five (5)
directors. The members of the Executive Committee shall serve at the will of
the Board of Directors. The Executive Committee shall have and may exercise
all of the powers of the Board of Directors in the management of the business
and affairs of the Corporation except when the Board of Directors is in
session, subject to the limitations set forth in Section 5.3 of these bylaws.
The Executive Committee shall fix its own rules governing the conduct of its
activities.

Section 5.2. OTHER COMMITTEES. The Board of Directors, by resolution
adopted by the affirmative vote of a majority of the number of directors then
in office, may establish one or more other committees of the Board of
Directors, each committee to consist of two (2) or more directors appointed
by the Board of Directors. Any such committee shall serve at the will of the
Board of Directors. Each such committee shall have the powers and duties
delegated to it by the Board of Directors. The Board of Directors may elect
one or more of its members as alternate members of any such committee who may
take the place of any absent member or members at any meeting of such
committee, upon request of the Chief Executive Officer or the chairperson of
such committee. Each such committee shall fix its own rules governing the
conduct of its activities as the Board of Directors may request.

Section 5.3. LIMITATIONS. A committee of the Board of Directors shall
not: (a) authorize distributions by the Corporation; (b) approve or propose
to shareholders of the Corporation action that the law requires be approved
by shareholders; (c) fill vacancies on the Board of Directors of the
Corporation or on any of its committees; (d) amend the Articles of
Incorporation of the Corporation; (e) adopt, amend or repeal bylaws of the
Corporation; (f) approve a plan of merger not requiring shareholder approval;
(g) authorize or approve reacquisition of shares by the Corporation, except
according to a formula or method prescribed by the Board of Directors; or (h)
authorize or approve the issuance or sale or contract for sale of shares, or
determine the designation and relative rights, preferences and limitations of
a class or series of shares, except that the Board of Directors may authorize
a committee or a senior executive officer of the Corporation to do so within
limits specifically prescribed by the Board of Directors.

ARTICLE VI

OFFICERS

Section 6.1. OFFICERS. The officers of the Corporation shall be a
Chairman of the Board, a Chief Executive Officer, a President, one or more
Vice Presidents (the number thereof to be determined by the Board of
Directors), a Secretary, a Treasurer and such other officers as may from time
to time be appointed by the Board of Directors. One person may hold the
offices and perform the duties of any two or more of said offices. In its
discretion, the Board of Directors may delegate the powers or duties of any
officer to any other officer or agents, notwithstanding any provision of
these bylaws, and the Board of Directors may leave unfilled for any such
period as it may fix, any office except those of Chairman of the Board, Chief
Executive Officer, President, Treasurer and Secretary. The officers of the
Corporation shall be appointed annually by the Board of Directors at the
annual meeting thereof. The Board of Directors shall designate the order of
seniority of the vice presidents and other officers junior to them at the
time of their appointment. Each such officer shall hold office until the next
succeeding annual meeting of the Board of Directors and until his or her
successor shall have been duly chosen and shall qualify or until his or her
death or until he or she shall resign or shall have been removed.

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Section 6.2. RESIGNATION AND REMOVAL. An officer may resign at any time by
delivering notice to the Secretary. A resignation is effective when the notice
is delivered unless the notice specifies a later effective date. Any officer may
be removed by the Board of Directors at any time with or without cause, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed.

Section 6.3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall, when
present, preside at all meetings of the shareholders. The Chairman of the Board
shall, when present, preside at all meetings of the Board of Directors. In
general he or she shall perform all duties incident to the office of Chairman of
the Board and such other duties as may be prescribed by the Board of Directors
from time to time.

Section 6.4. POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER. Subject to
the control of the Board of Directors, the Chief Executive Officer shall have
general charge of and direct the operations of the Corporation and shall be the
Chief Executive Officer of the Corporation. The Chief Executive Officer shall,
in the absence of the Chairman of the Board or in the event of his or her death,
inability or refusal to act, and when present, preside at all meetings of the
shareholders. The Chief Executive Officer shall, in the absence of the Chairman
of the Board or in the event of his or her death, inability or refusal to act,
and when present, preside at all meetings of the Board of Directors. The Chief
Executive Officer shall keep the Board of Directors fully informed and shall
freely consult with them concerning the business of the Corporation in his or
her charge. The Chief Executive Officer shall have authority to sign, execute
and acknowledge all contracts, checks, deeds, mortgages, bonds, leases or other
obligations on behalf of the Corporation as the Chief Executive Officer may deem
necessary or proper to be executed in the course of the Corporation's regular
business as authorized by the Board of Directors. The Chief Executive Officer
may sign, together with the Secretary or Assistant Secretary, certificate for
shares of the Corporation. The Chief Executive Officer may sign in the name of
the Corporation reports and all other documents or instruments which are
necessary or proper to be executed in the course of the Corporation's business.
He or she shall perform all duties incident to the office of Chief Executive
Officer as herein defined, and all such other duties as from time to time may be
assigned by the Board of Directors.

Section 6.5. POWERS AND DUTIES OF THE PRESIDENT. In the absence of the
Chief Executive Officer or in the event of his or her death, inability or
refusal to act, the President shall perform the duties of the Chief Executive
Officer and when so acting shall have the powers of and be subject to all the
restrictions upon the Chief Executive Officer. The President may sign with the
Secretary or Assistant Secretary all certificates for the shares of the capital
stock of the Corporation. The President shall perform all duties incident to the
office of President, as herein defined, and all such other duties as from time
to time may be assigned by the Chief Executive Officer or by the Board of
Directors.

Section 6.6. POWERS AND DUTIES OF THE VICE PRESIDENT(S). In the absence
of the President or in the event of his or her death, inability or refusal to
act, the Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order of seniority designated at the
time of their appointment, or in the absence of any designation, the senior
Vice President in length of service) shall perform the duties of the
President, and when so acting, shall have all the

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powers of and be subject to all the restrictions upon the President. Any Vice
President may sign, with the Secretary or Assistant Secretary, certificates for
shares of the Corporation; and shall perform such other duties and have such
authority as from time to time may be assigned to such Vice President by the
Chief Executive Officer, by the President or by the Board of Directors.

Section 6.7. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall (a)
keep minutes of all meetings of the shareholders and of the Board of Directors;
(b) authenticate records of the Corporation and attend to giving and serving all
notices of the Corporation as provided by these bylaws or as required by law;
(c) be custodian of the corporate seal, if any, the stock certificate books and
such other books, records and papers as the Board of Directors may direct; (d)
keep a stock record showing the names of all persons who are shareholders of the
Corporation, their post office addresses as furnished by each such shareholder,
and the number of shares of each class of stock held by them respectively, and
at least ten (10) days before each shareholders' meeting, prepare a complete
list of shareholders entitled to vote at such meeting arranged in alphabetical
order; (e) sign with the Chief Executive Officer, the President or a Vice
President certificates for shares of the Corporation, the issuance of which
shall have been duly authorized; and (f) in general, perform all duties incident
to the office of Secretary and such other duties as from time to time may be
assigned to the Secretary by the Chief Executive Officer or the Board of
Directors.

Section 6.8. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall (a)
have custody of and be responsible for all moneys and securities of the
Corporation, shall keep full and accurate records and accounts in books
belonging to the Corporation, showing the transactions of the Corporation,
its assets, liabilities and financial condition and shall see that all
expenditures are duly authorized and are evidenced by proper receipts and
vouchers; (b) deposit in the name of the Corporation in such depository or
depositories as are approved by the Board of Directors, all moneys that may
come into the Treasurer's hands for the Corporation's account; (c) prepare
annual financial statements that include a balance sheet as of the end of the
fiscal year and an income statement for that year; and (d) in general,
perform such duties as may from time to time be assigned to the Treasurer by
the Chief Executive Officer or by the Board of Directors.

Section 6.9. ASSISTANTS. There shall be such number of Assistant
Secretaries and Assistant Treasurers as the Board of Directors may from time to
time authorize and appoint. The Assistant Secretaries and Assistant Treasurers,
in general, shall perform such duties as shall be assigned to them by the
Secretary, or the Treasurer, respectively, or by the Chief Executive Officer or
the Board of Directors. The Board of Directors shall have the power to appoint
any person to act as assistant to any other officer, or to perform the duties of
any officer, whenever for any reason it is impracticable for such officer to act
personally, and such assistant or acting officer so appointed shall have the
power to perform all the duties of the office to which he or she is so appointed
to be assistant, or as to which he or she is so appointed to act, except as such
power may be otherwise defined or restricted by the Board of Directors.

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ARTICLE VII

SHARES, THEIR ISSUANCE AND TRANSFER

Section 7.1. CONSIDERATION FOR SHARES. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or intangible
property or benefit to the Corporation, including cash, promissory notes,
services performed, contracts for services to be performed, or other securities
of the Corporation. Before the Corporation issues shares, the Board of Directors
must determine that the consideration received or to be received for shares to
be issued is adequate.

Section 7.2. CERTIFICATES FOR SHARES. Every shareholder of the Corporation
shall be entitled to a certificate or certificates, to be in such form as the
Board of Directors shall prescribe, certifying the number and class of shares of
the Corporation owned by such shareholder.

Section 7.3. EXECUTION OF CERTIFICATES. The certificates for shares of
stock shall be numbered in the order in which they shall be issued and shall be
signed by the Chief Executive Officer, President or a Vice President and the
Secretary or an Assistant Secretary of the Corporation. The signatures of the
Chief Executive Officer, President or Vice President and the Secretary or
Assistant Secretary or other persons signing for the Corporation upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the Corporation itself or an
employee of the Corporation. In case any officer or other authorized person who
has signed or whose facsimile signature has been placed upon such certificate
for the Corporation shall have ceased to be such officer or employee or agent
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he or she were such officer or employee or agent at the date
of its issue.

Section 7.4. SHARE RECORD. A record shall be kept by the Secretary, or by
any other officer, employee or agent designated by the Board of Directors, of
the names and addresses of all shareholders and the number and class of shares
held by each represented by such certificates and the respective dates thereof
and in case of cancellation, the respective dates of cancellation.

Section 7.5. CANCELLATION. Every certificate surrendered to the Corporation
for exchange or transfer shall be canceled, and no new certificate or
certificates shall be issued in exchange for any existing certificate until such
existing certificate shall have been so canceled, except in cases provided in
Section 7.8 of these bylaws.

Section 7.6. TRANSFERS OF STOCK. Transfers of shares of the capital stock
of the Corporation shall be made only on the books of the Corporation by the
record holder thereof, or by his or her attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the
Corporation, and on surrender of the certificate or certificates for such
shares properly endorsed and the payment of all taxes thereon. The person in
whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof for all purposes as regards the Corporation;
provided, however, that whenever any transfer of shares shall be made for
collateral security, and not absolutely, such fact, if known to the Secretary
of the Corporation, shall be so expressed in the entry of transfer.

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Section 7.7. REGULATIONS. The Board of Directors may make such other rules
and regulations as it may deem expedient, not inconsistent with law, concerning
the issue, transfer and registration of certificates for shares of the stock of
the Corporation.

Section 7.8. LOST, DESTROYED, OR MUTILATED CERTIFICATES. In the event of
the loss, theft or destruction of any certificate of stock, another may be
issued in its place pursuant to such regulations as the Board of Directors may
establish concerning proof of such loss, theft or destruction and concerning the
giving of a satisfactory bond or bonds of indemnity.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.1. FACSIMILE SIGNATURES. In addition to the provisions for use of
facsimile signatures elsewhere specifically authorized in these bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.

Section 8.2. CORPORATE SEAL. The Corporation shall adopt an official seal.

Section 8.3. FISCAL YEAR. The fiscal year of the Corporation shall be from
the first day of January through the last day of December.

Section 8.4. BOOKS AND RECORDS. The books and records of the Corporation
shall be kept (except that the shareholder list must also be kept at the places
described in Section 3.6 of these bylaws) at the principal office of the
Corporation.

Section 8.5. VOTING OF STOCKS OWNED BY THE CORPORATION. In the absence of a
resolution of the Board of Directors to the contrary, the Chief Executive
Officer, the President and any Vice President acting within the scope of his or
her authority as provided in Section 6.6 of these bylaws, are authorized and
empowered on behalf of the Corporation to attend and vote, or to grant
discretionary proxies to be used, at any meeting of shareholders of any
corporation in which this Corporation holds or owns shares of stock, and in that
connection, on behalf of this Corporation, to execute a waiver of notice of any
such meeting or a written consent to action without a meeting. The Board of
Directors shall have authority to designate any officer or person as a proxy or
attorney-in fact to vote shares of stock in any other corporation in which this
Corporation may own or hold shares of stock.

Section 8.6. SHAREHOLDERS' RIGHT TO INFORMATION.

(a) A shareholder of the Corporation is entitled to inspect and copy,
during regular business hours at the Corporation's principal office, any of the
following records of the Corporation, if the shareholder gives the Corporation
written notice of the shareholder's demand at least five (5) business days
before the date on which the shareholder wishes to inspect a copy of any of the
following: (i) Articles or Restated Articles of Incorporation and all amendments
currently in effect, (ii) bylaws or restated bylaws and all amendments currently
in effect; (iii) resolutions adopted by the Board of Directors creating one or
more classes or series of shares and fixing their relative rights, preferences
and limitations, if shares issued pursuant to those resolutions are outstanding;
(iv) minutes of all shareholders' meetings and records of all action taken by
shareholders without a meeting, for the past three (3) years; (v) all written
communications to shareholders generally within the past three (3) years,
including the financial statements furnished for the past three (3) years; (vi)
A list of the names and business addresses of the Corporation's current
directors and officers; and (vii) The Corporation's most recent annual report
delivered to the Iowa Secretary of State.

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(b) If a shareholder makes a demand in good faith and for a proper purpose,
the shareholder describes with reasonable particularity the shareholder's
purpose and the records the shareholder desires to inspect, and the record
requested is directly connected with the shareholder's stated purpose, then the
shareholder shall be entitled to inspect and copy, during regular business hours
at a reasonable location specified by the Corporation, any of the following
records of the Corporation, provided the shareholder gives the Corporation
written notice of the shareholder's demand at least five (5) business days
before the date on which the shareholder wishes to inspect and copy any of the
following: (i) excerpts from minutes of any meeting of the Board of Directors,
records of any actions of a committee of the Board of Directors while acting in
place of the Board of Directors on behalf of the Corporation, minutes of any
meeting of the shareholders, and records of action taken by the shareholders or
the Board of Directors without a meeting to the extent not subject to inspection
under Section 8.6(a) of these bylaws; (ii) accounting records of the
Corporation; and (iii) the record of shareholders of the Corporation.

(c) The Corporation may impose a reasonable charge, covering the costs of
labor and material, for copies of any documents provided to the shareholder.
The charge shall not exceed the estimated cost of production or reproduction of
the records.

(d) Upon written request from a shareholder, the Corporation, at its
expense, shall furnish to that shareholder the annual financial statements of
the Corporation, including a balance sheet and income statement and, if the
annual financial statements are reported upon by a public accountant, that
report must accompany them.

<PAGE>

ARTICLE IX

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 9.1. INDEMNITY. The Corporation shall indemnify and advance
expenses to any person who was or is a party to or is threatened to be made a
party to any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (including a grand jury
proceeding) and whether formal or informal, by reason of the fact that such
person (a) is or was a director or officer of the Corporation, or (b) while a
director or officer of the Corporation, is or was serving at the request of the
Corporation as a director, officer, employee, agent, partner or trustee (or in a
similar capacity) of another corporation, partnership, joint venture, trust,
other enterprise, or employee benefit plan, to the maximum extent it is
empowered to indemnify and advance expenses to a director by Part E of Division
VIII of the Iowa Business Corporation Act as the same exists or may hereafter be
amended or changed (but, in the case of any such amendment or change, only to
the extent that such amendment or change empowers the Corporation to provide
broader indemnification than said law empowered the Corporation to provide prior
to such amendment or change), against reasonable expenses (including attorneys'
fees), judgments, fines, penalties, including an excise tax assessed with
respect to an employee benefit plan, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such claim, action, suit
or proceeding or any appeal thereof; provided, however, that except as provided
in Section 9.2 of these bylaws with respect to proceedings seeking to enforce
rights of indemnification, entitlement to such indemnification shall be
conditional upon the Corporation being afforded the opportunity to participate
directly on behalf of such person in such claim, action, suit or proceeding or
any settlement discussions relating thereto, and with respect to any settlement
or other nonadjudicated disposition of any threatened or pending claim, action,
suit or proceeding, entitlement to indemnification shall be further conditional
upon the prior approval by the Corporation of the proposed settlement or
nonadjudicated disposition. Such approval shall be made (a) by the Board of
Directors by majority vote of a quorum consisting of directors not at the time
parties to the claim, action, suit or proceeding, or (b) by special legal
counsel selected by the Board of Directors by majority vote of a quorum
consisting of directors not at the time parties to the claim, action, suit, or
proceeding, or, if the requisite quorum of the full board cannot be obtained
therefor, by a majority vote of the full board, in which selection of counsel
directors who are parties may participate. Approval or disapproval by the
Corporation of any proposed settlement or other nonadjudicated disposition shall
not subject the Corporation to any liability to or require indemnification or
reimbursement of any party whom the Corporation would not otherwise have been
required to indemnify or reimburse. The right to indemnification conferred in
this Article IX shall include the right to payment or reimbursement by the
Corporation of reasonable expenses incurred in connection with any such claim,
action, suit or proceeding in advance of its final disposition; provided,
however, that the payment or reimbursement of such expenses in advance of the
final disposition of such claim, action, suit or proceeding shall be made only
upon (a) delivery to the Corporation of a written undertaking, by or on behalf
of the person claiming indemnification under this Article IX to repay all
amounts so advanced if it shall ultimately be determined that such person
is not entitled to be indemnified under this Article IX or otherwise, or (b)
delivery to the Corporation of a written affirmation of such person's good faith
belief that such person has met the applicable standard of conduct necessary to
require indemnification by the Corporation pursuant to this Article IX or
otherwise, or (c) a determination that the facts then known to those making the
determination would not preclude indemnification under this Article IX.

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Section 9.2. PAYMENT. Any indemnification or advancement of expenses
required under this Article IX shall be made promptly upon, and in any event
within thirty (30) days after, the written request of the person entitled
thereto. If the Corporation denies a written request for indemnity or
advancement of expenses, in whole or in part, or if payment in full pursuant to
such request is not made within thirty (30) days of the date such request is
received by the Corporation, the person seeking indemnification or advancement
of expenses as granted by this Article IX may at any time within the applicable
statute of limitations bring suit against the Corporation in any court of
competent jurisdiction to establish such person's right to indemnity or
advancement of expenses. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification in any such
action or proceeding shall also be indemnified by the Corporation. It shall be a
defense to any action brought against the Corporation to compel indemnification
(other than an action brought to enforce a claim for the advancement of expenses
pursuant to this Article IX where the written affirmation of good faith or the
undertaking to repay as required above has been received by the Corporation)
that the claimant has not met the standard of conduct set forth in Section
490.851 of the Iowa Business Corporation Act, but the burden of proving such
defense shall be on the Corporation. Neither (a) the failure of the Corporation
(including its Board of Directors, special legal counsel or the shareholders) to
have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Section 490.851 of the
Iowa Business Corporation Act, nor (b) the fact that there has been an actual
determination by the Corporation (including its Board of Directors, special
legal counsel or the shareholders) that the claimant has not met such applicable
standard of conduct, shall create a presumption that the claimant has not met
the applicable standard of conduct. In the event that the applicable standard of
conduct has been met as to some claims, actions, suits or proceedings, but not
as to others, a person who has a right of indemnification pursuant to this
Article IX shall be indemnified against all expenses (including attorney fees)
actually and reasonably incurred by such person in connection with the claim,
action, suit or proceeding as to which the applicable standard has been met.
Nothing contained in this section shall limit the obligation, duty or ability of
the Corporation to indemnify such person as provided elsewhere in this Article
IX.

Section 9.3. CONTRACT. The provisions of this Article IX shall be deemed a
contract between the Corporation and each director and officer who serves in
such capacity at any time while this Article IX and the relevant provisions of
the Iowa Business Corporation Act are in effect, and any repeal or modification
of any such law or of this Article IX shall not adversely affect any rights or
obligations then existing with respect to any state of facts then or theretofore
existing or any claim, action, suit or proceeding theretofore or thereafter
brought or threatened based in whole or in part upon any such state of facts.

Section 9.4. WITNESSES. The Corporation shall indemnify and advance
expenses to any person who was or is a witness in or is threatened to be made a
witness in any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
a grand jury proceeding) and whether formal or informal, by reason of the fact
that such person (a) is or was a director or officer of the Corporation, or (b)
while a director or officer of the Corporation, is or was serving at the request
of the Corporation as a director, officer, employee, agent, partner or trustee
(or in a similar capacity) of another corporation, partnership, joint venture,
trust, other enterprise, or employee benefit plan, to the same extent that such
person would be entitled to indemnification and advancement of expenses under
this Article IX if such person were, or were threatened to be made, a party to
such claim, action, suit or proceeding, against reasonable expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with such claim, action, suit or proceeding or any appeal thereof.

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Section 9.5. NONEXCLUSIVE. Except as limited by section 490.851 of the Iowa
Business Corporation Act, the indemnification and advancement of expenses
provided by or granted pursuant to this Article IX shall not be deemed exclusive
of any other rights to which a person seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise; provided, however, that in no event shall
any such provision or agreement provide indemnification to a person who was or
is a director or officer of the Corporation (a) for a breach of a director's or
officer's duty of loyalty to the Corporation or its shareholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of the law, (c) for a transaction from which the person
seeking indemnification derived an improper personal benefit or (d) for
liability under section 490.833 of the Iowa Business Corporation Act.

Section 9.6. APPLICABILITY. This Article IX shall be applicable to all
claims, actions, suits or proceedings commenced after the effective date hereof,
whether arising from acts or omissions occurring before or after the effective
date hereof. Each person who is now serving or who shall hereafter serve as a
director or officer of the Corporation shall be deemed to be doing so in
reliance upon the rights of indemnification provided for in this Article IX, and
such rights of indemnification shall continue as to a person who has ceased to
be a director or officer, and shall inure to the benefit of the heirs,
executors, administrators and legal or personal representatives of such a
person. If this Article IX or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each director and officer of the Corporation to the
maximum extent permitted by any applicable portion of this Article IX that shall
not have been invalidated.

Section 9.7. INITIATION OF CLAIMS. Notwithstanding anything in this Article
IX to the contrary, except with respect to proceedings initiated to enforce
rights of indemnification to which such person is entitled under this Article IX
or otherwise, the Corporation shall indemnify any such person in connection with
a claim, action, suit or proceeding (or part thereof) initiated by such person
only if the initiation of such claim, action, suit or proceeding (or part
thereof) was authorized by the Board of Directors.

Section 9.8. INSURANCE. The Corporation may purchase and maintain
insurance, at its expense, to protect itself and any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust,
other enterprise, or employee benefit plan against any liability asserted
against such person and incurred by such person in such capacity, or arising out
of such person's status as such, whether or not the Corporation would have the
power to indemnify such person against such liability under the provisions of
this Article IX, the Iowa Business Corporation Act or otherwise. The Corporation
may create a trust fund, grant a security interest and/or use other means
(including, without limitation, letters of credit, surety bonds and/or similar
arrangements), as well as enter into contracts providing for indemnification to
the maximum extent permitted by law and including as part thereof any or all of
the foregoing, to ensure the payment of such sums as may become necessary to
effect full indemnification. The Corporation's obligation to make
indemnification and pay expenses pursuant to this Article IX shall be in excess
of any insurance purchased and maintained by the Corporation and such insurance
shall be primary. To the extent that indemnity or expenses of a person entitled
to indemnification and payment of expenses pursuant to this Article IX are paid
on behalf of or to such person by such insurance such payments shall be deemed
to be in satisfaction of the Corporation's obligation to such person to make
indemnification and pay expenses pursuant to this Article IX.

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ARTICLE X

EMERGENCY BYLAWS

Section l0.l. NATIONAL EMERGENCY. In the event of a national emergency
because of some catastrophic event which makes it impossible to conduct the
business of the Corporation in accordance with the Articles of Incorporation or
these bylaws, the provisions of this Article X (hereinafter referred to as the
Emergency Bylaws) shall become operative.

Section 10.2. EMERGENCY EXECUTIVE COMMITTEE.

(a) Upon the Emergency Bylaws becoming operative a meeting of the Executive
Committee may be called by any director or officer of the Corporation. Three (3)
members of the Executive Committee shall constitute a quorum for the transaction
of business at all such meetings of the Executive Committee.

(b) To the extent required to constitute a quorum at any such meeting of
the Executive Committee, first the available directors who are not members of
the Executive Committee in order of seniority as directors and then the
available officers of the Corporation in order of seniority determined
pursuant to Article VI of these bylaws shall be deemed members of the
Executive Committee for such meeting. The Board of Directors may, before
these Emergency Bylaws become operative, prepare a list of other officers of
the Corporation or other persons who shall be deemed members of the Executive
Committee at any meeting of the Executive Committee pursuant to these
Emergency Bylaws in the event that there are no directors or officers
determined pursuant to Article VI of these bylaws capable of serving as
members of the Executive Committee. The list shall specify the order of
priority in which such persons shall serve.

(c) Any vacancy on the Executive Committee pursuant to these Emergency
Bylaws may be filled at any meeting of the Executive Committee by a majority of
the members, though less than a quorum, or by the sole remaining member. Such
members shall serve until the annual meeting of the Board of Directors following
the end of the national emergency or until the successors are appointed and
qualified.

Section 10.3. ALTERNATIVE PLACES OF BUSINESS. The Board of Directors,
before these Emergency Bylaws become operative, may, effective when these
Emergency Bylaws are operative, designate several alternate places of business.

Section 10.4. DURATION. To the extent not inconsistent with this Section,
the bylaws of the Corporation shall remain in effect during the national
emergency and upon its termination these Emergency Bylaws shall cease to be
operative.

ARTICLE XI

AMENDMENTS

Section 11.1. AMENDMENTS TO BYLAWS. These bylaws may be amended or repealed
by the Board of Directors or by the shareholders; provided, however, that the
shareholders may from time to time specify particular provisions of the bylaws
which shall not be amended or repealed by the Board of Directors.

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AMENDED AND RESTATED ARTICLES OF INCORPORATION

AMERUS LIFE HOLDINGS, INC.

TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:

Pursuant to Section 1007 of the Iowa Business Corporation Act, Chapter 490,
Code of Iowa (1995), the corporation hereinafter named ("corporation"), does
hereby adopt the following Amended and Restated Articles of Incorporation:

1. The name of the corporation is AmerUs Life Holdings, Inc.

2. The Articles of Incorporation of the corporation are amended and
restated so as henceforth to read in their entirety as follows:

ARTICLE I

The name of the corporation is AmerUs Life Holdings, Inc.

ARTICLE II

The corporation shall have perpetual duration.

ARTICLE III

The purpose for which this corporation is organized is the transaction of
any and all lawful business for which corporations may be organized under the
Iowa Business Corporation Act.

ARTICLE IV

The aggregate number of shares of all classes of capital stock which the
corporation shall have authority to issue is one hundred and forty-five million
(145,000,000) shares, of which twenty million (20,000,000) shares shall be
Preferred Stock, no par value, issuable in one or more series, seventy-five
million (75,000,000) shares shall be Class A Common Stock, no par value, and
fifty million (50,000,000) shares shall be Class B Common Stock, no par value.

<PAGE>

PREFERRED STOCK. The board of directors of the corporation is hereby
expressly authorized, at any time and from time to time, to divide the
shares of Preferred Stock into one or more series, to issue from time to
time in whole or in part the shares of Preferred Stock or the shares of any
series thereof, and in the resolution or resolutions providing for the
issue of shares of Preferred Stock or of a particular series to fix and
determine the voting powers, full of limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof
that may be desired, to the fullest extent now or hereafter permitted by
Section 490.602 of the Iowa Business Corporation Act, as amended from time
to time; provided, however, in no event shall Preferred Stock have more
than one vote for each share of Preferred Stock.

CLASS A COMMON STOCK AND CLASS B COMMON STOCK.(A)(1) The powers,
preferences and rights of the Class A Common Stock and Class B Common
Stock, and the qualifications, limitations or restrictions thereof, shall
be in all respects identical, except as otherwise required by law or
expressly provided in these articles of incorporation.

(2) No person or persons shall own or have a beneficial interest in
shares of Class B Common Stock of the corporation except America Mutual
Holding Company, an Iowa mutual insurance holding company ("AMHC"), a
subsidiary of AMHC or any other mutual insurance holding company or
intermediate holding company which is expressly authorized by applicable
law (including, without limitation, the Iowa Code and the Commissioner of
Insurance of the State of Iowa to the extent that Iowa law is applicable)
to own or have a beneficial interest in Class B Common Stock (a "Permitted
Class B Holder"). Except as otherwise permitted by the second sentence of
Paragraph D (1) and Paragraph D (8) hereof, the number of outstanding
shares of Class A Common Stock (excluding shares of Class A Common Stock
owned by a Permitted Class B Holder) shall not at any time exceed the
number of outstanding shares of Class B Common Stock plus outstanding
shares of Class A Common Stock owned by a Permitted Class B Holder by a
ratio of more than three to one.

(B)(1) At each annual or special meeting of shareholders, each holder
of Class A Common Stock shall be entitled to one (1) vote in person or by
proxy for each share of Class A Common Stock standing in his name on the
stock transfer records of the corporation and, except as provided in the
next succeeding sentence and in Paragraph (E) hereof, each holder of Class
B Common Stock shall be entitled to one (1) vote in person or by proxy for
each share of Class B Common Stock standing in his name on the stock
transfer records of the corporation. If, on the record for determining
shares eligible to vote, the number of any outstanding shares of Class A
Common Stock (excluding shares of Class A Common Stock owned by a
Permitted Class B Holder) and shares of Preferred Stock having voting
rights, if any, (excluding shares of Preferred Stock owned by a Permitted
Class B Holder) equals or exceeds the number of outstanding shares of Class
B Common Stock, the voting rights for each share of Class B Common Stock
shall be equal to the aggregate number of shares of Class A Common Stock
(excluding shares

<PAGE>

of Class A Common Stock owned by a Permitted Class B Holder) and Preferred
Stock, having voting rights, if any, (excluding shares of Preferred Stock
owned by a Permitted Class B Holder) plus one divided by the number of
outstanding shares of Class B Common Stock. Except as set forth herein or
pursuant hereto, all actions submitted to a vote of shareholders shall be
voted on by the holders of Class A Common Stock and Class B Common Stock
(as well as the holders of any series of Preferred Stock, if any , entitled
to vote thereon) voting together as a single class.

(2) The holders of Class A Common Stock and Class B Common Stock
shall each be entitled to vote separately as a class with respect to (i)
amendments to this certificate of incorporation that alter or change the
powers, preferences or special rights of their respective class of stock
so as to affect them adversely and (ii) such other matters as may require
class votes under the Iowa Business Corporation Act.

(C) If and when dividends on the Class A Common Stock and Class B
Common Stock are declared payable from time to time by the board of
directors as provided in subdivision (H) of these articles of
incorporation, whether payable in cash, in property or in shares of stock
of the corporation, the holders of Class A Common Stock and the holders of
Class B Common Stock shall be entitled to share equally, on a per share
basis, in such dividends, except that if dividends are declared that are
payable in shares of Class A Common Stock or Class B Common Stock,
dividends shall be declared that are payable at the same rate on both
classes of stock and the dividends payable in shares of Class B Common
Stock shall be payable to holders of that class of stock and the dividends
payable in shares of Class B Common Stock shall be payable to holders of
that class of stock. If the corporation shall in any manner subdivide or
combine the outstanding shares of Class A Common Stock or Class B Common
Stock, the outstanding shares of the other such class of stock shall be
proportionally subdivided or combined in the same manner and on the same
basis as the outstanding shares of Class A Common Stock or Class B Common
Stock as the case may be, have been subdivided or combined.

(D)(1) Subject to the provisions of paragraph A(2) which requires a
certain minimum number of shares of Class B Common Stock to be outstanding
at all times, the holder of each outstanding share of Class B Common Stock
shall have the right at any time, or from time to time, at such holder's
option, to convert such share into one fully paid and non-assessable share
of Class A Common Stock, on and subject to the terms and conditions herein
set forth. In the event that Section 521A.14, subsection 7, or any
successor provision, of the Iowa Code ceases to require that a mutual
insurance holding company or an intermediate holding company own a
specified percentage of the capital stock of the Company having voting
rights or such requirement can be maintained even after conversion of the
Class B Common Stock to Class A Common Stock, the holder of each
outstanding share of Class B Common Stock shall have the right at any time,
or from time to time, at such holder's option, to convert such shares into
one fully paid and non-assessable share of Class A Common Stock, to the
extent permitted by the Iowa insurance laws and on and subject to the terms
and conditions herein set forth.

<PAGE>

(2) In order to exercise his, her or its conversion privilege, the
holder of any shares of Class B Common Stock to be converted shall present
and surrender the certificate representing such shares during usual business
hours at any office or agency of the corporation maintained for the transfer
of Class B Common Stock and shall deliver a written notice of the election
of the holder to convert the shares represented by such certificate or any
portion thereof specified in such notice. Such notice shall also state the
name or names (with address) in which the certificate or certificates for
shares of Class A Common Stock which shall be issuable on such conversion
shall be issued. If so required by the corporation, any certificate for
shares surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the corporation, duly executed by the
holder of such shares or his duly authorized representative. Each
conversion of shares of Class B Common Stock shall be deemed to have been
effected on the date (the "conversion date") on which the certificate or
certificates representing such shares shall have been surrendered and such
notice and any required instruments of transfer shall have been received as
aforesaid, and the person or persons in which name or names any certificate
or certificates for shares of Class A Common Stock shall be issuable on such
conversion shall be deemed to have become immediately prior to the close of
business on the conversion date the holder or holders of record of the
shares of Class A Common Stock represented thereby. The corporation shall
not permit a conversion of class B Common Stock to Class A Common Stock to
the extent necessary to maintain the minimum number of outstanding shares of
Class B Common Stock required by paragraph A(2).

(3) As promptly as practicable after the presentation and surrender
for conversion, as herein provided, of any certificate for shares of Class
B Common Stock, the corporation shall issue and deliver at such office or
agency, to or upon the written order of the holder thereof, certificates
for the number of shares of Class A Common Stock issuable upon such
conversion. In case any certificate for shares of Class B Common Stock
shall be surrendered for conversion of a part only of the shares
represented thereby, the corporation shall deliver at such office or
agency, to or upon the written order of the holder thereof, a certificate
or certificates for the number of shares of Class B Common Stock
represented by such surrendered certificate which are not being converted.
The issuance of certificates for shares of Class A Common Stock issuable
upon the conversion of shares of Class B Common Stock shall be made without
charge to the converting holder for any tax imposed on the corporation in
respect of the issue thereof. The corporation shall not, however, be
required to pay any tax which may be payable with respect to any transfer
involved in the issue and delivery of any certificate in a name other than
that of the holder of the shares being converted, and the corporation shall
not be required to issue or deliver any such certificate unless and until
the person requesting the issue thereof have paid to the corporation the
amount of such tax or has established to the satisfaction of the
corporation that such tax has been paid.

(4) Upon any conversion of shares of Class B Common Stock into
shares of Class A Common Stock pursuant hereto, no adjustment with respect
to dividends shall be made,

<PAGE>

only those dividends shall be payable on the shares so converted as may be
declared and may be payable to holders of record of shares of Class B
Common Stock on a date prior to the conversion date with respect to the
shares so converted; and only those dividends shall be payable on shares of
Class A Common Stock issued upon such conversion as may be declared and may
be payable to holders of record of shares of Class A Common Stock on or
after such conversion date.

(5) In case of any consolidation or merger of the corporation as a
result of which the holders of Class A Common Stock shall be entitled to
receive stock, other securities or other property with respect to or in
exchange for Class A Common Stock or in case of any sale or conveyance of
all or substantially all the property or business of the corporation as an
entirety, a holder of a share of Class B Common Stock shall have the right
thereafter, so long as the conversion right hereunder shall exist, to
convert such share into the kind and amount of shares of stock and other
securities and properties receivable upon such consolidation, merger, sale
or conveyance by a holder of one share of Class A Common Stock and shall
have no other conversion right with regard to such share. The provisions
of this subparagraph shall similarly apply to successive consolidations,
mergers, sales or conveyances.

(6) All shares of Class B Common Stock which shall have been
surrendered for conversion as provided in this paragraph (D) shall no
longer be deemed to be outstanding, and all rights with respect to such
shares, including the rights, if any, to receive notices and to vote, shall
thereupon cease and terminate, except only the right of the holders
thereof, subject to the provisions of subparagraph (3) of this paragraph
(D), to receive shares of Class A Common Stock in exchange therefor.

(7) Such number of shares of Class A Common Stock as may from time to
time be required for such purpose shall be reserved for issuance upon
conversion of outstanding shares of Class B Common Stock; provided that
nothing contained herein shall be construed to preclude the corporation
from satisfying its obligations in respect of conversion by the delivery of
shares of Class A Common Stock which are held in the treasury of the
corporation. The corporation will endeavor to list the shares of Class A
Common Stock required to be delivered upon conversion prior to such
delivery upon each national securities exchange, if any, upon which the
outstanding Class A Common Stock is listed at the time of such delivery.

(8) In the event that AMHC (or any successor mutual insurance holding
company) is converted from a mutual insurance holding company to a stock
company pursuant to Chapter 508B of the Iowa Code or any successor
provision, then, immediately, the outstanding shares of Class B Common
Stock shall automatically be converted into shares of Class A Common Stock
on the date and at the same time that the plan of conversion relating to
AMHC (or any successor mutual insurance holding company) is consummated.

(E)(1) Notwithstanding any other provision of these articles of
incorporation, the

<PAGE>

shares of Class B Common Stock plus outstanding shares of Class A Common
Stock owned by a Permitted Class B Holder shall at all times carry the
right to cast at least 50.1% of the votes of the outstanding shares of
capital stock of the corporation (the "Required Percentage"). A Permitted
Class B Holder may pledge, subject to a security interest or lien,
encumber, or otherwise hypothecate shares of Class B Common Stock only to
the extent such shares exceed the Required Percentage.

(2) Except as authorized by Paragraph (D) (with respect of the
conversion of Class B Common Stock to Class A Common Stock) and Paragraph
(E)(1) hereof, no shares of Class B Common Stock shall be conveyed,
transferred, assigned, pledged, subjected to a security interest or lien,
encumbered, or otherwise hypothecated or alienated by a Permitted Class B
Holder. Any conveyance, transfer, assignment, pledge, security interest,
lien, encumbrance or hypothecation or alienation of, in or on the Class B
Common Stock in violation of paragraph E(1) shall be void and ineffective
against the corporation in inverse order of the date of such conveyance,
transfer, assignment, pledge, security interest, lien, encumbrance, or
hypothecation or alienation as to the shares necessary to comply with the
provisions of Paragraph E(1).

(3) Any transfer, or attempted or purported transfer of any shares of
Class B Common Stock or any interest therein or right thereof, which would
result in the ownership or control by one or more persons who is not a
Permitted Class B Holder of any aggregate percentage of shares of Class B
Common Stock which is less than the Required Percentage shall, to the full
extent permitted by law, and for so long as such deficiency shall exist, be
void and shall be ineffective against the corporation, and the corporation
shall not recognize, to the extent of such deficiency, the purported
transferee as a shareholder of the corporation for any purpose whatsoever
except the purpose of making a further transfer to a person who is a
Permitted Class B Holder.

(4) The corporation may, as a condition precedent to the transfer or
the registration of transfer of shares of Class B Common Stock, require
the furnishing of such representations, affidavits or other proof as it
deems necessary to establish that such transferee is a Permitted Class B
Holder or that the Permitted Class B Holder owns the Required Percentage.
The Board of Directors is authorized to adopt such bylaws and to take such
other actions as it may deem necessary or desirable to implement the
restriction set forth in Paragraph (E).

(F)(1) Shares of Class B Common Stock shall be registered in the
name(s) of the beneficial owners(s) thereof (as hereafter defined) and not
in "street" or "nominee" names. For the purposes of this paragraph (F),
the term "beneficial owner(s)" of any shares of Class B Common Stock shall
mean the person or persons who possess the power to vote or dispose, or to
direct the voting or disposition, of such shares.

(2) The corporation shall note on the certificates representing the
shares of Class B Common Stock that there are restrictions on transfer and
registration of transfer imposed

<PAGE>

by paragraph (E) and this paragraph (F) and any other appropriate legend or
legends required by the board of directors of the corporation.

(G) The Class A Common Stock and Class B Common Stock are subject to
all the powers, rights, privileges, preferences and priorities of the
Preferred Stock as may be stated herein and as shall be stated and
expressed in any resolution or resolutions adopted by the board of
directors pursuant to authority expressly granted to and vested in it by
the provisions of this Article IV.

(H) After dividends to which the holders of Preferred Stock may then
be entitled under the resolutions creating any series thereof have been
declared and paid or set aside in funds for this purpose, dividends may be
declared and paid to the holders of Class A Common Stock and Class B Common
Stock in cash, property, or other securities of the corporation out of any
net profits or net assets of the corporation legally available therefor.

(I) Upon any liquidation, dissolution or winding-up of the
corporation, whether voluntary or involuntary, and after the holders, if
any, of the Preferred Stock of each series shall have been paid in full the
amounts to which they respectively shall be entitled or a sum sufficient
for such payment in full shall have been set aside, the remaining net
assets of the corporation shall be distributed pro rate to the holders of
the Class A Common Stock and Class B Common Stock in accordance with their
respective rights and interests, to the exclusion of the holders of the
Preferred Stock.

(J) Except as otherwise provided by law or by the resolution or
resolutions of the board of directors providing for the issue of any series
of the Preferred Stock, the holders of Class A Common Stock and Class B
Common Stock shall have the exclusive right to vote for the election of
directors and for all other purposes, each holder of the Class A Common
Stock and Class B Common Stock being entitled to vote as provided in
paragraph (B) and (E)(1).

ARTICLE V

The business and affairs of the corporation shall be under the direction of
the Board of Directors. The authorized number of directors shall in no case be
fewer than seven (7) or more than twenty-one (21). The exact number of
directors shall be fixed from time to time by the Board of Directors pursuant to
a resolution adopted by the affirmative vote of a majority of the entire Board
of Directors.

A. The directors of the corporation, other than those who may be
elected by the holders of any class or series of preferred stock, shall be
divided into three classes, as nearly equal in number as reasonably
possible: the first class, the second class and the third class. Each
such director shall serve for a term ending on the third annual meeting
of shareholders following the annual meeting at which such director was
elected, provided,

<PAGE>

however, that the directors first elected to the first class shall serve
for a term ending upon the election of directors at the annual meeting next
following the end of calendar year 1996, the directors first elected to the
second class shall serve for a term ending upon the election of directors
at the annual meeting next following the end of calendar year 1997, and the
directors first elected to the third class shall serve for a term ending
upon the election of directors at the annual meeting next following the end
of calendar year 1998.

B. At each annual election commencing at the first annual meeting
next following the end of calendar year 1996, the successors to the class
of directors whose term expires at that time shall be elected by the
shareholders to hold office for a term of three years to succeed those
directors whose term expires, so that the term of one class of directors
shall expire each year.

C. Notwithstanding the requirement that the three classes of
directors shall be as nearly equal in number of directors as reasonably
possible, in the event of any change in the authorized number of directors,
each director then continuing to serve as such shall nevertheless continue
as a director of the class of which he or she is a member until the
expiration of his or her current term, or his or her prior resignation,
disqualification, disability or removal. There shall be no cumulative
voting in the election of directors.

D. Subject to the rights of holders of a class or series of
preferred stock, any vacancy on the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office, an
increase in the number of directorships or other cause shall be filled only
by the affirmative vote of a majority of directors then in office, although
less than a quorum or by the sole remaining director. A director so chosen
shall hold office for a term expiring at the annual meeting at which the
term of the class to which he or she has been elected expires. If the
number of directors is changed, any increase or decrease shall be
apportioned among the three classes by a two-thirds (2/3) vote of the
directors then in office. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.

E. Advance notice of shareholder nominations for the election of
directors and of business to be brought by shareholders before any meeting
of the shareholders of the corporation shall be given in the manner
provided in the Bylaws of the corporation.

ARTICLE VI

The corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation in the manner now
or hereafter prescribed by statute. Notwithstanding the foregoing, the
affirmative vote of at least a majority of the outstanding shares of Class A
Common Stock (excluding outstanding shares of Class A Common Stock owned by
any Permitted Class B Holder) shall be required to amend or repeal the
second sentence of paragraph (A)(2) of Article IV of these Articles of
Incorporation.

<PAGE>

ARTICLE VII

So long as AMHC is a mutual insurance holding company within the meaning
of Section 521A.14 of the Iowa Code or any successor provision, AMHC or any
Permitted Class B Holder shall have the preemptive right to purchase unissued
shares of voting stock (including, without limitation, Class A Common Stock
and Class B Common Stock) or any securities convertible into or exchangeable
for shares of voting stock or any options, warrants or rights to acquire
shares of voting stock ("Equity Purchase Rights") to the extent required for
AMHC or any Permitted Class B Holder to comply with the provisions of the
second sentence of paragraph A(2) of Article IV. The corporation is
authorized and empowered to enter into an agreement with AMHC and/or a
Permitted Class B Holder relating to Equity Purchase Rights.

ARTICLE VIII

A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for a breach of the director's
duty of loyalty to the corporation or its shareholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for a transaction from which the director derives an
improper personal benefit, or (iv) under section 490.833 of the Iowa Business
Corporation Act. If the Iowa Business Corporation Act is hereafter amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of the corporation, in addition to the
limitation on personal liability provided herein, shall be eliminated or limited
to the extent of such amendment, automatically and without any further action,
to the maximum extent permitted by law. Any repeal or modification of this
Article by the shareholders of the corporation shall be prospective only and
shall not adversely affect any limitation on the personal liability or any other
right or protection of a director of the corporation with respect to any state
of facts existing at or prior to the time of such repeal or modification.

ARTICLE IX

The street address of the initial registered office of the corporation is
418 Sixth Avenue, Des Moines, Iowa 50309 and the name of the initial registered
agent at such address is James A. Smallenberger.

ARTICLE X

The name and address of the incorporator is:

American Mutual Holding Company
418 Sixth Avenue
Des Moines, Iowa 50309

3. The duly adopted Amended and Restated Articles of Incorporation supersedes
the original

<PAGE>

articles of incorporation and all amendments therein.

4. The Amended and Restated Articles of Incorporation amend the original
articles of incorporation which requires shareholders approval. The
designation, the number of outstanding shares, the number entitled to be
voted by the sole voting group entitled to vote on the said Amended and
Restated Articles of Incorporation, and the number of shares of the voting
group which indisputably voted with respect to the said Amended and
Restated Articles of Incorporation are as follows:

(a) Designation of voting group: Common Stock

(b) Number of outstanding shares of voting group:
10,000

(c) Number of shares of voting group entitled to vote separately on the
Amended and Restated Articles of Incorporation: None

(d) Number of shares of voting group which indisputably voted with respect
to the Amended and Restated Articles of Incorporation: 10,000

5. The total number of undisputed votes cast for the said Amended and Restated
Articles of Incorporation by the voting group entitled to vote on the said
Amended and Restated Articles of Incorporation is as follows:

Number of undisputed votes of voting group cast for the Amended and
Restated Articles of Incorporation: 10,000

6. The said number of votes cast for the said Amended and Restated Articles of
Incorporation was sufficient for the approval thereof by the said voting
group.

7. The effective time and date of these Amended and Restated Articles of
Incorporation shall be on filing with the Iowa Secretary of State.

Dated this ______ day of __________, 1996.

AmerUs Life Holdings, Inc.

By:
------------------------------------------
Roger K. Brooks, Chairman, President and
Chief Executive Officer

By:
------------------------------------------
James A. Smallenberger, Secretary

<PAGE>

STATE OF IOWA )
) SS
COUNTY OF POLK )

On this_____day of____________, 1996, before me, the undersigned, a Notary
Public in and for said State, personally appeared Roger K. Brooks and James A.
Smallenberger, being by me duly sworn, did say that they are the Chairman
President and Chief Executive Officer and Secretary, respectively, of AmerUs
Life Holdings, Inc., executing the within and foregoing instrument; that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors; and the said Chairman President and Chief Executive Officer and
Secretary, as such officers, acknowledged the execution of said instrument to be
the voluntary act and deed of said corporation, by it and by them voluntarily
executed.

----------------------------------------
Notary Public in and for said State

<PAGE>

CERTIFICATE OF APPROVAL
ATTORNEY GENERAL

Pursuant to provisions of the Iowa Code, the undersigned approves the
Amended and Restated Articles of Incorporation of AmerUs Life Holdings, Inc.,
and finds them in conformance with the laws of the United States and with the
laws and Constitution of the State of Iowa.

THOMAS J. MILLLER
Attorney General of Iowa

- ------------- -----------------------------------
Date By: SCOTT M. GALENBECK
Assistant Attorney General

CERTIFICATE OF APPROVAL
COMMISSIONER OF INSURANCE

Pursuant to the provisions of the Iowa Code, the undersigned approves the
Amended and Restated Articles of Incorporation of AmerUs Life Holdings, Inc.

THERESE M. VAUGHN
Commissioner of Insurance

- ------------- -----------------------------------
Date By: ROBERT L. HOWE
Deputy Commissioner and
Chief Examiner

<PAGE>

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of August 24, 1994, by and between
American Mutual Life Insurance Company, an Iowa mutual life insurance company
("American"), and Central Life Assurance Company, an Iowa mutual life insurance
company ("Central") (American and Central being hereinafter sometimes
collectively referred to as the "Constituent Companies").

WHEREAS, the both American and Central are organized pursuant to Chapters
491 and 508, Code of Iowa (1993), as mutual life insurance companies and neither
has authorized capital stock; and

WHEREAS, the Boards of Directors of American and Central deem it advisable
and in the best interests of the Policyowners (as hereinafter defined) of their
respective companies to effect the merger of American with and into Central (the
"Merger") upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, American and Central hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 DEFINITIONS. When used in this Agreement, the following words
or phrases have the following meanings and the following definitions shall be
equally applicable to both the singular and plural forms of any of the terms
herein defined:

"After-Tax Basis" shall mean tax effecting any gross amount by deducting
the federal income tax benefit which shall be deemed to be thirty-five percent
(35%) of the gross amount.

"Agreement" shall mean this Agreement and Plan of Merger, as it may be
amended, supplemented or restated from time to time.

"American" shall have the meaning set forth in the preamble to this
Agreement.

"American Adverse Effect" shall mean a material adverse effect on the
Condition of American and the American Subsidiaries, taken as a whole, resulting
from other than general economic or financial conditions which do not affect
American and the American Subsidiaries uniquely.

"American Benefit Plans" shall have the meaning set forth in Section 4.13
hereof.

"American Designees" shall have the meaning set forth in Section 6.9
hereof.

<PAGE>

"American Disclosure Schedule" shall mean the disclosure schedule
previously delivered by American to Central.

"American GAAP Financial Statements" shall have the meaning set forth in
Section 4.6 hereof.

"American Group" shall mean American and the American Subsidiaries.

"American Insurer" shall mean American and each American Subsidiary that is
authorized to transact an insurance or reinsurance business.

"American Material Change" shall mean a material adverse effect on the
financial condition, business, results of operations and/or properties or other
Assets of American and the American Subsidiaries, taken as a whole, resulting
from other than general economic or financial conditions which do not affect
American and the American Subsidiaries uniquely and which may reasonably be
expected to result in damages or expenses of twelve million five hundred
thousand dollars ($12,500,000) or more on an After-Tax Basis; provided, that,
for purposes of this Agreement, an American Material Change shall not occur
solely as a direct result of any rating or any lowering of a rating by any
rating agency or agencies of American or any American Subsidiary or the
Surviving Company or any of its Subsidiaries; provided, further, that, in
determining whether an American Material Change has occurred or will occur for
purposes of this Agreement, no consideration shall be given to the direct or
indirect effect of any of the following events to the extent such events occur
after the date of this Agreement: (i) any reduction in the aggregate Surplus
plus AVR of the American Insurers that has already been disclosed in the
American Disclosure Schedule; (ii) any reduction in the aggregate annualized
premiums on individual life policies and universal life policies of the American
Insurers; or (iii) any increase in the aggregate amount of policy loans
outstanding from American Insurers.

"American Operating Facility" shall mean any operating facility which is
owned by American or any American Subsidiary or in the management of which
American or any American Subsidiary actively participates.

"American Pension Plans" shall have the meaning set forth in Section 4.13I
hereof.

"American Subsidiaries" shall mean the Subsidiaries of American.

"American Welfare Plans" shall have the meaning set forth in Section 4.13II
hereof.

"Annual Statements" shall mean the annual statements filed pursuant to
state insurance Laws, in conformity with SAP.

"Articles" shall have the meaning set forth in Section 2.6 hereof.

"Articles of Merger" shall mean the articles of merger to be filed with the
Iowa Secretary as set forth in Section 2.4 hereof.

-2-

<PAGE>

"Assets" shall mean all rights, titles, franchises and interests in and to
every species of property, real, personal and mixed, tangible and intangible,
and things in action thereunto belonging, including, without limitation, cash
and cash equivalents, securities (including, without limitation, exempted
securities under the Securities Act), receivables, recoverables (from
reinsurance and otherwise), deposits and advances, loans, agent balances, real
property (together with buildings, structures and the improvements thereon,
fixtures contained therein and appurtenances thereto and easements and other
rights relating thereto), machinery, equipment, furniture, fixtures, leasehold
improvements, vehicles and other assets or property, leases, licenses, permits,
approvals, authorizations, joint venture agreements, contracts or commitments,
whether written or oral, policy forms, training materials, underwriting manuals,
lists of Policyowners and agents, processes, trade secrets, know-how, computer
software, computer programs and source codes, protected formulae., all other
Intellectual Property, research, goodwill, prepaid expenses, books of account,
records, files, invoices, data, rights, claims and privileges and any other
assets whatsoever.

"Business" shall mean, as to a Person, the business and operations of such
Person.

"By-laws" shall have the meaning set forth in Section 2.6 hereof.

"Central" shall have the meaning set forth in the preamble to this
Agreement.

"Central Adverse Effect" shall mean a material adverse effect on the
Condition of Central and the Central Subsidiaries, taken as a whole, resulting
from other than general economic or financial conditions which do not affect
Central and the Central Subsidiaries uniquely.

"Central Benefit Plans" shall have the meaning set forth in Section 5.13
hereof.

"Central Designees" shall have the meaning set forth in Section 6.9 hereof.

"Central Disclosure Schedule" shall mean the disclosure schedule previously
delivered by Central to American.

"Central GAAP Financial Statements" shall have the meaning set forth in
Section 5.6 hereof.

"Central Group" shall mean Central and the Central Subsidiaries.

"Central Insurer" shall mean Central and each Central Subsidiary that is
authorized to transact an insurance or reinsurance business.

"Central Material Change" shall mean a material adverse effect on the
financial condition, business, results of operations and/or properties or other
Assets of Central and the Central Subsidiaries, taken as a whole, resulting from
other than general economic or financial conditions which do not affect Central
and the Central Subsidiaries uniquely and which may reasonably be expected to
result in damages or expenses of twelve million five hundred thousand dollars
($12,500,000) or more on an After-Tax Basis; provided, that, for purposes of
this Agreement, a Central Material Change shall not occur solely as a direct
result of any rating or any lowering of a rating by any rating agency or
agencies of Central or any Central Subsidiary or the Surviving

-3-

<PAGE>

Company or any of its Subsidiaries; provided, further, that, in determining
whether a Central Material Change has occurred or will occur for purposes of
this Agreement, no consideration shall be given to the direct or indirect effect
of any of the following events to the extent such events occur after the date of
this Agreement: (i) any reduction in the aggregate Surplus plus AVR of the
Central Insurers that has already been disclosed in the Central Disclosure
Schedule; (ii) any reduction in the aggregate annualized premiums on individual
life policies and universal life policies of the Central Insurers; or (iii) any
increase in the aggregate amount of policy loans outstanding from Central
Insurers.

"Central Operating Facility" shall mean any operating facility which is
owned by Central or any Central Subsidiary or in the management of which Central
or any Central Subsidiary actively participates.

"Central Pension Plans" shall have the meaning set forth in Section 5.13I
hereof.

"Central Subsidiaries" shall mean the Subsidiaries of Central.

"Central Welfare Plans" shall have the meaning set forth in Section 5.13II
hereof.

"Closing Date of the Merger" shall have the meaning set forth in Section
2.4 hereof.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Condition" shall mean, as to a Person, the financial condition, business,
results of operations, prospects and/or properties or other Assets of such
Person.

"Confidentiality Agreement" shall have the meaning set forth in Section 9.6
hereof.

"Consent or Filing" shall have the meaning set forth in Section 4.4(b)
hereof for American and in Section 5.4(b) hereof for Central.

"Constituent Companies" shall have the meaning set forth in the preamble to
this Agreement.

"Contract" shall mean a contract, indenture, bond, note, mortgage, deed of
trust, lease, agreement or commitment, whether written or oral, including,
without limitation, an Insurance Contract.

"DOL" shall mean the Untied States Department of Labor or any successor
agency.

"Effective Time of the Merger" shall have the meaning set forth in Section
2.5 hereof.

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"Employee Benefit Plans" shall mean all written or oral plans, Contracts,
or other arrangements for the benefit or advantage of any officer, director,
employee, agent, or contractor, or any group of such Persons, including, without
limitation, plans described in Section 3(3) of ERISA, deferred compensation
arrangements, supplemental executive retirement plans, medical, disability,
life, and other subsidies, use of an automobile, payment of club dues, and any
other similar arrangements.

"Environmental Claim" shall mean any written notice by a Person alleging
actual or potential Liability (including, without limitation, potential
Liability for any investigatory cost, cleanup cost, governmental response cost,
natural resources damage, property damage, personal injury, or penalty) arising
out of, based on or resulting from (a) the presence, transport, disposal,
discharge, or release, of any Material of Environmental Concern at any location,
whether or not owned by American or Central, as the case may be, or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.

"Environmental Laws" shall mean all federal, state, local and foreign Laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, Laws relating to
emissions, discharges, releases or threatened releases, or the presence of
Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, existence, treatment, storage, disposal,
transport, recycling, reporting or handling of Materials of Environmental
Concern.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

"Financial Statements" shall mean balance sheets, statements of income and
changes in financial position, including, without limitation, all notes,
schedules, exhibits and other attachments thereto, whether consolidated,
combined or separate or audited or unaudited.

"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis, subject to, in the case of unaudited interim Financial
Statements, normal year-end adjustments and, in the case of all unaudited
Financial Statements, the absence of footnote disclosure.

"Governmental Entity" shall mean a court, legislature, governmental agency,
commission or administrative or regulatory authority or instrumentality,
domestic or foreign.

"Home Office" shall have the meaning set forth in Section 2.7 hereof.

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the regulations promulgated thereunder.

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"Indemnified Liabilities" shall have the meaning set forth in Section
6.6(a) hereof.

"Indemnified Parties" shall have the meaning set forth in Section 6.6(a)
hereof.

"Insurance Contract" shall mean any Contract of insurance or annuity.

"Insurance License" shall mean a License granted by a Governmental Entity
to transact an insurance or reinsurance business.

"Investment Assets" shall mean bonds, notes, debentures, mortgage loans,
collateral loans and all other instruments of indebtedness, stocks, partnership
interests and other equity interests (including, without limitation, equity
interests in Subsidiaries), real estate and leasehold and other interests
therein, certificates issued by or interests in trusts, cash on hand and on
deposit, personal property and interests therein and all other Assets acquired
for investment purposes.

"Iowa Code" shall mean the Code of Iowa (1993).

"Iowa Commissioner" shall mean the Insurance Commissioner of the State of
Iowa.

"Iowa Insurance Law" shall mean Subtitle 1. of Title XIII of the Iowa Code.

"Iowa Secretary" shall mean the Secretary of State of the State of Iowa.

"IRS" shall mean the Internal Revenue Service or any successor agency.

"Knowledge" shall mean receipt of notice by, actual knowledge of or, in the
reasonable exercise of such Person's duties in the ordinary course of business,
reason to know of, (a) such Person, if such Person is an individual, or any
officer or director of such Person, or (b) with respect to matters relating to a
Subsidiary of such Person, any officer or director of such Subsidiary.

"Law" shall mean a law, ordinance, rule or regulation enacted or
promulgated, or an Order issued or rendered, by any Governmental Entity.

"Liability" shall mean a liability, obligation, claim or cause of action
(of any kind or nature whatsoever, whether absolute, accrued, contingent or
other and whether known or unknown), including, without limitation, any
liability, obligation, claim or cause of action arising as a result of an
Insurance Contract.

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"License" shall mean a license, certificate of authority, permit or other
authorization to transact an activity or business issued or granted by a
Governmental Entity.

"Lien" shall mean a lien, mortgage, deed to secure debt, pledge, security
interest, lease, sublease, charge, claim, levy or other encumbrance of any kind.

"Losses" shall mean losses, claims, damages, costs, expenses, Liabilities
and judgments, including, without limitation, court costs and attorneys' fees.

"Material Law" shall mean any Law or Order, in each case, the violation of
which (i) may reasonably be expected to cause any Insurance License held by the
Person violating such Law or Order or any of its Subsidiaries to fail to be in
full force and effect, except for such failure which can be cured in thirty (30)
days or less without material cost or expense, including, without limitation,
costs relating to any interruption of Business, or to be otherwise amended,
limited or conditioned in any way, except as can be cured as provided above,
(ii) may reasonably be expected to result in (A) fines and penalties to the
Person violating such Law or Order of more than two hundred thousand dollars
($200,000), individually, or (B) damages or expenses to the Person violating any
such Laws or Orders of more than two million dollars ($2,000,000), in the
aggregate.

"Materials of Environmental Concern" shall mean chemicals, pollutants,
contaminants, wastes, toxic or hazardous substances, petroleum and petroleum
products.

"Meeting Notice" shall have the meaning set forth in Section 3.2 hereof.

"Member" shall mean, as to American, any Person who is a Policyowner of
American and qualified to vote in accordance with American's articles of
incorporation and by-laws, and, as to Central, any Person who is a Policyowner
qualified to vote in accordance with Central's articles of incorporation and by-
laws.

"Merger" shall have the meaning set forth in the preamble to this
Agreement.

"Order" shall mean an order, writ, ruling, judgment, injunction or decree
of, or any stipulation to or agreement with, any arbitrator, mediator or
Governmental Entity.

"PBGC" shall mean the Pension Benefit Guaranty Corporation or any successor
entity.

"Permitted Liens" shall mean, as to a party hereto, (i) all Liens approved
in writing by the other party hereto, (ii) statutory Liens arising out of
operation of Law with respect to a Liability which are incurred in the ordinary
course of business of such party or any of its Subsidiaries and are not
delinquent and can be paid without interest or penalty or (iii) such Liens and
other imperfections of title as do not materially detract from the value or
impair the use of the property subject thereto.

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"Person" shall mean an individual, corporation, partnership, association,
joint stock company, Governmental Entity, business trust, unincorporated
organization or other legal entity.

"Policyowner" shall mean the owner of a contract of life or health
insurance or annuity.

"Proceedings shall mean actions, suits, hearings, claims and other similar
proceedings.

"Quarterly Statements" shall mean the quarterly statements filed pursuant
to state insurance Laws, in conformity with SAP.

"Reorganization Proposal" shall have the meaning set forth in Section 6.8
hereof.

"Required Filings and Approvals" shall mean (i) the filing of this
Agreement with and the approval of such by, the Iowa Commissioner and the
commission established pursuant to Chapter 521 of the Iowa Code, and such other
application, registrations, declarations, filings, authorizations, Orders,
consents and approvals as may be required to be made or obtained prior to
consummation of the transactions contemplated hereby under the Laws of any
jurisdiction, (ii) the approval of this Agreement by the Members of American and
Central, and (iii) the filing of premerger notification reports by American and
Central under the HSR Act and the expiration of the waiting period thereunder or
early termination of such waiting period.

"SAP" shall mean accounting practices required or permitted by applicable
insurance Governmental Entities applied on a consistent basis, subject to, in
the case of unaudited interim Financial Statements, normal year-end adjustments
and, in the case of all unaudited Financial Statements, the absence of
interrogatories or footnote disclosure to the extent so required or permitted.

"SAP Statements" shall mean Annual Statements and Quarterly Statements
filed with the Iowa Commissioner.

"Subsidiary" of a Person means any Person with respect to whom such
specified Person, directly or indirectly, beneficially owns fifty percent (50%)
or more of the equity interests in, or holds the voting control of fifty percent
(50%) or more of the equity interests in, such Person.

"Surplus Plus AVR" shall mean, as to a Person, the surplus calculated in
substantially the same manner as set forth on line 36 of the Liabilities,
Surplus and Other Funds schedule of such Person's 1993 Annual Statement plus the
asset valuation reserve calculated in substantially the same manner as set forth
on line 24.1 of the Liabilities, Surplus and Other Funds schedule of such
Person's 1993 Annual Statement.

"Surviving Company" shall have the meaning set forth in Section 2.1 hereof.

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"Surviving Company Adverse Effect" shall mean a material adverse effect on
the Condition of the Surviving Company and its Subsidiaries, taken as a whole,
resulting from other than general economic or financial conditions which do not
affect the Surviving Company and its Subsidiaries uniquely and which may
reasonably be expected to result in damages or expenses of twelve million five
hundred thousand dollars ($12,500,000) or more on an After-Tax Basis.

"Taxes" shall mean all income, gross income, gross receipts, premium,
sales, use, transfer, franchise, profits, withholding, payroll, employment,
excise, severance, property and windfall profits taxes, and all other taxes,
assessments or similar charges of any kind whatsoever thereon or applicable
thereto, together with any interest and any penalties, additions to tax or
additional amounts, in each case imposed by any taxing authority (domestic or
foreign) upon any Person in the American Group or the Central Group, as the case
may be, including, without limitation, all amounts imposed as a result of being
a member of an affiliated or combined group.

"Tax Returns" or "Returns" shall mean all tax returns, declarations,
reports estimates, information returns and statements required to be filed under
federal, state, local or foreign tax laws.

ARTICLE II

THE MERGER

Section 2.1 THE MERGER. At the Effective Time of the Merger, American
shall be merged with and into Central in accordance with the terms of the
Agreement and Section 521.2 ET. SEQ., of the Iowa Code and the separate
existence of American shall thereupon cease, and Central, which shall be and
which is hereinafter sometimes referred to as the "Surviving Company," shall
continue its corporate existence under Iowa Law under the name "American Mutual
Life Insurance Company".

Section 2.2 SURVIVING COMPANY. At the Effective Time of the Merger, the
Surviving Company shall thereupon and thereafter possess all the rights,
authorities, privileges, immunities, powers, license, permits and franchises, of
a public as well as of a private nature, of each of the Constituent Companies,
and be subject to all the duties, liabilities and obligations of each of the
Constituent Companies, and all the rights, authorities, privileges, immunities,
powers, licenses, permits and franchises of each of the Constituent Companies,
and all property, real, personal and mixed, and all debts due to either of the
Constituent Companies on whatever account and all other choses in action and
every other interest of or belonging to or due to each of the Constituent
Companies shall vest in the Surviving Company; and all property, rights,
authorities, privileges, immunities, powers, licenses, permits and franchises
and every other interest shall be thereafter the property of the Surviving
Company as they were of the respective Constituent Companies; and the title to
any real estate or any interest therein, vested by deed or otherwise, in either
of the Constituent Companies shall not revert or be in any way impaired by
reason of the Merger; but all rights of creditors and all liens upon any
property of either of the Constituent Companies shall be preserved

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unimpaired; and all debts, duties, liabilities and obligations of either of the
Constituent Companies shall thenceforth attach to the Surviving Company, and may
be enforced against it to the same extent as if said debts, duties, liabilities
and obligations had been incurred or contracted by it.

Section 2.3 AMERICAN POLICYOWNERS RIGHTS AND INTERESTS IN SURVIVING
COMPANY. At the Effective Time of the Merger, the rights and interests of each
American Policyowner in American shall, by virtue of the Merger and without any
action on the part of the American Policyowner, be converted into corresponding
rights and interests in the Surviving Company as a Policyowner of the Surviving
Company.

Section 2.4 CLOSING DATE. As soon as is practicable after the
satisfaction or, if permitted, waiver of the conditions set forth in Article VII
hereof, the parties hereto shall cause the Merger to be consummated by executing
and delivering the Articles of Merger to the Iowa Secretary with the approval of
the Iowa Commissioner and such other documents in such form as required by, and
executed and acknowledged in accordance with, the relevant provisions of the
Laws of the State of Iowa. The date of delivery of the Articles of Merger to
the Iowa Secretary shall be the Closing Date (the "Closing Date").

Section 2.5 EFFECTIVE TIME. The Merger shall take effect after the close
of business on December 31, 1994 and before the commencement of business on
January 1, 1995. The Articles of Merger shall specify that the Merger shall
become effective at 11:59 p.m. on December 31, 1994 or as such other date and
time as the parties may agree (the "Effective Time of the Merger").

Section 2.6 ARTICLES AND BY-LAWS OF THE SURVIVING COMPANY. The articles
of incorporation and by-laws of Central in effect immediately prior to the
Effective Time of the Merger shall be the articles of incorporation and by-laws
of the Surviving Company until thereafter changed or amended as provided therein
and by Law, as set forth in Exhibit A (the "Articles") and Exhibit B (the "By-
Laws") hereto, except that the Articles and By-Laws are amended to change the
name of the Surviving Company to American Mutual Life Insurance Company at the
Effective Time of the Merger.

Section 2.7 HOME OFFICE OF THE SURVIVING COMPANY. The home office of the
Surviving Company shall be located in the present Central headquarters building
located at 611 Fifth Avenue, Des Moines, Iowa ("Home Office"). It is
contemplated that the Home Office will be expanded by construction of a new
building adjacent to Central's present headquarters building, provided however,
that any such contemplated expansion will be subject to the prior approval of
the Iowa Commissioner as provided by law.

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ARTICLE III

RELATED MATTERS

Section 3.1 MEMBER AND POLICYHOLDER APPROVALS. American and Central shall
each take all actions reasonably necessary or advisable under their respective
articles of incorporation and by-laws to convene a meeting of their respective
Members as promptly as practicable to consider and vote upon this Agreement.
Subject to their fiduciary duties under applicable Law, the Boards of Directors
of American and Central will recommend that the Members of their respective
companies vote in favor of this Agreement and will use their respective best
efforts to solicit such Members to vote in favor of this Agreement and to take
all other actions reasonably necessary or advisable to secure the votes of the
Members of each company which are required in order to approve this Agreement
and effect the Merger. American and Central shall together promptly prepare an
information statement in respect of the Merger for delivery to their respective
Policyowners entitled to vote on the Merger satisfying all applicable
requirement of Iowa law.

Section 3.2 MEETING NOTICE. Each of American and Central shall promptly
prepare meeting notices (each a "Meeting Notice") setting forth the time, place
and purpose of the Members' meetings referred to in Section 3.1 hereof which
notices shall include a summary of this Agreement.

Section 3.3 DIVIDEND PRINCIPLES OF SURVIVING COMPANY. American and
Central agree that the general principles and objectives guiding individual
dividend policy for the Surviving Company are as set forth in Exhibit "C"
hereto.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF AMERICAN

American represents and warrants to Central as follows:

Section 4.1 ORGANIZATION AND QUALIFICATION

(a) GENERAL. American is a mutual life insurance company duly organized,
validly existing and in good standing under the Laws of the State of Iowa and
has the requisite corporate power and authority to conduct its Business as it is
currently being conducted. Except as set forth in Section 4.1, Part I of the
American Disclosure Schedule, each of the American Subsidiaries is a corporation
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to conduct its Business as it is currently being conducted. American
and each of the American Subsidiaries is duly qualified to do business, and is
in good standing, in the respective jurisdictions where the character of its
Assets owned or leased or the nature of its Business makes such qualification
necessary, except for failures to be so qualified or in good standing which

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would not, individually or in the aggregate, have an American Adverse Effect.
Copies of the articles of incorporation and by-laws of American and each of the
American Subsidiaries have heretofore been delivered or made available to
Central, and such copies are accurate and complete as of the date hereof.

(b) INSURERS. Each American Insurer is listed in Section 4.1, Part II of
the American Disclosure Schedule. Each American Insurer possesses an Insurance
License in each jurisdiction in which such American Insurer is required to
possess an Insurance License. All such Insurance Licenses, including, without
limitation, authorizations to transact reinsurance, are listed and described in
Section 4.1, Part III of the American Disclosure Schedule and are in full force
and effect (except for any failure to be in full force and effect which failure
can be cured in thirty (30) days or less without material cost or expense,
including, without limitation, costs relating to any interruption of Business)
without amendment, limitation or restriction (except as can be cured as provided
above) and, except as set forth in Section 4.1, Part IV of the American
Disclosure Schedule. As of the date hereof, neither American nor any American
Subsidiary has Knowledge of any event, Proceeding or investigation which could
lead to the revocation, amendment, failure to renew, limitation, suspension or
restriction of any such License, whether or not such outcome is probable.

Section 4.2 CAPITALIZATION OF SUBSIDIARIES. All of the outstanding shares
of capital stock of each of the American Subsidiaries have been validly issued
and are fully paid and nonassessable and, except as set forth in Section 4.2,
Part I of the American Disclosure Schedule, are owned by either American or
another American Subsidiary, free and clear of all Liens. Except as set forth
in Section 4.2, Part II of the American Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, calls, rights, convertible
securities, obligations to make capital contributions or advances, or voting
trust arrangements, stockholders' agreements or other agreements, commitments or
understandings of any character relating to the issued or unissued capital stock
of any American Subsidiary or securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of such capital stock or
otherwise obligating American or any such American Subsidiary to issue, transfer
or sell any such capital stock or such other securities. The name, jurisdiction
of incorporation and percentages of outstanding capital stock as of the date of
this Agreement owned, directly or indirectly, by American, with respect to each
American Subsidiary are set forth in Section 4.2, Part III of the American
Disclosure Schedule.

Section 4.3 AUTHORITY RELATIVE TO THIS AGREEMENT.

(a) AUTHORITY. American has the requisite corporate power and authority
to execute and deliver this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved and authorized by the Board of Directors of American. Except for
the approval of this Agreement by the Members of American, no other corporate
proceedings on the part of American are necessary to authorize this Agreement
and the transactions contemplated hereby.

(b) BINDING OBLIGATIONS. This Agreement has been duly and validly
executed and delivered

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by American and (assuming this Agreement is a legal, valid and binding
obligation of Central) constitutes a legal, valid and binding agreement of
American enforceable against American in accordance with its terms, except that
such enforcement may be subject to rehabilitation, liquidation, conservation,
insolvency, reorganization, moratorium or other similar Laws now or hereafter in
effect relating to creditors' rights generally.

Section 4.4 NO VIOLATION.

(a) NO BREACH OR CONFLICT. The execution, delivery and performance of this
Agreement by American and the consummation of the transactions contemplated
hereby will not (i) constitute a breach or violation of or default under the
articles of incorporation or the by-laws of American or of any of the American
Subsidiaries or (ii) except as set forth in Section 4.4, Part I of the American
Disclosure Schedule, violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Lien upon
any of the Assets of American or of any of the American Subsidiaries under any
of the terms, conditions or provisions of, any Contract to which American or any
such American Subsidiary is a party or to which it or any of its Assets may be
subject.

(b) CONSENTS. Except as set forth on Section 4.4, Part II of the American
Disclosure Schedule, other than Required Filings and Approvals, no consent,
approval, Order or authorization of, or registration, application, declaration
or filing with (collectively, "Consent or Filing"), any Person is required with
respect to American or any American Subsidiary in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, except for any Consent or Filing, the failure to obtain or
do would not (i) cause any Insurance License held by an American Insurer to fail
to be in full force and effect without amendment, limitation or condition of any
kind, (ii) cause American or any American Subsidiary to be in violation of any
term or provision of any Material Law applicable to American or any American
Subsidiary or any of its respective Assets or (iii) individually or in the
aggregate, have an American Adverse Effect.

Section 4.5 SAP STATEMENTS. American has previously delivered to Central
true and complete copies of the Annual Statements of each American Insurer for
each of the years ended December 31, 1993, 1992 and 1991. American has also
furnished to Central true and complete copies of the Quarterly Statements filed
by or on behalf of each American Insurer for each of the three (3) months ended
March 31, 1994 and the six (6) months ended June 30, 1994. Each of the SAP
Statements was (and, as to the SAP Statements not filed as of the date hereof,
will be) in compliance in all material respects and was (and, as to SAP
Statements not filed as of the date hereof, will be) prepared in accordance with
SAP, and each fairly presents (and, as to SAP

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Statements not filed as of the date hereof, will present) in all material
respects the separate financial condition, Assets, Liabilities, surplus and
other funds, results of operations, and changes in financial position of the
Person covered thereby as at the dates or for the periods covered thereby, in
conformity with SAP.

Section 4.6 FINANCIAL STATEMENTS. American has previously delivered to
Central true and complete copies of (i) audited GAAP Financial Statements for
the years ended December 31, 1993 and 1992 of each American Subsidiary, other
than American Insurers, for which audited GAAP Financial Statements have been
prepared or, if such audited GAAP Financial Statements have not been prepared,
unaudited GAAP Financial Statements for each of such years and (ii) unaudited
GAAP Financial Statements for the three (3) months ended March 31, 1994 and the
six (6) months ended June 30, 1994 of each American Subsidiary (other than
American Insurers) (collectively, the "American GAAP Financial Statements").
Each of the American GAAP Financial Statements is correct and complete in all
material respects and was prepared in accordance with GAAP, and each presents
fairly in all material respects the financial conditions, results of operations
and changes in financial position of the Person covered thereby as of the dates
or for the periods covered thereby, in conformity with GAAP.

