SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14-6(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14-11 or 240.14-12
AmerUs Life Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14-6(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- ----
<PAGE>
[AmerUs Life Logo]
April 15, 1998
Dear Shareholder:
We are pleased to invite you to attend the 1998 Annual Meeting of
Shareholders of AmerUs Life Holdings, Inc. The meeting will be held on Friday,
May 8, 1998, at 9:00 a.m., local time, at the Polk County Convention Complex,
501 Grand Avenue, Des Moines, Iowa.
Our business at the meeting will include: (1) electing four directors, all
of whom are present AmerUs directors, (2) approving an amendment of Article IV
of the Amended and Restated Articles of Incorporation to increase the authorized
number of Class A Common Stock from 75 million shares to 180 million shares and
(3) ratifying the selection of KPMG Peat Marwick LLP as the Company's
independent public accountants. Each of the matters to be considered at the
meeting is described in detail in the attached Proxy Statement.
The directors and officers look forward to seeing you at the meeting. As
in the past, there will be a report on operations and an opportunity for
questions.
Your vote is important. Whether or not you plan to attend, I hope that you
will complete, sign, date and return your proxy promptly in the enclosed
envelope. If you later decide to attend the meeting and wish to vote your shares
personally, you may revoke your proxy at any time before it is exercised.
Very truly yours,
/s/ Roger K. Brooks
Roger K. Brooks
Chairman, President and
Chief Executive Officer
<PAGE>
[AmerUs Life Logo]
AMERUS LIFE HOLDINGS, INC.
------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be held May 8, 1998
-------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of AMERUS
LIFE HOLDINGS, INC., an Iowa corporation (the "Company"), will be held on
Friday, May 8, 1998, at 9:00 a.m., local time, at the Polk County Convention
Complex, 501 Grand Avenue, Des Moines, Iowa, for the following purposes:
1. to elect three Class II directors to serve for a three year term and
to elect one Class I director to serve for a two year term;
2. to approve an amendment to the Company's Amended and Restated Articles
of Incorporation to increase the authorized number of shares of Class
A Common Stock from 75 million to 180 million;
3. to ratify the appointment of KPMG Peat Marwick LLP as independent
public accountants of the Company for fiscal year 1998; and
4. to transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record at the close of business on March 31, 1998 are
entitled to notice of, and to vote at, the annual meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, please complete, sign,
date and return the enclosed proxy as promptly as possible in the postage
prepaid enclosed envelope. Any shareholder attending the meeting may vote in
person even if he or she has returned a proxy.
By order of the Board of Directors
James A. Smallenberger
Senior Vice President and Secretary
April 15, 1998
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED FORM OF PROXY
IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
AMERUS LIFE HOLDINGS, INC.
699 Walnut Street
Des Moines, Iowa 50309
PROXY STATEMENT FOR 1998
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of
AmerUs Life Holdings, Inc. (the "Company") for use at the annual meeting of
shareholders to be held on Friday, May 8, 1998, at 9:00 a.m., local time, or at
any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The annual meeting will
be held at the Polk County Convention Complex, 501 Grand Avenue, Des Moines,
Iowa. Shareholders of record at the close of business on March 31, 1998 will be
entitled to vote at the annual meeting.
Proxies are being solicited by the Board of Directors of the Company. The
cost of preparing, printing and mailing this Proxy Statement, the accompanying
notice and the enclosed proxy, and all other costs in connection with the
solicitation of proxies, will be paid by the Company. If the accompanying proxy
is executed and returned, the shares represented by the proxy will be voted as
specified therein. However, the shareholder may revoke the proxy before the
meeting by delivering a signed instrument revoking the proxy to: James A.
Smallenberger, Senior Vice President and Secretary, AmerUs Life Holdings, Inc.,
699 Walnut Street, Des Moines, Iowa 50309; to be effective, a revocation must be
received by the Secretary on or before May 7, 1998. The powers of the proxy
holders will be suspended if you attend the annual meeting in person and so
request, although attendance at the annual meeting will not by itself revoke a
previously granted proxy. This Proxy Statement is being mailed to shareholders
on or about April 15, 1998. In addition to solicitation by mail, the Company
will request banks, brokers and other custodian nominees and fiduciaries to
furnish proxy material to the beneficial owners of the Company's Class A Common
Stock of whom they have knowledge and will reimburse them for their expenses for
so doing. Additional solicitation may be made by letter, telephone or telecopier
by officers and employees of the Company and its affiliates.
As of March 31, 1998, the Company had issued and outstanding 29,734,918
shares of Class A Common Stock and 5 million shares of Class B Common Stock.
Each share of common stock is entitled to one vote. There were no shares of
voting preferred stock outstanding as of March 31, 1998.
The presence of a majority of the aggregate outstanding shares of Class A
and Class B Common Stock represented in person or by proxy at the meeting will
constitute a quorum permitting the conduct of business at the annual meeting.
In addition, a quorum of the outstanding shares of Class A Common Stock
represented in person or by proxy at the meeting will be necessary to permit a
vote on the proposed amendment to the Company's Amended and Restated Articles of
Incorporation. Shares represented by proxies that are marked "abstain" will be
counted as shares present for purposes of determining the presence of a quorum
and will also be counted in the total number of votes present for passage of any
proposal. Proxies relating to "street name" shares that are voted by brokers on
some matters will be treated as shares present for purposes of determining the
presence of a quorum, but will not be treated as shares entitled to vote at the
annual meeting on those matters as to which authority to vote is withheld by the
broker ("broker non-votes"). If no instructions are indicated on a duly executed
and returned proxy, the shares represented by the proxy will be voted FOR the
election of the three nominees for Class II directorships and the one nominee
for the Class I directorship proposed by the Board of Directors and set forth
herein, FOR the proposal to amend the Company's Amended and Restated Articles of
Incorporation to increase the authorized number of shares of Class A, FOR the
ratification of the appointment of KPMG Peat Marwick LLP as the independent
auditors of the Company for fiscal year 1998, and in accordance with the
judgment of the persons named in the proxy as to such other matters as may
properly come before the annual meeting.
All matters to be voted upon at the annual meeting will be decided by the
affirmative vote of a majority of the aggregate number of shares of Class A and
Class B Common Stock represented in person or by proxy at the meeting and
entitled to vote and, in the case of the proposed amendment to the Company's
Amended and Restated Articles of Incorporation, an affirmative vote of a
majority of the shares of Class A Common Stock represented in person or by proxy
at the meeting and entitled to vote. On any such matter, an abstention will
have the same effect as a negative vote. A broker non-vote will not be counted
as an affirmative vote or a negative vote because shares held by brokers will
not be considered entitled to vote on matters as to which the brokers withhold
authority.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Principal Holders
The following table sets forth the beneficial ownership as of March 1, 1998
of the Company's Class A and Class B Common Stock of each person known by the
Company to own beneficially more than 5% of each such class:
<TABLE>
Number
of Shares
Beneficially Percent of
Name and Address Class of Stock Owned Class
---------------- --------------- ----------- ----------
<S> <C> <C> <C>
AmerUs Group Co.
699 Walnut Street
Des Moines, IA 50309 Class A Common 12,380,300 42%
AmerUs Group Co.
699 Walnut Street
Des Moines, IA 50309 Class B Common 5,000,000 100%
American Mutual Holding Company
699 Walnut Street
Des Moines, IA 50309 Class A Common 12,380,300<F1> 42%
American Mutual Holding Company
699 Walnut Street
Des Moines, IA 50309 Class B Common 5,000,000<F1> 100%
- ---------------
<FN>
<F1> Indirect beneficial owner due to ownership of 100% of the capital stock
of AmerUs Group Co.
