<PAGE> 1
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> 2
AMERUS LIFE
HOLDINGS, INC.
699 Walnut Street
Des Moines, IA 50309-3948
ROGER K. BROOKS
Chairman, President &
Chief Executive
Officer
AMERUS LIFE HOLDINGS LOGO
March 31, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
AmerUs Life Holdings, Inc. to be held on Friday, May 14, 1999, at 9:00 a.m., Des
Moines local time, at the AmerUs Conference Center, Hub Tower, 3rd Floor, 699
Walnut Street, Des Moines, Iowa.
This booklet includes the Notice of Annual Meeting and the Proxy Statement,
which contain information about the formal business to be acted on by the
shareholders. The meeting will also feature a report on the operations of your
Company, followed by a question and discussion period.
We hope that you will be able to attend the meeting. However, whether or
not you plan to attend in person, please complete, sign, date and return the
enclosed proxy card promptly to ensure that your shares will be represented. If
you do attend the meeting and wish to vote your shares personally, you may
revoke your proxy at any time before it is exercised.
Thank you for your ongoing support and continued interest in AmerUs Life
Holdings, Inc.
Very truly yours,
/s/Roger K. Brooks
-----------------------
Roger K. Brooks
Chairman, President and
Chief Executive Officer
<PAGE> 3
[AMERUS LIFE HOLDINGS LOGO]
699 WALNUT STREET
DES MOINES, IOWA 50309-3948
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1999
------------------------------
To the Shareholders:
The annual meeting of shareholders of AMERUS LIFE HOLDINGS, INC. will be
held on Friday, May 14, 1999, at 9:00 a.m., Des Moines local time, at the AmerUs
Conference Center, Hub Tower, 3rd Floor, 699 Walnut Street, Des Moines, Iowa,
for the following purposes:
1. to elect four (4) directors to serve for a three year term;
2. to ratify the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company for the 1999 fiscal year; and
3. 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.
The board of directors has fixed the close of business on March 15, 1999 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the annual meeting. Accordingly, only shareholders of record on that
date are entitled to vote at the annual meeting or any adjournments thereof.
All shareholders are invited to attend the meeting in person. However, to
assure your representation at the meeting, please complete, sign, date and
return the enclosed proxy card promptly 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
/s/ James A. Smallenberger
-----------------------------------
James A. Smallenberger
Senior Vice President and Secretary
March 31, 1999
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE
ENCLOSED PRE-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE> 4
[AMERUS LIFE HOLDINGS LOGO]
699 WALNUT STREET
DES MOINES, IOWA 50309-3948
------------------------------
PROXY STATEMENT FOR 1999
------------------------------
This Proxy Statement is furnished to shareholders by the Board of Directors
of AmerUs Life Holdings, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Shareholders of the
Company to be held at the AmerUs Conference Center, Hub Tower, 3rd Floor, 699
Walnut Street, Des Moines, Iowa, on Friday, May 14, 1999, at 9:00 a.m., Des
Moines local time, and at any adjournments thereof.
This Proxy Statement, Notice of Annual Meeting and the accompanying proxy
card are being first mailed to shareholders on or about March 31, 1999. The
Company's 1998 Annual Report is being mailed to shareholders concurrently with
this Proxy Statement.
GENERAL INFORMATION
The Board of Directors has fixed March 15, 1999 as the record date (the
"Record Date") for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournments thereof. On the Record Date,
25,434,573 shares of Class A Common Stock and five million shares of Class B
Common Stock ("Common Stock") were outstanding and entitled to vote at the
meeting. Each share of Common Stock entitles the holder thereof to one vote on
each matter to be voted on at the Annual Meeting. There were no shares of voting
preferred stock outstanding as of the Record Date.
Any shareholder giving a proxy has the power to revoke it at any time
before it is voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking it, or (ii) a duly
executed proxy bearing a later date. In addition, a shareholder who is present
at the Annual Meeting may revoke the shareholder's proxy and vote in person if
the shareholder so desires.
Proxies furnished by shareholders pursuant hereto will be voted in
accordance with the directions on such proxies. If no choice is specified, the
proxy will be voted (i) "FOR" the election of the nominees listed under
"Election of Directors"; (ii) "FOR" ratification of the appointment of KPMG Peat
Marwick LLP as independent auditors; and (iii) at the discretion of the proxy
holders with regard to such other business as may come before the meeting and
all matters incident to the conduct of the meeting. If for any reason, one or
more of the nominees should be unable or refuse to serve as a Director (an event
which is not anticipated), the persons named in the enclosed proxy will vote for
substitute nominees of the Board of Directors unless otherwise instructed. The
Board of Directors knows of no matter to come before the meeting other than
those set forth in the Proxy Statement. If any further business is presented at
the meeting, the persons named in the proxy will act on behalf of the
shareholders according to their best judgment.
The presence at the meeting, in person or by proxy, of a majority of the
shares of Common Stock outstanding on the Record Date will constitute a quorum.
The affirmative vote of the holders of at least a majority of such quorum will
be required with respect to the election of directors and the election of KPMG
Peat Marwick LLP as the Company's independent auditors.
Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as the inspectors of election for
the meeting. The inspectors of election will treat shares represented by proxies
that reflect abstentions or include "broker non-votes" as shares that are
present and
<PAGE> 5
entitled to vote for purposes of determining the presence of a quorum.
Abstentions or brokers non-votes" do not constitute a vote "for" or "against"
any matter and thus will be disregarded in any calculation of "votes cast".
However, abstentions and "broker non-votes" will have the effect of a negative
vote if an item requires the approval of a majority of a quorum or of a
specified proportion of all issued and outstanding shares.
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 card, and all other costs in connection with the
solicitation of proxies, will be paid by the Company.
