SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
EQUITABLE OF IOWA COMPANIES
(Name of Registrant as Specified In Its Charter)
John A. Merriman, Secretary and General Counsel
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 14a-6(i)(1).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
EQUITABLE OF IOWA COMPANIES
PROXY STATEMENT
Annual Meeting of Shareholders, April 27, 1995
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of
EQUITABLE OF IOWA COMPANIES (the "Company"), 604 Locust Street,
Des Moines, Iowa, 50309, for use at the Annual Meeting
of Shareholders to be held April 27, 1995, and any adjournment
thereof (the "Meeting"). When such proxy is properly executed
and returned, the shares it represents will be voted at the
Meeting in accordance with the instructions contained therein.
If no direction is given, proxies will be voted in favor of
election of the three director nominees named herein, approval of
the restatement and amendment of the Key Employee Incentive Plan,
approval of the restatement and amendment of the 1992 Stock
Incentive Plan, and approval of Ernst & Young LLP as auditors for
1995. Any shareholder furnishing a proxy may revoke it at any
time before it is voted either by voting in person or by
delivering a revocation or later dated proxy to the Secretary of
the Company. The Proxy Statement and the accompanying Proxies
will be first mailed to shareholders on or about March 17, 1995.
The cost of the solicitation of the Proxies will be borne by the
Company. Proxies may be solicited by the Board of Directors or
management personally, by telephone or by facsimile.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH OF THE
PROPOSALS DESCRIBED IN THIS PROXY STATEMENT.
VOTING SECURITIES
Only shareholders of record as of the close of business on March
9, 1995, will be entitled to the notice of and to vote at the
Meeting. The Company has a single class of Common Stock without
par value ("Common Stock"), of which 31,594,057 shares were
outstanding and entitled to vote on such date. Shares present in
person or represented by proxy at the Meeting will be tabulated
for determination of whether or not a quorum is present. A
quorum will be present if a majority of the votes entitled to be
cast on a matter are represented for any purpose at the Meeting.
Votes withheld for any director, abstentions and broker-dealer
non-votes represented at the Meeting will be counted for quorum
purposes, but will not be counted as votes cast with respect to
any matter to come before the Meeting and will not affect the
outcome of any matter. If a quorum exists, directors will be
elected by a majority of the votes cast by the shares entitled to
vote in the election and action on other matters, including
appointment of auditors, will be approved if the votes cast
favoring the action exceed the votes cast opposing the action.
Holders of Common Stock are entitled to cumulative voting in the
election of directors which means that each shareholder is
entitled to as many votes as shall equal the number of votes
which such shareholder would be entitled to cast multiplied by
the number of directors to be elected, and such shareholder may
cast all such votes for a single director, or distribute them
among the number to be voted for, or any two or more of them, as
such shareholder may see fit. The Board of Directors unanimously
recommends election of the nominees named herein and a vote "For"
each of the other matters to be considered at the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following sets forth, as of March 9, 1995, security ownership
with respect to beneficial owners of more than five percent of
the Company's Common Stock.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Class
________________ ________________ ________________
<S> <C> <C>
Helen Hubbell Ingham (1) 3,026,986 9.6%
1429 North
Federal Hwy.
Ft. Lauderdale, FL 33304
Hans F. E. Wachtmeister 1,924,469 6.1%
Belmont Hill School
Belmont, MA 02178
<FN>
(1) All shares held in a revocable trust. Excludes 87,984
shares held by trusts for the benefit of her children, which
includes Mr. Ingham, Jr., a director of the Company.
</TABLE>
ELECTION OF DIRECTORS
The Board of Directors may consist of not less than 9 nor more
than 15 members, divided into three classes. At each annual
meeting of shareholders, the number of directors equal to the
number of the class whose term expires at the time of such
meeting shall be elected to hold office until the third
succeeding annual meeting and until their successors are elected
and qualified. There are presently eleven directors with the
terms of four expiring at the Meeting. Messrs. Covey, Heskett,
and Lee have been nominated by the Board of Directors for
election by the shareholders for terms ending in 1998, and all
are presently directors of the Company. Consistent with the
provisions of the Company's Restated Articles of Incorporation,
Mr. James E. Luhrs, who served as a director of the Company
during 1994, will be retiring from the Board of Directors as a
result of retiring as an active officer of an affiliated company.