</FN>
/TABLE
<PAGE>
Directors and Officers
The following table sets forth the beneficial ownership of the Company's
Class A Common Stock as of March 1, 1998 of each of the directors and director
nominees, the executive officers named in the Summary Compensation Table on
page 8, and all directors and executive officers as a group (which includes
executive officers not named in the Summary Compensation Table). No director or
executive officer beneficially owned 1% or more of the Company's Class A Common
Stock as of such date. The percentage of Class A Common Stock owned by all
directors and executive officers as a group as of March 1, 1998 was 0.54%. No
shares of Class B Common Stock were owned by any director, director nominee or
executive officer of the Company as of such date.
<TABLE>
Name Number of Shares
---- ----------------
<S> <C>
Roger K. Brooks<F1><F4> 28,186
Michael G. Fraizer<F1> 5,000
Thomas C. Godlasky<F1><F2> 5,254
Sam C. Kalainov<F1><F2><F3> 10,313
Gary R. McPhail 5,000
Michael E. Sproule<F1> 6,344
John R. Albers<F1> 20,000
Malcolm Candlish<F1> 2,000
Maureen M. Culhane 500
Thomas F. Gaffney<F1> 3,017
Ilene B. Jacobs 0
Ralph W. Laster, Jr.<F5><F6> 16,027
John W. Norris, Jr.<F1> 1,479
Jack C. Pester<F1> 536
John A. Wing 2,000
Directors and executive officers as a group (17 persons) 159,769
------------
<FN>
<F1> Mr. Brooks, Mr. Kalainov, Mr. Albers, Mr. Candlish, Mr. Gaffney, Mr. Norris
and Mr. Pester are directors of AmerUs Group Co., which owns 12,380,300
shares of Class A Common Stock and 5,000,000 shares of Class B Common
Stock, and of American Mutual Holding Company ("AMHC"), which beneficially
owns such shares through its 100% ownership of the capital stock of AmerUs
Group Co. In addition, Mr. Brooks is the President and Chief Executive
Officer of AmerUs Group Co. and AMHC, Mr. Fraizer is the Senior Vice
President, Treasurer and Controller of AmerUs Group Co. and AMHC,
Mr. Godlasky is Executive Vice President and Chief Investment Officer of
AmerUs Group Co. and AMHC, Mr. Kalainov is Chairman of AmerUs Group Co. and
AMHC and Mr. Sproule is Executive Vice President and Chief Financial
Officer of AmerUs Group Co. and AMHC. All of the foregoing persons have
disclaimed beneficial ownership of all shares of the Company's common stock
which are beneficially owned by AmerUs Group Co. or AMHC.
<F2> Includes beneficial interest in shares of the AmerUs Life Holdings, Inc.
Common Stock fund held pursuant to the Company's Savings & Retirement Plan
(as defined on page 11). The attributed shares owned by the Company's
Savings & Retirement Plan are voted by the trustees as directed by their
respective participants.
<F3> 5,000 shares reported for Mr. Kalainov are owned by his spouse.
<F4> 3,000 shares reported for Mr. Brooks are owned by his spouse.
<F5> 7,156 shares reported for Mr. Laster are owned by the Jerri S. Laster
Trust, of which Mr. Laster is a co-trustee.
<F6> Includes beneficial interest in shares held pursuant to AmVestors Financial
Corporation Employee Stock Ownership Plan.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of eleven members,
divided into three classes. Each class serves for three years on a
staggered-term basis.
The terms of the following Class II directors expire at the annual meeting
to be held on May 8, 1998: John R. Albers, Thomas F. Gaffney and Ilene B.
Jacobs. The Board of Directors is nominating Messrs. Albers and Gaffney and Ms.
Jacobs for reelection at the 1998 annual meeting to fill the Class II positions
on the Board. In addition, the Board of Directors is nominating Mr. Ralph W.
Laster, Jr. as a Class I member of the Board of Directors. If elected, Mr.
Laster will hold office until the annual meeting in 2000. Mr. Laster's
nomination is made pursuant to an understanding between Mr. Laster and the
Company in connection with the acquisition by the Company of AmVestors Financial
Corporation ("AmVestors") in December 1997. Mr. Laster had been Chairman and
Chief Executive Officer of AmVestors prior to the acquisition. Except for Mr.
Laster, the directors elected at the 1998 annual meeting will hold office until
the annual meeting in 2001 or until their successors are duly elected and
qualified. Unless otherwise instructed by the shareholders, it is the intention
of the persons named in the accompanying proxy to vote the proxies held by them
for the election of the nominees named below. However, if any of the nominees
shall not be a candidate for election at the time of the annual meeting (a
contingency which the Board of Directors does not expect to happen), it is
intended that such shares will be voted for such substitute nominee as may be
selected by the Board of Directors.
The following paragraphs set forth the principal occupation of, and certain
other information relating to, each director, nominee for director and executive
officer for the last five years. Directors who are nominees for election at the
1998 annual meeting are listed first. Ages shown for all directors are as of
March 1, 1998.
JOHN R. ALBERS - Nominee - Dallas, Texas.
President and Chief Executive Officer of Fairfield Enterprises, Inc., Dallas,
Texas since April 1995. From August 1988 to April 1995, Mr. Albers was
Chairman, Chief Executive Officer and President of Dr. Pepper/Seven-Up
Companies, Dallas, Texas. Mr. Albers is a director of American Mutual Holding
Company ("AMHC"), AmerUs Group Co., Recovery Engineering, Inc. and First
Alert, Inc. He is also a director of AMAL Corporation ("AMAL"), a 34%-owned
joint venture between Ameritas Life Insurance Corp. and AmerUs Life Insurance
Company ("AmerUs Life"), one of the Company's principal subsidiaries.
Mr. Albers has been a director of the Company since its formation in
August 1996. From November 1983 to May 1997, he was a director of AmerUs Life.
His current term expires May 8, 1998. He is 66 years of age.
THOMAS F. GAFFNEY - Nominee - Tierra Verde, Florida.
Managing Director of Raymond James Capital, Inc. since July 1997. From 1990 to
1997, Mr. Gaffney was a private investor. Mr. Gaffney is a director of AMHC and
AmerUs Group Co. Mr. Gaffney has been a director of the Company since its
formation in August 1996. From November 1983 to May 1997, Mr. Gaffney served as
a director of AmerUs Life. His current term expires May 8, 1998. He is 52 years
of age.
ILENE B. JACOBS - Nominee - Maynard, Massachusetts.
Senior Vice President, Human Resources -- Digital Equipment Corporation
("Digital") since March 1997. Previous positions with Digital include Vice
President, Business Development from July 1996 to March 1997 and Vice President
and Treasurer from March 1985 to July 1996. Ms. Jacobs has been a director of
the Company since February 1997. She is also a director of AmerUs Life, Little
Switzerland, Inc. and Arkwright Mutual Insurance Co. Her current term expires
May 8, 1998. She is 50 years of age.<PAGE>
RALPH W. LASTER, JR. - Nominee - Topeka, Kansas.