BENEFICIAL OWNERSHIP OF COMMON STOCK
PRINCIPAL HOLDERS
The following table sets forth the beneficial ownership as of February 28,
1999 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>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS CLASS OF STOCK BENEFICIALLY OWNED CLASS
---------------- -------------- ------------------ ----------
<S> <C> <C> <C>
AmerUs Group Co.................................. Class A Common 12,390,165 48.7%
699 Walnut Street
Des Moines, IA 50309
AmerUs Group Co.................................. Class B Common 5,000,000 100%
699 Walnut Street
Des Moines, IA 50309
American Mutual Holding Company.................. Class A Common 12,390,165(1) 48.7%
699 Walnut Street
Des Moines, IA 50309
American Mutual Holding Company.................. Class B Common 5,000,000(1) 100%
699 Walnut Street
Des Moines, IA 50309
</TABLE>
- ---------------
(1) Indirect beneficial owner due to ownership of 100% of the capital stock of
AmerUs Group Co.
2
<PAGE> 6
DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of the Company's
Class A Common Stock as of February 28, 1999 of each of the directors and
director nominees, the executive officers named in the Summary Compensation
Table on page 9, 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 February 28, 1999
was 3.19%. 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>
<CAPTION>
AMOUNT
AND NATURE
OF BENEFICIAL
NAME OWNERSHIP(1)
---- -------------
<S> <C>
John R. Albers(2)(12)....................................... 20,833
Roger K. Brooks(2)(3)(4)(5)(11)(14)......................... 166,552
Malcolm Candlish(2)(12)(13)................................. 6,908
Maureen M. Culhane(12)(13).................................. 3,193
Thomas F. Gaffney(2)(9)(12)(13)............................. 14,556
Sam C. Kalainov(2)(3)(4)(6)(11)............................. 204,653
Ralph W. Laster, Jr.(7)..................................... 8,570
John W. Norris, Jr.(2)(12)(13).............................. 3,418
Jack C. Pester(2)(12)(13)................................... 3,290
John A. Wing(12)(13)........................................ 11,697
Victor N. Daley(2)(3)(4)(11)................................ 31,079
Thomas C. Godlasky(2)(3)(4)(10)(11)......................... 55,389
Mark V. Heitz(8)(11)........................................ 206,431
Gary R. McPhail(3)(11)...................................... 47,149
Directors and executive officers as a group (16 persons).... 825,614
</TABLE>
- ---------------
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown. Some directors and executive
officers share the voting and dispositive power over their shares with
their spouses as community property, joint tenants or tenants in common.
(2) Messrs. Albers, Brooks, Candlish, Gaffney, Kalainov, Norris and Pester are
directors of AmerUs Group Co., which owns 12,390,165 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 Chairman, President and Chief Executive Officer of
AmerUs Group Co. and AMHC, Mr. Daley is Senior Vice President, Chief
Administration and Human Resources Officer of AmerUs Group Co. and AMHC,
Mr. Godlasky is Executive Vice President and Chief Investment 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.
(3) Includes shares of restricted stock which have vesting and transfer
restrictions for three (3) years from the date of grant.
(4) Includes beneficial interest in shares of the Company's Class A Common
Stock held pursuant to the Company's Savings & Retirement Plan (as defined
on page 13). The attributed shares owned by the Company's Savings &
Retirement Plan are voted by the trustees as directed by their respective
participants.
(5) Includes 6,000 shares owned by his spouse.
(6) Includes 25,000 shares owned by his spouse.
(7) Includes 7,156 shares owned by the Jerri S. Laster Trust, of which Mr.
Laster is a co-trustee.
3
<PAGE> 7
(8) Includes beneficial interest in 8,303 shares held pursuant to AmVestors
Financial Corporation Employee Stock Ownership Plan.
(9) Includes 12,517 shares owned by his spouse through the Donna L. Gaffney
Trust.
(10) Includes 7,400 shares and 650 shares of Class A Common Stock owned by his
spouse and his daughter, respectively.
(11) Includes shares of Class A Common Stock that may be purchased upon the
exercise of employee stock options exercisable on February 28, 1999 or
within sixty (60) days thereafter: Mr. Kalainov, 165,000; Mr. Heitz,
130,702; Mr. Brooks, 55,000; Mr. McPhail, 23,333; Mr. Godlasky, 20,000; Mr.
Daley, 13,333; and all directors and executive officers as a group,
310,702.
(12) Includes 833 shares of Class A Common Stock that were granted pursuant to
the Company's Non-Employee Stock Option Plan and may be purchased upon the
exercise of stock options exercisable on February 28, 1999 or within sixty
(60) days thereafter.
(13) Includes shares of Class A Common Stock that were acquired through the
Non-Employee Director Stock Plan which has vesting and transfer
restrictions for two (2) years after the date of payment: Ms. Culhane,
1,860; Mr. Gaffney, 1,206; Mr. Norris, 1,106; Mr. Candlish, 1,075; Mr.
Pester, 921; and Mr. Wing, 864.
(14) Includes 336 shares of Class A Common Stock that were acquired pursuant to
the Company's Warrant Agreement and may be purchased upon the exercise of
warrants exercisable on March 1, 1999 or sixty (60) days thereafter.
4
<PAGE> 8
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of ten members,
divided into three classes. Each class serves for three years on a
staggered-term basis.
The terms of the following directors expire at the annual meeting to be
held on May 14, 1999: Roger K. Brooks, Maureen M. Culhane, Jack C. Pester and
John A. Wing. The Board of Directors nominees to positions on the Board expiring
in May 2002 are Roger K. Brooks, Maureen M. Culhane, Jack C. Pester and John A.
Wing.
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
1999 annual meeting are listed first. Ages shown for all directors are as of
March 1, 1999.
ROGER K. BROOKS -- NOMINEE -- DES MOINES, IOWA.
Chairman, President and Chief Executive Officer of the Company and Chairman of
AmerUs Life Insurance Company ("AmerUs Life"), one of the Company's principal
subsidiaries, 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 Corporation
("AMAL"), a 34%-owned joint venture between Ameritas Life Insurance Corp. and
AmerUs Life, American Mutual Holding Company ("AMHC"), AmerUs Group Co., AmerUs
Life, AmVestors Financial Corporation ("AmVestors") and Delta Life Corporation
("Delta"). AmVestors and Delta are also principal subsidiaries of the Company.