Section 4.7 RESERVES. The aggregate actuarial reserves and other
actuarial amounts held in respect of Liabilities with respect to Insurance
Contracts of each American Insurer as established or reflected in the June 30,
1994 Quarterly Statement of each American Insurer: (a)(i) were determined in
accordance with generally accepted actuarial standards consistently applied,
(ii) were fairly stated in accordance with sound actuarial principles and (iii)
were based on actuarial assumptions that are in accordance with those specified
in the related Insurance Contracts; (b) met the requirements of the insurance
Laws of the applicable jurisdiction in all material respects; and (c) to the
Knowledge of American, were adequate (under generally accepted actuarial
standards consistently applied) to cover the total amount of all reasonably
anticipated matured and unmatured Liabilities of such American Insurer under all
outstanding Insurance Contracts pursuant to which such American Insurer has any
Liability. For purposes of clause (c) above, (i) the adequacy of reserves shall
be determined only on the basis of facts and circumstances known or which
reasonably should have been known (based on procedures consistently applied by
American in connection with assessing the adequacy of reserves from time to
time) by American as at the date hereof and (ii) the fact that reserves covered
by any such representation may be subsequently adjusted at times and under
circumstances consistent with American's ordinary practice of periodically
reassessing the adequacy of its reserves shall not be used to support any claim
regarding the accuracy of such representation.

Section 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 4.8 of the American Disclosure Schedule, since December 31, 1993, each
of American and the American Subsidiaries has conducted its Business only in the
ordinary course, consistent with past practice, and there has not occurred any
event, change or development which individually or in the aggregate has had or
may reasonably be expected to have an American Adverse Effect.

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Section 4.9 NO UNDISCLOSED LIABILITIES. Except as disclosed in the
December 31, 1993 Annual Statement and each 1994 Quarterly Statement of each
American Insurer and each of the most recent unaudited Financial Statements
provided by American to Central with respect to American Subsidiaries that are
not an American Insurer or as set forth in Section 4.9 of the American
Disclosure Schedule, neither American nor any American Subsidiary has any
Liabilities (other than Liabilities in respect of Insurance Contracts, payroll,
employee benefits and other employee compensation, and, with respect to the
period from the date of this Agreement through the Closing Date of the Merger,
Liabilities incurred without violation of Section 6.1 hereof, in each case
entered into in the ordinary course of business, consistent with past practice)
that individually exceed two million five hundred thousand dollars ($2,500,000)
on an After-Tax Basis or in the aggregate exceed ten million dollars
($10,000,000) on an After-Tax Basis or have or may reasonably be expected to
have an American Adverse Effect.

Section 4.10 TAXES AND TAX RETURNS. Except as set forth in Section 4.10
of the American Disclosure Schedule: (a) all material Tax Returns required to
be filed by any Person in the American Group have been timely filed (taking into
account any extensions of time for filing such Returns); (b) at the time filed,
such Returns were (and, as to Returns not filed as of the date hereof, will be)
true, complete and correct in all material respects and each Person in the
American Group has timely paid or caused to be timely paid all Taxes due and
payable for periods covered by such Returns; (c) the accruals and reserves
reflected in the audited American GAAP Financial Statements or SAP Statements,
as the case may be, of American and of the American Subsidiaries for the year
ended December 31, 1993, and the unaudited American GAAP Financial Statements or
SAP Statements, as the case may be, of American and of the American Subsidiaries
for the six (6) months ended June 30, 1994 are adequate in all material
respects to cover all Taxes accrued through the dates thereof for those and any
prior periods in accordance with GAAP or SAP, as the case may be; (d) there are
no material Liens for Taxes upon the Assets of any Person in the American Group
except liens for Taxes not yet due; (e) there are no outstanding deficiencies,
assessments or written proposals for the assessment of Taxes proposed, asserted
or assessed against any Person in the American Group; and (f) American has filed
a consolidated Tax Return for federal income tax purposes on behalf of itself
and all of its Subsidiaries since 1982 as the common parent corporation of an
"affiliated group" (within the meaning of Section 1504(a) of the Code) to the
extent such Subsidiaries are "includible corporations" within the meaning of
Section 1504(c)(1) of the Code.

Section 4.11 LITIGATION. Except as set forth in Section 4.11, Part I of
the American Disclosure Schedule, on the date of this Agreement there are no
Proceedings pending nor, to the Knowledge of American or any American
Subsidiary, any Proceedings or investigations (other than claims in the ordinary
course of the insurance Business), threatened against, relating to, involving or
otherwise affecting American or any American Subsidiary. Except as set forth in
Section 4.11, Part I of the American Disclosure Schedule, there are no
Proceedings pending nor, to the Knowledge of American or any American
Subsidiary, any Proceedings or investigations threatened against, relating to,
involving or otherwise affecting American or any American Subsidiary which,
individually or in the aggregate, may reasonably be expected to have an American
Adverse Effect. Except as set forth

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in Section 4.11, Part II of the American Disclosure Schedule, neither American
nor any American Subsidiary is subject to any Order, except for Orders which,
individually or in the aggregate, do not and would not reasonably be expected to
have an American Adverse Effect.

Section 4.12 COMPLIANCE WITH LAW.

(a) Except as set forth in Section 4.12, Part I of the American Disclosure
Schedule, neither American nor any American Subsidiary is in violation in any
material respect (or, with notice or lapse of time or both, would be in
violation in any material respect) of any term or provision of any Material
Law(other than Environmental Laws, the Code, state, local or foreign Tax Laws or
ERISA) applicable to it or any of its Assets. Without limiting the generality
of the foregoing: each of American and the American Subsidiaries has filed or
caused to be filed all reports, statements, documents, registrations, filings or
submissions which were required by any such Material Law to be filed by it and
all such filings complied in all material respects with all such Material Laws
when filed. American has delivered to Central all reports reflecting the
results of examinations of the affairs of each American Insurer issued by
insurance Governmental Entities for any period ending on a date on or after
January 1, 1987, and, except as set forth in Section 4.12, Part II of the
American Disclosure Schedule, all deficiencies or violations in such reports for
any prior period have been resolved. Except as set forth in Section 4.12, Part
III of the American Disclosure Schedule, all outstanding Insurance Contracts
issued or assumed by any American Insurer are, to the extent required by
applicable Law, on forms and at rates approved by the insurance Governmental
Entities of the jurisdictions where issued (except for immaterial deviations
from such approved forms) or have been filed with and not objected to by such
authorities within the periods provided for objection.

(b) Except as set forth in Section 4.12, Part IV of the American
Disclosure Schedule, neither American nor any American Subsidiary is a party to
any Contract with or other undertaking to, or is subject to any Order by, or is
a recipient of any supervisory letter or other oral or written communication of
any kind from, any Governmental Entity which (i) currently materially and
adversely affects or is reasonably likely to affect materially and adversely the
conduct of its Business, including, without limitation, its reserve adequacy,
its investment, sales or trade practices and policies, its underwriting
practices and policies or its management, (ii) may reasonably be expected to
have an American Adverse Effect, nor, to the Knowledge of American and the
American Subsidiaries, has American or any American Subsidiary been advised by
any Governmental Entity that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such Order,
Contract or other communications.

Section 4.13 EMPLOYEE BENEFIT PLANS: ERISA. There are no Employee
Benefit Plans maintained by the American Group or with respect to which the
American Group has or may have a Liability (the "American Benefit Plans"), other
than those described in Section 4.13, Part I of the American Disclosure
Schedule.

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I. With respect to each American Benefit Plan that is an "employee pension
benefit plan" as defined in Section 3(2) of ERISA and qualified under Section
401(a) of the Code (the "American Pension Plans"), except as set forth in
Section 4.13, Part II of the American Disclosure Schedule:

(a) As of the date of the most recent determination letter, the terms
of each of the American Pension Plans intended to be a tax-qualified plan
under Section 401(a) or 403(a) of the Code complies with the applicable
provisions of Section 401(a) of the Code from its initial effective date,
except for the period of time a plan predates Section 401(a) or 403(a) of
the Code, and such compliance is evidenced by one or more determination
letters; since the date of the most recent determination letter, each of
the American Pension Plans has been operated in good faith compliance with
Section 401(a) or 403(a) of the Code; each American Pension Plan is funded
by a trust which has been determined to be exempt from federal income taxes
pursuant to Section 501(a) of the Code or by an annuity contract described
in Section 403(a) of the Code.

(b) American and the American Subsidiaries have in all material
respects performed all obligations required to be performed by them under
the American Pension Plans and neither American nor any American Subsidiary
has any Knowledge of any such failure to perform such obligations by any
Person with respect to any such American Pension Plan.

(d) The present value of all benefit liabilities, within the meaning
of Section 4001(a)(16) of ERISA, under each of the American Pension Plans
subject to Title IV of ERISA did not, as of the latest valuation date used
for purposes of filing the most recent IRS Form 5500, exceed the value of
the Assets of such American Pension Plan allocable to such benefit
liabilities based upon actuarial assumptions which American has furnished
to Central.

(e) Each American Pension Plan has operated in accordance with the
reporting and disclosure requirements imposed under ERISA and the Code.

(f) No American Pension Plan is liable for any federal, state, local,
or foreign Taxes.

(g) American and the American Subsidiaries have not incurred any
material Liability (except for required premium payments, which premium
payments have been or will be made for plan years ended prior to the
Effective Time of the Merger) to the PBGC with respect to the American
Pension Plans.

(h) No American Pension Plan is currently under investigation, audit,
or review by the IRS, the DOL, or the PBGC, other than with respect to
routine plan amendments, and

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neither American nor any American Subsidiary has any Knowledge that any
such action is contemplated or under consideration.

(i) There are no Proceedings or investigations pending or, to the
Knowledge of American and the American Subsidiaries, threatened, against
any American Pension Plan or against American or any American Subsidiary
with respect to any American Pension Plan.

II. With respect to each American Benefit Plan that is an employee welfare
benefit plan as defined in Section 3(1) of ERISA (the "American Welfare Plans"),
except as set forth in Section 4.13, Part III of the American Disclosure
Schedule:

(a) Each of the American Welfare Plans has complied in all material
respects since its initial effective date with the applicable provisions of
the Code; any trust adopted in connection therewith has been exempt since
its initial effective date from federal income taxes; and all contributions
ever made to the American Welfare Plans and trust, if any, have been
deductible by the employee sponsor of the American Welfare Plans and trust
for federal income tax purposes.

(b) American and the American Subsidiaries have performed in all
material respects all obligations required to be performed by them under
the American Welfare Plans, and neither American nor any American
Subsidiary has any Knowledge of any failure to perform such obligations by
any Person with respect to any such American Welfare Plan.

(d) Each American Welfare Plan has operated in accordance with the
reporting and disclosure requirements imposed under ERISA and the Code.

(e) No American Welfare Plan is liable for any federal, state, local,
or foreign Taxes.

(f) Since the effective date of the group health plan continuation
coverage requirements of the Consolidated Omnibus Budget Reconciliation Act
of 1986 as set forth in Sections 601 through 608 of ERISA and former
Section 162(k) and Section 2980B of the Code and the Treasury Regulations
thereunder, American and American Subsidiaries have complied in all
material respects with such requirements.

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(g) No American Welfare Plan is currently subject to Proceedings by
the IRS or the DOL and neither American nor any American Subsidiary has any
Knowledge that any such action is contemplated or under consideration.

(h) There are no Proceedings or investigations, other than routine
claims for benefits, pending or, to the Knowledge of American and the
American Subsidiaries, threatened, against any American Welfare Plan or
against American or any American Subsidiary with respect to any such
American Welfare Plan.

(i) American and the American Subsidiaries do not maintain, nor have
they ever maintained, a Welfare Plan that provides benefits to current or
former employees of American or American Subsidiaries beyond their
termination of employment, other than on an employee-pay-all basis or which
by its terms permits American or American Subsidiaries to terminate such
American Welfare Plan at any time.

Section 4.14 ASSETS. Except as set forth in Section 4.14, Part I of the
American Disclosure Schedule or as set forth in the footnotes to the Financial
Statements previously delivered to Central pursuant to Sections 4.6 and 4.7
hereof and except for Assets disposed of since June 30, 1994 in arms' length
transactions at prices reasonably believed to be fair market value in the
ordinary course of business and consistent with past practice, each of American
and the American Subsidiaries has good title to all Assets that are disclosed or
otherwise reflected in its June 30, 1994 Quarterly Statement or unaudited GAAP
Financial Statements for the six (6) months ended June 30, 1994, as the case may
be, and all such Assets are owned by such Persons, free and clear of all Liens,
other than Permitted Liens.

Section 4.15 ENVIRONMENTAL MATTERS.

(a) Except as set forth in Section 4.15, Part I of the American Disclosure
Schedule, each of American and the American Subsidiaries is, and, to the
Knowledge of each of American and the American Subsidiaries, all American
Operating Facilities (including, with respect to any American Operating
facility, all owners or operators thereof), are in substantial compliance with
all applicable Environmental Laws. Except as set forth in Section 4.15, Part II
of the American Disclosure Schedule, to the Knowledge of each of American and
the American Subsidiaries, neither American nor any American Subsidiary has
received any communication (written or oral), that alleges that American or any
American Subsidiary or any American Operating Facility (including, with respect
to any American Operating Facility, any owner or operator thereof) is not in
such compliance, and, to the Knowledge of each of American and the American
Subsidiaries, there are no circumstances that may prevent or interfere with such
compliance in the future. All Licenses held on the date hereof by American or
any American Subsidiary pursuant to Environmental Laws are identified in Section
4.15, Part III of the American Disclosure Schedule.

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(b) Except as set forth in Section 4.15, Part IV of the American
Disclosure Schedule, there is no Environmental Claim pending against American or
any American Subsidiary or American Operating Facility or, to the Knowledge of
each of American and the American Subsidiaries, threatened against American or
any American Subsidiary or American Operating Facility or any Person whose
Liability for any Environmental Claims American or any American Subsidiary has
or may have retained or assumed either contractually or by operation of Law,
except for Environmental Claims which, individually or in the aggregate, may not
reasonably be expected to have an American Adverse Effect.

Section 4.16 CONTRACTS. Section 4.16, Part I of the American Disclosure
Schedule contains a true and complete list of all of the following Contracts as
of the date of this Agreement (true and complete copies of all such written
Contracts having been made available to Central) in force or operative in any
respect, to which American or any American Subsidiary is a party or by which any
Assets of American or any American Subsidiary are or may be bound, as such
Contracts may have been amended to the date of this Agreement:

(a) all employment, agency, brokerage, consultation, retirement
(other than pursuant to the existing provisions of any American Benefit
Plan in full force and effect on the date of this Agreement),
representation or other Contracts with present or former employees, agents
or consultants (including, without limitation, loans or advances to any
such Person) or with any Person which (i) may not be terminated on notice
of sixty (60) days or less without penalty or premium and (ii) provide for
compensation of one hundred thousand dollars ($100,000) or more per year
(including, without limitation, base salary, bonus and incentive payments
and other payments or fees, whether or not any portion thereof is
deferred), and the name, position and rate or terms of compensation of each
such Person and the expiration date of each such Contract;

(b) all Contracts with any Person, including, without limitation, any
Governmental Entity, containing any provision or covenant (i) limiting the
ability of American or any American Subsidiary to engage in any line of
business, to compete with any Person, to do business with any Person or in
any location or to employ any person or (ii) limiting the ability of any
Person to compete with American or any American Subsidiary;

(c) all Contracts with any Person containing any provision or
covenant relating to the indemnification or holding harmless by American or
any American Subsidiary of any Person which might reasonably be expected to
result in a Liability to American or any American Subsidiary of five
hundred thousand dollars ($500,000) or more;

(d) all investment advisory Contracts with any investment company
registered under the Investment Company Act or with any investment advisory
client; and

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(e) all reinsurance, retrocession, coinsurance or other similar
Contracts including, with respect to each such Contract, the ceding and
assuming Person, the Business reinsured or retroceded and the amount of
Liability reinsured.

Section 4.16 Part I of the American Disclosure Schedule also contains, as
of the date of this Agreement, a list of all third party administrators of
American and the American Subsidiaries.

Each of the Contracts listed in Section 4.16, Part I of the American
Disclosure Schedule is in full force and effect and (assuming each such Contract
is a valid and binding obligation of the other parties thereto) constitutes a
valid and binding obligation of American and each American Subsidiary to the
extent that it is party thereto, and, to the Knowledge of American and the
American Subsidiaries, of each other Person that is a party thereto in
accordance with its terms, and neither American nor any American Subsidiary is,
and, to the Knowledge of American and the American Subsidiaries, no other party
to such Contract is, on the date hereof, in material violation, breach or
default of any such Contract or with notice or lapse of time or both would be in
material violation, breach or default of any such Contract. Except as set forth
in Section 4.16, Part II of the American Disclosure Schedule, no such Contract
contains any provision providing that any other party thereto may terminate such
Contract by reason of the execution of this Agreement or the consummation of the
transactions contemplated hereby. Except as set forth in Section 4.16, Part III
of the American Disclosure Schedule, neither American nor any American
Subsidiary is a party to or bound by any Contract material to its Business that
was not entered into in the ordinary course of business or that has or may
reasonably be expected to have, in the aggregate with any other Contracts, an
American Adverse Effect. Neither American nor any American Subsidiary is a
party to or bound by any collective bargaining or similar labor Contract.

Section 4.17 WARRANTIES. The representations and warranties of American
contained herein, and the information provided by American contained and to be
contained herein and in the American Disclosure Schedule and any certificates
executed and delivered by an officer of American, do not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements herein or therein not misleading in
light of the circumstances in which made. The information provided by American
contained herein and in the American Disclosure Schedule fairly presents and
will fairly present the information purported to be shown herein and therein and
is and will be accurate in all material respects.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF CENTRAL

Central represents and warrants to American as follows:

Section 5.1 ORGANIZATION AND QUALIFICATION.

(a) GENERAL. Central is a mutual life insurance company duly organized,
validly existing and in good standing under the Laws of the State of Iowa and
has the requisite corporate power and authority to conduct its Business as it is
currently being conducted. Except as set forth in Section 5.1, Part I of the
Central Disclosure Schedule, each of the Central Subsidiaries is a corporation
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to conduct its Business as it is currently being conducted. Central
and each of the Central Subsidiaries is duly qualified to do business, and is in
good standing, in the respective jurisdictions where the character of its Assets
owned or leased or the nature of its Business makes such qualification
necessary, except for failures to be so qualified or in good standing which
would not, individually or in the aggregate, have a Central Adverse Effect.
Copies of the articles of incorporation and by-laws of Central and each of the
Central Subsidiaries have heretofore been delivered or made available to
American, and such copies are accurate and complete as of the date hereof.

(b) INSURERS. Each Central Insurer is listed in Section 5.1, Part II of
the Central Disclosure Schedule. Each Central Insurer possesses an Insurance
License in each jurisdiction in which such Central Insurer is required to
possess an Insurance License. All such Insurance Licenses, including, without
limitation, authorizations to transact reinsurance, are listed and described in
Section 5.1, Part III of the Central Disclosure Schedule and are in full force
and effect (except for any failure to be in full force and effect which failure
can be cured in thirty (30) days or less without material cost or expense,
including, without limitation, costs relating to any interruption of Business)
without amendment, limitation or restriction (except as can be cured as provided
above) and, except as set forth in Section 5.1, Part IV of the Central
Disclosure Schedule. As of the date hereof, neither Central nor any Central
Subsidiary has Knowledge of any event, Proceeding or investigation which could
lead to the revocation, amendment, failure to renew, limitation, suspension or
restriction of any such License, whether or not such outcome is probable.

Section 5.2 CAPITALIZATION OF SUBSIDIARIES. All of the outstanding shares
of capital stock of each of the Central Subsidiaries have been validly issued
and are fully paid and nonassessable and, except as set forth in Section 5.2,
Part I of the Central Disclosure Schedule, are owned by either Central or
another Central Subsidiary, free and clear of all Liens. Except as set forth in
Section 5.2, Part II of the Central Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, calls, rights, convertible
securities, obligations to make capital contributions or advances, or voting

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trust arrangements, stockholders' agreements or other agreements, commitments or
understandings of any character relating to the issued or unissued capital stock
of any Central Subsidiary or securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of such capital stock or
otherwise obligating Central or any such Central Subsidiary to issue, transfer
or sell any such capital stock or such other securities. The name, jurisdiction
of incorporation and percentages of outstanding capital stock as of the date of
this Agreement owned, directly or indirectly, by Central, with respect to each
Central Subsidiary are set forth in Section 5.2, Part III of the Central
Disclosure Schedule.

Section 5.3 AUTHORITY RELATIVE TO THIS AGREEMENT.

(a) AUTHORITY. Central has the requisite corporate power and authority to
execute and deliver this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved and authorized by the Board of Directors of Central. Except for
the approval of this Agreement by the Members of Central, no other corporate
proceedings on the part of Central are necessary to authorize this Agreement and
the transactions contemplated hereby.

(b) BINDING OBLIGATIONS. This Agreement has been duly and validly
executed and delivered by Central and (assuming this Agreement is a legal, valid
and binding obligation of American) constitutes a legal, valid and binding
agreement of Central enforceable against Central in accordance with its terms,
except that such enforcement may be subject to rehabilitation, liquidation,
conservation, insolvency, reorganization, moratorium or other similar Laws now
or hereafter in effect relating to creditors' rights generally.

Section 5.4 NO VIOLATION.

(a) NO BREACH OR CONFLICT. The execution, delivery and performance of
this Agreement by Central and the consummation of the transactions contemplated
hereby will not (i) constitute a breach or violation of or default under the
articles of incorporation or the by-laws of Central or of any of the Central
Subsidiaries or (ii) except as set forth in Section 5.4, Part I of the Central
Disclosure Schedule, violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Lien upon
any of the Assets of Central or of any of the Central Subsidiaries under any of
the terms, conditions or provisions of, any Contract to which Central or any
such Central Subsidiary is a party or to which it or any of its Assets may be
subject.

(b) CONSENTS. Except as set forth on Section 5.4, Part II of the Central
Disclosure Schedule, other than Required Filings and Approvals, no consent,
approval, Order or authorization of, or registration, application, declaration
or filing with (collectively, "Consent or Filing"), any Person is required with
respect to Central or any Central Subsidiary in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, except

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for any Consent or Filing, the failure to obtain or do would not (i) cause any
Insurance License held by a Central Insurer to fail to be in full force and
effect without amendment, limitation or condition of any kind, (ii) cause
Central or any Central Subsidiary to be in violation of any term or provision of
any Material Law applicable to Central or any Central Subsidiary or any of its
respective Assets or (iii) individually or in the aggregate, have a Central
Adverse Effect.

Section 5.5 SAP STATEMENTS. Central has previously delivered to American
true and complete copies of the Annual Statements of each Central Insurer for
each of the years ended December 31, 1993, 1992 and 1991. Central has also
furnished to American true and complete copies of the Quarterly Statements filed
by or on behalf of each Central Insurer for each of the three (3) months ended
March 31, 1994 and the six (6) months ended June 30, 1994. Each of the SAP
Statements was (and, as to the SAP Statements not filed as of the date hereof,
will be) in compliance in all material respects and was (and, as to SAP
Statements not filed as of the date hereof, will be) prepared in accordance with
SAP, and each fairly presents (and, as to SAP Statements not filed as of the
date hereof, will present) in all material respects the separate financial
condition, Assets, Liabilities, surplus and other funds, results of operations,
and changes in financial position of the Person covered thereby as at the dates
or for the periods covered thereby, in conformity with SAP.

Section 5.6 FINANCIAL STATEMENTS. Central has previously delivered to
American true and complete copies of (i) audited GAAP Financial Statements for
the years ended December 31, 1993 and 1992 of each Central Subsidiary, other
than Central Insurers, for which audited GAAP Financial Statements have been
prepared or, if such audited GAAP Financial Statements have not been prepared,
unaudited GAAP Financial Statements for each of such years and (ii) unaudited
GAAP Financial Statements for the three (3) months ended March 31, 1994 and the
six (6) months ended June 30, 1994 of each Central Subsidiary (other than
Central Insurers) (collectively, the "Central GAAP Financial Statements"). Each
of the Central GAAP Financial Statements is correct and complete in all material
respects and was prepared in accordance with GAAP, and each presents fairly in
all material respects the financial conditions, results of operations and
changes in financial position of the Person covered thereby as of the dates or
for the periods covered thereby, in conformity with GAAP.

Section 5.7 RESERVES. The aggregate actuarial reserves and other
actuarial amounts held in respect of Liabilities with respect to Insurance
Contracts of each Central Insurer as established or reflected in the June 30,
1994 Quarterly Statement of each Central Insurer: (a)(i) were determined in
accordance with generally accepted actuarial standards consistently applied,
(ii) were fairly stated in accordance with sound actuarial principles and (iii)
were based on actuarial assumptions that are in accordance with those specified
in the related Insurance Contracts; (b) met the requirements of the insurance
Laws of the applicable jurisdiction in all material respects; and (c) to the
Knowledge of Central, were adequate (under generally accepted actuarial
standards consistently applied) to cover the total amount of all reasonably
anticipated matured and unmatured Liabilities of such Central Insurer under all
outstanding Insurance Contracts pursuant to which such Central Insurer has any
Liability. For purposes of clause (c) above, (i) the adequacy of reserves shall
be determined only on the basis of facts and circumstances known or which
reasonably should have been known (based on

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procedures consistently applied by Central in connection with assessing the
adequacy of reserves from time to time) by Central as at the date hereof and
(ii) the fact that reserves covered by any such representation may be
subsequently adjusted at times and under circumstances consistent with Central's
ordinary practice of periodically reassessing the adequacy of its reserves shall
not be used to support any claim regarding the accuracy of such representation.

Section 5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 5.8 of the Central Disclosure Schedule, since December 31, 1993, each of
Central and the Central Subsidiaries has conducted its Business only in the
ordinary course, consistent with past practice, and there has not occurred any
event, change or development which individually or in the aggregate has had or
may reasonably be expected to have a Central Adverse Effect.

Section 5.9 NO UNDISCLOSED LIABILITIES. Except as disclosed in the
December 31, 1993 Annual Statement and each 1994 Quarterly Statement of each
Central Insurer and each of the most recent unaudited Financial Statements
provided by Central to American with respect to Central Subsidiaries that are
not a Central Insurer or as set forth in Section 5.9 of the Central Disclosure
Schedule, neither Central nor any Central Subsidiary has any Liabilities (other
than Liabilities in respect of Insurance Contracts, payroll, employee benefits
and other employee compensation, and, with respect to the period from the date
of this Agreement through the Closing Date of the Merger, Liabilities incurred
without violation of Section 6.1 hereof, in each case entered into in the
ordinary course of business, consistent with past practice) that individually
exceed two million five hundred thousand dollars ($2,500,000) on an After-Tax
Basis or in the aggregate exceed ten million dollars ($10,000,000) on an After-
Tax Basis or have or may reasonably be expected to have a Central Adverse
Effect.

Section 5.10 TAXES AND TAX RETURNS. Except as set forth in Section 5.10
of the Central Disclosure Schedule: (a) all material Tax Returns required to be
filed by any Person in the Central Group have been timely filed (taking into
account any extensions of time for filing such Returns); (b) at the time filed,
such Returns were (and, as to Returns not filed as of the date hereof, will be)
true, complete and correct in all material respects and each Person in the
Central Group has timely paid or caused to be timely paid all Taxes due and
payable for periods covered by such Returns; (c) the accruals and reserves
reflected in the audited Central GAAP Financial Statements or SAP Statements, as
the case may be, of Central and of the Central Subsidiaries for the year ended
December 31, 1993, and the unaudited Central GAAP Financial Statements or SAP
Statements, as the case may be, of Central and of the Central Subsidiaries for
the six (6) months ended June 30, 1994 are adequate in all material respects to
cover all Taxes accrued through the dates thereof for those and any prior
periods in accordance with GAAP or SAP, as the case may be; (d) there are no
material Liens for Taxes upon the Assets of any Person in the Central Group
except liens for Taxes not yet due; (e) there are no outstanding deficiencies,
assessments or written proposals for the assessment of Taxes proposed, asserted
or assessed against any Person in the Central Group; and (f) Central has filed a
consolidated Tax Return for federal income tax purposes on behalf of itself and
all of its Subsidiaries since 1990 as the common parent corporation of an
"affiliated group" (within the meaning of Section 1504(a) of the Code) to the
extent such Subsidiaries are "includible corporations" within the meaning

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of Section 1504(c)(2) of the Code.

Section 5.11 LITIGATION. Except as set forth in Section 5.11, Part I of
the Central Disclosure Schedule, on the date of this Agreement there are no
Proceedings pending nor, to the Knowledge of Central or any Central Subsidiary,
any Proceedings or investigations (other than claims in the ordinary course of
the insurance Business), threatened against, relating to, involving or otherwise
affecting Central or any Central Subsidiary. Except as set forth in Section
5.11, Part I of the Central Disclosure Schedule, there are no Proceedings
pending nor, to the Knowledge of Central or any Central Subsidiary, any
Proceedings or investigations threatened against, relating to, involving or
otherwise affecting Central or any Central Subsidiary which, individually or in
the aggregate, may reasonably be expected to have a Central Adverse Effect.
Except as set forth in Section 5.11, Part II of the Central Disclosure Schedule,
neither Central nor any Central Subsidiary is subject to any Order, except for
Orders which, individually or in the aggregate, do not and would not reasonably
be expected to have a Central Adverse Effect.

Section 5.12 COMPLIANCE WITH LAW.

(a) Except as set forth in Section 5.12, Part I of the Central Disclosure
Schedule, neither Central nor any Central Subsidiary is in violation in any
material respect (or, with notice or lapse of time or both, would be in
violation in any material respect) of any term or provision of any Material Law
(other than Environmental Laws, the Code, state, local or foreign Tax Laws,
ERISA) applicable to it or any of its Assets. Without limiting the generality
of the foregoing: each of Central and the Central Subsidiaries has filed or
caused to be filed all reports, statements, documents, registrations, filings or
submissions which were required by any such Material Law to be filed by it and
all such filings complied in all material respects with all such Material Laws
when filed. Central has delivered to American all reports reflecting the
results of examinations of the affairs of each Central Insurer issued by
insurance Governmental Entities for any period ending on a date on or after
January 1, 1987, and, except as set forth in Section 5.12, Part II of the
Central Disclosure Schedule, all deficiencies or violations in such reports for
any prior period have been resolved. Except as set forth in Section 5.12, Part
III of the Central Disclosure Schedule, all outstanding Insurance Contracts
issued or assumed by any Central Insurer are, to the extent required by
applicable Law, on forms and at rates approved by the insurance Governmental
Entities of the jurisdictions where issued (except for immaterial deviations
from such approved forms) or have been filed with and not objected to by such
authorities within the periods provided for objection.

(b) Except as set forth in Section 5.12, Part IV of the Central Disclosure
Schedule, neither Central nor any Central Subsidiary is a party to any Contract
with or other undertaking to, or is subject to any Order by, or is a recipient
of any supervisory letter or other oral or written communication of any kind
from, any Governmental Entity which (i) currently materially and adversely
affects or is reasonably likely to affect materially and adversely the conduct
of its Business, including, without limitation, its reserve adequacy, its
investment, sales or trade practices and policies, its underwriting practices
and policies or its management, (ii) may reasonably be expected to have a
Central Adverse Effect, nor, to the Knowledge of Central and the Central
Subsidiaries, has Central

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or any Central Subsidiary been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such Order, Contract or other communications.

Section 5.13 EMPLOYEE BENEFIT PLANS: ERISA. There are no Employee
Benefit Plans maintained by the Central Group or with respect to which the
Central Group has or may have a Liability (the "Central Benefit Plans"), other
than those described in Section 5.13, Part I of the Central Disclosure Schedule.

I. With respect to each Central Benefit Plan that is an "employee pension
benefit plan" as defined in Section 3(2) of ERISA and qualified under Section
401(a) of the Code (the "Central Pension Plans"), except as set forth in Section
5.13, Part II of the Central Disclosure Schedule:

(a) As of the date of the most recent determination letter, the terms
of each of the Central Pension Plans intended to be a tax-qualified plan
under Section 401(a) or 403(a) of the Code complies with the applicable
provisions of Section 401(a) of the Code from its initial effective date,
except for the period of time a plan predates Section 401(a) or 403(a) of
the Code, and such compliance is evidenced by one or more determination
letters; since the date of the most recent determination letter, each of
the Central Pension Plans has been operated in good faith compliance with
Section 401(a) or 403(a) of the Code; each Central Pension Plan is funded
by a trust which has been determined to be exempt from federal income taxes
pursuant to Section 501(a) of the Code or by an annuity contract described
in Section 403(a) of the Code.

(b) Central and the Central Subsidiaries have in all material
respects performed all obligations required to be performed by them under
the Central Pension Plans and neither Central nor any Central Subsidiary
has any Knowledge of any such failure to perform such obligations by any
Person with respect to any such Central Pension Plan.

(d) The present value of all benefit liabilities, within the meaning
of Section 4001(a)(16) of ERISA, under each of the Central Pension Plans
subject to Title IV of ERISA did not, as of the latest valuation date used
for purposes of filing the most recent IRS Form 5500, exceed the value of
the Assets of such Central Pension Plan allocable to such benefit
liabilities based upon actuarial assumptions which Central has furnished to
American.

(e) Each Central Pension Plan has operated in accordance with the
reporting and disclosure requirements imposed under ERISA and the Code.

(f) No Central Pension Plan is liable for any federal, state, local,
or foreign Taxes.

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(g) Central and the Central Subsidiaries have not incurred any
material Liability (except for required premium payments, which premium
payments have been or will be made for plan years ended prior to the
Effective Time of the Merger) to the PBGC with respect to the Central
Pension Plans.

(h) No Central Pension Plan is currently under investigation, audit,
or review by the IRS, the DOL, or the PBGC, other than with respect to
routine plan amendments, and neither Central nor any Central Subsidiary has
any Knowledge that any such action is contemplated or under consideration.

(i) There are no Proceedings or investigations pending or, to the
Knowledge of Central and the Central Subsidiaries, threatened, against any
Central Pension Plan or against Central or any Central Subsidiary with
respect to any Central Pension Plan.

II. With respect to each Central Benefit Plan that is an employee welfare
benefit plan as defined in Section 3(1) of ERISA (the "Central Welfare Plans"),
except as set forth in Section 5.13, Part III of the Central Disclosure
Schedule:

(a) Each of the Central Welfare Plans has complied in all material
respects since its initial effective date with the applicable provisions of
the Code; any trust adopted in connection therewith has been exempt since
its initial effective date from federal income taxes; and all contributions
ever made to the Central Welfare Plans and trust, if any, have been
deductible by the employee sponsor of the Central Welfare Plans and trust
for federal income tax purposes.

(b) Central and the Central Subsidiaries have performed in all
material respects all obligations required to be performed by them under
the Central Welfare Plans, and neither Central nor any Central Subsidiary
has any Knowledge of any failure to perform such obligations by any Person
with respect to any such Central Welfare Plan.

(d) Each Central Welfare Plan has operated in accordance with the
reporting and disclosure requirements imposed under ERISA and the Code.

(e) No Central Welfare Plan is liable for any federal, state, local,
or foreign Taxes.

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(f) Since the effective date of the group health plan continuation
coverage requirements of the Consolidated Omnibus Budget Reconciliation Act
of 1986 as set forth in Sections 601 through 608 of ERISA and former
Section 162(k) an Section 2980B of the Code and the Treasury Regulations
thereunder, Central and Central Subsidiaries have complied in all material
respects with such requirements.

(g) No Central Welfare Plan is currently subject to Proceedings by
the IRS or the DOL and neither Central nor any Central Subsidiary has any
Knowledge that any such action is contemplated or under consideration.

(h) There are no Proceedings or investigations, other than routine
claims for benefits, pending or, to the Knowledge of Central and the
Central Subsidiaries, threatened, against any Central Welfare Plan or
against Central or any Central Subsidiary with respect to any such Central
Welfare Plan.

(i) Central and the Central Subsidiaries do not maintain, nor have
they ever maintained, a Welfare Plan that provides benefits to current or
former employees of Central or Central Subsidiaries beyond their
termination of employment, other than on an employee-pay-all basis or which
by its terms permits Central or Central Subsidiaries to terminate such
Central Welfare Plan at any time.

Section 5.14 ASSETS. Except as set forth in Section 5.14, Part I of the
Central Disclosure Schedule or as set forth in the footnotes to the Financial
Statements previously delivered to American pursuant to Sections 5.6 and 5.7
hereof and except for Assets disposed of since June 30, 1994 in arms' length
transactions at prices reasonably believed to be fair market value in the
ordinary course of business and consistent with past practice, each of Central
and the Central Subsidiaries has good title to all Assets that are disclosed or
otherwise reflected in its June 30, 1994 Quarterly Statement or unaudited GAAP
Financial Statements for the six (6) months ended June 30, 1994, as the case may
be, and all such Assets are owned by such Persons, free and clear of all Liens,
other than Permitted Liens.

Section 5.15 ENVIRONMENTAL MATTERS.

(a) Except as set forth in Section 5.15, Part I of the Central Disclosure
Schedule, each of Central and the Central Subsidiaries is, and, to the Knowledge
of each of Central and the Central Subsidiaries, all Central Operating
Facilities (including, with respect to any Central Operating facility, all
owners or operators thereof), are in substantial compliance with all applicable
Environmental Laws. Except as set forth in Section 5.15, Part II of the Central
Disclosure Schedule, to the Knowledge of each of Central and the Central
Subsidiaries, neither Central nor any Central Subsidiary has received any
communication (written or oral), that alleges that Central or any Central
Subsidiary or any Central Operating Facility (including, with respect to any
Central Operating Facility, any owner or operator thereof) is not in such
compliance, and, to the Knowledge of each of Central and

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the Central Subsidiaries, there are no circumstances that may prevent or
interfere with such compliance in the future. All Licenses held on the date
hereof by Central or any Central Subsidiary pursuant to Environmental Laws are
identified in Section 5.15, Part III of the Central Disclosure Schedule.

(b) Except as set forth in Section 5.15, Part IV of the Central Disclosure
Schedule, there is no Environmental Claim pending against Central or any Central
Subsidiary or Central Operating Facility or, to the Knowledge of each of Central
and the Central Subsidiaries, threatened against Central or any Central
Subsidiary or Central Operating Facility, or any Person whose Liability for any
Environmental Claims Central or any Central Subsidiary has or may have retained
or assumed either contractually or by operation of Law, except for Environmental
Claims which, individually or in the aggregate, may not reasonably be expected
to have a Central Adverse Effect.

Section 5.16 CONTRACTS. Section 5.16, Part I of the Central Disclosure
Schedule contains a true and complete list of all of the following Contracts as
of the date of this Agreement (true and complete copies of all such written
Contracts having been made available to American) in force or operative in any
respect, to which Central or any Central Subsidiary is a party or by which any
Assets of Central or any Central Subsidiary are or may be bound, as such
Contracts may have been amended to the date of this Agreement:

(a) all employment, agency, brokerage, consultation, retirement
(other than pursuant to the existing provisions of any Central Benefit Plan
in full force and effect on the date of this Agreement), representation or
other Contracts with present or former employees, agents or consultants
(including, without limitation, loans or advances to any such Person) or
with any Person which (i) may not be terminated on notice of sixty (60)
days or less without penalty or premium and (ii) provide for compensation
of one hundred thousand dollars ($100,000) or more per year (including,
without limitation, base salary, bonus and incentive payments and other
payments or fees, whether or not any portion thereof is deferred), and the
name, position and rate or terms of compensation of each such Person and
the expiration date of each such Contract;

(b) all Contracts with any Person, including, without limitation, any
Governmental Entity, containing any provision or covenant (i) limiting the
ability of Central or any Central Subsidiary to engage in any line of
business, to compete with any Person, to do business with any Person or in
any location or to employ any person or (ii) limiting the ability of any
Person to compete with Central or any Central Subsidiary;

(c) all Contracts with any Person containing any provision or
covenant relating to the indemnification or holding harmless by Central or
any Central Subsidiary of any Person which might reasonably be expected to
result in a Liability to Central or any Central Subsidiary of five hundred
thousand dollars ($500,000) or more;

(d) all investment advisory Contracts with any investment company
registered

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under the Investment Company Act or with any investment advisory client;
and

Section 5.16 Part I of the Central Disclosure Schedule also contains, as of
the date of this Agreement, a list of all third party administrators of Central
and the Central Subsidiaries.

Each of the Contracts listed in Section 5.16, Part I of the Central
Disclosure Schedule is in full force and effect and (assuming each such Contract
is a valid and binding obligation of the other parties thereto) constitutes a
valid and binding obligation of Central and each Central Subsidiary to the
extent that it is party thereto, and, to the Knowledge of Central and the
Central Subsidiaries, of each other Person that is a party thereto in accordance
with its terms, and neither Central nor any Central Subsidiary is, and, to the
Knowledge of Central and the Central Subsidiaries, no other party to such
Contract is, on the date hereof, in material violation, breach or default of any
such Contract or with notice or lapse of time or both would be in material
violation, breach or default of any such Contract. Except as set forth in
Section 5.16, Part II of the Central Disclosure Schedule, no such Contract
contains any provision providing that any other party thereto may terminate such
Contract by reason of the execution of this Agreement or the consummation of the
transactions contemplated hereby. Except as set forth in Section 5.16, Part III
of the Central Disclosure Schedule, neither Central nor any Central Subsidiary
is a party to or bound by any Contract material to its Business that was not
entered into in the ordinary course of business or that has or may reasonably be
expected to have, in the aggregate with any other Contracts, a Central Adverse
Effect. Neither Central nor any Central Subsidiary is a party to or bound by
any collective bargaining or similar labor Contract.

Section 5.17 WARRANTIES. The representations and warranties of Central
contained herein, and the information provided by Central contained and to be
contained herein and in the Central Disclosure Schedule and any certificates
executed and delivered by an officer of Central, do not and will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements herein or therein not misleading in light of the
circumstances in which made. The information provided by Central contained
herein and in the Central Disclosure Schedule fairly presents and will fairly
present the information purported to be shown herein and therein and is and will
be accurate in all material respects.

ARTICLE VI

CERTAIN COVENANTS

Section 6.1 CONDUCT OF BUSINESS PENDING THE MERGER. American and Central
each covenants and agrees as to itself and its Subsidiaries that, prior to the
Closing Date of the Merger, unless the other party shall otherwise agree in
writing or except as set forth in Section

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6.1 of the American Disclosure Schedule or the Central Disclosure Schedule or as
otherwise expressly permitted or contemplated by this Agreement or required by
Law:

(a) the Business of each party and its Subsidiaries shall be
conducted only in the ordinary course in substantially the same manner as
heretofore conducted since December 31, 1993;

(b) American and Central shall use all reasonable efforts to preserve
their respective relationships with Policyowners, insureds, agents,
brokers, suppliers and others having business dealings with them to the end
that their respective goodwill and ongoing businesses shall not be impaired
in any material respect;

(c) no party shall make or propose to make, nor shall any party
permit any of its Subsidiaries to make or propose to make, any change in
its premium rates, dividends, underwriting, investment and other material
insurance practices in any respect which is material to the Condition of
such party and its Subsidiaries taken as a whole;

(d) no party shall, nor shall any party permit any of its
Subsidiaries to: (i) amend its articles or by-laws, (ii) except pursuant
to Contracts set forth in Section 4.16 of the American Disclosure Schedule
or Section 5.16 of the Central Disclosure Schedule, issue or sell any
shares of, or rights of any kind to acquire any shares of or to receive any
payment based on the value of, its capital stock or any securities
convertible into shares of any such capital stock, (iii) incur any
indebtedness for borrowed money other than in the ordinary course of
business and other than borrowings of up to five million dollars
($5,000,000), in the aggregate, (iv) make any material change in any method
of accounting or accounting practice or policy, (v) agree to any merger,
consolidation, demutualization, redomestication, sale of all or
substantially all of its Assets, bulk or assumption reinsurance arrangement
or similar reorganization, arrangement or business combination, (vi) enter
into any Contract that could materially and adversely affect such party's
ability to perform its obligations under this Agreement, (vii) enter into
any Contract limiting the ability of such party or any of its Subsidiaries
to engage in any Business, to compete with any Person, to do Business with
any Person or in any location or to employ any Person, (viii) enter into
any Contract relating to the direct or indirect guarantee (other than the
endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past practice) of any obligation of any
Person (other than its Subsidiaries or ultimate parent) in respect of
indebtedness for borrowed money or other financial obligations of any
Person (other than its Subsidiaries or ultimate parent) or (ix) modify any
Contract in existence as of the date hereof with respect to any of the
foregoing;

(e) no party shall, nor shall any party permit any of its
Subsidiaries to (i) increase in any manner the compensation of its
directors, officers or employees, except in the ordinary course of business
and consistent with past practice or pursuant to the terms of agreements or
plans as currently in effect, (ii) except as disclosed in writing to the
other party prior to the

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date of this Agreement, pay or agree to pay any pension, severance,
retirement allowance or other employee benefit not required by any existing
employee benefit plan, agreement or arrangement to any director, officer or
employee, whether past or present, (iii) except as required by the terms of
any existing plan or Contract, adopt or commit itself to or enter into any
additional pension, profit-sharing, bonus, incentive, deferred
compensation, group insurance, severance pay, retirement or other employee
benefit plan or Contract, or to any employment or consulting agreement with
or for the benefit of any Person which cannot be terminated by a party
hereto, its successor in interest or its Subsidiary upon notice of thirty
(30) days or less without penalty or premium, (iv) amend any plan or
Contract referred to in clause (iii) above, or (v) enter into, adopt or
increase any indemnification or hold harmless arrangements with any
directors, officers or other employees or agents of any Person.

(f) other than in the ordinary course of business and consistent with
past practice no party shall, nor shall any party permit any of its
Subsidiaries to, make any capital expenditures or commitments for capital
expenditures (other than in respect of Investment Assets) which
individually exceed five hundred thousand dollars ($500,000) or which in
the aggregate for such party and its Subsidiaries, taken as whole, exceed
five million dollars ($5,000,000).

Section 6.2 REASONABLE EFFORTS. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action to do, or cause to
be done, and to assist and cooperate with the other party hereto in doing, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.

Section 6.3 ACCESS AND INFORMATION. American and Central shall each
afford to the other and the other's representatives full access during normal
business hours through the period immediately prior to the Effective Time of the
Merger to all of their respective Assets, books, Contracts, commitments and
records (including, without limitation, Tax Returns and accountants' work
papers) and, during such period, American and Central shall each furnish
promptly to the other (i) a copy of each material report, schedule and other
document filed or received by it pursuant to the requirements of Law, including,
without limitation, Financial Statements and SAP Statements, and (ii) all such
other information concerning its Business, Assets and personnel as the other may
reasonably request. Information provided by each party to the other party
hereunder shall be deemed to be confidential information to the extent provided
in the Confidentiality Agreement.

Section 6.4 NOTICE OF PROCEEDINGS. Each of American and Central shall
promptly notify the other of, and provide to the other all information relating
to, any Proceedings or investigations commenced or, to the best of its
Knowledge, threatened against, relating to or involving or otherwise affecting
American or Central or any of their respective Subsidiaries, as the case may be,
which, if pending on the date hereof, would have been required to have been
disclosed in writing pursuant to Section 4.11 or Section 5.11 hereof or which
relate to the execution of this Agreement or the consummation of the
transactions contemplated hereby.

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Section 6.5 NOTIFICATION OF CERTAIN OTHER MATTERS. American and Central
shall promptly notify each other of and provide each other with all information
relating to:

(i) any notice of, or other communication relating to, a default or
event which, with notice or lapse of time or both, would become a default,
received by such party or any of its Subsidiaries subsequent to the date of
this Agreement under any Contract of a type required to be disclosed
pursuant to Section 4.16 or Section 5.16 hereof to which such party or any
of its Subsidiaries is a party or to which such party or any of its
Subsidiaries or any of its respective Assets may be subject or bound;

(ii) the occurrence of any event which, with notice or lapse of time
or both, may reasonably be expected to result in a default by such party or
any of its Subsidiaries or, to the Knowledge of such party and its
Subsidiaries, a default by any other Person, under any Contract of a type
required to be disclosed pursuant to Section 4.16 or Section 5.16 hereof to
which such party or any of its Subsidiaries is a party;

(iii) any notice or other communication from or to any Person
alleging that the consent of such Person is or may be required in
connection with the execution of this Agreement of the consummation of the
transactions contemplated hereby;

(iv) any notice or other communication from or to any rating agency in
connection with this Agreement or the transactions contemplated hereby or
otherwise and from or to any Governmental Entity in connection with this
Agreement or the transactions contemplated hereby; and

(v) any change or other event which may have a material adverse
effect on the Condition of such party of any of its Subsidiaries, or the
occurrence of an event or development which, so far as reasonable can be
foreseen at the time of its occurrence, could result in any such change
other than general economic or financial conditions which do not affect
such party or any of its Subsidiaries uniquely.

In furtherance of the foregoing, to the fullest extent permitted under
applicable Law, American and Central shall provide each other with copies (or,
to the extent written materials are not involved, oral notice) of proposed
notices, applications or any other communications to any Governmental Entity or
rating agency in connection with this Agreement or the transactions contemplated
hereby, in each case at least three (3) business days prior to dispatch of
written materials (or, to the extent written materials are not involved, prior
to initiation) and neither American nor Central will dispatch (or, to the extent
written materials are not involved, initiate) such notice, application or
communication without the prior consent of the other party, which consent shall
not be unreasonably withheld.

Section 6.6 INDEMNIFICATION.

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(a) Central agrees to indemnify to the extent permitted by law the present
officers directors and employees of American ("Indemnification Parties") against
any and all Losses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted
("Indemnified Liabilities"), to which they, or any of them, may become subject
under federal or state statutory law or regulation, or under common law or
otherwise, insofar as the Indemnified Liabilities arise directly out of this
Agreement or the transactions contemplated herein: provided, however, such
indemnification shall be effective only after all other sources of
indemnification have been exhausted without fully indemnifying the Indemnified
Party from the Indemnified Liabilities and provided, further, that such
indemnification shall be subject to the limitations set forth in the following
paragraphs:

(i) In no case will Central indemnify against any Indemnified Liability
(other than any investigation, attorneys fees, legal and other expenses
reasonably incurred in connection with any action, suit or proceeding or
any claim asserted) resulting from any final and binding judgment of a
court with jurisdiction of the matter and from which no further appeal can
be taken, determining that: the Indemnified Party did not act in good faith
and in a manner he or she reasonably believed to be in the best interests
of American; or the Indemnified Party had reasonable cause to believe his
or her conduct was unlawful; or the Indemnified Party is liable for gross
negligence or misconduct in the performance of his or her duties to
American.

(ii) Since the Surviving Company's By-Laws provide for indemnification of
its officers, directors and employees, Central will provide no
indemnification pursuant to this section arising out of any act or the
failure to act by any such officer, director or employee of American from
and after the Effective Time of the Merger, but in lieu thereof, will
provide indemnification for such officers, directors and employees pursuant
to such By-Laws.

(b) The rights of indemnification provided for herein shall not cease by
reason of the resignation or other cessation of service of any such officer,
director or employee of American whether prior to or after the Effective Time of
the Merger. The rights of indemnification provided for herein shall inure to
the benefit of the heirs and legal representatives of the Indemnified Parties.

(c) Any Indemnified Party who proposes to assert the right to
indemnification under this section will, promptly after receipt of a claim or a
notice of commencement of any action, suit or proceeding against the Indemnified
Party in respect of which a claim is to be made against Central under this
section, notify Central of the claim or the commencement of such action, suit or
proceeding, enclosing a copy of all papers received by or served upon him or
her, but the omission so to notify Central of any such claim, action, suit or
proceeding shall not relieve Central from any liability that it may have to the
Indemnified Party otherwise than under this section. Central shall participate
at its own expense in the defense of any such claim, action, suit or proceeding
within a reasonable time after receipt of notice with counsel satisfactory to
the Indemnified Party. Central shall not be liable to the Indemnified Party
for the fees and expenses of any additional legal counsel thereafter retained by
the Indemnified Party, except as provided below and except for the reasonable
costs of investigation subsequently incurred by the Indemnified Party in
connection with the defense

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thereof. The Indemnified Party shall have the right to employ his or her own
counsel in any such claim, action, suit or proceeding, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Party unless (1) the
employment of such additional counsel by the Indemnified Party has been
authorized in writing by Central, (2) the Indemnified Party shall have
reasonably concluded that there may be conflict of interest between Central and
the Indemnified Party in the conduct of the defense of such action (in which
case Central shall not have the right to direct the defense of such action on
behalf of the Indemnified Party), or (3) Central shall not in fact have employed
counsel to assume the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the expense of Central as such fees or
expenses are incurred. Central shall not be liable for any settlement of any
action, claim, suit or proceeding effected without its written consent.

Section 6.7 SUPPLEMENTAL DISCLOSURE. Each of American and Central shall
have the continuing obligation promptly to supplement or amend the American
Disclosure Schedule or the Central Disclosure Schedule, as the case may be, with
respect to any matter hereafter arising or discovered which, if existing or
known at the date hereof, would have been required to be set forth or described
therein.

Section 6.8 NO SOLICITATIONS.

(a) Without obtaining the prior written consent of the other party,
neither American or any American Subsidiary, nor Central or any Central
Subsidiary, shall authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, attorney, accountant,
actuary or other Person retained by it or on its behalf to: (i) solicit,
encourage (including, without limitation, by way of furnishing information),
enter into any discussions, negotiations or agreements, or take any action to
facilitate, pursue, or entertain any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Reorganization
Proposal, or (ii) agree to, approve or endorse any Reorganization Proposal.
Each party shall promptly advise the other orally and in writing of any such
inquiries or proposals however preliminary and whether written or oral, and
shall communicate the full and complete details of any such inquiry or proposal,
including, without limitation, the identity of all Persons involved. As used in
this Agreement, "Reorganization Proposal" shall mean any proposal for, or to
discuss, a merger, consolidation, purchase or sale of a significant amount of
the Assets (other than Investment Assets), demutualization, bulk or assumption
reinsurance arrangement or other reorganization, arrangement or business
combination involving a party hereto, or a Subsidiary of such party, other than
the transactions contemplated by this Agreement.

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(b) Notwithstanding Section 6.8(a), American agrees that Central and the
Central Subsidiaries may engage in discussions with Persons with respect to any
individual transaction involving a purchase price of twenty million dollars
($20,000,000) or less. Central agrees that it will not finalize any such
transaction without American's prior written approval.

(c) American and Central agree that any individual transaction involving
ten million dollars ($10,000,000) or less and which does not result in (i) a
merger or any other business combination of any Person with one of the parties
hereto or a Subsidiary of such party or (ii) the right to elect of a majority of
the Board of Directors of such Person by the party hereto or a Subsidiary of
such party, would not be deemed to involve the purchase or sale of a significant
amount of assets for purposes of Section 6.8(a).

(d) In the event that this Agreement is terminated by one of the parties,
except by a proper termination pursuant to Section 8.1 hereof, the party
terminating the Agreement shall be obligated to continue to comply with this
Section 6.8 for a period of one year from the date of such termination.

Section 6.9 DIRECTORS AND OFFICERS.

(a) Central and American shall take action to cause the number of
directors comprising the full Board of Directors of the Surviving Company at the
Effective Time of the Merger to be thirteen (13) Persons consisting of the
following: (i) John R. Albers, Roger K. Brooks, Malcolm Candlish, D T Doan,
Thomas F. Gaffney, John W. Norris, Jr., Ronald D. Pearson and John A. Wing (the
"Central Designees") and (ii) Wesley H. Boldt, Joseph A. Borgen, James S.
Cownie, Sam C. Kalainov and Jack C. Pester (the "American Designees"). The
Board of Directors of the Surviving Company shall be divided into five classes
as set forth in Exhibit "D" hereto. If Mr. Cownie declines to serve on the
Board of Directors, the American Designees have the right to cause the Board of
Directors of the Surviving Company to appoint to the Board of Directors a Person
who has never served as an officer, employee, general agent, agent or sales
representative of American. During the period beginning January 1, 1996 and
ending on March 31, 1996, the American Designees shall have the right in their
sole discretion to cause the Board of Directors of the Surviving Company to
appoint James J. Streck to the Board of Directors.

(b) If, prior to the Effective Time of the Merger, any of the American
Designees or Central Designees shall decline or be unable to serve as a
director, American (if such Person was an American Designee) or Central (if such
Person was a Central Designee) shall designate another Person, who has never
served as an officer, employee, general agent, agent or sales representative of
American or Central, to serve in such Person's stead, which Person shall be
reasonably acceptable to the other party.

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<PAGE>

(c) The Surviving Company Board of Directors shall take action as of the
Effective Time of the Merger to cause Mr. Kalainov to be elected Chairman of
the Board of the Surviving Company, Mr. Brooks to be elected Chief Executive
Officer of the Surviving Company, Mr. Doan to be elected Vice Chairman of the
Surviving Company for a term running through December 31, 1995 and Mr. Streck to
be elected President-Insurance Operations of the Surviving Company, effective as
of the Effective Time of the Merger.

(d) The Surviving Company Board of Directors shall also take action as of
the Effective Time of the Merger to cause the following officer positions to
report directly to the Chief Executive Officer: President - Life Insurance
Operations, President - Central Resource Group, Inc., Executive Vice President
and Chief Financial Officer, Executive Vice President and Chief Investment
Officer, Senior Vice President - Corporate Services and Senior Vice President -
Human Resources.

(e) If prior to the Effective Time of the Merger, any of Messrs. Kalainov,
Brooks, Doan or Streck shall decline or be unable to serve as an officer of the
Surviving Company, the Board of Directors of the Surviving Company shall elect
another person to serve in such Person's stead.

(f) At the Closing Date of the Merger, American and Central will take such
action as may be necessary to constitute each of the American Board of Directors
and the Central Board of Directors with the American Designees and the Central
Designees.

Section 6.10 EMPLOYEE MATTERS.

(a) Except as expressly provided under the terms of this Agreement, the
Surviving Company shall be under no obligation to employ on or after the
Effective Time of the Merger any of the employees of American or Central.

(b) So as to preserve continuity and assure a smooth transition after the
Effective Time of the Merger, the following employees of American shall be
offered employment agreements with the Surviving Company in the form as set
forth in Exhibit "E" hereto: Sam C. Kalainov, James J. Streck, Larry E. Dybvad,
Ronald P. Wittenwyler, Al Burns, Robert C. Fay, L. M. Fering, Gary Grant and
Keith Troester. The offering of such employment agreements shall not create any
independent rights with respect to the Merger in the employees of American who
are offered employment agreements. Such employee shall in no event be deemed to
be third party beneficiary of this Agreement.

(c) The Surviving Company shall comply with the applicable provisions, if
any, of the Worker Adjustment and Retraining Notification Act.

(d) Except as otherwise provided in the employment agreements attached as
Exhibit "E" hereto, former employees of American who are employed by the
Surviving Company on or after the Effective Time of the Merger shall be entitled
to employee benefits equal in value (determined with

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<PAGE>

respect to each individual benefit and not in the aggregate) to the benefits
generally provided from time to time to all other employees of the Surviving
Company taking into account for this purpose all years of service with American
for purposes of eligibility and vesting.

(e) In the event an American Employee Benefit Plan is merged into a
Central Employee Benefit Plan or any Employee Benefit Plan maintained by the
Surviving Company, each year of service for all purposes credited by American
under any such plan maintained by American shall be credited as a year of
service for all purposes under the Central or Surviving Company Employee Benefit
Plan; PROVIDED, HOWEVER, that in no case shall any former American employee
receive credit for years of service under the Central or Surviving Company
Employee Benefit Plan which exceeds the sum of the former American employee's
years of service with American and the Surviving Company.

(f) The severance policy which will apply to employees of American,
Central or the Surviving Company displaced as a result of the Merger, is as set
forth in Exhibit "F" hereto.

ARTICLE VII

CONDITIONS

Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Closing Date of the Merger of the
following conditions:

(a) this Agreement and the Merger shall have been approved and
adopted by the requisite votes of the respective Members of American and
Central;

(b) other than the filings provided for by Section 2.2, all Required
Filings and Approvals required to be obtained prior to the Closing Date of
the Merger shall have been obtained and not rescinded or adversely modified
or limited (as set forth in the proviso below) or, if merely required to be
filed, such filings shall have been made and accepted, and all waiting
periods prescribed by applicable Law shall have expired or been terminated
in accordance with applicable Law;

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<PAGE>

(c) no Order entered or Law promulgated or enacted by any
Governmental Entity or Person shall be in effect which would prevent the
consummation of the Merger or the other transactions contemplated hereby,
and no Proceeding brought by a Governmental Entity shall have been
commenced and be pending which seeks to restrain, prevent, or materially
delay or restructure the transactions contemplated hereby or which
otherwise questions the validity or legality of any such transactions; and

(d) the opinion of Belin Harris Lamson McCormick shall have been
obtained to the effect that the proposed Merger qualifies as a tax-free
reorganization, substantially as set forth in Exhibit "G" hereto.

Section 7.2 CONDITIONS TO OBLIGATION OF CENTRAL TO EFFECT THE MERGER. The
obligations of Central to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the Merger of the following additional
conditions:

(a) All corporate action on the part of American necessary to
authorize the execution, delivery and consummation of this Agreement or any
agreement or instrument contemplated hereby to which American is or is to
be party and the Merger and any other transactions contemplated hereby or
thereby shall have been duly and validly taken. American shall have
performed and complied in all material respects with all obligations and
agreements required to be performed and complied with by it under this
Agreement at or prior to the Closing Date of the Merger and the
representations and warranties of American contained in Sections 4.1, 4.2,
4.3, 4.4, 4.5, 4.6, 4.7 and 4.12(a) of this Agreement shall be true and
correct in all material respects at and as of the date of this Agreement
and at and as of the Closing Date of the Merger as if made at and as of
such date and time, except as otherwise contemplated or permitted by this
Agreement (it being understood that the truth and correctness of any such
representations and warranties made as of a specified date shall be
determined only as of such specified date). Central shall have received a
Certificate of the Chief Executive Officer of American as to the
satisfaction of this condition, substantially as set forth in Exhibit "H"
hereto;

(b) the representations and warranties of American shall be true and
correct at and as of the date of this Agreement and at and as of the
Closing Date of the Merger as if made at and as of such dates, except as
otherwise contemplated or permitted by this Agreement (it being understood
that the truth and correctness of any such representations or warranties
made as of a specified date shall be determined only as of such specified
date) and except to the extent that any breaches of such representations
and warranties, individually or in the aggregate, have not resulted, or may
not reasonably be expected to result, in (i) damage or expenses of twelve
million five hundred thousand dollars ($12,500,000) or more on an After-Tax
Basis or (ii) an American Material Change or a Surviving Company Adverse
Effect; and

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<PAGE>

(c) Central shall have received an opinion, in form and substance
reasonably satisfactory to Central, dated as of the Closing Date of the
Merger, from Belin Harris Lamson McCormick, substantially as set forth in
Exhibit "I" hereto.

Section 7.3 CONDITIONS TO OBLIGATION OF AMERICAN TO EFFECT THE MERGER.
The obligations of American to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the Merger of the following
additional conditions:

(a) All corporate action on the part of Central necessary to
authorize the execution, delivery and consummation of this Agreement or any
agreement or instrument contemplated hereby to which Central is or is to be
party and the Merger and any other transactions contemplated hereby or
thereby shall have been duly and validly taken. Central shall have
performed or complied in all material respects with all obligations and
agreements required to be performed and complied with by it under this
Agreement at or prior to the Closing Date of the Merger and the
representations and warranties of Central contained in Sections 5.1, 5.2,
5.3, 5.4, 5.5, 5.6, 5.7 and 5.12(a) of this Agreement shall be true and
correct in all material respects at and as of the date of this Agreement
and at and as of the Closing Date of the Merger as if made at and as of
such date and time, except as otherwise contemplated or permitted by this
Agreement (it being understood that the truth and correctness of any such
representations and warranties made as of a specified date shall be
determined only as of such specified date). American shall have received
a Certificate of the Chief Executive Officer of Central as to the
satisfaction of this condition, substantially as set forth in Exhibit "J"
hereto;

(b) the representations and warranties of Central shall be true and
correct at and as of the date of this Agreement and at and as of the
Closing Date of the Merger as if made at and as of such dates, except as
otherwise contemplated or permitted by this Agreement (it being understood
that the truth and correctness of any such representations or warranties
made as of a specified date shall be determined only as of such specified
date) and except to the extent that any breaches of such representations
and warranties, individually or in the aggregate, have not resulted, or may
not reasonably be expected to result, in (i) damage or expenses of twelve
million five hundred thousand dollars ($12,500,000) or more on an After-Tax
Basis or (ii) a Central Material Change or a Surviving Company Adverse
Effect; and

(c) American shall have received an opinion, in form and substance
reasonably satisfactory to American, dated as of the Closing Date of the
Merger, from the General Counsel of Central, substantially as set forth in
Exhibit "K" hereto.

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<PAGE>

ARTICLE VIII

TERMINATION

Section 8.1 TERMINATION. This Agreement may be terminated and the Merger
abandoned at any time prior to the Closing Date of the Merger, whether before or
after approval of the Agreement by the Members of American or Central;

(a) by mutual consent of American and Central;

(b) by either American or Central by written notice to Central or
American, as the case may be, if the Closing Date of the Merger shall not
have occurred on or before June 30, 1995;

(c) by either American or Central by written notice to Central or
American, as the case may be, if the number of votes in favor of the Merger
and this Agreement cast by the Members of American or Central required for
the consummation of the Merger shall not have been obtained at the meetings
of Members or at any adjournment thereof duly held for such purpose;
provided that the right to terminate this Agreement under this Section
8.1(c) shall not be available to any party which has failed to use its best
efforts to solicit the approval of the Merger and this Agreement by its
Members;

(d) by Central, upon no less than five (5) days prior written notice
to American, if there shall have occurred any event, change or development
which has caused an American Material Change; or

(e) by American, upon no less than five (5) days prior written notice
to Central, if, there shall have occurred any event, change or development
which has caused a Central Material Change.

Section 8.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement by either American or Central as provided above, this Agreement
shall thereafter become void and there shall be no Liability on the part of any
party hereto against any other party hereto, or their respective directors,
officers, Policyowners, or agents, except that (i) any such termination shall be
without prejudice to the rights of any party hereto arising out of the willful
breach by any other party of any covenant or agreement contained in this
Agreement, (ii) Section 9.2 shall continue in full force and effect
notwithstanding such termination and (iii) each of the parties hereto shall
provide the other party hereto with a copy of any proposed public announcement
regarding the occurrence of such termination and an opportunity to comment
thereon prior to its dissemination.

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<PAGE>

ARTICLE IX

MISCELLANEOUS

Section 9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties and agreements made by the parties to this Agreement
shall not survive after the Closing Date of the Merger, except as otherwise
provided in this Agreement and except for the agreements contained in Article
II, Section 3.3, Section 6.2, Section 6.6, Section 6.8(d), Section 6.9, Section
6.10 and Section 9.2 which shall survive until expressly provided therein or, if
not so expressly provided, indefinitely.

Section 9.2 FEES AND EXPENSES. Whether or not the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
or expenses except that (i) the expenses incurred jointly shall be borne thirty
five percent (35%) by American and sixty five percent (65%) by Central and (ii)
expenses incurred by American in connection with the due diligence investigation
of Central shall be shared equally by American and Central.

Section 9.3 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given upon delivery to the
address of such party specified below if (i) hand delivered (including delivery
by courier) or (ii) mailed by registered or certified mail, postage prepaid,
return receipt requested, as follows:

(a) If to Central, to:

Central Life Assurance Company
611 Fifth Avenue
Des Moines, IA 50309
Attention: Roger K. Brooks

with a copy to:

Central Life Assurance Company
611 Fifth Avenue
Des Moines, IA 50309
Attention: James A. Smallenberger

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<PAGE>

(b) If to American, to:

American Mutual Life Insurance Company
418 Sixth Avenue
Des Moines, IA 50309
Attention: Sam C. Kalainov

with a copy to:

Belin Harris Lamson McCormick
2000 Financial Center
Des Moines, IA 50309
Attention: Richard W. Lozier, Jr.

or to such other address as the Person to whom notice is given may have
previously furnished to the other party in writing in accordance herewith.

Section 9.4 AMENDMENTS. Subject to receipt of necessary approvals from
appropriate Governmental Entities, if any, this Agreement may be amended by the
parties hereto, by action taken by their respective Boards of Directors, at any
time before or after the approval of this Agreement by the Members of American
or Central, but after either such approval, no amendment or modification shall
be made which in any way materially adversely affects the rights of such Members
without the further approval of such Members. This Agreement may not be
amended, modified or supplemented except by written agreement of the parties
hereto.

Section 9.5 NO WAIVER. Nothing contained in this Agreement shall cause
the failure of either party to insist upon strict compliance with any covenant,
obligation, condition or agreement contained herein to operate as a waiver of,
or estoppel with respect to, any such covenant, obligation, condition or
agreement by the party entitled to the benefit thereto.

Section 9.6 CONFIDENTIALITY AGREEMENT. American and Central will hold
confidential, and will cause their respective officers, directors, employees,
agents, consultants and other representatives to hold confidential, unless
compelled to disclose by judicial or administrative Proceeding or by other
requirements of Law, all confidential documents and confidential or proprietary
information furnished to it by the other party hereto or such other party's
officers, directors, employees, agents, consultants or representatives,
concerning the Business or Condition of such other party or its Subsidiaries,
except to the extent that such documents or information can be shown to have
been (a) previously lawfully known by the party receiving such documents or
information, (b) in the public domain through no fault of such receiving party,
or (c) later acquired by the receiving party from other sources not themselves
bound by, and in breach of, a confidentiality agreement.

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<PAGE>

Section 9.7 BROKERS. Central represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated hereby based upon
any arrangements made by or on behalf of Central. American represents and
warrants that no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of Central.

Section 9.8 PUBLICITY. So long as this Agreement is in effect, the
parties hereto shall not issue or cause the publication of any press release or
other public announcement to any non-affiliated Person with respect to this
Agreement or the transactions contemplated hereby without the prior consent of
the other party, which consent shall not be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that nothing herein contained shall limit the right of each
of the parties hereto to respond in a manner consistent with prior announcements
for which prior consent had been obtained to any communications initiated by any
non-affiliated Person. Each party agrees to consult with the other regarding
communications with respect to this Agreement or the transactions contemplated
hereby to comply with the intent of this Agreement.

Section 9.9 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 9.10 NONASSIGNABILITY. This Agreement shall not be assigned by
operation of Law or otherwise without the prior written consent of the parties
hereto and any purported assignment in violation hereof shall be null and void.

Section 9.11 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their permitted
assigns, and nothing in this Agreement, expressed or implied, is intended to
confer upon any other Person any rights or remedies of any nature under or by
reason of this Agreement, except as expressly provided in Sections 6.6, 6.9 and
6.10.

Section 9.12 COUNTERPARTS. This Agreement may be executed in counterparts
each of which shall be deemed to constitute an original and constitute one and
the same instrument.

Section 9.13 GOVERNING LAW. This Agreement shall be governed and
construed and enforced in accordance with the Laws of the State of Iowa.

Section 9.14 ENTIRE AGREEMENT; STATEMENTS AS REPRESENTATIONS. This
Agreement and the Confidentiality Agreement constitute the entire agreement
between the parties hereto and supersede all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof. All statements contained in this agreement or in the
American Disclosure Schedule or the Central Disclosure Schedule or in any
schedule, certificate, list or other document delivered pursuant to this
Agreement shall be deemed representations and warranties as such terms are used
in the Agreement.

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<PAGE>

Section 9.15 SEVERABILITY. If any provisions hereof shall be held invalid
or unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.

Section 9.16 SPECIFIC PERFORMANCE. Each of the parties hereto
acknowledges and agrees that the other party hereto would be irreparably damaged
in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
each of the parties hereto agrees that they each shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having subject matter jurisdiction, in addition to any other
remedy to which American or Central may be entitled, at law or in equity.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of American and Central on the date first above
written.

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By /s/ Sam C. Kalainov
---------------------------------
Sam C. Kalainov, Chairman and
Chief Executive Officer

[SEAL]

ATTEST:

By /s/ James J. Streck
----------------------------------------
James J. Streck, Senior Vice President
and Secretary

CENTRAL LIFE ASSURANCE COMPANY

By /s/ Roger K. Brooks
---------------------------------
Roger K. Brooks, Chairman and
Chief Executive Officer

[SEAL]

ATTEST:

By /s/ James A. Smallenberger
---------------------------------------------
James A. Smallenberger, Senior Vice President
and Secretary

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<PAGE>

[LETTERHEAD]

EXHIBIT 10.5

April 22, 1996

Member No. 1110

Mr. Roger K. Brooks, CEO/Chairman
American Mutual Life Insurance Company
611 Fifth Avenue
Des Moines, Iowa 50309

Dear Mr. Brooks:

We are pleased to inform you that your application for an Open Line of Credit
(OLOC) commitment has been approved in the amount of $25,000,000.00. The
advance under this commitment was available for disbursement beginning March 8,
1996. A fee was charged to your demand account for $12,500.00 which represents
.05% of the amount approved. We are returning the executed copy of the
application for your files.

The individuals authorized to access the OLOC advance may do so by calling
extension 1013. The variable rate OLOC advance number can be found at the
bottom of the application. Please refernce this number for all OLOC activity.

Please contact the advances area if you have any questions concerning this
program. Thank you for your continuing support of the Bank.

Sincerely,

/s/ Jerry R. Ferguson

Jerry R. Ferguson
First Vice President

JRF/ems
Enclosure

<PAGE>

OPEN LINE OF CREDIT APPLICATION AND TERMS AGREEMENT

APPLICATION

American Mutual Life Insurance Company ("Member") hereby applies to the Federal
Home Loan Bank of Des Moines ("Bank") for an Open Line of Credit commitment
beginning on the date of approval and ending one year from the date of approval,
("Ending Date") in the amount of $25,000,000.

TERMS

1. Member, through its authorized representative may request funds by
telephone advice up to the approved Open Line of Credit limit. Funds will
be available upon advice.

2. Member may choose either an adjustable interest rate advance or a fixed-
rate, fixed-term, non-prepayable advance as follows:

a) For an adjustable interest rate advance, the interest rate will be set
and charged daily on the outstanding advance amount. The interest
amount will be deducted daily by the Bank from the member's demand
account.

b) For a fixed-rate, fixed-term, non-prepayable advance, the interest
rate will be set at issuance. The interest amount will be charged to
the member's demand account at maturity.

3. Each adjustable interest rate advance funded under the Open Line of Credit
will be available after the approval date and will mature on the Ending
Date. Each fixed-rate, fixed-term, non-prepayable advance will be
available after approval and will mature at the maturity date of the
advance.

4. Member represents and warrants that the Open Line of Credit amount
requested does not exceed 15% of assets.

5. The Bank shall have no obligation to make any advance under the Open Line
of Credit unless the Bank is satisfied as to Member's continued
creditworthiness and compliance with the terms of the Agreement for
Advances, Pledge and Security Agreement ("AAPSA"). If adverse facts
develop which make the member ineligible for Bank advances, the member must
provide the Bank with immediate written notification of its ineligibility
and the Bank may cancel this commitment.

<PAGE>

6. The fee for this Open Line of Credit commitment equals .05% times the
amount of the commitment. This fee will be charged to the member's demand
account on the date this application is approved by the Bank.

7. This Application and Terms Agreement, if approved by the Bank, will
constitute the Agreement between Member and Bank as to the Open Line of
Credit and will be wholly incorporated into and become a part of the AAPSA.

By signing this agreement, member hereby accepts the terms hereof.

American Mutual Life
Insurance Company Date: February 28, 1996
- -------------------------------------- ---------------------------------
Member

By: /s/ Michael G. Frazier By: /s/ Joseph K. Haggerty
--------------------------------- -----------------------------------

Michael G. Frazier Joseph K. Haggerty
- -------------------------------------- ----------------------------------------
Typed Name of Signer Typed Name of Signer

Senior Vice President and Senior Vice President and
- -------------------------------------- ----------------------------------------
Title Controller/Treasurer Title General Councsel

- --------------------------------------------------------------------------------
FOR FHLB USE

Date Approved: 3-8-96 FEDERAL HOME LOAN BANK OF DES MOINES
--------------
Expiration Date: 3-7-96 By: /s/ Jerry R. Ferguson
-------------- ------------------------------------
Amount Approved: $25,000,000 By: /s/ David J. Waldron
-------------- ------------------------------------
Commitment Number: 11109703
--------------
Commitment Fee: $12,500
--------------

<PAGE>

American Mutual Life
Insurance Company Date: March 8, 1996 --
- ------------------------------------ ---------------------------------
Member

By: /s/ Michael G. Frazier By: /s/ Thomas C. Godlasky
--------------------------------- -----------------------------------

Michael G. Frazier Thomas C. Godlasky
- -------------------------------------- ----------------------------------------
Typed Name of Signer Typed Name of Signer

Senior Vice President and Executive Vice President and
Controller/Treasurer Chief Investment Officer
- -------------------------------------- ----------------------------------------
Title Title

- --------------------------------------------------------------------------------
FOR FHLB USE

Date Approved: FEDERAL HOME LOAN BANK OF DES MOINES
--------------
Expiration Date: By: /s/ SIGNATURE
-------------- ------------------------------------
Amount Approved: By: /s/ David J. Waldron
-------------- ------------------------------------
Commitment Number:
--------------
Commitment Fee:
--------------

<PAGE>

ALL*AMERUS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

EFFECTIVE JANUARY 1, 1996

<PAGE>

TABLE OF CONTENTS PAGE #

ARTICLE 1: ESTABLISHMENT OF PLAN. . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2: ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 3: BOOKKEEPING ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 4: BENEFIT CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 5: PHANTOM INVESTMENT CREDITS . . . . . . . . . . . . . . . . . . . 2

ARTICLE 6: PAYMENT OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 7: PARTICIPANTS' RIGHTS . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 8: ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE 9: CLAIMS AND APPEAL PROCEDURES . . . . . . . . . . . . . . . . . . 4

ARTICLE 10: AMENDMENT AND DISCONTINUANCE. . . . . . . . . . . . . . . . . . 7

ARTICLE 11: RESTRICTIONS ON ASSIGNMENT. . . . . . . . . . . . . . . . . . . 7

ARTICLE 12: NATURE OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 13: CONTINUED EMPLOYMENT. . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 14: BINDING ON COMPANY, PARTICIPANTS AND THEIR SUCCESSORS . . . . . 8

ARTICLE 15: PAYMENTS MADE BY MISTAKE. . . . . . . . . . . . . . . . . . . . 8

ARTICLE 16: LAWS GOVERNING. . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 17: TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

<PAGE>

ALL*AMERUS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

ARTICLE 1: ESTABLISHMENT OF PLAN

Effective January 1, 1996 ("Effective Date"), American Mutual Life
Insurance Company ("Company") establishes the All*AmerUs Supplemental Executive
Retirement Plan ("SERP"), to supplement benefits provided under the All*AmerUs
Savings & Retirement Plan for Employees of American Mutual Life (EIN 42-0175020,
PN 101) and the All*AmerUs Savings & Retirement Plan for Employees of AmerUs
Group (EIN 42-1324920, PN 102) (collectively, the "401(k) Plan").