Private Investor since December 1997. Mr. Laster served as both Chief Executive
Officer of AmVestors from January 1988 to December 1997 and as Chairman of the
Board from May 1988 to December 1997. He also served as President and Chief
Executive Officer of American Investors Life Insurance from April 1991 to
December 1997, as Chief Executive Officer of Financial Benefit Life from April
1996 to December 1997, and as an executive officer of various other subsidiaries
of AmVestors Financial Corporation. Mr. Laster has been a director of the
Company since February 1998. His current term expires May 8, 1998. He is 46
years of age.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES
LISTED ABOVE.
The following directors serve for terms that expire after 1998:
ROGER K. BROOKS - Des Moines, Iowa.
Chairman, President and Chief Executive Officer of the Company since its
formation in August 1996 and Chairman of AmerUs Life since May 1997. Previous
positions with AmerUs Life include Chief Executive Officer from December 1994 to
May 1997, Chairman and Chief Executive Officer from August 1992 to December 1994
and President and Chief Executive Officer from February 1975 to August 1992. He
is a director of AMAL, AMHC, AmerUs Group Co., AmerUs Life, AmVestors and Delta
Life Corporation ("Delta"). Mr. Brooks has been a director of the Company since
its formation in August 1996 and of AmerUs Life since 1971. His current term
expires in 1999. He is 60 years of age.
MALCOLM CANDLISH - Osprey, Florida.
Chairman of First Alert, Inc., Chicago, Illinois since October 1996. Previous
positions with First Alert include Chairman, President and Chief Executive
Officer from May 1996 to October 1996 and Chairman and Chief Executive Officer
from December 1992 to May 1996. From 1989 to 1992, Mr. Candlish was the Chairman
and Chief Executive Officer of Sealy, Inc. He is a director of AMHC, AmerUs
Group Co., and Black & Decker Corporation. Mr. Candlish has been a director of
the Company since its formation in August 1996. From February 1987 to May 1997,
he was a director of AmerUs Life. His current term expires in 2000. He is 62
years of age.
MAUREEN M. CULHANE - Chicago, Illinois.
Vice President of Finance and Treasurer of Sara Lee Corporation since 1993. From
April 1990 to January 1993, Ms. Culhane was a Partner at Richards & Tierney and
from May 1985 to April 1990, she was a Vice President, Investment Banking
Division of Goldman Sachs & Co. Ms. Culhane has been a director of the Company
since February 1997 and is also a director of AmerUs Life. Her current term
expires in 1999. She is 49 years of age.
SAM C. KALAINOV - Des Moines, Iowa.
Chairman of AMHC and AmerUs Group Co. since September 1996. Mr. Kalainov was
Chairman of AmerUs Life from December 1994 until September 1996 and was Chairman
and Chief Executive Officer of American Mutual Life Insurance Company ("AML"),
one of the predecessors of AmerUs Life, from January 1983 to December 1994. He
is a director of AMHC, AmerUs Group Co. and AmerUs Life. Mr. Kalainov has been a
director of the Company since its formation in August 1996 and of AmerUs Life
since December 1994. From June 1972 to June 1996, he was a director of AML.
His current term expires in 2000. He is 67 years of age.
JOHN W. NORRIS, JR. - Dallas, Texas.
Chairman and Chief Executive Officer of Lennox International, Inc., Dallas,
Texas. He is a director of AMHC and AmerUs Group Co. Mr. Norris has been a
director of the Company since its formation in August 1996. From November 1974
to May 1997, he was a director of AmerUs Life. His current term expires in
2000. He is 62 years of age.
JACK C. PESTER - Houston, Texas.
Senior Vice President of The Coastal Corporation. He is a director of AMHC,
AmerUs Group Co. and KFX, Inc. Mr. Pester has been a director of the Company
since its formation in August 1996. He also was a director of AML from May 1981
to December 1994 and of AmerUs Life from December 1994 to May 1997. His current
term expires in 1999. He is 62 years of age.
JOHN A. WING - Chicago, Illinois.
Chairman and Chief Executive Officer of ABN AMRO Incorporated since January
1997. Prior to that time, Mr. Wing was Chairman and Chief Executive Officer of
The Chicago Corp. Mr. Wing is a director of AmerUs Life and The Chicago Board
Options Exchange. His current term expires in 1999. Mr. Wing has been a
director of the Company since its formation in August 1996 and of AmerUs Life
since May 1991. He is 62 years of age.
Executive officers who are not also directors:
VICTOR N. DALEY - Des Moines, Iowa.
Senior Vice President and Chief Administration and Human Resources Officer of
the Company and AmerUs Life since February 1998. Previously, Mr. Daley was
Senior Vice President and Chief Human Resources Officer of the Company from
August 1996 to February 1998 and of AmerUs Life from September 1995 to February
1998. From April 1989 to September 1995, Mr. Daley was Senior Vice President
and Chief Administrative Officer of Royal Insurance, Charlotte, North Carolina.
He is 54 years of age.
THOMAS C. GODLASKY - Des Moines, Iowa.
Executive Vice President and Chief Investment Officer of the Company since
August 1996 and of AmerUs Life since January 1995. From February 1988 to
January 1995, he was Manager of the Fixed Income and Derivatives Department of
Providian Corporation, Louisville, Kentucky. He is a director of AmerUs Life,
AmVestors, Ameritas Variable Life Insurance Company, ("AVLIC"), Ameritas
Investment Corp. ("AIC") and Delta. He is 42 years of age.
MICHAEL G. FRAIZER - Des Moines, Iowa.
Senior Vice President and Controller/Treasurer of the Company since August 1996
and of AmerUs Life since January 1993. 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. He is 48 years of age.
GARY R. McPHAIL - Des Moines, Iowa
President and Chief Executive Officer of AmerUs Life since May 1997 and Chairman
and Chief Executive Officer of Delta since October 1997. Mr. McPhail was
Executive Vice President--Marketing and Individual Operations of New York Life
Insurance Company, New York, New York, from July 1995 to November 1996. From
June 1990 to July 1995, he was President of Lincoln National Sales Corporation,
Fort Wayne, Indiana. Mr. McPhail is a director of AMAL, AmerUs Life, AIC, AVLIC
and Delta. He is 50 years of age.
MICHAEL E. SPROULE - Des Moines, Iowa
Executive Vice President and Chief Financial Officer of the Company since August
1996 and of AmerUs Life since August 1992. 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. Mr. Sproule is a director of AmerUs Life,
AmVestors, AIC, AVLIC and Delta. He is 50 years of age.
BOARD MEETINGS AND COMMITTEES
The Board of Directors meets on a regularly scheduled basis. The Board of
Directors met on six occasions during 1997. Each director, except for Mr.
Norris, attended at least 75% of the total number of meetings of the Board and
the Committees on which the director served.
The Board of Directors has assigned certain responsibilities to committees.
The Audit Committee recommends the appointment of the independent public
accountants, reviews the scope of the audits recommended by the independent
public accountants, reviews internal audit reports on various aspects of
corporate operations and consults with the independent public accountants on a
periodic basis on matters relating to internal financial controls and
procedures. The Audit Committee, which met two times during 1997, is composed of
Thomas F. Gaffney (Chairman), Maureen M. Culhane, Jack C. Pester and John A.
Wing.
The Board Operations Committee reviews the organization and operation of
the Board of Directors and recommends a slate of directors for election by
shareholders at each annual meeting and/or proposes candidates to fill vacancies
on the Board of Directors. The Board Operations Committee, which met two times
during 1997, is composed of Malcolm Candlish (Chairman), John R. Albers and Jack
C. Pester.
The Finance and Strategy Committee reviews the management of the Company's
financial resources and the impact of such management on the Company's strategic
business plans and objectives. The Finance and Strategy Committee, which met one
time in 1997 is composed of John W. Norris, Jr. (Chairman), Malcolm Candlish,
Thomas F. Gaffney and Ilene B. Jacobs.