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 May 14, 1999. He is 61
years of age.
MAUREEN M. CULHANE -- NOMINEE -- CHICAGO, ILLINOIS.
Consultant, Goldman, Sachs & Co., an international investment banking firm,
Chicago, Illinois since February 1999. Prior to that time, Ms. Culhane was Vice
President of Finance and Treasurer of Sara Lee Corporation from January 1993 to
September 1998. Ms. Culhane has been a director of the Company since February
1997 and is also a director of AmerUs Life. Her current term expires May 14,
1999. She is 50 years of age.
JACK C. PESTER -- NOMINEE -- HOUSTON, TEXAS.
Senior Vice President of The Coastal Corporation, an energy holding company,
Houston, Texas. 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 American Mutual Life Insurance Company ("AML"), one of
the predecessors of AmerUs Life, from May 1981 to December 1994 and of AmerUs
Life from December 1994 to May 1997. His current term expires May 14, 1999. He
is 63 years of age.
JOHN A. WING -- NOMINEE -- CHICAGO, ILLINOIS.
Executive Director, Center for Law and Financial Markets, Illinois Institute of
Technology, Chicago, Illinois since July 1998. From January 1997 to July 1998,
Mr. Wing was Chairman and Chief Executive Officer of ABN AMRO Incorporated.
Prior to that time, Mr. Wing was Chairman and Chief Executive Officer of The
Chicago Corp. from January 1981 to January 1997. Mr. Wing is a director of
AmerUs Life and the Futures Industry Association. Mr. Wing has been a director
of the Company since its formation in August 1996 and of AmerUs Life since May
1991. His current term expires May 14, 1999. He is 63 years of age.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE NOMINEES LISTED ABOVE.
5
<PAGE> 9
THE FOLLOWING DIRECTORS SERVE FOR TERMS THAT EXPIRE AFTER 1999:
JOHN R. ALBERS -- DALLAS, TEXAS.
President and Chief Executive Officer of Fairfield Enterprises, Inc., a holding
company for investments and real estate, 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 AMAL, AMHC, and AmerUs Group Co. 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 11, 2001. He is
67 years of age.
MALCOLM CANDLISH -- OSPREY, FLORIDA.
Consultant since May 1998. Prior to that time, Mr. Candlish was Chairman of
First Alert, Inc., Chicago, Illinois from October 1992 until April 1998 and
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 The 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 May 12, 2000. He is 63 years of age.
THOMAS F. GAFFNEY -- TIERRA VERDE, FLORIDA.
Managing Director of Raymond James Capital, Inc., a merchant banking firm, 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 11,
2001. He is 53 years of age.
SAM C. KALAINOV -- DES MOINES, IOWA.
Chairman Emeritus of AMHC and AmerUs Group Co. since May 1998. Prior to that
time, Mr. Kalainov was Chairman of AMHC and AmerUs Group Co. from September 1996
until May 1998, Chairman of AmerUs Life from December 1994 until September 1996
and was Chairman and Chief Executive Officer of AML, 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 May 12, 2000. He is 68 years of age.
RALPH W. LASTER, JR. -- TOPEKA, KANSAS.
Private Investor since December 1997. Mr. Laster served as both Chief Executive
Officer of AmVestors (which was acquired by the Company in December 1997) 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. Mr.
Laster has been a director of the Company since February 1998. His current term
expires May 12, 2000. He is 47 years of age.
JOHN W. NORRIS, JR. -- DALLAS, TEXAS.
Chairman and Chief Executive Officer of Lennox International, Inc., a
manufacturer of heating and air conditioning equipment, 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 May 12, 2000. He is 63
years of age.
6
<PAGE> 10
EXECUTIVE OFFICERS WHO ARE NOT ALSO DIRECTORS:
VICTOR N. DALEY -- DES MOINES, IOWA.
Senior Vice President, 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 55
years of age.
MICHAEL G. FRAIZER -- DES MOINES, IOWA.
Senior Vice President, Chief Financial Officer and Treasurer of the Company and
AmerUs Life since January 1999. Previously, Mr. Fraizer was Senior Vice
President and Controller/Treasurer of the Company from August 1996 to December
1998 and of AmerUs Life from January 1993 to December 1998. 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 49 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 43 years of age.
MARCIA S. HANSON -- DES MOINES, IOWA
Executive Vice President-Corporate Development of the Company since November
1998 and of AmerUs Group Co. since May 1998 and Chairman and Chief Executive
Officer of AmerUs Home Equity, Des Moines, Iowa since August 1, 1998. Ms. Hanson
was President and Chief Executive Officer of AmerUs Bank FSB, Des Moines, Iowa
from May 1995 to July 31, 1998. From February 1993 to May 1995, she was
President and Chief Executive Officer of Firstar Bank, Des Moines, Iowa. She is
53 years of age.
MARK V. HEITZ -- TOPEKA, KANSAS
President and Chief Executive Officer of AmVestors, American Investors Life
Insurance Company and Financial Benefit Life Insurance Company, Topeka, Kansas
since December 1997. Previously, Mr. Heitz served as the President, General
Counsel and Director of AmVestors from December 1986 until December 1997. Mr.
Heitz also served as President, General Counsel and Director of American
Investors Life Insurance Company from October 1986 until December 1997. He is 46
years of age.
GARY R. MCPHAIL -- DES MOINES, IOWA
President and Chief Executive Officer of AmerUs Life since May 1997 and
Chairman, President and Chief Executive Officer of Delta since January 1999 and
Chairman and Chief Executive Officer of Delta from October 1997 until January
1999. 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 51 years of age.
7
<PAGE> 11
BOARD STRUCTURE AND COMPENSATION
The Board of Directors meets on a regularly scheduled basis. During 1998,
the Board held four meetings and each director attended at least 75% of all
Board meetings and applicable committee meetings.