The SERP is an unfunded, nonqualified retirement plan maintained primarily
for the purpose of providing additional deferred compensation for a select group
of management and highly compensated employees, as described in sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974
("ERISA"). The SERP will enable select executives:

(a) to receive retirement benefits without regard to the limit on
compensation (currently $150,000) imposed upon the 401(k) Plan by section
401(a)(17) of the Internal Revenue Code of 1986 ("Code"); and

(b) to defer compensation in excess of the limit on elective
deferrals (currently $9,500) imposed upon the 401(k) Plan by sections 401(a)(30)
and 402(g)(1) of the Code, and to receive corresponding increases in Company
matching contributions.

This SERP is being established in conjunction with the All*AmerUs Excess
Benefit Plan ("Excess Plan"), and shall be administered in a manner consistent
with the Excess Plan.

ARTICLE 2: ELIGIBILITY

AN EXECUTIVE MAY PARTICIPATE IN THIS SERP ONLY IF HIS COMPENSATION UNDER
THE 401(K) PLAN ACTUALLY IS LIMITED BY CODE SECTION 401(A)(17). A participant
must complete such forms and make such elections as the Company's Benefit and
Pension Committee ("Committee") may require. In particular, a participant must
give advance written consent for the additional pretax deferrals permitted by
this SERP. A participant who fails to consent, or who consents only in part,
shall have his benefits under the SERP reduced accordingly.

ARTICLE 3: BOOKKEEPING ACCOUNTS

(1) A bookkeeping account shall be established for each SERP
participant, to record his interest in the SERP.

(2) Each participant's account shall be divided into subaccounts
corresponding to those under Sections 4.01(a) and (c) of the 401(k) Plan:

(a) a pretax account, and

(b) a matching account.

(3) Such other subaccounts shall be established as the Committee
determines are necessary to keep track of participants' interests under the
SERP.

(4) A participant shall vest in a subaccount under this SERP at the
same rate and in the same manner as he vests in the corresponding subaccount
under the 401(k) Plan.

(5) SERP records shall be kept on a calendar-year basis.

ARTICLE 4: BENEFIT CREDITS

Each year, the following calculations shall be performed for each
participant:

(a) His pretax deferrals and employer matching contributions shall be
calculated under the 401(k) Plan, but without regard to the limitations imposed
by Code section 415.

<PAGE>

(b) His pretax deferrals and employer matching contributions shall be
calculated without regard to the limitation on pretax deferrals imposed by Code
sections 401(a)(30) and 402(g)(1), without regard to the limitation on
compensation imposed by Code section 401(a)(17), and without regard to
limitations imposed by Code section 415.

(c) The differences between pretax deferrals and employer matching
contributions in (b) and (a) shall be credited to the participant's subaccounts
established under Article 3, paragraph (2) above, in accordance with generally
accepted accounting principles and consistently with the purposes of this SERP
and the Excess Plan.

ARTICLE 5: PHANTOM INVESTMENT CREDITS

Each participant may elect to invest, on a hypothetical basis, his
bookkeeping account under this SERP in the investment options available to him
under the 401(k) Plan. This investment election shall be independent of his
investment elections under the 401(k) Plan and the Excess Plan. A participant's
account under this SERP shall be credited (or debited) with the investment
return (including losses) it would have earned had it actually been invested
according to the participant's directions. The account of a participant who
fails to make an investment election shall receive the performance it would have
received had it been invested in the default option under the 401(k) Plan.

ARTICLE 6: PAYMENT OF BENEFITS

The vested balance in a participant's account under this SERP shall be paid
as soon as administratively feasible following his termination of employment (on
account of retirement, disability, etc.) with the Company. The Committee shall
determine in which of the following forms the participant's benefits shall be
paid:

(a) A single cash sum;

(b) Periodic installments paid monthly, quarterly, or annually over a
period designated by the Committee;

(d) A joint and 50% survivor annuity for the lives of the participant
and spouse, which is purchased from a life insurance company with the proceeds
of the participant's bookkeeping account; or

(e) An annuity for the participant's life, which is purchased from a
life insurance company with the proceeds of the participant's bookkeeping
account.

Installment payments under paragraph (b) or (c) shall not be made over a
period exceeding the participant's life expectancy.

An annuity described in paragraph (d) or (e) shall be purchased from an
insurance company designated in writing by the participant. Annuities may be
purchased from American Mutual Life Insurance Company. The purchase of an
annuity under this Article shall discharge the SERP, the Company, and the
Committee from all obligations to the participant.

In the event the participant dies before his vested account balance is
exhausted, the balance shall be paid to his beneficiary (as determined in
accordance with the terms of the 401(k) Plan) in a single sum as soon as
administratively feasible.

All amounts not vested in accordance with the terms of the SERP shall be
forfeited upon the participant's termination of employment with the Company.

ARTICLE 7: PARTICIPANTS' RIGHTS

This SERP is unfunded for purposes of the Internal Revenue Code and ERISA.
Accordingly, no participant or beneficiary shall have any title to or beneficial
ownership in any assets of the Company.

All benefits payable under this SERP (including those derived from
participants' deferrals) shall be general, unsecured obligations of the Company,
to be paid by the Company from its own funds, and such payments shall not (a)
impose any obligation upon the trust fund under the 401(k) Plan; (b) be paid
from the trust fund under the

<PAGE>

401(k) Plan; or (c) have any effect whatsoever upon the 401(k) Plan or the
payment of benefits from the trust fund under the 401(k) Plan.

ARTICLE 8: ADMINISTRATION

This SERP shall be administered by the American Mutual Life Insurance
Company Benefit and Pension Committee, which shall administer it as an unfunded
plan which is not intended to meet the qualification requirements of section 401
of the Code. The Committee shall have discretionary authority to interpret and
administer this SERP, and to issue rules and regulations for its governance. No
member of the Committee shall be liable to any person for any action taken or
omitted in connection with the interpretation or administration of this SERP. A
Committee member shall not participate in any action or determination regarding
his own benefits.

ARTICLE 9: CLAIMS AND APPEAL PROCEDURES

The purpose of the claims and appeal provisions set forth in this Article
is to secure the speedy, inexpensive resolution of all disputes over SERP
benefits and rights granted by the SERP. These provisions shall be liberally
construed so as to avoid litigation and its attendant expenses.

Each person who claims entitlement to any right or benefit under the SERP
("claimant") may submit a claim with respect to that benefit or right. All
claims shall be submitted in writing to the Committee and shall be accompanied
by such information and documentation as the Committee determines is required to
make a ruling on the claim. Upon receipt of a claim hereunder, the Committee
shall consider the claim and shall render a decision and communicate the same to
the claimant. The Committee shall render a decision within 90 days after
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 90-day period. In no event shall such
extension exceed a period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Committee expects to render a decision. In
the event that the claim is denied in whole or in part, the claimant shall be
given notice in writing, which shall set forth the following in a manner
reasonably calculated to be understood by the claimant:

(a) the specific reason(s) for the denial;

(b) specific reference to pertinent SERP provisions on which the
denial is based;

(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary;

(d) an explanation of the SERP's appeal procedure.

The failure of the Committee to render a decision on a claim within the
time specified shall be deemed to be a denial of such claim.

Any claim under this claims procedure must be submitted within 12 months
from the earlier of (i) the date on which the claimant learned of facts
sufficient to enable him to formulate such claim, or (ii) the date on which the
claimant reasonably should have been expected to learn of facts sufficient to
enable him to formulate such claim.

When a claim has been or is deemed denied, the claimant (hereinafter
referred to as appellant) shall have the right within 60 days after receipt of
written notice thereof or the date the claim is deemed denied to file an appeal
with the Committee and to go through the appeal procedure herein set forth. All
appeals shall be in writing, and shall set forth the reasons why the appellant
believes the decision denying his claim is erroneous. The appellant may be
represented by counsel, or by other representative authorized in writing by
appellant in a manner specified by the Committee, and appellant or his counsel
or duly authorized representative may review pertinent documents and may submit
issues and comments in writing to the Committee. The expense of a paid
representative shall be borne by the appellant. Within 60 days after such
written appeal is received, the Committee shall conduct a full and fair review
of the entire claim. The Committee shall render a decision on the appeal in
writing not later than 60 days after receipt of the written appeal, unless
special circumstances (such as the need to hold a hearing, which shall be
determined by the Committee) require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later than
120 days after receipt of a written appeal. If special circumstances require an
extension of time for processing, the Committee shall so notify the appellant
prior to the commencement of the extension. If the Committee does not render a
decision within 60 days (120 days if special circumstances arise), the appeal
shall be deemed denied.

<PAGE>

The decision shall include specific references to provisions of this SERP and of
law and shall be written in a manner reasonably calculated to be understood by
the appellant.

The decision of the Committee shall be administratively final and shall be
binding upon the appellant, his beneficiaries, heirs, and assigns and all other
persons claiming by, through or under him.

A failure to file a claim and an appeal in the manner and within the time
limits set forth herein shall be deemed a failure by the aggrieved party to
exhaust his administrative remedies and shall constitute a waiver of the rights
or benefits sought to be established under the SERP.

No legal action to recover SERP benefits or to enforce or to clarify rights
under the SERP shall be commenced under section 502(a)(1)(B) of ERISA, or under
any other provisions of law, whether or not statutory, unless and until the
claimant first shall have exhausted the claims and appeal procedures available
to him hereunder in this Article. A claimant must raise all issues and present
all theories relating to his claim to the Committee at one time. Otherwise, the
claimant shall be deemed to have abandoned forever all issues and theories not
raised and presented to the Committee.

Any suit brought to contest a decision of the Committee shall be filed in a
court of competent jurisdiction within 1 year from receipt of written notice of
the Committee's final decision or from the date the appeal is deemed denied, and
any suit not filed within this 1-year limitation period shall be dismissed by
the court. Service of legal process shall be made upon the SERP by service upon
the Committee.

All state law causes of action that arise out of the SERP or to entitlement
to rights or benefits under the SERP shall be deemed to have been preempted by
section 514 of ERISA.

In any suit contesting a decision of the Committee, all issues of fact
shall be tried by the court and not by a jury. No evidence may be introduced in
court which was not previously presented to the Committee and no evidence may be
introduced to modify or contradict the terms of the SERP document.

The Committee shall have full discretionary authority to interpret and
apply the terms of this SERP document and other relevant documents and relevant
provisions of law, and deference shall be afforded the Committee's decisions.
This grant of authority shall be broadly construed and shall include the
authority to find facts, to reach conclusions of law, to interpret and apply
ambiguous terms, and to supply missing terms reasonably necessary to resolution
of claims and appeals. No finding of fact by the Committee shall be set aside
by a court unless the party contesting the finding shall prove by clear and
convincing evidence that the finding is arbitrary and capricious. No conclusion
of law reached by the Committee shall be reversed by a court unless the party
contesting the conclusion shall demonstrate that the Committee is guilty of
manifest disregard of law.

In any suit over SERP benefits or rights, recovery shall be limited to the
amount of benefits found due, without interest, or to specific enforcement of
rights established under the SERP, and shall not include any other damages
whether denominated incidental, special, consequential, collateral,
compensatory, exemplary, punitive or whatever.

The Committee may issue, or cause to be issued, from time to time
statements to employees, participants, retirees or beneficiaries indicating
eligibility, service or other data regarding their SERP benefits. If any such
person wishes to challenge the accuracy of such data, the person shall do so in
the manner and within the time limits set forth above in this Article.

After termination of the SERP, the Committee may direct a final
determination of the rights and benefits of some or all persons having an
interest in the SERP. The determination with respect to any person may be
mailed to that person at his last known address and that person may be given 90
days within which to challenge the determination through the claims and appeal
procedures set forth in this Article. The mailing of a copy of a determination
to a person at his last known address shall be deemed constructive receipt by
that person of a copy of the determination. Any determination not challenged
through the claims and appeals procedures shall govern a person's rights under
the SERP, and the rights of any person claiming by, through or under him.

ARTICLE 10: AMENDMENT AND DISCONTINUANCE

The Company expects to continue this SERP indefinitely, but reserves the
right to amend or discontinue it if, in its sole judgment, such a change is
deemed necessary or desirable. However, if the Company should amend or
discontinue this SERP, the Company shall be liable for any benefits accrued
under this SERP (determined on the basis of each participant's presumed
termination of employment as of the date of such amendment or discontinuance) as
of the date of such action.

The Committee shall have the authority to amend the SERP on behalf of the
Company, except that any amendment which increases the rate of benefit accrual
or the cost of the SERP shall be made by the Company's Board of

<PAGE>

Directors, unless the Board delegates this responsibility to the Committee in
writing, or such amendment is required by the provisions of any law. The power
to discontinue the SERP shall rest solely with the Board of Directors.

No employee, supervisor, officer, or director of the Company has authority
to alter, vary or modify the terms of the SERP. No representation contrary to
the terms of the SERP and the formal amendments thereto shall be binding upon
the SERP, the Committee, or the Company.

ARTICLE 11: RESTRICTIONS ON ASSIGNMENT

The interest of a participant or his beneficiary in the SERP may not be
sold, transferred, assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be null and void; neither
shall the benefits hereunder be liable for or subject to the debts, contracts,
liabilities, engagement, or torts of any person to whom such benefits or funds
are payable, nor shall they be subject to garnishment, attachment, or other
legal or equitable process nor shall they be an asset in bankruptcy, except that
no amount shall be payable hereunder until and unless any and all amounts
representing debts or other obligations owed to the Company or any affiliate of
the Company by the participant with respect to whom such amount would otherwise
be payable shall have been fully paid and satisfied.

ARTICLE 12: NATURE OF AGREEMENT

The adoption of this SERP and any setting aside of amounts by the Company
with which to discharge its obligations hereunder shall not be deemed to create
a trust (other than a grantor trust within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code); legal and equitable title to
any funds so set aside shall remain in the Company, and any recipient of
benefits hereunder shall have no security or other interest in such funds. Any
and all funds so set aside shall remain subject to the claims of the general
creditors of the Company, present and future, and no payment shall be made under
this SERP unless the Company is then solvent. This provision shall not require
the Company to set aside any funds, but the Company may set aside such funds if
it chooses to do so.

ARTICLE 13: CONTINUED EMPLOYMENT

Nothing contained herein shall be construed as conferring upon any employee
the right to continue in the employ of the Company in any capacity.

ARTICLE 14: BINDING ON COMPANY, PARTICIPANTS AND THEIR SUCCESSORS

This SERP shall be binding upon and inure to the benefit of the Company,
its successors and assigns and the participants and their heirs, executors,
administrators and legal representatives.

ARTICLE 15: PAYMENTS MADE BY MISTAKE

Notwithstanding anything to the contrary, a participant or beneficiary is
entitled only to those benefits provided by the SERP and promptly shall return
any payment made by mistake of fact or law.

ARTICLE 16: LAWS GOVERNING

This SERP shall be construed in accordance with and governed by the laws of
the State of Iowa (but without regard to Iowa's principles on the conflicts of
laws), except to the extent it is controlled by ERISA.

ARTICLE 17: TAXES

<PAGE>

The Company does not represent or guarantee that any particular tax
consequences (favorable or unfavorable) will result from participation in the
SERP. Participants shall bear their share of taxes assessed against them
because of benefits paid or accrued under the SERP. Any taxes owed may be
withheld from or charged against benefits otherwise payable from the SERP.

<PAGE>

IN WITNESS WHEREOF, American Mutual Life Insurance Company has adopted this
All*AmerUs Supplemental Executive Retirement Plan, to be effective January 1,
1996.

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By /s/ Victor N. Daley
--------------------------------------
Victor N. Daley, Chairman
Benefit and Pension Committee

<PAGE>

AMERICAN MUTUAL LIFE INSURANCE COMPANY

SUPPLEMENTAL PENSION PLAN

AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1994

<PAGE>

AMERICAN MUTUAL LIFE INSURANCE COMPANY

SUPPLEMENTAL PENSION PLAN

Heretofore, American Mutual Life Insurance Company (the "Employer") has
maintained the American Mutual Life Insurance Company Supplemental Pension Plan
(the "Supplemental Plan" or simply "Plan"), as a nonqualified plan of deferred
compensation, to supplement the benefits provided under the American Mutual Life
Insurance Company Employee's Pension Plan and Trust Agreement (the "Basic
Pension Plan"). With the reduction of the compensation limit under Code section
401(a)(17) to $150,000, the Employer wishes to expand the scope of the Plan to
encompass benefits limited under the American Mutual Life Insurance Company
Employee's Savings Plus Plan and Trust Agreement (the "Basic 401(k) Plan") and
under the American Mutual Life Insurance Company Employee's Progress Sharing
Plan and Trust Agreement (the "Basic Profit-Sharing Plan"). The three qualified
plans may be referred to collectively as the "Basic Plans".

The rights and benefits of any employee who terminated employment prior to
January 1, 1994, shall be determined under the provisions of the Plan in force
at the time of termination. Those employees who were participants in the Plan
immediately prior to January 1, 1994, and who have continued their employment
with the Employer shall continue as participants in this amended and restated
Plan.

The Employer hereby amends and restates the Plan, effective as of January
1, 1994, to consist of the following two separate and distinct component plans:

(a) an unfunded excess benefit plan, as that term is defined in sections
3(36) and 4(b)(5) of the Employee Retirement Income Security Act of 1974 (the
"Excess Plan"); and

(b) an unfunded supplemental executive retirement plan which is maintained
primarily for the purpose of providing additional deferred compensation for a
select group of management and highly compensated employees, as described in
sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974 (the "Executive Retirement Plan").

ARTICLE 1: PURPOSE OF THE PLAN

The Employer intends and desires by the adoption of this Plan to recognize
the value to the Employer of past and present services of employees covered by
the Basic Plans and to encourage and assure their continued service with the
Employer by making more adequate provision for their future retirement security.
The establishment of this Plan is made necessary by certain benefit limitations
which are imposed on the Basic Plans by the Employee Retirement Income Security
Act of 1974 ("ERISA"), by sections 415 and 401(a)(17) of the Code, and more
recently by section 401(a)(4) of the Code.

ARTICLE 2: INCORPORATION OF THE BASIC PLANS

The Basic Plans, with any amendments thereto to the date of adoption of
this amended and restated Plan, are hereby incorporated by reference into and
shall form a part of this Plan as fully as if set forth herein verbatim. Any
amendment made to the Basic Plans by the Employer also shall be incorporated by
reference into and form a part of this Plan, effective as of the effective date
of such amendment. The Basic Plans, whenever referred to in this Plan, shall
mean the Basic Plans, as amended, as they may exist as of the date any
determination is made of benefits payable under this Plan. All terms used in
this Plan shall have the meanings assigned to them under the provisions of the
Basic Plans unless otherwise qualified by the context.

ARTICLE 3: ADMINISTRATION

This Plan shall be administered by the Committee under the Basic Plans,
which shall administer it in a manner consistent with the administration of the
Basic Plans, as from time to time amended and in effect, except that this Plan
shall be administered as an unfunded plan which is not intended to meet the
qualification requirements of section 401 of the Code. The Committee shall have
full power and authority to interpret, construe and administer this Plan, and
the Committee's interpretations and construction hereof, and actions hereunder,
including the timing, form, amount or recipient of any payment to be made
hereunder, shall be binding and conclusive on all persons for all purposes. No
member of the Committee shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this Plan
unless attributable to his own willful misconduct or lack of good faith. A
Committee member shall not participate in any action or determination regarding
his own benefits hereunder.

<PAGE>

ARTICLE 4: ELIGIBILITY

The following Employees are eligible to participate in the Plan:

(a) Employees who are participating in the Basic Pension Plan and whose
pension or pension-related benefits under the Basic Pension Plan are limited
pursuant to section 415 of the Code shall be eligible to participate under the
Excess Plan. In no event shall an Employee who is not entitled to benefits
under the Basic Pension Plan be eligible for a benefit under the Excess Plan.

(b) Employees designated by the Board of Directors of the Employer, who
form "a select group of management or highly compensated employees" (within the
meaning of Title I of ERISA), who are participating in the Basic Plans and whose
benefits under the Basic Plans are limited pursuant to section 401(a)(17) of the
Code, shall be eligible to participate under the Executive Retirement Plan. In
no event shall an Employee who is not entitled to benefits under the Basic Plans
be eligible for a benefit under the Executive Retirement Plan.

(c) Employees who (1) are elected officers of the Employer, and (2) had
attained age 55 and earned at least ten (10) years of Credited Service for
Vesting Purposes under the Basic Pension Plan as of January 1, 1991, shall be
eligible to participate under the Executive Retirement Plan. The benefit
payable to such an Employee or his Beneficiary or Beneficiaries under the
Executive Retirement Plan shall be the amount determined under Article 6,
paragraph (a) of the Plan, calculated as though the Employee were entitled to an
annual Normal Retirement Benefit under the Basic Pension Plan of not less than
two percent (2%) of Plan Compensation multiplied by years of Credited Service
for Benefit Accrual Purposes, to a maximum of thirty (30) years.

ARTICLE 5: AMOUNT OF EXCESS PLAN BENEFIT

The benefit payable to an eligible Employee or his beneficiary or
beneficiaries under the Excess Plan shall be the actuarial equivalent of the
excess, if any, of:

(a) the benefit which would have been payable to such Employee or on his
behalf to his Beneficiary or Eligible Spouse, as the case may be, under the
Basic Pension Plan if the provisions of the Basic Pension Plan were administered
without regard to the maximum amount of retirement income limitations of section
415 of the Code,

over

(b) the benefit which is in fact payable to such Employee or on his behalf
to his Beneficiary or Eligible Spouse under the Basic Pension Plan.

Benefits payable under the Excess Plan to any recipient shall be computed
in accordance with the foregoing and with the objective that such recipient
should receive under the Excess Plan and the Basic Pension Plan the total amount
which would have been payable to that recipient solely under the Basic Pension
Plan had section 415 of the Code not been applicable thereto.

ARTICLE 6: AMOUNT OF EXECUTIVE RETIREMENT PLAN BENEFITS

The benefits payable to an eligible Employee or his beneficiary or
beneficiaries under the Executive Retirement Plan shall be (a), (b) and (c)
described below:

(a) The actuarial equivalent of the excess, if any, of:

(1) the benefit which would have been payable to such Employee or on
his behalf to his Beneficiary or Eligible Spouse, as the case may be, under the
Basic Pension Plan if the provisions of the Basic Pension Plan were administered
without regard to either the maximum amount of retirement income limitations of
section 415 of the Code or the maximum compensation limitation of section
401(a)(17) of the Code,

over the sum of

(2) the benefit which is in fact payable to such Employee or on his
behalf to his Beneficiary or Eligible Spouse under the Basic Pension Plan, and

(3) the amount of the Excess Plan benefit, if any, which is in fact
payable to such Employee or on his behalf to his Beneficiary or Eligible Spouse
under Article 5 of the Plan.

<PAGE>

Benefits payable under this paragraph (a) of the Executive Retirement Plan
to any recipient shall be computed in accordance with the foregoing and with the
objective that such recipient should receive under the Excess Plan, the
Executive Retirement Plan and the Basic Pension Plan the total amount which
would have been payable to that recipient solely under the Basic Pension Plan
had neither section 415 nor section 401(a)(17) of the Code been applicable
thereto and had the grandfathering under Section 4.01 of the Basic Pension Plan
not been restricted to Nonexecutive Participants.

(b) The excess, if any, of:

(1) The benefit which would have been payable to such Employee or on
his behalf to his Beneficiary, as the case may be, under the Basic 401(k) Plan
if the provisions of the Basic 401(k) Plan were administered without regard to
the maximum compensation limitation of section 401(a)(17) of the Code,

over

(2) the benefit which is in fact payable to such Employee or on his
behalf to his Beneficiary under the Basic 401(k) Plan.

(1) the benefit which would have been payable to such Employee or on
his behalf to his Beneficiary, as the case may be, under the Basic Profit-
Sharing Plan if the provisions of the Basic Profit-Sharing Plan were
administered without regard to the maximum compensation limitation of section
401(a)(17) of the Code,

over

(2) the benefit which is in fact payable to such Employee or on his
behalf to his Beneficiary under the Basic Profit-Sharing Plan.

ARTICLE 7: PAYMENT OF BENEFITS

The benefit payable to an Employee under Article 5 and paragraph (a) of
Article 6 shall be payable in accordance with paragraphs (a) through (t)
hereunder. The benefit payable to an Employee under paragraph (b) of Article 6
is payable in accordance with paragraph (u). A benefit payable in accordance
with paragraph (c) of Article 6 is payable in accordance with paragraph (v).

(a) An Employee whose employment terminates upon attainment of his Normal
Retirement Age, as described in the Basic Pension Plan, shall be entitled to an
annual benefit commencing on his Normal Retirement Date (as that term is defined
in the Basic Pension Plan) which shall be payable in monthly amounts of
one-twelfth of the annual amount. Such monthly amount shall be payable for life
with ten (10) years guaranteed.

(b) An Employee whose employment terminates after his Normal Retirement
Date shall be entitled to a benefit commencing on his Late Retirement Date (as
that term is defined in the Basic Pension Plan) in the form described in
paragraph (a).

(c) An Employee whose employment terminates on his Early Retirement Date
(as that term is defined in the Basic Pension Plan) shall be entitled to a
deferred benefit commencing on his Normal Retirement Date. Such monthly amount
shall be payable for life with ten (10) years guaranteed.

(d) Benefit payments may begin earlier than the Normal Retirement Date at
the request of the Employee. Such monthly amount shall be payable for life with
ten (10) years guaranteed.

(e) Upon the termination of an Employee's employment for any reason other
than Early, Normal, or Late Retirement or death, the Employee shall be entitled
to receive a deferred vested benefit equal to the vested percentage of his
accrued benefit. Such Employee shall be 100% vested after completion of five
(5) years of Credited Service for Vesting Purposes.

Upon attainment of the Normal Retirement Age, an active Employee
automatically shall become 100% vested.

Benefit payments shall commence on an Employee's Normal Retirement Date and
shall be paid monthly for life with ten (10) years guaranteed. However, an
Employee who separates from service after completing fifteen (15) or more years
of Credited Service for Vesting Purposes but before satisfying the age
requirement for early retirement shall be eligible to receive benefit payments
commencing before his Normal Retirement Date upon satisfying the age requirement
for early retirement and after filing the required forms within the ninety (90)
day period before the date benefit payments are to begin.

<PAGE>

(f) At the sole discretion of the Committee, the Plan may make a
distribution of the actuarial equivalent of the benefit of an Employee in an
amount up to $3,500. Such distribution may be made only on account of
termination of participation in the Plan.

(g) Benefit for Eligible Spouse of an Employee Who Dies in Service (i)
While Eligible to Retire, or (ii) After 15 Years of Service Before Eligible to
Retire, or (iii) After Vesting and Before 15 Years of Service. If (i) an active
Employee who would be entitled to a deferred vested benefit if he separated
from service dies, or (ii) an Employee on Leave of Absence due to Disability
dies after having accumulated at least 5 years of Credited Service for Vesting
Purposes, and if such Employee in case (i) or (ii) is survived by an Eligible
Spouse, such Eligible Spouse shall be entitled to the preretirement Eligible
Spouse death benefit as described in (1) or (2), below, whichever applies:

(1) The monthly benefit payable to the Eligible Spouse shall be the
benefit which would have been payable under one of the following circumstances
which applies:

(A) If the Employee dies after becoming eligible for benefits
under paragraphs (a)-(d), the monthly benefit which would have been payable if
the Employee had retired on the day before his death with a 66 2/3% joint and
survivor annuity form of payment in effect, as described below;

(B) If the Employee dies before becoming eligible for early
retirement benefits but after completing at least fifteen (15) years of Credited
Service for Benefit Accrual Purposes, the monthly benefit which would have been
payable if the Employee had terminated employment on the date of death, survived
to his fifty-fifth (55th) birthday, retired with an immediate 66 2/3% joint and
survivor annuity form of payment in effect, as described below, and died on the
following day; or

(C) If the Employee dies before becoming eligible for normal
retirement benefits and before completing at least fifteen (15) years of
Credited Service for Benefit Accrual Purposes, the monthly benefit which would
have been payable if the Employee had terminated employment on the date of
death, survived to the Normal Retirement Age, retired with an immediate 66 2/3%
joint and survivor annuity form of payment in effect, as described below, and
died on the following day.

A benefit payable under subparagraph (1)(A) above, shall commence on the
first day of the next month following the death of the Employee and shall
continue for the Eligible Spouse's lifetime. A benefit payable under
subparagraph (1)(B) above, shall commence as of the first day of the next month
following the date on which the Employee would have become eligible for early
retirement had such Employee lived. A benefit payable under subparagraph (1)(C)
above, shall commence as of the first day of the next month following the date
on which the Employee would have attained the Normal Retirement Date, had such
Employee lived. Notwithstanding the foregoing, no benefit payable under this
paragraph (g) which has an actuarially equivalent single sum value greater than
$3,500 shall commence earlier than the date on which the Employee would have
attained the Normal Retirement Date, had such Employee lived, unless the
Eligible Spouse consents in writing to earlier commencement.

(2) Notwithstanding the applicability of subparagraph (g)(1), the
Eligible Spouse may elect to receive a benefit of 40% of the Employee's benefit
as of his date of death. Benefit payments shall be in the form of a monthly
annuity which shall commence on the first day of the next month following the
death of the Employee and shall continue for the Eligible Spouse's lifetime.
However, if the Eligible Spouse is more than three (3) years younger than the
deceased Employee, the amount of the death benefit shall be reduced by 1/10th of
1% for each month by which the Eligible Spouse is more than thirty-six (36)
months younger than the Employee.

Within three months after the death of the Employee, the Eligible Spouse
shall elect in writing on the form provided by the Committee one of the benefits
described in subparagraphs (g)(1) or (g)(2). If the election is not made within
this three-month period, the Eligible Spouse shall be deemed to have elected the
benefit described in subparagraph (g)(1). The Committee may extend the election
period for up to three additional months if the Eligible Spouse is incapacitated
to the degree that an election cannot be made or because the Committee cannot
locate the Eligible Spouse.

(h) Benefit for a Beneficiary of an Employee Without an Eligible Spouse
Who Dies in Service (i) While Eligible to Retire or (ii) After Completion of 5
Years Credited Service for Vesting Purposes. If (i) an active Employee, who
would be entitled to a benefit if he separated from service, dies or (ii) an
Employee on leave of absence due to disability dies after having accumulated at
least 5 years of Credited Service for Vesting Purposes, and in either case (i)
or case (ii) the Employee is not survived by an Eligible Spouse, the Beneficiary
of such Employee shall be entitled to the preretirement death benefit as
described in this subparagraph (h).

The amount of such preretirement death benefit payable to the Beneficiary
of an Employee shall be equal to 40% of the Employee's accrued benefit as of the
date of death. Benefit payments shall be in the form of a monthly annuity which
shall commence on the first day of the next month following the death of the
Employee and shall continue for a period of ten (10) years.

<PAGE>

Notwithstanding the above, if the Employee dies after becoming eligible for
early retirement, the monthly benefit payable to the Beneficiary shall not be
less than 100% of the normal form of benefit which would have been payable if
the Employee had retired on the day before death.

(i) Death Benefit to Eligible Spouse of a Terminated Vested Employee Who
Is Not Eligible for Early Retirement at Termination of Employment and Who Dies
After Termination of Employment. If an Employee terminates employment before
becoming eligible for an early retirement benefit and such Employee has a
deferred vested benefit, and dies prior to commencement of benefit payments, the
death benefit payable to the Eligible Spouse shall be as described in (1) or
(2), below, whichever applies:

(1) The monthly benefit payable to the Eligible Spouse shall be the
benefit which would have been payable under one of the following circumstances,
as the case may be:

(A) If the Employee dies after completing at least fifteen (15)
years of Credited Service for Benefit Accrual Purposes but before age 55, the
monthly benefit which would have been payable if the Employee had survived to
his fifty-fifth (55th) birthday, retired with an immediate 66 2/3% joint and
survivor annuity form of payment in effect, as described below, and died on the
following day;

(B) If the Employee dies after completing at least fifteen (15)
years of Credited Service for Benefit Accrual Purposes but at or after age 55,
the monthly benefit which would have been payable if the Employee had retired on
the date of his death with an immediate 66 2/3% joint and survivor annuity form
of payment in effect, as described below, and died immediately after retirement;
or

(C) If the Employee had not completed at least fifteen (15)
years of Credited Service for Benefit Accrual Purposes, the monthly benefit
which would have been payable if the Employee had survived to the Normal
Retirement Age, retired with an immediate 66 2/3% joint and survivor annuity
form of payment in effect, as described below, and died on the following day.

A benefit payable under subparagraph (1)(A) above, shall commence as of the
first day of the next month following the date on which the Employee would have
attained the Early Retirement Date, had such Employee lived. A benefit payable
under subparagraph (1)(B) above, shall commence as of the first day of the next
month following the date of the Employee's death. A benefit payable under
subparagraph (1)(C) above, shall commence as of the first day of the next month
following the date on which the Employee would have attained his Normal
Retirement Date, had such Employee lived.

Notwithstanding the foregoing, no benefit payable under this subparagraph
(i) which has an actuarially equivalent single sum value greater than $3,500
shall commence earlier than the date on which the Employee would have attained
the Normal Retirement Date, had he lived, unless the Eligible Spouse consents in
writing to earlier commencement.

(2) Notwithstanding subparagraph (i)(1) above, the Eligible Spouse
may elect, to receive a benefit of 40% of the Employee's Accrued benefit as of
his date of death. Benefit payments shall be in the form of a monthly annuity
which shall commence on the first day of the next month following the death of
the Employee and shall continue for a period of ten (10) years.

Within three months of the death of the Employee, the Eligible Spouse shall
elect in writing on the form provided by the Committee one of the benefits
described in subparagraphs (i)(1) and (2) above. If the election is not made
within this three-month period, the Eligible Spouse shall be deemed to have
elected the benefit described in subparagraph (i)(1). The Committee may extend
the election period for up to three additional months if the Eligible Spouse is
incapacitated to the degree that an election cannot be made or because the
Committee cannot locate the Eligible Spouse.

(j) Death Benefit to Beneficiary of a Terminated Vested Employee Who Does
Not Have an Eligible Spouse, Who Is Not Eligible for Early Retirement at
Termination of Employment, and Who Dies After Termination of Employment. If an
Employee terminates employment before becoming eligible for an early retirement
benefit and such Employee is entitled to a benefit, and dies prior to
commencement of Benefit payments, the death benefit described in this paragraph
(j) shall be payable to the Beneficiary. Such benefit shall be equal to 40% of
the Employee's benefit as of his date of termination. Benefit payments shall be
in the form of a monthly annuity which shall commence on the first day of the
month following the death of the Employee and shall continue for a period of ten
(10) years.

(k) Benefit to Eligible Spouse or Beneficiary of an Employee Who Terminates
Service After Becoming Eligible to Retire, Does Not Commence Benefits at That
Time, and Dies Before Benefits Commence. If an Employee terminates employment
after becoming eligible for benefits under subparagraphs (a) - (d) and dies
prior to the commencement of monthly benefit payments, and is survived by an
Eligible Spouse, such Eligible Spouse may elect to receive a monthly benefit
equal to (1) or (2), below:

<PAGE>

(1) A monthly life income equal to the survivor portion of the 66
2/3% joint and survivor annuity described below, which would have been payable
if the Employee had elected, immediately prior to his death, to have benefits
commence under this annuity option; or

(2) A monthly income for ten (10) years, equal to the monthly benefit
which would have been payable if the Employee had elected, immediately prior to
his death, to have benefits commence as a monthly benefit payable for his
lifetime with payments guaranteed for ten (10) years.

The benefit described above shall commence on the first day of the next
month following the death of the Employee and shall continue for the Eligible
Spouse's lifetime if (1) is payable, or for a period of ten (10) years if (2) is
payable.

Notwithstanding the foregoing, no benefit payable under this subparagraph
(j) which has an actuarially equivalent single sum value greater than $3,500
shall commence earlier than the date on which the Employee would have attained
the Normal Retirement Date, had he lived, unless the Eligible Spouse consents in
writing to earlier commencement.

Within three months of the death of the Employee, the Eligible Spouse shall
elect in writing on the form provided by the Committee one of the benefits
described in subparagraphs (k)(1) or (2) above. If the election is not made
within this three-month period, the Eligible Spouse shall be deemed to have
elected the benefit described in subparagraph (k)(1). The Committee may extend
the election period for up to three additional months if the Eligible Spouse is
incapacitated to the degree that an election cannot be made or because the
Committee cannot locate the Eligible Spouse.

If such Employee is not survived by an Eligible Spouse, the Beneficiary
shall be entitled to a benefit in the amount and form described in subparagraph
(2) above.

(l) If the death benefit as determined in paragraphs (g), (h), (i), (j) or
(k) above has a single sum value of $3,500 or less, the actuarial equivalent of
the benefit automatically shall be paid in the form of a single sum to the
deceased Employee's Eligible Spouse or Beneficiary, as the case may be. No
single sum payment shall be paid to a surviving Eligible Spouse after monthly
benefit payments have commenced, unless the surviving Eligible Spouse consents
in writing to receive such single sum payment in the form and manner described
in paragraph (o).

(m) The normal form of benefit payment for an Employee who is not married
to an Eligible Spouse on the date his benefit payments commence shall be a
monthly benefit payable for his lifetime with payments guaranteed for ten (10)
years. benefits under such form of payment shall commence on the applicable
date specified in subparagraphs (a) through (e) and shall terminate the later of
after ten (10) years of monthly payments or with the last monthly benefit
payment before the Employee's death.

The normal form of benefit payment for an Employee who is married to an
Eligible Spouse on the date his benefit payments commence shall be a qualified
50% joint and survivor annuity. The reduced monthly benefit payable to an
Employee under a 50% joint and survivor annuity shall be actuarially equivalent
to the monthly benefit which otherwise would be payable for his lifetime with
payments guaranteed for ten (10) years. Benefit payments to the Employee shall
commence on the applicable date specified in paragraphs (a) through (e) and
shall continue until the last monthly benefit payment before his death. Upon
the Employee's death, his Eligible Spouse (if living) shall be entitled to
receive a monthly benefit during her lifetime equal to fifty percent (50%) of
the monthly benefit which was payable to the Employee before his death.
Payments to such Eligible Spouse shall commence with the first monthly benefit
payable after the Employee's death and shall terminate with the last monthly
benefit payment before her death.

(n) The normal form of benefit payment as provided in paragraph (m)
automatically shall be deemed to have been elected at the time an Employee
applies for the benefit to which he is entitled. The effective date of such
automatic election shall be the date monthly benefit payments commence.

(o) No less than thirty (30) days and no more than ninety (90) days before
the date monthly benefit payments are to commence, the Committee shall provide
an Employee by mail or personal delivery a written explanation (including the
relative financial effect) of the normal form of benefit payment, the
circumstances in which it automatically shall be deemed to have been elected
unless it is revoked, the procedure by which the Employee may revoke the
automatic election, a description of eligibility conditions and other material
features of the optional forms of payment, additional information explaining
the relative values of the optional forms of benefit under the Plan, and an
explanation of how further information may be obtained. The Employee shall
have sixty (60) days from the time of mailing or personal delivery of his
written explanation to request any such additional information. If the Employee
makes such a request, the Committee shall provide the additional information
within thirty (30) days of the request.

If the Employee does not request the additional information within the
allotted sixty (60) day period, the Committee shall be under no obligation to
furnish it in the future.

<PAGE>

(p) An Employee may revoke the automatic election of the normal form of
payment or designate a Beneficiary other than an Eligible Spouse by notifying
the Committee of such revocation in writing and electing an optional form of
payment.
An election to revoke the automatic election of the normal form of payment
will be effective only if the spouse of the Employee has consented in writing.
The waiver must be witnessed by the Committee or a notary public and it must
acknowledge the effect of the alternate election. Such spousal consent is not
required if there is no spouse or the spouse cannot be located. The Committee
may require such evidence as he deems necessary to establish whether the
participant has a spouse or whether the spouse cannot be located.

A revocation or an alternate election may be made within 90 days prior to
the date monthly benefits payments are to commence. Such alternate election may
be revoked at anytime during this 90 day period without the spouse's consent and
the automatic election of the normal form shall apply.

(q) Subject to the provisions of subparagraph (p), an Employee may revoke
the automatic election of the normal form of payment and elect to receive
benefits under an actuarially equivalent optional form of payment. The
following optional forms of payment are available.

(1) A monthly benefit payable for the lifetime of the Employee;

(2) A monthly benefit payable for the lifetime of the Employee, with
100%, 66 2/3%, or 50% of such monthly benefit payment continuing after the
Employee's death to his Beneficiary until the death of such Beneficiary;

(3) Other options which are specified by the Committee in a written
resolution and which are available to all Employees on a nondiscriminatory
basis.

Benefits under an optional form of payment shall commence on the applicable
date specified in suparagraphs (a) through (e) and shall continue for the period
specified under the form of payment in effect. The following conditions shall
apply to the optional forms of benefit payment in (2) above:

(A) If the Beneficiary dies before the form of benefit payment
becomes effective, then the form of payment shall no longer be applicable.

(B) If the Beneficiary dies before the Employee and after
benefit payments commence, the form of payment shall continue to be effective
and the Employee's benefits shall continue to be paid in the same amount as
before the death of the Beneficiary.

(r) Upon an Employee's request, but not before the Employee receives the
notice described in paragraph (o), and makes the revocation described in
paragraph (p), the Committee shall provide him with the forms designated for
electing an optional form of benefit payment available under paragraph (q). An
election may be made, rescinded, or changed by an Employee by executing and
submitting the designated forms to the Committee no more than ninety (90) days
before benefit payments commence.

(s) An Employee shall be required to provide the Committee with proof of
age or any other information that may be required for determining the amount of
benefit payable under the form of payment in effect.

(t) Eligible Spouse, for purposes of paragraphs (a) through (s) means a
spouse who is legally married throughout the one year period prior to the date
any benefits are paid hereunder. Beneficiary, for purposes of paragraphs (a)
through (s) means the Beneficiary designated under the terms of the Basic
Pension Plan.

(u) The benefit payable to an Employee under paragraph (b) of Article 6
shall be paid in a single sum, sixty (60) days following the Employee's
termination of employment, or on any later date the Employee selects, so long as
such date is not later than the Employee's 65th birthday. In the event of the
death of an Employee prior to his termination of employment, payment of such
benefit shall be made to his Beneficiary. "Beneficiary", for this purpose,
means the beneficiary designated under the terms of the Basic 401(k) Plan.

(v) The benefit payable to an Employee under paragraph (c) of Article 6
shall be paid in a single sum, sixty (60) days following the Employee's
termination of employment, or on any later date the Employee selects, so long
as such date is not later than the Employee's 65th birthday. No benefit is
payable under this paragraph (v) unless the Employee is vested in his benefit
under the Basic Profit-Sharing Plan. In the event of the death of an Employee
prior to his termination of employment, payment of such benefit shall be made
to his Beneficiary. "Beneficiary", for this purpose, means the beneficiary
designated under the terms of the Basic Profit-Sharing Plan.

ARTICLE 8: EMPLOYEES' RIGHTS

<PAGE>

Except as otherwise specifically provided, an Employee's rights under this
Plan, including the rights to vested benefits, shall be the same as the rights
under the Basic Plans. Benefits payable under this Plan shall be a general,
unsecured obligation of the Employer to be paid by the Employer from its own
funds, and such payments shall not (a) impose any obligation upon the Trust
Funds under said Basic Plans; (b) be paid from the Trust Funds under said Basic
Plans; or (c) have any effect whatsoever upon the Basic Plans or the payment of
benefits from the Trust Funds under said Basic Plans. No employee or his
Beneficiary or Eligible Spouse shall have any title to or beneficial ownership
in any assets which the Company may earmark to pay benefits hereunder.

ARTICLE 9: CLAIMS AND APPEAL PROCEDURES

The purpose of the claims and appeal provisions set forth in this Article
is to secure the speedy, inexpensive resolution of all disputes over Plan
benefits and rights granted by the Plan. These provisions shall be liberally
construed so as to avoid litigation and its attendant expenses.

Each person who claims entitlement to any right or benefit under the Plan
("claimant") may submit a claim with respect to that benefit or right. All
claims shall be submitted in writing to the Committee and shall be accompanied
by such information and documentation as the Committee determines is required to
make a ruling on the claim. Upon receipt of a claim hereunder, the Committee
shall consider the claim and shall render a decision and communicate the same to
the claimant. The Committee shall render a decision within 90 days after
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 90-day period. In no event shall such
extension exceed a period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Committee expects to render a decision. In
the event that the claim is denied in whole or in part, the claimant shall be
given notice in writing, which shall set forth the following in a manner
reasonably calculated to be understood by the claimant:

(a) the specific reason(s) for the denial;

(b) specific reference to pertinent Plan provisions on which the denial is
based;

(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary;

(d) an explanation of the Plan's appeal procedure.

The failure of the Committee to render a decision on a claim within the
time specified shall be deemed to be a denial of such claim.

Any claim under this claims procedure must be submitted within 12 months
from the earlier of (i) the date on which the claimant learned of facts
sufficient to enable him to formulate such claim, or (ii) the date on which
the claimant reasonably should have been expected to learn of facts sufficient
to enable him to formulate such claim.

When a claim has been or is deemed denied, the claimant (hereinafter
referred to as appellant) shall have the right within 60 days after receipt of
written notice thereof or the date the claim is deemed denied to file an appeal
with the Committee and to go through the appeal procedure herein set forth. All
appeals shall be in writing, and shall set forth the reasons why the appellant
believes the decision denying his claim is erroneous. The appellant may be
represented by counsel, or by other representative authorized in writing by
appellant in a manner specified by the Committee, and appellant or his counsel
or duly authorized representative may review pertinent documents and may submit
issues and comments in writing to the Committee. The expense of a paid
representative shall be borne by the appellant. Within 60 days after such
written appeal is received, the Committee shall conduct a full and fair review
of the entire claim. The Committee shall render a decision on the appeal in
writing not later than 60 days after receipt of the written appeal, unless
special circumstances (such as the need to hold a hearing, which shall be
determined by the Committee) require an extension of time for processing,
in which case a decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a written appeal. If special circumstances
require an extension of time for processing, the Committee shall so notify the
appellant prior to the commencement of the extension. If the Committee does
not render a decision within 60 days (120 days if special circumstances arise),
the appeal shall be deemed denied. The decision shall include specific
references to provisions of this Plan and of law and shall be written in a
manner reasonably calculated to be understood by the appellant.

The decision of the Committee shall be final and shall be binding upon the
appellant, his beneficiaries, heirs, and assigns and all other persons claiming
by, through or under him.

<PAGE>

No legal action to recover Plan benefits or to enforce or to clarify rights
under the Plan shall be commenced under section 502(a)(1)(B) of ERISA, or under
any other provisions of law, whether or not statutory, unless and until the
claimant first shall have exhausted the claims and appeal procedures available
to him hereunder in this Article. A claimant must raise all issues and present
all theories relating to his claim to the Committee at one time. Otherwise, the
claimant shall be deemed to have abandoned forever all issues and theories not
raised and presented to the Committee.

All state law causes of action that arise out of or relate to the Executive
Retirement Plan portion of this Plan or to entitlement to rights or benefits
under the Executive Retirement Plan portion of the Plan shall be deemed to have
been preempted by section 514 of ERISA.

The Committee shall have full discretionary authority to interpret and
apply the terms of this Plan document and other relevant documents and relevant
provisions of law, and deference shall be afforded the Committee's decisions.
This grant of authority shall be broadly construed and shall include the
authority to find facts, to reach conclusions of law, to interpret and apply
ambiguous terms, and to supply missing terms reasonably necessary to resolution
of claims and appeals. No finding of fact by the Committee shall be set aside
by a court unless the party contesting the finding shall prove by clear and
convincing evidence that the finding is arbitrary and capricious. No conclusion
of law reached by the Committee shall be reversed by a court unless the party
contesting the conclusion shall demonstrate that the Committee is guilty of
manifest disregard of law.

In any suit over Plan benefits or rights, recovery shall be limited to the
amount of benefits found due, without interest, or to specific enforcement of
rights established under the Plan, and shall not include any other damages
whether denominated incidental, special, consequential, collateral, compensatory
exemplary, punitive or whatever.

The Committee may issue, or cause to be issued, from time to time statements
to employees, participants, retirees or beneficiaries indicating eligibility,
service or other data regarding their Plan benefits. If any such person wishes
to challenge the accuracy of such data or of any information issued in
response to a request within the terms of sections 105(a) or 209(a)(1) of ERISA,
the person shall do so in the manner and within the time limits set forth above
in this Article.

After termination of the Plan, the Committee may direct a final
determination of the rights and benefits of some or all persons having an
interest in the Plan. The determination with respect to any person may be
mailed to that person at his last known address and that person may be given
90 days within which to challenge the determination through the claims and
appeal procedures set forth in this Article. The mailing of a copy of a
determination to a person at his last known address shall be deemed constructive
receipt by that person of a copy of the determination. Any determination not
challenged through the claims and appeals procedures shall govern a person's
rights under the Plan, and the rights of any person claiming by, through or
under him.

ARTICLE 10: AMENDMENT AND DISCONTINUANCE

The Employer expects to continue this Plan indefinitely, but reserves the
right to amend or discontinue it if, in its sole judgment, such a change is
deemed necessary or desirable. However, if the Employer should amend or
discontinue this Plan, the Employer shall be liable for any benefits accrued
under this Plan (determined on the basis of each employee's presumed termination
of employment as of the date of such amendment or discontinuance) as of the date
of such action.

No employee, supervisor, officer, or director of the Employer has authority
to alter, vary or modify the terms of the Plan, except in writing. No
representation contrary to the terms of the Plan and the formal amendments
thereto shallbe binding on the Plan, the Committee, or the Employer.

ARTICLE 11: RESTRICTIONS ON ASSIGNMENT

<PAGE>

The interest of an employee or his Beneficiary or Eligible Spouse may not
be sold, transferred, assigned, or encumbered in any manner, either voluntarily
or involuntarily, and any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be null and void; neither
shall the benefits hereunder be liable for or subject to the debts, contracts,
liabilities, engagement, or torts of any person to whom such benefits or funds
are payable, nor shall they be subject to garnishment, attachment, or other
legal or equitable process nor shall they be an asset in bankruptcy, except that
no amount shall be payable hereunder until and unless any and all amounts
representing debts or other obligations owed to the Employer or any affiliate of
the Employer by the employee with respect to whom such amount would otherwise be
payable shall have been fully paid and satisfied.

ARTICLE 12: NATURE OF AGREEMENT

The adoption of this Plan and any setting aside of amounts by the Employer
with which to discharge its obligations hereunder shall not be deemed to create
a trust (other than a grantor trust within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code); legal and equitable title to
any funds so set aside shall remain in the Employer, and any recipient of
benefits hereunder shall have no security or other interest in such funds. Any
and all funds so set aside shall remain subject to the claims of the general
creditors of the Employer, present and future, and no payment shall be made
under this Plan unless the Employer is then solvent. This provision shall not
require the Company to set aside any funds, but the Employer may set aside such
funds if it chooses to do so.

ARTICLE 13: CONTINUED EMPLOYMENT

Nothing contained herein shall be construed as conferring upon any employee
the right to continue in the employ of the Employer in any capacity.

ARTICLE 14: BINDING ON EMPLOYER, EMPLOYEES AND THEIR SUCCESSORS

This Plan shall be binding upon and inure to the benefit of the Employer,
its successors and assigns and the employee and his heirs, executors,
administrators and legal representatives.

ARTICLE 15: PAYMENTS MADE BY MISTAKE

Notwithstanding anything to the contrary, an eligible Employee is entitled
only to those benefits provided by the Plan and promptly shall return any
payment made by mistake of fact or law.

ARTICLE 16: LAWS GOVERNING

This Plan shall be construed in accordance with and governed by the laws of
the State of Iowa (but without regard to Iowa's laws on the conflicts of laws),
except to the extent that the Executive Retirement Plan is governed by ERISA.

ARTICLE 17: CONTINGENT RIGHTS

Notwithstanding anything to the contrary, participation in and all benefits
accrued under this Plan on or after January 1, 1994, shall be contingent upon
the Employee fulfilling the restrictive conditions enumerated below. If an
Employee violates any one or more of the restrictive conditions, then no further
benefits shall be accrued or paid under this Plan, to or on behalf of the
Employee.

<PAGE>

(a) The Employee shall not use for his own benefit, or make any disclosure
not authorized by American Mutual of, the Employer's trade secrets and other
confidential business information, including but not limited to information
about policyholders, policy renewal dates, prospects, business and product
development plans, and computer programs. This duty not to use or disclose
trade secrets and other confidential business information shall survive any and
all other conditions and shall remain in full force and effect until the
information sought to be protected no longer is confidential within the meaning
of the law of trade secrets.

(b) Except as otherwise agreed in writing by American Mutual, the Employee
shall not compete, directly or indirectly, as an owner, director, officer,
employee, or agent of a competitor or otherwise, with American Mutual in any
market in which it does any business at any time during the Employee's
participation in the Plan.

(c) If the Employee desires to take employment or to engage in any other
activity which may compete with American Mutual, he shall give the Employer 30
days' advance written notice of his proposed activity, by certified mail, return
receipt requested. The Employee shall make full disclosure and inform the
Employer of all material facts and shall not withhold any material fact. If the
Employer does not approve the proposed activity in writing within 30 days of
receipt of the Employee's notice, the Employee shall not undertake the activity.

(d) If an Employee fails to fulfill any condition in this Article 17, he
will forfeit all rights to participate in the Plan and to receive benefits
accrued under the Plan, on or after January 1, 1994.

(e) Any dispute over these conditions, including whether an Employer has
fulfilled their terms so as to be eligible for benefits under the Plan, shall be
resolved administratively through the Plan's claims and appeal procedures.
Provided, however, that nothing in this Article 17 shall preclude the Employer
from enforcing in a court of law any intellectual property rights it may have
under law outside of this Plan.

(f) Any failure of the Employer to enforce the conditions in this Article
17, in whole or in part, at any given time shall not be deemed a waiver of the
Employer's right to enforce them in whole or in part at any subsequent time.

(g) If any provision of this Article 17 is found by a court of competent
jurisdiction to be overly broad, the court shall narrow the provision to an
enforceable scope.

IN WITNESS WHEREOF, American Mutual Life Insurance Company, the Employer, has
adopted this amended and restated Plan, to be effective January 1, 1994.

AMERICAN MUTUAL LIFE INSURANCE COMPANY, Employer

By /s/ William R. Engel
--------------------------------------------------

Its President
--------------------------------------------------

<PAGE>

AMERUS LIFE HOLDINGS, INC.

STOCK INCENTIVE PLAN

SEPTEMBER 15, 1996

Section I. General Purpose of Plan; Definitions.

The name of this plan is the AmerUS Life Holdings, Inc. Stock Incentive Plan
(the "Plan"). The purpose of the Plan is to enable AmerUS Life Holdings, Inc.
(the "Company") and its Subsidiaries to attract and retain employees who
contribute to the Company's success by their ability, ingenuity and industry,
and to enable such employees to participate in the long-term success and growth
of the Company through an equity interest in the Company.

For purposes of the Plan, the following terms shall be defined as set forth
below:

a. "AFFILIATE" means any corporation (other than a Subsidiary), partnership,
joint venture or any other entity in which the Company owns, directly or
indirectly, at least a ten percent (10%) beneficial ownership interest.

b. "BOARD" means the Board of Directors of the Company.

c. "CAUSE" means the willful and continued failure to substantially perform
the duties with the Company (other than a failure resulting from the
participant's Disability), the willful engaging in conduct which is
demonstrably injurious to the Company or any Subsidiary or Affiliate,
monetarily or otherwise, including any act of dishonesty, commission of a
felony, or a significant violation of any statutory or common law duty of
loyalty to the Company.

d. "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.

e. "COMMITTEE" means the Human Resources Committee of the Board of Directors
of the Company. If at any time there is no Committee, then the functions
of the Committee specified in the Plan shall be exercised by the Board.

f. "COMMISSION" means the Securities and Exchange Commission.

<PAGE>

g. "COMPANY" means AmerUS Life Holdings, Inc., a corporation organized under
the laws of the State of Iowa(or any successor corporation).

h. "DISABILITY" means total and permanent disability as determined under the
Company's long term disability program.

i. "EARLY RETIREMENT" means retirement from active employment with the
Company, any Subsidiary, and any Affiliate under the terms of the
All*AmerUS Savings & Retirement Plan adopted by AmerUs Life Insurance
Company.

j. "EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended,
and any successor thereto.

k. "FAIR MARKET VALUE" means, as of any given date, the closing price of the
Stock on such date on the NASDAQ National Market.

l. "INCENTIVE STOCK OPTION" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422
of the Code.

m. "NON-EMPLOYEE DIRECTOR" means a director who is Non-Employee Director
under Rule 16b-3 under Section 16 of the Exchange Act and is an outside
director under Section 1.162-27(e)(3) of the regulations promulgated under
the Code.

n. "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

o. "NORMAL RETIREMENT" means retirement from active employment with the
Company, any Subsidiary, and any Affiliate as this term is defined in the
All*AmerUS Savings & Retirement Plan adopted by AmerUs Life Insurance
Company.

p. "PLAN" means this Stock Incentive Plan.

q. "RESTRICTED STOCK AWARD" means an award of shares of Stock that are subject
to restrictions under Section 7 below.

r. "RETIREMENT" means Normal or Early Retirement as those terms are defined in
the All*AmerUS Savings & Retirement Plan adopted by AmerUs Life Insurance
Company.

<PAGE>

s. "STOCK" means the Class A Common Stock of the Company.

t. "STOCK APPRECIATION RIGHT" means a right granted under Section 6 below, to
surrender to the Company all or a portion of a Non-Qualified or Incentive
Stock Option in exchange for an amount in cash or shares of Stock equal to
the difference between (i) the Fair Market Value, as of the date such
Stock Option or such portion thereof is surrendered, of the shares of Stock
covered by such Stock Option or such portion thereof, and (ii) the
aggregate exercise price of such Stock Option, or such portion thereof.

u. "STOCK OPTION" means any option to purchase shares of Stock granted
pursuant to Section 5 below.

v. "SUBSIDIARY" means any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations (other than the
last corporation in the unbroken chain) owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

w. "TEN PERCENT SHAREHOLDER" means a person who owns (after taking into
account the attribution rules of Code Section 424(d) more than ten percent
(10%) of the total combined voting power of all classes of stock of the
company.

Section 2. Administration.

The Plan shall be administered by the Committee which shall at all times consist
of not less than two Non-Employee Directors.

The Committee shall have the power and authority to grant to eligible employees,
pursuant to the terms of the Plan: Non-Qualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, and/or Restricted Stock Awards.

In particular, the Committee shall have the authority:

a. To select officers and other key and high potential employees of the
Company; its Subsidiaries, and its Affiliates to whom Non-Qualified or
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock or a
combination of the foregoing from time to time will be granted hereunder;

<PAGE>

b. To determine whether and to what extent Incentive Stock Options, Non-
Qualified Stock Options, Stock Appreciation Rights or a combination of the
foregoing, are to be granted hereunder;

c. To determine the number of shares of Stock to be covered by each such award
granted hereunder;

d. To determine the terms and conditions, not inconsistent with the terms of
the Plan, of any award granted hereunder (including, but not limited to,
any restriction on any Stock Option or other award and/or the shares of
Stock relating hereto based on performance and/or such factors as the
Committee may determine, in its sole discretion, and any vesting
acceleration features based on performance and/or such factors as the
Committee may determine, in its sole discretion).

e. The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable, to interpret the terms and
provisions of the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.

All decisions made by the Committee pursuant to the provisions of the Plan shall
be final and binding on all persons, including the Company and Plan
participants.

Section 3. Stock Subject to Plan; Limitations.

The total number of shares of stock reserved and available for distribution
under the Plan shall be 1,400,000. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares. If any shares of
Stock that have been optioned cease to be subject to option, or if any shares
subject to a Restricted Stock Award granted hereunder are forfeited or such
award otherwise terminates, such shares shall again be available for
distribution in connection with future awards under the Plan.

The maximum total number of shares subject to awards which may be granted under
the Plan in any one year will be 700,000, and the maximum number of shares
subject to awards which may be granted under the Plan to any individual in any
one year is 230,000 (in both cases, subject to appropriate adjustments to
reflect changes in capitalization of the Company). No awards may be made under
the Plan until the Company's Stock has been publicly traded on the NASDAQ
National Market or a national stock exchange for at least six months.

In the event of any merger, reorganization, consolidation, recapitalization,
Stock dividend, or other change in the corporate structure affecting the Stock,
a substitution or adjustment shall be

<PAGE>

made in the aggregate number of shares reserved for issuance under the Plan, in
the number and option price of the shares subject to outstanding Stock Options
granted under the Plan and in the number of shares subject to Restricted Stock
Awards granted under the Plan as may be determined to be appropriate by the
Committee in its sole discretion, provided that the number of shares subject to
any awards shall always be a whole number. Such adjusted option price shall
also be used to determine the amount payable by the Company upon the exercise of
any Stock Appreciation Rights associated with any Stock Option.

Section 4. Eligibility.

Officers and other key and high potential employees of the Company, its
Subsidiaries or its Affiliates (but excluding members of the Committee and any
person who serves only as a director) who are responsible for or contribute to
the management, growth and/or profitability of the business of the Company, its
Subsidiaries, or its Affiliates are eligible to be granted Stock Options, Stock
Appreciation Rights, or Restricted Stock Awards. The options and participants
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, and the Committee shall determine, in its
sole discretion, the number of shares covered by each award or grant.

Section 5. Stock Options.

Stock Options may be granted either alone or in addition to other awards granted
under the Plan. Any Stock Option granted under the Plan shall be in such form
as the Committee may from time to time approve, and the provisions of Stock
Option awards need not be the same with respect to each optionee.

The Stock Options granted under the Plan may be of two types: Incentive Stock
Options and Non-Qualified Stock Options.

The Committee shall have the authority to grant any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights). To the extent that any Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.

Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. Notwithstanding the foregoing, in the event an optionee
voluntarily disqualifies an option as an Incentive Stock Option within the
meaning of Section 422 of the Code, the Committee may, but shall not be
obligated to, make such additional grants, awards or bonuses as the Committee
shall deem appropriate, to reflect the tax savings to the Company which result
from such disqualification.

<PAGE>

Stock Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

a. OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant but
shall not be less than the Fair Market Value of the Stock on the date of
grant of the Stock Option; provided, however, if the Option is an Incentive
Stock Option granted to a Ten Percent Shareholder, the option price per
each share of stock subject to such Incentive Stock Option shall be no less
than one hundred ten percent (110%) of the Fair Market Value of a share of
Stock on the date such Incentive Stock Option is granted.

b. OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date such Stock Option is issued.

c. EXERCISABILITY. Subject to paragraph (g) of this Section 5 with respect to
Incentive Stock Options, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by
the Committee at grant; provided, however, that, unless otherwise
determined by the Committee at grant, no Stock Option shall be exercisable
prior to the first anniversary date of the granting of the option. If the
Committee provides, in its discretion, that any Stock Option is exercisable
only in installments, the Committee may waive such installment exercise
provisions at any time, in whole or in part, based on performance and/or
such factors as the Committee may determine in its sole discretion

d. METHOD OF EXERCISE. Stock Options which are then exercisable may be
exercised in whole or in part at any time during the option period by
optionee, the legal representative of the optionee, or the legatee under
the optionee's will through the giving of written notice of exercise to the
Company specifying the number of shares to be purchased, accompanied by
payment in full of the purchase price, in cash, by check or such other
instrument as may be acceptable to the Committee. As determined by the
Committee, in its sole discretion, at or after grant, payment in full or in
part may also be made in the form of unrestricted Stock already owned by
the optionee or, in the case of the exercise of a Non-Qualified Stock
Option, Restricted Stock Award subject to an award hereunder (based, in
each case, on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee). If payment of the option
exercise price of a Non-Qualified Stock Option is made in whole or in part
in the form of Restricted Stock Award, the shares received upon the
exercise of such Stock Option shall be restricted in accordance with the
original term of the Restricted Stock Award in question, except that the
Committee may direct that such shall apply only to the number of such
shares equal to the number of shares of Restricted Stock surrendered upon
the exercise of such option. No shares of unrestricted Stock shall be
issued until full payment thereof has been made. An optionee shall have
the rights to dividends or

<PAGE>

other rights of a stockholder with respect to shares subject to the option
when the optionee has given written notice of exercise and has paid in full
for such shares.

e. NON-TRANSFERABILITY OF OPTIONS. Except as otherwise set forth in the
Section 5(e), no Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and all
Stock Options shall be exercisable, during the optionee's lifetime, only be
the optionee. The Committee shall have the discretionary authority,
however, to grant Non-Qualified Stock Options which would be transferable
to members of an optionee's immediate family, including trusts for the
benefit of such family members and partnerships in which such family
members are the only partners. In exercising such discretionary authority,
the Committee may take into account whether the granting of such
transferable options would require registration with the Securities and
Exchange Commission under a form other than Form S-8. A transferred Stock
Option may be exercised by the transferee only to the extent that the
optionee would have been able to exercise such Stock Option had the option
not been transferred.

f. TERMINATION OF EMPLOYMENT FOR CAUSE. Unless otherwise determined by the
Committee at grant, if an optionee's employment with the Company, any
Subsidiary, or any Affiliate terminates or is involuntarily terminated with
Cause, the Stock Option shall terminate immediately at the date of the
termination of employment

g. LIMIT ON VALUE OF INCENTIVE STOCK OPTION FIRST EXERCISABLE ANNUALLY. The
aggregate Fair Market Value (determined at the time of grant) of the Stock
for which "incentive stock options" within the meaning of Section 422 of
the Code are exercisable for the first time by an optionee during any
calendar year under the Plan (and/or any other stock option plans of the
Company, any Subsidiary and any Affiliate) shall not exceed $100,000.

h. TERMINATION OF EMPLOYMENT. All of the terms relating to the exercise,
cancellation or other disposition of a Stock Option upon a termination of
employment with or service to the Company or a Subsidiary or Affiliate of
the optionee, whether by reason of Disability, Retirement, death, or other
termination shall be determined by the Committee. Such determination shall
be made at the time of the grant of such Stock Option and shall be
specified in the written agreement evidencing such Stock Option.

Section 6. Stock Appreciation Rights.

a. GRANT AND EXERCISE. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan.
In the case of a Non-Qualified Stock Option, such rights may be granted
either at or after the time of the grant of such Non-Qualified Stock
Options. In the case of an Incentive Stock Option, such rights may be
granted only at the time of grant of such Incentive Stock Options. A Stock
Appreciation Right or applicable

<PAGE>

portion thereof granted with respect to a given Stock Option shall
terminate and no longer be exercisable upon the termination or exercise of
the related Stock Option, except that, unless otherwise provided by the
Committee at the time of grant, a Stock Appreciation Right granted with
respect to less than the full number of shares covered by a related Stock
Option shall only be reduced if and to the extent that the number of shares
covered by the exercise or termination of the related Stock Option exceeds
the number of shares not covered by the Stock Appreciation Right.

A Stock Appreciation Right may be exercised by an optionee, in accordance
with paragraph (b) of this Section 6, by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in paragraph (b) of this Section 6. Stock Options which have
been so surrendered, in whole or in part, shall no longer be exercisable to
the extent the related Stock Appreciation rights have been exercised.

b. TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to the
terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the
following:

1. Stock Appreciation Rights shall be exercised only at such time or
times and to the extent that the Stock Options to which they relate
shall be exercisable in accordance with the provisions of Section 5
and this Section 6 of the Plan:

2. Upon exercise of a Stock Appreciation right, an optionee shall be
entitled to receive up to, but not more than, an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value
of one share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.

3. Stock Appreciation Rights shall be transferable only when and to the
extent that the underlying Stock Option would be transferable under
paragraph (e) of Section 5 of the Plan.

4. Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall
be deemed to have been exercised for the purpose of the limitation set
forth in Section 3 of the plan on the number of shares of Stock to be
issued under the Plan.

5. A Stock Appreciation Right granted in connection with an Incentive
Stock Option may exercised only if and when the market price of the
Stock subject to the Incentive Stock Option exceeds the exercise price
of such Stock Option.

<PAGE>

6. All of the terms relating to the exercise, cancellation or other
disposition of a Stock Appreciation Right upon a termination of
employment with or service to the Company or a Subsidiary or an
Affiliate of the optionee, whether by reason of Disability,
Retirement, death, or other termination shall be determined by the
Committee. Such determination shall be made at the time of the grant
of such Stock Appreciation Right and shall be specified in the written
agreement evidencing such Stock Appreciation Right, unless otherwise
determined by the Committee at grant, if an Optionee's employment with
the Company, any Subsidiary, or any Affiliate terminated or is
involuntarily terminated by Cause, the Stock Appreciation Right shall
terminate immediately at the date of the termination of employment.

Section 7. Restricted Stock.

a. ADMINISTRATION. Shares of Restricted Stock may be issued alone or in
addition to awards granted under the Plan. The Committee shall determine
the officers, key and high potential employees of the Company, its
Subsidiaries and Affiliates to whom, and the time or times at which, grants
of Restricted Stock will be made, the number of shares to be awarded, the
price, if any, to be paid by the recipient of Restricted Stock (subject to
Section 7(b) hereof), the time or times within which such awards may be
subject to forfeiture, and all other conditions of the awards. The
Committee may also condition the grant of a Restricted Stock Award upon the
attainment of specified performance goals, or such other criteria as the
Committee may determine, in its sole discretion. The provisions of the
Restricted Stock Awards need not be the same with respect to each
recipient.

b. Awards and Certificates. The prospective recipient of an award of shares
of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the
award (a "Restricted Stock Award Agreement") and has delivered a fully
executed copy thereof to the Company, and has otherwise complied with the
then applicable terms and conditions.

1. Awards of Restricted Stock must be accepted within a period of sixty
(60) days (or such shorter period as the Committee may specify) after
the award date by executing a Restricted Stock Award Agreement and
paying whatever price, if any, is required.

2. A stock certificate in respect of shares of Restricted Stock shall be
issued in the name of each participant who is awarded Restricted
Stock. Such certificate shall be registered in the name of the
participant, and shall bear an appropriate legend

<PAGE>

referring to the terms, conditions, and restrictions applicable to
such award, substantially in the following form:

3. "The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the AmerUS Life Holdings, Inc. Stock Incentive Plan
and a Restricted Stock Award Agreement entered into between the
registered owner and the Company. Copies of such Plan and Agreement
are on file on in the offices of the Company, (418 6th Avenue, Des
Moines, Iowa 50309)."

4. The Committee shall require that the stock certificates evidencing
such shares be held in custody by the Company until the restrictions
thereon have lapsed, and that, as a condition of any Restricted Stock
Award, the participant shall have delivered a stock power, endorsed in
blank, relating to the Stock covered by such award.

5. All of the terms relating to the satisfaction of specified performance
goals and the termination of any period designated by the Committee
during which the Stock subject to the Restricted Stock Award may not
be sold, transferred, pledged or assigned, or any cancellation or
forfeiture of such Restricted Stock Award upon a termination of
employment with or service to the Company or any Subsidiary or any
Affiliate of the holder of such Restricted Stock Award, whether by
reason of Disability, retirement, death or other termination shall be
set forth in the written agreement relating to such Restricted Stock
Award. Unless otherwise determined by the Committee at grant, if a
holder's employment with the Company, any Subsidiary, or any Affiliate
terminates or is involuntarily terminated with Cause, the portion of
the Restricted Stock Award which is subject to a Restricted Period (as
hereinafter defined) on the effective date of such holder's
termination of employment or service shall be forfeited by such holder
and such portions shall be canceled by the Company.

c. RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions
and conditions:

1. Subject to the provisions of the Plan and the Restricted Stock Award
Agreements, during such period as may be set by the Committee
commencing on the grant date (the"Restriction Period"), the
participant shall not be permitted to sell, transfer, pledge or assign
shares of Restricted Stock awarded under the Plan. within these
limits, the Committee may, in its sole discretion, provide for the
lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part based on performance and/or such
factors as the Committee may determine, in its sole discretion.

2. Except as provided in paragraph c(1) of this Section 7, the
participant shall have,

<PAGE>

with respect to the shares of Restricted Stock, all of the rights of a
stockholder of the Company, including the right to vote and receive
any dividends. Dividends paid in Stock or other securities of the
Company or Stock received in connection with a stock split with
respect to Restricted Stock shall be subject to the same restrictions
as on such Restricted Stock. Certificates for shares of unrestricted
Stock shall be delivered to the participant promptly after, and only
after, the period of forfeiture shall expire without forfeiture in
respect of such shares of Restricted Stock.

Section 8. Amendments and Termination.

The Board may amend, alter or discontinue the Plan, but no amendment, alteration
or discontinuation shall be made which would impair the right of an optionee or
participant under a Stock Option, Stock Appreciation Right, or Restricted Stock
Award theretofore granted, without the optionee's or participant's consent, or
which without the approval of the stockholders would:

a. Except as expressly provided in this Plan, increase the total number of
shares reserved for the purpose of the Plan;

b. Decrease the option price of any Stock Option to less than fifty percent
(50%) of the Fair Market Value on the date of the granting of the option;

c. Change the employees or class of employees eligible to participate in the
Plan; or

d. Extend the maximum option period under paragraph (b) of Section 5 of the
Plan.

The Committee may amend the terms of any award or option theretofore granted,
prospectively or retroactively, but no amendment shall impair the rights of any
holder without his consent. The Committee may also substitute new Stock Options
for previously granted Stock Options including options granted under other plans
applicable to the participant and previously granted Stock Options having higher
option prices.

Section 9. Unfunded Status of the Plan.

The Plan is intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a participant or
optionee by the Company, nothing set forth herein shall give any such
participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver

<PAGE>

Stock or payments in lieu thereof with respect to awards hereunder, provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.

Section 10. General Provisions.

All certificates for shares of Stock delivered under the Plan shall be subject
to such stock transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Commission,
any stock exchange upon which the stock is listed, and any applicable Federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

Section 11. Effective Date of Plan.

The Plan shall be effective on the date that it is approved by a majority vote
of the holders of the Company's voting common stock.

Section 12. Term of Plan.

No Stock Option, Stock Appreciation Right, or Restricted Stock Award shall be
granted pursuant to the Plan on or after the tenth anniversary of the date of
stockholder approval, but awards previously granted may extend beyond that
point.