The Human Resources Committee reviews and recommends the compensation for
executive officers, including base salary, incentive compensation and other
benefits. The Human Resources Committee also administers the Company's stock
option plans. The Human Resources Committee has general oversight with respect
to the Company's compensation policy and employee benefit programs and
management succession planning. The Human Resources Committee, which met four
times in 1997, is composed of John R. Albers (Chairman), Malcolm Candlish, Ilene
B. Jacobs and John W. Norris, Jr.
The Intercompany Transactions Committee reviews transactions between the
Company and its affiliates. The Intercompany Transactions Committee, which met
one time in 1997, is composed of Ilene B. Jacobs (Chairman), Maureen M. Culhane,
Ralph W. Laster, Jr. and John A. Wing.
The Investment Committee oversees investments and investment policy of the
Company and its operating subsidiaries. The Investment Committee, which met four
times in 1997, is composed of John A. Wing (Chairman), Maureen M. Culhane and
Thomas F. Gaffney.
The Executive Committee exercises the powers and authority of the Board of
Directors between board meetings, except those powers, that, by law, cannot be
delegated by the Board of Directors. The Executive Committee is composed of
Roger K. Brooks (Chairman), Thomas F. Gaffney and John W. Norris, Jr. The
Executive Committee did not meet during 1997.
EXECUTIVE OFFICER/DIRECTOR COMPENSATION
Executive Officer Compensation
Summary Compensation Table
All compensation received, earned or accrued by such officers has been from
either the Company or AmerUs Life.<PAGE>
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 (collectively, the
"Named Executive Officers") during the years ended December 31, 1997, 1996,
and 1995:
<TABLE>
Summary Compensation Table
Annual Compensation Long-Term Compensation
----------------------- -----------------------
LTIP All Other
Name and Fiscal Bonus Payouts Compensation
Principal Position Year Salary ($) (A) ($) (B)($) (C)($)
-------------------- ------ --------- ------ ------- --------------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks 1997 480,000 520,000 258,133 157,188
Chairman, 1996 455,000 415,000 290,400 109,409
President and 1995 440,000 300,000 352,000 -
Chief Executive Officer
of the Company
Gary R. McPhail (D) 1997 325,000 174,453 - 250,015(E)
President and 1996 - - - -
Chief Executive 1995 - - - -
Officer of
AmerUs Life and
Chairman and
Chief Executive
Officer of Delta
Life and Annuity
Thomas C. Godlasky 1997 275,000 200,000 91,667 35,418
Executive Vice 1996 262,500 110,000 103,070 37,197
President and 1995 239,600 - 125,000 204,000(E)
Chief Investment
Officer of the
Company
Michael E. Sproule 1997 275,000 200,000 91,667 43,435
Executive Vice 1996 262,500 200,000 103,070 35,864
President and 1995 250,000 200,000 125,000 -
Chief Financial
Officer of the
Company
Michael G. Fraizer 1997 210,000 100,000 35,787 30,092
Senior Vice 1996 200,000 125,000 40,150 28,446
President, 1995 200,000 115,000 48,800 -
Controller and
Treasurer of the
Company
- -----------------
</TABLE>
(A)Pursuant to the Management Incentive Plan, bonuses shown for 1995, 1996 and
1997 were paid in 1996, 1997 and 1998, respectively. In addition to bonuses
paid under the Management Incentive Plan, Mr. Brooks and Mr. Sproule
received discretionary bonuses for 1996 of $200,000 and $100,000,
respectively, and for 1997, Mr. Brooks, Mr. Godlasky and Mr. Sproule
received discretionary bonuses of $280,000, $90,000 and $90,000,
respectively.
(B)Long term incentive compensation pursuant to the Performance Share Plan
(the "LTIP"). LTIP payouts indicated were earned over periods ending
December 31 for each of 1995, 1996 and 1997 and were payable in 1996, 1997
and 1998, respectively.
(C)Amounts shown as "Other Compensation" for 1996 and 1997 are comprised of
the items set forth in the table below.
<PAGE>
<TABLE>
Excess
Suppplemental Executive Benefit
Qualified Plan Retirement Plan Plan
------------------------------ -------------------------- ---------
SERP
401(K) Matching Basic Interim
Matching Basic Benefit Contrib- Contrib- Benefit Benefit
ContributionContribution Supplement ution ution Supplement Supplement
($) ($) ($) ($) ($) ($) ($)
----------- ---------- --------- ------- ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Roger K. Brooks 1997 8,000 6,400 6,100 35,805 29,237 63,810 7,836
1996 7,500 6,000 13,065 18,963 20,104 43,777 -
Gary R. McPhail 1997 8,000 6,400 - 7,453 3,162 - -
1996 - - - - - - -
Thomas G. Godlasky 1997 8,000 6,400 - 12,014 9,004 - -
1996 7,500 6,000 - 10,995 12,702 - -
Michael E. Sproule 1997 8,000 6,400 - 16,514 12,521 - -
1996 7,500 6,000 - 10,943 11,421 - -
Michael G. Fraizer 1997 8,000 6,400 - 8,755 6,937 - -
1996 7,500 6,000 - 8,338 6,608 - -
</TABLE>
(D) Mr. McPhail commenced employment with the Company in April 1997.
(E) The amounts shown include payment of a $225,000 sign-on bonus for Mr.
McPhail in 1997 and a $204,000 sign-on bonus for Mr. Godlasky in 1995, of
which, in both cases, a pro-rata portion is repayable in the event of
termination during the initial 36 months of employment.
Option Grants Table
The following table presents information as to stock options granted
during the year ended December 31, 1997. The two columns on the right project
the amount that could be earned if the Class A Common Stock price appreciates at
the annual rates indicated and if the options are held until the expiration
dates shown. There is no assurance that any particular level of potential
realizable value will actually be earned.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
-------------------------------------- ----------------------
% of Total
Number Options
of Granted
Securities to
Underlying Employees
Options in Exercise
Granted Fiscal Price Expiration
Name <F1><F2> Year ($/sh) Date 5% 10%
- ---------------- ------- -------- ------ ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Roger K. Brooks 165,000 24.1 $27.875 7/28/07 $2,892,522 $7,330,219
Gary R. McPhail 70,000 10.2 27.875 7/28/07 1,227,131 3,109,790
Thomas G. Godlasky 60,000 8.8 27.875 7/28/07 1,051,826 2,665,534
Michael E. Sproule 60,000 8.8 27.875 7/28/07 1,051,826 2,665,534
Michael G. Fraizer 22,500 3.3 27.875 7/28/07 394,435 999,575
- --------------
<FN>
<F1> New Options to purchase Class A Common Stock granted under the Stock
Incentive Plan. All options permit the optionee to pay the exercise
price with shares of Class A Common Stock owned for at least six months
and to pay withholding tax with shares acquired on exercise. New Options
vest and become exercisable in equal installments on the first, second
and third anniversaries after the date of grant.
<F2> Based on shares outstanding on July 28, 1997, the closing stock price of
$27.875 on that date, and a 121-month period, all of which conform to the
regular stock option awards made to executives on that date.