The Board of Directors has assigned certain responsibilities to committees.
The Audit Committee recommends the appointment of the independent auditors,
reviews the scope of the audits recommended by the independent auditors, reviews
internal audit reports on various aspects of corporate operations and consults
with the independent auditors on a periodic basis on matters relating to
internal financial controls and procedures. Members of the Audit Committee,
which met three times during 1998, are Thomas F. Gaffney (Chairman), Maureen M.
Culhane, Jack C. Pester and John A. Wing. All members are non-employee
directors.
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. Members of the Board Operations Committee, which met
four times during 1998, are Malcolm Candlish (Chairman), John R. Albers and Jack
C. Pester. All members are non-employee directors.
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. Members of the Finance and Strategy Committee,
which met three times in 1998 are John W. Norris, Jr. (Chairman), Malcolm
Candlish and Thomas F. Gaffney. All members are non-employee directors.
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. Members of the Human Resources Committee, which
met seven times in 1998, are John R. Albers (Chairman), Malcolm Candlish and
John W. Norris, Jr. All members are non-employee directors.
The Intercompany Transactions Committee reviews transactions between the
Company and its affiliates. Members of the Intercompany Transactions Committee,
which met three times in 1998, are Ralph W. Laster, Jr. (Chairman), Maureen M.
Culhane and John A. Wing. All members are non-employee directors.
The Investment Committee oversees investments and investment policy of the
Company and its operating subsidiaries. Members of the Investment Committee,
which met five times in 1998, are John A. Wing (Chairman), Maureen M. Culhane
and Thomas F. Gaffney and Ralph W. Laster, Jr. All members are non-employee
directors.
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. Members of the Executive Committee, which
met one time in 1998, are Roger K. Brooks (Chairman), Thomas F. Gaffney and John
W. Norris, Jr.
8
<PAGE> 12
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, AmerUs Life or AmVestors.
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 and AmVestors) to its
Chief Executive Officer and the other named executive officers (collectively,
the "Named Executive Officers") during the years ended December 31, 1998, 1997,
and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION --------------------------------------
----------------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND FISCAL BONUS(A) COMPENSATION AWARD(S) OPTIONS/ PAYOUTS(D) COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($) ($) ($)(B) SARS(#)(C) ($) (E)($)
------------------ ------ --------- -------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Roger K. Brooks......... 1998 500,000 100,000 -- 67,125 -- 352,000 181,773
Chairman, President 1997 480,000 520,000 -- -- 165,000 258,133 157,220
and Chief Executive 1996 455,000 415,000 -- -- -- 290,400 109,439
Officer of the
Company
Mark V. Heitz(F)........ 1998 337,500 200,000 -- -- 18,500 -- 24,202
President and Chief 1997 -- -- -- -- 20,000 -- --
Executive Officer of 1996 -- -- -- -- -- -- --
AmVestors Financial
Corporation, American
Investors Life
Insurance Company and
Finance Benefit Life
Insurance Company
Gary R. McPhail(G)...... 1998 335,000 110,000 -- 22,375 -- 24,400 48,794
President and Chief 1997 325,000 162,500 -- -- 70,000 11,953 250,015(H)
Executive Officer of 1996 -- -- -- -- -- -- --
AmerUs Life and
Chairman, President
and Chief Executive
Officer of Delta Life
and Annuity
Thomas C. Godlasky...... 1998 300,000 75,000 -- 22,375 -- 125,000 46,436
Executive Vice President 1997 275,000 200,000 -- -- 60,000 91,667 35,418
and Chief Investment 1996 262,500 110,000 -- -- -- 103,070 37,197
Officer of the Company
Victor N. Daley......... 1998 200,000 75,000 -- 11,188 -- 37,500 35,313
Senior Vice President, 1997 175,000 120,000 -- -- 40,000 27,500 29,657
Chief Administration 1996 155,000 70,000 -- -- -- 30,910 25,425
and Human Resources
Officer of the Company
</TABLE>
- ---------------
(A) Pursuant to the Management Incentive Plan ("MIP"), bonuses shown for 1996,
1997 and 1998 were paid in 1997, 1998 and 1999, respectively. In addition to
bonuses paid under the Management Incentive Plan, Mr. Brooks received
discretionary bonuses for 1996 of $200,000 and Mr. Brooks, Mr. Godlasky and
Mr. Daley received discretionary bonuses for 1997 of $280,000, $90,000 and
$50,000 respectively. In 1998, the MIP was amended to provide that employees
participating in the MIP were eligible to defer a portion of their annual
bonus to purchase stock units. On the third anniversary of the employee's
deferral, the Company will match a specified percentage of the stock units
purchased pursuant to the deferral program, provided the employee continues
to be employed by the Company or one of its subsidiaries on
9
<PAGE> 13
that date. The Human Resources Committee of the Board of Directors
determines on an annual basis the maximum amount of bonus that can be
deferred and the percentage match of the Company. For the 1998 bonus paid in
1999, the following amounts were deferred: Mr. Brooks -- $50,000; Mr.
Heitz -- $120,000; Mr. McPhail -$55,000; Mr. Godlasky -- $37,500; and Mr.
Daley -- $18,750.
(B) Restricted Stock is valued without regard to restrictions on transfer. The
valuation of these awards is based upon the fair market value stock price on
the date of grant. The awards will not vest until the third anniversary of
the date the award was granted. At December 31, 1998 (based upon a fair
market value stock price of $22.375) the number and market value of shares
of restricted stock held by each of the named executive officers were as
follows: Mr. Brooks (3,000; $67,125), Mr. Heitz (0;$0), Mr. McPhail (1,000;
$22,375), Mr. Godlasky (1,000; $22,375) and Mr. Daley (500; $11,188). The
shareholder is entitled to receive cash dividends and has all other rights
as a shareholder as to such shares prior to vesting. However, the entire
award is forfeited if the shareholder's employment terminates prior to
vesting.