230786.01 CLEMENS, RICHARD G. CH September 18, 1996 (1:42a)

<PAGE>

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made February 1, 1995, by and between AMERICAN MUTUAL
LIFE INSURANCE COMPANY (the "EMPLOYER"), and SAM C. KALAINOV (the "EMPLOYEE").
WHEREAS, the Employee has been a valuable employee of the Employer whose
services the Employer desires to retain;
NOW, THEREFORE, it is agreed as follows:
1. EMPLOYMENT. The Employer employs the Employee, and the Employee
accepts employment subject to the terms and conditions of this Agreement.
2. TERM. The term of this Agreement shall begin on February 1, 1995, and
shall continue to May 15, 2000. The term of this Agreement may expire prior to
May 15, 2000 if Roger K. Brooks ceases to perform the duties of Chief Executive
Officer ("CEO") of the Employer, in which case the Employee's employment
hereunder shall cease at the later of (a) May 15, 1998, or (b) the date Mr.
Brooks ceases to be CEO of the Employer; unless the Employer elects to continue
the term of this Agreement to May 15, 2000. In the event that the Employee's
service as Chairman terminates prior to May 15, 2000, until May 15, 2000 the
Employer shall nevertheless provide the Employee with a suitable downtown office
and a consulting contract with the Employer, pursuant to which the Employer
shall pay the Employee the difference between the benefits he receives under the
Employer's qualified and non-qualified pension plans and the sum of his base
salary plus incentive compensation for the preceding 12 months. In any event
Employee shall remain Chairman of the Employer's Charitable Foundation
("FOUNDATION") until May 15, 2000.
3. COMPENSATION. The Employer shall pay the Employee for all services
rendered compensation equal to compensation paid to the Employer's CEO,
including a salary equal to that paid to the CEO, payable in installments on the
regular pay days of similar executive managerial employees, and incentive
compensation equal to the incentive compensation paid the CEO in accordance with
the Employer's executive incentive

<PAGE>

compensation plan. Salary and incentive compensation payments shall be subject
to applicable withholding and other applicable taxes.
4. DUTIES. The Employee shall serve as the Employer's Chairman of the
Board and Chairman of the Foundation, and such other duties as the Employer may
specify.
5. EXTENT OF SERVICES. The Employee shall devote his entire time and
attention to the Employer's business. During the term of this Agreement, the
Employee shall not engage in any other business activity, regardless of whether
it is pursued for gain or profit. The Employee, however, subject to compliance
with the Employer's policies regarding restrictions on personal investments
applicable to other executives of comparable rank, may invest his assets in
other companies so long as they do not require the Employee's services in the
operation of their affairs.
6. WORKING FACILITIES. The Employee shall have a private office, support
staff and other facilities and services that are suitable to his position and
appropriate for the performance of his duties.
7. FRINGE BENEFITS. The Employee shall participate in the Employer's
employee benefit plan (the "PLAN"), a summary of which has been provided to the
Employee, such benefits to include, but not be necessarily limited to,
retirement pension, life insurance, disability income insurance, health
insurance and vacation time. In addition, the Employee shall be entitled to
country club and downtown dining club dues, company owned automobile, attendance
at professional and industry conferences and seminars, professional and other
association dues, travel and other incidental expenses at Employer's expense.
For purposes of calculation of benefits to which the Employee is entitled under
the Plan, all years of service of the Employee with the Employer and with
American Mutual Life Insurance Company prior to its merger with Central Life
Assurance Company shall be counted. Notwithstanding anything contained herein
or in the Plan, at retirement the Employee shall receive supplementary
retirement pension benefits so that his annual retirement benefit on a 10 years
certain and life basis is not less than 75% of his average annual base salary
plus incentive

-2-

<PAGE>

compensation paid to him by Employer in the best three of the preceding five
years prior to retirement. This supplemental retirement pension benefit will be
payable using the actuarial equivalent and the same form of benefit as is
elected under the qualified pension plan.
8. RETIREMENT. The Employee may elect to retire at any time by giving 30
days' written notice to the Employer. In that event, the Employee, if requested
by the Employer, shall continue to render his services, and shall be paid his
regular compensation up to the date of retirement. Upon retirement the
Employee shall be entitled to retirement pension benefits specified in Par. 7
above, and the Employer shall pay the Employee 1.67 times the applicable premium
to continue health insurance coverage as provided in the Plan for the Employee
and covered dependents beginning on the date of retirement and ending on May 15,
2000. Upon retirement, the Employee shall receive such life and health
insurance benefits as may be provided by the Plan.
9. DEATH DURING EMPLOYMENT. If the Employee dies during the term of this
Agreement, in addition to life insurance benefits provided pursuant to the Plan,
the Employer shall pay the compensation specified in Par. 3 above that would
otherwise be paid to the Employee had he not died. Such payments shall be made
to Employee's widow, or, if he is not then survived by his widow, to the
Employee's lawful living issue per stirpes, or, if there is no lawful living
issue, to the Employee's estate.
10. DISABILITY DURING EMPLOYMENT. If during the term hereof the Employee
becomes disabled and unable to perform the essential duties of his regular
occupation, he shall nevertheless continue to receive his salary, incentive
compensation and other benefits as provided herein through the remainder of the
term of this Agreement, offset, however, for any disability income benefits
received pursuant to the Plan.
11. TERMINATION FOR CAUSE. This Agreement may be terminated by the
Employer for cause on account of the Employee's embezzlement, fraud, willful and
wanton misconduct, or breach of fiduciary duty involving personal profit. In
the event the Employee is terminated for cause, he shall be deemed to have
retired and shall be entitled only to

-3-

<PAGE>

retirement pension benefits provided in Par. 7 above and other benefits
specified pursuant to the Plan.
12. NOTICES. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and sent by certified mail, return
receipt requested, to the Employee's residence or to the Employer's principal
office, as the case may be.
13. WAIVER OF BREACH. The Employer's or the Employee's waiver of a breach
of any provision of this Agreement by the Employee or the Employer,
respectively, shall not operate or be construed as a waiver of any subsequent
breach. No waiver shall be valid unless in writing and signed on behalf of the
Employee by the Employee or on behalf of the Employer by the Employer's CEO.
14. ASSIGNMENT. The Employee acknowledges that his services are unique.
Accordingly, the Employee may not assign his rights or delegate his duties or
obligations under the Agreement. The Employer's rights and obligations under
this Agreement shall inure to the benefit of, and shall be binding upon, the
Employer's successors and assigns.
15. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties. It may not be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, or extension, or discharge is sought.
16. ARBITRATION. All disputes, differences or controversies arising out
of, under, or in connection with this Agreement or its breach, shall be
submitted to arbitration to be held in Des Moines, Iowa under the rules and
regulations of the American Arbitration Association. All the parties hereto
shall be bound by the determination of the arbitration.
17. HEADINGS. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement on February
10, 1995.

-4-

<PAGE>

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ Roger K. Brooks
-------------------------------------
Chief Executive Officer

CORPORATE SEAL

ATTEST:

/s/ J. A. Smallenberger
- -----------------------------------
Secretary

/s/ Sam C. Kalainov
----------------------------------------
Sam C. Kalainov,
Employee

<PAGE>

AMERUS LIFE HOLDINGS, INC.

NON-EMPLOYEE DIRECTOR STOCK PLAN

SEPTEMBER 15, 1996

Section 1. Purpose of the Plan.

The purpose of the AmerUS Life Holdings, Inc. Non-Employee Director Stock
Plan (the "Plan") is to provide stock based compensation to eligible
directors of AmerUS Life Holdings, Inc. (the "Company") in order to encourage
the highest level of director performance and to promote long-term
shareholder value by providing such directors with a proprietary interest in
the Company's success and progress through grants of shares of the Company's
Class A Common Stock ("Common Stock") which are restricted in accordance with
the terms and conditions set forth below ("Restricted Shares") and by
granting them options to purchase shares of Common Stock ("Options").

Section 2. Certain Definitions.

(a) "BOARD" means the Board of Directors of the Company.

(b) "CODE" means the Internal Revenue Code of 1986, as amended.

(d) "COMMON STOCK" means the Class A Common Stock of the Company.

(e) "COMPANY" means AmerUS Life Holdings, Inc. an Iowa corporation.

(f) "DIRECTOR FEE" means the annual retainer fee payable to a Non-Employee
Director in accordance with the Company's regular payment practices with
respect to service on the Board.

(g) "DISABILITY" means a permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan. The
determination of Disability for purposes of this Plan shall not be construed
to be an admission of disability for any other purpose.

(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(i) "FAIR MARKET VALUE" means, as of any given date, the closing price of
the Common stock on NASDAQ Composite Tape.

(j) "NON-EMPLOYEE DIRECTOR" means a director which is not currently an
officer for Section 16 of the Securities and Exchange Act of 1934 or
otherwise currently employed, or a consultant to, the Company, its Affiliates
or Subsidiaries and is an outside director under Section 1.162-27(e)(3) of
the regulations promulgated under the Code.

<PAGE>

(k) "NORMAL RETIREMENT" means the date specified by the Board as the
retirement date for members of the Board.

(l) "OPTIONS" means options to purchase shares of Common Stock granted
pursuant to Section 6 of the Plan.

(m) "PLAN" means the AmerUS Life Holdings, Inc. Non-Employee Director Stock
Plan.

(n) "PAYMENT DATE" means the date on which the Company pays Director Fees or
issues restricted stock in lieu thereof in accordance with Section 7 hereof.

(o) "RESTRICTED STOCK" means shares of Common Stock granted pursuant to
Section 7 of the Plan.

(p) "RESTRICTED STOCK AGREEMENT" means a written agreement evidencing an
award of Restricted Stock and setting forth the terms and conditions of such
award.

(q) "RULE 16B-3" means Rule 16b-3, as currently in effect or as hereinafter
amended or modified, promulgated under the Exchange Act.

Section 3. Administration of the Plan.

The Plan shall be administered by the Human Resources Committee of the Board
of Directors of the Company. Grants of options to purchase Common Stock
under the Plan and the amount and nature of the awards of Restricted Stock
shall be made automatically as provided in Section 6 and Section 7,
respectively. However, the Human Resources Committee shall have full
authority to interpret the Plan, to promulgate such rules and regulations
with respect to the Plan as it deems desirable, and to make all
determinations necessary or appropriate for the administration of the Plan,
and such determinations shall be final and binding upon all persons having an
interest in the Plan.

Section 4. Common Stock Subject to the Plan.

The total number of shares of Common Stock reserved and available for
distribution under the Plan shall be 150,000. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares. If
any shares of Common Stock that have been optioned cease to be subject to
option, or if any shares subject any Restricted Stock award granted hereunder
are forfeited or such award otherwise terminates, such shares shall again be
available for distribution in connection with future awards under the Plan.

In the event of any merger, reorganization, consolidation, recapitalization,
Common Stock dividend, or other change in corporate structure affecting the
Common Stock, a substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under the Plan, in the number and
option price of shares subject to outstanding Stock Options granted under the
Plan and in the number of shares subject to Restricted Stock awards granted
under the Plan as may be determined to be

<PAGE>

appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole
number.

Section 5. Participation.

Each Non-Employee Director shall be eligible to
participate in the Plan.

Section 6. Non-Qualified Stock Options.

(a) GENERAL. Options granted to Non-Employee Directors under the Plan
shall be options which are not intended to be "incentive stock options"
within the meaning of Section 422 of the Code.

(b) ANNUAL GRANT OF OPTIONS. An Option covering 2,500 shares of common
stock of the Company shall be granted to each Non-Employee Director
automatically on the first day of each calendar year in which the Common
Stock is publicly traded on NASDAQ National Market or a national
securities exchange; provided, however, that if the Common Stock has not
been publicly traded on the NASDAQ National Market or a national
securities exchange for at least six months, no option shall be granted
for such calendar year.

(c) TERMS OF OPTIONS. Options granted under the Plan shall be evidenced
by a written agreement in such form as the Committee shall from time to
time approve, which agreements shall comply with and be subject to the
following terms and conditions:

(i) OPTION PRICE. The option price per share of Common Stock
purchasable under an Option shall be 100% of the Fair Market Value of
the Common Stock on the date of the grant of the Option.

(ii) OPTION TERM. Each Option shall be exercisable for a term of ten
(10) years from the date such Option is granted (subject to prior
termination as hereinafter provided).

(iii) EXERCISABILITY. Except as provided in Section 8, Options
shall not become first exercisable by their terms until the
expiration of twelve (12) months from the date of the grant of the
Option. If the Committee provides, in its discretion, that any Stock
Option is exerciseable only in installments, the Committee may waive
such installment exercise provisions at any time, in whole or in
part, based on performance and/or such other factors as the Committee
may determine in its discretion.

(iv) METHOD OF EXERCISE. Options may be exercised in whole or in
part at any time during the option period by giving written notice of
exercise to the Company specifying the number of shares to be
purchased, accompanied by payment in full of the purchase price, in
cash, by check or such other instrument as may be acceptable to the
Committee. Payment in full or in part may also be made in the form
of unrestricted Common Stock already owned by the optionee (based on
the Fair Market Value of the Common Stock on the date the Option is
exercised). No shares of Common Stock shall be issued until full
payment therefor has been made. An optionee shall have the right to
dividends or other

<PAGE>

rights of a stockholder with respect to shares subject to an Option
which the optionee has given written notice of exercise and has paid
in full for such shares.

(v) NON-TRANSFERABILITY OF OPTIONS EXCEPTION. Except as otherwise
set forth in this Section 6(v), no Option shall be transferable by
the optionee otherwise than by will or by the laws of descent and
distribution, and all Options shall be exercisable, during the
optionee's lifetime, only by the optionee. The Committee shall have
the discretionary authority, however, to grant Options which would be
transferable to members of an optionee's immediate family, including
trusts for the benefit of such family members and partnerships in
which such family members are the only partners. For purposes of
Section 9, a transferred Option may be exercised by the transferee
only to the extent that the optionee would have been entitled had the
Option not been transferred.

Section 7. Restricted Stock.

(a) AWARDS. After the Common Stock has been publicly traded on the
NASDAQ National Market for at least six months, each Non-Employee
Director may elect, pursuant to a written irrevocable election, to
receive Restricted Stock in lieu of part or all of such Non-Employee
Director's Fee. Such election shall be effective beginning on the
Payment Date immediately following the date which is six (6) months after
the date of such election. The number of shares of Restricted Stock
granted to a Non-Employee Director pursuant to such election shall be
equal to the dollar amount of Director Fees which the Non-Employee
Director has elected not to receive, divided by seventy-five percent
(75%) of the Fair Market Value of the Common Stock as of each applicable
Payment Date. Such an election by a Non-Employee Director shall continue
in effect until the earlier of (i) such Non-Employee Director's
termination as a director of the Company and (ii) the Payment Date
immediately following the date which is six (6) months following the
receipt by the Company of a written election by such Non-Employee
Director to discontinue receiving Restricted Stock in lieu of all or a
portion of such Non-Employee Director's Director Fees or a written
election by a Non-Employee Director to change the amount of such election.

(b) AWARDS AND CERTIFICATES.

(i) A Non-Employee Director who elects to receive Restricted Stock
pursuant to this Section 7 shall not have any rights with respect to
such award, unless and until such recipient has executed a Restricted
Stock Agreement and has delivered a fully executed copy thereof to
the Company, and has otherwise complied with the then applicable
terms and conditions.

(ii) A stock certificate in respect of shares of Restricted Stock
shall be issued in the name of each Non-Employee Director who
receives Restricted Stock. Such certificate shall be registered in
the name of the Non-Employee Director, and shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:

<PAGE>

"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the AmerUS Life Holdings, Inc. Non-Employee Director
Stock Plan and a Restricted Stock Agreement entered into between the
registered owner and the Company. Copies of such Plan and Agreement
are on file in the offices of the Company, (418 6th Avenue, Des
Moines, Iowa 50309).

(iii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of
any Restricted Stock award, the Non-Employee Director shall have
delivered a stock power, endorsed in blank, relating to the Common
Stock covered by such award.

(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions
and conditions:

(i) Subject to the provisions of this Plan and the Restricted Stock
Agreements, a Non-Employee Director shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock awarded under
the Plan for a period of two (2) years following the effective date
of the Restricted Stock Agreement pursuant to which such shares of
Restricted Stock were awarded.

(ii) Except as provided in Section 7(b), a Non-Employee Director
shall have, with respect to the shares of Restricted Stock, all of
the rights of a stockholder of the Company, including the right to
vote and to receive any dividends. Dividends paid in stock of the
Company or stock received in connection with a stock split with
respect to Restricted Stock shall be subject to the same restrictions
as on such Restricted Stock. Certificates for shares of unrestricted
Common Stock shall be delivered to the Non-Employee Director promptly
after, and only after, the period of forfeiture shall expire without
forfeiture in respect of such shares of Restricted Stock.

Section 8. Termination of Directorship.

(a) TERMINATION BY REASON OF DISABILITY OR DEATH. Upon the termination
of a Non-Employee Director by reason of Disability or death, (i) any
Restricted Stock held by such Non-Employee Director shall immediately
vest and all restrictions applicable to such shares shall lapse, or, in
the case of death, the Restricted Stock granted to such Non-Employee
Director shall immediately vest in the Non-Employee Director's
beneficiary or estate and all restrictions applicable to such shares
shall lapse, and (ii) any Options granted to such non-Employee Director
shall immediately vest in the Non-Employee Director's beneficiary or
estate and all restrictions applicable to such shares shall lapse, and
(iii) any Options held by such optionee may thereafter be immediately
exercised, notwithstanding the provisions of Section 6 hereof, by the
optionee or, in the case of death, by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee,
until the expiration of the stated term of such Options.

<PAGE>

(b) TERMINATION BY REASON OF NORMAL RETIREMENT. If an optionee's status
as a Non-Employee Director with the Company terminates by reason of
Normal Retirement, (i) any Restricted Stock held by such Non-Employee
Director shall immediately vest and all restrictions applicable to such
shares shall lapse, and (ii) any Options held by such optionee shall
become immediately exercisable and may thereafter be exercised until the
expiration of the stated terms of the Options. If the retired optionee
dies while any Options are still outstanding, such Options may be
exercised by the legal representative of the estate or by the legatee of
the optionee under the will of the optionee, until the expiration of the
stated term of the Options.

(c) OTHER TERMINATION. Upon the termination of a Non-Employee Director
from the Company with the approval of the remainder of the majority of
the Board, (i) any Restricted Stock held by such Non-Employee Director
shall immediately vest and all restrictions applicable to such shares
shall lapse, and (ii) any Options held by such optionee shall become
immediately exercisable and may thereafter be exercised until the
expiration of the stated terms of the Options. Upon the termination of a
Non-Employee Director from the Company without the approval of the
remainder of the majority of the Board, (i) any Restricted Stock held by
such Non-Employee Director which is not fully vested as of the date of
termination shall be forfeited by the Non-Employee Director, and (ii) any
Options held by such optionee shall be forfeited by the Non-Employee
Director.

Section 9. Termination or Amendment of the Plan.

The Board may suspend or terminate the Plan or any portion thereof at any
time, and the Board may amend the Plan from time to time as may be deemed to
be in the best interests of the Company; provided, however, that no such
amendment, alteration or discontinuation shall be made (a) that would impair
the rights of a Non-Employee Director with respect to Options and Restricted
Stock theretofore awarded, without such person's consent, or (b) without the
approval of the stockholders (i) if such approval is necessary to comply with
any legal, tax or regulatory requirement, including any approval requirement
which is a prerequisite for exemptive relief from Section 16(b) of the
Exchange Act; or (ii) to increase the maximum number of shares subject to
this Plan, increase the maximum number of shares issuable to may Non-Employee
Director under this Plan, or change the definition of persons eligible to
receive awards under this Plan, or (c) if the Plan has been amended within
the preceding six (6) months, unless such amendment is necessary to comply
with changes in the Internal Revenue Code of 1986, as amended, or the
Employee Retirement Income Security Act of 1974, as amended, or rule
promulgated thereunder.

Section 10. Section 16.

It is intended that the Plan and any grants made to a person subject to
Section 16 of the Exchange Act meet all of the requirements of Rule 16b-3.
If any provision of the Plan or any award hereunder would disqualify the Plan
or such award, or would otherwise not comply with Rule 16b-3, such provision
or award shall be construed or deemed amended to conform to Rule 16b-3.

<PAGE>

Section 11. General Provisions.

(a) NO RIGHT OF CONTINUED SERVICE. Nothing in the Plan shall be deemed
to create any obligation on the part of the Board to nominate any
Non-Employee Director for reelection by the Company's stockholders.

(b) PAYMENT OF TAXES. The Company shall have the right to require,
prior to the issuance or delivery of any Restricted Stock or issuance and
delivery of Common Stock upon the exercise of Options, payment by the
Non-Employee Director of any taxes required by law with respect to the
issuance or delivery of such shares. Such amount may be paid in cash, in
shares of Common Stock previously owned by the Non-Employee Director, by
withholding a portion of the shares of Common Stock that otherwise would
be distributed to such Non-Employee Director upon delivery of the
Restricted Stock or exercise of an Option or a combination of cash and
shares of Common Stock.

(c) SHARES. The shares of Common Stock granted as Restricted Stock or
issued upon the exercise of Options under the Plan may be either
authorized by unissued shares or shares which have been or may be
reacquired by the Company, as determined from time to time by the Board.

(d) GOVERNING LAW. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Iowa (other than its law respecting choice of law). The Plan shall be
construed to comply with all applicable law, and to avoid liability to
the Company or a Non-Employee Director, including, without limitation,
liability under Section 16(b) of the Exchange Act.

(e) HEADINGS. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this
Plan.

(f) SEVERABILITY. If any provision of this Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereby, and this Plan shall be
construed as if such invalid or unenforceable provision were omitted.

(g) SUCCESSORS AND ASSIGNS. This Plan shall inure to the benefit of and
be binding upon each successor and assign of the Company. all
obligations imposed upon a Non-Employee Director, and all rights granted
to the Company hereunder, shall be binding upon the Non-Employee
Director's heirs, legal representatives and successors.

<PAGE>

DOCUMENT PREPARED BY:

Diane M. Davidson, Assistant General Counsel
American Mutual Life Insurance Company
4949 Westown Parkway, Suite 245, West Des Moines, Iowa 50266 (515) 221-6000
- --------------------------------------------------------------------------------

MODIFICATION OF REAL ESTATE CONTRACT

This Modification of Real Estate Contract (the "CONTRACT") is made as of this
1st day of July, 1996, by and between AMERUS LIFE INSURANCE COMPANY f/k/a
Central Life Assurance Company ("SELLER") and AMERUS PROPERTIES, INC. ("BUYER").

W I T N E S S E T H

WHEREAS, the Seller is the holder of the original Real Estate Contract -
Installments which was dated and executed July 1, 1986 between MIDLAND FINANCIAL
SAVINGS AND LOAN ASSOCIATION and CENTRAL LIFE ASSURANCE COMPANY;

WHEREAS, Central Life Assurance Company assigned its interest in the Contract
to KAJAMA DEVELOPMENT CO., on December 28, 1989; Kajama Development Co. then
merged with CENTRAL PROPERTIES, INC. n/k/a AMERUS PROPERTIES, INC.;

Midland Financial Savings and Loan Association assigned its interest in the
Contract to WISCONSIN LIFE INSURANCE COMPANY ("WISCONSIN") on January 31, 1991;
Wisconsin then merged with Central Life Assurance Company n/k/a AMERUS LIFE
INSURANCE COMPANY;

WHEREAS, the Seller has requested certain modifications of the Contract;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

1. The provisions of Section 1b of the original Contract shall be
modified as follows:

A. The maturity date of the Contract shall be extended to July
1, 2001;

B. The new outstanding balance on the Contract as of the date
of the Agreement shall be $3,500,000.00 and the Buyer shall
make a principal curtailment as of the date of this
Agreement in an amount necessary to bring the balance to
equal this amount;

<PAGE>

C. The interest rate shall be reduced from 11% to 9% per annum;

D. The loan will be amortized over a 20 year period; and

E. The monthly payment, beginning July 1, 1996, will be
$31,490.41, due on or before the first day of each month.

2. The parties hereto shall execute such further documents and instruments and
take such other actions as may become necessary in order to implement the
provisions of this Agreement.

3. The signature of any person to this Agreement shall be deemed to be a
personal warranty that she/he has the power and authority to bind any
corporation or partnership or any other business entity for which she/he
proposes to act.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first hereinabove set forth.

SELLER:

AMERUS LIFE INSURANCE COMPANY

By: /s/ Diane M. Davidson
---------------------------------------------
Diane M. Davidson, Assistant Secretary

BUYER:

AMERUS PROPERTIES, INC.

By: /s/ Gene Harris
---------------------------------------------
Gene Harris, Senior Vice President

<PAGE>

ASSET MANAGEMENT AND DISPOSITION AGREEMENT

THIS AGREEMENT made and entered into this 3rd day of January, 1995, by
and between CENTRAL PROPERTIES, INC., an Iowa corporation, with its principal
office at 6000 Westown Parkway, Suite 200W, West Des Moines, Iowa 50266
(hereinafter referred to as "Manager") and AMERICAN MUTUAL LIFE INSURANCE
COMPANY, an Iowa corporation, with its principal office at 418 Sixth Avenue,
Des Moines, Iowa 50309 (hereinafter referred to as "Owner").

W I T N E S S E T H

WHEREAS, on January 1, 1995, Owner had an ownership interest in the real
estate described on Exhibit "A"; and

WHEREAS, Manager desires to perform management services for Owner; and

WHEREAS, Owner believes that the Properties will benefit from Manager's
expertise.

NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:

ARTICLE 1. SERVICES

Manager will provide the following asset management services:

1. Complete evaluation of the Properties including physical
inspections and economic analysis of the Properties and the markets in
which they are located.

2. Develop short and long term management strategies for the
Properties including capital improvements, recommended lease rates and
terms, financing options and hold/sell recommendations.

3. Recommend a property manager and select leasing agents,
<PAGE>

contractors and other third party vendors with the assistance of the
property manager.

4. Oversight of all Property activity.

5. Regular reporting to Owner of activities.

6. Provide Owner with investment analysis information.

ARTICLE 2. TERM.

The initial term of this Agreement shall be for one (1) year commencing
January 1, 1995, and shall be renewed automatically on a year-to-year basis
unless sixty (60) days prior to the expiration of any term Owner notifies
Manager of its election to terminate this Agreement.

ARTICLE 3. MANAGER'S CONTROL.

Manager shall have uninterrupted control over the day-to-day operations of
the Properties, and shall manage them in the best interest of the Owner in the
same manner as it manages real estate assets in its own portfolio.

ARTICLE 4. COMPENSATION.

Manager shall receive as compensation for the services provided under this
Agreement an annual fee equal to .50 percent of the net market value for each of
the Properties and a one time disposition fee for any and every Property
disposed of during the term of this Agreement equal to 1.00 percent of the sales
price. Net market value is defined as market value times Owner's percentage
interest in the Properties. Market value will be jointly agreed to by Owner and
Manager. Independent appraisals, third party opinions, and internal valuation
methods will be used by Manager to recommend market values to Owner. All
properties will have a current appraisal as of the date of foreclosure.
Thereafter, all properties over a market value of $1.5 million will have an
appraisal update every 3 to 5 years, depending upon changes in market
conditions. Exhibit "A" will be generated on a monthly basis and will reflect
changes in Owner's Properties such as acquisitions, dispositions, and changes in
market value. All travel and legal expenses incurred by Manager in the
performance of

-2-
<PAGE>

this agreement will be paid by Owner.

ARTICLE 5. EXPENDITURES.

Manager shall invoice Owner no less frequently then quarterly hereunder or
more often than monthly. At Owner's option it may direct the Property Manager
to make direct disbursements to the Manager out of cash flow from the
Properties.

ARTICLE 6. REMEDIES.

If either Manager or Owner fails to perform under this Agreement either
party on five (5) days written notice may terminate this Agreement and are
entitled to utilize any and all remedies and actions at law or in equity
available to them and shall be entitled to obtain judgment for costs and
attorney fees as permitted by law.

ARTICLE 7. NOTICES.

All notices, demands, consents or requests which are either required or
desired to be given or furnished hereunder shall be in writing and shall be
deemed to have been properly given if either delivered personally or by
overnight commercial carrier or sent by United States registered or certified
mail, postage prepaid, return receipt requested, to the address of the parties
hereinabove set out. By notice complying with this section, each party may from
time to time change the address to be subsequently applicable to it for the
purpose of this section. Such notice shall be effective on receipt if by
personal delivery or by overnight commercial courier and on the earlier of
actual receipt or three (3) days following mailing if sent by mail.

ARTICLE 8. RELATIONSHIP, AUTHORITY AND FURTHER ACTION.

Manager and Owner shall not be construed as joint venturers or partners of
each other and neither shall have the power to bind or obligate the other except
as set forth in this Agreement. Manager is, however, clothed with and granted
such additional authority and

-3-
<PAGE>

powers as may be necessary to carry out the spirit and intent of this Agreement.

Manager is authorized to make, enter into and perform in the name of, for
the account of, on behalf of and at the expense of Owner any contracts and
agreements deemed necessary by Manager to carry out and place in effect the
terms and conditions of this Agreement except Manager shall have no right to
encumber the title of the property or enter into any contract or agreement in
excess of Fifteen Thousand and 00/100 Dollars ($15,000.00), without the express
prior written approval of Owner.

Owner and Manager agree to take all reasonable actions necessary to comply
with the provisions of this Agreement and the intent hereof.

ARTICLE 9. APPLICABLE LAW.

The interpretation, validity and performance of this Agreement shall be
governed by the laws of the State of Iowa. If any of the terms and provisions
hereof shall be held invalid or unenforceable for any reason, such validity or
unenforceablilty shall in no event affect any of the other terms or provisions
hereof, all such other terms and provisions to be valid and enforceable to the
fullest extent commended by law; provided, however, if in any event any material
part of Owner's obligations under this Agreement shall be declared invalid or
unenforceable, Manager shall have the option to terminate this Agreement.

-4-
<PAGE>

ARTICLE 10. SUCCESSORS AND ASSIGNS.

All provisions hereof shall inure to and bind the respective successors and
assigns of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement effective the day and year first above written.

OWNER:

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ William C. Knapp II
-------------------------------------
William C. Knapp II, Asst. Secretary

MANAGER:

CENTRAL PROPERTIES, INC.

By: /s/ Roger Langpaul
-------------------------------------
Roger Langpaul, Vice President

ACKNOWLEDGEMENTS

STATE OF IOWA )
) SS.
COUNTY OF DALLAS )

On this 1 day of January, 1995 before me a Notary Public in and for the
State and County personally appeared William C. Knapp II, to me personally
known, who by be duly sworn did say, that he is the Asst. Secretary of
American Mutual Life Insurance Company, an Iowa corporation, and he
acknowledged to me that he executed the same for the purposes and
consideration therein expressed, in the capacity therein stated, and as the
voluntary act and deed of said corporation.

-5-
<PAGE>

/s/ Kathy O. Kantner
-------------------------------------
Notary Public in and for said State

My commission expires: 6-2-97
--------------

ACKNOWLEDGMENTS - CONTINUED

STATE OF IOWA )
) SS.
COUNTY OF DALLAS )

On this 3rd day of January, 1995 before me a Notary Public in and for the
State and County personally appeared Roger Langpaul, to me personally known, who
by be duly sworn did say, that he is the Vice President of Central Properties,
Inc., an Iowa corporation, and he acknowledged to me that he executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated, and as the voluntary act and deed of said corporation.

/s/ Christine M. Woosley
-------------------------------------
Notary Public in and for said State

My commission expires: 9-20-96
--------------

-6-

<PAGE>

A PROPOSAL FOR

MANAGEMENT SERVICES

Richland Pointe Mall
North Richland Hills, Texas

PREPARED FOR:

American Mutual Life Insurance Company
418 Sixth Avenue
Des Moines, Iowa 50309

PREPARED BY:

CPI Resource Group
6000 Westown Parkway, Suite 200W
West Des Moines, IA 50266

<PAGE>
TABLE OF CONTENTS

PAGE
----
Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

Article III - The Manager's Authority
Section 3.01. General Authority 2
Section 3.02. Repairs and Maintenance 2
Section 3.03. Collection of Rents and Charges 3
Section 3.04. Security Deposits 3
Section 3.05. Personnel 3
Section 3.06. Service Contracts 3
Section 3.07. Disbursements 3

Article IV - Duties and Obligations of the Manager
Section 4.01. Maintenance & Repair of the Property 4
Section 4.02. Books and Records 4
Section 4.03. Returns Required by Law 4
Section 4.04. Collections and Bank Accounts 4
Section 4.05. Disbursements 4
Section 4.06. Monthly Reports 4
Section 4.07. Time Devoted 5

Article V - Termination
Section 5.01. Termination 5
Section 5.02. Damage, Destruction, Sale or
Condemnation 5
Section 5.03. Bankruptcy, Reorganization and
Insolvency 5
Section 5.04. Effect of Termination and
Termination Fund 5

<PAGE>

TABLE OF CONTENTS
(CONT.)

PAGE
----
Article VI - Compensation of the Manager
Section 6.01. Management 6
Section 6.02. Payment of Compensation 6
Section 6.03. Additional Services 6
Section 6.04. Renewal and Expansion of Leases
by Manager 6
Article VII - Definitions
Section 7.01. Gross Receipts 6
Section 7.02. Net Proceeds 6

Article VIII - Miscellaneous Provisions
Section 8.01. Leasing Policies 7
Section 8.02. Not a Partnership 7
Section 8.03. Indemnity 7
Section 8.04. Insurance 7
Section 8.05. The Owner's Representative 8
Section 8.06. Entire Agreement 8
Section 8.07. Headings 8
Section 8.08. Consent and Approval 8
Section 8.09. Waiver of Subrogation 8
Section 8.10. Notices 9
Section 8.11. Governing Law 9
Section 8.12. Binding Effect 9
Section 8.13. Agent's Sign 9
Section 8.14. Other Provisions 10

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the FIRST
day of NOVEMBER 1994, by and between AMERICAN MUTUAL LIFE INSURANCE COMPANY (the
"Owner") and CPI RESOURCE GROUP (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as RICHLAND POINTE MALL, located in NORTH
RICHLAND HILLS, TEXAS, such project being more fully described on EXHIBIT "A"
which is attached hereto and incorporated herein by reference for all purposes
(the "Property"); and

B. The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

NOW THEREFORE, in consideration of the mutual promises hereunder and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

APPOINTMENT

SECTION 1.01. EXCLUSIVE AGENCY - APPOINTMENT. The Owner hereby engages,
appoints and employs the Manager to rent, operate, and manage the Property as
the Owner's sole and exclusive agent during the term of this Contract, upon the
terms and conditions hereinafter set forth.

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of NOVEMBER 1, 1994 and shall continue through and including
OCTOBER 31, 1995 (the "Term"), unless earlier terminated as hereinafter
provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

<PAGE>

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(a) that the Owner has full right and authority to enter into this
Agreement, perform its obligations hereunder and engage, appoint and employ the
Manager for the purposes and consideration herein set forth;

(b) that the Owner is duly organized, existing and in good standing
under the laws of the State of Iowa and is duly authorized and qualified to do
business in the State of Iowa;

(c) to waive, release and relinquish any and all claims which the
Owner may have against Manager for damages to the Property or any personal
property located on the Property to the extent that such damages are covered by
the Owner's insurance policies.

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.01. GENERAL AUTHORITY. The Manager shall have the exclusive
authority, right and power to rent, operate, and manage the Property (all or any
of which, at Manager's option, may be exercised in the name of the Owner).
Except as specifically set forth in this contract, all obligations or expenses
incurred by the Manager pursuant to its authority hereunder shall be for the
benefit of, account of, or behalf of and at the expense of the Owner, and the
Owner expressly agrees to assume and pay any and all such expenses and
obligations.

SECTION 3.02. REPAIRS AND MAINTENANCE. The Manager shall have the specific
authority on behalf of and at the expense of the Owner to (a) make or cause to
be made all ordinary repairs and replacements necessary to preserve the Property
in its present condition; (b) make all alterations required to comply with lease
requirements; (c) negotiate contracts for nonrecurring items not exceeding TWO
THOUSAND Dollars ($2,000.00) without the prior written approval of the Owner;
provided, however, monthly or recurring operating charges and emergency repairs
may be incurred in excess of such maximum, if in the opinion of the Manager,
such repairs are necessary to protect the Property from damage or to maintain
services to the tenants as called for in their leases; (d) enter into contracts
for all necessary repairs, maintenance, minor alterations and utility services;
and (e) place orders on behalf of the Owner for such equipment, tools,
appliances, materials and supplies as are reasonable and necessary to properly
maintain the Property. Manager agrees to annually furnish the Owner an up-to-
date inventory list of equipment, tools and appliances owned by the Owner and
used in the operation of the Property.

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall have the
specific authority, if authorized under the applicable lease, to collect (a)
rents and assessments and other items due or to become due, give receipts
therefore and deposit all funds collected hereunder in the bank account provided
for and described in SECTION 4.04; (b) a late rent administrative charge; (c) a
charge for non-negotiable checks; (d) a fee for credit reports; and (e) an
administrative charge for subleasing.

SECTION 3.04. SECURITY DEPOSITS. The Manager shall have the right to
collect security deposits and deposit such funds to an account specified by the
Owner from time to time. Manager shall have the right to refund tenant's
security deposits at the expiration of leases.

SECTION 3.05. PERSONNEL. The Manager shall have the express authority to
investigate, hire, train, promote, pay, supervise and discharge all personnel
reasonably necessary in order to properly maintain and operate the Property.
Such personnel shall not be deemed employees of the Owner, who shall have no
right to supervise or direct such employees. All reasonable salaries, wages or
personnel employed by the Manager, including but not limited to the cost of
group medical and health insurance, social security taxes, federal and state
unemployment taxes, Workman's Compensation Insurance and vacations shall be
deemed to be expenses reimbursable to the Manager by the Owner. See Schedule B.

SECTION 3.06. SERVICE CONTRACTS. The Manager shall have the authority, in
the name and on behalf of the Owner, to enter into contracts for water,
electricity, gas fuel, window cleaning, telephone, vermin extermination, trash
removal, janitorial service, laundry service, landscaping and lawn care,
elevator, security and other necessary services deemed by the Manager to be
necessary or advisable for the operation of the Property.

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on or
before the TENTH (10TH) day of the following month and after establishing a cash
reserve in the amount of FIVE THOUSAND Dollars ($5,000.00) to pay other costs
and expenses incidental to the operation of the Property, including non-
recurring emergency repairs. Sufficient funds for capital expenditures which
shall become due and payable within the succeeding calendar month and for

<PAGE>

which the cash to make such payments may not be generated by operations during
such period shall be retained in addition to the cash reserve established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.01. MAINTENANCE AND REPAIR OF THE PROPERTY. The Manager shall,
at the Owner's sole expense, cause the property to be maintained in accordance
with standards reasonably acceptable to the Owner, including without limitation,
interior and exterior cleaning, painting, plumbing and carpentry.

SECTION 4.02. BOOKS AND RECORDS. The Manager shall keep books of account
and such other records reflecting the results of operation of the Property.
Such books and records shall be kept in all material respects in accordance with
accepted accounting practices. The Manager shall allow the Owner, its
accountants, attorneys and agents, the right to enter to examine or inspect the
books and records relating to the operation and maintenance of the Property at
any time during normal business hours upon notification to the Manager. Books
and records of the Property shall be kept at the Property or such other place as
the Manager may deem appropriate.

SECTION 4.03. RETURNS REQUIRED BY LAW. The Manager shall execute and file
punctually when due, all forms, reports and returns required by law relating to
personnel employed by the Manager for the maintenance and operation of the
Property.

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit all
sums collected pursuant to this Contract (less any sums properly deducted as
provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled: "CPI
RESOURCE GROUP - As Agent For AMERICAN MUTUAL LIFE INSURANCE COMPANY" and shall
be maintained at all times separate from the Manager's corporate accounts. The
Manager shall endeavor to collect on behalf of the Owner and at the Owner's
expense, all rents and other charges for the use and occupancy of the Property.

SECTION 4.05. DISBURSEMENTS. The Manager shall make disbursements in
accordance with the authority as set forth in SECTION 3.07 hereof. In the event
the disbursements required under SECTION 3.07 (1) and (2) hereof shall be in
excess of receipts from the Property, the Owner agrees to pay to the Manager the
amount necessary to restore the balance in the account to the amount specified
in SECTION 3.07 (3) immediately upon notification by Manager. No provision of
this Contract shall in any manner obligate the Manager to advance its own funds
on behalf of the Owner for any purpose.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day as stipulated
in SECTION 3.07 deliver a written report of the previous month's operations to
the Owner, which report shall include a complete listing of all receipts and
disbursements and the amount, if any, payable by the Owner to restore the
balance in the account as provided in SECTION 4.05 hereof.

<PAGE>

SECTION 4.07. TIME DEVOTED. The Manager shall devote such of its time,
attention and business capacity to the management and operation of the Project
as may be necessary in order for Manager to fully comply with the terms of this
Agreement. It is understood and agreed that the Manager has, may continue to
have, and hereafter may engage in other similar or related businesses, even
though such other businesses may be in competition with the Project.

ARTICLE V

TERMINATION

SECTION 5.01. TERMINATION. Notwithstanding anything in this document to
the contrary, either party may terminate this agreement with or without cause by
giving to the other party thirty (30) days written notice effective on the last
day of any given month. If the owner thus cancels this agreement without cause,
Owner hereby agrees to pay Manager on the date of termination, an amount equal
to the sum of the management fees collected for the three (3) months prior to
termination. If Owner cancels this agreement and hires either directly or
indirectly through another Managing Agent any employee of Manager within sixty
(60) days of termination, Owner hereby agrees to pay Manager an amount equal to
the sum of the payroll costs for said employee for ninety (90) days prior to
termination. After the expiration of the initial Term hereof, this Contract
shall thereafter continue from year to year until terminated, with or without
cause by either party, which termination shall be effective on the last day of
any given month thirty (30) days after receipt of written notice from the
terminating party.

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the event of
damage to or destruction of the Property so that the same shall become
untenantable, or in the event of taking of a substantial portion of the
Property, by condemnation or threat thereof, or similar proceeding, or in the
event of sale of the Property; then, in any such event this Contract may be
terminated by the Owner which termination shall be effective THIRTY (30) days
after receipt by Manager of written notice from the Owner.

SECTION 5.03. BANKRUPTCY, REORGANIZATION AND INSOLVENCY. In the event a
receiver, liquidator or trustee of the Manager shall be appointed by court order
or if a petition shall be filed against the Manager under any bankruptcy,
reorganization or insolvency laws and such petition shall not have been vacated
within one hundred and twenty (120) days of the date of filing or in the event
the Manager shall make an assignment for the benefit of creditors or be
adjudicated a bankrupt under the federal bankruptcy laws, then the Owner may
forthwith terminate this Contract upon written notice to the Manager.

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon termination
pursuant to this ARTICLE V, the Manager and the Owner shall have no further
duties and obligations, one to another save and except the Owner's obligations
under Article VI and SECTION 8.03; provided that in the event of termination as
provided for herein, the Manager will remit to the Owner gross collections and
net proceeds as called for herein on the effective date of termination and the
Owner agrees to insure that all bills, fees (inclusive of Manager's fees and
commissions) and

<PAGE>

charges attributable to the Property have been fully paid. Upon the effective
date of termination, the Manager shall deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to FIVE Percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than TWO THOUSAND FIVE HUNDRED Dollars ($2,500.00) for each month of
the term of this Contract. The Owner shall pay to Manager such other fees
relating to management and construction administration as are set forth in
SCHEDULE A.

SECTION 6.02. PAYMENT OF COMPENSATION. The compensation payable under
SECTION 6.01 hereof shall be payable on the same day as stipulated in SECTION
3.07, following the month for which such compensation is due and shall be
deducted from Gross Receipts prior to remitting the Net Proceeds to the Owner
pursuant to SECTION 3.07 hereof.

SECTION 6.03. ADDITIONAL SERVICES. If Manager's agent is called upon to
perform any services not customarily a part of the usual services performed by a
management agent, it is agreed that Manager shall receive additional
compensation in an amount agreed upon and approved by the Owner in writing, in a
manner in which both parties agree.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See Schedule A
for Compensation.

ARTICLE VII

DEFINITIONS

SECTION 7.01. GROSS RECEIPTS. The term "Gross Receipts" shall mean all
amounts actually collected by the Manager as rents or other charges for use and
occupancy of the Property including parking, receipts from coin operated
machines and other miscellaneous receipts collected by the Manager from the
Property but shall exclude all other receipts including but not limited to,
income derived from interest on investments or otherwise, proceeds of claims on
account of insurance policies, abatement of taxes, and awards arising from
eminent domain proceedings or the threat thereof, discount, deposits and
dividends on insurance policies.

SECTION 7.02. NET PROCEEDS. The term "Net Proceeds" shall mean Gross
Receipts for each calendar month less (i) the sum of all disbursements properly
made by the Manager during each calendar month pursuant to the authority granted
the Manager under this contract and (ii) the compensation payable to the Manager
for the calendar month under this Contract, including without limitation,
management fees, leasing commission, and construction administration fees.

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all the
owner's leasing policies in relation to the Property and the Owner expressly
agrees to the following:

(a) An adequate supply of forms of lease agreements and all
attachments and addenda necessary thereto will be at all times provided to the
Manager by the Owner;

(b) the Manager is authorized, subject to the Owner's approval, to
employ, at the expense of the Owner, a space planner in order to expedite lease
proposals, and to provide working drawings to the on-site manager for assistance
in construction of the leased space;

(c) all inquiries concerning leases, renewals, expansions,
extensions, continuations of tenancy, or agreements for the rental, occupancy or
operation of the Property, or any part thereof, shall be referred to the
Manager, and all negotiations connected therewith shall be conducted solely by
or under direction of the Manager; and

SECTION 8.02. NOT A PARTNERSHIP. Nothing contained in this Contract shall
constitute or be construed to be, or create, a partnership or joint venture
between the Owner and the Manager, or their successors and assigns and the
Manager is, shall be and remain an independent contractor.

SECTION 8.03. INDEMNITY. The Manager hereby agrees to indemnify, defend
and hold harmless the Owner from any cost, loss, damage or expense resulting
from the breach of this Agreement by Manager, except to the extent same
constitutes the negligence of Manager and it is covered by the public liability
insurance described in SECTION 8.04. The Owner hereby agrees to indemnify,
defend and hold harmless the Manager from any cost, loss, damage or expense
resulting from the willful misconduct or gross negligence of the Owner. The
Manager shall not be held responsible for any act or failure to act which is
occasioned by the failure of the Owner to provide funds; provided, that, the
Owner has been notified in writing and given sufficient time to remedy the
situation.

SECTION 8.04. INSURANCE. The Owner agrees to carry, at his own expense,
necessary public liability, fire and extended coverage insurance adequate to
protect the interests of the parties hereto, which policies shall be so written
as to protect the Manager in the same manner to the same extent they protect the
Owner, and will name the Manager as an additional insured. Manager agrees to
carry, at his own expense, necessary public liability and workman's compensation
insurance. The Manager is allowed to include a proportionate share of workman's
compensation insurance premium as a component of salary/wages reimbursement.
The policies shall be so written as to protect the Owner in the same manner to
the same extent they protect the Manager, and will name the Owner as an
additional insured.

<PAGE>

The Owner agrees to furnish the Manager certificates evidencing the
existence of the insurance coverage set forth in this paragraph which
certificates shall provide that the Manager shall receive at least thirty (30)
days notice from the insurance carrier prior to cancellation or material
alteration of any insurance coverage. Unless the Owner shall provide such
insurance and furnish such certificates within thirty (30) days from the date of
this Contract, the Manager may, but shall not be obligated to, place said
insurance (including retroactive coverage of up to two (2) years) and charge the
cost thereof to the account of the Owner. Manager agrees to furnish the Owner
certificates evidencing the existence of the insurance coverage set forth in
this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates Metz Metcalf, as its
representative, who shall be readily available to make such decisions. The
Owner may change such designated representative by written notice to the
Manager.

SECTION 8.06. ENTIRE AGREEMENT. This Contract constitutes all of the
understandings and agreements of whatever nature or kind existing, of which the
Manager is a party, with respect to the Manager's operation and management of
the Property. The Manager makes no guarantees, warranties or representations
that there will be profits or that there will not be losses from the operation
of the Property.

SECTION 8.07. HEADINGS. The article and section headings contained herein
are for convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this Contract.

SECTION 8.08. CONSENT AND APPROVAL. Whenever under any provision of this
Contract the approval or consent of either party is required, the decision
thereon shall be promptly given and such approval or consent shall not be
unreasonably withheld or delayed. It is further understood and agreed that
whenever, under any provision of this Contract, approval or consent is required,
the approval or consent shall be deemed to have been duly given if such approval
or consent is given by the person executing this Contract or any other person,
as the case may be, designated in SECTION 8.05 hereof. The Manager may rely
exclusively and conclusively on the designation set forth in SECTION 8.05
hereof.

SECTION 8.09. WAIVER OF SUBROGATION. The Owner and Manager hereby waive
any rights each may have against the other on account of any loss or damage
occasioned to the Owner or Manager, as the case may be (whether or not such loss
or damage is caused by the fault or negligence of the other party), to their
respective property, or to any portion of the property arising from any risk
covered by the standard form of fire and extended coverage insurance used in the
State of Iowa at the time of the loss or damage. If a party waiving rights
under this Section is carrying a fire and extended coverage insurance policy in
the standard form used in the State of Iowa and an amendment to such standard
form is passed, such amendment shall be deemed not a part of such standard form
until it applies to the policy being carried by the waiving party. The parties
hereto each, on behalf of their respective insurance companies insuring the
property of either The Owner or Manager against any such loss, waive any right

<PAGE>

of subrogation that it may have against the other party. The Owner and Manager
agree immediately to give to their respective insurer written notification of
the terms of the mutual waivers contained in this Section, and to have said
insurance policies properly endorsed, if necessary, to prevent the invalidation
of said insurance coverages by reason of said waivers.

SECTION 8.10. NOTICES. Any notice by any party to any other party shall
be in writing and shall be given, and be deemed except as otherwise provided in
this Contract, to have been duly given (i) when actually received if delivered
personally or (ii) five (5) days after deposit in the United States mail, in a
registered or certified postage paid envelope, return receipt, addressed to the
respective parties as follows:

OWNER: AMERICAN MUTUAL LIFE INSURANCE COMPANY
418 SIXTH AVENUE
DES MOINES, IOWA 50309

ATTN: METZ METCALF
INVESTMENT OFFICER

MANAGER: CPI RESOURCE GROUP
6000 WESTOWN PARKWAY, SUITE 200W
WEST DES MOINES, IA 50266

ATTN: ROGER W. lANGPAUL
SENIOR VICE PRESIDENT

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

SECTION 8.12. BINDING EFFECT. This Contract shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the privilege of
displaying Agent's sign in and upon said premises announcing that said premises
is under Agent's management. Sign and design shall be subject to the Owner's
approval.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on the 23 day of NOVEMBER, 1994.

OWNER:

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ Robert C. Fay
------------------------
Robert C. Fay
Vice Pres. Investments

MANAGER:

CPI RESOURCE GROUP

By: /s/ Roger W. Langpaul
------------------------
Roger W. Langpaul
Senior Vice President

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

American Mutual Life Insurance Company

AND

CPI Resource Group

PROPERTY DESCRIPTION

Locally known as 5201 Rufe Snow Drive, North Richland Hills, Texas

<PAGE>

SCHEDULE A

1. For the management services provided for the RICHLAND POINTE MALL, Manager
will be paid a management fee equal to FIVE percent (5%) of the gross receipts,
but not less than TWO THOUSAND FIVE HUNDRED Dollars ($2,500.00) for each month
of the term of the contract.

2. A construction and administration fee of FIVE percent (5%) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with the RICHLAND POINTE MALL shall be
charged to the property on a pro-rata or hourly basis as provided in SECTION
3.05 and as outlined in Schedule "B".

4. Manager will be provided a fully furnished and equipped management office
to accommodate the personnel required to properly maintain and manage the
property. Owner agrees to provide at Owner's expense a fully furnished and
decorated management and leasing office in the building for the Manager and its'
employees; the location and size of such office to be determined by the mutual
agreement of the Manager and the Owner; the office shall not exceed
approximately 900 usable square feet and TEN DOLLARS ($10.00) per usable square
foot in tenant finish unless approved in writing by the Owner.

LEASING COMMISSIONS AND FEES:

1. New and Expansions: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion lease
of all or a portion of the property equal to FOUR AND ONE-HALF percent (4 1/2%)
of the total gross rents to be charged by Owner over the term of such lease.
Payment of such commissions would be one-half upon execution and one-half upon
occupancy.

2. RENEWALS: The renewal commissions will be TWO AND ONE-FOURTH percent
(2 1/4%) of the total gross rents to be charged by Owner. These renewals will
only be paid provided that Manager is still contracted to perform the leasing
and management duties of the office building at the time of occurrence or by
other agreement with the Owner. Payment of such commissions would be in full
upon execution of the lease renewal.

- --------------------------------------------------------------------------------

APPROVED: DATE: 11-4-94
-------

Owner: AMERICAN MUTUAL LIFE INSURANCE CO. Manager: CPI RESOURCE GROUP

By: /s/ Robert C. Fay By: /s/ Roger W. Langpaul
------------------------- ---------------------
Robert C. Fay Roger W. Langpaul
Vice Pres. Investments Senior Vice President

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: RICHLAND POINTE MALL

Recommended Fidelity Bond
Wage or Salary or Employee
(Net of Benefits) Dishonesty
No. With Allocated to Coverage
Employee Title Title Building Y or N
- -------------- --------- ----------------- -------------

ON-SITE:
- --------

Property Manager 1 $40,000 Y
- -------

Maintenance Engineer 3 $25,000 Y
- -------

Maintenance N/A Y
---

NOTE 1: Each of the above employees will be billed to the properties as full-
time employees or pro-rata.

OFF-SITE:
- ---------

Director of Engineering/
Maintenance $20.00 Y
---------
(Flat Rate)

NOTE 2: This schedule outlines "not-to-exceed" amounts for the primary year of
the Contract, only. Owner agrees to increase the above salaries by an equitable
amount. Each of the above employees will be billed based on hours spent
directly related to the buildings. The quantity of time expended will vary
according to seasonal variations, site specific requirements and Owner's goals.

<PAGE>
A PROPOSAL FOR
MANAGEMENT SERVICES
INTERSTATE ASSURANCE
1206 MULBERRY AVENUE
DES MOINES, IOWA

PREPARED FOR:

CENTRAL LIFE ASSURANCE COMPANY
611 Fifth Avenue
Des Moines, Iowa 50309

PREPARED BY:

CENTRAL PROPERTIES, INC.
6000 Westown Parkway, Suite 33OW
West Des Moines, Iowa 50266

<PAGE>

TABLE OF CONTENTS

PAGE
----

Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 2

Article II - The Owner's Representation 2

Article III - The Manager's Authority
Section 3.01. General Authority 2
Section 3.02. Renting and Leasing 2
Section 3.03. Repairs and Maintenance 3
Section 3.04. Collection of Rents and Charges 3
Section 3.05. Security Deposits 3
Section 3.06. Personnel 3
Section 3.07. Service Contracts 4
Section 3.08. Disbursements 4

Article IV - Duties and Obligations of the Manager
Section 4.01. Maintenance & Repair of the Property 5
Section 4.02. Books and Records 5
Section 4.03. Returns Required by Law 5
Section 4.04. Collections and Bank Accounts 5
Section 4.05. Disbursements 5
Section 4.06. Monthly Reports 5
Section 4.07. Time Devoted 6

Article V - Termination
Section 5.01. Termination 6
Section 5.02. Damage, Destruction, Sale or
Condemnation 6
Section 5.03. Bankruptcy, Reorganization and
Insolvency 6
Section 5.04. Effect of Termination and
Termination Fund 7
Article VI - Compensation of the Manager
Section 6.01. Management 7
Section 6.02. Payment of Compensation 7
Section 6.03. Additional Services 7

Article VII - Definitions
Section 7.01. Gross Receipts 7

<PAGE>

TABLE OF CONTENTS
(CONT.)

PAGE
----
Article VII - Definitions (cont.)
Section 7.02 Net Proceeds 8

Article VIII - Miscellaneous Provisions

Section 8.01. Leasing Policies 8
Section 8.02. Not a Partnership 8
Section 8.03. Indemnity 8
Section 8.04. Insurance 8
Section 8.05. The Owner's Representative 9
Section 8.06. Entire Agreement 9
Section 8.07. Headings 9
Section 8.08. Consent and Approval 9
Section 8.09. Waiver of Subrogation 9
Section 8.10. Notices 10
Section 8.11. Governing Law 10
Section 8.12. Binding Effect 10
Section 8.13. Agent's Sign 10
Section 8.14. Other Provisions 11

Exhibit A 12

Schedule A 13

<PAGE>

CENTRAL PROPERTIES, INC.

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the lST
day of JANUARY, 1993, by and between CENTRAL LIFE ASSURANCE COMPANY, (the
"Owner") and CENTRAL PROPERTIES, INC., a corporation organized and existing
under the laws of the State of Iowa (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this
Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as 1206 MULBERRY AVENUE, located in DES
MOINES, IOWA, such project being more fully described on EXHIBIT "A" which is
attached hereto and incorporated herein by reference for all purposes (the
"Property"); and

B . The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

ARTICLE I

APPOINTMENT

SECTION 1.01. EXCLUSIVE AGENCY - APPOINTMENT. The Owner hereby engages,
appoints and employs the Manager to rent, operate, and manage the Property as
the Owner's sole and exclusive agent with the exclusive right to lease the
Property during the term of this Contract, upon the terms and conditions
hereinafter set forth.

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of JANUARY 1, 1993 and shall continue through and including DECEMBER
31, 1993 (the "Term"), unless earlier terminated as hereinafter provided.

<PAGE>

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(b) that the Owner is duly organized, existing and in good standing
under the laws of the United States of America and the State of Iowa and is duly
authorized and qualified to do business in the State of Iowa;

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.02. RENTING AND LEASING. The Manager shall have the specific
authority to advertise the Property for rent or lease and in connection with
such activities undertake any or all of the following: (a) investigate
references of prospective tenants; (b) negotiate leases and rental agreements
(subject to prior written approval of Owner); (c) amend, renew, extend, expand,
modify or cancel the existing leases and rental agreements and prepare any new
leases and rental agreements (subject however to the prior written approval of
the Owner); (d) terminate tenancies and sign and serve such notices as are
deemed appropriate by the Manager;

2
<PAGE>

(e) institute and prosecute all actions, at Manager's option, (in the name of
the Owner, the Property or the Manager) to remove tenants and recover possession
of the portion of the Property occupied by any tenant; (f) prepare and
disseminate signs, plans, brochures and other advertising materials and (g)
engage attorneys for any matter deemed appropriate by the Manager, subject to
Owner's prior written approval.

SECTION 3.03. REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of Owner to (a) make or cause
to be made all ordinary repairs and replacements necessary to preserve the
Property in its present condition; (b) make all alterations required to comply
with lease requirements; (c) remodel portions of the Property; (d) negotiate
contracts for non-recurring items not exceeding FIVE THOUSAND Dollars
($5,000.00) without the prior written approval of the Owner; provided, however,
monthly or recurring operating charges and emergency repairs may be incurred in
excess of such maximum, if in the opinion of the Manager, such repairs are
necessary to protect the Property from damage or to maintain services to the
tenants as called for in their leases; (e) enter into contracts for all
necessary repairs, maintenance, minor alterations and utility services; (f) pay
all bills incidental to the Property; and (g) place orders on behalf of the
Owner for such equipment, tools, appliances, materials and supplies as are
reasonable and necessary to properly maintain the Property. Manager agrees to
annually furnish Owner an up-to-date inventory list of equipment, tools and
appliances owned by Owner and used in the operation of the Property.

SECTION 3.04. COLLECTION OF RENTS AND CHARGES. The Manager shall have
the specific authority, if authorized under the applicable lease, to collect (a)
rents and assessments and other items due or to become due, give receipts
therefore and deposit all funds collected hereunder in the bank account provided
for and described in SECTION 4.04; (b) a late rent administrative charge; (c) a
charge for non-negotiable checks; (d) a fee for credit reports; and (e) an
administrative charge for subleasing.

SECTION 3.05. SECURITY DEPOSITS. The Manager shall have the right to
collect security deposits and deposit such funds to an account specified by the
Owner from time to time. Manager shall have the right to refund tenant's
security deposits at the expiration of leases.

SECTION 3.06. PERSONNEL. The Manager shall have the express authority to
investigate, hire, train, promote, pay, supervise and discharge all personnel
reasonably necessary in order to properly maintain and operate the Property.
Such personnel shall not be deemed employees of the Owner, who shall have no
right to supervise or direct such employees. All reasonable salaries, wages or
personnel employed by the Manager, including but not limited to the

3
<PAGE>

cost of group medical and health insurance, social security taxes, federal and
state unemployment taxes, Workman's Compensation Insurance and vacations shall
be deemed to be expenses reimbursable to the Manager by the Owner.

SECTION 3.07. SERVICE CONTRACTS. The Manager shall have the authority,
in the name and on behalf of the Owner, to enter into contracts for water,
electricity, gas fuel, window cleaning, telephone, vermin extermination, trash
removal, janitorial service, laundry service, landscaping and lawn care,
elevator, security and other necessary services deemed by the Manager to be
necessary or advisable for the operation of the Property.

SECTION 3.08. DISBURSEMENTS. Notwithstanding any other provision to the
contrary herein contained, the Manager is hereby expressly authorized to
disburse funds, on or before the tenth (10th) day of the following month during
the term of this Contract, to the following parties in the order set forth
below:

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02),
on or before the FIFTEENTH (15TH) day of the following month and after
establishing a cash reserve in the amount of TEN THOUSAND Dollars ($10,000.00)
to pay other costs and expenses incidental to the operation of the Property,
including non-recurring emergency repairs. Sufficient funds for capital
expenditures which shall become due and payable within the succeeding calendar
month and for which the cash to make such payments may not be generated by
operations during such period shall be retained in addition to the cash reserve
established above.

4
<PAGE>

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.03. RETURNS REQUIRED BY LAW. The Manager shall execute and
file punctually when due, all forms, reports and returns required by law
relating to personnel employed by the Manager for the maintenance and operation
of the Property.

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit
all sums collected pursuant to this Contract (less any sums properly deducted
as provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled:
"Central Properties, Inc. - AS AGENT FOR CENTRAL LIFE ASSURANCE COMPANY" and
shall be maintained at all times separate from the Manager's corporate accounts.
The Manager shall endeavor to collect on behalf of the Owner and at Owner's
expense, all rents and other charges for the use and occupancy of the Property
on a periodic basis no less often than once each calendar month.

SECTION 4.05. DISBURSEMENTS. The Manager shall make disbursements in
accordance with the authority as set forth in SECTION 3.08 hereof. In the event
the disbursements required under SECTION 3.08 (1) and (2) hereof shall be in
excess of receipts from the Property, the Owner agrees to pay to the Manager the
amount necessary to restore the balance in the account to the amount specified
in SECTION 3.08 (3) immediately upon notification by Manager. No provision of
this Contract shall in any manner obligate the Manager to advance its own funds
on behalf of the Owner for any purpose.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day as
stipulated in SECTION 3.08 deliver a written report of the

5
<PAGE>

previous month's operations to the Owner, which report shall include a complete
listing of all receipts and disbursements, and the amount, if any, payable by
the Owner to restore the balance in the account as provided in SECTION 4.05
hereof.

ARTICLE V

TERMINATION

SECTION 5.01. TERMINATION. Notwithstanding anything in this document to
the contrary, either party may terminate this agreement with or without cause by
giving to the other party thirty (30) days written notice. After the expiration
of the initial Term hereof, this Contract shall thereafter continue from year to
year until terminated, with or without cause by either party, which termination
shall be effective thirty (30) days after receipt of written notice from the
terminating party.

6
<PAGE>

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon
termination pursuant to this ARTICLE V, the Manager and the Owner shall have no
further duties and obligations, one to another save and except Owner's
obligations under Article VI and SECTION 8.03; provided that in the event of
termination as provided for herein, the Manager will remit to Owner gross
collections and net proceeds as called for herein on the effective date of
termination and Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and charges attributable to the Property have
been fully paid. Upon the effective date of termination, the Manager shall
deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to FIVE percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than SIX HUNDRED AND FIFTY Dollars ($650.00) for each month of the term
of this Contract. Owner shall pay to Manager such other fees relating to
management and construction administration as are set forth in SCHEDULE A.

SECTION 6.02 . PAYMENT OF COMPENSATION. The compensation payable
under SECTION 6.01 hereof shall be payable on the same day as stipulated in
SECTION 3.08, following the month for which such compensation is due and shall
be deducted from Gross Receipts prior to remitting the Net Proceeds to the Owner
pursuant to SECTION 3.08 hereof.

SECTION 6.03. ADDITIONAL SERVICES. If Manager's agent is called upon to
perform any services not customarily a part of the usual services performed by a
management agent, it is agreed that Manager shall receive additional
compensation in an amount agreed upon and approved by Owner, in writing, in a
manner in which both parties agree.

ARTICLE VII

DEFINITIONS

SECTION 7.01. GROSS RECEIPTS. The term "Gross Receipts" shall mean
all amounts actually collected by the manager as rents or other charges for use
and occupancy of the Property including parking, receipts from coin operated
machines and other miscellaneous receipts collected by the Manager from the
Property but shall exclude all other receipts including but not limited to,
income derived from interest on investments or otherwise, proceeds

7
<PAGE>

of claims on account of insurance policies, abatement of taxes, and awards
arising from eminent domain proceedings or the threat thereof, discount,
deposits and dividends on insurance policies.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall have the authority to
determine and control all leasing policies, subject to Owner's approval, in
relation to the Property.

SECTION 8.04. INSURANCE. The Owner agrees to carry, at his own expense,
necessary public liability, fire and extended coverage insurance adequate to
protect the interests of the parties hereto, which policies shall be so written
as to protect the Manager in the same manner to the same extent they protect the
Owner, and will name the Manager as an additional insured. Manager agrees to
carry, at his own expense, necessary public liability and workman's
compensation insurance. The Manager is allowed to include a proportionate share
of workman's compensation insurance premium as a component of salary/wages
reimbursement. The policies shall be so written as to protect the Owner in the
same manner to the same extent they protect the Manager, and will name the Owner
as an additional insured.

Owner agrees to furnish the Manager certificates evidencing the existence
of the insurance coverage set forth in this paragraph which certificates shall
provide that the Manager shall receive at least thirty (30) days notice from the
insurance carrier prior to

8
<PAGE>

cancellation or material alteration of any insurance coverage. Unless the Owner
shall provide such insurance and furnish such certificates within thirty (30)
days from the date of this Contract, the Manager may, but shall not be obligated
to, place said insurance (including retroactive coverage of up to two (2) years)
and charge the cost thereof to the account of the Owner. Manager agrees to
furnish Owner certificates evidencing the existence of the insurance coverage
set forth in this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates JOE SYATA/KEITH
GUNZENHAUSER, as its representative, who shall be readily available to make such
decisions. The Owner may change such designated representative by written
notice to the Manager.

SECTION 8.09. WAIVER OF SUBROGATION. Owner and Manager hereby waive any
rights each may have against the other on account of any loss or damage
occasioned to Owner or Manager, as the case may be (whether or not such loss or
damage is caused by the fault or negligence of the other party) , to their
respective property, or to any portion of the property arising from any risk
covered by the standard form of fire and extended coverage insurance used in the
State of Iowa at the time of the loss or damage. If a party waiving rights
under this Section is carrying a fire and extended coverage insurance policy in
the standard form used in the State of

9
<PAGE>

Iowa and an amendment to such standard form is passed, such amendment shall be
deemed not a part of such standard form until it applies to the policy being
carried by the waiving party. The parties hereto each, on behalf of their
respective insurance companies insuring the property of either Owner or Manager
against any such loss, waive any right of subrogation that it may have against
the other party. Owner and Manager agree immediately to give to their
respective insurer written notification of the terms of the mutual waivers
contained in this Section, and to have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverages
by reason of said waivers.

OWNER: CENTRAL LIFE ASSURANCE COMPANY
611 FIFTH AVENUE
DES MOINES, IOWA 50309

ATTN: KEITH GUNZENHAUSER

MANAGER: CENTRAL PROPERTIES, INC.
6000 WESTOWN PARKWAY, SUITE 33OW
WEST DES MOINES, IOWA 50266

ATTN: EVAN L. OSTER

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

SECTION 8.12. BINDING EFFECT. This Contract shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.

SECTION 8.13. AGENT'S SIGN. Owner hereby grants Agent the privilege of
displaying Agent's sign in and upon said premises announcing that said premises
is under Agent's management. Sign and design shall be subject to Owner's
approval.

10
<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on the 15th day of January, 1993.

OWNER:

CENTRAL LIFE ASSURANCE COMPANY

By: /s/ Keith Gunzenhauser
--------------------------------
KEITH GUNZENHAUSER

MANAGER:

CENTRAL PROPERTIES, INC.

By: /s/ Evan L. Oster
----------------------------------
EVAN L. OSTER

11
<PAGE>

EXHIBIT "A"

TO MANAGEMENT AND LEASING CONTRACT

BETWEEN

CENTRAL LIFE ASSURANCE COMPANY ("OWNER")

AND

CENTRAL PROPERTIES, INC. ("MANAGER")

PROPERTY DESCRIPTION

Lots 1, 2, 3, 4, 7, and 8, and all that part of the vacated North and South
alley lying between said Lots 2 and 3, and all that part of the vacated North
and South alley lying between Lots 6 and 7, and all that part of the vacated
East-West alley lying West of the Southerly extended East line of said Lot 1, to
the Southerly extended West line of said Lot 4, all in Block 30 in KEENE &
POINDEXTER'S ADDITION TO FORT DES MOINES, now included in and forming a part
of the City of Des Moines, Iowa; and

Lots 1 and 2 and the North 1/2 and North 22.0 feet of the South 1/2 of Lot 10
and the vacated alley between said Lots 2 and 10, all in Block 33 in KEENE &
POINDEXTER'S ADDITION TO FORT DES MOINES, now included in and forming a part of
the City of Des Moines, Iowa; and

The North 1/2 of Lots 1, 2, and 3 in Block 31 KEENE & POINDEXTER'S ADDITION TO
FORT DES MOINES, also, all that portion of 12th Street in the City of Des Moines
within the following lines, to wit: Commencing at the Northwest Corner of Lot 6
in Block 22 of KEENE & POINDEXTER'S ADDITION TO FORT DES MOINES now included in
and forming a part of the City of Des Moines, Iowa, thence Southerly along the
West line of said Lot 6, 84.0 feet, thence Westerly 66.25 feet to a point in the
East line of Lot 1 in Block 31 of said Addition, said point being 90.0 feet
Southerly from the Northeast corner of said Lot 1, thence Northerly along the
East line of said Lot 1, 90.0 feet to the Northeast corner of said Lot 1, thence
Easterly 66.0 feet to the point of commencement, also all that part of the North
and South alley in said Block 31 which abuts on the North 1/2 of Lots 2 and 3 of
said Block; now included in and forming a part of the City of Des Moines, Iowa.

12
<PAGE>

SCHEDULE A

1. For the management services provided for the 1206 MULBERRY AVENUE BUILDING,
Central Properties, Inc. will be paid a management fee equal to FIVE percent
(5%) of the gross receipts, but not less than SIX HUNDRED AND FIFTY Dollars
($650.00) for each month of the term of the contract.

2. A construction and administration fee of FIVE percent (5%) of any
extensive construction or repair job where the Manager coordinates the services
of outside contractors will be billed to the Owner if such service is requested
by Owner of the Manager.

3. All personnel directly involved with the 1206 MULBERRY AVENUE BUILDING
shall be charged to the property on a pro-rata or hourly basis as provided.

LEASING COMMISSIONS AND FEES:

1. LEASING FEE: The Property Manager shall have the specific authority to
advertise the Property for rent or lease and in connection with such activities
undertake any or all of the following: (a) investigate references of prospective
tenants; (b) prepare and disseminate signs, plans, brochures and other
advertising materials.

2. RENEWALS/EXPANSIONS: The renewal and option/expansion commissions will
be paid pursuant to prior and existing Brokerage Agreements in place.

- --------------------------------------------------------------------------------

APPROVED: DATE: JANUARY 15, 1993

Owner: CENTRAL LIFE ASSURANCE CO. By: /s/ Keith Gunzenhauser
--------------------------
Keith Gunzenhauser

Manager: CENTRAL PROPERTIES, INC. By: /s/ Evan L. Oster
--------------------------
Evan L. Oster

<PAGE>

Liberty & Cherry St.
A PROPOSAL FOR

MANAGEMENT SERVICES

418 6th Avenue
and
604 Cherry Street
Des Moines, Iowa

PREPARED FOR:

American Mutual Life Insurance Co.
418 6th Avenue
Des Moines, Iowa 50309

PREPARED BY:

Central Properties, Inc.
6000 Westown Parkway, Suite 20OW
West Des Moines, Iowa 50266

<PAGE>
TABLE OF CONTENTS

PAGE
----
Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

<PAGE>

TABLE OF CONTENTS
(CONT.)

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the lst
day of January 1995, by and between American Mutual Life Ins. Co. (the "Owner")
and Central Properties, Inc. (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as 418 6th Ave., and 604 Cherry Street,
located in Des Moines, Iowa, such project being more fully described on Exhibit
"A" which is attached hereto and incorporated herein by reference for all
purposes (the "Property"); and

B. The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

ARTICLE I

APPOINTMENT

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of January 1, 1995 and shall continue through and including December
31, 1995 (the "Term"), unless earlier terminated as hereinafter provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

<PAGE>

ARTICLE 11

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(b) that the Owner is duly organized, existing and in good standing under
the laws of the State of Iowa and is duly authorized and qualified to do
business in the State of Iowa;

(c) to waive, release and relinquish any and all claims which the Owner
may have against Manager for damages to the Property or any personal property
located on the Property to the extent that such damages are covered by the
Owner's insurance policies.

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.02 REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of the Owner to (a) make or
cause to be made all ordinary repairs and replacements necessary to preserve the
Property in its present condition; (b) make all alterations required to comply
with lease requirements; (c) negotiate contracts for nonrecurring items not
exceeding five thousand Dollars ($5,000.00) without the prior written approval
of the Owner; provided, however, monthly or recurring operating charges and
emergency repairs may be incurred in excess of such maximum, if in the opinion
of the Manager, such repairs are necessary to protect the Property from damage
or to maintain services to the tenants as called for in their leases; (d) enter
into contracts for all necessary repairs, maintenance, minor alterations and
utility services; and (e) place orders on behalf of the Owner for such
equipment, tools, appliances, materials and supplies as are reasonable and
necessary to properly maintain the Property. Manager agrees to annually furnish
the Owner an up-to-date inventory list of equipment, tools and appliances owned
by the Owner and used in the operation of the Property.

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall have
the specific authority, if authorized under the applicable lease, to collect (a)
rents and assessments and other items due or to become due, give receipts
therefore and deposit all funds collected hereunder in the bank account provided
for and described in SECTION 4.04, (b) a late rent administrative charge; (c) a
charge for non- negotiable checks; (d) a fee for credit reports; and (e) an
administrative charge for subleasing.

SECTION 3.07. DISBURSEMENTS. Notwithstanding any other provision to the
contrary herein contained, the Manager is hereby expressly authorized to
disburse funds, on or before the tenth (1Oth) day of the following month during
the term of this Contract, to the following parties in the order set forth
below:
(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on or
before the fifteenth (15th) day of the following month and after establishing a
cash reserve in the amount of Ten Thousand Dollars ($10,000.00) to pay other
costs and expenses incidental to the operation of the Property, including non-
recurring emergency repairs. Sufficient funds for capital expenditures which
shall become due and payable within the succeeding calendar month

<PAGE>

and for which the cash to make such payments may not be generated by operations
during such period shall be retained in addition to the cash reserve established
above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit
all sums collected pursuant to this Contract (less any sums properly deducted as
provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled:
"Central Properties, Inc. - As Agent For American Mutual Life Ins. Co." and
shall be maintained at all times separate from the Manager's corporate accounts.
The Manager shall endeavor to collect on behalf of the Owner and at the Owner's
expense, all rents and other charges for the use and occupancy of the Property.

SECTION 4.06. MONTHLY RENTS. The Manager shall on the same day as
stipulated in SECTION 3.07 deliver a written report of the previous month's
operations to the Owner, which report shall include a complete listing of all
receipts and disbursements and the amount, if any, payable by the Owner to
restore the balance in the account as provided in SECTION 4.05 hereof.

<PAGE>

ARTICLE V

TERMINATION

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the event of
damage to or destruction of the Property so that the same shall become
untenantable, or in the event of taking of a substantial portion of the
Property, by condemnation or threat thereof, or similar proceeding, or in the
event of sale of the Property; then, in any such event this Contract may be
terminated by the Owner which termination shall be effective thirty (30) days
after receipt by Manager of written notice from the Owner.

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon
termination pursuant to this article V, the Manager and the Owner shall have no
further duties and obligations, one to another save and except the Owner's
obligations under Article VI and SECTION 8.03; provided that in the event of
termination as provided for herein, the Manager will remit to title Owner gross
collections and net proceeds as called for herein on the effective date of
termination and the Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and

<PAGE>

charges attributable to the Property have been fully paid. Upon the effective
date of termination, the Manager shall deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to FIVE percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than ONE THOUSAND EIGHT HUNDRED FIFTY Dollars ($1,850.00) for each
month of the term of this Contract. The Owner shall pay to Manager such other
fees relating to management and construction administration as are set forth in
SCHEDULE A.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See Schedule A
for Compensation.

ARTICLE VII

DEFINITIONS

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all the
owner's leasing policies in relation to the Property and the Owner expressly
agrees to the following:

(a) An adequate supply of forms of lease agreements and all attachments
and addenda necessary thereto will be at all times provided to the Manager by
the Owner;

(b) the Manager is authorized, subject to the Owner's approval, to employ,
at the expense of the Owner, a space planner in order to expedite lease
proposals, and to provide working drawings to the on-site manager for assistance
in construction of the leased space;

(c) all inquiries concerning leases, renewals, expansions, extensions,
continuations of tenancy, or agreements for the rental, occupancy or operation
of the Property, or any part thereof, shall be referred to the Manager, and all
negotiations connected therewith shall be conducted solely by or under direction
of the Manager; and

<PAGE>

The Owner agrees to furnish the Manager certificates evidencing the
existence of the insurance coverage set forth in this paragraph which
certificates shall provide that the Manager shall receive at least
thirty (30) days notice from the insurance carrier prior to cancellation or
material alteration of any insurance coverage. Unless the Owner shall provide
such insurance and furnish such certificates within thirty (30) days from the
date of this Contract, the Manager may, but shall not be obligated to, place
said insurance (including retroactive coverage of up to two (2) years) and
charge the cost thereof to the account of the Owner. Manager agrees to furnish
the Owner certificates evidencing the existence of the insurance coverage set
forth in this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates SAM C. KALAINOV as its
representative, who shall be readily available to make such decisions. The
Owner may change such designated representative by written notice to the
Manager.

SECTION 8.08. CONSENT AND APPROVAL. Whenever under any provision of
this Contract the approval or consent of either party is required, the
decision thereon shall be promptly given and such approval or consent shall
not be unreasonably withheld or delayed. It is further understood and agreed
that whenever,under any provision of this Contract, approval or consent is
required, the approval or consent shall be deemed to have been duly given if
such approval or consent is given by the person executing this Contract or
any other person, as the case may be, designated in SECTION 8.05 hereof. The
Manager may rely exclusively and conclusively on the designation set forth in
SECTION 8.05 hereof

<PAGE>

of subrogation that it may have against the other party. The Owner and Manager
agree immediately to give to their respective insurer written notification of
the terms of the mutual waivers contained in this Section, and to have said
insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverages by reason of said
waivers.