</FN>
</TABLE>
Option Exercises and Values Table
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Value
<TABLE>
Value of
Number of Securities Unexercised In-the-
Underlying Unexercised Money Options at
Options at FY-End (#) FY-End <F1>
--------------------- -----------------
Shares
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
------- ----------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Roger K. Brooks - - - 165,000 - $1,485,000
Gary R. McPhail - - - 70,000 - 630,000
Thomas G. Godlasky - - - 60,000 - 540,000
Michael E. Sproule - - - 60,000 - 540,000
Michael G. Fraizer - - - 22,500 - 202,500
<FN>
<F1> Based on a closing stock price of $ 36.875 per on December 31, 1997, the
last business day of the Company's fiscal year.
</FN>
</TABLE>
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 AmerUs Life Board of Directors has the authority to
grant Performance Shares to eligible employees on such dates as the Human
Resources Committee shall determine. Performance Shares which were granted to
the Named Executive Officers under the LTIP during 1997 are shown in the
following table. While there will be continued payouts for awards granted in
previous years, the LTIP has been discontinued as of 1998.
LONG-TERM INCENTIVE PLANS - AWARDS
FOR FISCAL YEAR 1997
<TABLE>
Estimated Future Payouts Under
Non-Stock Price-Based Plans
------------------------------
Performance or
Other
Number Of Period
Shares, Until
Units Maturation
or Other or Threshold Target Maximum
Rights (#) Payout ($) ($) ($)
--------- --------- --------- ------ --------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks 728 3 years 36,400 72,800 145,600
Gary R. McPhail(A) 244 2 years 12,200 24,400 48,800
325 3 years 16,250 32,500 65,000
Thomas C. Godlasky 275 3 years 13,750 27,500 55,000
Michael E. Sproule 263 3 years 13,150 26,300 52,600
Michael G. Fraizer 100 3 years 5,000 10,000 20,000
- ------------
(A) Mr. McPhail received two separate Performance Share grants in 1997.
</TABLE>
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"). The Stock Plan was
approved by the Company's sole shareholder and became effective on December 4,
1996. No grants were made under the Stock Plan until July 28, 1997. The
purpose of the Stock Plan is to enable the Company to attract and retain
employees and to align employees' interest with the performance of 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.
Savings and Profit Sharing Plans
Each of the Named Executive Officers participates in the All*AmerUs
Savings & Retirement Plan (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, except Mr. McPhail, also had 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"). Additionally, the
Named Executive Officers, except Mr. McPhail, have a frozen benefit under the
American Mutual Life Insurance Company Supplemental Executive Retirement Plan
(the "AML Frozen SERP").
The Company 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 and the Supplemental Plan ("Basic Contributions").
In addition, the Company will make a maximum matching contribution equal to 5%
of an employees' compensation for the first 4% of salary deferral ("Matching
Contributions").
The employer 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 discretionary profit sharing contribution
allocated to such employee under the Savings & Retirement Plan and the
Supplemental Plan.
Frozen Pension Plans
Prior to January 1, 1996, AmerUs 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
employee's 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 Central Life)
Frozen Pension Plan were based primarily on an employee's years of service and
career compensation as of December 31, 1995. All employees' frozen accrued
benefits as of December 31, 1995 are fully vested. Active participants in the
Frozen Pension Plans on December 31, 1995, had the right to receive a
distribution of accrued benefits on September 26, 1997, under a one-time
irrevocable election as a result of the termination of the AmerUs Retirement
Plan. The AmerUs Retirement Plan was established as a "conduit" plan to provide
for the spin-off of accrued benefits from the Surviving AML Pension Plan. Upon
receipt of assets supporting the accrued benefits of participants electing to
receive such benefits by the AmerUs Retirement Plan from the Surviving AML
Pension Plan, the AmerUs Retirement Plan was terminated and the assets
supporting the accrued benefits were distributed to each participant in the form
of: (1) an immediate lump sum payment; (ii) an immediate annuity; or (iii) a
rollover into a qualified plan or an individual retirement account. Each of the
Named Executive Officers received a distribution of the assets supporting their
respective accrued benefits as a result of their election to have such accrued
benefits transferred from the Surviving AML Pension Plan to the AmerUs
Retirement Plan.
Prior to January 1, 1996, AmerUs Life also maintained the AML Frozen SERP
and a supplemental retirement plan for certain former employees of Central Life
Assurance Company, one of the predecessors to AmerUs Life (the "Central Life
Frozen SERP"), which plans were similar in operation to the Supplemental Plan
currently in effect. The benefits under these plans 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 AML
Frozen SERP and the Central Life Frozen SERP, assuming retirement at age 65
(current normal retirement age):
<TABLE>
Pension Table
Frozen Accrued Benefits
Name Monthly Benefits
- ------ ----------------
<S> <C>
Roger K. Brooks $21,285
Gary R. McPhail 0
Thomas C. Godlasky $671
Michael E. Sproule $1,562
Michael G. Fraizer $722
</TABLE>
Director Compensation
For their services on the Board, non-employee directors are paid $10,000
per year and $2,000 for each meeting attended. The chairman of each of the
Audit, Board Operations, Finance and Strategy, Human Resources, Intercompany
Transactions and Investment Committees receives an additional $2,000 per year.
Members of the Intercompany Transactions Committee receive an additional $16,000
per year for services on such committee.
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total shareholder
return on the Company's Class A Common Stock for the period from January 28,
1997, the date of the Company's initial public offering, through December 31,
1997 with the cumulative total return of the Standard & Poor's 500 stock index
and a peer group of companies (the "Peer Group") consisting of eight life
insurance companies to which the Company has traditionally compared its business
and operations: Reliastar Financial Corporation, Protective Life Corporation,
Liberty Corporation, Penncorp. Financial Group, Inc., Presidential Life
Corporation, American Heritage Life Insurance Company, Kansas City Life
Investment Corporation and Guarantee Life Companies Inc. The graph assumes a
$100.00 investment on January 28, 1997 and the reinvestment of dividends. The
return of the Peer Group is based on the return of each company included therein
weighted to reflect each such company's stock market capitalization.
<TABLE>
CUMULATIVE TOTAL RETURNS
PERIOD BEGINNING
JANUARY 28, 1997
AND ENDING
DECEMBER 31, 1997
TOTAL SHAREHOLDER RETURNS
(Graph)
1/28/97 3/31/97 6/30/97 9/30/97 12/31/97
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
AmerUs Life Holdings, Inc. $100.00 $134.85 $169.59 $200.33 $225.82
Peer Group 100.00 103.43 125.48 132.45 142.26
S&P 100.00 103.27 115.70 123.82 126.85
</TABLE>
<PAGE>
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee (the "Committee") presently consists of
Messrs. Albers, Candlish and Norris and Ms. Jacobs, none of whom is an officer
or employee of the Company. As part of its duties, the Committee reviews
compensation levels of executive officers, evaluates management performance and
administers the Company's Management Incentive Plan, Long-Term Incentive Plan
and Stock Option Plan. The Committee is assisted by the Company's Human
Resources personnel, and from time to time by compensation consulting firms
which supply statistical data and other executive compensation information to
the Committee to permit it to compare the Company's compensation policies to
compensation levels nationwide and against programs of other companies of
similar size in the Company's industry and geographic area.
The Company's executive compensation programs are designed to attract and
retain executives who will contribute to the Company's long-term success, to
reward executives for achieving the Company's short- and long-term strategic
goals, to link executive compensation and shareholder interests through Company
performance and equity-based plans, and to recognize individual contributions to
Company performance.
Compensation for the Company's executive officers consists of three
principal elements; base salary, annual incentive, and long-term incentive. The
combination and relative weighting of these elements reflect the Committee's
belief that executive compensation should be closely tied to the Company's
profitability.