(C) The options were granted with an exercise price equal to the fair market
value of the underlying stock on the date of grant.
(D) Long term incentive compensation pursuant to the Performance Share Plan (the
"LTIP"). LTIP payouts indicated were earned over periods ending December 31
for each of 1996, 1997 and 1998 and were payable in 1997, 1998 and 1999,
respectively.
(E) Amounts shown as "Other Compensation" for 1996, 1997 and 1998 are comprised
of the items set forth in the table below. Contributions recorded for Mr.
Heitz under "Basic Contributions" represent monies funded to his account
under the former AmVestors Employee Stock Ownership Plan and contributions
recorded under "Benefit Supplement" represent monies funded to his account
under the former AmVestors Money Purchase Pension Plan.
<TABLE>
<CAPTION>
SUPPLEMENTAL EXECUTIVE
QUALIFIED PLAN RETIREMENT PLAN
-------------------------------------------------- ----------------------------------------------
401(K)
MATCHING BASIC BENEFIT SERP MATCHING BASIC BENEFIT
CONTRIBUTION($) CONTRIBUTIONS($) SUPPLEMENT($) CONTRIBUTION($) CONTRIBUTION SUPPLEMENT($)
--------------- ---------------- ------------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Roger K. Brooks...... 1998 8,000 6,400 5,600 44,338 34,271 74,796
1997 8,000 6,400 6,100 35,805 29,237 63,810
1996 7,500 6,000 13,095 18,963 20,104 43,777
Mark V. Heitz........ 1998 -- 12,202 12,000 -- -- --
1997 -- -- -- -- -- --
1996 -- -- -- -- -- --
Gary R. McPhail...... 1998 8,000 6,400 -- 19,957 14,437 --
1997 8,000 6,400 -- 7,453 3,162 --
1996 -- -- -- -- -- --
Thomas G. Godlasky... 1998 8,000 6,400 -- 18,599 13,437 --
1997 8,000 6,400 -- 12,014 9,004 --
1996 7,500 6,000 -- 10,995 12,702 --
Victor N. Daley...... 1998 8,000 6,400 3,104 8,547 6,237 3,025
1997 8,000 6,400 3,104 7,296 3,271 1,586
1996 7,500 6,000 2,910 5,494 2,371 1,150
<CAPTION>
EXCESS BENEFIT
PLAN
--------------
INTERIM
BENEFIT
SUPPLEMENT($)
-------------
<S> <C>
Roger K. Brooks...... 8,368
7,868
--
Mark V. Heitz........ --
--
--
Gary R. McPhail...... --
--
--
Thomas G. Godlasky... --
--
--
Victor N. Daley......
--
--
</TABLE>
(F) Mr. Heitz became affiliated with the Company in December 1997 as a result of
its acquisition of AmVestors.
(G) Mr. McPhail commenced employment with AmerUs Life in April 1997.
(H) The amount shown includes payment of a $225,000 sign-on bonus for Mr.
McPhail in 1997, of which a pro-rata portion is repayable in the event of
termination during the initial 36 months of employment.
OPTION GRANTS TABLE
The following table presents information as to stock options granted during
the year ended December 31, 1998. The two columns on the right project the
amount that could be earned if the Class A Common Stock
10
<PAGE> 14
price appreciates at the annual rates indicated and if the options are held
until the expiration dates shown. There is no assurance that any particular
level of potential realizable value will actually be earned.
OPTION GRANTS FOR FISCAL YEAR 1998
<TABLE>
<CAPTION>
INDIVIDUAL
GRANTS
----------------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM($)(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------------
NAME GRANTED YEAR ($/SH) DATE 5% 10%
---- ---------- ---------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Roger K. Brooks....... -- -- -- -- -- --
Mark V. Heitz......... 18,500(1) 12.75% $31.1875 7/31/2008 362,853 919,540
Gary R. McPhail....... -- -- -- -- -- --
Thomas C. Godlasky.... -- -- -- -- -- --
Victor N. Daley....... -- -- -- -- -- --
</TABLE>
- ---------------
(1) These options were granted on July 31, 1998 at the then fair market value of
the Company's Class A Common Stock. The options vest and become exercisable
in equal installments on the first, second and third anniversaries after the
date of grant.
(2) Potential realizable value is based on the assumption that the Common Stock
price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the ten-year option period. The Company's
stock price at the end of the ten-year term for the options are $50.80 and
$80.89, for 5% and 10% appreciation, respectively. The numbers are
calculated based on requirements promulgated by the Securities and Exchange
Commission. The actual value, if any, an executive may realize will depend
on the excess of the stock price over the exercise price on the date the
option is exercised (if the executive were to sell the shares on the date of
exercise), so there is no assurance that the value realized will be at or
near the potential realizable value as calculated in this table. The total
gain to all shareholders would be $596,933,098 at 5% annual appreciation and
$1,512,745,672 at 10% annual appreciation. The gain for the above officer
represents less than 0.06% of the gain to all shareholders.
OPTION EXERCISES AND VALUES TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#) AT FY-END($)(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger K. Brooks.............. -- -- 55,000 110,000 -- --
Mark V. Heitz................ -- -- 130,702 42,278 586,596 33,704
Gary R. McPhail.............. -- -- 23,333 46,667 --
Thomas G. Godlasky........... -- -- 20,000 40,000 -- --
Victor N. Daley.............. -- -- 13,333 26,667 -- --
</TABLE>
- ---------------
(1) Based on a closing stock price of $22.375 per share on December 31, 1998,
the last business day of the Company's fiscal year and the exercise price of
in-the-money options multiplied by the number of shares subject to
in-the-money options. None of the options were in-the-money at the end of
the last completed fiscal year except for Mr. Heitz.