OWNER: AMERICAN MUTUAL LIFE INSURANCE COMPANY
418 6TH AVENUE
DES MOINES, IOWA 50309

ATTN: SAM C. KALAINOV
CHAIRMAN OF THE BOARD

MANAGER: CENTRAL PROPERTIES, INC.
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL, CPM, CRE
VICE PRESIDENT REAL ESTATE EQUITIES MANAGEMENT

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the privilege
of displaying Agent's sign in and upon said premises announcing that said
premises is under Agent's management. Sign and design shall be subject to the
Owner's approval.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on the 4th day of JANUARY, 1995

OWNER:

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ Sam C. Kalainov
-------------------------------------
Sam C. Kalainov
Chairman of the Board

MANAGER:

CENTRAL PROPERTIES, INC.

By: /s/ Roger W. Langpaul
-------------------------------------
Roger W. Langpaul, CPM, CRE
Vice President Real Estate Equities Management

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

American Mutual Life Insurance Company

AND

Central Properties, Inc.

PROPERTY DESCRIPTION

418 SIXTH AVENUE, LIBERTY BUILDING

Lots Seven (7) and Eight (8), Block "B", Commissioner's Addition to Fort Des
Moines, now included in and forming a part of the City of Des Moines, Iowa.

604 CHERRY STREET

All of lot One (1), the West eighty-nine and six tenths (89.) feet of lot Eight
(8), the North two and twenty-six (2.26) feet of Lot Two (2), and the North two
and twenty-six hundredths (2.26) feet of the West eighty-nine and six tenth
(89.6) feet of Lot Seven (7), all in Block Nine (9), Town of Fort Des Moines,
together with the North sixty-eight and eight-tenths (68.8) feet of the vacated
north and south alley between West Sixth (6th) and West Seventh (7th) Streets
lying between the south line of Cherry Street and the north line of the vacated
east and west alley between Cherry and Vine Streets in said City of Des Moines,
Iowa.

<PAGE>

SCHEDULE A

1. For the management services provided for the 418 6TH AVE., AND 604 CHERRY
STREET Manager will be paid a management fee equal to FIVE percent (5%) of the
gross receipts, but not less than ONE THOUSAND EIGHT HUNDRED FIFTY Dollars
($1,850.00) for each month of the term of the contract.

2. A construction and administration fee of FIVE percent (5%) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with the 418 6TH AVE., AND 604 CHERRY
STREET shall be charged to the property on a pro-rata or hourly basis as
provided in SECTION 3.05 and as outlined in Schedule "B".

4. Manager will be provided a fully furnished and equipped management office
to accommodate the personnel required to properly maintain and manage the
property. Owner agrees to provide at Owner's expense a fully furnished and
decorated management and leasing office in the building for the Manager and its'
employees; the location and size of such office to be determined by the mutual
agreement of the Manager and the Owner; the office shall not exceed
approximately 1,000 usable square feet and N/A ($N/A) per usable square foot in
tenant finish unless approved in writing by the Owner.

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion lease
of all or a portion of the property equal to FOUR AND ONE-HALF percent (4 1/2%)
of the total gross rents to be charged by Owner over the term of such lease.
Payment of such commissions would be one-half upon execution and one-half upon
occupancy.

2. RENEWALS: The renewal commissions will be TWO AND ONE-FOURTH Percent
(2 1/4%) of the total gross rents to be charged by Owner. These renewals will
only be paid provided that Manager is still contracted to perform the leasing
and management duties of the office building at the time of occurrence or by
other agreement with the Owner. Payment of such commissions would be in full
upon execution of the lease renewal.

3. It is further agreed that in the event an agent other than Central
Properties, Inc., leases any office space in the Liberty Building, Liberty shall
pay a normal commission rate to such real estate agency. Said commission shall
be paid when a new lease has been entered into and shall preclude any commission
to Central Properties, Inc., as outlined in paragraph one of this section.

- --------------------------------------------------------------------------------

APPROVED: DATE:
------------------------------

Owner: AMERICAN MUTUAL LIFE INSURANCE CO. Manager: CENTRAL PROPERTIES, INC.

By: /s/ Sam C. Kalainov By: /s/ Roger W. Langpaul
-------------------------------------- --------------------------------
Sam C. Kalainov Roger W. Langpaul, CPM, CRE
Chairman of the Board Vice President
Real Estate Equities Management

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: 418 6TH AVENUE AND 604 CHERRY STREET
DES MOINES, IOWA

Recommended Fidelity Bond
Wage or Salary or Employee
(Net of Benefits) Dishonesty
No. With Allocated to Coverage
Employee Title Title Building (Y or N)
- -------------- -------- ----------------- -------------

ON-SITE:

Building Manager 1 $36,000.00 Y

Maintenance Engineer 2 $26,000.00 Y

Maintenance N/A $N/A

NOTE 1: Each of the above employees will be billed to the properties as full-
time employees or pro-rata.

OFF-SITE:
Director of Engineering/ $20,000.00
Maintenance (Flat Rate)

<PAGE>

A PROPOSAL FOR

MANAGEMENT SERVICES

702 E. Osborn
Phoenix, Arizona

PREPARED FOR:

Central Life Assurance Company
c/o Central Properties, Inc.
6000 Westown Parkway, Suite 20OW
West Des Moines, Iowa 50266

PREPARED BY:

CPI Resource Group
7272 E. Indian School Road, Suite 212
Scottsdale, Arizona 85251

<PAGE>

TABLE OF CONTENTS

PAGE
----
Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

<PAGE>

TABLE OF CONTENTS
(CONT.)

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the
lst day of July 1994 , by and between CENTRAL LIFE ASSURANCE COMPANY (the
"Owner") and CPI RESOURCE GROUP (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this
Contract:

A. The Manager desires to manage, rent, lease and operate that
certain office building project commonly known as 702 E. OSBORN, located in
PHOENIX, ARIZONA, such project being more fully described on EXHIBIT "A"
which is attached hereto and incorporated herein by reference for all
purposes (the "Property"); and

B. The Owner desires to engage and employ the Manager to rent,
operate and manage the Property:

NOW THEREFORE, in consideration of the mutual promises hereunder
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

APPOINTMENT

SECTION 1.02. Term. The term of the appointment of the Manager
shall commence as of July 1, 1994 and shall continue through and including
June 30, 1995 (the "Term"), unless earlier terminated as hereinafter provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent,
for the period, and upon the terms herein provided.

<PAGE>

ARTICLE II
THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(a) that the Owner has full right and authority to enter into
this Agreement, perform its obligations hereunder and engage, appoint and
employ the Manager for the purposes and consideration herein set forth;

(b) that the Owner is duly organized, existing and in good
standing under the laws of the State of Iowa and is duly authorized and
qualified to do business in the State of Iowa;

(c) to waive, release and relinquish any and all claims which
the Owner may have against Manager for damages to the Property or any
personal property located on the Property to the extent that such damages are
covered by the Owner's insurance policies.

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.01. GENERAL AUTHORITY. The Manager shall have the
exclusive authority, right and power to rent, operate, and manage the
Property (all or any of which, at Manager's option, may be exercised in the
name of the Owner). Except as specifically set forth in this contract, all
obligations or expenses incurred by the Manager pursuant to its authority
hereunder shall be for the benefit of, account of, or behalf of and at the
expense of the Owner, and the Owner expressly agrees to assume and pay any
and all such expenses and obligations.

SECTION 3.02. REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of the Owner to (a) make
or cause to be made all ordinary repairs and replacements necessary to
preserve the Property in its present condition; (b) make all alterations
required to comply with lease requirements; (c) negotiate contracts for
nonrecurring items not exceeding Two Thousand Dollars ($2,000.00) without the
prior written approval of the Owner; provided, however, monthly or recurring
operating charges and emergency repairs may be incurred in excess of such
maximum, if in the opinion of the Manager, such repairs are necessary to
protect the Property from damage or to maintain services to the tenants as
called for in their leases; (d) enter into contracts for all necessary
repairs, maintenance, minor alterations and utility services; and (e) place
orders on behalf of the Owner for such equipment, tools, appliances,
materials and supplies as are reasonable and necessary to properly maintain
the Property. Manager agrees to annually furnish the Owner an up-to-date
inventory list of equipment, tools and appliances owned by the Owner and used
in the operation of the Property.

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall
have the specific authority, if authorized under the applicable lease, to
collect (a) rents and assessments and other items due or to become due, give
receipts therefore and deposit all funds collected hereunder in the bank
account provided for and described in SECTION 4.04: (b) a late rent
administrative charge; (c) a charge for non-negotiable checks; (d) a fee for
credit reports; and (e) an administrative charge for subleasing.

SECTION 3.04. SECURITY DEPOSITS. The Manager shall have the right
to collect security deposits and deposit such funds to an account specified
by the Owner from time to time. Manager shall have the right to refund
tenant's security deposits at the expiration of leases.

SECTION 3.05. PERSONNEL. The Manager shall have the express
authority to investigate, hire, train, promote, pay, supervise and discharge
all personnel reasonably necessary in order to properly maintain and operate
the Property. Such personnel shall not be deemed employees of the Owner, who
shall have no right to supervise or direct such employees. All reasonable
salaries, wages or personnel employed by the Manager, including but not
limited to the cost of group medical and health insurance, social security
taxes, federal and state unemployment taxes, Workman's Compensation Insurance
and vacations shall be deemed to be expenses reimbursable to the Manager by
the Owner. See Schedule B.

SECTION 3.06. SERVICE CONTRACTS. The Manager shall have the
authority, in the name and on behalf of the Owner, to enter into contracts
for water, electricity, gas fuel, window cleaning, telephone, vermin
extermination, trash removal, janitorial service, laundry service,
landscaping and lawn care, elevator, security and other necessary services
deemed by the Manager to be necessary or advisable for the operation of the
Property.

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on
or before the tenth (10th) day of the following month and after establishing a
cash reserve in the amount of Two Thousand Five Hundred Dollars ($2,500.00)
to pay other costs and expenses incidental to the operation of the Property,
including non-recurring emergency repairs. Sufficient funds for capital
expenditures which shall become due and payable within the succeeding
calendar month

<PAGE>

and for which the cash to make such payments may not be generated by
operations during such period shall be retained in addition to the cash
reserve established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.01. MAINTENANCE AND REPAIR OF THE PROPERTY. The Manager
shall, at the Owner's sole expense, cause the property to be maintained in
accordance with standards reasonably acceptable to the Owner, including
without limitation, interior and exterior cleaning, painting, plumbing and
carpentry.

SECTION 4.02. BOOKS AND RECORDS. The Manager shall keep books of
account and such other records reflecting the results of operation of the
Property. Such books and records shall be kept in all material respects in
accordance with accepted accounting practices. The Manager shall allow the
Owner, its accountants, attorney's and agents, the right to enter to examine
or inspect the books and records relating to the operation and maintenance of
the Property at any time during normal business hours upon notification to
the Manager. Books and records of the Property shall be kept at the Property
or such other place as the Manager may deem appropriate.

SECTION 4.03. RETURNS REQUIRED BY LAW. The Manager shall execute
and file punctually when due, all forms, reports and returns required by law
relating to personnel employed by the Manager for the maintenance and
operation of the Property.

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall
deposit all sums collected pursuant to this Contract (less any sums properly
deducted as provided herein) in a trust account in a national or state bank
mutually acceptable to the Owner and the Manager. Such accounts shall be
styled: "CPI RESOURCE GROUP - As Agent For CENTRAL LIFE ASSURANCE COMPANY"
and shall be maintained at all times separate from the Manager's corporate
accounts. The Manager shall endeavor to collect on behalf of the Owner and at
the Owner's expense, all rents and other charges for the use and occupancy of
the Property.

SECTION 4.05. DISBURSEMENTS. The Manager shall make disbursements
in accordance with the authority as set forth in SECTION 3.07 hereof. In the
event the disbursements required under SECTION 3.07 (1) and (2) hereof shall
be in excess of receipts from the Property, the Owner agrees to pay to the
Manager the amount necessary to restore the balance in the account to the
amount specified in SECTION 3.07 (3) immediately upon notification by
Manager. No provision of this Contract shall in any manner obligate the
Manager to advance its own funds on behalf of the Owner for any purpose.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day
as stipulated in SECTION 3.07 deliver a written report of the previous
month's operations to the Owner, which report shall include a complete
listing of all receipts and disbursements and the amount, if any, payable by
the Owner to restore the balance in the account as provided IN SECTION 4.05
hereof.

<PAGE>

SECTION 4.07. TIME DEVOTED. The Manager shall devote such of its
time, attention and business capacity to the management and operation of the
Project as may be necessary in order for Manager to fully comply with the
terms of this Agreement. It is understood and agreed that the Manager has,
may continue to have, and hereafter may engage in other similar or related
businesses, even though such other businesses may be in competition with the
Project.

ARTICLE V

TERMINATION

SECTION 5.01. TERMINATION. Notwithstanding anything in this
document to the contrary, either party may terminate this agreement with or
without cause by giving to the other party thirty (30) days written notice
effective on the last day of any given month. If the owner thus cancels this
agreement without cause, Owner hereby agrees to pay Manager on the date of
termination, an amount equal to the sum of the management fees collected for
the three (3) months prior to termination. If Owner cancels this agreement
and hires either directly or indirectly through another Managing Agent any
employee of Manager within sixty (60) days of termination, Owner hereby
agrees to pay Manager an amount equal to the sum of the payroll costs for
said employee for ninety (90) days prior to termination. After the
expiration of the initial Term hereof, this Contract shall thereafter
continue from year to year until terminated, with or without cause by either
party, which termination shall be effective on the last day of any given
month thirty (30) days after receipt of written notice from the terminating
party.

SECTION 5.02. DAMAGE. DESTRUCTION, SALE OR CONDEMNATION. In the
event of damage to or destruction of the Property so that the same shall
become untenantable, or in the event of taking of a substantial portion of
the Property, by condemnation or threat thereof, or similar proceeding, or in
the event of sale of the Property; then, in any such event this Contract may
be terminated by the Owner which termination shall be effective thirty (30)
days after receipt by Manager of written notice from the Owner.

SECTION 5.03. BANKRUPTCY, REORGANIZATION AND INSOLVENCY. In the
event a receiver, liquidator or trustee of the Manager shall be appointed by
court order or if a petition shall be filed against the Manager under any
bankruptcy, reorganization or insolvency laws and such petition shall not
have been vacated within one hundred and twenty (120) days of the date of
filing or in the event the Manager shall make an assignment for the benefit
of creditors or be adjudicated a bankrupt under the federal bankruptcy laws,
then the Owner may forthwith terminate this Contract upon written notice to
the Manager.

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon
termination pursuant to this ARTICLE V, the Manager and the Owner shall have
no further duties and obligations, one to another save and except the Owner's
obligations under Article VI and SECTION 8.03; provided that in the event of
termination as provided for herein, the Manager will remit to the Owner gross
collections and net proceeds as called for herein on the effective date of
termination and the Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and

<PAGE>

charges attributable to the Property have been fully paid. Upon the
effective date of termination, the Manager shall deliver to the Owner a final
report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for
its services as Manager under this Contract, a management fee ("Management
Fee") equal to Four percent (4%) of Gross Receipts (as defined in SECTION
7.01), but not less than One Thousand Dollars ($1,000.00) for each month of
the term of this Contract. The Owner shall pay to Manager such other fees
relating to management and construction administration as are set forth in
SCHEDULE A.

SECTION 6.02. PAYMENT OF COMPENSATION. The compensation payable
under SECTION 6.01 hereof shall be payable on the same day as stipulated in
SECTION 3.07, following the month for which such compensation is due and
shall be deducted from Gross Receipts prior to remitting the Net Proceeds to
the Owner pursuant to SECTION 3.07 hereof.

SECTION 6.03. ADDITIONAL SERVICES. If Manager's agent is called
upon to perform any services not customarily a part of the usual services
performed by a management agent, it is agreed that Manager shall receive
additional compensation in an amount agreed upon and approved by the Owner in
writing, in a manner in which both parties agree.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See
Schedule A for Compensation.

ARTICLE VII

DEFINITIONS

SECTION 7.01. GROSS RECEIPTS. The term "Gross Receipts" shall mean
all amounts actually collected by the Manager as rents or other charges for
use and occupancy of the Property including parking, receipts from coin
operated machines and other miscellaneous receipts collected by the Manager
from the Property but shall exclude all other receipts including but not
limited to, income derived from interest on investments or otherwise,
proceeds of claims on account of insurance policies, abatement of taxes, and
awards arising from eminent domain proceedings or the threat thereof,
discount, deposits and dividends on insurance policies.

SECTION 7.02. NET PROCEEDS. The term "Net Proceeds" shall mean
Gross Receipts for each calendar month less (i) the sum of all disbursements
properly made by the Manager during each calendar month pursuant to the
authority granted the Manager under this contract and (ii) the compensation
payable to the Manager for the calendar month under this Contract, including
without limitation, management fees, leasing commission, and construction
administration fees.

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all
the owner's leasing policies in relation to the Property and the Owner
expressly agrees to the following:

(a) An adequate supply of forms of lease agreements and all
attachments and addenda necessary thereto will be at all times provided
to the Manager by the Owner;

(b) the Manager is authorized, subject to the Owner's
approval, to employ, at the expense of the Owner, a space planner in order to
expedite lease proposals, and to provide working drawings to the on-site
manager for assistance in construction of the leased space;

(c) all inquiries concerning leases, renewals, expansions,
extensions, continuations of tenancy, or agreements for the rental, occupancy
or operation of the Property, or any part thereof, shall be referred to the
Manager, and all negotiations connected therewith shall be conducted solely
by or under direction of the Manager; and

SECTION 8.02. NOT A PARTNERSHIP. Nothing contained in this
Contract shall constitute or be construed to be, or create, a partnership or
joint venture between the Owner and the Manager, or their successors and
assigns and the Manager is, shall be and remain an independent contractor.

SECTION 8.03. INDEMNITY. The Manager hereby agrees to indemnify,
defend and hold harmless the Owner from any cost, loss, damage or expense
resulting from the breach of this Agreement by Manager, except to the extent
same constitutes the negligence of Manager and it is covered by the public
liability insurance described in SECTION 8.04. The Owner hereby agrees to
indemnify, defend and hold harmless the Manager from any cost, loss, damage
or expense resulting from the willful misconduct or gross negligence of the
Owner. The Manager shall not be held responsible for any act or failure to
act which is occasioned by the failure of the Owner to provide funds;
provided, that, the Owner has been notified in writing and given sufficient
time to remedy the situation.

SECTION 8.04. INSURANCE. The Owner agrees to carry, at his own
expense, necessary public liability, fire and extended coverage insurance
adequate to protect the interests of the parties hereto, which policies shall
be so written as to protect the Manager in the same manner to the same extent
they protect the Owner, and will name the Manager as an additional insured.
Manager agrees to carry, at his own expense, necessary public liability and
workman's compensation insurance. The Manager is allowed to include a
proportionate share of workman's compensation insurance premium as a
component of salary/wages reimbursement. The policies shall be so written as
to protect the Owner in the same manner to the same extent they protect the
Manager, and will name the Owner as an additional insured.

The Owner agrees to furnish the Manager certificates evidencing the
existence of the insurance coverage set forth in this paragraph which
certificates shall provide that the Manager

<PAGE>

shall receive at least thirty (30) days notice from the insurance carrier
prior to cancellation or material alteration of any insurance coverage.
Unless the Owner shall provide such insurance and furnish such certificates
within thirty (30) days from the date of this Contract, the Manager may, but
shall not be obligated to, place said insurance (including retroactive
coverage of up to two (2) years) and charge the cost thereof to the account
of the Owner. Manager agrees to furnish the Owner certificates evidencing
the existence of the insurance coverage set forth in this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with
decisions required by the Owner under this Contract, the Owner acknowledges
that immediate decisions will be necessary and accordingly designates ROGER
W. LANGPAUL, as its representative, who shall be readily available to make
such decisions. The Owner may change such designated representative by
written notice to the Manager.

SECTION 8.06. ENTIRE AGREEMENT. This Contract constitutes all of
the understandings and agreements of whatever nature or kind existing, of
which the Manager is a party, with respect to the Manager's operation and
management of the Property. The Manager makes no guarantees, warranties or
representations that there will be profits or that there will not be losses
from the operation of the Property.

SECTION 8.07. HEADINGS. The article and section headings contained
herein are for convenience of reference only and are not intended to define,
limit or describe the scope or intent of any provision of this Contract.

SECTION 8.08. CONSENT AND APPROVAL. Whenever under any provision
of this Contract the approval or consent of either party is required, the
decision thereon shall be promptly given and such approval or consent shall
not be unreasonably withheld or delayed. It is further understood and agreed
that whenever, under any provision of this Contract, approval or consent is
required, the approval or consent shall be deemed to have been duly given if
such approval or consent is given by the person executing this Contract or
any other person, as the case may be, designated in SECTION 8.05 hereof. The
Manager may rely exclusively and conclusively on the designation set forth in
SECTION 8.05 hereof.

SECTION 8.09. WAIVER OF SUBORDINATION. The Owner and Manager
hereby waive any rights each may have against the other on account of any
loss or damage occasioned to the Owner or Manager, as the case may be
(whether or not such loss or damage is caused by the fault or negligence of
the other party), to their respective property, or to any portion of the
property arising from any risk covered by the standard form of fire and
extended coverage insurance used in the State of Iowa at the time of the loss
or damage. If a party waiving rights under this Section is carrying a fire
and extended coverage insurance policy in the standard form used in the State
of Iowa and an amendment to such standard form is passed, such amendment
shall be deemed not a part of such standard form until it applies to the
policy being carried by the waiving party. The parties hereto each, on behalf
of their respective insurance companies insuring the property of either The
Owner or Manager against any such loss, waive any right of subrogation that
it may have against the other party. The Owner and Manager agree immediately
to give to their respective insurer written notification of the terms of the
mutual

<PAGE>

waivers contained in this Section, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said
insurance coverages by reason of said waivers.

SECTION 8.10. NOTICES. Any notice by any party to any other
party shall be in writing and shall be given, and be deemed except as
otherwise provided in this Contract, to have been duly given (i) when
actually received if delivered personally or (ii) five (5) days after deposit
in the United States mail, in a registered or certified postage paid
envelope, return receipt, addressed to the respective parties as follows:

OWNER: CENTRAL LIFE ASSURANCE COMPANY
C/O CENTRAL PROPERTIES, INC.
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL

MANAGER: CPI RESOURCE GROUP
7272 E. INDIAN SCHOOL ROAD, SUITE 212
PHOENIX, AZ 85251

ATTN: Thomas Kimsey

Either party may at any time change the address for notices to such
party by the delivery or mailing, as aforesaid, of a notice stating the
change and setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to
have been made and shall be construed and interpreted in accordance with the
laws of the State of Iowa.

SECTION 8.12. BINDING EFFECT. This Contract shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the
privilege of displaying Agent's sign in and upon said premises announcing
that said premises is under Agent's management. Sign and design shall be
subject to the Owner's approval.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on this 29th day of September, 1994.

OWNER:

CENTRAL LIFE ASSURANCE COMPANY

BY: /s/ ROGER W. LANGPAUL
----------------------------
ROGER W. LANGPAUL

MANAGER

CPI RESOURCE GROUP

BY: /s/ THOMAS KIMSEY
------------------------------
THOMAS KIMSEY

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

Central Life Assurance Company

AND

CPI Resource Group

PROPERTY DESCRIPTION

Locally known as 702 E. Osborne, Phoenix, Arizona

<PAGE>

SCHEDULE A

1. For the management services provided for 702 E. Osborn, Manager will
be paid a management fee equal to Four percent (4%) of the gross receipts,
but not less than One Thousand Dollars ($1,000.00) for each month of the term
of the contract.

2. A construction and administration fee of Five percent (5%) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with 702 E. Osborn shall be charged
to the property on a pro-rata or hourly basis as provided in SECTION 3.05 and
as outlined in Schedule "B".

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would
pay to manager a leasing commission in relation to any new lease or expansion
lease of all or a portion of the property equal to Four and One-Half
percent(4 1/2%) of the total gross rents to be charged by Owner over the
term of such lease. Payment of such commissions would be one-half upon
execution and one-half upon occupancy.

2. RENEWALS: The renewal commissions will be Two and One-Fourth percent
(2 1/4%) of the total gross rents to be charged by Owner. These renewals
will only be paid provided that Manager is still contracted to perform the
leasing and management duties of the office building at the time of
occurrence or by other agreement with the Owner. Payment of such commissions
would be in full upon execution of the lease renewal.

- ------------------------------------------------------------------------------

APPROVED: DATE: September 27, 1994
-------------------------------
Owner: Central Life Assurance Company Manager: CPI Resource Group
------------------------------ --------------------

By: /s/ Roger W. Langpaul By: /s/ Thomas Kimsey
--------------------------- ---------------------------
Roger W. Langpaul Thomas Kimsey

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: 702 E. Osborn
--------------

RECOMMENDED FIDELITY BOND
WAGE OR SALARY OR EMPLOYEE
(NET OF BENEFITS) DISHONESTY
NO. WITH ALLOCATED TO COVERAGE
EMPLOYEE TITLE TITLE BUILDING (Y OR N)
- -------------- --------- ----------------- -------------

ON-SITE:

Property Manager N/A $___ Y
Maintenance Engineer 1 $___ Y
Maintenance N/A $___ Y

NOTE 1: Each of the above employees will be billed to the properties as
full-time employees or pro-rata.

OFF-SITE:

Director OF Engineering/ $20.00
Maintenance ----------- Y
(Flat Rate)

NOTE 2: This schedule outlines "not-to-exceed" amounts for the primary year
of the Contract, only. Owner agrees to increase the above salaries by an
equitable amount. Each of the above employees will be billed based on hours
spent directly related to the buildings. The quantity of time expended will
vary according to seasonal variations, site specific requirements and Owner's
goals.

<PAGE>
A PROPOSAL FOR

MANAGEMENT SERVICES

Oldtowne Office Center
6651 N. Oak Trafficway
Gladstone, MO 64118

PREPARED FOR:

Central Life Assurance Company
6000 Westown Parkway, Suite 20OW
West Des Moines, IA 50266

PREPARED BY:

Central Properties, Inc.
6000 Westown Parkway, Suite 20OW
West Des Moines, IA 50266

<PAGE>

TABLE OF CONTENTS

PAGE
----

Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

Article III - The Manager's Authority 2
Section 3.01. General Authority 2
Section 3.02. Repairs and Maintenance 2
Section 3.03. Collection of Rents and Charges 3
Section 3.04. Security Deposits 3
Section 3.05. Personnel 3
Section 3.06. Service Contracts 3
Section 3.07. Disbursements 3

<PAGE>

PAGE
----

Article VI - Compensation of the Manager
Section 6.01. Management 6
Section 6.02. Payment of Compensation 6
Section 6.03. Additional Services 6
Section 6.04. Renewal and Expansion of Leases
by Manager 6

Article VII - Definitions
Section 7.01. Gross Receipts 6
Section 7.02. Net Proceeds 6

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the
1st day of May 1994, by and between CENTRAL LIFE ASSURANCE COMPANY (the
"Owner") AND CENTRAL PROPERTIES, INC., (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this
Contract:

A. The Manager desires to manage, rent, lease and operate that
certain office building project commonly known as OLDTOWNE OFFICE CENTER,
located in GLADSTONE, MISSOURI, such project being more fully described on
EXHIBIT "A" which is attached hereto and incorporated herein by reference for
all purposes (the "Property"); and

B. The Owner desires to engage and employ the Manager to rent,
operate and manage the Property:

NOW THEREFORE, in consideration of the mutual promises hereunder
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

APPOINTMENT

SECTION 1.01. EXCLUSIVE AGENCY - APPOINTMENT. The Owner hereby
engages, appoints and employs the Manager to rent, operate, and manage the
Property as the Owner's sole and exclusive agent during the term of this
Contract, upon the terms and conditions hereinafter set forth.

SECTION 1.02. TERM. The term of the appointment of the Manager
shall commence as of May 1, 1994 and shall continue through and including
April 30, 1995 (the "Term"), unless earlier terminated as hereinafter
provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent,
for the period, and upon the terms herein provided.

<PAGE>

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(a) that the Owner has full right and authority to enter into this
Agreement, perform its obligations hereunder and engage, appoint and employ
the Manager for the purposes and consideration herein set forth;

(b) that the Owner is duly organized, existing and in good
standing under the laws of the State of Iowa and is duly authorized and
qualified to do business in the State of Iowa;

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.01. GENERAL AUTHORITY . The Manager shall have the
exclusive authority, right and power to rent, operate, and manage the
Property (all or any of which, at Manager's option, may be exercised in the
name of the Owner). Except as specifically set forth in this contract, all
obligations or expenses incurred by the Manager pursuant to its authority
hereunder shall be for the benefit of, account of, or behalf of and at the
expense of the Owner, and the Owner expressly agrees to assume and pay any
and all such expenses and obligations.

SECTION 3.02. REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of the Owner to (a) make
or cause to be made all ordinary repairs and replacements necessary to
preserve the Property in its present condition; (b) make all alterations
required to comply with lease requirements; (c) negotiate contracts for
nonrecurring items not exceeding Two Thousand Dollars ($2,000.00) without the
prior written approval of the Owner; provided, however, monthly or recurring
operating charges and emergency repairs may be incurred in excess of such
maximum, if in the opinion of the Manager, such repairs are necessary to
protect the Property from damage or to maintain services to the tenants as
called for in their leases; (d) enter into contracts for all necessary
repairs, maintenance, minor alterations and utility services; and (e) place
orders on behalf of the Owner for such equipment, tools, appliances,
materials and supplies as are reasonable and necessary to properly maintain
the Property. Manager agrees to annually furnish the Owner an up-to-date
inventory list of equipment, tools and appliances owned by the Owner and used
in the operation of the Property.

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall
have the specific authority, if authorized under the applicable lease, to
collect (a) rents and assessments and other items due or to become due, give
receipts therefore and deposit all funds collected hereunder in the bank
account provided for and described in SECTION 4.04: (b) a late rent
administrative charge; (c) a charge for non-negotiable checks; (d) a fee for
credit reports; and (e) an administrative charge for subleasing.

SECTION 3.04. SECURITY DEPOSITS. The Manager shall have the right
to collect security deposits and deposit such funds to an account specified
by the Owner from time to time. Manager shall have the right to refund
tenant's security deposits at the expiration of leases.

SECTION 3.05. PERSONNEL. The Manager shall have the express
authority to investigate, hire, train, promote, pay, supervise and discharge
all personnel reasonably necessary in order to properly maintain and operate
the Property. Such personnel shall not be deemed employees of the Owner, who
shall have no right to supervise or direct such employees. All reasonable
salaries, wages or personnel employed by the Manager, including but not
limited to the cost of group medical and health insurance, social security
taxes, federal and state unemployment taxes, Workman's Compensation Insurance
and vacations shall be deemed to be expenses reimbursable to the Manager by
the Owner. See Schedule B.

SECTION 3.06. SERVICE CONTRACTS. The Manager shall have the
authority, in the name and on behalf of the Owner, to enter into contracts
for water, electricity, gas fuel, window cleaning, telephone, vermin
extermination, trash removal, janitorial service, laundry service,
landscaping and lawn care, elevator, security and other necessary services
deemed by the Manager to be necessary or advisable for the operation of the
Property.

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in Section 7.02), on
or before the tenth (10th) day of the following month and after establishing a
cash reserve in the amount of Five Thousand Dollars ($5,000.00) to pay other
costs and expenses incidental to the operation of the Property, including
non-recurring emergency repairs. Sufficient funds for capital expenditures
which shall become due and payable within the succeeding calendar month and
for

<PAGE>

which the cash to make such payments may not be generated by operations
during such period shall be retained in addition to the cash reserve
established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.01. MAINTENANCE AND REPAIR OF THE PROPERTY. The Manager
shall, at the Owner's sole expense, cause the property to be maintained in
accordance with standards reasonably acceptable to the Owner, including
without limitation, interior and exterior cleaning, painting, plumbing and
carpentry.

SECTION 4.02. BOOKS AND RECORDS. The Manager shall keep books of
account and such other records reflecting the results of operation of the
Property. Such books and records shall be kept in all material respects in
accordance with accepted accounting practices. The Manager shall allow the
Owner, its accountants, attorneys and agents, the right to enter to examine
or inspect the books and records relating to the operation and maintenance of
the Property at any time during normal business hours upon notification to
the Manager. Books and records of the Property shall be kept at the Property
or such other place as the Manager may deem appropriate.

SECTION 4.03. RETURNS REQUIRED BY LAW, The Manager shall execute
and file punctually when due, all forms, reports and returns required by law
relating to personnel employed by the Manager for the maintenance and
operation of the Property.

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall
deposit all sums collected pursuant to this Contract (less any sums properly
deducted as provided herein) in a trust account in a national or state bank
mutually acceptable to the Owner and the Manager. Such accounts shall be
styled: "CENTRAL PROPERTIES, INC. - As Agent For CENTRAL LIFE ASSURANCE
COMPANY" and shall be maintained at all times separate from the Manager's
corporate accounts. The Manager shall endeavor to collect on behalf of the
Owner and at the Owner's expense, all rents and other charges for the use and
occupancy of the Property.

SECTION 4.05. DISBURSEMENTS. The Manager shall make disbursements
in accordance with the authority as set forth in SECTION 3.07 hereof. In the
event the disbursements required under SECTION 3.07 (1) and (2) hereof shall
be in excess of receipts from the Property, the Owner agrees to pay to the
Manager the amount necessary to restore the balance in the account to the
amount specified in SECTION 3.07 (3) immediately upon notification by
Manager. No provision of this Contract shall in any manner obligate the
Manager to advance its own funds on behalf of the Owner for any purpose.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day
as stipulated in SECTION 3.07 deliver a written report of the previous
month's operations to the Owner, which report shall include a complete
listing of all receipts and disbursements and the amount, if any, payable by
the Owner to restore the balance in the account as provided in SECTION 4.05
hereof.

<PAGE>

SECTION 4.07. TIME DEVOTED. The Manager shall devote such of its
time, attention and business capacity to the management and operation of the
Project as may be necessary in order for Manager to fully comply with the
terms of this Agreement. It is understood and agreed that the Manager has,
may continue to have, and hereafter may engage in other similar or related
businesses, even though such other businesses may be in competition with the
Project.

ARTICLE V

TERMINATION

SECTION 5.01. TERMINATION. Notwithstanding anything in this
document to the contrary, either party may terminate this agreement with or
without cause by giving to the other party thirty (30) days written notice
effective on the last day of any given month. If the owner thus cancels this
agreement without cause, Owner hereby agrees to pay Manager on the date of
termination, an amount equal to the sum of the management fees collected for
the three (3) months prior to termination. If Owner cancels this agreement
and hires either directly or indirectly through another Managing Agent any
employee of Manager within sixty (60) days of termination, Owner hereby
agrees to pay Manager an amount equal to the sum of the payroll costs for
said employee for ninety (90) days prior to termination. After the
expiration of the initial Term hereof, this Contract shall thereafter
continue from year to year until terminated, with or without cause by either
party, which termination shall be effective on the last day of any given
month thirty (30) days after receipt of written notice from the terminating
party.

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the
event of damage to or destruction of the Property so that the same shall
become untenantable, or in the event of taking of a substantial portion of
the Property, by condemnation or threat thereof, or similar proceeding, or in
the event of sale of the Property; then, in any such event this Contract may
be terminated by the Owner which termination shall be effective THIRTY (30)
days after receipt by Manager of written notice from the Owner.

SECTION 5.03. BANKRUPTCY, REORGANIZATION AND INSOLVENCY. In the
event a receiver, liquidator or trustee of the Manager shall be appointed by
court order or if a petition shall be filed against the Manager under any
bankruptcy, reorganization or insolvency laws and such petition shall not
have been vacated within one hundred and twenty (120) days of the date of
filing or in the event the Manager shall make an assignment for the benefit
of creditors or be adjudicated a bankrupt under the federal bankruptcy laws,
then the Owner may forthwith terminate this Contract upon written notice to
the Manager.

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon
termination pursuant to this ARTICLE V, the Manager and the Owner shall have
no further duties and obligations, one to another save and except the Owner's
obligations under Article VI and SECTION 8.03; provided that in the event of
termination as provided for herein, the Manager will remit to the Owner gross
collections and net proceeds as called for herein on the effective date of
termination and the Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and

<PAGE>

charges attributable to the Property have been fully paid. Upon the
effective date of termination, the Manager shall deliver to the Owner a final
report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for
its services as Manager under this Contract, a management fee ("Management
Fee") equal to Five percent (5%) of Gross Receipts (as defined in SECTION
7.01), but not less than Seven Hundred Fifty Dollars ($750.00) for each month
of the term of this Contract. The Owner shall pay to Manager such other fees
relating to management and construction administration as are set forth in
SCHEDULE A.

SECTION 6.02. PAYMENT OF COMPENSATION. The compensation payable
under SECTION 6.01 hereof shall be payable on the same day as stipulated in
SECTION 3.07, following the month for which such compensation is due and
shall be deducted from Gross Receipts prior to remitting the Net Proceeds to
the Owner pursuant to SECTION 3.07 hereof.

SECTION 6.03. ADDITIONAL SERVICES. If Manager's agent is called
upon to perform any services not customarily a part of the usual services
performed by a management agent, it is agreed that Manager shall receive
additional compensation in an amount agreed upon and approved by the Owner in
writing, in a manner in which both parties agree.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See
Schedule A for Compensation.

ARTICLE VII

DEFINITIONS

SECTION 7.01. GROSS RECEIPTS. The term "Gross Receipts" shall mean
all amounts actually collected by the Manager as rents or other charges for
use and occupancy of the Property including parking, receipts from coin
operated machines and other miscellaneous receipts collected by the Manager
from the Property but shall exclude all other receipts including but not
limited to, income derived from interest on investments or otherwise,
proceeds of claims on account of insurance policies, abatement of taxes, and
awards arising from eminent domain proceedings or the threat thereof,
discount, deposits and dividends on insurance policies.

SECTION 7.02. NET PROCEEDS. The term "Net Proceeds" shall mean
Gross Receipts for each calendar month less (i) the sum of all disbursements
properly made by the Manager during each calendar month pursuant to the
authority granted the Manager under this contract and (ii) the compensation
payable to the Manager for the calendar month under this Contract, including
without limitation, management fees, leasing commission, and construction
administration fees.

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all
the owner's leasing policies in relation to the Property and the Owner
expressly agrees to the following:

(a) An adequate supply of forms of lease agreements and all
attachments and addenda necessary thereto will be at all times provided to
the Manager by the Owner;

(b) the Manager is authorized, subject to the Owner's approval, to
employ, at the expense of the Owner, a space planner in order to expedite
lease proposals, and to provide working drawings to the on-site manager for
assistance in construction of the leased space;

(c) all inquiries concerning leases, renewals, expansions,
extensions, continuations of tenancy, or agreements for the rental, occupancy
or operation of the Property, or any part thereof, shall be referred to the
Manager, and all negotiations connected therewith shall be conducted solely
by or under direction of the Manager; and

SECTION 8.02. NOT A PARTNERSHIP. Nothing contained in this
Contract shall constitute or be construed to be, or create, a partnership or
joint venture between the Owner and the Manager, or their successors and
assigns and the Manager is, shall be and remain an independent contractor.

SECTION 8.03. INDEMNITY. The Manager hereby agrees to indemnify,
defend and hold harmless the Owner from any cost, loss, damage or expense
resulting from the breach of this Agreement by Manager, except to the extent
same constitutes the negligence of Manager and it is covered by the public
liability insurance described in SECTION 8.04. The Owner hereby agrees to
indemnify, defend and hold harmless the Manager from any cost, loss, damage
or expense resulting from the willful misconduct or gross negligence of the
Owner. The Manager shall not be held responsible for any act or failure to
act which is occasioned by the failure of the Owner to provide funds;
provided, that, the Owner has been notified in writing and given sufficient
time to remedy the situation.

SECTION 8.04. INSURANCE. The Owner agrees to carry, at his own
expense, necessary public liability, fire and extended coverage insurance
adequate to protect the interests of the parties hereto, which policies shall
be so written as to protect the Manager in the same manner to the same extent
they protect the Owner, and will name the Manager as an additional insured.
Manager agrees to carry, at his own expense, necessary public liability and
workman's compensation insurance. The Manager is allowed to include a
proportionate share of workman's compensation insurance premium as a
component of salary/wages reimbursement. The policies shall be so written as
to protect the Owner in the same manner to the same extent they protect the
Manager, and will name the Owner as an additional insured.

<PAGE>

The Owner agrees to furnish the Manager certificates evidencing the
existence of the insurance coverage set forth in this paragraph which
certificates shall provide that the Manager shall receive at least thirty
(30) days notice from the insurance carrier prior to cancellation or material
alteration of any insurance coverage. Unless the Owner shall provide such
insurance and furnish such certificates within thirty (30) days from the date
of this Contract, the Manager may, but shall not be obligated to, place said
insurance (including retroactive coverage of up to two (2) years) and charge
the cost thereof to the account of the Owner. Manager agrees to furnish the
Owner certificates evidencing the existence of the insurance coverage set
forth in this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with
decisions required by the Owner under this Contract, the Owner acknowledges
that immediate decisions will be necessary and accordingly designates SCOTT
D. HARRIS, as its representative, who shall be readily available to make such
decisions. The Owner may change such designated representative by written
notice to the Manager.

SECTION 8.06. ENTIRE AGREEMENT. This Contract constitutes all of
the understandings and agreements of whatever nature or kind existing, of
which the Manager is a party, with respect to the Manager's operation and
management of the Property. The Manager makes no guarantees, warranties or
representations that there will be profits or that there will not be losses
from the operation of the Property.

SECTION 8.07. HEADINGS. The article and section headings contained
herein are for convenience of reference only and are not intended to define,
limit or describe the scope or intent of any provision of this Contract.

SECTION 8.08. CONSENT AND APPROVAL. Whenever under any provision
of this Contract the approval or consent of either party is required, the
decision thereon shall be promptly given and such approval or consent shall
not be unreasonably withheld or delayed. It is further understood and agreed
that whenever, under any provision of this Contract, approval or consent is
required, the approval or consent shall be deemed to have been duly given if
such approval or consent is given by the person executing this Contract or
any other person, as the case may be, designated in SECTION 8.05 hereof. The
Manager may rely exclusively and conclusively on the designation set forth in
SECTION 8.05 hereof.

SECTION 8.09. WAIVER OF SUBROGATION. The Owner and Manager hereby
waive any rights each may have against the other on account of any loss or
damage occasioned to the Owner or Manager, as the case may be (whether or not
such loss or damage is caused by the fault or negligence of the other party),
to their respective property, or to any portion of the property arising from
any risk covered by the standard form of fire and extended coverage insurance
used in the State of Iowa at the time of the loss or damage. If a party
waiving rights under this Section is carrying a fire and extended coverage
insurance policy in the standard form used in the State of Iowa and an
amendment to such standard form is passed, such amendment shall be deemed not
a part of such standard form until it applies to the policy being carried by
the waiving party. The parties hereto each, on behalf of their respective
insurance companies insuring the property of either The Owner or Manager
against any such loss, waive any right

<PAGE>

of subrogation that it may have against the other party. The Owner and
Manager agree immediately to give to their respective insurer written
notification of the terms of the mutual waivers contained in this Section,
and to have said insurance policies properly endorsed, if necessary, to
prevent the invalidation of said insurance coverages by reason of said
waivers.

SECTION 8.10. NOTICES. Any notice by any party to any other
party shall be in writing and shall be given, and be deemed except as
otherwise provided in this Contract, to have been duly given (i) when
actually received if delivered personally or (ii) five (5) days after deposit
in the United States mail, in a registered or certified postage paid
envelope, return receipt, addressed to the respective parties as follows:

OWNER: CENTRAL LIFE ASSURANCE COMPANY
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: SCOTT D. HARRIS

MANAGER: CENTRAL PROPERTIES, INC.
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL

Either party may at any time change the address for notices to such
party by the delivery or mailing, as aforesaid, of a notice stating the change
and setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have
been made and shall be construed and interpreted in accordance with the laws
of the State of Iowa.

SECTION 8.12. BINDING EFFECT. This Contract shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the
privilege of displaying Agent's sign in and upon said premises announcing
that said premises is under Agent's management. Sign and design shall be
subject to the Owner's approval.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on this ______________ day of _____________, 19___.

OWNER:

CENTRAL LIFE ASSURANCE COMPANY

By: /s/ Scott D. Harris
---------------------------------

MANAGER

CENTRAL PROPERTIES, INC.

By: /s/ Roger W. Langpaul
----------------------------------
Roger W. Langpaul, CPM, CRE

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

Central Life Assurance Company

AND

Central Properties, Inc.

PROPERTY DESCRIPTION

Clay County, Bolling Heights, Lots 1 & 2, Block 1, Subdivision Tract A,
locally known as 6651 N. Oak Trafficway, Gladstone, MO 64118

<PAGE>

SCHEDULE A

1. For the management services provided for the OLDTOWNE OFFICE CENTER,
Manager will be paid a management fee equal to Five percent (5%) of the gross
receipts, but not less than Seven Hundred Fifty Dollars ($750.00) for each
month of the term of the contract.

2. A construction and administration fee of Five percent (5 %) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with the OLDTOWNE OFFICE CENTER shall be
charged to the property on a pro-rata or hourly basis as provided in SECTION
3.05 and as outlined in Schedule "B".

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion
lease of all or a portion of the property equal to Four and One-Half percent
4 1/2%) of the total gross rents to be charged by Owner over the term of such
lease. Payment of such commissions would be one-half upon execution and
one-half upon occupancy.

2. RENEWALS: The renewal commissions will be Two and One-Fourth percent (2
1/4 %) of the total gross rents to be charged by Owner. These renewals will
only be paid provided that Manager is still contracted to perform the leasing
and management duties of the office building at the time of occurrence or by
other agreement with the Owner. Payment of such commissions would be in full
upon execution of the lease renewal.

- -------------------------------------------------------------------------------

APPROVED: DATE:-----------------------------------

Owner: CENTRAL LIFE ASSURANCE COMPANY Manager: CENTRAL PROPERTIES, INC.

By: /s/ Scott D. Harris By: /s/ Roger W. Langpaul
---------------------------- ---------------------------
Roger W. Langpaul, CPM, CRE

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: OLDTOWNE OFFICE CENTER

ON-SITE:

Property Manager N/A $-- Y
Maintenance Engineer N/A $-- Y
Maintenance N/A $-- Y

</TABLE>

NOTE 1: Each of the above employees will be billed to the properties as
full-time employees or pro-rata.

OFF-SITE:

Director of Engineering/ $20.00
Maintenance ------ Y
(Flat Rate)

NOTE 2: This schedule outlines "not-to-exceed" amounts for the primary year
of the Contract, only. Owner agrees to increase the above salaries by an
equitable amount. Each of the above employees will be billed based on hours
spent directly related to the buildings. The quantity of time expended will
vary according to seasonal variations, site specific requirements and Owner's
goals.

<PAGE>

A PROPOSAL FOR

MANAGEMENT SERVICES

Picture Hills Shopping Centre
Highway 45 and Cosby Avenue
Kansas City, MO 64151

PREPARED FOR:

Central Life Assurance Company
6000 Westown Parkway, Suite 20OW
West Des Moines, IA 50266

PREPARED BY:

Central Properties, Inc.
6000 Westown Parkway, Suite 20OW
West Des Moines, IA 50266

<PAGE>

TABLE OF CONTENTS

PAGE
----
Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

<PAGE>

TABLE OF CONTENTS
(CONT.)

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the first
day of February, 1994, by and between Central Life Assurance Company (the
"Owner") and Central Properties, Inc. (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as Picture Hills Shopping Center,
located in Kansas City Missouri, such project being more fully described on
Exhibit "A" which is attached hereto and incorporated herein by reference for
all purposes (the "Property"); and

B. The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

ARTICLE I

APPOINTMENT

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of February 1, 1994 and shall continue through and including January
31, 1995 (the "Term") unless earlier terminated as hereinafter provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

<PAGE>

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(b) that the Owner is duly organized, existing and in good standing
under the laws of the State of Iowa and is duly authorized and qualified to do
business in the State of Iowa;

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.02. REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of the Owner to (a) make or
cause to be made all ordinary repairs and replacements necessary to preserve the
Property in its present condition; (b) make all alterations required to comply
with lease requirements; (c) negotiate contracts for nonrecurring items not
exceeding Two Thousand Dollars ($2,000.00) without the prior written approval of
the Owner; provided, however, monthly or recurring operating charges and
emergency repairs may be incurred in excess of such maximum, if in the opinion
of the Manager, such repairs are necessary to protect the Property from damage
or to maintain services to the tenants as called for in their leases; (d) enter
into contracts for all necessary repairs, maintenance, minor alterations and
utility services; and (e) place orders on behalf of the Owner for such
equipment, tools, appliances, materials and supplies as are reasonable and
necessary to properly maintain the Property. Manager agrees to annually furnish
the Owner an up-to-date inventory list of equipment, tools and appliances owned
by the Owner and used in the operation of the Property.

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall have the
specific authority, if authorized under the applicable lease, to collect (a)
rents and assessments and other items due or to become due, give receipts
therefore and deposit all funds collected hereunder in the bank account provided
for and described in SECTION 4.04: (b) a late rent administrative charge; (c) a
charge for non-negotiable checks; (d) a fee for credit reports; and (e) an
administrative charge for subleasing.

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on or
before the tenth (10th) day of the following month and after establishing a cash
reserve in the amount of Five Thousand Dollars ($5,000.00) to pay other costs
and expenses incidental to the operation of the Property, including non-
recurring emergency repairs. Sufficient funds for capital expenditures which
shall become due and payable within the succeeding calendar month and for

<PAGE>

which the cash to make such payments may not be generated by operations during
such period shall be retained in addition to the cash reserve established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.01. MAINTENANCE AND REPAIR OF THE PROPERTY. The Manager shall, at
the Owner's sole expense, cause the property to be maintained in accordance with
standards reasonably acceptable to the Owner, including without limitation,
interior and exterior cleaning, painting, plumbing and carpentry.

SECTION 4.02. BOOKS AND RECORDS. The Manager shall keep books of account and
such other records reflecting the results of operation of the Property. Such
books and records shall be kept in all material respects in accordance with
accepted accounting practices. The Manager shall allow the Owner, its
accountants, attorneys and agents, the right to enter to examine or inspect the
books and records relating to the operation and maintenance of the Property at
any time during normal business hours upon notification to the Manager. Books
and records of the Property shall be kept at the Property or such other place as
the Manager may deem appropriate.

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit
all sums collected pursuant to this Contract (less any sums properly deducted as
provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled:
"Central Properties, Inc., - As Agent For Central Life Assurance Company" and
shall be maintained at all times separate from the Manager's corporate accounts.
The Manager shall endeavor to collect on behalf of the Owner and at the Owner's
expense, all rents and other charges for the use and occupancy of the Property.

<PAGE>

ARTICLE V

TERMINATION

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the event of
damage to or destruction of the Property so that the same shall become
untenantable, or in the event of taking of a substantial portion of the
Property, by condemnation or threat thereof, or similar proceeding, or in the
event of sale of the Property; then, in any such event this Contract may be
terminated by the Owner which termination shall be effective thirty (30) days
after receipt by Manager of written notice from the Owner.

SECTION 5.04. EFFECT OF TERMINATION AND TERMINATION FUND. Upon
termination pursuant to this ARTICLE V, the Manager and the Owner shall have no
further duties and obligations, one to another save and except the Owner's
obligations under Article VI and SECTION 8.03; provided that in the event of
termination as provided for herein, the Manager will remit to the Owner gross
collections and net proceeds as called for herein on the effective date of
termination and the Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and

<PAGE>

charges attributable to the Property have been fully paid. Upon the effective
date of termination, the Manager shall deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to five percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than TWO THOUSAND DOLLARS ($2,000.00) for each month of the term of
this Contract. The Owner shall pay to Manager such other fees relating to
management and construction administration as are set forth in SCHEDULE A.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See Schedule A
for Compensation.

ARTICLE VII

DEFINITIONS

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all the
owner's leasing policies in relation to the Property and the Owner expressly
agrees to the following:

(a) An adequate supply of forms of lease agreements and all
attachments and addenda necessary thereto will be at all times provided to the
Manager by the Owner;

The Owner agrees to furnish the Manager certificates evidencing the
existence of the insurance coverage set forth in this paragraph which
certificates shall provide that the Manager

<PAGE>

shall receive at least thirty (30) days notice from the insurance carrier prior
to cancellation or material alteration of any insurance coverage. Unless the
Owner shall provide such insurance and furnish such certificates within thirty
(30) days from the date of this Contract, the Manager may, but shall not be
obligated to, place said insurance (including retroactive coverage of up to two
(2) years) and charge the cost thereof to the account of the Owner. Manager
agrees to furnish the Owner certificates evidencing the existence of the
insurance coverage set forth in this paragraph.

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates SCOTT D. HARRIS., as its
representative, who shall be readily available to make such decisions. The
Owner may change such designated representative by written notice to the
Manager.

<PAGE>

waivers contained in this Section, and to have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverages
by reason of said waivers.

OWNER: CENTRAL LIFE ASSURANCE COMPANY
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: SCOTT D. HARRIS

MANAGER: CENTRAL PROPERTIES, INC.
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the privilege
of displaying Agent's sign in and upon said premises announcing that said
premises is under Agent's management. Sign and design shall be subject to the
Owner's approval.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on the day of , 19 .
------------ --------------- -----

OWNER:

CENTRAL LIFE ASSURANCE COMPANY

By: /s/ Scott D. Harris
------------------------------------

MANAGER:

CENTRAL PROPERTIES, INC.

By: /s/ Roger W. Langpaul
------------------------------------
Roger W. Langpaul, CPM, CRE
Vice President
Real Estate Equities Management

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

Central Life Assurance Company

AND

Central Properties, Inc.

PROPERTY DESCRIPTION

Platte County, Section 19, Township 51, Range 33, Lots 2B and H locally known as
6507-6545 N.W. Cosby Avenue, Kansas City, Missouri 64151.

<PAGE>

SCHEDULE A

1. For the management services provided for the PICTURE HILLS SHOPPING CENTER,
Manager will be paid a management fee equal to FIVE percent (5%) of the gross
receipts, but not less than TWO THOUSAND Dollars ($2,000.00) for each month of
the term of the contract.

2. A construction and administration fee of FIVE percent (5%) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with the PICTURE HILLS SHOPPING CENTRE
shall be charged to the property on a pro-rata or hourly basis as provided in
SECTION 3.05 and as outlined in Schedule "B".

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion lease
of all or a portion of the property equal to FOUR AND ONE-HALF Percent (4 1/2%)
of the total gross rents to be charged by Owner over the term of such lease.
Payment of such commissions would be one-half upon execution and one-half upon
occupancy.

- --------------------------------------------------------------------------------

APPROVED: DATE
-------------------------------

Owner: CENTRAL LIFE ASSURANCE COMPANY Manager: CENTRAL PROPERTIES

By: /s/ Scott D. Harris By: /s/ Roger W. Langpaul
---------------------------------- --------------------------------
Roger W. Langpaul, CPM, CRE
Vice President
Real Estate Equities
Management

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: PICTURE HILLS SHOPPING CENTRE

ON-SITE:

Property Manager N/A $ Y
----- ------
Maintenance Engineer N/A $ Y
----- ------
Maintenance N/A $ Y
----- ------

NOTE 1: Each of the above employees will be billed to the properties as full-
time employees or pro-rata.

OFF-SITE:

Director of Engineering/Maintenance $20.00 Y
------
NOTE 2: This schedule outlines "not-to-exceed" amounts for the primary year of
the Contract, only. Owner agrees to increase the above salaries by an equitable
amount. Each of the above employees will be billed based on hours spent
directly related to the buildings. The quantity of time expended will vary
according to seasonal variations, site specific requirements and Owner's goals.

<PAGE>
A PROPOSAL FOR

MANAGEMENT SERVICES

Mesa Commerce Center
Mesa, Arizona

PREPARED FOR:

Central Life Assurance Company
c/o Central Properties, Inc.
6000 Westown Parkway, Suite 20OW
West Des Moines, Iowa 50266

PREPARED BY:

CPI Resource Group
7272 E. Indian School Road, Suite 212
Scottsdale, Arizona 85251

<PAGE>

TABLE OF CONTENTS

PAGE
----
Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

<PAGE>

TABLE OF CONTENTS
(CONT.)
PAGE
----
Article VI - Compensation of the Manager
Section 6.01. Management 6
Section 6.02. Payment of Compensation 6
Section 6.03. Additional Services 6
Section 6.04. Renewal and Expansion of Leases
by Manager 6

Article VII - Definitions
Section 7.01. Gross Receipts 6
Section 7.02. Net Proceeds 6

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the FOURTH
day of JANUARY 1994, by and between CENTRAL LIFE ASSURANCE COMPANY (the "Owner")
and CPI RESOURCE GROUP (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as MESA COMMERCE CENTER, located in MESA,
ARIZONA, such project being more fully described on EXHIBIT "A" which is
attached hereto and incorporated herein by reference for all purposes (the
"Property"); and

B. The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

ARTICLE I

APPOINTMENT

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of JANUARY 4, 1994, and shall continue through and including
December 31, 1994, (the "Term"), unless earlier terminated as hereinafter
provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

<PAGE>

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(b) that the Owner is duly organized, existing and in good standing
under the laws of the State of Iowa and is duly authorized and qualified to do
business in the State of Iowa;

ARTICLE III

THE MANAGER'S AUTHORITY

<PAGE>

SECTION 3.03. COLLECTION OF RENTS AND CHARGES. The Manager shall have the
specific authority, if authorized under the applicable lease, to collect (a)
rents and assessments and other items due or to become due, give receipts
therefore and deposit all funds collected hereunder in the bank account provided
for and described in SECTION 4.04: (b) a late rent administrative charge; (c) a
charge for non-negotiable checks; (d) a fee for credit reports; and (e) an
administrative charge for subleasing.

(1) to the Manager for monies advanced by the Manager on behalf of the
Owner (provided, however that the Manager shall in no event have any obligation
to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on or
before the TENTH 10TH day of the following month and after establishing a cash
reserve in the amount of FIVE THOUSAND Dollars ($5,000.00) to pay other costs
and expenses incidental to the operation of the Property, including non-
recurring emergency repairs. Sufficient funds for capital expenditures which
shall become due and payable within the succeeding calendar month and for

<PAGE>

which the cash to make such payments may not be generated by operations during
such period shall be retained in addition to the cash reserve established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit all
sums collected pursuant to this Contract (less any sums properly deducted as
provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled: "CPI
RESOURCE GROUP - As Agent For CENTRAL LIFE ASSURANCE COMPANY" and shall be
maintained at all times separate from the Manager's corporate accounts. The
Manager shall endeavor to collect on behalf of the Owner and at the Owner's
expense, all rents and other charges for the use and occupancy of the Property.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day as
stipulated in SECTION 3.07 deliver a written report of the previous month's
operations to the Owner, which report shall include a complete listing of all
receipts and disbursements and the amount, if any, payable by the Owner to
restore the balance in the account as provided in SECTION 4.05 hereof.

<PAGE>

ARTICLE V

TERMINATION

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the event of
damage to or destruction of the Property so that the same shall become
untenantable, or in the event of taking of a substantial portion of the
Property, by condemnation or threat thereof, or similar proceeding, or in the
event of sale of the Property; then, in any such event this Contract may be
terminated by the Owner which termination shall be effective THIRTY (3O) days
after receipt by Manager of written notice from the Owner.

<PAGE>

charges attributable to the Property have been fully paid. Upon the effective
date of termination, the Manager shall deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to FIVE percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than TWO THOUSAND Dollars ($2,000.00) for each month of the term of
this Contract. The Owner shall pay to Manager such other fees relating to
management and construction administration as are set forth in SCHEDULE A.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See Schedule A
for Compensation.

ARTICLE VII

DEFINITIONS

<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all the
owner's leasing policies in relation to the Property and the Owner expressly
agrees to the following:

(a) An adequate supply of forms of lease agreements and all attachments
and addenda necessary thereto will be at all times provided to the Manager by
the Owner;

(b) the Manager is authorized, subject to the Owner's approval, to employ,
at the expense of the Owner, a space planner in order to expedite lease
proposals, and to provide working drawings to the on-site manager for assistance
in construction of the leased space;

(c) all inquiries concerning leases, renewals, expansions, extensions,
continuations of tenancy, or agreements for the rental, occupancy or operation
of the Property, or any part thereof, shall be referred to the Manager, and all
negotiations connected therewith shall be conducted solely by or under direction
of the Manager; and

<PAGE>

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates ROGER W. LANGPAUL, as its
representative, who shall be readily available to make such decisions. The
Owner may change such designated representative by written notice to the
Manager.

<PAGE>

SECTION 8. 10. NOTICES. Any notice by any party to any other party shall
be in writing and shall be given, and be deemed except as otherwise provided in
this Contract, to have been duly given (i) when actually received if delivered
personally or (ii) five (5) days after deposit in the United States mail, in a
registered or certified postage paid envelope, return receipt, addressed to the
respective parties as follows:

OWNER: CENTRAL LIFE ASSURANCE COMPANY
C/O CENTRAL PROPERTIES, INC
6000 WESTOWN PARKWAY, SUITE 20OW
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL

MANAGER: CPI RESOURCE GROUP
7272 E. INDIAN SCHOOL ROAD, SUITE 212
SCOTTSDALE, ARIZONA 85251

ATTN: THOMAS KIMSEY

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on this 29TH day of SEPTEMBER, 1994.

OWNER:

CENTRAL LIFE ASSURANCE COMPANY

By: ROGER W. LANGPAUL
---------------------------
Roger W. Langpaul

MANAGER:

CPI RESOURCE GROUP

By: THOMAS KIMSEY
--------------------------
Thomas Kimsey

<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

Central Life Assurance Company

AND

CPI Resource Group

PROPERTY DESCRIPTION

Locally known as 1930 South Alma School Road, Mesa, Arizona

<PAGE>

SCHEDULE A

1. For the management services provided for the Mesa Commerce Center, Manager
will be paid a management fee equal to Five percent (5 %) of the gross receipts,
but not less than Two Thousand Dollars ($2,000.00) for each month of the term of
the contract.

2. A construction and administration fee of Five percent (5 %) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with THE MESA COMMERCE CENTER shall be
charged to the property on a pro-rata or hourly basis as provided in Section
3.05 and as outlined in Schedule "B".

4. Manager will be provided a fully furnished and equipped management office
to accommodate the personnel required to properly maintain and manage the
property. Owner agrees to provide at Owner's expense a fully furnished and
decorated management and leasing office in the building for the Manager and its'
employees; the location and size of such office to be determined by the mutual
agreement of the Manager and the Owner; the office shall not exceed
approximately 900 usable square feet and Ten Dollars ($10.00) per usable square
foot in tenant finish unless approved in writing by the Owner.

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion lease
of all or a portion of the property equal to Four and One-Half percent (4 1/2%)
of the total gross rents to be charged by Owner over the term of such lease.
Payment of such commissions would be one-half upon execution and one-half upon
occupancy.

2. Renewals: The renewal commissions will be Two and One-Fourth percent
(2 1/4%) of the total gross rents to be charged by Owner. These renewals will
only be paid provided that Manager is still contracted to perform the leasing
and management duties of the office building at the time of occurrence or by
other agreement with the Owner. Payment of such commissions would be in full
upon execution of the lease renewal.

APPROVED: DATE: September 27, 1994

OWNER: Central Life Assurance Company MANAGER: CPI Resource Group
------------------------------ ------------------
By: /s/ Roger W. Langpaul By: /s/ Thomas Kimsey
---------------------------------- -------------------------
Roger W. Langpaul Thomas Kimsey

<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: MESA COMMERCE CENTER

Recommended Wage or Fidelity Bond or
No. With Salary (Net of Benefits) Employee Dishonesty
Employee Title Title Allocated to Building Coverage (Y or N)
- -------------- -------- ----------------------- -------------------

ON SITE:
- -------

Property Manager 1 $40,000 Y

Maintenance Engineer 1 $18,000 Y

Maintenance N/A

NOTE 1: Each of the above employees will be billed to the properties as full-
time employees or pro-rata.

OFF-SITE:
- --------

Director of Engineering/ $20.00
Maintenance (FLAT RATE)

<PAGE>

A PROPOSAL FOR

MANAGEMENT SERVICES

Lake Worth Center
Lake Worth, Texas

PREPARED FOR:

American Mutual Life Insurance Company
418 Sixth Avenue
Des Moines, IA 50309

PREPARED BY:

CPI Resource Group
6000 Westown Parkway, Suite 200W
West Des Moines, Iowa 50266
<PAGE>

TABLE OF CONTENTS

PAGE
----

Management Contract 1

Introductory Provisions 1

Article I - Appointment
Section 1.01. Exclusive Agency - Appointment 1
Section 1.02. Term 1
Section 1.03. Acceptance of Appointment 1

Article II - The Owner's Representation 2

Article V - Termination
Section 5.01. Termination 5
Section 5.02. Damage, Destruction, Sale or 5
Condemnation
Section 5.03. Bankruptcy, Reorganization and 5
Insolvency
Section 5.04. Effect of Termination and 5
Termination Fund
<PAGE>

TABLE OF CONTENTS
(CONT.)
PAGE
----

Exhibit A 11

Schedule A 12

Schedule B 13

<PAGE>

MANAGEMENT CONTRACT

This Management Contract (the "Contract") is entered into as of the
FIRST day of NOVEMBER 1994, by and between AMERICAN MUTUAL LIFE INSURANCE
COMPANY (the "Owner") and CPI RESOURCE GROUP (the "Manager");

INTRODUCTORY PROVISIONS:

The following provisions are a part and form the basis of this Contract:

A. The Manager desires to manage, rent, lease and operate that certain
office building project commonly known as LAKE WORTH, located in LAKE WORTH,
TEXAS, such project being more fully described on EXHIBIT "A" which is attached
hereto and incorporated herein by reference for all purposes (the "Property");
and

B. The Owner desires to engage and employ the Manager to rent, operate
and manage the Property:

ARTICLE I

APPOINTMENT

SECTION 1.02. TERM. The term of the appointment of the Manager shall
commence as of NOVEMBER 1, 1994 and shall continue through and including OCTOBER
31, 1995 (the "Term"), unless earlier terminated as hereinafter provided.

SECTION 1.03. ACCEPTANCE OF APPOINTMENT. The Manager accepts the
engagement, appointment and employment by the Owner hereunder to the extent, for
the period, and upon the terms herein provided.

1
<PAGE>

ARTICLE II

THE OWNER'S REPRESENTATION

The Owner hereby represents, undertakes, warrants and agrees:

(b) that the Owner is duly organized, existing and in good standing
under the laws of the State of Iowa and is duly authorized and qualified to do
business in the State of Iowa;

ARTICLE III

THE MANAGER'S AUTHORITY

SECTION 3.02. REPAIRS AND MAINTENANCE. The Manager shall have the
specific authority on behalf of and at the expense of the Owner to (a) make or
cause to be made all ordinary repairs and replacements necessary to preserve the
Property in its present condition; (b) make all alterations required to comply
with lease requirements; (c) negotiate contracts for non-recurring items not
exceeding TWO THOUSAND Dollars ($2,000.00) without the prior written approval of
the Owner; provided, however, monthly or recurring operating charges and
emergency repairs may be incurred in excess of such maximum, if in the opinion
of the Manager, such repairs are necessary to protect the Property from damage
or to maintain services to the tenants as called for in their leases; (d) enter
into contracts for all necessary repairs, maintenance, minor alterations and
utility services; and (e) place orders on behalf of the Owner for such
equipment, tools, appliances, materials and supplies as are reasonable and
necessary to properly maintain the Property. Manager agrees to annually furnish
the Owner an up-to-date inventory list of equipment, tools and appliances owned
by the Owner and used in the operation of the Property.

2
<PAGE>

(1) to the Manager for monies advanced by the Manager on behalf of
the Owner (provided, however that the Manager shall in no event have any
obligation to advance any monies on behalf of the Owner);

(2) amounts otherwise due and payable as operating expenses of the
Property authorized to be incurred under the other terms of this Contract,
including the Manager's compensation;

(3) to the Owner the Net Proceeds (as defined in SECTION 7.02), on or
before the TENTH (10TH) day of the following month and after establishing a
cash reserve in the amount of FIVE THOUSAND Dollars ($5,000.00) to pay other
costs and expenses incidental to the operation of the Property, including non-
recurring emergency repairs. Sufficient funds for capital expenditures

3
<PAGE>

which shall become due and payable within the succeeding calendar month and for
which the cash to make such payments may not be generated by operations during
such period shall be retained in addition to the cash reserve established above.

ARTICLE IV

DUTIES AND OBLIGATIONS OF THE MANAGER

SECTION 4.04. COLLECTIONS AND BANK ACCOUNTS. The Manager shall deposit
all sums collected pursuant to this Contract (less any sums properly deducted as
provided herein) in a trust account in a national or state bank mutually
acceptable to the Owner and the Manager. Such accounts shall be styled: "CPI
RESOURCE GROUP - As Agent For AMERICAN MUTUAL LIFE INSURANCE COMPANY" and shall
be maintained at all times separate from the Manager's corporate accounts. The
Manager shall endeavor to collect on behalf of the Owner and at the Owner's
expense, all rents and other charges for the use and occupancy of the Property.

SECTION 4.06. MONTHLY REPORTS. The Manager shall on the same day as
stipulated in SECTION 3.07 deliver a written report of the previous month's
operations to the Owner, which report shall include a complete listing of all
receipts and disbursements and the amount, if any,

4
<PAGE>

payable by the Owner to restore the balance in the account as provided in
SECTION 4.05 hereof.

ARTICLE V

TERMINATION

SECTION 5.02. DAMAGE, DESTRUCTION, SALE OR CONDEMNATION. In the event of
damage to or destruction of the Property so that the same shall become
untenantable, or in the event of taking of a substantial portion of the
Property, by condemnation or threat thereof, or similar proceeding, or in the
event of sale of the Property; then, in any such event this Contract may be
terminated by the Owner which termination shall be effective thirty (30) days
after receipt by Manager of written notice from the Owner.

5
<PAGE>

collections and net proceeds as called for herein on the effective date of
termination and the Owner agrees to insure that all bills, fees (inclusive of
Manager's fees and commissions) and charges attributable to the Property have
been fully paid. Upon the effective date of termination, the Manager shall
deliver to the Owner a final report.

ARTICLE VI

COMPENSATION OF THE MANAGER

SECTION 6.01. MANAGEMENT. The Owner agrees to pay the Manager for its
services as Manager under this Contract, a management fee ("Management Fee")
equal to FIVE percent (5%) of Gross Receipts (as defined in SECTION 7.01), but
not less than TWO THOUSAND Dollars ($2,000.00) for each month of the term of
this Contract. The Owner shall pay to Manager such other fees relating to
management and construction administration as are set forth in SCHEDULE A.

SECTION 6.04. RENEWAL AND EXPANSION OF LEASES BY MANAGER. See Schedule A
for Compensation.

ARTICLE VII

DEFINITIONS

6
<PAGE>

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. LEASING POLICIES. The Manager shall implement all the
owner's leasing policies in relation to the Property and the Owner expressly
agrees to the following:

(a) An adequate supply of forms of lease agreements and all
attachments and addenda necessary thereto will be at all times provided to the
Manager by the Owner;

7
<PAGE>

SECTION 8.05. THE OWNER'S REPRESENTATIVE. In connection with decisions
required by the Owner under this Contract, the Owner acknowledges that immediate
decisions will be necessary and accordingly designates METZ METCALF, as its
representative, who shall be readily available to make such decisions. The
Owner may change such designated representative by written notice to the
Manager.

8
<PAGE>

have against the other party. The Owner and Manager agree immediately to give
to their respective insurer written notification of the terms of the mutual
waivers contained in this Section, and to have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverages
by reason of said waivers.

OWNER: AMERICAN MUTUAL LIFE INSURANCE COMPANY
418 SIXTH AVENUE
DES MOINES, IOWA 50309

ATTN: METZ METCALF
INVESTMENT OFFICER

MANAGER: CPI RESOURCE GROUP
6000 WESTOWN PARKWAY, SUITE 200W
WEST DES MOINES, IA 50266

ATTN: ROGER W. LANGPAUL
SENIOR VICE PRESIDENT

Either party may at any time change the address for notices to such party
by the delivery or mailing, as aforesaid, of a notice stating the change and
setting forth the changed address.

SECTION 8.11. GOVERNING LAW. This Contract shall be deemed to have been
made and shall be construed and interpreted in accordance with the laws of the
State of Iowa.

SECTION 8.13. AGENT'S SIGN. The Owner hereby grants Agent the privilege
of displaying Agent's sign in and upon said premises announcing that said
premises is under Agent's management. Sign and design shall be subject to the
Owner's approval.

9
<PAGE>

SECTION 8.14. OTHER PROVISIONS.

Schedule A - Management Fees

EXECUTED on the 23 day of November, 1994.

OWNER:

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ Robert C. Fay
----------------------------------------
Robert C. Fay
Vice Pres. Investments

MANAGER:

CPI RESOURCE GROUP

By: /s/ Roger W. Langpaul
---------------------------------------
Roger W. Langpaul
Senior Vice President

10
<PAGE>

EXHIBIT "A"

TO MANAGEMENT

BETWEEN

American Mutual Life Insurance Company

AND

CPI Resource Group

PROPERTY DESCRIPTION

Locally known as 6300 Jacksboro Highway, Lake Worth, Texas

11
<PAGE>

SCHEDULE A

1. For the management services provided for the LAKE WORTH CENTER, Manager
will be paid a management fee equal to FIVE percent (5%) of the gross receipts,
but not less than TWO THOUSAND Dollars ($2,000.00) for each month of the term of
the contract.

2. A construction and administration fee of FIVE percent (5%) of any
construction or repair job will be billed to the Owner if such service is
requested by the Owner of the Manager.

3. All personnel directly involved with the LAKE WORTH CENTER shall be charged
to the property on a pro-rata or hourly basis as provided in SECTION 3.05 and as
outlined in Schedule "B".

LEASING COMMISSIONS AND FEES:

1. NEW AND EXPANSIONS: For each lease executed by the Owner, Owner would pay
to Manager a leasing commission in relation to any new lease or expansion
lease of all or a portion of the property equal to FOUR AND ONE-HALF percent (4
1/2%) of the total gross rents to be charged by Owner over the term of such
lease. Payment of such commissions would be one-half upon execution and one-
half upon occupancy.

2. RENEWALS: The renewal commissions will be TWO AND ONE-FOURTH percent (2
1/4%) of the total gross rents to be charged by Owner. These renewals will only
be paid provided that Manager is still contracted to perform the leasing and
management duties of the office building at the time of occurrence or by other
agreement with the Owner. Payment of such commissions would be in full upon
execution of the lease renewal.

- -------------------------------------------------------------------------------

APPROVED: DATE: 11-4-94
----------------------------------------

Owner: AMERICAN MUTUAL LIFE INSURANCE CO. Manager: CPI RESOURCE GROUP

By: /s/ Robert C. Fay By: /s/ Roger W. Langpaul
-------------------------------------------- ----------------------
Robert C. Fay Roger W. Langpaul
Vice Pres. Investments Senior Vice President

12
<PAGE>

SCHEDULE B

REIMBURSABLE EMPLOYEES

Property: LAKE WORTH CENTER

Recommended Fidelity Bond
Wage or Salary or Employee
(Net of Benefits) Dishonesty
No. With Allocated to Coverage
Employee Title Title Building (Y OR N)
- -------------- -------- -------------- ----------

ON-SITE:
- --------

Property Manager 1 $38,000 Y
-------

Maintenance Engineer 1 $27,000 Y
-------

Maintenance N/A Y
----

NOTE 1: Each of the above employees will be billed to the properties as full-
time employees or pro-rata.

OFF-SITE:
- ---------
Director of Engineering/ $20.00 Y
Maintenance ----------
(Flat Rate)

<PAGE>

EXHIBIT 10.26

LEASE-BUSINESS PROPERTY - SHORT FORM

THIS AGREEMENT, made and entered into on this 1st day of December, 1995, by and
between AMERICAN MUTUAL LIFE INSURANCE COMPANY ("Landlord"), whose address, for
the purpose of this lease, is: 611 5th Avenue, Des Moines, Iowa 50309 and
AMERUS LEASING ("Tenant"), whose address for the purpose of this lease is: 611
5th Avenue, Des Moines, Iowa 50309.

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to Tenant the following real estate,
situated in Polk County, Iowa:

611 5th Avenue
2nd Floor American Mutual Life Insurance Company Building
Des Moines, Iowa 50309

The term of the lease is for five (5) years commencing December 1, 1995.

The rental rate is $13.50 per square foot. The subject premises is
9,137 square feet.

together with all improvements thereon, and all rights, easements and
appurtenances thereto belonging, for a term beginning on the 1st day of
December, 1995, upon the condition that Tenant performs as provided in this
lease.

2. RENT. Tenant agrees to pay Landlord as rent $10,315.00 per month, in
advance commencing on the 1st day of December, 1995 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

3. POSSESSION. Tenant shall be entitled to possession on the first day of
the lease term, and shall yield possession to Landlord at the termination of
this lease. SHOULD LANDLORD BE UNABLE TO GIVE POSSESSION ON SAID DATE,
TENANT'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT.