Base Salary
Executive officer salaries are initially determined by evaluating the
responsibilities of the position held and the experience and performance of the
individual, with reference to the competitive marketplace for executive talent,
including a comparison to base salaries for comparable positions in the
financial services industry based on statistical data provided by a nationally
recognized compensation consulting firm retained by the Company. Executive
officer base salaries are targeted at or below the 50th percentile established
by such data in order to place a greater emphasis on Company performance-based
components of the compensation package. The Committee reviews executive salaries
annually and adjusts them as appropriate to reflect changes in market conditions
and individual performance and responsibilities. Base compensation for Mr. Roger
K. Brooks, the Company's Chairman, President and Chief Executive Officer, was
increased from $455,000 for fiscal 1996 to $480,000 for fiscal 1997 to $500,000
for fiscal 1998.
Annual Incentive
The Company's annual incentive program acknowledges Company and individual
performance. Generally, awards under the annual program can be paid only if the
Company achieves certain pre-approved targets agreed to by the Committee. The
annual program is intended to bring the executives' total cash compensation
(base salary and annual incentive) to the 50th percentile established by
reference to the statistical data discussed above when all Company profitability
and individual performance criteria are met. In those circumstances where
performance significantly exceeds pre-approved targets, the total cash
compensation could exceed the 50th percentile.
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 corporate-
wide goals can generate payment of cash bonuses ranging from 10% to 80% of an
executive's base salary. Payment of these annual incentives is approved by the
Board of Directors of AmerUs Life and made in a separate lump-sum on or before
the end of February of the ensuing year. Based on the Company's results in 1997
against the pre-determined targets, a performance award of $520,000 was paid to
Mr. Brooks.
Beginning in 1999, employees eligible for MIP payments will be able to
elect a deferral, for a three year period (the "deferral period"), of up to 50%
of their annual incentive payment (subject to a maximum of $100,000). The
deferred payment will be converted into units (the "Units"). The value of each
Unit will be equivalent to the share price of the Company's Class A Common
Stock. At the end of the deferral period, the Company will match 50% of each
participating employees Units (the "Match") and distribute to each such employee
the value of the Units (including those Units contributed pursuant to the Match)
in either cash or shares of the Company's Class A Common Stock, at such
employee's election. The Company has the discretion, at any time, to
discontinue the deferral option.
Long-Term Incentive
The Company has established two separate long-term incentive plan programs,
(1) a Long-Term Incentive Plan based on strategic performance and (2) a Stock
Option Plan designed to align the interests of executive officers with those of
the Company's shareholders. Under the Company's Stock Option Plan, stock
options, stock appreciation rights or restricted stock awards may be granted to
executive officers and other key employees of the Company and AmerUs Life. Upon
joining the Company, an individual's initial grant will be based on the
individual's responsibilities and position and upon competitive market
information provided by the Company's compensation consultants. Therefore, the
size of any annual award will be based primarily on an individual's
responsibilities and the individual's performance and position with the Company.
All stock options granted to the Company's executive officers will be granted
with an exercise price equal to the fair market value of the Company's Class A
Common Stock on the date of grant and will generally vest over three years.
Vesting is designed to encourage the creation of shareholder value over the long
term since no benefit will be realized from the stock option grant unless the
price of the Class A Common Stock rises over a number of years. Mr. Brooks was
granted 165,000 stock options on July 28, 1997.
The Long-Term Incentive Plan was implemented in January 1995 for certain
senior executive officers of the Company. The plan is designed to align the
executives' interests and reward them based on growth of AMHC's cumulative GAAP
Net Worth. Notional shares with a value of $100 as of January in each of 1995,
1996 and 1997 were granted based on a percentage of base salary tied to
competitive industry market data provided by compensation consultants. In 1997,
the plan continued to grant shares on a limited basis to the Company's senior
executive officers in conjunction with the Stock Option Plan. Payout for 1998
under the Long-Term Incentive Plan formula is based upon results of operations
over the period from 1995 to 1997. While there will be continued payouts for
awards granted in previous years, the Long Term Incentive Plan has been
discontinued as of 1998. Mr. Brooks received $258,133 for 1998 under the Long-
Term Incentive Plan.
Other elements of executive compensation include participation in a
Company-wide medical and insurance benefits plan, and the ability to defer
compensation pursuant to a 401(k) plan. The Company presently makes matching
contributions for all participants in the 401(k) plan subject to a maximum
Company match of 5% for the first 4% of salary deferral. Additionally, a core
contribution of 4% of base salary plus annual incentive is contributed to all
participants' accounts.
Chief Executive Officer Compensation
In determining Mr. Brooks' base salary, annual incentive, and long term
incentive for fiscal 1997, the Committee considered the Company's overall
performance and Mr. Brooks' individual performance by the same methods described
above for Company officer compensation. The Committee also considered
compensation granted to chief executive officers of other companies in similar
industries, as well as incentives for future performance.
The Committee believes that Mr. Brooks' total compensation as Chief
Executive Officer appropriately reflects his performance and in turn, that of
the Company in fiscal 1997. Among the quantitative factors that were taken into
consideration and that support this conclusion are the Company's increased stock
price and its growth in earnings, net worth and asset value. Qualitatively, the
Company's productive first year as a publicly-owned stock corporation and its
successful merger and acquisition activity in fiscal 1997 were also factored in
the determination of Mr. Brooks' compensation.
Mr. Brooks receives no other material compensation or benefits not provided
to all executive officers.<PAGE>
The Committee has considered the potential impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1 million in any taxable year
for any of the Named Executive Officers, unless such compensation is
performance- based. The Company's policy is to qualify, to the extent
reasonable, its executive officers' compensation for deductibility under
applicable tax laws. However, the Committee believes that its primary
responsibility is to provide a compensation program that will attract, retain
and reward the executive talent necessary to the Company's success.
Consequently, the Committee recognizes that the loss of a tax deduction could be
necessary in some circumstances.
HUMAN RESOURCES COMMITTEE OF THE
BOARD OF DIRECTORS
John R. Albers, Chairman
Malcolm Candlish
Ilene B. Jacobs
John W. Norris, Jr.
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
AmerUs Life is a wholly-owned direct subsidiary of the Company. The Company
is a direct subsidiary of AmerUs Group Co. ("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
and transactions described herein are on a basis no less favorable than could be
obtained from unaffiliated third parties. 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.
Ownership of Voting Interests of the Company
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. All of the issued and outstanding shares of the Company's Class B
Common Stock are owned by AmerUs Group. Additionally, the Company's Amended and
Restated 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 (a "Permitted Class
B Holder"). Any proposed amendments to the Company's Amended and Restated
Articles of Incorporation are subject to approval by the Iowa Commissioner and
the Iowa Attorney General.
Intercompany Agreement
AMHC, AmerUs Group and the Company entered into an Amended and Restated
Intercompany Agreement dated as of December 1, 1996 (the "Intercompany
Agreement"). Pursuant to the Intercompany Agreement, AmerUs Group and certain
members of the AmerUs Affiliated Group agreed to, among other things, the
following: (i) the grant to the Company and certain of its subsidiaries of a
non-exclusive, revocable license to use the AmerUs name and certain trademarks
solely in connection with the Company's life insurance business and activities
related to such life insurance business; (ii) the indemnification by the Company
of members of the AmerUs Affiliated Group and each of their respective officers,
directors, employees and agents against certain losses; (iii) the grant by the
Company to certain members of the AmerUs Affiliated Group of registration rights
with respect to the Class A Common Stock owned by such entities; (iv) the grant
of equity purchase rights, under certain conditions, to certain members of the
AmerUs Affiliated Group; and (v) the agreement by the Company to provide to the
AmerUs Affiliated Group certain management and administrative services with
respect to aspects of the business and affairs of the AmerUs Affiliated Group in
exchange for payment by AmerUs Group to the Company of $2 million per year in
consideration for such services.