11
<PAGE> 15
Long-Term Incentive Compensation Plan
AmerUs Life established a long-term incentive compensation performance
share plan effective January 1, 1995 (the "LTIP"). While there was a payout in
1998 to certain Named Executive Officers for awards granted in previous years,
the LTIP was discontinued as of 1998 and no awards were made in 1998. The final
payout for awards granted in previous years will occur in 2000.
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. No options were granted to Executive Officers in 1998,
except for Mr. Heitz. Restricted stock awards were granted to all Executive
Officers in 1998, except Mr. Heitz.
Executive Stock Purchase Plan
In November 1998, the Company adopted the AmerUs Life Holdings, Inc.
Executive Stock Purchase Plan (the "Purchase Plan") to encourage direct,
long-term ownership of the Company's securities by executive officers and
certain senior officers. Under the Purchase Plan, up to $25 million of Class A
Common Stock or the Company's 7.00% Adjustable Conversion-rate Equity Securities
Units ("ACES Units") could be purchased in open market or negotiated
transactions with independent parties. Purchases are to be financed by full
recourse personal loans at market interest rates to the participants from a
bank. The Company has agreed to guarantee the loans in the event of default, but
has recourse to the participants if it incurs a loss under the guarantee.
Participants in the Purchase Plan are fully liable for any losses, as well as
for the repayment of the loan when it comes due. A total of 49 officers of the
Company and its subsidiaries elected to participate in the Purchase Plan.
Savings and Profit Sharing Plans
Each of the Named Executive Officers, except Mr. Heitz, 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"). Mr.
Heitz participates in the AmVestors Financial Corporation Employees' Stock
Ownership Plan (the "ESOP") and the AmVestors Financial Corporation Money
Purchase Plan (the "Money Purchase Plan"). Each of the Named Executive Officers,
except Messrs. Heitz and McPhail, also had a frozen benefit under the American
Mutual Life Insurance Company Pension Plan (the "AML Frozen Pension Plan").
Additionally, the Named Executive Officers, except Messrs. Daley, Heitz and
McPhail, have a frozen benefit under the American Mutual Life Insurance Company
Supplemental Pension Plan (the "AML Frozen SERP").
Under the Savings and Retirement Plan and Supplemental Plan, the Company
will contribute 4% of each eligible participating employee's compensation as of
the end of a plan year in accordance with plan provisions ("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 Company may also contribute to the Savings and Retirement Plan and
Supplemental Plan, 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 &
12
<PAGE> 16
Retirement Plan and Supplemental 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.
Under the Money Purchase Plan, AmVestors Financial Corp. will contribute on
behalf of each eligible participant a percentage of compensation (ranging from
5-15%) based on age at plan entry. Mr. Heitz qualifies for a 7.5% annual
contribution. AmVestors Financial Corp. shall make a contribution of company
stock to the ESOP of an amount determined by the Board not less than the amount
needed to provide the trustee with cash consistent to pay maturing obligations
under loan. Effective January 1, 1999, the Money Purchase Plan and ESOP merged
into the Savings & Retirement Plan, and all named executive officers participate
in the restated Savings & Retirement Plan and Supplemental Plan.
Supplemental Pension Agreement
An agreement between the Company and Mr. Daley provides for monthly
retirement income, beginning August 31, 2008, in an amount equal to .2693% of
his average monthly earnings multiplied by number of months employed minus the
Deductible Amount. The "Deductible Amount" equals an amount calculated by (i)
taking 2% of his pensionable earnings for each month that he is employed plus
the amount of AmerUs' core and interim benefit supplement contributions to the
Savings and Retirement Plan and the Supplemental Plan; (ii) crediting such
amounts with an 8% compound annual interest rate; and (iii) taking the aggregate
of those amounts on August 8, 2008 and determining the monthly amount that would
have been payable under a net single premium life annuity purchased on that
date.
Frozen Pension Plans
Prior to January 1, 1996, AmerUs Life maintained the AML Frozen Pension
Plan, which was qualified under Section 401(a) of the Code. The benefits under
this plan were curtailed as of December 31, 1995. Retirement benefits under the
AML 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
AML Frozen Pension Plan 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 AML Frozen Pension Plan. Upon
receipt of assets supporting the accrued benefits of participants electing to
receive such benefits by the AmerUs Retirement Plan from the AML Frozen 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 except Messrs. Heitz and McPhail 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 AML Frozen Pension
Plan to the AmerUs Retirement Plan.
Prior to January 1, 1996, AmerUs Life also maintained a supplemental
retirement plan for certain former employees of Central Life Assurance Company,
one of the predecessors to AmerUs Life (the "Frozen SERP"). The benefits under
this plan were also curtailed as of December 31, 1995.
13
<PAGE> 17
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
Frozen SERP, assuming retirement at age 65 (current normal retirement age):
PENSION TABLE
FROZEN ACCRUED BENEFITS
<TABLE>
<CAPTION>
MONTHLY
NAME BENEFITS
---- --------
<S> <C>
Roger K. Brooks............................................. $17,363
Mark V. Heitz............................................... 0
Gary R. McPhail............................................. 0
Thomas C. Godlasky.......................................... 671
Victor N. Daley............................................. 0
</TABLE>
Employment Agreement
Mr. Heitz currently is employed pursuant to an employment agreement dated
September 19, 1998, which provides a base compensation of $28,125 per month, an
annual incentive bonus of up to 100% of annual base compensation assuming
certain performance targets are met (up to $150,000 of which can be deferred to
purchase stock units with a 100% company match on the third anniversary date of
the deferral if Mr. Heitz continues to be employed by AmVestors or an affiliate
company), annual stock option grants targeted to produce a Black-Scholes value
of approximately 40% of annual base compensation and certain insurance and other
fringe benefits. The agreement continues until December 31, 2000.