4. USE. Tenant shall use the premises only for business purposes.

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof) (exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) (sidewalks) (exterior decorating)___________________________
_____________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs or replacements unless Landlord fails to do so within a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe, serviceable,
clean and presentable condition, and except for the repairs and replacements
provided to be made by Landlord in subparagraph (b) above, shall make all
repairs, replacements and improvements to the premises, INCLUDING ALL CHANGES,
ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED GOVERNMENT
AUTHORITY DIRECTLY RELATED TO TENANTS USE OF THE PREMISES. Tenant shall make no
structural changes or alterations without the prior written consent of Landlord.
Unless otherwise provided, and if the premises include the ground floor, Tenant
agrees to remove all snow and ice and other obstructions from the sidewalk on or
abutting the premises.

6. UTILITIES AND SERVICES. Tenant shall pay for all utilities and
services which may be used on the premises, except the following to be
furnished by Landlord: Lessor agrees to provide refrigerated air
conditioning, heat, water and electricity for lighting and normal office
usage. Landlord shall not be liable for damages for failure to perform as
herein provided, or for any stoppage for needed repairs or for improvements
or arising from causes beyond the control of Landlord, provided Landlord uses
reasonable diligence to resume such services.

7. SURRENDER. Upon the termination of this lease, Tenant will surrender
the premises to Landlord in good and clean condition, except for ordinary wear
and tear or damage without fault or liability of Tenant. Continued possession,
beyond the term of this Lease and the acceptance of rent by Landlord shall
constitute a month-to-month extension of this lease.

8. ASSIGNMENT AND SUBLETTING. No assignment or subletting, either
voluntary or by operation of law, shall be effective without the prior written
consent of Landlord, which consent shall not unreasonably be withheld.

<PAGE>

9. PROPERTY INSURANCE. (a) Tenant will not do or omit the doing of any
act which would invalidate any insurance, or increase the insurance rates in
force on the premises.
(b) To the extent of all insurance collectible for damage to property, and
to the extent permitted by their respective policies of fire and extended
coverage insurance, each party hereby waives rights of subrogation against the
other, regardless of fault.

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 Million
for any person injured, $2 Million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

11. DAMAGE. In the event of damage to the premises, so that Tenant is
unable to conduct business on the premises, this lease may be terminated at the
option of either party. Such termination shall be effected by notice of one
party to the other within twenty ____ days after such notice; and both parties
shall thereafter be released from all future obligations hereunder.

12. MECHANICS' LIENS. Neither Tenant, nor anyone claiming by, through, or
under Tenant, shall have the right to file any mechanic's lien against the
premises. Tenant shall give notice in advance to all contractors and
subcontractors who may furnish, or agree to furnish, any material, service or
labor for any improvement on the premises.

13. TERMINATION UPON DEFAULT OF TENANT. Upon default in payment of rent,
abandonment of the premises, or upon any other default by Tenant of the terms of
this lease, this lease may, at the option of Landlord, and without prejudice to
any other rights or remedies afforded Landlord by law, be cancelled and
forfeited; PROVIDED, HOWEVER, before any such cancellation and forfeiture,
Landlord shall give Tenant notice specifying the default, or defaults, and
stating that this Lease will be cancelled and forfeited ten ____ days after
notice, unless such default or defaults are remedied within such period.

14. SIGNS. Landlord, during the last ninety ____ days of this lease,
shall have the right to maintain on the premises either or both a "For Rent"
or "For Sale" sign. Tenant will permit prospective tenants or buyers to
enter and examine the premises.

15. NOTICES AND DEMANDS. All notices shall be given to the parties
hereto at the addresses designated unless either party notifies the other, in
writing, of a different address. Without prejudice to any other method of
notifying a party in writing or making a demand or other communication, such
notice shall be considered given under the terms of this lease when it is
deposited in the U.S. Mail, registered or certified, properly addressed,
return receipt requested, and postage prepaid.

16. PROVISIONS BINDING. Each and every covenant and agreement herein
contained shall extend to and be binding upon the respective successors, heirs,
administrators, executors and assigns of the parties hereto.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS LEASING
- -------------------------------------- -----------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ THOMAS R. BERNAU, PRES.
- -------------------------------------- -----------------------------------
DIANE M. DAVIDSON

<PAGE>

Exhibit 10.27

LEASE-BUSINESS PROPERTY - SHORT FORM

THIS AGREEMENT, made and entered into on this 1st day of January, 1996, by and
between American Mutual Life Insurance Company ("Landlord"), whose address, for
the purpose of this lease, is: 611 5th Avenue, Des Moines, Iowa 50309 and
AMERUS BANK ("Tenant"), whose address for the purpose of this lease is: 611 5th
Avenue, Des Moines, Iowa 50309.

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to tenant the following real estate,
situated in Polk County, Iowa:

611 5TH AVENUE
2nd Floor American Mutual Life Insurance Company Building
Des Moines, Iowa 50309

The lease term is for five (5) years commencing January 1, 1996. The
rental rate is $13.50 per square foot. The subject premises is 10,263
square feet.

together with all improvements thereon, and all rights, easements and
appurtenances thereto belonging, for a term beginning on the 1st day of January,
1996, upon the condition that Tenant performs as provided in this lease.

2. RENT. Tenant agrees to pay Landlord as rent $11,587.00 per month, in
advance commencing on the 1st day of January, 1996 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

3. POSSESSION. Tenant shall be entitled to possession on the first day of
the lease term, and shall yield possession to Landlord at the termination of
this lease. SHOULD LANDLORD BE UNABLE TO GIVE POSSESSION ON SAID DATE,
TENANTS'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT.

4. USE, Tenant shall use the premises only for business purposes.

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof)(exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) sidewalks) (exterior decorating)____________________________
______________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs of replacements unless Landlord fails to do no with a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe, serviceable,
clean and presentable condition, and except for the repairs and replacements
provided to be made by Landlord in subparagraph (b) above, shall make all
repairs, replacements and improvements to the premises, INCLUDING ALL CHANGES,
ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED GOVERNMENT
AUTHORITY DIRECTLY RELATED TO TENANTS USE OF THE PREMISES. Tenant shall make no
structural changes or alterations without the prior written consent of Landlord.
Unless otherwise provided, and if the premises include the ground floor, Tenant
agrees to remove all snow and ice and other obstructions from the sidewalk on or
abutting the premises.

6. UTILITIES AND SERVICES. Tenant shall pay for all utilities and
services which may be used on the premises, except the following to furnished by
Landlord: Lessor agrees to provide refrigerated air conditioning, heat, water
and electricity for lighting and normal office usage. Landlord shall not be
liable for damages for failure to perform as herein provided, or for any
stoppage for needed repairs or for improvements or arising from causes beyond
the control of Landlord, provided Landlord uses reasonable diligence to resume
such services.

<PAGE>

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 million for
any person injured, $2 million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

11. DAMAGE. In the event of damage to the premises, so that Tenant is
unable to conduct business on the premises, this lease may be terminated at the
option of either party, Such termination shall be effected by notice of one
party to the other within twenty ____ days after such notice; and both parties
shall thereafter be released from all future obligations hereunder.

13. TERMINATION UPON DEFAULT OF TENANT. Upon default in payment of rent,
abandonment of the premises, or upon any other default by Tenant of the terms of
this lease, this lease may, at the option of Landlord, and without prejudice to
any other rights or remedies afforded Landlord by law, be canceled and
forfeited; PROVIDED, HOWEVER, before any such cancellation and forfeiture,
Landlord shall give Tenant notice specifying the default, or defaults, and
stating that this Lease will be canceled and forfeited ten ____ days after
notice, unless such default or defaults are remedied within such period.

14. SIGNS. Landlord during the last ninety ____ days of this lease, shall
have the right to maintain on the premises either or both a "For Rent" or "For
Sale" sign. Tenant will permit prospective tenants or buyers to enter and
examine the premises.

15. NOTICES AND DEMANDS. All notices shall be given to the parties hereto
at the addresses designated unless either party notifies the other in writing of
a different address. Without prejudice to any other method of notifying a party
in writing or making a demand or other communication, such notice shall be
considered given under the terms of this lease when it is deposited in the U.S.
Mail, registered or certified, properly addressed, return receipt requested, and
postage prepaid.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS BANK
- -------------------------------------- -----------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ D. RICHARD TEN BRAAK
- -------------------------------------- -----------------------------------
Diane M. Davidson, Asst. Secretary

<PAGE>

EXHIBIT 10.28

LEASE-BUSINESS PROPERTY - SHORT FORM

THIS AGREEMENT, made and entered into on this 1st day of January, 1996, by and
between AMERICAN MUTUAL LIFE INSURANCE COMPANY ("Landlord"), whose address, for
the purpose of this lease, is: 611 5th Avenue, Des Moines, Iowa 50309 and
AMERUS BANK ("Tenant"), whose address for the purpose of this lease is: 418 6th
Avenue, Des Moines, Iowa 50309.

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to Tenant the following real estate,
situated in Polk County, Iowa:

418 6th Avenue
9th Floor Liberty Building
Des Moines, Iowa 50309

The term of the lease is for five (5) years commencing January 1, 1996.

The rental rate is $13.50 per square foot with the subject premises
being 6,256 square feet.

2. RENT. Tenant agrees to pay Landlord as rent $7,038.00 per month, in
advance commencing on the 1st day of April, 1996 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

4. USE. Tenant shall use the premises only for business purposes

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof) (exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) (sidewalks) (exterior decorating)____________________________
______________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs or replacements unless Landlord fails to do so within a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe,
serviceable, clean and presentable condition, and except for the repairs and
replacements provided to be made by Landlord in subparagraph (b) above, shall
make all repairs, replacements and improvements to the premises, INCLUDING
ALL CHANGES, ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED
GOVERNMENT AUTHORITY DIRECTLY RELATED TO TENANT'S USE OF THE PREMISES.
Tenant shall make no structural changes or alterations without the prior
written consent of Landlord. Unless otherwise provided, and if the premises
include the ground floor, Tenant agrees to remove all snow and ice and other
obstructions from the sidewalk on or abutting the premises.

<PAGE>

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 Million for
any person injured, $2 Million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS BANK
- -------------------------------------- -----------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ D. RICHARD TEN BRAAK
- -------------------------------------- -----------------------------------
DIANE M. DAVIDSON, Asst. Secretary

<PAGE>

EXHIBIT 10.29

LEASE-BUSINESS PROPERTY - SHORT FORM

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to Tenant the following real estate,
situated in Polk County, Iowa:

418 6th Avenue
10th Floor Liberty Building
Des Moines, Iowa 50309

The lease term is for five (5) years commencing January 1, 1996.

The rental rate is $13.50 per square foot with the subject premises
being 10,850 square feet.

2. RENT. Tenant agrees to pay Landlord as rent $12,206.00 per month, in
advance commencing on the 1st day of April, 1996 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

4. USE. Tenant shall use the premises only for business purposes

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof) (exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) (sidewalks) (exterior decorating)____________________________
______________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs or replacements unless Landlord fails to do so within a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe, serviceable,
clean and presentable condition, and except for the repairs and replacements
provided to be made by Landlord in subparagraph (b) above, shall make all
repairs, replacements and improvements to the premises, INCLUDING ALL CHANGES,
ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED GOVERNMENT
AUTHORITY DIRECTLY RELATED TO TENANT'S USE OF THE PREMISES. Tenant shall make
no structural changes or alterations without the prior written consent of
Landlord. Unless otherwise provided, and if the premises include the ground
floor, Tenant agrees to remove all snow and ice and other obstructions from the
sidewalk on or abutting the premises.

<PAGE>

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 Million for
any person injured, $2 Million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS BANK
- -------------------------------------- -----------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ D. RICHARD TEN BRAAK
- -------------------------------------- -----------------------------------
DIANE M. DAVIDSON, Asst. Secretary

<PAGE>

Exhibit 10.30

LEASE-BUSINESS PROPERTY - SHORT FORM

THIS AGREEMENT, made and entered into on this 1st day of January, 1996, by and
between American Mutual Life Insurance Company ("Landlord"), whose address, for
the purpose of this lease, is: 611 5th Avenue, Des Moines, Iowa 50309 and
AMERUS GROUP ("Tenant"), whose address for the purpose of this lease is: 418 6th
Avenue, Des Moines, Iowa 50309.

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to tenant the following real estate,
situated in Polk County, Iowa:

418 6TH AVENUE
12th Floor Liberty Building
Des Moines, Iowa 50309

The term of the lease is five (5) years commencing January 1, 1996.

The rental rate is $13.50 per square foot with the subject premises
being 725 square feet.

2. RENT. Tenant agrees to pay Landlord as rent $930.00 per month, in
advance commencing on the 1st day of January, 1996 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

3. POSSESSION. Tenant shall be entitled to possession on the first day of
the lease term, and shall yield possession to Landlord at the termination of
this lease. SHOULD LANDLORD BE UNABLE TO GIVE POSSESSION ON SAID DATE,
TENANTS'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT.

4. USE, Tenant shall use the premises only for _________________________
______________________________________________________________________________

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof)(exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) sidewalks) (exterior decorating)____________________________
______________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs of replacements unless Landlord fails to do no with a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe, serviceable,
clean and presentable condition, and except for the repairs and replacements
provided to be made by Landlord in subparagraph (b) above, shall make all
repairs, replacements and improvements to the premises, INCLUDING ALL CHANGES,
ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED GOVERNMENT
AUTHORITY DIRECTLY RELATED TO TENANTS USE OF THE PREMISES. Tenant shall make no
structural changes or alterations without the prior written consent of Landlord.
Unless otherwise provided, and if the premises include the ground floor, Tenant
agrees to remove all snow and ice and other obstructions from the sidewalk on or
abutting the premises.

<PAGE>

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 million for
any person injured, $2 million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

13. TERMINATION UPON DEFAULT OF TENANT. Upon default in payment of rent,
abandonment of the premises, or upon any other default by Tenant of the terms of
this lease, this lease may, at the option of Landlord, and without prejudice to
any other rights or remedies afforded Landlord by law, be canceled and
forfeited; PROVIDED, HOWEVER, before any such cancellation and forfeiture,
Landlord shall give Tenant notice specifying the default, or defaults, and
stating that this Lease will be canceled and forfeited ten ____ days after
notice, unless such default or defaults are remedied within such period.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS GROUP
- -------------------------------------- ------------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ D. RICHARD TEN BRAAK
- -------------------------------------- ------------------------------------
DIANE M. DAVIDSON, Asst. Secretary

<PAGE>

Exhibit 10.31

LEASE-BUSINESS PROPERTY - SHORT FORM

THIS AGREEMENT, made and entered into on this 1st day of January, 1996, by and
between American Mutual Life Insurance Company ("Landlord"), whose address, for
the purpose of this lease, is: 611 5th Avenue, Des Moines, Iowa 50309 and
AMERUS GROUP ("Tenant"), whose address for the purpose of this lease is: 418 6th
Avenue, Des Moines, Iowa 50309.

The parties agree as follows:

1. PREMISES AND TERM. Landlord leases to tenant the following real estate,
situated in Polk County, Iowa:

418 6TH AVENUE
9th Floor Liberty Building
Des Moines, Iowa 50309

The term of the lease is five (5) years commencing January 1, 1996.

The rental rate is $13.50 per square foot with the subject premises
being 4,594 square feet.

2. RENT. Tenant agrees to pay Landlord as rent $5,168.00 per month, in
advance commencing on the 1st day of January, 1996 and on the 1st day of each
month thereafter, during the term of this lease. Rent for any partial month
shall be prorated as additional rent. Tenant shall also pay:
[blank]

All sums shall be paid at the address of Landlord, or at such other place
as Landlord may designate in writing. Delinquent payments shall draw interest
at 12% per annum.

3. POSSESSION. Tenant shall be entitled to possession on the first day of
the lease term, and shall yield possession to Landlord at the termination of
this lease. SHOULD LANDLORD BE UNABLE TO GIVE POSSESSION ON SAID DATE,
TENANTS'S ONLY DAMAGES SHALL BE A PRO RATA ABATEMENT OF RENT.

4. USE, Tenant shall use the premises only for business purposes.

5. CARE AND MAINTENANCE. (a) Tenant takes the premises as is, except as
herein provided.
(b) Landlord shall keep the following in good repair: (STRIKE THOSE NOT
APPLICABLE) (roof)(exterior walls) (foundation) (sewer) (plumbing) (heating)
(wiring) (air conditioning) (plate glass) (windows and window glass) (parking
area) (driveways) sidewalks) (exterior decorating)____________________________
______________________________________________________________________________,
except when the same are occasioned by the misuse or negligence of Tenant, its
agents, employees or invitees. Landlord shall not be liable for failure to make
any repairs of replacements unless Landlord fails to do no with a reasonable
time after written notice from Tenant.
(c) Tenant shall maintain the premises in a reasonable safe, serviceable,
clean and presentable condition, and except for the repairs and replacements
provided to be made by Landlord in subparagraph (b) above, shall make all
repairs, replacements and improvements to the premises, INCLUDING ALL CHANGES,
ALTERATIONS OR ADDITIONS ORDERED BY ANY LAWFULLY CONSTITUTED GOVERNMENT
AUTHORITY DIRECTLY RELATED TO TENANTS USE OF THE PREMISES. Tenant shall make no
structural changes or alterations without the prior written consent of Landlord.
Unless otherwise provided, and if the premises include the ground floor, Tenant
agrees to remove all snow and ice and other obstructions from the sidewalk on or
abutting the premises.

<PAGE>

10. INDEMNITY AND LIABILITY INSURANCE. Except for any negligence of
Landlord, Tenant will protect, defend, and indemnify Landlord from and against
any and all loss, costs, damage and expenses occasioned by, or arising out of,
any accident or other occurrence causing or inflicting injury or damage to any
person or property, happening or done in, upon or about the premises, or due
directly or indirectly to the tenancy, use or occupancy thereof, or any part
thereof by Tenant or any person claiming through or under Tenant. Tenant will
procure and maintain liability insurance in amounts not less than $1 million for
any person injured, $2 million for any one accident, and with the limits of
$100,000.00 for property damage, which names Landlord as an insured.

13. TERMINATION UPON DEFAULT OF TENANT. Upon default in payment of rent,
abandonment of the premises, or upon any other default by Tenant of the terms of
this lease, this lease may, at the option of Landlord, and without prejudice to
any other rights or remedies afforded Landlord by law, be canceled and
forfeited; PROVIDED, HOWEVER, before any such cancellation and forfeiture,
Landlord shall give Tenant notice specifying the default, or defaults, and
stating that this Lease will be canceled and forfeited ten ____ days after
notice, unless such default or defaults are remedied within such period.

17. ADDITIONAL PROVISIONS.

AMERICAN MUTUAL LIFE INSURANCE COMPANY AMERUS GROUP
- -------------------------------------- ------------------------------------
LANDLORD TENANT

/s/ DIANE M. DAVIDSON /s/ D. RICHARD TEN BRAAK
- -------------------------------------- ------------------------------------
DIANE M. DAVIDSON, Asst. Secretary

<PAGE>

INDEMNIFICATION AGREEMENT

This Agreement is entered into as of this ____ day of September, 1996
by and between AmerUs Life Holdings, Inc., an Iowa corporation (the
"Corporation"), and _______________________, ("Indemnitee").

WHEREAS, competent persons are becoming more reluctant to serve
corporations as officers, directors or employees unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation; and

WHEREAS, the current impracticability of obtaining adequate insurance
and the uncertainties relating to indemnification have increased the difficulty
of attracting and retaining such persons; and

WHEREAS, the Board of Directors of the Corporation has determined that
these constraints on its ability to attract and retain such persons is
detrimental to the best interests of the Corporation and its shareholders and
that the Corporation should act to assure such persons that there will be
increased certainty of such protection in the future; and

WHEREAS, Section 490.302, 490.856 and 490.858 of the Iowa Business
Corporation Act contemplates that directors, officers, employees and agents can
be granted indemnification rights pursuant to an agreement between such person
and the Corporation in addition to those provided by law; and

WHEREAS, it is reasonable, prudent and necessary for the Corporation
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Corporation free from undue concern for litigation claims for damages arising
out of or related to the performance of such service; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Corporation or a subsidiary on the
condition that Indemnitee be indemnified to the fullest extent permitted by
applicable law;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee agree as follows:

<PAGE>

ARTICLE I

DEFINITIONS

For purposes of this Agreement, the following terms shall have the
meaning given here:

1.1. "Corporate Status" describes the status of a person who is, was
or has agreed to serve as, a director, officer, employee, agent or fiduciary of
the Corporation, and the status of a person who is or was serving at the request
of the Corporation as a director, officer, partner, trustee, employee or agent
of another foreign or domestic corporation, limited liability company, business
trust, partnership, joint venture, trust, other enterprise or employee benefit
plan.

1.2. "D&O Insurance" means any valid directors' and officers'
liability insurance policy maintained by the Corporation for the benefit of the
Indemnitee, if any.

1.3. "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding or subject to an asserted claim in
respect of which indemnification is sought by Indemnitee.

1.4. "Excluded Claim" means any payment for Losses or Expenses in
connection with any Proceeding: (i) based upon or attributable to Indemnitee
gaining in fact any personal profit advantage to which Indemnitee is not
entitled; (ii) for the return by Indemnitee of any remuneration paid to
Indemnitee which is illegal; (iii) resulting from Indemnitee's knowingly
fraudulent, dishonest or willful misconduct; (iv) for an accounting of profits
in fact made from the purchase or sale by Indemnitee of securities of the
Corporation within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, or similar provisions of state law; (v) the payment by which
of the Corporation under this Agreement is not permitted by Section 490.858 of
the Iowa Business Corporation Act; or (vi) the payment of which by the
Corporation under this Agreement is not permitted by applicable law.

1.5. "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being or preparing to be a witness in
a Proceeding.

1.6. "Good faith" shall mean Indemnitee having acted in good faith
and in a manner Indemnitee reasonably believed to be in and not opposed to the
best interests of the Corporation and, with respect to any criminal Proceeding,
having had no reasonable cause to believe Indemnitee's conduct was unlawful.
With respect to an employee benefit plan, "Good Faith" shall mean Indemnitee
having acted for a purpose the Indemnitee reasonably believed to be in the
interests of the participants in and beneficiaries of such plan.

1.7. "Losses" means any amounts or sums which Indemnitee is legally
obligated to pay as a result of a Proceeding including, without limitation,
damages, judgments and sums of amounts paid in settlement of a Proceeding, and
any fine, penalty or, with respect to an employee benefit plan, any excise tax
or penalties assessed with respect thereto.

-2-

<PAGE>

1.8. "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
actual, threatened or completed proceeding whether civil, criminal,
administrative or investigative, whether formal or informal, or any appeal
therefrom, in which Indemnitee was or is a party or threatened to be made a
party or subpoenaed as a witness by reason of his or her Corporate Status or by
reason of anything allegedly done or not done by him or her in any such
capacity, other than a proceeding initiated by the Indemnitee without the prior
written consent of the Corporation.

ARTICLE II

TERM OF AGREEMENT

This Agreement shall continue until and terminate upon the later of:
(i) the expiration of all applicable statutes of limitations; or (ii) the final
termination of all pending Proceedings in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee regarding the interpretation or enforcement
of this Agreement.

ARTICLE III

INDEMNIFICATION PROCEDURES

Section 3.1. NOTIFICATION. Promptly after receipt by Indemnitee of
notice of any Proceeding, Indemnitee shall, if indemnification with respect
thereto may be sought from the Corporation under this Agreement, notify the
Corporation of the commencement thereof; PROVIDED, HOWEVER, that the failure to
give such notice promptly shall not affect or limit the Corporation's
obligations with respect to the matters described in the notice of such
Proceeding, except to the extent that the Corporation is prejudiced thereby.
Indemnitee agrees further not to make any admission or effect any settlement
with respect to such Proceeding without the written consent of the Corporation,
except any Proceeding with respect to which the Indemnitee has undertaken the
defense in accordance with the last sentence of Section 3.4.

Section 3.2. NOTICE TO D&O INSURER. If, at the time of the receipt
of such notice, the Corporation has D&O Insurance in effect, the Corporation
shall give prompt notice of the commencement of a Proceeding covered by the D&O
Insurance to the insurers in accordance with the procedures set forth in the
respective policies. The Corporation shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of Indemnitee, all
Losses and Expenses payable as a result of such Proceeding in accordance with
the Corporation's written policies and procedures.

Section 3.3. PAYMENT OF EXPENSES. To the extent the Corporation
does not, at the time of the Proceeding, have applicable D&O Insurance, or if a
determination is made that any Expenses arising out of such Proceeding will not
be payable under the D&O Insurance then in effect, the Corporation shall be
obligated to pay the Expenses incurred in connection with any Proceeding in
advance of the final disposition thereof and the Corporation, if appropriate,
shall be entitled to assume the defense of such Proceeding, with counsel
reasonably satisfactory to Indemnitee, upon the delivery to Indemnitee of
written notice of its election so to do. After delivery of such notice, the
Corporation will not be liable to Indemnitee under this Agreement for any legal
or other Expenses subsequently incurred by Indemnitee in connection with such
defense other than

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<PAGE>

reasonable Expenses of investigation; PROVIDED that Indemnitee shall have the
right to employ its counsel in such Proceeding but the fees and expenses of such
counsel incurred after delivery of notice from the Corporation of its assumption
of such defense shall be at the Indemnitee's expense; PROVIDED FURTHER that if:
(i) authorized in writing by the Corporation, (ii) counsel which has been
provided by the Corporation reasonably determines after its engagement that its
continued representation of Indemnitee would present it with a conflict of
interest, (iii) Indemnitee reasonably determines that there may be legal
defenses available to him or her which are different from or in addition to
those available to the Corporation, or (iv) the Corporation shall not, in fact,
have employed counsel to assume the defense of such action, the reasonable fees
and expenses of counsel shall be at the expense of the Corporation; PROVIDED
FURTHER, that the Corporation shall not in any event be liable for the fees and
expenses of more than one firm of attorneys in any jurisdiction representing
Indemnitee in any one action or group of related actions.

Section 3.4. TIME FOR PAYMENT. All payments on account of the
Corporation's indemnification obligations under this Agreement shall be made
within thirty (30) days of Indemnitee's written request therefor unless a
determination is made that the Proceeding giving rise to Indemnitee's request is
an Excluded Claim or otherwise not payable under this Agreement, PROVIDED THAT
all payments on account of the Corporation's obligation to pay Expenses under
Section 3.3 of this Agreement prior to the final disposition of any Proceeding
shall be made within 15 days of Indemnitee's written request therefor unless a
determination is made that such payment would constitute an "Excluded Claim" but
shall be subject to Section 3.5 of this Agreement. Indemnitee's requests for
the Corporation to pay Expenses hereunder shall be accompanied by appropriate
documentation evidencing the Expenses so incurred by Indemnitee. In the event
the Corporation takes the position that Indemnitee is not entitled to
indemnification in connection with any Proceeding, Indemnitee shall have the
right at his own expense to undertake defense of any such Proceeding, insofar as
such Proceeding involves the Indemnitee, by written notice given to the
Corporation within 10 days after the Corporation has notified Indemnitee in
writing of its contention that Indemnitee is not entitled to indemnification;
PROVIDED, HOWEVER, that the failure to give such notice within such 10-day
period shall not affect or limit the Corporation's obligations with respect to
any such Proceeding if such Proceeding is subsequently determined not to be an
Excluded Claim and that Indemnitee, therefor, is entitled to be indemnified
under the provisions of Article IV hereof, the Corporation shall promptly
indemnify Indemnitee.

Section 3.5. REIMBURSEMENT. Indemnitee hereby expressly undertakes
and agrees to reimburse the Corporation for all Losses and Expenses paid by the
Company in connection with any Proceeding against Indemnitee in the event and
only to the extent that a determination shall have been made by a court of
competent jurisdiction in a decision from which there is no further right to
appeal that Indemnitee is not entitled to be indemnified by the Corporation for
such Losses and Expenses because the Proceeding is an Excluded Claim or because
Indemnitee is otherwise not entitled to payment under this Agreement or
applicable law.

Section 3.6. SETTLEMENT. The Corporation shall have no obligation
to indemnify Indemnitee under this Agreement for any amounts paid in settlement
of any Proceeding effected without the Corporation's prior written consent. The
Corporation shall not settle any Proceeding in which it takes the position that
Indemnitee is not entitled to indemnification in connection with such settlement
without the written consent of Indemnitee, nor shall the Corporation settle any
Proceeding in any manner which would impose any fine, penalty or any obligation
on Indemnitee, without Indemnitee's written consent. Neither the Corporation
nor Indemnitee shall unreasonably withhold its consent to any proposed
settlement.

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<PAGE>

ARTICLE IV

INDEMNIFICATION

Section 4.1. IN GENERAL. The Corporation shall indemnify and
advance Expenses to Indemnitee in connection with any Proceeding as provided in
this Agreement and to the fullest extent permitted by applicable law in effect
on the date hereof and to such greater extent as applicable law may thereafter
from time to time permit; provided, however, that the Corporation shall not be
obligated to indemnify or advance Expenses relating to any claim, issue or
matter if the payment would be prohibited by Section 4.7 hereof.

Section 4.2. THIRD PARTY ACTIONS. If Indemnitee was or is a party
or is threatened to be made a party to any Proceeding (other than a Proceeding
by or in the right of the Corporation) by reason of his or her Corporate Status,
or by reason of anything done or not done by him in any such capacity, the
Corporation shall indemnify Indemnitee against any and all Losses and Expenses
actually incurred by or for Indemnitee in connection with the investigation,
defense, settlement or appeal of such Proceeding or any claim, issue or matter
therein if he or she acted in Good Faith and payment thereof would not be
prohibited by Section 4.7 hereof.

Section 4.3. DERIVATIVE ACTIONS. If Indemnitee was or is a party or
is threatened to be made a party to any Proceeding by or in the right of the
Corporation to procure a judgment in its favor by reason of his Corporate
Status, or by reason of anything done or not done by him in any such capacity,
the Corporation shall indemnify him against any and all Expenses actually
incurred by or for him or her in connection with the investigation, defense,
settlement, or appeal of such Proceeding if he or she acted in Good Faith and
payment thereof would not be prohibited by Section 4.7 hereof; except that no
indemnification under this Section 4.3 shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged to be
liable to the Corporation by a court of competent jurisdiction, unless and then
only to the extent, the court in which such Proceeding was brought shall
determine upon application that, despite the adjudication of liability (but in
view of all the circumstances of the case), such person is fairly and reasonably
entitled to indemnity for such amounts which such court shall deem proper.

Section 4.4. INDEMNIFICATION OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. To the extent that Indemnitee is, by reason of Indemnitee's
Corporate Status, a party to and is successful, on the merits or otherwise, in
any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted
by law, against any and all Losses and Expenses actually incurred by or for him
or her in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Corporation
shall indemnify Indemnitee to the maximum extent permitted by law, against all
Losses and Expenses actually and reasonably incurred by or for him or her in
connection with each successfully resolved claim, issue or matter. For purposes
of this Section 4.4 and without limitation, the termination of any claim, issue
or matter in such a Proceeding by a final and non-appealable order of dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter, so long as there has been no finding (either adjudicated
or pursuant to Article V) that Indemnitee did not act in Good Faith.

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<PAGE>

Section 4.5. INDEMNIFICATION FOR EXPENSES OF A WITNESS. To the
extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a witness
in any Proceeding, Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by or for such Indemnitee in connection therewith.

Section 4.6. CONTRIBUTION. If the indemnification or reimbursement
provided for hereunder is finally judicially determined by a court of competent
jurisdiction to be unavailable to Indemnitee in respect of any Losses or
Expenses relating to a Proceeding (other than for any reason specified in
Section 4.7 hereof), then the Corporation agrees, to the extent permitted by
applicable law, in lieu of indemnifying Indemnitee, to contribute to the amount
paid or payable by Indemnitee as a result of such Losses or Expenses in such
proportion as is appropriate to reflect the relative benefits accruing to the
Corporation and Indemnitee with respect to the events giving rise to such Losses
or Expenses. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then the Corporation agrees to
contribute to the amount paid or payable by Indemnitee as a result of such
Losses or Expenses in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Corporation with respect to
the events giving rise to such Losses or Expenses. For purposes of this
Section, (i) the relative benefits accruing to the Corporation shall be deemed
to be the benefits accruing to it and to all of its directors, officers,
employees and agents (other than Indemnitee), as a group and treated as one
person (the "Company Group"), and the relative benefits accruing to Indemnitee
shall be deemed to be an amount not greater than Indemnitee's compensation from
the Corporation and its subsidiaries during the first year in which the events
giving rise to such Losses or Expenses are alleged to have occurred, and
(ii) the relative fault of the Corporation shall be deemed to be the fault of
the Company Group, and the relative fault of the Corporation and Indemnitee
shall be determined by reference to the relative intent, knowledge and access to
information of the Company Group and Indemnitee and their relative opportunity
to have altered or prevented the events giving rise to such Losses or Expenses.

Section 4.7. LIMITATIONS ON INDEMNIFICATION AND CONTRIBUTION.
Notwithstanding any other provision of this Agreement, no contribution shall be
paid pursuant to Section 4.6 and Indemnitee shall not be indemnified and held
harmless from any Losses or Expenses (a) which have been determined, as provided
herein, to constitute an Excluded Claim; (b) to the extent Indemnitee is
indemnified by the Corporation and has actually received payment pursuant to the
Article of Incorporation, Bylaws, the Iowa Business Corporation Act, D&O
Insurance or otherwise; or (c) other than pursuant to the last sentence of
Section 3.4 or Section 5.3, in connection with any Proceeding initiated by
Indemnitee, unless the Corporation has joined in or the Board of Directors has
authorized such Proceeding.

ARTICLE V

DETERMINATION OF RIGHT TO INDEMNIFICATION

Section 5.1. FORUM FOR DETERMINATION. The Corporation shall be
entitled to select the manner in which the determination will be made that
Indemnitee is entitled to indemnification from among the following:

(a) A majority vote of Disinterested Directors, constituting a quorum
of directors of the Corporation;

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<PAGE>

(b) If a quorum of Disinterested Directors cannot be obtained, by
majority vote of a committee duly designated by the board of directors, in which
designation directors who are parties may participate, consisting solely of two
or more directors not at the time parties to the Proceeding;

(c) By special legal counsel selected by the Board of Directors or
its committee in the manner prescribed in clause (a) or (b);

(d) If a quorum of the Board of Directors cannot be obtained under
clause (a) and a committee cannot be designated under clause (b), by special
legal counsel selected by majority vote of the full board of directors, in which
selection directors who are parties may participate;

(e) By the shareholders, but shares owned or voted under the control
of the directors who are at the time parties to the Proceeding shall not be
voted on the determination; or

(f) By a court acting pursuant to section 480.854 of the Iowa
Business Corporation Act or any other court of competent jurisdiction.

Authorization of indemnification and determination as to reasonableness shall be
made in the same manner as the determination that indemnification is
permissible, except that if the determination that indemnification is
permissible is made by special legal counsel, authorization of indemnification
and determination as to reasonableness of expenses shall be made in the manner
specified in subsections (c) or (d) of this Section 5.1 for the selection of
such counsel. Indemnitee shall cooperate with the person or persons making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person upon reasonable advance request any
documentation or information that is not privileged or otherwise protected from
disclosure and that is reasonably available to Indemnitee and reasonably
necessary to such determination. For purposes of this Agreement, "special legal
counsel" means a law firm, or a member of a law firm, that is experienced in
matters of corporation law.

Section 5.2. RIGHT TO APPEAL. Notwithstanding a determination by
any forum listed in clauses (a) through (d) of Section 5.2 hereof that
Indemnitee is not entitled to indemnification with respect to a specific
Proceeding, Indemnitee shall have the right to apply to the court in which that
Proceeding is or was pending, or any other court of competent jurisdiction, for
the purpose of enforcing Indemnitee's right to indemnification or contribution
pursuant to this Agreement. Indemnitee shall commence such action seeking such
an adjudication within 180 days following the date on which Indemnitee first has
the right to commence such action pursuant to this Section 5.2, or such right
shall expire.

Section 5.3. EXPENSES UNDER THIS AGREEMENT. Except as provided in
Section 4.7 hereof, the Corporation shall indemnify Indemnitee against all
Expenses actually incurred by Indemnitee in connection with any hearing or
proceeding under this Article V involving Indemnitee and against all Expenses
actually incurred by Indemnitee in connection with any other action between the
Corporation and Indemnitee involving the interpretation or enforcement of the
rights of Indemnitee under this Agreement.

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<PAGE>

ARTICLE VI

PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS

Section 6.1. BURDEN OF PROOF. In making a determination with
respect to entitlement to indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement and the Corporation shall have the burden
of proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that presumption.

Section 6.2. EFFECT OF OTHER PROCEEDINGS. The termination of any
Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not of itself adversely affect the right of Indemnitee to indemnification
to the extent permitted by this Agreement or applicable law.

Section 6.3. RELIANCE AS SAFE HARBOR. In making a determination
with respect to entitlement to indemnification hereunder, the person or persons
or entity making such determination shall recognize that Indemnitee is entitled
to rely in good faith on the records or books of account of the Corporation,
including financial statements, or, in the case of an Indemnitee who is a
director, on information supplied to Indemnitee by the officers of the
Corporation in the course of their duties, or on the advice of legal counsel for
the Corporation or on information or records given or reports made to the
Corporation by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation. The provisions
of this Section 6.3 shall not be deemed to be exclusive or to limit in any way
the other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

Section 6.4. ACTIONS OF OTHERS. The knowledge and/or actions, or
failure to act, of any director, officer, agent or employee of the Corporation
shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.

ARTICLE VII

NON-EXCLUSIVITY, INSURANCE, SUBROGATION

Section 7.1. NON-EXCLUSIVITY. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Corporation's Articles of Incorporation, the
Bylaws, any agreement, a vote of shareholders or a resolution of Board of
Directors, or otherwise.

Section 7.2. INSURANCE. The Corporation may maintain an insurance
policy or policies against liability arising out of this Agreement or otherwise.

Section 7.3. SUBROGATION. In the event of any payment under this
Agreement, the Corporation shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Corporation to bring
suit to enforce such rights.

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<PAGE>

Section 7.4. NO DUPLICATIVE PAYMENT. The Corporation shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the Corporation and its successors and assigns and shall inure to
the benefit of Indemnitee and Indemnitee's heirs, executors and administrators.

Section 8.2. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever the validity, legality and enforceability of the remaining provisions
of this Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby, and to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of
any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.

Section 8.3. NO ADEQUATE REMEDY. The parties declare that it is
impossible to measure in money the damages which will accrue to either party by
reason of a failure to perform any of the obligations under this Agreement.
Therefore, if either party shall institute any action or proceeding to enforce
the provisions hereof, such party against whom such action or proceeding is
brought hereby waives the claim or defense that such party has an adequate
remedy at law, and such party shall not urge in any such action or proceeding
the claim or defense that the other party has an adequate remedy at law.

Section 8.4. MODIFICATION AND WAIVER. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver. No amendment, rescission or replacement of this Agreement or any
provision hereof shall be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee's Corporate Status prior to
such amendment, alteration, rescission or replacement.

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<PAGE>

Section 8.5. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

If to Indemnitee, as shown with Indemnitee's signature below.

If to the Corporation to:

AmerUs Life Holdings, Inc.
418 6th Avenue
Des Moines, Iowa 50309
Attention: Secretary

or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.

Section 8.6. GOVERNING LAW. The parties agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Iowa without application of the conflict of laws principles
thereof.

Section 8.7. ENTIRE AGREEMENT. This Agreement may be executed in
one or more counterparts. Except as provided in the following sentence, this
Agreement constitutes the entire agreement and understanding between the parties
hereto in reference to all the matters herein agreed upon. The rights conferred
in this Agreement are in addition to, and supplement, any other rights
Indemnitee may have had at any time under applicable law, the Corporation's
Articles of Incorporation, the Bylaws, and any prior understanding.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

AMERUS LIFE HOLDINGS, INC.

By
---------------------------------------
Its
--------------------------------------

INDEMNITEE:

-----------------------------------------
(signature)

-----------------------------------------
(printed name)
Address:
---------------------------------
-----------------------------------------

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<PAGE>

CERTIFICATE OF LIMITED PARTNERSHIP
AND LIMITED PARTNERSHIP AGREEMENT OF
API HOUSING PARTNERS VI, L.P.

THIS CERTIFICATE OF LIMITED PARTNERSHIP AND LIMITED PARTNERSHIP AGREEMENT
executed and entered into by and between AMERUS PROPERTIES, INC., an Iowa
corporation (hereinafter referred to as "general partner") and any other persons
(hereinafter referred to as "limited partners") executing and delivering to the
general partner this Agreement or a subscription agreement and upon filing of an
amendment to this Certificate so showing.

W I T N E S E T H:

The general partner and the limited partners agree as follows:

1. ORGANIZATION OF PARTNERSHIP.

Pursuant to the Iowa Uniform Limited Partnership Act (hereinafter referred to as
the "Act"), the general partner and the limited partners hereby form a limited
partnership (hereinafter referred to as the "Partnership").

2. NAME OF PARTNERSHIP.

The name of the Partnership shall be API Housing Partners VI, L.P.

Its federal identification number is 42-1445311.

3. BUSINESS OF THE PARTNERSHIP.

The business of the Partnership shall be to invest as a partner in partnerships
to own real estate and to enter into any and all contracts, leases, mortgages,
loans and agreements incident thereto.

4. PRINCIPAL PLACE OF BUSINESS, OFFICE, AGENT FOR SERVICE OF PROCESS AND
BUSINESS ADDRESSES.

The principal place of business and the office of the Partnership shall be 6000
Westown Parkway, Suite 200W, West Des Moines, Iowa. The agent for service of
process on the Partnership shall be Jon L. Staudt, whose address is 2000
Financial Center, Des Moines, Iowa.

The business address of the general partner is 6000 Westown Parkway, Suite 200W,
West Des Moines, Iowa. The business address of the limited partner executing
this Agreement is American Mutual Life Insurance Company at 611 Fifth Avenue,
Des Moines, Iowa. The business addresses of those partners subsequently
becoming limited partners by the execution of a subscription agreement shall be
as set forth opposite their names at the end of such subscription agreement.

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<PAGE>

5. DEFINITIONS.

(a) CREDITED CAPITAL CONTRIBUTION. The term "credited capital
contribution" shall mean the amount credited to a partner's capital account
for the partner's contribution to the capital of the Partnership as set
forth in paragraph 6. Such amount shall be the amount of cash contributed
and the adjusted basis of any property contributed (net of any liabilities
assumed by the Partnership or any liabilities to which such property is
subject). Solely for purposes of making allocations and distributions
under paragraphs 7, 8 and 9, a partner shall be credited with the amount of
capital the partner is required to have contributed under paragraph 6(b),
even if not yet contributed.

(b) CAPITAL ACCOUNT. The term "capital account" shall mean the sum of:

(1) Each partner's credited capital contributions; and

(2) Any net profits or non-taxable income allocated to the partner's
account under paragraph 7,

less the sum of:

(3) Any net losses or unallowable deductions allocated to the
partner's account under paragraph 7; and

(4) The amount of any previous cash distributions and the
Partnership's adjusted basis in any previous property distributions
(net of liabilities assumed by such partner or liabilities to which
such property is subject) to the partner.

(c) NET PROFITS AND LOSSES. The terms "net profits" and "net losses" shall
mean the taxable income or taxable loss of the Partnership determined for
purposes of preparing the Partnership information return for federal income
tax purposes.

(d) NON-TAXABLE INCOME AND UNALLOWABLE DEDUCTIONS. The terms "non-taxable
income" and "unallowable deductions" shall mean any items of income or
deduction properly treated as income or deductions by the Partnership for
financial accounting purposes but not includable as income or allowable as
a deduction for federal income tax purposes, and expenditures described in
Section 705(a)(2)(B) of the Internal Revenue Code.

(e) CASH FLOW. The term "cash flow" shall mean the excess of cash receipts
over cash disbursements for the applicable period; provided, however, cash
flow shall not include any cash received pursuant to the dissolution and
termination of the Partnership.

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<PAGE>

(f) DISTRIBUTABLE CASH. The term "distributable cash" shall mean cash flow
for the applicable period reduced (or increased) by such amounts which are
determined by the general partner to be reasonably necessary (or not longer
necessary) to be expended or held as reserves for the conduct of
partnership business, including expansion thereof, capital improvements,
and future payments of anticipated obligations and liabilities.

(g) PARTNER. The term "partner" shall mean the general partner and each of
the limited partners.

(h) MAJORITY IN INTEREST OF THE LIMITED PARTNERS. The term "majority in
interest of the limited partners" shall refer to those limited partners
credited with more than 50% of the limited partners' credited capital
contributions of those limited partners referred to.

(i) "APPLICABLE RATE" shall mean the lesser of (1) a per annum rate which
is two percent higher than the corporate base interest rate announced by
Citibank, N.A. (or its successor) during the period the indebtedness in
question is outstanding, as such corporate base interest rate changes from
time to time, or (2) the maximum interest that may be charged on such
indebtedness under the applicable usury law (if any).

6. CREDITED CAPITAL CONTRIBUTIONS.

(a) INITIAL CAPITAL CONTRIBUTIONS. The general partner shall contribute as
a general partner $10 to the capital of the Partnership, which amount shall
be credited as a capital contribution and become a part of the capital
account of the general partner on the date of contribution.

Each limited partner's capital contribution to the Partnership shall be in
the amount set forth opposite such partner's name in this Agreement or in
the subscription agreement executed by such limited partner, which amount
shall be credited as a capital contribution and become a part of the
capital account of the limited partner on the date of contribution. The
general partner may contribute as a limited partner to the Partnership,
which contribution shall be treated as any other limited partner's
contribution.

(b) CONTRIBUTION UPON CERTIFICATE FILING. Upon filing of the certificate
of limited partnership the credited capital contributions of the partners
are as follows:

General Partner: $ 10

Limited Partner: $990

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<PAGE>

(c) ADDITIONAL CAPITAL CONTRIBUTIONS. If the general partner, with the
consent of a majority in interest of the limited partners, determines in
its best judgement that additional capital contributions are required to
meet anticipated Partnership expenditures then the general partner and the
limited partners shall contribute the additional capital required in the
ratios of their credited capital contributions or, if a partner declines to
make such a contribution, such partner shall have its interest in the
partnership diluted as provided in the next paragraph below. Such amounts
shall be contributed in cash or cash equivalents or by wire transfer of
immediately available funds to the bank account established in the name of
the Partnership within thirty (30) business days of notification by the
general partner to the limited partners.

If a partner fails to make or declines to make its required additional
capital contributions within such thirty (30) day period then the
defaulting partner's credited capital contribution shall cease to include
the amount of the contribution default and neither the Partnership nor any
other person shall have any further rights with respect to such unpaid
capital contribution. In addition, the nondefaulting partner or partners
may loan the Partnership the amount of such unpaid capital contribution in
accordance with paragraph 17 of this Agreement.

7. PROFITS, LOSSES AND CREDITS.

(a) ACCOUNTING PERIOD AND METHOD. The Partnership shall adopt a calendar
year as its taxable year and shall use the accrual method of accounting.

(b) ALLOCATIONS OF ACCOUNTING INCOME AND CREDITS. Net profits, net losses,
non-taxable income, unallowable deductions and credits shall be computed
for each period and shall be allocated among the partners in accordance
with their credited capital contributions as of the end of such period;
provided, however, upon the sale or disposition of any property, other than
cash, contributed to the Partnership any gain attributable to the excess of
the fair market value of such property credited to the capital of the
Partnership at the time of such contribution over its basis to the
Partnership at such time shall be allocated to the Partner making such
contribution.

(c) LIMITED ON LIMITED PARTNER LIABILITY. Although losses may be allocated
to a limited partner, no limited partner shall be liable for losses of the
Partnership beyond the contribution or obligated contribution of such
partner to the capital of the Partnership.

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<PAGE>

8. DISTRIBUTIONS OF DISTRIBUTABLE CASH.

Distributable cash shall be distributed among the partners in accordance with
their credited capital contributions as of such distribution.

Except as provided in this paragraph 8 and paragraph 9, no partner shall be
entitled to withdraw any amount from the partner's capital account.

9. TERMINATION PROCEEDS.

In the event of the dissolution and termination of the Partnership under
paragraph 11(e) the proceeds shall be allocated as follows:

First, in payment of all accrued but unpaid debts and liabilities of the
Partnership (including debts or liabilities to partners) requiring payment
in order of priority; and

Second, to expenses of sale of dissolution, including customary brokerage
fees;

Third, to provide such reserves as the dissolving manager deems advisable
for contingent liabilities of the Partnership (which reserves will be held
in escrow); and

Fourth, to all of the partners in accordance with their capital accounts
after all allocations made to such capital accounts under paragraph 5(b) or
paragraph 7.

Each partner shall look solely to the assets of the Partnership for the return
of such partner's capital contribution and if the Partnership property remaining
after the payment or discharge of the prior debts, liabilities and distributions
of the Partnership is insufficient to return such capital contribution no
partner shall have any recourse against any other partner.

10. POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNER.

(a) AUTHORITY OF GENERAL PARTNER. The general partner shall diligently
apply itself in and about the business of the Partnership. Except as
specifically otherwise set forth in this Agreement the general partner
shall have full, exclusive and complete authority and discretion in the
management and control of the Partnership business and shall make all
decisions affecting the Partnership business. The general partner shall
manage and control the affairs of the Partnership to the best of its
ability and shall use its best efforts to carry out the Partnership
business. The rights, powers and duties of the general partner include,
but are not limited to, the following:

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<PAGE>

(1) To expend the capital and revenues of the Partnership in
furtherance of the Partnership business and to invest Partnership
funds.

(2) To borrow money for any Partnership business or purpose, and in
connection therewith, issue debt securities and hypothecate all or any
part of the assets of the Partnership to secure repayment of the
borrowed sums, obtain replacement of, refinance, increase, prepay,
modify, consolidate or extend, in whole or in part, any obligation for
borrowed money or any other obligation, mortgage, encumbrance, pledge
or other security device of the Partnership or affecting its property
or investments.

(3) To cause to be maintained the books and records required by this
Agreement and to cause income tax returns to be prepared and reports
to be furnished to limited partners.

(4) To make elections under the tax laws as to the treatment of items
of Partnership income, gain, loss, deduction and credit and as to all
other relevant matters as it believes advisable, including elections
to adjust the basis of Partnership property and to serve as "tax
matters partner"; provided, however, the general partner shall not
have the power to enter into any agreement extending the time for the
assessment of federal income tax against any partner.

(5) To employ and pay agents to assist in the Partnership business,
and to pay and be reimbursed by the Partnership for locally reasonable
expenses and fees incurred by the general partner in connection with
the organization, operation and dissolution of the Partnership,
including, without limitation, legal, accounting and consultant fees
and expenses, including such fees of in-house counsel or accountants,
and including fees and expenses for such services provided by an
affiliate or employee of an affiliate or any partner, including the
general partner.

(6) To arrange to prosecute, defend, settle or compromise actions at
law or in equity and to satisfy any judgment, decree, decision or
settlement in connection therewith.

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<PAGE>

specifically to enter into such contracts, leases and agreements with
any partner, including the general partner, or any entity or person
related to or affiliated with any partner, including the general
partner.

(8) To delegate by contract, power of attorney, or otherwise, all or
any part of its duties under this Agreement to an entity chosen by the
general partner, including an entity affiliated with, related to or
owned by the general partner, and compensate such entity for the
performance of such duties, provided that such delegation shall not
relieve the general partner of its responsibilities under this
Agreement.

(9) To exercise such other rights and powers of general partners of
limited partnerships authorized or permitted under the laws of the
State of Iowa, except to the extent any of such rights or powers may
be limited or restricted by the express provisions of this Agreement.

(b) MAJORITY IN INTEREST OF LIMITED PARTNERS. Without the written
agreement of a majority in interest of the limited partners the general
partner shall not have the authority to:

(1) sell all or substantially all of the assets of the Partnership;

(2) liquidate the Partnership, except as permitted in paragraph 11(a)
of this Agreement;

(3) borrow in the aggregate in excess of One Hundred Thousand Dollars
($100,000.00) in the name of the Partnership;

(4) mortgage or convey or agree to mortgage or convey Partnership
property or any portion of the Partnership property;

(5) prosecute any claim, counterclaim or cross claim, or settle or
confess judgment on any matter for an amount in excess of One Hundred
Thousand Dollars ($100,000.00).

(c) INDEMNIFICATION OF PARTNERS. The partners (including any directors,
officers and employees of each partner) shall not be liable to each other
or the Partnership for amounts paid upon settlement or judgment and
expenses (including attorney's fees) of claims arising out of their
activities as or for the Partnership resulting from errors in judgment or
any acts or omissions, whether or not disclosed, which do not constitute
willful misconduct, fraud or gross negligence provided such persons acted
in good faith for the benefit of the Partnership. The general partner
shall be liable to the limited partners and

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<PAGE>

the Partnership for its willful misconduct, fraud or gross negligence, in
the performance of its duties as general partner. To the extent of
Partnership assets, the Partnership shall indemnify a partner or a
director, officer or employee or a partner for liability arising out of
activities for the Partnership (including reasonable attorney's fees)
resulting from errors in judgment or any acts or omissions, whether or not
disclosed, which do not constitute willful misconduct, fraud or gross
negligence provided such persons acted in good faith for the benefit of the
Partnership.

(d) DEBTS AND OBLIGATIONS OF PARTNERSHIP. No partner, other than the
general partner, shall make, accept, or endorse any bill of exchange,
promissory note, or other engagement for the payment of money, or guarantee
any debt or account on behalf of the Partnership, or pledge the credit of
the Partnership in any way.

(e) COMPETITION. Any partner may compete with the Partnership without
limitation.

(f) MEETINGS. The partners shall meet annually and shall meet at such
other times as requested by any partners holding 10% or more of the
partners' credited capital contributions upon five (5) prior business days
written notice, unless such prior notice is expressly waived by the other
partners. These meetings shall be held at such time, date and place as
designated by the general partner. At such meetings, the partners shall
review the operations of the Partnership and transact such other business
as may properly be brought before the meeting.

11. TERM, DISSOLUTION AND TERMINATION OF PARTNERSHIP.

(a) TERM AND DISSOLUTION OF PARTNERSHIP. The term of the Partnership shall
commence upon filing for record of the certificate of limited partnership
in the Office of the Secretary of State, and shall continue until the
earliest of the following (each of which shall be called a "dissolving
event") upon which the Partnership shall be dissolved:

(1) The sale, expiration, abandonment or other disposition of all
Partnership assets;

(2) Dissolution of the Partnership by judicial decree;

(3) At such time as the general partner ceases to be a general partner
by reason of:

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<PAGE>

(a) In the case of an individual, the death or adjudication of
incompetency of the individual; or, in the case of a corporation,
the filing of a certificate of dissolution or the revocation of
its charter;

(b) Upon such person's making an assignment for the benefit of
creditors, filing a voluntary petition in bankruptcy or
adjudication of bankruptcy or insolvency;

(c) Upon such person's filing a petition, answer or other
pleading seeking, or failing to contest material allegations in a
petition seeking, for such person reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law or regulation or upon 120 days
after the commencement of such proceeding if not dismissed within
such time; or

(d) If such person seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of all or a
substantial part of such person's properties, or 90 days after
the appointment, without such person's consent, of such as
trustee, receiver, or liquidator, unless such appointment is
vacated within such time or within 90 days after any stay of such
appointment within such time; or

(4) December 31, 2030 or by the decision of the general partner with
the written agreement of a majority in interest of the limited
partners.

(b) NO DISSOLUTION OR WITHDRAWAL AS A RESULT OF CERTAIN OTHER EVENTS. The
Partnership shall not be dissolved by any event not set forth in paragraph
11(a), including, but not limited to: (1) the death, incompetency,
bankruptcy, insolvency, dissolution or other cessation to exist as a legal
entity of any limited partner; (2) the assignment by any partner of the
partner's interest in the Partnership; or (3) the admission of a new
partner. No event except as set forth in paragraph 11(a) shall entitle a
partner or the partner's estate or representative to withdraw from the
Partnership or to a return of capital.

(c) WINDING UP, LIQUIDATION, DISTRIBUTION OF ASSETS AND TERMINATION. If
there is a dissolving event under paragraph 11(a) then:

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<PAGE>

Partnership assets in a manner consistent with attempting to obtain
the fair market value thereof; and shall terminate the Partnership.

(2) The proceeds from such disposition shall be distributed under
paragraph 9.

12. NO AUTHORITY OF PARTNERSHIP RECORDS.

The limited partners shall take no part in the control and management of the
Partnership business. The limited partners shall transact no business or
otherwise act in any manner for or on behalf of the Partnership. The limited
partners shall have no power to sign for or bind the Partnership.

13. INSPECTION OF PARTNERSHIP RECORDS.

The Partnership shall keep at its office books and records setting forth a
current list of the full name and last known business address of each partner, a
copy of the Certificate of Limited Partnership and all amendments together with
any executed powers of attorney, copies of the Partnership's federal and state
income tax returns, if any, for the three most recent years, and copies of any
written partnership agreements and of any financial statements of the
Partnership for the three most recent years. Any partner may inspect and copy
such records provided that the partner's request to inspect and copy is
reasonable and is done at the partner's expense.

14. ANNUAL REPORTS AND BUDGET.

The general partner shall cause an annual report, which need not be audited,
unless a majority in interest of the limited partners shall otherwise determine,
to be sent to the limited partners not later than 75 days after the close of
each taxable year, which report shall include a balance sheet, operating
statement, cash flow statement and statement of distribution of funds to the
partners for such year and a proposed budget for the upcoming year.

15. SUBSTITUTIONS, ASSIGNMENTS AND ADMISSION OF ADDITIONAL PARTNERS.

(a) NEW OR SUBSTITUTED GENERAL PARTNERS. The general partner shall not
bring in a co-general partner and shall not substitute a general partner in
its place without the written consent of a majority in interest of the
limited partners excluding the general partner. No assignment, sale,
transfer, pledge or hypothecation of the general partner's interest in the
Partnership is authorized nor will it be binding upon or accepted by the
Partnership unless the general partner obtains the prior written consent of
a majority in interest of the limited partners excluding the general
partner.

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<PAGE>

(b) ADDITIONAL LIMITED PARTNERS. The general partner may admit additional
limited partners upon receipt of such persons' capital contributions to the
Partnership.

(c) ASSIGNMENT OF LIMITED PARTNER INTEREST. No assignment, sale, transfer,
pledge or hypothecation of a limited partner's interest in the Partnership
is authorized nor will the same be binding upon or accepted by the
Partnership unless the transferor obtains the prior written consent of the
general partner (provided, however, such restriction shall not apply to any
transfer by reason of the death, incompetency or bankruptcy of a limited
partner, provided that the transferee thereunder shall be bound by the
terms and provisions of this agreement), which consent shall be in the
absolute discretion of the general partner and which consent shall in no
event be granted if, in the opinion of the general partner or of the
counsel for the Partnership, such assignment, sale, transfer, pledge or
hypothecation could either (1) jeopardize the partnership status of the
Partnership for federal income tax purposes; or (2) violate or cause the
Partnership to violate, any state or federal securities law or any other
applicable law or governmental rule or regulation; or (3) adversely affect
the availability of any federal and state securities law exemption pursuant
to which the interest in the Partnership were originally offered and sold
to the limited partners.

(d) SUBSTITUTED LIMITED PARTNER. In connection with a permissible
assignment of a limited partner's interest, the assignor shall have the
power and right to substitute the assignee as the limited partner as to
such interest if all of the following are satisfied:

(1) A duly executed and acknowledged written instrument in form
satisfactory to the general partner is submitted to the Partnership
setting forth the intention of the limited partner that the assignee
become a substituted limited partner.

(2) The limited partner and assignee execute and acknowledge such
other instruments as the general partner deems desirable to effect
such admission, including the written acceptance and adoption by the
assignee of all the provisions of this Agreement.

(3) The general partner shall have consented to substitution of such
assignee as the limited partner, which consent shall not be
unreasonably withheld. A person shall become a substituted limited
partner only upon the recording of an amended certificate of limited
partnership in which such person is designated as a limited partner.

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<PAGE>

Upon the death, legal incompetency or dissolution of a limited partner, such
partner's legal representative or successor shall have all the rights such as
the partner possessed to constitute his or her successor as an assignee and to
join with the assignee in making application to substitute such assignee as
limited partner.

16. SIGNATURES

Any check, draft, contract, evidence of indebtedness, deed, mortgage, deed of
trust, lease, contract of sale, bill of sale, certificate of limited
partnership, or other similar document shall be executed for the Partnership by
the general partner and no other signatures shall be required.

17. LOANS

Loans by a partner to the Partnership shall not constitute a contribution of
capital to the Partnership or be credited to the capital account of the lending
partner or entitle such partner to any increase in such partner's share of any
allocation or distribution. Such loans shall be a debt due from the Partnership
to such lending partner and the principal and accrued interest then due thereon
shall be paid in full prior to any other distribution to the partners in respect
of their interest in the Partnership. Except as otherwise provided in this
paragraph, the partners shall be given the opportunity to loan in proportion to
their credited capital contributions any amount to be borrowed by the
Partnership from partners before a partner may loan the entire amount, and each
partner shall be deemed to have rejected such opportunity unless it agrees to
loan its respective share within fifteen (15) days after the written request to
participate in such loan. Loans by any one or more of the partners to the
Partnership shall bear interest at the Applicable Rate.

18. DESIGNATION.

Each Partner who is not an individual shall designate and each partner who is an
individual may designate ("designating partner") one or more persons
("designated person"), any one of whom shall have full and complete authority
and discretion to act in all matters on behalf of the designating partner as
between the partners with respect to the Partnership. Each decision, agreement,
consent or other undertaking of the designated person with respect to the
Partnership, shall be binding on the designating partner as between the partners
and may be relied upon by the other partners without further investigation or
determination of authority.

19. POWER OF ATTORNEY.

(a) GRANT OF POWER. Each of the limited partners irrevocably constitutes
and appoints the general partner as true and lawful

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<PAGE>

attorney in such limited partner's name, place and stead to make, swear to,
execute, acknowledge and file:

(1) Any certificates of the Partnership and any amendments thereto
required by the Act, including amendments required for the admission
of additional limited partners and the substitution of a limited
partner.

(2) Any certificate or other instrument and any amendments thereto
required to accomplish the business and purposes of the Partnership or
otherwise permitted under this Agreement, including any business
certificate or assumed name certificate.

(3) Any cancellation of such certificates of Partnership and any
documents required upon the dissolution and termination of the
Partnership.

(4) New or amended certificates of limited partnership and any
documents and instruments required to effectuate the continuation of
the business of the Partnership.

If a limited partner assigns his interest as permitted in paragraph 15(c), the
foregoing power of attorney shall survive the delivery of the instruments
effecting such assignment for the purpose of enabling the general partner to
sign, swear to, execute , acknowledge and file any amendments to the certificate
of limited partnership and other instruments and documents to effectuate the
substitution of the assignee as a limited partner.

(b) LIMIT ON POWER. It is expressly intended that the foregoing power of
attorney under this paragraph 19 is coupled with an interest, and the general
partner shall not exercise the same in any manner which would (1) remove the
general partner, (2) enlarge any obligation or liability of a limited partner,
or (3) affect any Partnership allocations in a manner adverse to the limited
partners.

20. NO PRIORITY AMONG LIMITED PARTNERS.

No present or future limited partner shall have any priority over any other
limited partner as to contributions and compensation by way of income or
otherwise.

21. NO RIGHT OF LIMITED PARTNERS TO RECEIVE PROPERTY OTHER THAN CASE IN RETURN
FOR CONTRIBUTIONS.

No limited partner shall have any right to demand or receive property other than
cash in return for his or her contribution to the capital of the Partnership;
provided, however, a distribution upon dissolution and termination of the
Partnership may, as provided in this Agreement or as required by law, be in a
form

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<PAGE>

other than cash.

22. COVENANT NOT TO CAUSE DISSOLUTION.

To the extent Section 402(1) or Section 602 of the Act is construed to grant the
general partner the power to cause the dissolution or termination of the
Partnership; notwithstanding such provision, the general partner hereby
covenants and agrees not to cause the dissolution or termination of the
Partnership by such partner's voluntary action pursuant to such provision and,
should such partner cause the Partnership to be dissolved or terminated, prior
to the occurrence of any event of dissolution or termination otherwise provided
for herein, such partner shall be liable to all other partners for all damages
thereby occasioned.

23. AMENDMENTS.

Amendments to this Agreement may be proposed by the general partner of by any
limited partners holding 10% or more of the partners' credited capital
contributions. Following such proposal, the general partner shall submit to the
limited partners a verbatim statement of any proposed amendment and the general
partner shall include in any such submission a recommendation as to the proposed
amendment. The general partner shall seek the written vote of the partners on
the proposed amendment. A proposed amendment shall be adopted and be effective
as an amendment hereto if it receives in writing the affirmative vote of the
general partner and of a majority in interest of the limited partners excluding
the general partner.

Notwithstanding the foregoing paragraph, this Agreement shall not be amended
without the consent of each person adversely affected if such amendment would
(i) remove the general partner, (ii) enlarge any obligation or liability of a
limited partner, or (iii) affect any Partnership allocations in a manner adverse
to any partner.

24. NOTICES

Notices to the partners or to the Partnership to be furnished hereunder shall be
deemed to have been given on the date received at the address provided for in
paragraph 4 if personally delivered or on the date sent by certified or
registered mail in the United States of America unless there has been a notice
of change of address previously given in writing by the addressee in which case
the address shall be that shown on the most recent change of address notice.

25. BINDING EFFECT.

This agreement shall inure to and bind all of the parties, their estates, heirs,
personal representatives, successors and assigns.

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<PAGE>

IN WITNESS WHEREOF, the general partner and the limited partner have executed
this Limited Partnership Agreement as of the 10th day of October, 1995.

AMERUS PROPERTIES, INC.,
General Partner

By: /s/ Gene Harris
----------------------------
Gene Harris, Vice President

AMERICAN MUTUAL LIFE INSURANCE
COMPANY, Limited Partner

By: /s/ Scott D. Harris
---------------------------
Scott D. Harris,
Vice President

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<PAGE>

CERTIFICATE OF LIMITED PARTNERSHIP
AND LIMITED PARTNERSHIP AGREEMENT OF
ALTOONA MEADOWS INVESTORS, L.P.

CERTIFICATE OF LIMITED PARTNERSHIP AND LIMITED PARTNERSHIP AGREEMENT executed
and entered into by and between KPI Investments, Inc. (hereinafter referred to
as "general partner") and Dennis Galeazzi (hereinafter referred to as "limited
partner(s)").

W I T N E S S E T H:

The general partner and the limited partners agree as follows:

1. ORGANIZATION OF PARTNERSHIP.

2. NAME OF PARTNERSHIP.

The name of the Partnership shall be Altoona Meadows Investors, L.P.

3. BUSINESS OF THE PARTNERSHIP.

The business of the Partnership shall be to invest as a partner in Altoona
Meadows, an Iowa general partnership, and to enter into any and all contracts,
leases, mortgages, loans and agreements incident thereto.

4. PRINCIPAL PLACE OF BUSINESS, OFFICE, AGENT FOR SERVICE OF PROCESS AND
BUSINESS ADDRESSES.

The principal place of business and the office of the Partnership shall be 5000
Westown Parkway, Suite 100, West Des Moines, Iowa 50266. The agent for service
of process on the Partnership shall be Gerard D. Neugent, whose address is 5000
Westown Parkway, Suite 100, West Des Moines, Iowa 50266.

The business address of the general partner is 5000 Westown Parkway, Suite 100,
West Des Moines, Iowa 50266. The business address of the limited partner is
5000 Westown Parkway, Suite 100, West Des Moines, Iowa 50266.

5. DEFINITIONS.

(a) Credited Capital Contribution. The term "credited capital
contribution" shall mean the amount credited to a partner's capital account
for the partner's contribution to the capital of the Partnership as set
forth in paragraph 6. Such amount shall be the amount of cash contributed
and the adjusted basis of any property contributed (net of any liabilities
assumed by the Partnership or any liabilities to which such property is
subject). Solely for purposes of making allocations and distributions
under paragraphs 7, 8 and 9 a partner shall be credited with the amount of
capital the partner is required to have contributed under paragraph 6(b),
even if not yet contributed.

(b) Capital Account. The term "capital account" shall mean the sum of:

<PAGE>

(1) Each partner's credited capital contribution; and

(2) Any net profits or non-taxable income allocated to the partner's
account under paragraph 7,

less the sum of:

(3) Any net losses or unallowable deductions allocated to the
partner's account under paragraph 7; and

(c) Net Profits And Losses. The terms "net profits" and "net losses"
shall mean the taxable income or taxable loss of the Partnership determined
for purposes of preparing the Partnership information return for federal
income tax purposes.

(d) Non-taxable Income And Unallowable Deductions. The terms "non-taxable
income" and "unallowable deductions" shall mean any items of income or
deduction properly treated as income or deductions by the Partnership for
financial accounting purposes but not includable as income or allowable as
a deduction for federal income tax purposes, and expenditures described in
Section 705(a)(2)(B) of the Internal Revenue Code.

(e) Cash Flow. The term "cash flow" shall mean the excess of cash
receipts over cash disbursements for the applicable period; provided,
however, cash flow shall not include any cash received pursuant to the
dissolution and termination of the Partnership.

(f) Distributable Cash. The term "distributable cash" shall mean cash
flow for the applicable period reduced (or increased) by such amounts which
are determined by the general partner to be reasonably necessary (or not
longer necessary) to be expended or held as reserves for the conduct of
partnership business, including expansion thereof, capital improvements,
and future payments of anticipated obligations and liabilities.

(g) Partner. The term "partner" shall mean the general partner and each
of the limited partners.

(h) Majority In Interest Of The Limited Partners. The term "majority in
interest of the limited partners" shall refer to those limited partners
credited with more than 50% of the limited partners' credited capital
contributions of those limited partners referred to.

6. CREDITED CAPITAL CONTRIBUTIONS.

(a) Initial Capital Contributions. The general partner shall contribute
as a general partner $1.00 to the capital of the Partnership, which amount
shall be credited as a capital contribution and become a part of the
capital account of the general partner on the date of contribution.

Each limited partner's capital contribution to the Partnership shall be in
the amount set forth opposite such partner's name in this Agreement, which
amount shall be credited as a capital contribution and become a part of the
capital account of the limited partner on the date of contribution. The
general partner may contribute as a limited partner to the Partnership,
which contribution shall be treated as any other limited partner's
contribution.

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<PAGE>

(b) Contributions Upon Certificate Filing. Upon filing of the amended and
restated certificate of limited partnership the credited capital
contributions of the partners are as follows:

General Partner:

KPI Investments, Inc. $1.00

Limited Partner(s):

Dennis Galeazzi $99.00

(c) Additional Capital Contributions. If the general partner, with the
consent of a majority in interest of the limited partners, determines in
its best judgement that additional capital contributions are required to
meet anticipated Partnership expenditures then the general partner and the
limited partners shall contribute the additional capital required in the
ratios of their credited capital contributions or, if a partner declines to
make such a contribution, such partner shall have its interest in the
Partnership diluted as provided in the next paragraph below. Such amounts
shall be contributed in cash or cash equivalents or by wire transfer of
immediately available funds to the bank account established in the name of
the Partnership within thirty (30) business days of notification by the
general partner to the limited partners.

If a partner fails to make or declines to make its required additional
capital contribution within such thirty (30) day period then the defaulting
partner's credited capital contribution shall cease to include the amount
of the contribution default and neither the Partnership nor any other
person shall have any further rights with respect to such unpaid capital
contribution. In addition, the nondefaulting partner or partners may loan
the Partnership the amount of such unpaid capital contribution in
accordance with paragraph 17 of this Agreement.

7. PROFITS, LOSSES AND CREDITS.

(a) Accounting Period And Method. The Partnership shall adopt a calendar
year as its taxable year and accounting period and shall use the method of
accounting selected by the general partner.

(b) Allocations Of Accounting Income And Credits. Net profits, net
losses, non-taxable income, unallowable deductions and credits shall be
computed for each period and shall be allocated among the partners in
accordance with their credited capital contributions as of the end of such
period; provided, however, upon the sale or disposition of any property,
other than cash, contributed to the Partnership any gain attributable to
the excess of the fair market value of such property credited to the
capital of the Partnership at the time of such contribution over its basis
to the Partnership at such time shall be allocated to the Partner making
such contribution.

(c) Limit On Limited Partner Liability. Although losses may be allocated
to a limited partner, no limited partner shall be liable for losses of the
Partnership beyond the contribution or obligated contribution of such
partner to the capital of the Partnership.

8. DISTRIBUTIONS OF DISTRIBUTABLE CASH.

Distributable cash shall be distributed among the partners in accordance with
their credited capital contributions as of such distribution.

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<PAGE>

Except as provided in this paragraph 8 and paragraph 9, no partner shall be
entitled to withdraw any amount from the partner's capital account.

9. TERMINATION PROCEEDS.

In the event of the dissolution and termination of the Partnership under
paragraph 11(e) the proceeds shall be allocated as follows:

First, in payment of all accrued but unpaid debts and liabilities of the
Partnership (including debts or liabilities to partners) requiring payment
in order of priority; and

Second, to expenses of sale or dissolution, including customary brokerage
fees; and

Third, to provide such reserves as the dissolving manager deems advisable
for contingent liabilities of the Partnership (which reserves will be held
in escrow); and

Fourth, to all of the partners in accordance with their capital accounts
after all allocations made to such capital accounts under paragraph 5(b) or
paragraph 7.

Each partner shall look solely to the assets of the Partnership for the return
of such partner's capital contribution and if the Partnership property remaining
after the payment or discharge of the prior debts, liabilities and distributions
of the Partnership is insufficient to return such capital contributions no
partner shall have any recourse against any other partner.

10. POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNER.

(a) Authority Of General Partner. The general partner shall diligently
apply itself in and about the business of the Partnership. Except as
specifically otherwise set forth in this Agreement the general partner
shall have full, exclusive and complete authority and discretion in the
management and control of the Partnership business and shall make all
decisions affecting the Partnership business. The general partner shall
manage and control the affairs of the Partnership to the best of its
ability and shall use its best efforts to carry out the Partnership
business. The rights, powers and duties of the general partner include,
but are not limited to, the following:

(1) To expend the capital and revenues of the Partnership in
furtherance of the Partnership business and to invest Partnership
funds.

(3) To cause to be maintained the books and records required by this
Agreement and to cause income tax returns to be prepared and reports
to be furnished to limited partners.

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<PAGE>

the power to enter into any agreement extending the time for the
assessment of federal income tax against any partner.

(6) To arrange to prosecute, defend, settle or compromise actions at
law or in equity and to satisfy any judgment, decree, decision or
settlement in connection therewith.

(7) To perform any other acts customary or incident to the
acquisition, ownership, management, operation, improvement,
development, leasing or disposition of interests in any Partnership
property, including sale of all or any portion of Partnership property
and to enter into all contracts, leases and agreements incident to
such acquisition, ownership, management, operation, improvement,
development, leasing or disposition and specifically to enter into
such contracts, leases and agreements with any partner, including the
general partner, or any entity or person related to or affiliated with
any partner, including the general partner.

(b) Majority In Interest Of Limited Partners. Without the written
agreement of a majority in interest of the limited partners the general
partner shall not have the authority to:

(1) sell all or substantially all of the assets of the Partnership;

(2) liquidate the Partnership, except as permitted in paragraph 11(a)
of this Agreement;

(3) borrow in the aggregate in excess of One Hundred Thousand Dollars
($100,000.00) in the name of the Partnership;

(4) mortgage or convey or agree to mortgage or convey Partnership
property or any portion of the Partnership property;

(5) prosecute any, claim, counterclaim or cross claim, or settle or
confess judgment on any matter for an amount in excess of One-Hundred
Thousand Dollars ($100,000.00).

(c) Indemnification Of Partners. The partners (including any directors,
officers and employees of each partner) shall not be liable to each other
or the Partnership for amounts paid upon settlement or judgment and
expenses (including attorney's fees) of claims arising

-5-

<PAGE>

out of their activities as or for the Partnership resulting from errors in
judgment or any acts or omissions, whether or not disclosed, which do not
constitute willful misconduct, fraud or gross negligence provided such
persons acted in good faith for the benefit of the Partnership. The
general partner shall be liable to the limited partners and the Partnership
for its willful misconduct, fraud or gross negligence, in the performance
of its duties as general partner. To the extent of Partnership assets, the
Partnership shall indemnify a partner or a director, officer or employee of
a partner for liability arising out of activities for the Partnership
(including reasonable attorney's fees) resulting from errors in judgment or
any acts or omissions, whether or not disclosed, which do not constitute
willful misconduct, fraud or gross negligence provided such persons acted
in good faith for the benefit of the Partnership.

(d) Debts And Obligations Of Partnership. No partner, other than the
general partner, shall make, draw, accept, or endorse any bill of exchange,
promissory note, or other engagement for the payment of money, or guarantee
any debt or account on behalf of the Partnership, or pledge the credit of
the Partnership in any way.

(e) Competition. Any partner may compete with the Partnership without
limitation.

(f) Meetings. The partners shall meet annually and shall meet at such
other times as requested by any partners holding 10% or more of the
partners' credited capital contributions upon five (5) prior business days
written notice, unless such prior notice is expressly waived by the other
partners. These meetings shall be held at such time, date and place as
designated by the general partner. At such meetings, the partners shall
review the operations of the Partnership and transact such other business
as may properly be brought before the meeting.

11. TERM, DISSOLUTION AND TERMINATION OF PARTNERSHIP.

(a) Term And Dissolution Of Partnership. The term of the Partnership
shall commence upon filing for record of the certificate of limited
partnership in the Office of the Secretary of State, and shall continue
until the earliest of the following (each of which shall be called a
"dissolving event") upon which the Partnership shall be dissolved:

(1) The sale, expiration, abandonment or other disposition of all
Partnership assets;

(2) Dissolution of the Partnership by judicial decree;

(3) At such time as the general partner ceases to be a general
partner by reason of:

(b) Upon such person's making an assignment for the benefit of
creditors, filing a voluntary petition in bankruptcy or
adjudication of bankruptcy or insolvency;

-6-

<PAGE>

(d) If such person seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of all or a
substantial part of such person's properties, or 90 days after
the appointment, without such person's consent of such as
trustee, receiver, or liquidator, unless such appointment is
vacated within such time or within 90 days after any stay of such
appointment within such time; or

(4) December 31, 2030 or by the decision of the general partner with
the written agreement of a majority in interest of the limited
partners.