Agreements Involving Real Estate
AmerUs Life has entered into asset and property management contracts with
AmerUs Properties, Inc., a direct subsidiary of AmerUs Group and a member of the
AmerUs Affiliated Group ("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 $154,000 for the year ended December
31, 1997.
The Company and AmerUs Life lease facilities owned by API which serve as
the Company's and AmerUs Life's executive and home offices. The Company and
AmerUs Life currently occupy approximately 192,000 square feet of office space
under their lease arrangements with API for an aggregate monthly cost of
approximately $229,000, which cost includes approximately $580,000 in tenant
improvements amortized over the term of one of the leases which expires in 2004.
The other leases expire in 2001. Total rental expense paid to API during the
year ended December 31, 1997 was $1,790,000.
AmerUs Life has entered into various limited partnership and joint venture
agreements in which API or an affiliate serves as general partner. AmerUs Life
contributed portions of its joint venture interests to API and sold several of
these partnership interests to newly formed partnerships in which API has an
interest. Total proceeds from these sales were $10,979,040 for the year ended
December 31, 1997. In addition, AmerUs Life agreed to make loans to the newly
formed partnerships in the aggregate amount of up to $3.5 million, of which
$500,000 had been loaned and was outstanding as of December 31, 1997.
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 of up to $3.7 million.
As of December 31, 1997, AmerUs Life had a total investment of $11,987,000
in various partnerships and joint ventures in which API had an interest.
Loan Servicing Agreements
AmerUs Life has entered into various loan servicing agreements with members
of the AmerUs Affiliated Group. The aggregate expense incurred by AmerUs Life
for such services was approximately $896,000 for the year ended December 31,
1997.
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 revenue earned
by AmerUs Life for such services was approximately $22,000 for the year ended
December 31, 1997.
Other Service Agreements
The Company and AmerUs Life have entered into various services agreements
with members of the AmerUs Affiliated Group. Pursuant to such agreements, the
Company and AmerUs Life provide certain communications, tax, legal, accounting,
internal audit, human resources, administrative and data processing services to
such other parties to the agreements, as requested. The aggregate revenue earned
for services performed by the Company and AmerUs Life in accordance with such
agreements was approximately $10,983,000 for the year ended December 31, 1997.
Purchase of Loans and Securitization
AmerUs Life entered into a master agreement of purchase and sale with
AmerUs Bank, dated as of March 5, 1997, whereby the terms under which AmerUs
Life would purchase home equity mortgage loans from AmerUs Bank were
established. AmerUs Life records the purchases of such loans at their purchase
price which represents fair market value, which may be different from AmerUs
Bank's carrying value. AmerUs Life would accordingly recognize gain or loss on
such transactions. As of December 31, 1997, AmerUs Life has acquired loans with
aggregate principal balances at the time of sale of $98,476,213. Most of the
acquired loans were sold by AmerUs Life on October 24, 1997, to The Bank of New
York, as Trustee of the AmerUs Home Equity Loan Trust 1997-1 (the "Trust") in a
$125 million offering of home equity loans. Of the $125 million, $30,947,779
was set aside under the Pooling and Servicing Agreement to be used by AmerUs
Life to acquire additional home equity mortgage loans for inclusion in the
Trust. AmerUs Life services the loans in the Trust and AmerUs Bank acts as a
subservicer of the loans and receives a pass-through of the servicing fee of 50
basis points of the outstanding principal balances of the loans.
AmerUs Life entered into a purchase agreement with AmerUs Mortgage dated
March 1, 1997, whereby AmerUs Life committed to purchase up to $200 million
principal amount of first mortgage loans originated by AmerUs Mortgage. The
commitment expired on December 31, 1997. As of December 31, 1997, AmerUs Life
had purchased 81 mortgage loans pursuant to such commitment for a total purchase
price of $12,885,000.
Sale of Insurance Policies
AmerUs Life 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 Investments fees in the form of commissions in exchange for
generating sales of such products. Total commissions paid to AmerUs Investments
were $1,883,000 for the year ended December 31, 1997.
AmerUs Life is also party to certain Affiliated Agent Contracts with
employees of AmerUs Investments (the "Affiliated Agents") to solicit, sell and
service AmerUs Life insurance products, in addition to 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.
Loans and Credit Support to the AmerUs Affiliated Group
AmerUs Life provided financing to members of the AmerUs Affiliated Group or
their affiliates for various purposes. The outstanding balance of all such
financings was $46 million as of December 31, 1997. AmerUs Life recorded
interest income of $5.3 million for the year ended December 31, 1997.
AmerUs Life guaranteed various borrowings of members of the AmerUs
Affiliated Group with an outstanding balance of approximately $7 million at
December 31, 1997.
AmerUs Life has outstanding loan commitments to various partnerships in
which API has an interest. At December 31, 1997, the outstanding loan
commitments were approximately $3.5 million.
Security Arrangements for Bank Credit Facility
In connection with the Company's $250 million bank credit facility (the
"Bank Credit Facility"), the Company pledged to the lenders approximately 49.9%
of the common stock of AmerUs Life owned by the Company, 100% of the common
stock of Delta and a $50 million 9% surplus note payable to the Company by
AmerUs Life. AmerUs Group also pledged shares of the Company's Class A Common
Stock owned by AmerUs Group in an amount which is limited by Iowa law and which,
together with the voting shares owned by shareholders other than AmerUs Group,
shall be less than 50% of the total voting shares of the Company. Under Iowa
law, AMHC and AmerUs Group are prohibited from pledging 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. In addition, the Company is prohibited by Iowa law from
pledging a majority of the shares necessary to elect the Board of Directors of
AmerUs Life.
Transactions with Affiliates of Directors
John A. Wing, a director of the Company, is Chairman and Chief Executive
Officer of ABN AMRO Incorporated. ABN AMRO Incorporated has from time to time
performed investment banking services for the Company, including assisting the
Company with its subscription offering and serving as co-manager of the
Company's initial public offering of its Class A Common Stock, each of which was
completed on February 3, 1997. The total fee paid by the Company to ABN AMRO
Incorporated during 1997 was $1,043,298. Additionally, ABN AMRO is a co-manager
of the Bank Credit Facility.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and 10 percent holders of the Company's Class A
Common Stock to file reports concerning their transactions in, and ownership of
the Company's equity securities. Based solely on the review of the Forms 3, 4
and 5 furnished to the Company and certain representations made to the Company,
the Company believes that the only filing deficiencies under Section 16(a) by
its directors and executive officers during 1997 were untimely filed Form 3s by
all of the directors and officers of the Company, except Ms. Culhane, Ms. Jacobs
and Messrs. Laster and McPhail, and a delinquent Form 4 filed by Mr. Pester.
AMENDMENT OF THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION
The Company's Amended and Restated Articles of Incorporation ("Articles of
Incorporation") presently provides that the Company is authorized to issue 75
million shares of Class A Common Stock. The Board of Directors recommends and
proposes that the authorized shares of Class A Common Stock be increased from 75
million to 180 million and that the Articles of Incorporation be so amended.