The agreement includes a provision pursuant to which Mr. Heitz may elect to
receive, in the event of a termination of the agreement by AmVestors or an
affiliated company without cause or by Mr. Heitz for "Good Reason", a severance
allowance equal to 48 months of his base compensation in effect on the date of
termination. For such purposes, a termination by Mr. Heitz for "Good Reason"
includes the following reasons: (1) his duties or responsibilities, or his
reporting responsibilities, titles or offices are changed or terminated; (2) his
monthly base compensation is reduced or (3) he is required without his agreement
to be based anywhere other than Topeka, Kansas.
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
Transaction 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. The schedule of fees paid to
non-employee directors in 1998 remained unchanged from 1997.
Non-employee directors participate in the Non-Employee Director Stock Plan
("Director Plan"), which was approved by the Company's stockholders on December
4, 1996. Under the Director Plan, options to purchase 2,500 shares of the
Company's Class A Common Stock are automatically granted to each non-employee
director on the first business day of each year beginning in 1998. The exercise
price for all non-employee director options granted under the Director Plan is
100% of the fair market value of the shares on the date of grant. All such
options become exercisable over a three-year period from the date of grant,
assuming continued service on the Board of Directors.
The Director Plan also provides that non-employee directors may elect to
take all or part of their director fees in the Company's Class A Common Stock.
Directors making this election will receive the number of shares equal to the
dollar amount of director fees which the director has elected to receive in the
form of stock, divided by 75% of the fair market value of the stock as of each
payment date. Each director making this election must enter into an agreement
which restricts the stock from being sold, transferred, pledged or assigned for
a period of two years from the purchase date.
14
<PAGE> 18
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,
1998 with the cumulative total return of the Russell 2000 stock index and a peer
group of companies (the "Peer Group") consisting of thirteen life insurance
companies to which the Company has traditionally compared its business and
operations: Reliastar Financial Corporation, Protective Life Corporation,
Liberty Corporation, Presidential Life Corporation, American Heritage Life
Investment Corporation, Kansas City Life Insurance Company, Guarantee Life
Companies Inc., American Annuity Group, Inc., ARM Financial Group, Inc., Conseco
Inc., Delphi Financial Group, Inc., FBL Financial Group, Inc. and Liberty
Financial 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.
CUMULATIVE TOTAL RETURNS
PERIOD BEGINNING
JANUARY 28, 1997
AND ENDING
DECEMBER 31, 1998
TOTAL SHAREHOLDER RETURNS
[PERFORMANCE GRAPH]
[LINE GRAPH]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
1/28/97 6/30/97 12/31/97 6/30/98 12/31/98
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AmerUs Life Holdings, Inc. $100.00 $169.59 $225.82 $199.49 $139.02
- --------------------------------------------------------------------------------------------------------------
Peer Group 100.00 117.48 139.13 153.35 133.21
- --------------------------------------------------------------------------------------------------------------
Russell 2000 100.00 108.16 119.25 124.81 115.14
- --------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 19
HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee (the "Committee") presently consists of
Messrs. Albers, Candlish and Norris, none of whom is an 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 the Committee statistical
data and other executive compensation information to permit the Committee to
compare the Company's compensation policies against 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 based on statistical data provided by the Company's compensation
consultants. 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 $480,000 to $500,000 for fiscal 1998
and was not increased for fiscal 1999.
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.
Beginning with awards paid in 1999, participants in the annual incentive
program are eligible to defer up to 50% of their annual award to purchase stock
units. The Company has agreed to match on the third anniversary of the deferral
a certain percentage (determined annually by the Committee) of the stock units
purchased provided the participant remains employed by the Company on that date.
For fiscal 1998, each executive's target bonus under the management
incentive program was based on a percentage of the executive's base salary. Once
eligibility was established, actual awards were adjusted at the Committee's
discretion for individual performance and other Company performance criteria.
Based on results of the Company against the pre-determined targets, an award of
$100,000 was granted for 1998 performance to Mr. Brooks.
Long-Term Incentive. The Company has established two separate long-term
incentive plan programs -- a Long-Term Incentive Plan based on strategic
performance and 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 may be granted to executive officers and other key
employees of the Company and AmerUs Life. Upon joining the Company, an
individual's initial option grant will be based on the individual's
responsibilities and position and upon competitive market information provided
by the Company's
16
<PAGE> 20
compensation consultant. Thereafter, the size of any annual stock option 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 stockholder 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 options on
July 28, 1997. No grant was made to Mr. Brooks in 1998.
The Long-Term Incentive Plan was implemented in January 1995 for certain
senior executive officers of the Company to align the executives' interest and
reward with the Company's cumulative GAAP Net Worth growth. Notional shares with
a value of $100 as of January 1995 were granted based on a percentage of base
salary tied to competitive industry market data provided by compensation
consultants. With the adoption of the Stock Option plan, the Committee ceased
granting new shares in 1998. Payout in 1999 for shares granted in 1996 under the
Long-Term Incentive Plan formula (based upon fiscal year 1998 results of
operations) was $352,000 for Mr. Brooks.
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.
Mr. Brooks receives no other material compensation or benefits not provided
to all executive officers.
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
John W. Norris, Jr.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
AmerUs Life, Delta and AmVestors are wholly-owned direct subsidiaries 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, Delta and
AmVestors, 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.
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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
The Company and AmerUs Life lease facilities owned by AmerUs Affiliated
Group which serve as the Company's and AmerUs Life's executive and home offices.
The Company and AmerUs Life currently occupy approximately 224,000 square feet
of office space under their lease arrangements with AmerUs Affiliated Group for
an aggregate monthly cost of approximately $295,000, which cost includes
approximately $1,452,000 in tenant improvements amortized over the term of one
of the leases which expires in 2007. The other leases expire in 2001 and 2002.
Total rental expense paid to AmerUs Affiliated Group during the year ended
December 31, 1998 was $3,205,000.
AmerUs Life has entered into various limited partnership and joint venture
agreements in which AmerUs Affiliated Group or an affiliate serves as general
partner. AmerUs Life contributed portions of its joint venture interests to
AmerUs Affiliated Group and sold several of these partnership interests to newly
formed partnerships in which AmerUs Affiliated Group has an interest. Total
proceeds from these sales were $4,739,182 for the year ended December 31, 1998.