(b) No Dissolution Or Withdrawal As A Result Of Certain Other Events. The
Partnership shall not be dissolved by any event not set forth in paragraph
11(a), including, but not limited to: (1) the death, incompetency,
bankruptcy, insolvency, dissolution or other cessation to exist as a legal
entity of any limited partner; (2) the assignment by any partner of the
partner's interest in the Partnership; or (3) the admission of a new
partner. No event except as set forth in paragraph 11(a) shall entitle a
partner or the partner's estate or representative to withdraw from the
Partnership or to a return of capital.

(c) Winding Up, Liquidation, Distribution Of Assets And Termination. If
there is a dissolving event under paragraph 11(a) then:

(1) The general partner, or if there is none, any person selected by
a majority in interest of the limited partners (such partner or person
called the "dissolving manager") shall wind up the affairs of the
Partnership, sell or otherwise liquidate or dispose of or abandon all
of the Partnership assets in a manner consistent with attempting to
obtain the fair market value thereof; and shall terminate the
Partnership.

(ii) The proceeds from such disposition shall be distributed under
paragraph 9.

12. NO AUTHORITY IN LIMITED PARTNER.

13. INSPECTION OF PARTNERSHIP RECORDS.

14. ANNUAL REPORTS AND BUDGET.

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<PAGE>

15. SUBSTITUTIONS, ASSIGNMENTS AND ADMISSION OF ADDITIONAL PARTNERS.

(a) New Or Substituted General Partners. The general partner shall not
bring in a co-general partner and shall not substitute a general partner in
its place without the written consent of a majority in interest of the
limited partners excluding the general partner. No assignment, sale,
transfer, pledge or hypothecation of the general partner's interest in the
Partnership is authorized nor will it be binding upon or accepted by the
Partnership unless the general partner obtains the prior written consent of
a majority in interest of the limited partners excluding the general
partner.

(b) Additional Limited Partners. The general partner may admit additional
limited partners upon receipt of such persons' capital contributions to the
Partnership.

(c) Assignment Of Limited Partner Interest. No assignment, sale,
transfer, pledge or hypothecation of a limited partner's interest in the
Partnership is authorized nor will the same be binding upon or accepted by
the Partnership unless the transferor obtains the prior written consent of
the general partner (provided, however, such restriction shall not apply to
any transfer by reason of the death, incompetency or bankruptcy of a
limited partner, provided that the transferee thereunder shall be bound by
the terms and provisions of this agreement), which consent shall be in the
absolute discretion of the general partner and which consent shall in no
event be granted if, in the opinion of the general partner or of the
counsel for the Partnership, such assignment, sale, transfer, pledge or
hypothecation could either (1) jeopardize the partnership status of the
Partnership for federal income tax purposes; or (2) violate or cause the
Partnership to violate, any state or federal securities law or any other
applicable law or governmental rule or regulation; or (3) adversely affect
the availability of any federal and state securities law exemption pursuant
to which the interests in the Partnership were originally offered and sold
to the limited partners.

(d) Substituted Limited Partner. In connection with a permissible
assignment of a limited partner's interest, the assignor shall have the
power and right to substitute the assignee as the limited partner as to
such interest if all of the following are satisfied:

Upon the death, legal incompetency or dissolution of a limited partner,
such partner's legal representative or successor shall have all the rights
such as the partner possessed to constitute his or her successor as an
assignee and to join with the assignee in making application to substitute
such assignee as limited partner.

16. SIGNATURES.
Any check, draft, contract, evidence of indebtedness, deed, mortgage, deed of
trust, lease, contract of sale, bill of sale, certificate of limited
partnership, or other similar document shall

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<PAGE>

be executed for the Partnership by the general partner and no other signatures
shall be required.

17. LOANS.

18. DESIGNATION.

19. POWER OF ATTORNEY.

(a) Grant Of Power. Each of the limited partners irrevocably constitutes
and appoints the general partner as true and lawful attorney in such
limited partner's name, place and stead to make, swear to, execute,
acknowledge and file:

(3) Any cancellation of such certificates of Partnership and any
documents required upon the dissolution and termination of the
Partnership.

(4) New or amended certificates of limited partnership and any
documents and instruments required to effectuate the continuation of
the business of the Partnership.

If a limited partner assigns his interest as permitted in paragraph 15(c),
the foregoing power of attorney shall survive the delivery of the
instruments effecting such assignment for the purpose of enabling the
general partner to sign, swear to, execute, acknowledge and file any
amendments to the certificate of limited partnership and other instruments
and documents to effectuate the substitution of the assignee as a limited
partner.

-9-

<PAGE>

(b) Limit On Power. It is expressly intended that the foregoing power of
attorney under this paragraph 19 is coupled with an interest, and the
general partner shall not exercise the same in any manner which would (l)
remove the general partner, (2) enlarge any obligation or liability of a
limited partner, or (3) affect any Partnership allocations in a manner
adverse to the limited partners.

20. NO PRIORITY AMONG LIMITED PARTNERS.

No present or future limited partner shall have any priority over any other
limited partner as to contributions and compensation by way of income or
otherwise.

21. NO RIGHT OF LIMITED PARTNERS TO RECEIVE PROPERTY OTHER THAN CASH IN RETURN
FOR CONTRIBUTIONS.

22. COVENANT NOT TO CAUSE DISSOLUTION.

23. AMENDMENTS.

Amendments to this Agreement may be proposed by the general partner or by any
limited partners holding 10% or more of the partners' credited capital
contributions. Following such proposal, the general partner shall submit to the
limited partners a verbatim statement of any proposed amendment and the general
partner shall include in any such submission a recommendation as to the proposed
amendment. The general partner shall seek the written vote of the partners on
the proposed amendment. A proposed amendment shall be adopted and be effective
as an amendment hereto if it receives in writing the affirmative vote of the
general partner and of a majority in interest of the limited partners excluding
the general partner.

24. NOTICES.

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<PAGE>

25. BINDING EFFECT.

This agreement shall inure to and bind all of the parties, their estates, heirs,
personal representatives, successors and assigns.

IN WITNESS WHEREOF, the general partner and the limited partners have executed
this Limited Partnership Agreement as of the 22 day of February, 1995.

KPI INVESTMENTS, INC., an Iowa
corporation, as General Partner

By /s/ Gerard D. Neugent
-------------------------------------
Gerard D. Neugent, President

/s/ Dennis Galeazzi
----------------------------------------
Dennis Galeazzi, Limited Partner

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<PAGE>

FIRST AMENDMENT TO THE CERTIFICATE OF LIMITED PARTNERSHIP
AND LIMITED PARTNERSHIP AGREEMENT
OF ALTOONA MEADOWS INVESTORS, L.P.

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

1. The name of the limited partnership is Altoona Meadows Investors, L.P.
("Partnership").

2. The original Certificate of Limited Partnership, dated February 22,
1995, was filed with the Iowa Secretary of State on February 23, 1995
("Agreement").

3. The purpose of this First Amendment is to acknowledge and confirm that
in accordance with the provisions of the Agreement, American Mutual
Life Insurance Company has been substituted as the Limited Partner in
place of Dennis Galeazzi, and paragraph 4 of the Agreement is restated
to read as follows:

"The principal place of business and the office of the Partnership
shall be 6000 Westown Parkway, Suite 200W, West Des Moines, Iowa
50266. The agent for service of process on the Partnership shall be
William C. Knapp II, whose address is 6000 Westown Parkway, Suite
200W, West Des Moines, Iowa 50266.

The business address of the General Partner is 6000 Westown Parkway,
Suite 200W, West Des Moines, Iowa 50266. The business address of the
Limited Partner is 418 Sixth Avenue, Des Moines, Iowa 50309."

In all other respects, the Agreement remains unchanged and in full force and
effect.

IN WITNESS WHEREOF, the undersigned have executed this First Amendment as of the
28th day of September, 1995.

KPI INVESTMENTS, INC., An Iowa
Corporation, as General Partner

By /s/ Gene Harris
-------------------------------------
Gene Harris, President

AMERICAN MUTUAL LIFE INSURANCE COMPANY,
as Limited Partner

By /s/ Scott Harris
-------------------------------------
Scott Harris, Vice President

<PAGE>

CONSTRUCTION LOAN SERVICING AGREEMENT

THIS AGREEMENT, made and entered into this 20 day of November,
1995, by and between AmerUs Properties, Inc. hereinafter called "API" and
American Mutual Life, Des Moines, Iowa, hereinafter called "AML" Witnesseth:

WHEREAS, API is desirous of providing construction loan servicing for the
Construction Loan made to Altoona Meadows III, L.C., on behalf of AML:

NOW THEREFORE, in consideration of the mutual agreements of the parties
hereto, it is agreed between AML and API as follows, to-wit:

PART A. API agrees--

1. To deliver all documents in connection with the construction loan prepared
and executed in form and manner satisfactory to AML. In cases where no
title insurance policies are furnished, then API hereby agrees to protect
and hold harmless AML from all loss or damage by reason of any lien or any
encumbrance upon or defect in the title to the property securing such loan,
or invalidity of the note or mortgage.

2. To furnish a plat of survey by a registered surveyor, showing the location
of the improvements with reference to lot lines, streets, alleys, driveways
and known easements, and to furnish such other instruments as AML may
require.

3. To pay all expenses of every kind incurred in connection with the servicing
of the loan.

4. That AML shall have the right to inspect the security from the date of
delivery of and payment for the loan and for confirmation of facts in the
submission.

5. To make every effort to conserve the continuing property of AML.

6. To perform without cost or charge to AML, except as provided in Part B
hereof, all services and duties incident to the servicing of each loan,
including, but not limited to, the following:-

(a) To maintain proper facilities and continuity of management by a staff
qualified to perform all of the obligations of API under the
provisions of this contract.

(b) To keep complete and accurate records of all payments made by each
mortgagor in accordance with sound accounting practices and promptly
remit such payments to AML, or deposit them in a bank account
maintained by AML for that purpose, together with reports required by
AML. Funds collected by API for AML shall not be mingled with API's
own funds, but shall be held separate and apart in trust for AML
pending proper disposal. API shall submit to AML for inspection each
month upon request original statements of bank accounts covering said
trust funds.
<PAGE>

(d) To make monthly property inspections of the construction site as
required by AML, and make prompt written reports of the condition of
said property. In addition, API shall promptly notify AML of any loss
or damage by fire or any other cause with respect to the security
covered by the mortgage which may come to the attention of API. API
shall make diligent effort to obtain prompt and proper correction of
any physical impairment if requested to do so by AML.

(e) To procure from the mortgagor all hazard insurance as required by AML
and permitted by the mortgage, and renewals of such insurance prior to
expiration. Should the mortgagor fail to supply such insurance, API
shall procure the insurance in behalf of the mortgagee as provided in
the mortgage. All hazard insurance policies of which API has
knowledge, together with mortgage clauses, shall be delivered to AML
when requested by AML.

(f) To advise AML of any sale or transfer of the legal or equitable title
to the mortgaged premises, the date of the instrument transferring the
title, and whether the grantee or vendee purchased the premises
subject to the existing mortgage or assumed payment thereof.

(g) To use due diligence to prevent any lien superior to that held by AML
from attaching to the mortgaged property, and to notify AML promptly
of any lien or claim of which API has knowledge.

(h) In the event of a default in the loan serviced by API, and when
authorized by AML, API shall promptly institute foreclosure
proceedings or proceed to acquire the property by other means and, if
applicable, follow procedure in accordance with the provisions of the
National Housing Act or Servicemen's Readjustment Act of 1944 and
amendments to these acts and the rules and regulations issued or to be
issued thereunder, or any Governmental Authority under which loan may
be made. Attorneys selected by API to conduct foreclosure proceedings
shall be subject to prior approval by AML. API will conduct all such
proceedings as directed by AML, and if any property is conveyed to the
Federal Housing Commissioner or Veterans Administrator, API will
attend to the settlement as a part of its services when requested to
do so by AML. During the pendency of any foreclosure proceedings, API
shall, if requested by AML, manage and protect the mortgaged premises,
including, but not limited to, the collection of rentals therefrom
and, if vacant, the renting thereof, attending to insurance of the
premises, and shall perform such other services as are customary in
the management of property in the locality involved. API shall be
compensated for management services on the basis of fees to be
predetermined by mutual agreement between API and AML, but in the
event a mutual agreement cannot be reached, then, at AML's option, API
shall nevertheless perform these services and shall be compensated
therefor at the prevailing local real estate board schedule of
management fees.

2
<PAGE>

7. That unless written consent is given by AML, API, either directly or
indirectly, shall not take title to, nor hold any lien or encumbrance on,
the property securing the loan nor make any payment for the benefit of any
mortgagor.

8. That AML's name shall not be used in any advertising or display unless
written permission has first been obtained.

9. That no sale, assignment or transfer of any right, title or interest in and
to this agreement, in whole or in part, may be made without the written
consent of AML.

10. That upon termination of this agreement, API shall upon request, and
without cost or expense to AML:

(a) Furnish AML a complete report of the condition and balances of all
accounts, loans, funds and business whatsoever;

(b) Remit to AML all of AML's funds and monies, including mortgagors'
trust funds, held by API;

(d) Furnish AML originals or copies of all records, documents,
correspondence and papers of any kind pertinent to the loan being
serviced by API; and

(e) Give AML full access to and use of all accounts, books and records.

PART B. AML agrees--

1. To reimburse API for necessary costs and expenses, including reasonable
attorneys fees, of any foreclosure processed by API.

PART C. It is mutually agreed by the parties hereto--

1. The compensation to be paid to API by AML shall be 1.10% per annum of the
commitment amount, to be prorated and paid at the end of the construction
period.

2. It is expressly understood and agreed by API that it does not have, and
shall not have, any vested right, title, interest, claim, demand or
otherwise in the mortgage loan that AML shall have full ownership and
control thereof, together with the full right and power to deal with the
same, including the right and power to sell, assign, renew, extend,
endorse, foreclose, and procure the release of the same, and accept title
in lieu of foreclosure,

3
<PAGE>

without consent of API.

3. It is further understood and agreed that in all cases where the mortgage is
fully paid before maturity, the right of API to participate in the interest
therein shall immediately cease and be determined upon the date of such
payment. In case of foreclosure, API shall not receive any further
participation unless a full cash redemption is made prior to the time
allowed by law for redemption. In case of the conveyance of the security
for the loan to AML in satisfaction of the borrower's obligation to it, API
shall receive no further interest participation. API shall not, in any
case where AML acquires title to property or security, have any interest in
said property or premises.

4. Upon failure of API to satisfactorily perform its obligations hereunder or
in the event a receiver, trustee, conservator or other legal representative
is appointed for API, or should API become otherwise incapacitated by
operation of law or fact for the faithful or proper performance of its
duties hereunder, or any part thereof, then in that event all service
agreements and arrangements and all rights and duties of API shall cease
and this contract shall terminate, and API shall immediately make all
reports, remittances and notices provided for in Paragraph A(10) hereof.

5. Either party may, for any reason, terminate and cancel this servicing
agreement upon giving thirty (30) days notice in writing to the other in
which event all servicing agreements and all rights and duties of API shall
cease, and API shall thereafter not participate in or have any claim
whatsoever to monies collected in connection with the loan. Upon
termination of this agreement API shall immediately make all reports,
remittances and notices provided for in Paragraph A(10) hereof.

6. That upon termination of this agreement, the right of API to compensation
as provided in this agreement hereof shall immediately terminate.

7. If any term or provision of this Contract, or the application thereof to
any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of this Contract, or the application of such
term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Contract shall be valid and enforceable to the
fullest extent permitted by law. The term "mortgage", whenever used in
this Contract, shall be construed to include deed of trust or any other
instrument given to secure the construction loan on real estate. Whenever
the singular number is used herein, it shall include the plural and the
plural shall include the singular, and the use of any gender shall include
all genders.

8. That AML shall have the right at all times to check with the borrower and
verify the balance due on the mortgage and the date of last payment.

4
<PAGE>

Signatures on the following page.

5
<PAGE>

AMERICAN MUTUAL LIFE INSURANCE CO.

BY: /s/ Thomas C. Godlasky
----------------------------------

AMERUS PROPERTIES, INC.

BY: /s/ Gene Harris
----------------------------------

<PAGE>

Exhibit 10.50

LOAN SERVICING AGREEMENT

THIS LOAN SERVICING AGREEMENT (the "Agreement") is made effective as
of the 1st day of September, 1994, by and between MIDLAND SAVINGS BANK, FSB,
a federal stock savings association having its principal office at 606 Walnut
Street, Des Moines, Iowa, 50309 ("Midland") and CENTRAL LIFE ASSURANCE
COMPANY, an Iowa corporation having an office at 611 Fifth Avenue, Des
Moines, Iowa, 50309 ("Central").

WHEREAS, Midland desires to have Central service certain
nonresidential mortgage loans now owned by Midland and which Midland may
hereafter make or acquire; and

WHEREAS, Central is prepared to provide such services to Midland on the
basis described in this Agreement;

NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Central and Midland do hereby
agree as follows:

ARTICLE I. DEFINITIONS

SECTION 1.01. DEFINITIONS.

In addition to the definitions in the opening paragraph of this
Agreement the following terms shall have the following respective meanings:

(a) "Cut Off Date" shall mean the date used to prepare a Cut Off Report.
The Cut Off Dates shall be the 25th day of each month during the term
of this Agreement.

(b) "Cut Off Reports" are reports to Midland of all amounts due and payable
to Midland through the Cut Off Date.

(d) "Mortgage Loans" shall mean the non-single family residential mortgage
loans consisting of multi-family, commercial real estate and similar
non-single family residential mortgages now owned by Midland and
described in Appendix 1 to this Agreement, and similar non-single family
residential mortgage loans which Midland may hereafter make or acquire
during the term of this Agreement, provided, however, that such term
shall not include certain bond project developer loans described in
Appendix 1A to this Agreement.

(e) "Mortgage Loan Documents" shall mean the promissory titles, mortgage
agreements, deeds of trust, collateral assignment

<PAGE>

documents, U.C.C. financing statements and security agreements and other
financing documents relating to the Mortgage Loans referred to in this
Agreement.

(f) "Remittance Date" shall mean the date loan payment amounts collected by
Central and shown on the Cut Off Report are to be remitted to Midland.
The monthly Remittance Date shall be five business day(s) following the
corresponding monthly Cut Off Date.

(g) "Remittance Amount" shall be the actual net payments received by
Central in its capacity as Servicing Agent from the mortgagors under
the Mortgage Loan Documents including payments of principal, interest,
late payment fees, default interest and deposits or reimbursements for
taxes, insurance premiums or any other amounts received to be escrowed
with Central, which net payments shall be reduced by the Servicing Fees
payable to Central under this Agreement and direct payments made by
Central on behalf of Midland to taxing authorities, insurance companies
or other parties and any escrow deposits to be held by Central under
this Agreement.

(h) "Service Fee" means the fees to be paid by Midland and/or retained by
Central for the performance of services by Central under this Agreement.

(i) "Service Period" shall mean the twelve month period commencing
September 1, 1994 and ending August 31, 1995 as referred to in Section
8.01 of this Agreement and any extension thereof mutually agreed to by
Midland and Central.

ARTICLE II. AGENCY

SECTION 2.01. APPOINTMENT.

Midland hereby appoints Central as its agent during the Service Period
for the purpose of servicing the Mortgage Loans in accordance with the
terms of this Agreement. Midland hereby conveys and grants to Central
the power and authority to perform all of the obligations and duties on
the part of Central to be performed under this Agreement and on
Midland's part to be performed or permitted under the Mortgage Loans
and the Mortgage Loan Documents including the exercise of any rights
conveyed to Midland thereunder which are delegated to Central under the
terms of this Agreement.

SECTION 2.02. ACCEPTANCE OF APPOINTMENT.

Central hereby accepts the appointment and authority to act as
Midland's agent to service the Mortgage Loans and Mortgage Loan

<PAGE>

Documents as provided in Section 2.01 hereof. Central hereby agrees to perform
and discharge the obligations and duties on the part of Central to be performed
under this Agreement and on Midland's part to be performed or which are
permitted under the Mortgage Loans and the Mortgage Loan Documents to the extent
that the agency to perform such obligations and duties or to exercise such
rights are granted to Central under this Agreement.

SECTION 2.03. STAFFING.

Central hereby agrees to maintain, during the Servicing Period,
adequate staff and support service and facilities as are reasonably necessary
in Central's judgment, reasonably exercised, to perform its responsibilities
under this Agreement.

ARTICLE III. SERVICES TO BE PROVIDED BY CENTRAL

SECTION 3.01. MORTGAGE LOAN SERVICES.

During the Service Period, Central shall provide Midland with the
following mortgage loan services:

(a) Collection of all payments due under the terms of each Mortgage Loan
as such payments become due;

(b) Maintenance of complete and accurate accounting records of and proper
application of the funds collected from each mortgagor on account of
each Mortgage Loan, which accounting shall include payments payable
and/or paid for principal, interest, taxes, assessments, hazard
insurance premiums, mortgage insurance premiums, late payment fees,
default interest and other payments required to be made or allowed to
be made and so made under the terms of the Mortgage Loan Documents;

(c) Notification to Midland of the failure of any Mortgagor to make
required payments under the terms of the Mortgage Loan Documents
applicable to such mortgagor, which notice shall be provided within
thirty days of the failure to make the required payment;

(d) Adjustments to interest rates in compliance with the applicable
provisions of the mortgage loan notes which are secured by the mortgage
documents in compliance with applicable regulatory regulations of which
Central has received notice, and delivery of written or other required
notices to the mortgagor(s) of such interest rate adjustments;

(e) Monitor the performance of each mortgagor of its respective obligations
under the Mortgage Loan Documents and delivery of written notice to
Midland of any failure of such performance promptly after the discovery
thereof by Central.

<PAGE>

(f) Monitor payments for taxes, special assessments, ground rents and
premium payments for hazard insurance payable under the Mortgage Loan
Documents by the mortgagors and delivery of written notice to Midland
of any deficiencies in such funds prior to the date that the particular
collateral may be threatened or impaired in order that Midland may fund
such deficiencies;

(g) Monitor the performance or non-performance of non-monetary obligations
under the Mortgage Loan Documents and notify Midland promptly after
discovery by Central of any of the following conditions:

(1) The vacating of or any adverse change in the occupancy of the
property secured by a mortgage included within the Mortgage Loans;

(2) The sale or transfer of property secured by a mortgage included
within the Mortgage Loans;

(3) The death, bankruptcy, insolvency or other financial disability of
a mortgagor which might impair the ability to repay a loan secured
by a Mortgage Loan;

(4) Loss or damage to property secured by a Mortgage Loan and upon
request of Midland notification of such loss or damage to
appropriate insurance carriers;

(5) The lack or failure of repairs or other deterioration or waste
suffered or committed to property secured by a Mortgage Loan;

(6) The failure to submit any required documents, instruments or
information required under a Mortgage Loan including any financial
statement or cash flow analysis;

(7) The occurrence of any other event of default or event which would
constitute an event of default under any Mortgage Loan Documents
but for the passage of time or the giving of notice.

(h) Administer the collection and distribution of escrow payments under the
terms of the Mortgage Loan Documents and applicable law, including but
not limited to preparation and delivery of escrow reports to the
mortgagors and Midland and disbursement to the proper parties of
payments for taxes, special assessments, ground rents and premiums for
hazard insurance.

Section 3.02. Additional Services.

In addition to the Mortgage Loan Services described in Section 3.01
hereof, Central agrees, subject to Section 6.02 hereof, to

<PAGE>

provide Midland with the following services during the Service Period:

(a) Services which are ancillary or supportive and necessary to or
associated with the specific services described in Section 3.01
hereof and which are associated with usual, customary and normal
business practices related to such specific loan servicing
activities except to the extent any such services are specifically
excluded from this Agreement.

(b) Annual inspections of each property encumbered by a Mortgage Loan
in accordance with a schedule provided to Midland, and
reinspection of particular properties as soon as practical after
either written request therefor from Midland or if a Mortgage Loan
remains delinquent for a period of sixty days after the
expiration of any time period allowed to the mortgagor for cure of
such delinquency.

(c) Preparation and delivery of such reports and documents in
connection with Central's responsibilities hereunder as may be
required by applicable law, the terms of the Mortgage Loan
Documents or as Midland may reasonably request from time to time.

SECTION 3.03. LITIGATION SUPPORT SERVICES.

In the event that a Mortgage Loan comes into and continues in default
or a mortgagor files a petition seeking protection under the provision of any
federal or state bankruptcy and or similar law, then Central upon written
request from Midland shall, subject to Section 6.02 hereof, undertake the
following on behalf of and in the name of Midland:

(a) Seek the appointment of a receiver to control and manage the
encumbered property for the benefit of Midland.

(b) Foreclose upon or otherwise convert the ownership of the
property encumbered by the Mortgage Loan Documents to Midland;

(c) File proof of claims, motions for relief from stay and for payment
of the mortgagor's obligations under the Mortgage Loan Documents,
such other motions and pleadings as Central shall deem to be
appropriate in the exercise of its business judgment and other
motions and pleadings as Midland may reasonably request.

<PAGE>

SECTION 3.04. MAINTENANCE AND MANAGEMENT OF PROPERTY.

In the event that Midland obtains possession of any property
encumbered by a Mortgage Loan, then Central agrees, subject to Section 6.02
hereof, upon written request from Midland to manage such property, directly
or indirectly, including securing such acquired property from waste and
vandalism, preparing such property for resale and coordinating efforts to
market the property for sale and coordinating the closing of any such sale.

SECTION 3.05. RIGHT TO MODIFY SERVICES.

The parties hereto agree that Central shall have the right, upon
thirty days' advance written notice to Midland to modify the services to be
provided to Midland under this Agreement provided that:

(a) Such modified services shall be reasonably equivalent to or better
than the services being replaced; and

(b) Midland consents to such modified services within three business
days after Central's request therefor, which consent(s) shall not
be unreasonably withheld or delayed by Midland.

SECTION 3.06. REMITTANCES.

Central agrees to remit the monthly net Remittance Amount and the
monthly Cut Off Report to Midland on or before the corresponding monthly
Remittance Date.

SECTION 3.07. RESTRICTIONS/WAIVERS AND RELEASES.

Central will not waive, modify, release or consent to postponement on
the part of any mortgagor under a Mortgage Loan or any term or provision of a
Mortgage Loan Document on the part of such mortgagor to perform without the
written consent of Midland.

ARTICLE IV. OWNERSHIP OF RECORDS, CONFIDENTIALITY, DISCLOSURE AND RETENTION.

SECTION 4.01. OWNERSHIP OF RECORDS.

Central and Midland acknowledge and agree that the Mortgage Loan
Documents and all original documents, agreements, papers, recordings,
instruments and other writings generated by Central under this Agreement in
performance of Central's obligations and duties to Midland under this
Agreement shall be and remain the personal property of Midland provided,
however, that Central shall hold such originals during the Service Period as
mentioned in

<PAGE>

Section 4.04 hereof and shall also have the right to keep and maintain copies
of all such documents, agreements, papers, recordings, instruments and other
writings.

SECTION 4.02. CONFIDENTIALITY.

Central and Midland acknowledge and agree that the Mortgage Loan
Documents and all other agreements referred to in Section 4.01 of this
Agreement and the contents thereof shall be confidential and Central shall
not disclose the contents thereof to any third party other than the
mortgagors or their authorized representatives as to the transactions related
to such parties or as reasonably necessary to perform the obligations and
duties on Central's part to be performed under this Agreement and except as
such disclosure may be reasonable required in connection with compliance with
regulatory requirements, examination by the employees and agents of Midland,
any litigation or proceeding between Central and Midland or as may be
otherwise authorized by Midland.

SECTION 4.03. DISCLOSURE.

Midland acknowledges that the records maintained by Central in
connection with services performed or required under this Agreement may be
subject to examination and audit by various regulatory agencies and other
governmental authorities, and the provisions of Section 4.02 or any other
provision of this Agreement to the contrary notwithstanding that Central
shall have the right and obligation to make all such records available for
examination by such governmental authorities and regulators pursuant to
applicable laws and regulations.

SECTION 4.04. RETENTION OF RECORDS.

During the Servicing Period, the Mortgage loan records, files and
Mortgage Loan Documents shall be held and maintained by Central or under
Central's control provided that such records, files and documents shall be
accessible to Midland in accordance with Central's record storage operation
procedures. Central will use reasonable care in protecting the records,
files and documents from damage.

ARTICLE V. NOTICES

SECTION 5.01. ADDRESSES.

Any notice or other communication given pursuant to this Agreement
shall be given in writing to the other party at the address stated herein or
at such other address as such party shall specify by notice hereunder. Such
notice shall be conclusively deemed to be served when delivered personally or
three (3) calendar days after sending by registered mail or one (1) business
day after sending by facsimile or similar electronic means.

<PAGE>

SECTION 5.02. AUTHORIZED REPRESENTATIVES.

Central and Midland shall each appoint one or more individuals who
shall serve as contact persons for purposes of communications concerning this
Agreement. Such contact persons shall be authorized to act on behalf of the
respective parties as to matters pertaining to this Agreement and the other
party shall have the right to rely on the actions of such individuals
designated to act on behalf of the other party unless and until such
designation is changed, at which time such party may rely on the new
designation. The initial representatives of the parties are listed in
Appendix 2 to this Agreement.

ARTICLE VI. COMPENSATION.

SECTION 6.01. SERVICING FEE.

Midland shall pay Central for the services performed by Central as
mentioned in Section 3.01 of this Agreement monthly by the tenth day of each
month for the prior month a Servicing Fee equal to 1/12th of an amount equal
to one quarter of one percent (0.25%) per annum of the outstanding principal
balance of all the Mortgage Loans then being serviced under this Agreement as
of the first day of each calendar month for which such payment is to be made.
Midland and Central agree that Central shall have the right, in lieu of a
direct payment by Midland, to retain the monthly fee to be paid by Midland to
Central from the monthly Remittance Amounts received and processed by Central
under this Agreement.

SECTION 6.02. OTHER FEES.

Central's performance for Midland of any of the Additional Services
mentioned in Sections 3.02, 3.03 or 3.04 of this Agreement shall be subject
to negotiation of a fee structure for the performance of such services which
is acceptable to Central. If Midland requests such services and the parties
agree upon an acceptable fee structure, then the parties shall enter into an
amendment to this Agreement documenting such fee agreement. If the parties
do not agree on such a fee structure, then Central shall have no obligation
to perform such Additional Services.

ARTICLE VII. INSURANCE AND INDEMNITY

SECTION 7.01. INSURANCE COVERAGE.

Central agrees to use reasonable efforts during the Servicing Period
to assure that the provisions of the Mortgage Loan Documents concerning the
maintenance of required insurance by the mortgagors are complied with and
shall furnish proof of such coverages to Midland upon demand to the extent
that such proof is available to

<PAGE>

Central. In the event that the Mortgage Loan Documents provide that Midland is
to provide such insurance with the premium cost to be paid or reimbursed by the
respective mortgagors, then Central shall collect such contributions to premium
cost and obtain such insurance for the benefit of Midland. In the event that
any mortgagor fails to obtain insurance which it is required to carry under its
Mortgage Loan Documents or in the alternative fails to pay or reimburse the
premium cost, if such be the obligation, then Central shall promptly notify
Midland of such failure and proceed to obtain insurance coverage for Midland's
benefit. In such case, Midland shall reimburse Central for all costs incurred
by Central in obtaining such insurance including the premium cost. Midland
acknowledges and agrees that Central shall be named as an additional insured
under all liability policies obtained or required in connection with the
operation of the properties encumbered by the Mortgage Loan Documents. Midland
specifically acknowledges that the Mortgage Loan Document files provided to
Central did not demonstrate evidence of the maintenance of such required
insurance coverages when such files were originally delivered to Central for
servicing.

SECTION 7.02. INDEMNIFICATION OF CENTRAL.

(a) Midland shall indemnify and hold harmless Central, and will promptly
reimburse Central for any losses, damages, claims, charges, deficiencies
or expenses of any nature (including without limitation, reasonable
attorney's fees) incurred by or assessed against Central arising out of or
resulting from:

(1) The inaccuracy or incompleteness of any representation or
warranty made by Midland in this Agreement, or in any file, schedule,
statement or certificate furnished pursuant to this Agreement; or

(2) The failure by Midland to perform or observe any term or
provision contained in this Agreement, or the failure by Midland or any
predecessor to perform or observe any term or provision in any Mortgage Loan
Document, schedule, statement, or certificate furnished pursuant to this
Agreement; or

(3) Errors of Midland or any predecessor of Midland in servicing the
Mortgage Loans prior to the Effective Date, or

losses, damages or claims resulting from Midland's negligence or willful
misconduct.

(4) Directions from Midland to Central in or relating to this
Agreement or Central's performance of obligations, responsibilities or duties
under this Agreement; or

(5) Any claim arising from, out of or on account of Central's use,
maintenance or control of any property recovered on behalf of

<PAGE>

Midland by Central including without limitation as a result of abandonment,
foreclosure or deed in lieu of foreclosure, which shall include any claim
resulting from or arising out of or related to any matter involving the
violation of or responsibility for compliance with any applicable laws,
rules, orders or regulations including without limitation any environmental,
health, safety, building or zoning laws and regulations.

(b) Central agrees to promptly notify Midland in writing of the existence of
a fact actually known to Central giving rise to any obligations of Midland
under this Section and, in the case of any claim or any litigation brought
about by a third party which may give rise to any such obligations, Central
agrees to promptly notify Midland of the making of such claim or the
commencement of such action by a third party as and when the same become
known to Central. Midland shall be entitled to employ counsel in its own
name and at its own expense with respect to Midland's interest in such claims
or litigation and shall cooperate fully with Central in the handling and
disposition of such claim or litigation. Midland agrees to promptly notify
Central of the assertion of any claim or commencement of any action by a
person other than Central which may give rise to an obligation of Midland
under this Section.

SECTION 7.03. INDEMNIFICATION OF MIDLAND.

(a) Central shall indemnify and hold harmless Midland, and will promptly
reimburse Midland for any losses, damages, claims, charges, deficiencies or
expenses of any nature (including without limitation, reasonable attorney's
fees) incurred by or assessed against Midland arising out of or resulting
from:

(1) The inaccuracy or incompleteness of any representation or
warranty made by Central in this Agreement; or

(2) Central's gross negligence or willful misconduct in performing
its obligations under this Agreement.

(b) Midland agrees to promptly notify Central in writing of the existence of
a fact actually known to Midland giving rise to any obligations of Central
under this Section and, in the case of any claim or any litigation brought
about by a third party which may give rise to any such obligations, Midland
agrees to promptly notify Central of the making of such claim or the
commencement of such action by a third party as and when the same become
known to Midland. Central shall be entitled to employ counsel in its own
name and at its own expense with respect to Central's interest in such claims
or litigation and shall cooperate fully with Midland in the handling and
disposition of such claim or litigation. Central agrees to promptly notify
Midland of the assertion of any claim or commencement of any action by a
person other than Midland which may give rise to an obligation of Central
under this Section.

<PAGE>

ARTICLE VIII. TERM AND TERMINATION.

SECTION 8.01. TERM.

SECTION 8.02. EXTENSION.

The parties agree that the Service Period shall be extended for up to
ten consecutive one year periods (each of which is referred to herein as an
"Extension Period") unless either party provides written notice to the other
party of termination of the Agreement at least thirty days prior to the then
expiring Service Period or Extension Period, in which event this Agreement
shall terminate on the last day of the expiring Period. (hereinafter
referred to as an "Extension Period")

SECTION 8.03. TERMINATION.

During the Service Period or any Extension Period either Central or
Midland may terminate this Services Agreement as to all its respective
services, or may terminate any specific services provided hereunder, upon
sixty (60) days' prior written notice to the other party.

SECTION 8.04. SURVIVAL ON PARTIAL TERMINATION.

This Services Agreement, or any service provided hereunder, may be
terminated or substantially reduced at any time by mutual consent of the
parties. The termination of any one or more of, but less than all of the
services provided hereunder by Central shall not be deemed to terminate this
Services Agreement in its entirety.

ARTICLE IX. MISCELLANEOUS

SECTION 9.01. ENTIRE AGREEMENT.

This Agreement is the complete and exclusive statement of the
agreement between the parties and supersedes all prior agreements and
representations between them relating to the subject matter of this
Agreement. Amendments to this Agreement shall not be effective unless in
writing and signed by the duly authorized representatives of Midland and
Central.

<PAGE>

SECTION 9.02. GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with
the laws of the State of Iowa.

SECTION 9.03. WAIVER, ATTORNEYS FEES AND THIRD PARTY BENEFICIARIES.

No delay or failure by either party to exercise any of its rights or
remedies hereunder shall operate as a waiver thereof. Each party shall
reimburse the other party for all expenses, including reasonable attorneys'
fees, incurred by the other party in exercising any of its rights or remedies
hereunder, or resulting from any default by the reimbursing party. Nothing
herein contained is intended to confer upon any person, other than the
parties and their respective permitted successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.

IN WITNESS WHEREOF, Central and Midland have caused this Loan Servicing
Agreement to be duly executed effective as of September 1, 1994.

CENTRAL LIFE ASSURANCE COMPANY

By /s/ William Knapp II
----------------------------------------
William Knapp II, Assistant Secretary

MIDLAND SAVINGS BANK FSB

By /s/ Brian J. Beverly
-----------------------------------------
Brian J. Beverly, Senior Vice President

STATE OF IOWA )
) SS
COUNTY OF DALLAS )

On this 1st day of September, 1994, before me a Notary Public in and
for the State and County personally appeared William Knapp, II, President of
CENTRAL PROPERTIES, INC., known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in
the capacity therein stated, and as the act and deed of said corporation.

/s/ Kathy O. Kantner
--------------------------------------------
Notary Public in and for said State

My commission expires: 6-2-97
--------------------

<PAGE>

STATE OF IOWA )
) SS
COUNTY OF POLK )

On this 5th day of January, 1995, before me a Notary Public in and
for the State and County personally appeared Brian J. Beverly, Senior
President of MIDLAND SAVINGS BANKS FSB, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged to me that
he executed the same for the purposes and consideration therein expressed, in
the capacity therein stated, and as the act and deed of said corporation.

/s/ Lori Danielson
--------------------------------------------
Notary Public in and for said State

My commission expires: 5-4-95
--------------------

(SEAL)

<PAGE>

APPENDIX 1A

(To Be Provided)

APPENDIX 1A

<PAGE>

APPENDIX 2

Authorized Representatives

For Midland: Brian J. Beverly
Sr Vice President
Midland Savings Bank FSB
206 Sixth Avenue
Suite 100
Des Moines, Iowa 50309
515-281-2129
515-280-2245 (Fax)

For Central: William Knapp, II
President
Central Properties, Inc.
6000 Westown Parkway
Suite 200W
West Des Moines, Iowa 50266
515-221-6010
515-221-6013 (Fax)

APPENDIX 2

<PAGE>

MISCELLANEOUS SERVICES AGREEMENT

This Miscellaneous Services Agreement (the "Services Agreement") is made as
of the 1st day of January, 1996, by and among American Mutual Life Insurance
Company, an Iowa corporation having its corporate offices at 611 Fifth Avenue,
Des Moines, Iowa 50309 ("AML"); AmerUs Group, Inc., an Iowa corporation having
its corporate offices at 418 Sixth Avenue, Des Moines, Iowa 50309 ("AmerUs
Group"); AmerUs Bank, a federal savings bank having its corporate offices at 418
Sixth Avenue, Des Moines, Iowa 50309 (the "Bank"); AmerUs Mortgage, Inc., an
Iowa corporation having its corporate offices at 1516 35th Street, Suite 200,
West Des Moines, Iowa ("AmerUs Mortgage"); Iowa Realty Company, Inc., an Iowa
corporation having its corporate offices at 3501 Westown Parkway, West Des
Moines, Iowa 50265 ("Iowa Realty"); Midland Homes, Inc., an Iowa corporation
having its corporate offices at 4949 Westown Parkway, Suite 195, West Des
Moines, Iowa 50266 ("Midland Homes"); Iowa Title Company, an Iowa corporation
having its corporate offices at 100 Fourth Street, Des Moines, Iowa 50309 ("Iowa
Title"); AmerUs Insurance, Inc., an Iowa corporation having its corporate
offices at 4949 Westown Parkway, Suite 255, West Des Moines, Iowa 50266 ("AmerUs
Insurance"); and AmerUs Finance, an Iowa corporation having its corporate
offices at 611 Fifth Avenue, Des Moines, Iowa 50309 ("AmerUs Finance" and,
together with AmerUs Group, the Bank, AmerUs Mortgage, Iowa Realty, Midland
Homes, Iowa Title, AmerUs Insurance, the "AmerUs Companies").

WHEREAS, in the course of the operation and administration of the business
of the AmerUs Companies, the AmerUs Companies will require certain services from
AML; and

WHEREAS, AML is prepared to provide such services to the AmerUs Companies
on the basis described in this Services Agreement; and

Now, therefore, in consideration of the mutual promises and covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, AML and the AmerUs Companies do
hereby agree as follows:

ARTICLE I. SERVICES TO BE PROVIDED

Section 1.01. For a period of up to twelve (12) months after the date
hereof (hereinafter referred to as the "Services Period") and from month to
month thereafter until terminated in accordance with the provisions contained in
Article V hereof, AML shall provide each of the AmerUs Companies with those
services described in the appropriate schedule to this Services Agreement (the
"Schedules"), which Schedules are attached hereto and made a part hereof.

Section 1.02. The parties agree that any ancillary or support services
necessary or, in the usual and customary manner and the normal course of
business, associated with the specific services described in the Schedules shall
be deemed to be included in, and governed by, this Services Agreement unless
specifically excluded.

<PAGE>

Section 1.03. The parties agree that on forty-five (45) days' prior
written notice to the affected AmerUs Company, AML may modify the services
described in the Schedule for such company, provided that:

(a) Such modified services shall be equivalent to or better than the
services being replaced; and

(b) The affected AmerUs Company consents to the modified services, its
consent not to be unreasonably withheld.

ARTICLE II. ADEQUATE STAFF AND FACILITIES

Section 2.01. During the Service Period, AML shall maintain adequate
staff, support services and facilities as may be necessary to perform its
responsibilities under this Services Agreement.

ARTICLE III. RESPONSIBLE PERSONS

Section 3.01. AML and each of the AmerUs Companies shall each appoint in
writing one or more individuals who shall serve as contact person(s) for
purposes of the carrying out of this Services Agreement. Such contact person(s)
shall be authorized to act on behalf of their respective parties as to matters
pertaining to this Services Agreement.

ARTICLE IV. COMPENSATION

Section 4.01. Except as otherwise provided in the Schedules, in connection
with the services to be performed under this Services Agreement, the AmerUs
Companies shall compensate AML as set forth in this Article IV.

Section 4.02. For each of the services described in the Schedules, the
parties have agreed to the compensation set forth for such services or reports
on the appropriate schedule.

Section 4.03. Bills shall be rendered within fifteen (15) business days
after the first of the month and payment shall be remitted within fifteen (15)
business days after receipt of a proper bill. If an AmerUs Company determines
that the services performed hereunder by AML are not satisfactory or that the
fees charged are in excess of those provided for in this Services Agreement, the
affected AmerUs Company is hereby authorized to withhold payment for such
service until the matter in dispute is resolved or the fees charged are
substantiated or adjusted appropriately. Adjustments for errors on previous
billings and for a final settlement shall be made no more than sixty (60) days
after this Services Agreement terminates.

2
<PAGE>

ARTICLE V. TERM AND TERMINATION

Sectin 5.01. Unless this Services Agreement is otherwise terminated
according to its provisions and except as may otherwise be provided in the
Schedules, AML shall be obligated to provide, and the AmerUs Companies shall be
obligated to pay for, the services and reports described in the Schedules during
the Service Period.

Section 5.02. Except as otherwise provided in this Services Agreement,
during the Servie Period or any Extension Period, AML may terminate this
Services Agreement at its option, at any time, upon sixty (60) days' written
notice to any one or all of the AmerUs Companies. In addition, AML may
terminate or substantially reduce any one or more of the services to be
furnished hereunder by AML, but such termination shall not be deemed to
terminate this Services Agreement in its entirety.

Section 5.03. This Services Agreement, or any service provided hereunder,
may be terminated or substantially reduced at an time by mutual consent of the
parties. The termination of any one or more, but less than all, of the services
provided hereunder by AML shall not be deemed to terminate this Services
Agreement in its entirety.

ARTICLE VI. MISCELLANEOUS

Section 6.01. This Services Agreement is the complete and exclusive
statement of the agreement between the parties and supersedes all prior
agreements and representations between them relating to the subject matter of
this Services Agreement except as set forth on Schedule 6.01. Amendments to
this Services Agreement shall not be effective unless in writing and signed by
the duly authorized representative of the party against whom enforcement of the
amendment is sought.

Section 6.02. Any notice or other communication given pursuant to this
Services Agreement shall be given in writing to the other party at the address
stated herein or at such other address as such party shall specify by notice
hereunder. Such notice shall be conclusively deemed to be served when delivered
personally or three (3) calendar days after sending by registered mail or one
(1) business day after sending by telecopy or telex or similar electronic means.

Section 6.03. This Services Agreement and the rights and duties of the
parties shall be governed by and construed in accordance with the internal laws
of the State of Iowa, without regard to principles of conflicts of laws.

Section 6.04. No delay or failure by any party to exercise any of its
rights or remedies hereunder shall operate as a waiver thereof. Each party
shall reimburse the other parties for all expenses, including reasonable
attorneys' fees, incurred by the other party in exercising any of its rights or
remedies hereunder, or resulting from any default by the reimbursing party.

3
<PAGE>

Section 6.05. This Services Agreement shall be binding upon the parties
and their respective successors and assigns and shall inure to the benefit of
the parties and to the benefit of their successors and assigns.

Section 6.06. Nothing herein contained is intended to confer upon any
person, other than the parties and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this Services
Agreement.

4
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Miscellaneous
Services Agreement effective as of the day and year first above written.

AMERICAN MUTUAL LIFE AMERUS GROUP, INC.
INSURANCE COMPANY

By /s/ D. Richard Ten Braak
-------------------------------
By /s/ Roger K. Brooks D. Richard Ten Braak, Chief
------------------------------ Financial Officer
Roger K. Brooks, President

AMERUS MORTGAGE, INC. AMERUS BANK

By /s/ James F. Taylor By /s/ Marcia S. Hanson
------------------------------ ------------------------------
James F. Taylor, President Marcia S. Hanson, President

IOWA REALTY COMPANY, INC. MIDLAND HOMES, INC.

By: /s/ R. Michael Knapp By: /s/ Ted Grob
------------------------------ ------------------------------
R. Michael Knapp, President Ted Grob, President

IOWA TITLE COMPANY AMERUS INSURANCE, INC.

By: /s/ Connie Wimer By: /s/ Robert J. Lippold
------------------------------ ------------------------------
Connie Wimer, President Robert J. Lippold, President

AMERUS FINANCE, INC.

By: /s/ Thomas R. Bernau
----------------------
Thomas R. Bernau, President

<PAGE>

AMENDMENT TO SERVICE AGREEMENT

This amendment to the Miscellaneous Services Agreement of January 1, 1995 is
made as of May 1, 1996 by and between American Mutual Life (AML, formerly
Central Life Assurance Company) and AmerUs Bank (Bank, formerly Midland Savings
Bank).

The parties hereto agree as follows:

1. SERVICES. AML agrees to provide telephone and data communications services
to the Bank, including the installation and maintenance of appropriate
communications lines, services, and termination equipment to support Bank
operating units as requested. The Bank will be charged monthly as follows:

Local Telephone Service 40.00/Month per Station
Phone Mail Box 4.00/Month per Station
Analog Modem/Fax Line 100.00/Month*
Call Processing Box 150.00/Month
ACD Group 200.00/Month
Local Information .50/Call
Long Distance Information .85/Call
InBound Long Distance .18/Minute
Outbound Long Distance .15/Minute
Analyst/Technician 30.00/Hour
Clerical/Switchboard 10.00/Hour

Other requested services, including additional telephone equipment beyond
the initial installation, will be charged at the actual cost to AML, plus
the hourly charges needed to install and/or maintain said services. For
the initial establishment at Bell Avenue, AML will pay for the installation
of the switch; the Bank will pay for the installation and termination
charges from the local and long distance service vendors.

Existing and/or new data communications facilities will be paid directly by
the Bank; AML will pay all bills associated with voice telephone service.
A complete list of existing data facilities is attached.

2. TERM. The Agreement will extend for five years from the date of
commencement, terminating May 1, 2001. AML agrees to limit price increases
over that period to no more than 5% annually

American Mutual Life AmerUs Bank

By /s/ Lance Krieg By /s/ D. Richard Ten Braak, CFO
----------------------------------- ------------------------------------
Lance Krieg, VP D. Richard Ten Braak, SVP & CFO

Date 4/25/96 Date 4-20-96
---------- ----------

* The Bank may receive a rebate on this charge equal to the amount of the
charge which is in excess of AML's actual cost.

<PAGE>

EXHIBIT 10.54

FIRST AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This First Amendment to Data Processing Service Agreement (the "Amendment")
is made as of September 30, 1990 by and between Central Life Assurance
Company, an Iowa corporation, having its corporate offices at 611 Fifth
Avenue, Des Moines, Iowa 50309 ("Central") and Midland Savings Bank FSB,
f/k/a Midland Financial Savings and Loan Association, having its corporate
offices at 606 Walnut, Des Moines, Iowa 50309 ("Midland")

The parties hereto agree as follows:

1. BACKGROUND. Central and Midland entered into a Data Processing Service
Agreement dated as of November 1, 1989 (the "Agreement"). Midland desires to
modify the Agreement in order to provide further backup and record
protection provisions and to provide for allocation of liability for source
documents while in transit to and from Central. Central is willing to so
modify the Agreement.

2. AMENDMENTS TO AGREEMENT. Section 1.04 of the Agreement is hereby amended
to add the following sentences:

"Central will backup all programs and data daily. The backup tapes are
transported to a secure offsite backup facility. The recovery plan is
tested quarterly by transporting the tapes to the "hot site" facility,
currently located in Chicago. All pertinent information regarding the
test is documented and available for inspection by Midland or its
designate. Such information includes, but is not limited to, location of
the test, date of the test, files and programs tested, and any problems
encountered during the test."

Section 4.03 of the Agreement is amended to add the following sentence:

"To the extent that Central provides courier services for source
documents, Central agrees that it shall be liable for any loss or damage
to source documents while in transit to and from Central's data
processing center and Midland's office.

3. CONTINUATION OF ALL OTHER TERMS AND CONDITIONS. All other terms and
conditions contained in the Agreement and not specifically referred to and
modified herein shall continue in full force and effect.

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

CENTRAL LIFE ASSURANCE CO. MIDLAND SAVINGS BANK
FSB

By /s/ George T. Eldridge Jr. By /s/ Randall C. Bray
----------------------------- --------------------------
George T. Eldridge, Jr., Randall C. Bray, Executive
Senior Vice President Vice President

<PAGE>

SECOND AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This Second Amendment to Data Processing Service Agreement (the "Amendment")
is made as of May 1, 1991 by and between Central Life Assurance Company, an
Iowa corporation, having its corporate offices at 611 Fifth Avenue, Des
Moines, Iowa 50309 ("Central") and Midland Savings Bank FSB, f/k/a Midland
Financial Savings and Loan Association, having its corporate offices at 606
Walnut, Des Moines, Iowa 50309 ("Midland").

The parties hereto agree as follows:

1. BACKGROUND. Central and Midland entered into a Data Processing Service
Agreement dated as of November 1, 1989 as amended by the First Amendment
dated September 30, 1990 (the "Agreement"). Central and Midland wish to
modify the Agreement to provide for reduced charges from Central reflecting
lower operating costs as a result of the installation of new equipment.

2. AMENDMENTS TO AGREEMENT. Section 1.01 of the Agreement is hereby amended
to add the following service:

(vi) Applications computer programming.

Section 1.03 of the Agreement is amended to add the following:

(iv) The following applications computer programming shall be provided
by Central to Midland.

(A) Central shall provide applications computer programming services
consisting of a staff of five (5) qualified programmers to be dedicated
to the support of Midland's systems. At least four (4) of the programmers
shall have technical knowledge and experience with integrated banking
systems, preferably with the Systematics Systems.

(B) Central shall make available to Midland a minimum of 7,000 billable
hours of applications computer programming services at the request of
Midland according to priorities established by Midland.

(C) The applications computer programming services to be provided by
Central to Midland shall include maintenance of a fully operational
banking system, installation of new software products and vendor supplied
update releases for existing software and performance of routine service
requests as directed by Midland.

(D) Central agrees to provide Midland with reasonable access to data
for Midland's use in connection with Midland's local area network and for
Midland's ad hoc internal and external reporting requirements.

<PAGE>

Section 4.02 of the Agreement is amended to add the following at the end
thereof:

Compensation set forth on Schedule II for services other than unit
charges shall be reviewed annually prior to November 1 in each year
during the Service Period and may be further amended upon mutual
agreement of the parties.

Schedule II to the Agreement shall be replaced by the following Amended
Schedule II:

AMENDED SCHEDULE II

Description Cost

Teleprocessing Lines at Seller's cost
Terminal Connections $10/month per terminal
Fiche Pages $.005 per page
Line Printer Pages $.0657 per page
Laser Printer Pages $.03100 per page

Tape mounts $2.11 per mount
Disk Space $.08 per track/month
Batch CPU Seconds - Day $.345 per second
Batch CPU Seconds - Night $.08 per second
Batch CPU Seconds - Weekend $.08 per second
CICS CPU Seconds $.345 per second
TSO CPU Seconds $.345 per second
Communications Line Management $200 per month
Courier Service $100 per month
Systems Programming support $60 per hour
* Senior Level
Applications Programmer $50 per hour
* Applications Programmer $40 per hour

* These rates will increase at the rate of 4% per year to
compensate for increases in salary and benefits.

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

CENTRAL LIFE ASSURANCE CO. MIDLAND SAVINGS BANK
FSB

By /s/ George T. Eldridge Jr. By /s/ Randall C. Bray
----------------------------- --------------------------
George T. Eldridge, Jr. Randall C. Bray
Senior Vice President Executive Vice President

<PAGE>

EXHIBIT I

COST COMPARISON

MIDLAND COSTS

Programmer Salary Benefits Office Total
---------- -------- -------- -------- --------

Ann Grill $ 40,383 $ 14,134 $ 1,200 $ 55,717
Randy Lyon 28,569 9,999 1,200 39,768
Michelle Burgin 23,321 8,162 1,200 32,683
Bruce Bilyeu 37,000 12,950 1,200 51,150
Programmer 30,740 10,759 1,200 42,699
(1)Manager 60,000 21,000 1,800 82,800
-------- -------- ------- --------

Total $220,013 $ 77,004 $ 7,800 $304,817

PROPOSED CENTRAL LIFE COSTS

Programmer Hourly Rate Billable Hours Total
- ---------- ------------- -------------- ---------

Ann Grill $ 50 $ 1,400 $ 70,000
Randy Lyon 40 1,400 56,000
Michele Burgin 40 1,400 56,000
Bruce Bilyeu 40 1,400 56,000
Programmer 40 1,400 56,000
--------

Total (2)$294,000

- ----------------------------
(1) For approximately the past 12 months Midland's programming staff has been
managed by a consultant working full time at an hourly rate of $80.00
plus travel and living expenses. The total expense listed above for a
manager assumes Midland would have to hire a Systems Manager on a
permanent basis.

(2) This number is the maximum Midland would be billed. If the programmers
work less than 1400 hours on Midland projects, the expense would be
reduced accordingly.

<PAGE>

EXHIBIT II

Market Rate Comparison
of Programmer Services

William James and Associates
- ----------------------------
$60 to $90 per hour plus expenses

Continuum
- ---------
Consultant, Senior Professional Staff $137.50/Hour
Professional Staff 117.50/Hour
Associate Professional Staff 92.50/Hour
Support Staff 65.00/Hour

Wenneborg and Associates
- ------------------------
Management Consultant 80.00/Hour
Consultant 70.00/Hour
Consultant 65.00/Hour

Central Life
- ------------
$60 per hour for Programmer
Services to Interstate Assurance Company
and Employers Health Insurance Company

$58 to $65 per hour charged
to Central Life internal departments.

<PAGE>

THIRD AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This Third Amendment to Data Processing Service Agreement (the "Amendment")
is made as of October 1, 1991 by and between Central Life Assurance Company,
an Iowa corporation, having its corporate office at 611 Fifth Avenue, Des
Moines, Iowa 50309 ("Central") and Midland Savings Bank, FSB, F/K/A Midland
Financial Savings and Loan Association, having its corporate office at 606
Walnut, Des Moines, Iowa 50309 ("Midland").

The parties hereto agree as follows:

1. BACKGROUND. Central and Midland entered into a Data Processing Service
Agreement dated as of November 1, 1989 as amended by the First Amendment
dated September 30, 1990 and the Second Amendment dated as of May 1, 1991
(the "Agreement"). As a result of an OTS audit, Central was made aware that
the frequency of testing of the Disaster Recovery Plan is different from the
testing frequency specified in the Data Processing Service Agreement.
Accordingly, Central and Midland wish to modify the Agreement.

2. AMENDMENTS TO AGREEMENT. Section 1.04 is hereby amended to replace:

"Central will backup all programs and data daily. The backup tapes are
transported to a secure offsite backup facility. The recovery plan is tested
quarterly by transporting the tapes to the "hot site" facility, currently
located in Chicago. All pertinent information regarding the test is
documented and available for inspection by Midland or its designate. Such
information includes, but is not limited to, location of the test, date of
the test, files and programs tested, and any problems encountered during the
test."

With:

"Central will backup all programs and data daily. The backup tapes are
transported to a secure offsite backup facility. The recovery plan is tested
at least semi-annually by transporting the tapes to the "hot site" facility,
currently located in Chicago. All pertinent information regarding the test is
documented and available for inspection by Midland or its designate. Such
information includes, but is not limited to, location of the test, date of
the test, files and programs tested, and any problems encountered during the
test."

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

CENTRAL LIFE ASSURANCE CO. MIDLAND SAVINGS BANK FSB

By /s/ George T. Eldridge Jr. By /s/ Randall C. Bray
------------------------------ ---------------------------
George T. Eldridge, Jr., Randall C. Bray,
Senior Vice President President

<PAGE>

FOURTH AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This Fourth Amendment to Data Processing Service Agreement (the "Amendment")
is made as of January 2, 1992 by and between Central Life Assurance Company,
an Iowa corporation, having its corporate office at 611 Fifth Avenue, Des
Moines, Iowa 50309 ("Central") and Midland Savings Bank, FSB, F/K/A Midland
Financial Savings and Loan Association, having its corporate office at 606
Walnut, Des Moines, Iowa 50309 ("Midland").

The parties hereto agree as follows:

1. BACKGROUND. Central and Midland entered into a Data Processing Service
Agreement dated as of November 1, 1989 as amended by the First Amendment
dated September 30, 1990, the Second Amendment dated as of May 1, 1991, (the
"Agreement"), and the Third Amendment dated as of October 1, 1991. Midland
wishes to introduce a new service utilizing an automated voice response unit
to answer customer inquiries. Midland desires to provide this services and
from 7:00 a.m. to 11:00 p.m. Monday through Sunday. Accordingly, Midland and
Central wish to modify the Agreement.

2. AMENDMENTS TO AGREEMENT. Section 1.02(i) is hereby amended to replace:

"Online processing operations - 7:30 a.m. to 7:30 p.m. Monday through
Saturday."

With:

"Online processing operations - 7:00 a.m. to 11:00 p.m. Monday through
Sunday."

Section 1.02 is amended to add the following sentences:

(vii) Midland and Central agree that extending the hours of online
operations to 11:00 p.m. increase the probability that a program
problem with the batch cycle will cause a delay in online
availability the next day.

If Midland decides to return to the online hours of 7:30 a.m. to
7:30 p.m. Midland will continue to pay the increased charges until
Central is reimbursed for all costs it incurred in switching to the
new hours and back to the original hours.

Schedule II as amended in the Second Amendment is amended to add the
following:

The following charges are in addition to the usage charges:

Online Services 7:00 a.m. to 11:00 p.m., Monday
through Saturday $500/month
Online Services 7:00 a.m. to 11:00 p.m., Sunday $30,000/year
payable in monthly
installments

<PAGE>

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

CENTRAL LIFE ASSURANCE CO. MIDLAND SAVINGS BANK FSB

By /s/ George T. Eldridge Jr. By /s/ Randall C. Bray
----------------------------- ---------------------------
George T. Eldridge, Jr., Randall C. Bray,
Senior Vice President President

<PAGE>

FIFTH AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This Fifth Amendment to Data Processing Service Agreement (the
"Amendment") is made as of July 1, 1993 by and between Central Life Assurance
Company, an Iowa Corporation having its corporate offices at 611 Fifth
Avenue, Des Moines, Iowa 50309 ("Central") and Midland Savings Bank FSB,
having its corporate offices at 606 Walnut, Des Moines, Iowa 50309
("Midland").

The parties hereto agree as follows:

1. BACKGROUND. Central and Midland entered into a Data Processing
Service Agreement dated November 1, 1989 which was amended by the First
Amendment dated September 30, 1990, the Second Amendment dated May 1, 1991,
the Third Amendment dated October 1, 1991, and the Fourth Amendment dated
January 2, 1992, (The "Agreement"). Central and Midland wish to modify the
Agreement to more specifically describe the services provided and to updated
the charges for such services.

2. AMENDMENTS TO AGREEMENT. Schedules I and II of the Agreement as
previously amended are hereby deleted and replaced by a new schedule of
services and charges, to be known as Schedule I-1A, which is attached hereto
and by this amendment becomes part of the Agreement upon the effective date
of this Amendment.

Section 1.01 of the Agreement, on Services to be Provided, as
amended, is hereby amended by replacing the description of the data
processing services therein with the description of Basic Processing Services
and Optional Processing and Support Services shown in Schedule I-1A.

Section 1.02 of the Agreement, on Availability of Services, as
amended, is hereby amended by replacing subsections (i), (ii), (iii), (iv),
(v), and (vii) with Part B of Schedule I-1A.

Sections 4.01, 4.02, 4.03 and 4.04(i), on the Compensation to be
paid by Midland for data processing services, courier services and disaster
recovery services provided by Central, are hereby amended by replacing the
references to Schedule II and all other rates and charges specified therein
with the applicable rates shown in Schedule I-1A.

<PAGE>

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

CENTRAL LIFE ASSURANCE COMPANY MIDLAND SAVINGS BANKS, FSB

By /s/ Michael G. Frazier By /s/ Alfred P. Moore
------------------------------------ -----------------------------------
Michael G. Frazier Alfred P. Moore
Senior Vice President President

<PAGE>

SCHEDULE I-1A
DATA PROCESSING SERVICES

A. BASIC PROCESSING CHARGES
------------------------
a. ACCOUNTS OR LOANS:
INSTALLMENT CREDIT ACCOUNTS
---------------------------
FROM TO MONTHLY RATE
PER LOAN

0 15,000 0.65
15,001 and above 0.50

CONSUMER LOANS
--------------
FROM TO MONTHLY RATE
PER LOAN

0 5,000 0.95
5,001 and above 0.75

SAVINGS ACCOUNTS
----------------
FROM TO MONTHLY RATE
PER LOAN

0 50,000 0.55
50,001 and above 0.45

CHECKING ACCOUNTS
-----------------
FROM TO MONTHLY RATE
PER LOAN

0 50,000 0.60
50,001 and above 0.40

For the fee described above, the processing services provided are the
following:

1. Computer processing (On-line and Batch)
2. Disk input/output and storage
3. Magnetic Tape input/output and storage
4. Help Desk Telephone Support
5. Production Control Support
6. Storage Administration
7. Disaster/Recovery Services

The above fees cover total on-line transactions equal to a maximum of 3.5
million transactions per month. Central Life Corporate Service shall have the
right to bill Client and Client agrees to pay a fee as negotiated by both
parties for the number of transactions over and above the maximum number of
transactions.

<PAGE>

INSTALLATION MONTHLY
b. TELECOMMUNICATIONS SERVICES CHARGE CHARGE

1. 19200 BPS limited distance
transmission line at proposed $270
rate

2. Host Mainframe Access $10
Charge per userid

RATE
PER
c. PRINTING SERVICES UNIT
----

1. Impact Printing per page .0657
2. Laser Printing per page .031
3. Microfiche Printing per page .005

<PAGE>

C. OPTIONAL PROCESSING AND SUPPORT SERVICES
----------------------------------------
RATE PER UNIT
1. PERSONNEL AND RELATED

a. CTS Director per hour 100.00
b. Data Center Supervisor per hour 55.00
c. Programming Director per hour 100.00
d. Systems Programmer per hour 75.00
e. Data Services Analyst per hour 40.00
f. Data Services Specialist per hour 35.00
g. Production Supp. Analyst per hour 40.00
h. Production Supp. Spec per hour 35.00
i. Programming Supervisor per hour 65.00
j. Network/PC Manager per hour 65.00
k. Business Analyst per hour 58.00
l. Telecommunication Analyst per hour 58.00
m. Senior Programmer Analyst per hour 48.00
n. Programmer Analyst per hour 43.00
o. Senior Programmer per hour 35.00
p. Network Analyst per hour 49.00*
q. Network Technician per hour 44.00*
r. PC-Senior Program. Anal. per hour 49.00*
s. PC-Programmer Analyst per hour 44.00*
t. PC-Senior Programmer per hour 36.00*
u. Senior systems Program. per hour 100.00
v. Security Administrator per hour 50.00
w. Prod/Support Supervisor per hour 65.00
x. Computer Operator per hour 35.00

* Rates are higher to reflect additional overhead costs due to
necessary hardware and software.

2. COMPUTER PROCESSING

a. Tapes shipped out of house will be
billed to Client if not returned
within three months 25.00
b. Data file restore to magnetic disk 7.00

3. SPECIAL PROCESSING AND SERVICES

a. Lewis System Delivery/per month 74.00
b. Tape Copiers/per copy 35.00
c. IIN Access/per month 60.00
- American Express, American Airlines
- ADP, Dow Jones, Dun & Bradstreet
- LOMA, LEXIS, WESTLAW
d. INFOBOT Services for Sundays 3000.00

<PAGE>

4. MEDIA AND OTHER

a. Special microfiche copies
- 1-25 copies 10.00
- 26 and above time & material
b. Tape retrieval from offsite storage 20.00
c. Data Center report pickup at window 5.00

5. NETWORK USAGE
RATE PER
1000 UNITS
----------
a. Usage will be calculated monthly in .037
1,000 units

For the fee described above, the network services provided
are the following:

1. Network wiring and access
2. Tape backup and recovery
3. Network maintenance, monitoring, tuning, trouble shooting
4. Network hardware and software (maintenance and upgrades)
5. Network administration (adding users, security, etc)
6. Disk storage

b. The network hours of scheduled availability will be as follows:

Sunday through Saturday, from 6:00 a.m. until 10:00 p.m.

<PAGE>

SIXTH AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This sixth amendment to the Data Processing Service Agreement (the
"Amendment") is made as of September 1, 1995 by and between American Mutual
Life Insurance Company (AML, formerly Central Life Assurance Company), and
AmerUs Bank (Bank).

The parties hereto agree as follows:

1. Background. AML and Bank entered into a Data Processing Service
Agreement dated November 1, 1989 which was subsequently amended by the First
Amendment dated September 30, 1990, the Second Amendment dated May 1, 1991,
the Third Amendment dated October 1, 1991, the Fourth Amendment dated January
2, 1992, and the Fifth Amendment dated July 1, 1993 (the "Agreement"). AML
and Bank desire to modify the Agreement to update the charges for such
services.

2. Amendment. Effective September 1, 1995, the parties agree that the
fees per account set forth in the Agreement will be reduced by twenty percent.

3. Continuation of all Other Terms and Conditions. All other terms and
conditions contained in the Agreement and not specifically refused to and
modified herein shall continue in full force and effect.

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

American Mutual Life Insurance Company AmerUs Bank

By /s/ George T. Eldridge, Jr. By /s/ Marcia S. Hanson
------------------------------------ -----------------------------------
George T. Eldridge, Jr. Marcia S. Hanson
Senior Vice President President, Chief Executive Officer

<PAGE>

DRAFT 3 DP BUDGET AMERUS BANK 1996
ASSUMPTIONS DETAIL

Service Contracts

Systematics 288,000 No reduction for Mortgage
NSS 30,000 This has already been capitalized
Platform HW Maint IBM 111,334 New contract being signed

Total Maintenance 429,334 Any other??????

Data Center
Computer Charges

<TABLE>
<CAPTION>
Monthly
Chg/Unit # Accounts Charge % Average incr
w/price cut 10/5/95 reduced rates Increase for Volume
<S> <C> <C> <C> <C> <C>
CL 0-5000 0.76
CL > 5000 0.60 6,155 4,493.00 0.10 4,882.30
IC 0-15000 0.52
IC > 15000 0.40 22,670 10,868.00 0.10 11,774.80
IM 0-50000 0.48
IM > 50000 0.32 86,840 35,788.80 0.10 38,567.68
ST 0-50000 0.44
ST > 50000 0.36 36,370 16,002.80 0.10 17,603.08

Total Monthly Charge 67,152.60 72,807.86
Annual Charge 152,035 805,831.20 873,694.32

152,035
1.10
-------
167,239
(239)
-------
167,000
-------
-------

Laser Printing 7,250 87,000 0.00 87,000
Fiche 20,000 240,000 0.00 240,000
Tele Proc Line 2,160 25,920 0.00 25,920
Host 4,220 50,640 0.00 50,640
Other 3,000 36,000 0.00 36,000

Total Laser thru Other 439,560
Total Data Center 1,313,254
(340,000) printing to be billed @ actual
---------
Mainframe Prog 973,254 + 1746 rd = $975,000 - $7,000 = 888,000 DIVIDED BY 12 = 74,000
--------- -------
---------
Ann's Group 547,250 5@45*1700+1@55*[email protected]*850+1@100*800
Outside Ann's Group 76,500 2@45*850
DB Administrator 55,250 1@850*85 Data Base Admin

Total Programming 679,000

PC Area

Hardware Tech 2,800 31,200
Network Services 20,000 240,000 Administer branches & bank
Network Tech 4,700 58,400
Other 37,000 444,000 Consulting Help
Business Analyst 40 480
Senior Analyst 7,000 84,000
Supervisor 1,000 12,000

Total 888,080

Production Control

Outside Printing 100 1,200
Other 100 1,200
Prod Support Special 4,300 51,800
Rush 15 180
Security Administrator 1,800 19,200
Sr. Sys Programmer 0 0
Supervisor 300 3,600
Sys Programmer 4,167 50,004

Total Prod Cont + SW Prog 126,984
</TABLE>

<PAGE>

Exhibit 10.60

SEVENTH AMENDMENT TO
DATA PROCESSING SERVICE AGREEMENT

This seventh amendment to the Data Processing Service Agreement (the
"Amendment") is made as of January 1, 1996 by and between American Mutual Life
Insurance Company (AML, formerly Central Life Assurance Company), and AmerUs
Bank (Bank).

The parties hereto agree as follows:

1. Background. AML and Bank entered into a Data Processing Service
Agreement dated November 1, 1989 which was subsequently amended by the First
Amendment dated September 30, 1990, the Second Amendment dated May 1, 1991, the
Third Amendment dated October 1, 1991, the Fourth Amendment dated January 2,
1992, the Fifth Amendment dated July 1, 1993, and the Sixth Amendment dated
September 1, 1995 (the "Agreement"). AML and Bank desire to modify the
Agreement to update the charges for such services.

2. Amendment. Effective January 1, 1996, the parties agree that AML will
provide core data processing services to Bank under the following terms and
pricing:

- Basic core data processing, including printing, fiche, etc. per
the attached schedule for $975,000 for calendar year 1996. All
NSS and IBM hardware maintenance will be paid directly by Bank.
This charge is based on 167,000 accounts

- When the Bank's account level exceeds 167,000 accounts, any
accounts over 167,000 but under 200,000 will be billed at $.25
per account. The 200,000th account and any account over 200,000
will be billed at $.20 per account.

- In addition to the core data processing charges above, the Bank
will purchase programming services from AML. AML agrees that for
calendar year 1996, it will charge the following rates for those
services:
Programming Supervisor $65/hour
Senior Programmer/Analyst $50/hour
Programmer $45/hour
Data Base Administrator $65/hour

- Designated representatives of AML and the Bank will meet on a
quarterly basis to assess AML's performance and the Bank's
satisfaction or lack thereof with that performance and agree to
work together to achieve the level of service expected by the
Bank.

- By June 30, 1996, designated representatives of AML and the Bank
will meet and agree on specific performance standards that AML
will commit to meet. The parties further agree to establish a
penalty structure for failure to meet those agreed upon
performance standards.

<PAGE>

3. Term of the Amendment. This amendment will continue in effect until
December 31, 2000, unless otherwise extended or terminated by mutual agreement
of both parties. The per hour charges for programming services will be
established by AML and provided to the Bank each year in the normal budgeting
process and the Bank will agree on the number of hours it will use based on
those rates. Nothing in this agreement shall bind the Bank to purchase
programming services in the years after 1996.

4. Continuation of all Other Terms and Conditions. All other terms and
conditions contained in the Agreement and not specifically referred to and
modified herein shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have duly executed the amendment
as of the date first above written.

American Mutual Life Insurance Company AmerUs Bank

By /s/ George T. Eldridge,Jr. By /s/ Marcia S. Hanson
------------------------------------ ---------------------------------
George T. Eldridge, Jr. Marcia S. Hanson
Senior Vice President President, Chief Executive
Officer

<PAGE>

MISCELLANEOUS SERVICES AGREEMENT

This Miscellaneous Services Agreement (the "Services Agreement") is made as of
the 5th day of February, 1992, by and between Midland Savings Bank FSB, a
federal stock association having its principal office at 606 Walnut Street, Des
Moines, Iowa 50309 ("Midland") and Central Life Assurance Company, an Iowa
corporation having its corporate offices at 611 Fifth Avenue, Des Moines, Iowa
50309 ("Central").

WHEREAS, in the course of the operation and administration of the business of
Midland, Midland will require certain services by Central; and

WHEREAS, Central is prepared to provide such services to Midland on the basis
described in this Services Agreement;

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Central and Midland do hereby agree as follows:

ARTICLE I. SERVICES TO BE PROVIDED

SECTION 1.01. For a period of up to twelve (12) months after the Effective Date
as defined below (hereinafter referred to as the "Service Period") and from
month to month thereafter until terminated in accordance with the provisions
contained in Article V hereof, Central shall provide Midland with comprehensive
internal audit services, including those services described below:

(a) Perform risk assessment in order to risk rate each area subject to
audit and to rank in priority order.

(b) Prepare annual audit plan as recommended by the Director of Internal
Audit and approved by Midland's Audit Committee to assure areas of highest
risk receive adequate review and analysis.

(c) Provide internal audit services with respect to each of the areas
described in the Services Schedule attached to this Services Agreement in
accordance with generally accepted auditing standards.

(d) Assure adequate resources are available to perform required procedures.

SECTION 1.02. The parties agree that any ancillary or support services necessary
to or, in the usual and customary manner and the normal course of business,
associated with the specific services described in this Services Agreement shall
be deemed to be included in, and governed by, this Services Agreement unless
specifically excluded.

SECTION 1.03. The parties agree that on forty-five (45) days' prior written
notice to Midland, Central may modify the services described in this Services
Agreement, provided that:

(a) Such modified services shall be equivalent to or better than the
services being replaced; and

(b) Midland consents to the modified services, its consent not to be
unreasonably withheld.

<PAGE>

SECTION 1.04. The parties agree that Central may provide the services described
in this Services Agreement through employees of Central or through employees of
Midland (other than those of the Director of Internal Audit) or any combination
thereof.

SECTION 1.05. The parties agree that audit findings and status reports on
adherence to the audit plan shall be furnished by the Director of Internal Audit
to Midland's Audit Committee periodically.

SECTION 1.06. The parties agree that all documentation relating to the services
provided under this Services Agreement, regardless of who provides the services,
will be considered records of Midland and subject to regulatory confidentiality
requirements and open to examination by the appropriate employees and agents of
Midland. This documentation shall be available for examination by the
appropriate regulatory agencies.

ARTICLE II. ADEQUATE STAFF AND FACILITIES

SECTION 2.01. During the Service Period and any Extension Period, Central shall
employ a qualified Director of Internal Audit to perform his or her
responsibilities under this Services Agreement. The Director of Internal Audit
will maintain his or her office at Central.

SECTION 2.02. During the Service Period and any Extension Period, Central shall
maintain adequate staff, support services and facilities as may be necessary to
perform its responsibilities under this Services Agreement. The internal audit
staff shall report to the Director of Internal Audit and the Director of
Internal Audit shall manage and coordinate the services to be performed under
this Services Agreement with Midland's Audit Committee. Midland may request
Central to utilize employees of Midland as members of the internal audit staff.
If Midland so requests, these Midland employees shall be subject to approval by
the Director of Internal Audit and shall report to, be supervised by, and take
direction from the Director of Internal Audit. In the event the Director of
Internal Audit determines that Midland's employees do not constitute an adequate
internal audit staff necessary to perform Central's responsibilities under this
Services Agreement, Midland agrees that it will either employ replacement or
additional qualified internal audit staff members or permit qualified employees
of Central to perform such services. If the parties mutually agree, Midland's
current internal audit staff consisting of three full time employees may be
transferred to Central and become full time employees of Central.