The additional shares of Common Stock for which authorization is sought would be
a part of the Company's existing Class A Common Stock and, if and when issued,
would have the same rights and privileges as the shares of Class A Common Stock
now outstanding.
As of March 1, 1998, there were 29,734,918 shares of Class A Common Stock
issued and outstanding. In addition, 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 AmerUs Life Holdings, Inc. Stock Incentive Plan and the AmerUs
Life Holdings, Inc. Non-Employee Director Stock Plan, respectively, and 5
million shares of Class A Common Stock are reserved for issuance upon conversion
of Class B Common Stock. Options for 797,000 shares of Class A Common Stock are
held under AmVestors' stock option plans. Warrants for 475,380 shares of
Class A Common Stock are also outstanding.
The Board recommends the increase in authorized Common Stock to enable the
Company to have additional shares available for possible issuance in connection
with such general corporate purposes as stock splits and stock dividends,
issuance of shares for cash to raise equity capital, conversions of convertible
securities, or in connection with business acquisitions, stock option plans, or
other employee benefit plans which may be adopted in the future. The Board
believes that additional authorized Common Stock will give the Company greater
flexibility and may allow shares of Common Stock to be issued without the
expense and delay of a shareholders' meeting to authorize additional shares if
and when the need arises.
If the proposed amendment is adopted, the Company would be permitted to
issue the authorized shares without further shareholder approval, except to the
extent otherwise required by law, by a securities exchange or association on
which the Common Stock is listed or quoted as of the time, or by the Articles of
Incorporation. 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 a three to one ratio of outstanding shares of Class A Common Stock
(excluding shares of Class A Common Stock owned by a Permitted Class B Holder)
to the number of outstanding shares of Class B Common Stock plus the outstanding
shares of Class A Common Stock owned by AMHC or another Permitted Class B
Holder. The Intercompany Agreement also affords the AmerUs Affiliated Group
certain equity purchase rights. Under Iowa Law, a Permitted Class B Holder must
at all times possess the right to cast at least a majority of the votes of the
outstanding shares of capital stock of the Company.
The additional authorized shares would also be available for issuance
(subject to further shareholder approval only as noted above) at such times and
for such proper corporate purposes as the Board of Directors may approve,
including possible future financing and acquisition transactions.
If this proposal is adopted, the first paragraph of Article IV of the
Articles of Incorporation of the Company will be amended and restated to read in
its entirety as follows:
The aggregate number of shares of all classes of capital
stock which the corporation shall have authority to issue is two
hundred and fifty million (250,000,000) shares, of which twenty
million (20,000,000) shares shall be Preferred Stock, no par
value, issuable in one or more series, one hundred and eighty
million (180,000,000) 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
SELECTION OF AUDITORS
The Board of Directors, acting upon recommendation of the Audit Committee,
has appointed the firm of KPMG Peat Marwick LLP to examine the financial
statements of the Company and its subsidiaries for the fiscal year ending
December 31, 1998. The same firm conducted the fiscal 1997 examination. The
favorable vote of the holders of the majority of the outstanding shares present
in person or represented by proxy and entitled to vote at the annual meeting is
required for shareholder ratification of this action.
Representatives from KPMG Peat Marwick LLP will be present at the 1998
annual meeting. The representatives will have the opportunity to make a
statement if they so desire, and will also be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
Neither the Board of Directors nor management intends to bring any matter
for action at the 1998 annual meeting of shareholders other than those matters
described above. If any other matter or any proposal should be presented and
should properly come before the meeting for action, the persons named in the
accompanying proxy will vote upon such matter and upon such proposal in
accordance with their best judgment.
Shareholder Proposals for the 1999 Annual Meeting
Under the rules of the Securities and Exchange Commission (the "SEC"),
proposals of shareholders intended to be presented at the 1999 annual meeting of
shareholders (May 1999) must be received by the Company no later than December
15, 1998, as well as meet the other SEC requirements, in order to be considered
for inclusion in the Company's 1999 Annual Meeting Proxy Statement and form of
proxy to be mailed in March 1999.
The Company's By-laws set forth certain procedures which shareholders must
follow in order to nominate a director or present any other business at an
annual meeting of shareholders. Generally, a shareholder must give timely notice
to the Secretary of the Company. To be timely, a shareholder's notice must be
delivered or mailed to and received by the Secretary of the Company at the
principal office of the Company not less than thirty (30) days prior to the date
of the annual 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 present 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 Company's books, of the shareholder
proposing such business, (iii) the class and number of the Company's capital
stock that are beneficially owned by such shareholder and (iv) any material
interest of such shareholder in such business.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as filed with the Securities and Exchange Commission, will be
sent to any shareholder without charge upon written request addressed to AmerUs
Life Holdings, Inc., to the attention of Susan Boe, Vice President for Investor
Relations, 699 Walnut Street, Des Moines, IA 50309.
By Order of the Board of Directors
James A. Smallenberger
Senior Vice President
and Secretary<PAGE>
AMERUS LIFE HOLDINGS, INC.
Proxy for Annual Meeting of Shareholders on May 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of AmerUs Life Holdings, Inc. (the "Company")
appoints Roger K. Brooks, Michael E. Sproule and James A. Smallenberger, and
each of them, with full power of substitution, as proxy to vote all shares of
the undersigned in the Company, at the Annual Meeting of Shareholders to be held
on May 8, 1998 and at any adjournments thereof (the "Annual Meeting"), with like
effect and as if the undersigned were personally present and voting, upon the
matters set forth in this proxy card.
1. To elect three Class II Directors. To elect one Class I Director.
John R. Albers Ralph W. Laster, Jr.
Thomas F. Gaffney
Ilene B. Jacobs
/ / For / / Withhold
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.
- -----------------------------------------------------------
2. Proposal to approve the amendment to the Company's Amended and
Restated Articles of Incorporation to increase the number of
authorized shares of the Company's Class A Common Stock from 75
million to 180 million.
/ / For / / Against / / Abstain
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent public accountants of the Company for fiscal year 1998.
/ / For / / Against / / Abstain
4. Such other matters as may properly come before the Annual Meeting or
any adjournments thereof, at the discretion of the proxy holders.
PROXIES WILL BE VOTED AS DIRECTED OR SPECIFIED, IF NO CHOICE IS SPECIFIED, THIS
PROXY WILL BE VOTED (1) FOR THE ELECTION OF NOMINEES JOHN R. ALBERS, THOMAS F.
GAFFNEY AND ILENE B. JACOBS TO SERVE AS CLASS II DIRECTORS, AND RALPH W. LASTER,
JR. TO SERVE AS A CLASS I DIRECTOR, (2) FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION, (3) FOR RATIFICATION
OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS AND (4) FOR OR AGAINST ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE ANNUAL MEETING AT THE DISCRETION OF THE PROXY HOLDERS. PLEASE BE
SURE TO SIGN AND DATE THIS PROXY BELOW.
Dated:------------------, 1998
---------------------------------------
Shareholder sign above
---------------------------------------
Co-holder, if any, sign above
SIGNATURE(S) MUST CORRESPOND EXACTLY WITH NAME(S) AS IMPRINTED HEREON. When
signing as attorney, executor, administrator, trustee or guardian, please give
the full title as such, and if the signer is a corporation, please sign with the
full name by a duly authorized officer. If stock is held in the name of more
than one person, all named holders must sign the proxy.
PLEASE VOTE AT ONCE. It is important.