In addition, AmerUs Life agreed to make loans to the newly formed partnerships
in the aggregate amount of up to $6.9 million, of which $3.6 million had been
loaned and was outstanding as of December 31, 1998.
AmerUs Life has also entered into agreements with various partnerships in
which AmerUs Affiliated Group has an interest pursuant to which AmerUs Life is
obligated to make future capital contribution to such partnerships of up to
$16.5 million. As of December 31, 1998, AmerUs Life had a total investment of
$7,149,000 in various partnerships and joint ventures in which AmerUs Affiliated
Group 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 $1,421,000 for the year ended December 31,
1998.
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SERVICE AGREEMENTS
The Company and AmerUs Life have entered into various cost reimbursement
and services agreements with members of the AmerUs Affiliated Group. Pursuant to
such agreements, the Company and AmerUs Life provide certain communications,
tax, legal, accounting, real estate management, 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
$8,750,000 for the year ended December 31, 1998.
PURCHASE OF LOANS AND SECURITIZATION
AmerUs Life entered into a master agreement of purchase and sale with
AmerUs Bank (a former subsidiary) and its successor, dated as of March 5, 1997,
under which AmerUs Life would purchase home equity mortgage loans from AmerUs
Bank and/or AmerUs Home Equity. AmerUs Life records the purchases of such loans
at their purchase price which represents fair market value, which may be
different from the seller's carrying value. AmerUs Bank/AmerUs Home Equity would
accordingly recognize gain or loss on such transactions. During 1998, AmerUs
Life acquired loans with aggregate principal balances at the time of purchase of
$175,496,142.
AmerUs Life entered into an origination agreement with AmerUs Home Equity,
dated August 1, 1998, under which AmerUs Life reimburses AmerUs Home Equity for
costs to originate home equity loans for AmerUs Life. During 1998, AmerUs Life
reimbursed AmerUs Home Equity $671,199 for the origination of $38.2 million of
loans.
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 $877,000 for the year ended December 31, 1998.
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.
Both of the agreements referred to in this section were terminated in 1998
in connection with the sale of AmerUs Bank to Commercial Federal Corporation on
July 31, 1998.
LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP
AmerUs Life provided mortgage and construction loan financing to members of
the AmerUs Affiliated Group or to a partnership in which a member of the AmerUs
Affiliated Group has an ownership interest. The outstanding balance of all such
financings was $21 million as of December 31, 1998. AmerUs Life recorded
interest income of $3.2 million for the year ended December 31, 1998.
AmerUs Life guaranteed various borrowings of members of the AmerUs
Affiliated Group with an outstanding balance of approximately $13.7 million at
December 31, 1998.
AmerUs Life has outstanding loan commitments to various partnerships in
which AmerUs Affiliated Group has an ownership interest. At December 31, 1998,
the outstanding loan commitments were approximately $6.9 million.
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SALE OF OWNERSHIP INTEREST IN CERTAIN PARTNERSHIPS
The Company sold as of October 30, 1998 its limited partner ownership
interest in Financial Institution Partners L.P. I and its limited partner
ownership interest in Financial Institution Partners L.P. II to AmerUs Group Co.
for $7,621,067 and $4,312,177, respectively.
SALE OF ACES UNITS
During the fourth quarter of 1998, AmerUs Group purchased in the open
market 451,000 ACES Units at a cost of $10,324,353 and then sold 451,000 ACES
Units to the Company for a purchase price of $10,324,353.
LOAN GUARANTEE
Pursuant to the Purchase Plan, the Company will guarantee personal loans in
the aggregate amount of up to $25 million made by a bank to certain members of
the Company's management, including the Named Executive Officers. Each
participant has agreed to repay the Company for any amounts paid by the Company
under the guarantee in accordance with a reimbursement agreement entered into
between the participant and the Company. While no securities were purchased by
participants pursuant to the Purchase Plan during 1998, $15,422,385 was
purchased by participants as of February 28, 1999. As of that date, the
outstanding principal balances of the bank loans to the Named Executive Officers
which are guaranteed by the Company were as follows: Mr. Brooks $2,467,581; Mr.
Heitz $1,028,673; Mr. McPhail $616,895; Mr. Godlasky $832,808; and Mr. Daley
$555,205.
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 there were no filing deficiencies under Section 16(a)
by its directors and executive officers during 1998.
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PROPOSAL 2
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, 1999. The same firm conducted the fiscal 1998 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 1999
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 1999 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 2000 ANNUAL MEETING
Under the rules of the Securities and Exchange Commission (the "SEC"),
proposals of shareholders intended to be presented at the 2000 annual meeting of
shareholders (May 2000) must be received by the Company no later than December
1, 1999, as well as meet the other SEC requirements, in order to be considered
for inclusion in the Company's 2000 Annual Meeting Proxy Statement and form of
proxy to be mailed in March 2000.
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.
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998, 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 MARTIN P. KETELAAR, DIRECTOR OF
INVESTORS RELATIONS, 699 WALNUT STREET, DES MOINES, IA 50309.
By Order of the Board of Directors
/s/ James A. Smallenberger
----------------------------------
James A. Smallenberger
Senior Vice President
and Secretary
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AMERUS LIFE HOLDINGS, INC.
Proxy for Annual Meeting of Shareholders on May 14, 1999
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 G. Fraizer 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 14, 1999 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 four Directors:
Roger K. Brooks
Maureen M. Culhane
Jack C. Pester
John A. Wing
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK "FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
2. Proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for fiscal year 1999.
[ ] For [ ] Against [ ] Abstain
3. 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 ROGER K.
BROOKS, MAUREEN M. CULHANE, JACK C. PESTER AND JOHN A. WING TO SERVE AS
DIRECTORS, (2) FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS
THE COMPANY'S INDEPENDENT AUDITORS AND (3) 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: , 1999
---------------------------
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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.
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