ARTICLE III. RESPONSIBLE PERSONS

SECTION 3.01. Central and Midland each shall appoint in writing one or more
individuals who shall serve as contact persons for purposes of the carrying out
of this Services Agreement. Such contact persons shall be authorized to act on
behalf of their respective parties as to the matters pertaining to this Services
Agreement.

ARTICLE IV. COMPENSATION

SECTION 4.01. In connection with the services to be performed under this
Services Agreement, Midland shall compensate Central as set forth on this
Article IV.

SECTION 4.02. To the extent services under this Services Agreement are performed
by current or future employees of Central (other than those services performed
personally by the Director of Internal Audit), the parties agree that Midland
shall pay to Central an hourly fee for hours spent by each Central employee
providing services to Midland under this Services Agreement equal to the hourly
fee set opposite that individual's name on a Fee Schedule to be attached to this
Services Agreement and initialed by both parties.

-2-

<PAGE>

These fees may be revised periodically as agreed to by both parties and Central
employees added and deleted as agreed to by both parties, in both instances by
attaching a revised Fee Schedule initialed by both parties. Fees will be set
at an amount sufficient to reimburse Central for the compensation, employee
benefits, housing and related support and management services provided to each
such employee by Central plus a charge of 10% of such amounts as a contribution
to unallocated corporate overhead. The base charge will be determined in a
manner similar to the manner other internal transfer charges are determined at
Central, such as hourly fees for data processing application development
services.

SECTION 4.03. To the extent services under this Services Agreement are performed
by current or future employees of Midland, the parties agree that Midland shall
not be required to pay all compensation therefor to Central; however Midland
shall be solely responsible for all compensation, employee benefits, housing and
related support and management services for such Midland employees, except
direction provided to Midland employees under the provisions of Section 2.02
hereof.

SECTION 4.04. Midland also agrees to pay an allocable portion of the
compensation, employee benefits, housing and related support and management
services provided to the Director of Internal Audit as compensation for the
management services of the Director of Internal Audit. Midland's Audit Committee
and the Director of Internal Audit will prepare a budget of estimated time that
the Director of Internal Audit will devote for services under this Services
Agreement in behalf of Midland which include a prorata portion of time spent by
the Director of Internal Audit on administrative duties and professional
development. The Director of Internal Audit will maintain time records to
substantiate the amount of time expended in connection with services under this
Services Agreement for Midland and services performed for other affiliates of
Midland and Central. Compensation for the Director of Internal Audit shall be
adjusted periodically to reflect any differences between the budget and the time
records of the Director of Internal Audit.

SECTION 4.05. Bills shall be rendered within fifteen (15) business days after
the first day of the month and payment shall be remitted within fifteen (15)
business days after receipt of a proper bill. Adjustments for errors on previous
billings and for a final settlement shall be made no more than sixty (60) days
after this Services Agreement terminates. If Midland determines that the
services performed by Central employees fail to comply with the requirements of
this Services Agreement or that billings are in excess of those provided for in
this Services Agreement, Midland shall be authorized to withhold payment until
the work has been remedied or the billings substantiated or adjusted
appropriately.

ARTICLE V. TERM AND TERMINATION

SECTION 5.01. Unless this Services Agreement is otherwise terminated
according to its provisions, Central shall be obligated to provide, and
Midland shall be obligated to pay for, the services described in this
Services Agreement during the Service Period and any Extension Period.

SECTION 5.02. The parties may agree by mutual written consent to extend the
Service Period for either a definite or an indefinite period (hereinafter
referred to as an Extension Period").

SECTION 5.03. Except as otherwise provided in this Services Agreement during the
Service Period or any Extension Period either Central or Midland may terminate
this Services Agreement as to all its respective services, or may terminate any
specific services provided hereunder, upon sixty (60) days' prior written notice
to the other party.

-3-

<PAGE>

SECTION 5.04. This Services Agreement, or any service provided hereunder, may be
terminated or substantially reduced at any time by mutual consent of the
parties. The termination of any one or more of, but less than all, the services
provided hereunder by Central shall not be deemed to terminate this Services
Agreement in its entirety.

SECTION 5.05. Except as may be otherwise provided, the parties acknowledge that
the services provided under this Services Agreement shall be performed in Des
Moines, Iowa.

ARTICLE VI. MISCELLANEOUS

SECTION 6.01. This Services Agreement is the complete and exclusive statement of
the agreement between the parties and supersedes all prior agreements and
representations between them relating to the subject matter of this Services
Agreement. Amendments to this Services Agreement shall not be effective unless
in writing and signed by the duly authorized representative of the party against
whom enforcement of the amendment is sought.

SECTION 6.02. Any notice or other communication given pursuant to this
Agreement shall be given in writing to the other party at the address stated
herein or at such other address as such party shall specify by notice
hereunder. Such notice shall be conclusively deemed to be served when
delivered personally or three (3) calendar days after sending by registered
mail or one (1) business day after sending by cable or telex or similar
electronic means.

SECTION 6.03. This Services Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa.

SECTION 6.04. No delay or failure by either party to exercise any of its rights
or remedies hereunder shall operate as a waiver thereof. Each party shall
reimburse the other party for all expenses, including reasonable attorneys'
fees, incurred by the other party in exercising any of its rights or remedies
hereunder, or resulting from any default by the reimbursing party. Nothing
herein contained is intended to confer upon any person, other than the parties
and their respective permitted successors, and assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Services Agreement.

ARTICLE VII. EFFECTIVE DATE

SECTION 7.01. This Services Agreement shall be come effective February 5, 1992.

IN WITNESS WHEREOF, the parties have executed this Services Agreement effective
as of the day and year first above written.

CENTRAL LIFE ASSURANCE COMPANY

By /s/ DT Doan
------------------------------------
DT Doan, Executive Vice President -
Corporate

MIDLAND SAVINGS BANKS FSB

By /s/ Randall C. Bray
-----------------------------------
Randall C. Bray, President

-4-

<PAGE>

SERVICES SCHEDULE

SUMMARY OF AREAS SUBJECTED TO INTERNAL AUDITING

1. Branch Office Operations

2. Cash in Banks

3. Cash Items, Proof and Transit, and Items in Transit

4. Investment Securities

5. Single-family mortgage lending

6. Commercial Loans of all Types

7. Consumer and Credit Card Loans

8. Allowance for Loan Losses

9. Other Real Estate Owned

10. Deferred Debits, Prepaid and Other Assets

11. Fixed Assets

12. Retail Consumer Deposits

13. Advances from the FHLB

14. Other Borrowings

15. Accounts Payable, Deferred Credits, and Accrued Expenses

16. Travelers Checks, Savings Bonds, and Charged-off Loans

17. Income and Expense accounts

<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
PUBLICLY TRADED SECURITIES

This Investment Management Agreement (the "Agreement") is made as of the 15th
day of August, 1992, by and between Midland Savings Bank FSB, a federal stock
association having its principal office at 606 Walnut Street, Des Moines, Iowa
50309 ("Midland") and Central Life Assurance Company, an Iowa corporation having
its corporate offices at 611 Fifth Avenue, Des Moines, Iowa 50309 ("Central").

WHEREAS, in the course of the operation and administration of the business of
Midland, Midland desires Central to perform certain investment management
services; and

WHEREAS, Central is prepared to provide such services to Midland on the basis
described in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Central and Midland do hereby agree as follows:

1. SERVICES.

During the term of this Agreement, Central shall provide Midland with the
investment services with respect to certain publicly traded securities as
described in this Agreement:

(a) Review and make recommendations upon Midland's Asset/Liability
Committee's investment strategy on a monthly basis.

(b) Meet with Midland's Asset/Liability Committee monthly, or more often as
necessary to:

(i) review Midland's current portfolio of publicly traded
securities;

(ii) review investment activity during the prior month;

(iii) make recommendations for repositioning and changes in publicly
traded securities;

(iv) review geographic and other diversification factors;

(v) discuss the forecast of interest rate movement and the economic
outlook and investment alternatives;

(c) monitor publicly traded securities with respect to potential rating
changes and provide reports to Midland's Chief Investment Officer; and

(d) monitor mortgage backed securities with respect to currently
anticipated prepayments and their impact on yield and diversification and
report to Midland's Asset/Liability Committee and provide reports to
Midland's Chief Investment Officer.

Keith Gunzenhauser, the Executive Vice President of Finance at Central, or
another qualified employee of Central designated by him, shall attend meetings
of Midland's Asset/Liability Committee and shall furnish the recommendations and
reports described above or if necessary during periods between meetings shall
furnish such information to

<PAGE>

Midland's Chief Investment Officer. The recommendations and reports will be
prepared by the investment staff of Central based on investment analysis of the
investment staff of Central or third party contractors, including Bankers Trust
Company, New York, New York.

2. INVESTMENT GUIDELINES.

Midland's Asset/Liability Committee shall be responsible for approving and
establishing the investment strategy and guidelines on a monthly basis or more
often as necessary consistent with the Investment Policy approved by Midland's
Board of Directors and the applicable regulations of the Office of Thrift
Supervision. The Asset/Liability Committee shall furnish Central monthly, or
more often as necessary, with investment guidelines in writing for the following
month. This information shall include the cash available for investments, the
types and quality of publicly traded securities in which investments are to be
made, and their acceptable range of maturities and interest rates (hereinafter
called "Eligible Securities"). Eligible Securities covered by this Agreement
shall be limited to "Eligible Investments" described in the Investment Policy of
Midland under the caption "Eligible Investments" other than those described
under the subcaptions "Loan Portfolio" and "Other Securities Portfolio".

3. AUTHORIZATION.

Central shall be authorized to select and purchase Eligible Securities for
Midland's account that are consistent with the investment guidelines approved by
the Asset/Liability Committee for the applicable period. Within the written
investment guidelines approved by the Asset/Liability Committee Central shall
have discretion to select the specific Eligible Securities for purchase. Central
shall execute purchases only through an approved primary, regional and national
bank security dealer listed in Exhibit "A" to the Investment Policy of Midland
approved by its Board of Directors. Each investment transaction will be
prepared on a Security Transaction Form in the form attached to the Investment
Policy of Midland signed by one of the authorized employees of Central listed on
Schedule 1 attached hereto. The Security Transaction Form will be delivered by
Central to the Accounting Department of Midland for the preparation of a journal
voucher and, if applicable, a wire transfer form. After a transaction is
completed, the transaction shall be supported by a Confirmation Form from the
appropriate dealer involved. A Safekeeping Receipt shall also be received and
delivered to the Accounting Department of Midland. Central acknowledges that it
is the policy of Midland to keep the investment functions separate from the
safekeeping functions. For all Eligible Securities, Central shall utilize the
safekeeping service of the Federal Home Loan Bank, the Federal Reserve Bank, or
a correspondent bank of Midland which has been preapproved by Midland. Whenever
Eligible Securities are purchased or sold, payment will be made at time of
delivery. No exception to the transaction procedure, including safekeeping
requirements, shall be authorized. All transactions will be entered and balanced
under the supervision of the Chief Financial Officer of Midland.

4. DOCUMENTATION AND REPORTS.

Upon execution of an investment transaction, the authorized employee of Central
preparing the Security Transaction Form must document on the form the following:

(a) identify Midland's intent to hold the security as an investment, hold
it for sale, or trade the security, based on Midland's written monthly
investment strategies and guidelines.

-2-

<PAGE>
(b) comment on how the transaction fits Midland's current investment policy
and strategy and the Eligible Security guidelines approved by the
Asset/Liability Committee at its prior meeting.

Central shall provide to the Asset/Liability Committee a report of all
transactions initiated during the prior period and furnish the Asset/Liability
Committee with a report on how the specific transactions fit Midland's
investment policy and the Asset/Liability Committee's strategy, the Eligible
Securities guidelines approved by the Asset/Liability Committee, and the purpose
and/or reasons for the specific transactions and deliver any and all supporting
documentation including, but not limited to: prospectus, geographic
concentrations, WAC's, WAM's, cash flows, and shock tests.

5. APPROVAL OF TRANSACTIONS; UNAUTHORIZED TRADES.

The Asset/Liability Committee shall be responsible for approving, in arrears,
the specific transactions initiated by Central pursuant to the authority
provided in this Agreement. In the event any specific transaction initiated by
Central fails to comply with the applicable requirements of this Agreement
Central shall be liable therefore, and Central shall immediately take corrective
action to restore Midland to the same position as if Central's failure to comply
had not occurred.

6. ADEQUATE STAFF AND PORTFOLIO SERVICES.

During the term of this Agreement, Central shall maintain adequate staff,
support services and facilities as may be necessary to perform its
responsibilities under this Agreement. Central's Executive Vice President of
Finance, Keith Gunzenhauser, shall manage and coordinate the services to be
performed by Central under this Agreement. Central may engage Bankers Trust
Company, New York, New York, or another qualified institution, to provide
certain investment portfolio services regarding Midland's portfolio of mortgage
backed securities.

7. ANCILLARY SERVICES

Subject to the limitations described in this Agreement, the parties agree that
any ancillary or support services necessary to, or in the usual and customary
manner and in the normal course of business associated with, the specific
services described in this Agreement shall be deemed to be included, and
governed by this agreement unless specifically excluded.

8. MODIFIED SERVICES

The parties agree that upon forty-five (45) days prior written notice to
Midland, Central may modify the services described in this Agreement, provided
that:

(a) such modified services shall be the equivalent to or better than the
services being replaced; and

(b) Midland consents to the modified services, its consent not to be
unreasonably withheld.

9. RECORDS OF MIDLAND.

The parties agree that all documentation and reports relating to the services
provided under this agreement, regardless of who provides the services, will be
considered records of

-3-

<PAGE>
Midland and subject to regulatory confidentiality requirements and open to
examination by the appropriate employees and agents of Midland. This
documentation and reports shall be available for examination by the appropriate
regulatory agencies.

10. COMPENSATION

In connection with the services to be performed under this Agreement, Midland
shall compensate Central by paying to Central the following:

(a) A monthly fee of $3,000, payable in arrears, and

(b) An amount equal to four basis points per annum of the principal amount
as of month end of Midland's mortgage backed securities for the services
relating to Midland's portfolio of mortgage backed securities.

Midland shall be responsible for payment of all investment transaction amounts,
including all fees and costs payable to third parties, including but not limited
to safekeeping agents and dealers.

Bills shall be rendered within fifteen (15) days after the last day of the month
and payment shall be remitted within fifteen (15) days after receipt of a proper
bill. Adjustments for errors on previous billings and for a final statement
shall be made no more than sixty (60) days after this Agreement terminates. If
Midland determines that the services performed by Central fail to comply with
the requirements of this Agreement or that billings are in excess of those
provided for in this Agreement, Midland shall be authorized to withhold payment
until the work has been remedied or the billings substantiated or adjusted
appropriately.

11. TERM OF AGREEMENT.

Unless this Agreement is otherwise terminated according to its provisions,
Central shall be obligated to provide, and Midland shall be obligated to pay
for, the services described in this Agreement for a period of up to twelve (12)
months after the effective date as defined below (hereinafter referred to as the
"Service Period") and from month to month thereafter until terminated in
accordance with the provisions of this Agreement and any extension period. The
parties may by mutual consent agree to extend the service period for either a
definite or indefinite period ("Extension Period").

12. TERMINATION.

Except as otherwise provided in this Agreement, during the Service Period or any
Extension Period either Central or Midland may terminate this Agreement for any
reason as to all its respective services, or may terminate any specific services
provided hereunder, upon sixty (60) days prior written notice to the other
party, and Midland may by notice terminate this Agreement immediately in the
event Central breaches any of its representations, warranties, covenants,
agreements or any other obligation of Central hereunder. This Agreement, or any
service provided hereunder, may be terminated or substantially reduced at any
time by mutual consent of the parties. The termination of any one or more of,
but less than all, services provided hereunder by Central shall not be deemed to
terminate this Agreement in its entirety.

13. MISCELLANEOUS.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Iowa.

-4-

<PAGE>

This Agreement is the complete and exclusive statement of the agreement between
the parties and supersedes all prior agreements and representations between them
relating to the subject matter of this Agreement. Amendments to this Agreement
shall not be effective unless in writing and signed by the duly authorized
representative of the party against whom enforcement of the amendment is sought.

Any notice or other communication given pursuant to this Agreement shall be
given in writing to the other party at the address stated herein or at such
other address as such parties shall specify by notice hereunder. Such notice
shall be conclusively deemed to be served when delivered personally or three (3)
calendar days after sending by registered mail or one (1) business day after
sending by telefacsimile or similar electronic means.

No delay or failure by either party to exercise any of its rights or remedies
hereunder shall operate as a waiver thereof. Each party shall reimburse the
other party for all expenses, including reasonable attorney's fees, incurred by
the other party in exercising any of its rights or remedies hereunder, or
resulting from any default by the reimbursing party. Nothing herein contained is
intended to confer upon any person, other than the parties and their respective
permitted successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, other than the services
contemplated to be provided by Bankers Trust Company.

14. EFFECTIVE DATE.

This Agreement shall become effective August 15, 1992.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year last above written.

CENTRAL LIFE ASSURANCE
COMPANY

By /s/ Keith Gunzenhauser
------------------------------
Keith Gunzenhauser, Executive
Vice President of Finance

MIDLAND SAVINGS BANK FSB

By /s/ Randall C. Bray
-----------------------------
Randall C. Bray, President

-5-

<PAGE>

AMENDMENT
TO
INVESTMENT MANAGEMENT AGREEMENT
PUBLICLY TRADED SECURITIES

The Investment Management Agreement (the "Agreement") dated the 15th day of
August, 1992 between Midland Savings Bank FSB, a federal stock association
("Midland") and Central Life Assurance Company, an Iowa Corporation ("Central")
is hereby amended as of April 1, 1994 in the following respect:

1. Midland has requested additional services from Central and Central has
agreed to supply the additional services as outlined in Exhibit "A", a memo
addressed to Michael Buck from Marsha Yelick dated March 15, 1994.

In connection with additional services to be performed, paragraph 10 of the
Agreement is amended by deleting sub-paragraph (a). Sub-paragraph (b)
becomes the only sub-paragraph after the phrase "by paying to Central the
following:" and is amended by deleting from the first line the word "four"
and inserting in lieu thereof, the word "ten."

2. Schedule 1 is amended by removing the name "Kathy Beyer" and inserting in
lieu thereof, the name "Marsha Yelick."

3. This Amendment shall become effective April 1, 1994.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year last above written.

CENTRAL LIFE ASSURANCE COMPANY

BY: /s/ Keith Gunzenhauser
---------------------------------
Keith Gunzenhauser
Executive Vice President-Finance

MIDLAND SAVINGS BANK FSB
BY: /s/ Alfred P. Moore
---------------------------------
Alfred P. Moore
President

-6-

<PAGE>

DISBURSEMENT SERVICES AGREEMENT

This Disbursement Services Agreement is made as of this 15th day of April
1995, by and between American Mutual Life Insurance Company ("AML") and Midland
Savings Bank FSB ("Midland").

WHEREAS, Midland will enter into sales agreements for the sale of certain
certificate of deposit accounts (the "Accounts") with various persons who also
represent AML in the sale of certain insurance products (the "Representatives");

WHEREAS, AML has an established distribution system with respect to
payments and communications to the Representatives; and

WHEREAS, Midland desires to utilize and AML desires to provide access to
such system in connection with communications to and compensation of the
Representatives for the Accounts;

NOW, THEREFORE, in consideration of the mutual promises and obligations
contained herein, the parties hereto agree as follows:

Section 1. DISBURSEMENT SERVICES. Midland may, from time to time, in its
sole discretion, disburse any funds owed to the Representatives in connection
with the Accounts through AML. In order to disburse such amounts, the aggregate
amount of all funds to be paid to the Representatives shall be transferred by
Midland to AML. In making such transfer, Midland shall provide the name of each
Representative to be paid, the amount of such payment and any other information
reasonably required by AML.

Section 2. COMMUNICATIONS SERVICES. Midland may, from time to time, in
its sole discretion have access to AML's communication process in order to
provide sales support material and services to the Representatives for the
marketing and promotion of the Accounts. All such materials and services shall
be provided by Midland to AML, and no such materials or services shall be
communicated through AML without the prior approval of Midland. Such material
and services shall be distributed and communicated to the Representatives in the
same manner and to the same extent as is generally provided by AML in connection
with the sale of insurance products.

Section 3. REIMBURSEMENT OF COSTS. Midland shall reimburse AML for all of
the costs incurred by AML in providing the services set forth in Sections 1 and
2 above. Midland and AML will agree on the manner in which such costs shall be
reimbursed. Notwithstanding the foregoing, at no time shall Midland be
obligated to reimburse AML for any costs in excess of the following percentages
of the aggregate amount of all deposits accepted by Midland:

Term of Account Initial Service Fee Renewal Service Fee

<PAGE>

1 year .25% .15%
2 years .25% .15%
3 years .20% .15%
5 years .30% .20%

Section 4. RELATIONSHIPS OF PARTIES. Nothing in this Agreement is
intended to nor shall be construed to create a broker, agency, employment,
partnership or joint venture relationship between Midland and AML.

Section 5. USE OF MIDLAND NAME. Any use by AML of the Midland name, or its
products or services, and any description of Midland, or its products or
services, is subject to the prior approval of Midland.

Section 6. ASSIGNABILITY. This Agreement shall not be assignable, in whole
or in part, without the prior consent of the other party. Any attempted
assignment without such consent shall be void and of no force or effect.

Section 7. TERMINATION. This Agreement may be terminated by either party,
with or without cause, upon thirty (30) days' written notice to the other.

Section 8. MIDLAND CUSTOMER SERVICE. Midland shall have the sole right to
provide services to or otherwise communicate and deal with its account owners
for the purposes of maintaining the Accounts and providing customer service with
respect thereto. AML agrees it shall not interfere with such activities or
communications.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written by and through their representatives
thereunto duly authorized.

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By: /s/ Dempsey R. Adkins
---------------------------------------
Its: Senior V.P. Career Marketing
------------------------------------

MIDLAND SAVINGS BANK FSB

By: /s/ John R. Christenson
---------------------------------------
Its: Vice President
------------------------------------

-2-

<PAGE>
[Execution Copy]

PURCHASE AGREEMENT

Dated as of June 28, 1996

between

AMERUS LIFE INSURANCE COMPANY

and

AMERUS BANK

<PAGE>
TABLE OF CONTENTS

SECTION PAGE
------- ----
ARTICLE I

DEFINITIONS . . . . . . . . . . . . . . . 1

SECTION 1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Rules of Construction. . . . . . . . . . . . . . . 3

ARTICLE II

PURCHASE AND SALE. . . . . . . . . . . . . . 3

SECTION 2.01. Purchase and Sale of the Note and
Certificate. . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.02. Price. . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE III

CLOSING . . . . . . . . . . . . . . . . 4

SECTION 3.01. Closing. . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Transactions to be Effected at the
Closing. . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE IV

CONDITIONS PRECEDENT TO
OBLIGATION OF THE PURCHASER . . . . . . . . . . . 4

SECTION 4.01. Performance by the Seller. . . . . . . . . . . . . . . . 4
SECTION 4.02. Representations and Warranties . . . . . . . . . . . . . 4
SECTION 4.03. Officer's Certificate. . . . . . . . . . . . . . . . . . 4
SECTION 4.04. Financing Statements . . . . . . . . . . . . . . . . . . 5
SECTION 4.05. Ratings. . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.06. No Actions or Proceedings. . . . . . . . . . . . . . . . 5
SECTION 4.07. Approvals and Consents . . . . . . . . . . . . . . . . . 5
SECTION 4.08. Other Documents. . . . . . . . . . . . . . . . . . . . . 5

ARTICLE V

CONDITIONS PRECEDENT TO
OBLIGATION OF THE SELLER . . . . . . . . . . . . 5

SECTION 5.01. Performance by the Purchaser . . . . . . . . . . . . . . 6
SECTION 5.02. Representations and Warranties . . . . . . . . . . . . . 6
SECTION 5.03. Officer's Certificate. . . . . . . . . . . . . . . . . . 6
SECTION 5.04. No Actions or Proceedings. . . . . . . . . . . . . . . . 6
SECTION 5.05. Approvals and Consents . . . . . . . . . . . . . . . . . 6

-i-

<PAGE>

SECTION PAGE
------- ----

SECTION 5.06. Other Documents. . . . . . . . . . . . . . . . . . . . . 6

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . 6

SECTION 6.01. Organization . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6.02. Authority. . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.03. The Note and Certificate . . . . . . . . . . . . . . . . 7
SECTION 6.04. Litigation . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE VII

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER . . . . . . . . . . . . . . 8

SECTION 7.01. Organization . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.02. Authority. . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.03. Non-Transferability of Certificate;
Securities Act Matters . . . . . . . . . . . . . . . . 9
SECTION 7.04. Investment Company Act . . . . . . . . . . . . . . . . . 9
SECTION 7.05. Representations and Warranties Relating
to Issuance of Securities. . . . . . . . . . . . . . . 9

ARTICLE VIII

MUTUAL COVENANTS . . . . . . . . . . . . . . 11

SECTION 8.01. Legal Conditions to Closing. . . . . . . . . . . . . . . 11
SECTION 8.02. Mutual Obligations . . . . . . . . . . . . . . . . . . . 12

ARTICLE IX

MISCELLANEOUS. . . . . . . . . . . . . . . 12

SECTION 9.01. Amendments, etc. . . . . . . . . . . . . . . . . . . . . 12
SECTION 9.02. Notices, etc . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 9.03. No Waiver; Remedies. . . . . . . . . . . . . . . . . . . 13
SECTION 9.04. Binding Effect; Assignability. . . . . . . . . . . . . . 13
SECTION 9.05. Governing Law. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.06. Execution in Counterparts. . . . . . . . . . . . . . . . 13

-ii-

<PAGE>

PURCHASE AGREEMENT dated as of June 28, 1996, between
AmerUS Life Insurance Company, an Iowa mutual life insurance
company (the "Purchaser"), and AmerUs Bank, a federal savings bank
("AmerUs Bank").

RECITALS

The Seller (as defined below) (a) has sold and assigned its
interest in certain home equity mortgage loans owned by the Seller (the
"Mortgage Loans") and certain other assets to the AB/HEL Trust 1996-1 (the
"Trust") and (b) proposes to sell to the Purchaser the AB/HEL Trust 1996-1
Asset Backed Class A Note (the "Note") and the AB/HEL Trust 1996-1 Class R
Certificate (the "Certificate"), on the terms and subject to the conditions
set forth herein.

The Mortgage Loans and other assets have been or will be conveyed
by the Seller to the Trust pursuant to a Pooling and Servicing Agreement
dated as of June 28, 1996 (the "Pooling and Servicing Agreement"), between
AmerUs Bank, as seller and servicer, and Boatmen's Trust Company, as trustee
(the "Trustee"), and pursuant to a Transfer Agreement dated as of June 28,
1996 between AmerUs Bank and the Trustee. The Note and Certificate will be
issued by the Trust pursuant to the Pooling and Servicing Agreement.

In consideration of the representations, warranties and agreements
herein contained, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. CERTAIN DEFINED TERMS. Capitalized terms used in
this Agreement without definition shall have the meaning set forth in the
Pooling and Servicing Agreement. In addition, as used in this Agreement, the
following terms shall have the following meanings:

"ACT" shall mean the Securities Act of 1933, as amended.

"AGREEMENT" shall mean this agreement and any supplements,
amendments, exhibits and schedules hereto.

"CERTIFICATE" shall have the meaning set forth in the recitals
hereto.

"CERTIFICATE PURCHASE PRICE" shall have the meaning set forth in
Section 2.02.

<PAGE>

"CLOSING" shall have the meaning set forth in Section 3.01.

"CLOSING DATE" shall have the meaning set forth in Section 3.01.

"GOVERNMENTAL ACTIONS" shall mean any and all consents, approvals,
permits, orders, authorizations, waivers, exceptions, variances, exemptions
or licenses of, or registrations, declarations or filings with, any
Governmental Authority required under any Governmental Rules.

"GOVERNMENTAL AUTHORITY" shall mean any governmental department,
commission, board, bureau, agency, court or other instrumentality of any
nation, state, province, territory, commonwealth, municipality or other
political subdivision thereof having jurisdiction over the Person in question.

"GOVERNMENTAL RULES" shall mean any and all laws, statutes, codes,
rules, regulations, ordinances, orders, writs, decrees and injunctions of any
Governmental authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.

"MORTGAGE LOANS" shall have the meaning set forth in the recitals
hereto.

"NOTE" shall have the meaning set forth in the recitals hereto.

"NOTE PURCHASE PRICE" shall have the meaning set forth in Section
2.02.

"PERSON" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.

"POOLING AND SERVICING AGREEMENT" shall have the meaning set forth
in the recitals hereto.

"S&P" shall have the meaning set forth in Section 4.05.

"SELLER" shall mean AmerUs Bank, a federal savings bank.

"TRUST" shall have the meaning set forth in the recitals hereto.

-2-

<PAGE>

"TRUSTEE" shall have the meaning set forth in the recitals hereto.

SECTION 1.02. OTHER RULES OF CONSTRUCTION. References in this
Agreement to sections, exhibits and schedules are to sections of and exhibits
and schedules to this Agreement unless otherwise indicated. The words
"hereof", "herein", "hereunder" and comparable terms refer to the entirety of
this Agreement and not to any particular article, section or other
subdivision hereof or attachment hereto. Words in the singular include the
plural and in the plural include the singular. The word "or" is not
exclusive. The word "including" shall be deemed to mean "including, without
limitation". The section and article headings and table of contents
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Except as
otherwise specified herein, all references herein (a) to any Person shall be
deemed to include such Person's successors and assigns and (b) to any
Governmental Rule or contract specifically defined or referred to herein
shall be deemed references to such Governmental Rule or contract as the same
may be supplemented, amended, waived, consolidated, replaced or modified from
time to time, but only to the extent permitted by, and effected in accordance
with, the terms thereof.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01. PURCHASE AND SALE OF THE NOTE AND CERTIFICATE. On
the terms and subject to the conditions set forth in this Agreement, and in
reliance on the covenants, representations, warranties and agreements herein
set forth, the Seller agrees to sell, transfer and deliver to the Purchaser,
and the Purchaser agrees to purchase, at the Closing, the Note and the
Certificate.

SECTION 2.02. PRICE. The Note is to be purchased at a purchase
price of $43,715,844.92 (the "Note Purchase Price"). The Class R Certificate
is to be purchased at a purchase price of $3,039,069.43 (the "Certificate
Purchase Price").

-3-

<PAGE>

ARTICLE III

CLOSING

SECTION 3.01. CLOSING. The Closing of the purchase and sale of
the Note and Certificate (the "Closing") shall take place at the offices of
AmerUS Life Insurance Company, 418 Sixth Avenue, Des Moines, Iowa 50309 on
June 28, 1996 at 9:00 a.m., or as soon as practicable after the conditions
hereof have been satisfied or waived, or at such other time, date and place
as the parties shall agree upon (the date of the Closing being referred to
herein as the "Closing Date").

SECTION 3.02. TRANSACTIONS TO BE EFFECTED AT THE CLOSING. At the
Closing, (a) the Purchaser will deliver to the Seller funds in an amount
equal to the aggregate of the Note Purchase Price and the Certificate
Purchase Price and (b) the Seller shall deliver to the Purchaser the Note and
Certificate.

ARTICLE IV

CONDITIONS PRECEDENT TO
OBLIGATION OF THE PURCHASER

The obligation of the Purchaser to purchase and pay for the Note
and Certificate on the Closing Date is subject to the satisfaction at the
time of the Closing of the following conditions (any or all of which may be
waived by the Purchaser in the Purchaser's sole discretion):

SECTION 4.01. PERFORMANCE BY THE SELLER. All the terms,
covenants, agreements and conditions of this Agreement and the Pooling and
Servicing Agreement to be complied with and performed by the Seller by the
Closing shall have been complied with and performed in all material respects.

SECTION 4.02. REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Seller made in this Agreement and the
Pooling and Servicing Agreement shall be true and correct in all material
respects as of the time of the Closing.

SECTION 4.03. OFFICER'S CERTIFICATE. The Purchaser shall have
received from the Seller, in form and substance reasonably satisfactory to
the Purchaser, an Officer's Certificate, dated the Closing Date, certifying
as to the satisfaction of the conditions set forth in Sections 4.01 and 4.02
hereof.

-4-

<PAGE>

SECTION 4.04. FINANCING STATEMENTS. The Purchaser shall have
received evidence reasonably satisfactory to it that, on or before the
Closing Date, UCC-1 financing statements have been filed in the offices of
the Secretary of State of the applicable states and in the appropriate office
or offices in such locations as may be specified by the Purchaser reflecting
the sale and assignment by the Seller of the Mortgage Loans and the proceeds
thereof to the Trust and the interest of the Trust in the Mortgage Loans and
the proceeds thereof.

SECTION 4.05. RATINGS. (a) The Note shall have been rated at
least "A" by Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies ("S&P"), and S&P shall not have placed the Note under
review with possible negative implications.

(b) The Purchaser shall have received from S&P a letter to the
effect that the issuance of the Note and Certificate and the consummation of
the transactions contemplated by this Agreement and by the Pooling and
Servicing Agreement will not result in any downgrading in the rating of the
debt securities of the Purchaser.

SECTION 4.06. NO ACTIONS OR PROCEEDINGS. No action, suit,
proceedings or investigation by or before any Governmental Authority shall
have been instituted to restrain or prohibit the consummation by the Seller
or the Purchaser of, or to invalidate, the transactions contemplated by this
Agreement or the Pooling and Servicing Agreement in any material respect.

SECTION 4.07. APPROVALS AND CONSENTS. All Governmental Actions of
Governmental Authorities required by the Purchaser or the Seller with respect
to the transactions contemplated by this Agreement have been obtained or made.

SECTION 4.08. OTHER DOCUMENTS. The Seller shall have furnished to
the Purchaser such other information, certificates and documents as the
Purchaser or its counsel may reasonably request.

ARTICLE V

CONDITIONS PRECEDENT TO
OBLIGATION OF THE SELLER

The obligation of the Seller to sell the Note and Certificate to
the Purchaser on the Closing Date is subject to the satisfaction at the time
of the Closing of the following

-5-

<PAGE>

conditions (any or all of which may be waived by the Seller in the Seller's
sole discretion):

SECTION 5.01. PERFORMANCE BY THE PURCHASER. All the terms,
covenants, agreements and conditions of this Agreement to be complied with
and performed by the Purchaser by the Closing shall have been complied with
and performed in all material respects.

SECTION 5.02. REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Purchaser made in this Agreement shall
be true and correct in all material respects as of the time of the Closing.

SECTION 5.03. OFFICER'S CERTIFICATE. The Seller shall have
received from the Purchaser, in form and substance reasonably satisfactory to
the Seller, a certificate signed by an officer of the Purchaser, dated the
Closing Date, certifying as to the satisfaction of the conditions set forth
in Sections 5.01 and 5.02 hereof.

SECTION 5.04. NO ACTIONS OR PROCEEDINGS. No action, suit,
proceeding or investigation by or before any Governmental Authority shall
have been instituted to restrain or prohibit the consummation by the Seller
or the Purchaser of, or to invalidate, the transactions contemplated by this
Agreement or the Pooling and Servicing Agreement in any material respect.

SECTION 5.05. APPROVALS AND CONSENTS. All Governmental Actions of
Governmental Authorities required by the Purchaser or the Seller with respect
to the transactions contemplated by this Agreement shall have been obtained
or made.

SECTION 5.06. OTHER DOCUMENTS. The Purchaser shall have furnished
to the Seller such other information, certificates and documents as the
Seller or its counsel may reasonably request.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to the Purchaser as of
the Closing Date as follows:

SECTION 6.01. ORGANIZATION. The Seller has been duly organized
and is validly existing as a federal savings bank in good standing under the
laws of the United States and is duly qualified to do business and in good
standing under the laws of

-6-

<PAGE>

each jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business, and has full corporate
power and authority to own its properties and conduct its business as
currently conducted.

SECTION 6.02. AUTHORITY. The Seller has all requisite corporate
power and authority to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement and the Note and Certificate,
to execute the Note and Certificate and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Seller of
this Agreement, the Pooling and Servicing Agreement, and the consummation by
the Seller of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action on the part of
the Seller. Each of this Agreement and the Pooling and Servicing Agreement
has been duly and validly executed and delivered by the Seller and
constitutes a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. Neither the execution or delivery by the Seller of
this Agreement or the Pooling and Servicing Agreement, nor the issuance or
delivery of the Note or Certificate, nor the consummation by the Seller of
any of the transactions contemplated by this Agreement or the Pooling and
Servicing Agreement, nor the fulfillment by the Seller of the terms of the
Note or Certificate, this Agreement or the Pooling and Servicing Agreement
will conflict with, or violate, result in a material breach of or constitute
a material default (with or without notice or lapse of time, or both) under
(a) any term or provision of the Articles of Organization or by-laws of the
Seller or any Governmental Rule applicable to the Seller or the Trust or (b)
any term or provision of any indenture or other agreement or instrument to
which the Seller is a party or by which it or any material portion of its
properties are bound. No Governmental Action is required by or with respect
to the Seller in connection with the execution and delivery of this Agreement
or the Pooling and Servicing Agreement by the Seller or the consummation by
the Seller of the transactions contemplated hereby or thereby, other than the
filing of the UCC-1 financing statements contemplated in Section 4.04 hereof,
all of which have been duly filed.

SECTION 6.03. THE NOTE AND CERTIFICATE. The Note and Certificate
have been duly and validly authorized, and, when executed and authenticated
by the Trustee in accordance with the terms of the Pooling and Servicing
Agreement and delivered to and paid for by the Purchaser in accordance with
this Agreement, will

-7-

<PAGE>

be duly and validly issued and outstanding, and will be entitled to the
benefits of the Pooling and Servicing Agreement.

SECTION 6.04. LITIGATION. There is no pending or, to the best
knowledge of the Seller, threatened action, suit or proceeding by or against
the Seller before any Governmental Authority or any arbitrator with respect
to the Trust, the Note, the Certificate, this Agreement, the Pooling and
Servicing Agreement, or any of the transactions contemplated herein or
therein, or with respect to the Seller which, in the case of any such action,
suit or proceeding with respect to the Seller, if adversely determined,
would, in the reasonable judgment of the Seller's management, have a material
adverse effect on the ability of the Seller to perform its obligations under
this Agreement or the Pooling and Servicing Agreement.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller as of
the date of this Agreement and as of the Closing Date as follows:

SECTION 7.01. ORGANIZATION. The Purchaser has been duly
incorporated and is validly existing as an Iowa mutual life insurance company
in good standing under the laws of Iowa.

SECTION 7.02. AUTHORITY. The Purchaser has all requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery by the Purchaser of this Agreement and the
consummation by the Purchaser of the transactions contemplated hereby has
been duly and validly authorized by all necessary corporate action on the
part of the Purchaser. This Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to bankruptcy, reorganization, insolvency, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights and to general principles of equity. Neither the execution or delivery
by the Purchaser of this Agreement, nor the consummation by the Purchaser of
any of the transactions contemplated hereby, nor the fulfillment by the
Purchaser of the terms hereof, will conflict with, or violate, result in a
material breach of or constitute a material default (with or without notice
or lapse of time, or both) under (a) any term or

-8-

<PAGE>

provision of the Articles of Incorporation or By-laws of the Purchaser or any
Governmental rule applicable to the Purchaser or (b) any term or provision of
any indenture or other agreement or instrument (including the Liquidity
Agreement), to which the Purchaser is a party or by which the Purchaser or
any material portion of its properties are bound. No Governmental Action is
required by or with respect to the Purchaser in connection with the execution
and delivery of this Agreement by the Purchaser or the consummation by the
Purchaser of the transactions contemplated hereby.

SECTION 7.03. NON-TRANSFERABILITY OF CERTIFICATE; SECURITIES ACT
MATTERS. The Purchaser acknowledges that the Certificate by its terms is
non-transferable and the Purchaser affirms that it will not sell or offer to
sell or otherwise dispose of the Certificate (or any interest therein). In
addition, the Purchaser will not offer to sell or otherwise dispose of the
Note or Certificate so acquired by it (or any interest therein) in violation
of any of the registration requirements of the Act or any applicable state or
other securities laws. The Purchaser acknowledges that it has no right to
require the Seller to register under the Act or any other securities law the
Note or Certificate to be acquired by the Purchaser pursuant to this
Agreement.

SECTION 7.04. INVESTMENT COMPANY ACT. The Purchaser is not
subject to registration as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

SECTION 7.05. REPRESENTATIONS AND WARRANTIES RELATING TO ISSUANCE
OF SECURITIES. The Note and Certificate have been offered and will be issued
without registration under the Act in reliance upon exemptions from
registration under the Act, including the safe harbor provided by Regulation
D promulgated under Section 4(2) of the Act. The Purchaser hereby represents
and warrants, as of the date of this Agreement and as of the Closing Date, as
follows:

(a) The Purchaser will acquire the Note and Certificate for its
own account, for investment purposes only and not with a view to the resale
or other distribution thereof, in whole or in part. The Purchaser has no
reason to anticipate any change in the Purchaser's circumstances, financial
or otherwise, which would cause or require any sale or distribution of the
Note or Certificate.

(b) The Purchaser acknowledges, agrees and is aware that:

-9-

<PAGE>

(i) an investment in the Note or Certificate involves a high
degree of risk, and the Purchaser may lose the entire amount of the
Purchaser's investment;

(ii) no United States federal or state or any foreign agency
has passed upon the accuracy, validity or completeness of this Agreement
or the Pooling and Servicing Agreement or made any finding or
determination as to the fairness of an investment in the Note or
Certificate;

(iii) the Note and Certificate are each illiquid, and the
Purchaser must bear the economic risk of investment in them;

(iv) the Note contains substantial restrictions on
transferability; the Certificate is non-transferable by its terms;

(v) there is no existing public or other market for the Note,
and it is not expected that any such market will develop; there can be
no assurance that the Purchaser will be able to sell or dispose of the
Note; and

(vi) the Note and Certificate have not been registered under
the Act or under the securities laws of any other jurisdiction, and no
issuer thereof is under any obligation to, and currently does not intend
to, register or qualify the Note or Certificate for resale by the
Purchaser or assist the Purchaser in complying with any exemption under
the Act or the securities laws of any such jurisdiction or any other
jurisdiction; an offer or sale of the Note by the Purchaser in the
absence of registration under the Act will require the availability of
an exemption thereunder, as well as compliance with the terms of the
Note; a restrictive legend is placed on the Note; and a notation shall
be made in the Register maintained by the Trustee indicating that the
Note is subject to restrictions on transfer and that the Certificate is
non-transferable.

(d) The Purchaser acknowledges that it:

(i) has been furnished with information relating to the Note
and Certificate and the Purchaser has carefully read such information
and understands and has evaluated the risks of purchasing the Note and
Certificate;

-10-

<PAGE>

(ii) has been given the opportunity to ask questions of, and
receive answers from AmerUs Bank and its officers, employees,
consultants and sponsors concerning the terms and conditions of the Note
and Certificate and other matters pertaining to an investment in the
Note and Certificate; has been given the opportunity to obtain such
additional information necessary to evaluate the merits and risks of
holding the Note and Certificate to the extent such entities possess
such information, and has received all documents and information that it
has requested relating to an investment in the Note and Certificate;

(iii) has not relied upon any representations or other
information (whether oral or written) from AmerUs Bank or their
respective directors, officers or affiliates, or from any other persons;

(iv) is familiar with the nature of and risks attendant to
investments in the Note and Certificate and securities in general and
has carefully considered and has, to the extent the Purchaser believes
such discussion necessary, discussed with the Purchaser's professional
legal, financial and tax advisers, the suitability of an investment in
the Note and Certificate for its particular financial and tax situation
and has determined that such Note and Certificate is a suitable
investment for it; and

(v) has made and is solely responsible for making, its own
independent evaluation of the economic, credit and other risks involved
in its investment in the Note and Certificate and its own independent
decision to make such investment.

ARTICLE VIII

MUTUAL COVENANTS

SECTION 8.01. LEGAL CONDITIONS TO CLOSING. Each of the Purchaser
and the Seller will take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on it with respect to the
Closing (including satisfaction of the conditions contained in Article IV or
V, as applicable), and will promptly cooperate with and furnish information
to one another in connection with any such legal requirements. Each of the
Purchaser and the Seller will take all reasonable action necessary to obtain
(and will cooperate with one another in obtaining) any consent,
authorization, permit, license, franchise, order or approval of, or any
exemption by any Governmental Authority or any other Person, required to be

-11-

<PAGE>

obtained or made by it in connection with any of the transactions
contemplated by this Agreement.

SECTION 8.02. MUTUAL OBLIGATIONS. On and after the Closing, each
of the Purchaser and the Seller will do, execute and perform all such other
acts, deeds and documents as the other party may from time to time reasonably
require in order to carry out the intent of this Agreement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Seller
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Seller and the holders of the Note and Certificate, and
then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telecopies, telegraphic, telex or cable communication) and mailed,
telecopied, telegraphed, telexed, cabled or delivered, as to each party
hereto, at its address set forth below or at such other address as shall be
designated by such party in a written notice to the other party hereto. All
such notices and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answer back or
delivered to the cable company, respectively.

If to the Purchaser:

AmerUS Life Insurance Company
418 Sixth Avenue
Des Moines, Iowa 50309
Attention: Thomas C. Godlasky
Telecopier No. (515) 283-3286

-12-

<PAGE>

If to the Seller:

AmerUs Bank
418 Sixth Avienue
Des Moines, Iowa 50309
Attention: D. Richard Ten Braak
Telecopier No. (515) 283-3370

SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.

SECTION 9.04. BINDING EFFECT; ASSIGNABILITY. This Agreement shall
be binding upon and inure to the benefit of the Seller and the Purchaser and
their respective successors and assigns (including any subsequent holder of
the Class A Note); PROVIDED, HOWEVER, that the Seller shall not have the
right to assign its rights hereunder or any interest herein (by operation of
law or otherwise) without the prior written consent of the Purchaser except
in connection with a transaction permitted under the Pooling and Servicing
Agreement.

SECTION 9.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF IOWA.

SECTION 9.06. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.

-13-

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.

AMERUS LIFE INSURANCE COMPANY

By: /s/ Thomas C. Godlasky
------------------------------
Name: Thomas C. Godlasky
Title: Chief Investment
Officer, Executive
Vice President

AMERUS BANK

By: /s/ D. Richard Ten Braak
------------------------------
Name: D. Richard Ten Braak
Title: Senior Vice President

Purchase Agreement Signature Page - 14

<PAGE>

AMERICAN MUTUAL LIFE INSURANCE COMPANY

ORGANIZED IN 1896 DES MOINES, IOWA 50306

BROKERAGE CONTRACT

This contract is entered into at Des Moines, Iowa, between American Mutual Life
Insurance Company (the "Company") and Midland Investment Services, Inc. (the
"Agent") with an Effective Date of January 1, 1995.

SECTION 1. THE AGENCY

A. AUTHORITY OF AGENT

The Agent may solicit Applications for insurance policies, annuity
contracts and other products offered by the Company in the territory assigned to
his/her General Agent, and in other geographical areas as permitted by the Rules
of the Company. The Agent is authorized to deliver policies and contracts
issued by the Company upon payment of the required initial premium and upon
compliance with the terms and conditions of such policies and contracts and the
Rules of the Company governing such delivery.

B. LIMITATION OF AGENT'S AUTHORITY

The Agent has no authority personally or on behalf of the Company to make,
modify or waive any of the terms or conditions of any policy or contract; to
bind the Company by making any promise or by accepting any representation or
information not contained in an application; or to incur any obligation or
liability for which the Company shall be responsible.

C. RELATIONSHIP

The Agent is an independent contractor and nothing in this Contract shall
be construed to make the Agent an employee of the Company or the General Agent.
The Agent shall be free to exercise his/her own judgment as to the persons from
whom Applications will be solicited and the time, place and manner of
solicitation, but the Company from time to time may adopt Rules respecting the
solicitation of Applications by the Agent as do not interfere with such freedom
of action.

D. DUTIES OF AGENT

1. The Agent shall comply with all applicable statutes and governmental
rules and regulations and shall so conduct himself/herself as not to affect
adversely the Business, good standing or reputation of the Agent, the General
Agent or the Company.

2. The Agent shall comply with the rules and operating procedures of the
Company which are published from time to time by the Company and by this
reference, is made a part of this Contract.

3. The Agent shall assist the Company in the care and conservation of the
Business sold by him/her and provide prompt service to its policyowners.

4. The Agent shall indemnify and save the Company harmless from and
against all costs, expenses, damages and other liabilities resulting from any
act or failure to act by the Agent.

<PAGE>
SECTION 2. COMPENSATION

A. PAYMENT

The Company will pay to the Agent the Compensation specified in the
Schedule of Commissions and any supplement or amendment hereto as in effect on
the Paid Date of each insurance policy, annuity contract or other product issued
by the Company and sold by the Agent. Unless otherwise specifically provided,
such Compensation shall be paid in accordance with the Company's Rules when the
respective premiums or other sums on Business sold by the Agent are paid to the
Company.

B. ENTIRE COMPENSATION

The Agent agrees that the Compensation specified in the Schedule of
Commissions and any supplement or amendment hereto, as in effect on the Paid
Date of each insurance policy, annuity contract or other product issued by the
Company and sold by the Agent, shall constitute the Agent's entire remuneration
for services rendered pursuant to this Contract.

C. RIGHTS RESERVED

The Company reserves the right to amend from time to time the terms and
conditions of the payment of Compensation as set forth in the Schedule of
Commissions and any supplement or amendment hereto by giving Notice of such
amendment. No such amendment shall operate to reduce the Compensation paid on
Business sold by the Agent with a Paid Date prior to the date when the amendment
becomes effective.

D. CHARGEBACK OF COMPENSATION

The Agent agrees that if the Company for any reason refunds a premium or
any other payment on which any Compensation has been paid to the Agent, then
such Compensation shall become an indebtedness of the Agent and become
immediately due and payable to the Company.

E. RIGHT OF SET-OFF

All Compensation which is or may be paid under this Contract is subject to
the prior and absolute right of the Company to receive and apply such amounts on
account of all indebtedness, obligations and liabilities of the Agent to the
Company whether arising out of this Contract or otherwise, and on account of
costs, expenses, damages and other liabilities which the Company may sustain or
be liable for by reason of any act or failure to act on the part of the Agent.
This right of set-off shall also apply to any Compensation paid after
termination of the Contract.

SECTION 3. TERMINATION AND COMPENSATION AFTER TERMINATION

A. TERMINATION

This Contract shall terminate on the occurrence of any of the following
events:

(i) death of the Agent;

(ii) whenever the company shall determine that the commissions for any 12
month period will amount to less than $100;

(iii) appointment of the Agent as a General Agent, Career Agent or as an
employee of the Company;

(iv) written notice of termination by either the Agent or the Company,
either delivered personally or mailed to the last known address of the other
party, at least thirty days prior to the effective date of such termination;

(v) if the Agent commits an act of dishonesty or fraud which directly
affects the Company, or if the Agent misappropriates or withholds funds of
the Company or for which the Company is or may be liable, or if the Agent
violates any statute or governmental rule or regulation applicable to the
sale of Business by the Agent.

(vi) if the Agent or any person acting on behalf of or in association with
the Agent attempts at any time to induce or persuade any person under contract
with the Company to leave its service to enter the service of another insurance
company or agency thereof, or replaces more than 10%, measured by annualized
premium, of his/her Business having an Issue Date in one calendar year with

2
<PAGE>

insurance or investment products issued or sold by another company.

B. COMPENSATION AFTER TERMINATION

1. If this contract terminates as a result of the occurrence of an event
as specified in Section 3.A.(i)(iv), the Company will pay the compensation
the Agent would have received had this contract remained in force, except
that payment of service fees and persistency bonus payments shall immediately
cease.

2. If the Contract terminates as a result of the occurrence of the event
specified in Section 3.a (ii), then all rights of the Agent to compensation
under this Contract shall immediately cease and the Agent shall not be
entitled to any further payments from the Company of any kind.

3. If the contract terminates as a result of the occurrence of the event
specified in Section 3.A.(iii), the Agent shall receive all the compensation
he/she would have received had this contract remained in force; provided,
however, the provisions of Section 3.B.1 shall become applicable if and when
the agent ceases to be a General Agent, Career Agent or employee of the
Company.

4. If the contract terminates as a result of the occurrence of any one
of the events specified in Section 3.A.(v) or (vi) or if the Agent,
subsequent to termination of the contract for any reason, should commit any
of the acts specified in Section 3.A.(v) or (vi), then all rights of the
Agent to compensation under this contract shall immediately cease and the
Agent shall not be entitled to any further payments from the Company if any
kind.

SECTION 4. GENERAL

A. DEFINITIONS

The following terms shall have the indicated meanings in this Contract and
in any supplement or amendment hereto:

APPLICATION: An application to the Company for an insurance policy, annuity
contract or other product.

BONUS PAYMENTS: Amounts determined, computed and paid by the Company to the
Agent in accordance with the terms and conditions of the Persistency Bonus
Supplement which, by this reference, are made a part of this Contract.

BUSINESS: Insurance policies, annuity contracts and other products issued by
the Company.

COMPENSATION: Commissions of every type provided for in the Schedule of
Commissions, Bonus Payments and any other amounts, by whatever name, allowed the
Agent under this Contract.

CONTRACT: This Brokerage Agent's contract and any supplement or amendment
hereto.

ISSUE DATE: The issue date specified in an insurance policy or annuity
contract issued by the Company.

FIRST YEAR COMMISSIONS (FYC): First year commissions credited to the Agent's
account on the Company's record system less any charges as a result of premiums
refunded by the Company to the policyowner.

NOTICE: Written notice by the Company that will be immediately effective,
unless otherwise specifically provided, upon depositing same in the mail
addressed to the Agent at his/her last known address. The Agent will be deemed
to have knowledge of the content of the Notice and be bound thereby upon its
effective date.

PAID DATE: The date when an insurance policy, annuity contract or other
product issued by the Company is entered as paid on the Company's record system.

PERSISTENCY: For any designated period of time, the percentage computed in
accordance with the Rules of the Company as of the end of such period by
dividing (1) the amount of FYC credited on all life insurance policies sold by
the Agent with an Issue Date in any one calendar year which actually renew for
the designated period by (2) the amount of FYC originally credited on all life
insurance policies sold by the Agent with an Issue Date in that calendar year.

RULES: Rules prescribed by the Company for the solicitation, delivery and
servicing of Business, the computation and payment of Compensation and the
computation of Persistency, as may from time to time be published in the
Company's ratebooks and manuals.

SCHEDULE OF COMMISSIONS: A supplement to this Contract which sets forth the
First Year, Renewal and service fees paid by the Company

<PAGE>

for the years shown and at the percentages stated therein.

B. INDEBTEDNESS OF AGENT

The Company shall have a first lien on and the Agent hereby assigns to the
Company all Compensation which is or may be paid under this Contract or any
previous agency contract between the Agent and the Company as security for
payment of all indebtedness and all other amounts due or that become due it from
the Agent, and the Agent agrees to pay interest on such indebtedness and other
amounts as remain from time to time outstanding at the rate of 10% per annum.
The Company reserves the right from time to time to change the rate of interest
charged by publishing such change. The lien created hereby shall not be
extinguished by termination of this Contract or any previous agency contract
between the Agent and the Company.

C. ASSIGNMENT

This Contract is not transferable. No assignment of any Compensation or
other right hereunder shall be effective against the Company unless consented to
in writing by the Company and unless the original assignment or a duplicate
original thereof is filed with the Company at its Home Office; and any such
assignment shall be subject to the first lien and right of set-off of the
Company provided under this Contract.

D. RIGHTS RESERVED TO THE COMPANY

The Company may, without liability to the Agent, withdraw from any
territory, revise its premium rates and dividends, and revise, discontinue or
withdraw any policy or contract form or forms.

E. CONFORMITY WITH COMPANY PROCEDURES

The amount and time of payment of Compensation on replacements, policy
changes, reinstatements, conversions, exchanges, term renewals, premiums paid in
advance and other special cases shall be governed by the rules form time to time
published by the Company.

F. PREVIOUS AGENCY CONTRACTS

Any existing agency contract between the Agent and the Company shall
terminate as of the effective date of this contract except as to any
indebtedness of the Agent to the Company under such contract. This contract
shall not be deemed to place or continue the Agent in the service of the Company
for any purpose under any previous agency contract between the Agent and the
Company.

G. NO WAIVER

No forbearance or neglect by the Company to enforce any term, condition, or
provision of this Contract shall be construed as a waiver of any of its rights
or privileges hereunder or affect its rights arising from any default or failure
of performance by the Agent.

Executed in duplicate as of the Effective Date set forth above.

AMERICAN MUTUAL LIFE INSURANCE COMPANY

By /s/ signature /s/ Dempsey R. Adkins
- ------------------------------------ --------------------------------------
Vice-President

----------------------------------

Agent

Appointed by:

/s/ Midland Investment Services
- -------------------------------
General Agent

<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
AMERICAN MUTUAL LIFE INSURANCE COMPANY

SCHEDULE OF COMMISSIONS
Effective Date: January 1, 1995 (or Effective Date of Contract, if later)

The agent shall receive commissions equal to the following percentages of
premiums paid to the Company on policies and contracts sold by the Agent with a
Paid Date while this schedule is in effect.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF PREMIUMS
------------------------------------------------------------------------
FIRST YEAR SERVICE FEE
TYPE OF POLICY OR CONTRACT COMMISSION RENEWAL COMMISSIONS COMMISSIONS
---------- ------------------------- --------------
YEARS 12
YEAR 1 YEAR 2 YEARS 3-11 AND LATER
--------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
HERITAGE SERIES LIFE INSURANCE
- -DIAM-Special 98 55% 12% 5% 2%
- -DIAM-HeritageFlex (Base) 50% 12% 5% 2%
(APB) 50% 3% 3% 2%
- -DIAM-Equity Builder 55% 5% 5% 2%
- -DIAM-Heritage Extra 35% 5% 5% 2%
- -DIAM-SurvivorFlex (Base) 50% 5% 5% 2%
(APB) 50% 3% 3% 2%
- -STAR-10 Year Term 50% 5% 5% 2%
- -STAR-Yearly Renewable Term 30% 25% 5% 2%
HERITAGE SERIES RIDERS & BENEFITS
10 Year Term Rider 50% 5% 5% 2%
Yearly Renewable Term Rider 30% 25% 5% 2%
Additional Insured Rider 50% 5% 5% 2%
1st Death Term Rider (SurvivorFlex) 50% 3% 3% 2%
Plus Rider 3% 3% 3% 2%
Plus 1 Rider 3%
SurvivorPlus Rider 3% 3% 3% 2%
SurvivorPlus 1 Rider 3%
Double Death Benefit (SurvivorFlex) 3%
Waiver of Premium Rider
Accidental Death Benefit
Children's Insurance Rider Same as Policy
Guaranteed Purchase Option
Spouse Insurance Rider
Policy Split Option (SurvivorFlex)

AMERICAN SERIES LIFE INSURANCE
- -STAR-American Executive 70% 12% 5% 2%
- -STAR-Executive Whole Life 70% 12% 5% 2%
- -STAR-Life Paid-Up at 65 70% 12% 5% 2%
- -STAR-Decreasing Term 50% 5% 5% 2%
AMERICAN SERIES RIDERS & BENEFITS
//10 Year Term Rider 50% 5% 5% 2%
//Decreasing Term Rider 50% 5% 5% 2%
Other Insured Rider 50% 5% 5% 2%
Additional Paid-Up Life Rider 4% 4% 4% 2%
ART Rider (Flex Term) 0% 0% 0% 0%
Family Term-Children Only
Guaranteed Additions Rider Same as Policy
Waiver of Premium Rider
Accidental Death Benefit
</TABLE>

- -DIAM- First year commissions are shown for issue ages 0-60. The rate shown
shall be reduced by 1% for each year the issue age is over 60 and under 71;
and by 2% for each year the issue age is over 70. For SurvivorFlex the rate
shown shall be reduced by 1% for each issue age over 70. For HeritageExtra
the rate shall be reduced by 1% for each issue age over 70.

- -STAR- Commissions are paid on premiums excluding the policy fee.

// Non-commissionable versions of 10 Year Term Rider and Decreasing Term Rider
are also available.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
AMERICAN MUTUAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Type of Policy or Contract PERCENTAGE OF PREMIUMS
- -------------------------------------------------------------------------------------------------------------------
FIRST YEAR RENEWAL SERVICE FEE
COMMISSIONS COMMISSIONS COMMISSIONS
-TRIA-
-------------- ------------- ------------------------------
YEARS 20
YEAR 1 YEARS 2-9 YEARS 10-20 AND LATER
------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
UNIVERSAL LIFE
Prime Provider 55% 3% * *
Prime Performer 35% 1.5% ** **

PRIME RIDERS
Additional Insured Rider
Waiver of Monthly Premium
Waiver of Monthly Deduction Same as Policy
Children's Insurance Rider
Accidental Death Benefit
Guaranteed Purchase Option

- -STAR-AMERIPLAN 1 50% 3% 3% 2%
- -STAR-AMERIPLAN 2 60% 3% 3% 2%

AMERIPLAN RIDERS
Guaranteed Additions Rider
Waiver Monthly Deduction
Accidental Death Benefit Same as Policy
Primary Insured Rider
Other Insured Rider
Family Term - Children Only
</TABLE>

- -TRIA- The first year rates shown apply to Target Premium. The renewal
commission rate is paid on premium exceeding the Target Premium received in
the first year. Target Premiums are described in one or more of the
following: Product Manual and Rate Book, Agent's Manual or Product Brochures.

- -STAR- Commissions are paid on premiums excluding the policy fee.
<TABLE>
<CAPTION>
Commission on Subsequent Deposits
FIRST YEAR YEARS 6
COMMISSION YEAR 2 YEAR 3 YEAR 4 YEAR 5 AND LATER
---------- ------ ------ ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
ANNUITY
Advantage Plus 6.50% 4.25% 3.25% 2.25% 1.25% 0
Advantage Bonus
Advantage MVA 7.00% 4.25% 3.25% 2.25% 1.25% 0
Flex 30 5.00% 3.00% 3.00% 3.00% 3.00% 2.00%
Guarantee 5 4.00%
Single Premium Immediate Annuity 4.00%
Option F 2.00% of Annuitized Funds
</TABLE>
* 0.25% of the Account Value is paid annually in years 10 and later.
** 0.175% of the Account Value is paid Annually in years 10 and later.
*** 0.75% of the Purchase Account Value is paid annually in year 6 and later.

Consult field publications to determine current Company policy regarding
commission adjustments including but not limited to: annualization,
replacements, substandard ratings and extra premiums, conversion credits,
chargebacks and changes in Universal Life face amounts.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

AMERICAN MUTUAL LIFE INSURANCE COMPANY

Overwriting Commission Supplement
Effective Date: January 1, 1995 (or Effective Date of Contract, if later)

LIFE OVERWRITING FIRST YEAR COMMISSIONS

The Company will pay to Midland Investment Services, Inc. each month a first
year overwriting commission rate of 100% of the Life NAFYC credited during
that month to each agent of record.

The Company will pay to Midland Investment Services, Inc. each month a
renewal overwriting commission in accordance with the Renewal Overwriting
Commissions Schedule.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

<PAGE>

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

AMERICAN MUTUAL LIFE INSURANCE COMPANY

RENEWAL OVERWRITING COMMISSIONS SCHEDULE
Effective Date: June 1, 1995 (or Effective Date of Contract, if later)

The Company agrees to pay the General Agent or Regional General Agent
Overwriting Renewal and Service Fee Commissions in accordance with the
provisions of this schedule.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Overwriting Percentage of Premiums
----------------------------------------------------------------------------------------
Type of Policy or Contract Service Fee
Renewal Commissions Commissions
-------------------------------------------------------------------- ----------------
YEAR YEAR YEAR YEARS YEARS YEARS 12
2 3 4 5-7 8-11 AND LATER
-------- -------- --------- --------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
HERITAGE SERIES LIFE INSURANCE
Special 98 6% 4% 3% 1.5% 1.5% 0.5%
HeritageFlex (Base) 6% 4% 3% 1.5% 1.5% 0.5%
(APB) 1% 1% 1% 1% 1% 0.5%
Equity Builder 4% 4% 3% 1.5% 1.5% 0.5%
HeritageExtra 4% 4% 3% 1.5% 1.5% 0.5%
SurvivorFlex (Base) 4% 4% 3% 1.5% 1.5% 0.5%
(APB) 1% 1% 1% 1% 1% 0.5%
- -STAR- 10 Year Term 4% 4% 3% 1.5% 1.5% 0.5%
- -STAR- Yearly Renewable Term 12% 5% 4% 2.5% 1.5% 0.5%

HERITAGE SERIES RIDERS & BENEFITS
10 Year Term Rider 4% 4% 3% 1.5% 1.5% 0.5%
Yearly Renewable Term Rider 12% 5% 4% 2.5% 1.5% 0.5%
Additional Insured Rider 4% 4% 3% 1.5% 1.5% 0.5%
1st Death Term Rider (SurvivorFlex) 1% 1% 1% 1% 1% 0.5%
Plus Rider 1% 1% 1% 1% 1% 0.5%
SurvivorPlus Rider 1% 1% 1% 1% 1% 0.5%
Waiver of Premium Rider
Accidental Death Benefit
Children's Insurance Rider Same as Policy
Guaranteed Purchase Option
Spouse Insurance Rider
Policy Split Option (Survivor Flex)

AMERICAN SERIES LIFE INSURANCE
- -STAR-American Executive 6% 4% 3% 1.5% 1.5% 0.5%
- -STAR-Executive Whole Life 6% 4% 3% 1.5% 1.5% 0.5%
- -STAR-Life Paid-Up at 65 6% 4% 3% 1.5% 1.5% 0.5%
- -STAR-Decreasing Term 4% 4% 3% 1.5% 1.5% 0.5%

AMERICAN SERIES RIDERS & BENEFITS
//10 Year Term Rider 4% 4% 3% 1.5% 1.5% 0.5%
//Decreasing Term Rider 4% 4% 3% 1.5% 1.5% 0.5%
Other Insured Rider 4% 4% 3% 1.5% 1.5% 0.5%
Additional Paid-Up Life Rider 1% 1% 1% 1% 1% 0.5%
ART Rider (Flex Term) 0% 0% 0% 0% 0% 0%
Family Term - Children Only
Guaranteed Additions Rider
Waiver of Premium Rider Same as Policy
Accidental Death
</TABLE>

- -STAR- Overwrites are paid on premiums excluding the policy fee.

<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

AMERICAN MUTUAL LIFE INSURANCE COMPANY

- ------------------------------------------------------------------------------
Type of Policy or Contract OVERWRITING PERCENTAGE
- ------------------------------------------------------------------------------

UNIVERSAL LIFE
Prime Provider 1% of premium paid in years 2-9. Service fee
of 0.05% of the Account Value is paid
annually in years 10 and later.

Prime Performer 0.5% of premium paid in years 2-9. Service
fee of 0.0375% of the Account Value is
paid annually in years 10 and later.

Ameriplan 1 1% of premium paid in years 2-9. Service fee
of 1% of premium is paid in years 10 and
later.

Ameriplan 2 1% of premium paid in years 2-9. Service fee
of 1% of premium is paid in years 10 and
later.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

<PAGE>

Exhibit 10.67

SERVICING AGREEMENT

This Agreement dated 1st day of March, 1992 between Central Life Assurance
Company (herein referred to as Central) and Midland Investment Services, Inc.
(herein referred to as "MISI").

WHEREAS, Central has contracted one or more employees of MISI to Affiliated
Agents contracts (hereafter referred to as Affiliated Agents) to solicit, sell
and service Central insurance products;

WHEREAS, each Affiliated Agent is an employee is MISI and has absolutely
assigned all of the compensation earned under the Affiliated Agent's Contract to
MISI;

WHEREAS, Central wants MISI to supervise the Affiliated Agents regarding
the solicitation, sale and service of the business maintaining continuity in the
servicing of the business sold by the Affiliated Agents, particularly should the
Affiliated Agent's Contract terminate for any reason; and

WHEREAS, MISI has agreed to be responsible for the supervision of the
Affiliated Agents and the continued servicing of the Central business sold by
the Affiliated Agents.

NOW THEREFORE, in consideration of Central contracting certain employees of
MISI as Affiliated Agents and MISI supervising the Affiliated Agents and
servicing Central's business, the parties agree as follows:

MISI agrees to:

1. Assume responsibility for servicing the business sold by any
Affiliated Agent who at the time of the sale was an employee of MISI, and agrees
to perform the servicing of such business in accordance with the rules and
direction of Central, including but not limited to, maintaining policyowners
records, and providing policy information and assistance to policyowners
regarding their policies.

2. Supervise their employees who are contracted with Central as
Affiliated Agents to ensure the agents are properly licensed, and shall at all
times perform their activities in a professional manner.

3. Pay to Central a) any and all indebtedness incurred under any
Affiliated Agent's Contract assigned to it and b) any and all amounts paid to
MISI as equivalent to credits that otherwise would have been made to the
Corporate Agent's Retirement Plan pursuant to paragraph 10 below but were
subsequently unearned. In the event of termination of the Servicing Agreement,
all amounts owed by MISI to Central, pursuant to this paragraph shall be
immediately due and payable.

4. Indemnify Central from and against any and all losses, claims,
damages, liabilities (including attorney's fees and other expenses reasonably
incurred in connection with, and any amount paid in settlement

<PAGE>

of, any action, suit or proceeding, or any claim asserted) to which Central may
become subject in respect of acts or omissions performed or omitted by MISI or
the Affiliated Agents, insofar as such losses, claims, damages or liabilities
arise out of duties required under this Service Agreement or an Affiliated
Agent's Contract.

5. To have at all times at least one employee who is licensed by law to
sell life insurance products and who has an Affiliated Agent's contract.

6. To be responsible as the employer of the Affiliated Agents to be the
sole sponsor or provider of any employee benefits such as health insurance or
retirement benefits. MISI acknowledges that Affiliated Agents are not entitled
to participate in any Central retirement and welfare benefit plan sponsored for
its Career Agents. MISI will be responsible for the withholding of all federal,
state and local taxes and the payment of any Social Security taxes required
because of its employee's earnings.

7. In the event of termination of this Servicing Agreement, to return
immediately to Central all records and supplies including, but not limited to,
policyowner files and records, contract applications, servicing supplies, and
manuals. MISI also agrees that all Central policyowners remain the clients of
Central and MISI will not, subsequent to the termination, directly or indirectly
induce any Central policyowner to lapse, surrender or otherwise terminate any
policy or product. In the event of a violation of this provision, all
compensation otherwise payable to MISI under any Affiliated Agent's Contract
shall immediately cease and MISI will be liable to Central for any damages
suffered by Central as a consequence of such actions.

Central agrees to:

8. Annualize commissions payable under any Affiliated Agent's Contract on
the same basis as a Career Agent of Central; provided however, that Central
reserves the right to terminate annualization on any or all Affiliated Agents
upon 30 days written notice to MISI.

9. Pay to MISI an amount equal to the monthly health insurance subsidy
Central would have provided had each Affiliated Agent been a Central Career
Agent. Central reserves the right from time to time to change such subsidy and
to change the amounts paid to MISI.

10. Pay to MISI an amount equal to the credits (including the Employer's
social security contribution) that Central would have made under the terms of
its Corporate Agent's Retirement Plan if each Affiliated Agent was a Corporate
sub-agent. Payment of these credits will be subject to all of the terms
contained in the Corporate Agent's Retirement Plan pertaining to amount vesting
and forfeiture. Should any amount paid be received by Central because of the
vesting schedule or forfeiture, MISI will repay Central or at Central's options
such amounts may be used to offset future payments to MISI under this Servicing
Agreement.

<PAGE>

11. Allow 50% of the normal Central Leader's Class credit given to Central
Career Agents on behalf of Affiliated Agents to qualify for Central conventions.
Central has the right to change the qualification for convention qualification
for Career Agents, and in such event, the Affiliated Agents qualifications
will likewise change. Additionally, Affiliated Agents will be able to
attend Education Conferences on the same terms as Career Agents. Affiliated
Agents will not be eligible for any top agent awards or other individual agent
recognition from Central.

12. Make available to MISI Cost Recovery Accounts credits based on
Affiliated Agents production, subject to the same rules as apply to Central
Career Agents.

Central and MISI jointly agree

13. The Servicing Agreement may be terminated

a. by either party on 30 days written notice to the other; or

b. immediately upon

1. MISI's failure to comply with paragraph 5 above; or

2. the controlling interest of MISI is sold to another entity.

14. In the event of termination of this Servicing Agreement pursuant to
paragraph 13 above, all Affiliated Agent's Contracts assigned to MISI shall
terminate on the same date as termination of this Servicing Agreement and
payment of future amounts to MISI shall be subject to the terms and conditions
of the Affiliated Agent's contract except as provided herein.

15. The Affiliated Agent's contract notwithstanding, in the event of
termination under paragraph 13(b)(2) above, all compensation payable to MISI
under any Affiliated Agent's Contract or this Servicing Agreement shall cease as
of the date of sale.

16. This Servicing Agreement may not be modified or any way amended except
in writing signed by both parties hereto.

MIDLAND INVESTMENT SERVICES, INC. CENTRAL LIFE ASSURANCE COMPANY

By: /s/ signature By: /s/ J.A. Smallenberger
-------------------------------- ------------------------------------

<PAGE>
EXHIBIT 21.1

LIST OF SIGNIFICANT SUBSIDIARIES
OF
AMERUS LIFE HOLDINGS, INC.

Subsidiary % Owned Jurisdiction
- ---------- ------- ------------
AmerUs Life Insurance Company 100% Iowa
CLA Assurance Company 100 Iowa
Centralife Annuity Services, Inc. 100 Arizona
American Vanguard Life Insurance Company 100 Iowa

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
AmerUs Life Holdings, Inc.:

We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the Prospectus.

KPMG Peat Marwick LLP

Des Moines, Iowa
September 17, 1996

<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Michael E. Sproule, Michael G. Fraizer
and James A. Smallenberger, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign a registration statement on Form S-1 relating to the Class
A Common Stock of AmerUs Life Holdings, Inc. and any and all amendments
(including post-effective amendments) to such registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and any documents
relating to the qualification or registration under state Blue Sky or
securities laws of such states, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in
person, ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ Roger K. Brooks
------------------------------
Roger K. Brooks

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 17th day of September, 1996.

/s/ John R. Albers
------------------------------
John R. Albers

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ Malcolm Candlish
------------------------------
Malcolm Candlish

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ D T Doan
------------------------------
D T Doan

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 17th day of September, 1996.

/s/ Thomas F. Gaffney
------------------------------
Thomas F. Gaffney

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ Sam C. Kalainov
------------------------------
Sam C. Kalainov

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 16th day of September, 1996.

/s/ John W. Norris, Jr.
------------------------------
John W. Norris, Jr.

<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 17th day of September, 1996.

/s/ John A. Wing
------------------------------
John A. Wing

<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Michael E. Sproule and James A.
Smallenberger, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities to sign a registration
statement on Form S-1 relating to the Class A Common Stock of AmerUs Life
Holdings, Inc. and any and all amendments (including post-effective
amendments) to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and any documents relating to the
qualification or registration under state Blue Sky or securities laws of such
states, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes he might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ Michael G. Fraizer
------------------------------
Michael G. Fraizer

<PAGE>

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Michael G. Fraizer and James A.
Smallenberger, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities to sign a registration
statement on Form S-1 relating to the Class A Common Stock of AmerUs Life
Holdings, Inc. and any and all amendments (including post-effective
amendments) to such registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and any documents relating to the
qualification or registration under state Blue Sky or securities laws of such
states, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes he might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

IN WITNESS WHEREOF, each of the undersigned has signed his name
this 15th day of September, 1996.

/s/ Michael E. Sproule
------------------------------
Michael E. Sproule

<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERUS LIFE
HOLDINGS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 JUN-30-1996
<DEBT-HELD-FOR-SALE> 3,142,096 2,326,904
<DEBT-CARRYING-VALUE> 0 0
<DEBT-MARKET-VALUE> 0 0
<EQUITIES> 109,675 90,438
<MORTGAGE> 353,597 278,328
<REAL-ESTATE> 52,199 44,085
<TOTAL-INVEST> 3,965,028 3,324,120
<CASH> 4,620 0
<RECOVER-REINSURE> 1,392 0
<DEFERRED-ACQUISITION> 267,711 128,820
<TOTAL-ASSETS> 4,371,946 4,273,980
<POLICY-LOSSES> 3,435,505 2,097,994
<UNEARNED-PREMIUMS> 0 0
<POLICY-OTHER> 16,617 12,828
<POLICY-HOLDER-FUNDS> 186,032 0
<NOTES-PAYABLE> 36,461 29,299
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 539,909 504,009
<TOTAL-LIABILITY-AND-EQUITY> 4,371,946 4,273,980
301,457 152,614
<INVESTMENT-INCOME> 285,344 143,888
<INVESTMENT-GAINS> 51,387 64,409
<OTHER-INCOME> 5,390 1,330
<BENEFITS> 374,620 189,328
<UNDERWRITING-AMORTIZATION> 50,239 26,823
<UNDERWRITING-OTHER> 58,655 28,218
<INCOME-PRETAX> 110,550 91,548
<INCOME-TAX> 41,202 33,627
<INCOME-CONTINUING> 69,348 57,921
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 69,348 57,921
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
<RESERVE-OPEN> 0 0
<PROVISION-CURRENT> 0 0
<PROVISION-PRIOR> 0 0
<PAYMENTS-CURRENT> 0 0
<PAYMENTS-PRIOR> 0 0
<RESERVE-CLOSE> 0 0
<CUMULATIVE-DEFICIENCY> 0 0

</TABLE>