Mr. Luhr's retirement from the Board will be effective upon the
conclusion of the Meeting. Upon the conclusion of the Meeting the
Board of Directors will consist of ten members.
Although the Board anticipates that all nominees will be able to
serve, in the event any one or more should be unable to do so,
proxies will be voted for such substitute nominee or nominees as
the Board in its discretion may recommend. Proxies will be voted
for the election of the nominees unless the stockholder giving
the proxy withholds such authority.
The following information is furnished for each continuing
director:
<TABLE>
<CAPTION>
Name; (Age);
Principal Occupation
During Last Five Years; Year First Year
Directorships in Other Elected Term
Public Companies Director Expires
______________________ __________ _______
<S> <C> <C>
Richard B. Covey (65), Partner in law firm 1971(a) 1995
of Carter Ledyard & Milburn.
Doris M. Drury (68), John J. Sullivan 1986 1997
Professor of Economics, Regis University,
Denver, Colorado; President and Chief
Executive Officer, Center for Business and
Economic Forecasting, Inc.; previously
Professor of Economics, University of Denver;
Director, Public Service Company of Colorado,
Inc. and Colorado National Bankshares, Inc.
James L. Heskett (61), Professor, Harvard 1985 1995
University Graduate School of Business
Administration; Director, Cardinal Health, Inc.
</TABLE>
<TABLE>
<CAPTION>
Name; (Age);
Principal Occupation
During Last Five Years; Year First Year
Directorships in Other Elected Term
Public Companies Director Expires
______________________ __________ _______
<S> <C> <C>
Fred S. Hubbell (43), Chairman (since April, 1987 1997
1993), President, and Chief Executive
Officer of the Company, Equitable American
Insurance Company ("Equitable American")
(since January, 1993), and Equitable Life
Insurance Company of Iowa ("Equitable Life")
(since May, 1992), and Chairman of Equitable
Investment Services, Inc. ("EISI") and USG
Annuity & Life Company ("USG"); Director,
Pioneer Hi-Bred International, Inc. and
The Macerich Company.
Richard S. Ingham, Jr. (49), Vice President 1994 1997
and Controller, Asterisk, Inc. (diversified
media, real estate and retail holding
company).
Robert E. Lee (59), Executive Director, The 1981 1995
Denver Foundation (community foundation);
Director, Meredith Corporation and
Storage Technology Corporation.
Jack D. Rehm (62), Chairman (since July, 1988 1996
1992), President, Chief Executive Officer
and Director and previously an officer,
Meredith Corporation (diversified media
company); Director, The Vernon Company
and International Multifoods, Inc.
Thomas N. Urban (60), Chairman, President 1979 1997
and Director, Pioneer Hi-Bred International,
Inc. (hybrid seed corn business), Director,
Sigma Aldrich Corp.
Hans F. E. Wachtmeister (50), Teacher, 1981 1996
Belmont Hill School, Belmont, Massachusetts.
Richard S. White (57), General Manager of the 1993 1996
John Deere Des Moines Works of Deere & Company.
<FN>
(a) Includes period in which served as director of Equitable
Life, which, in a 1977 reorganization, became a wholly-owned
subsidiary of the Company.
</TABLE>
Committees of the Board of Directors
The Board of Directors has standing Compensation and Audit
Committees and does not have a standing Nominating Committee.
The Compensation Committee administers the executive compensation
and benefit programs of the Company and its subsidiaries. It is
composed of four directors, Dr. Drury, Messrs. Covey, Lee, and
Rehm, who are not employees of the Company. The Committee met
two times during 1994 to evaluate the executive compensation
program. The Committee sometimes seeks advice from outside
consultants in evaluating compensation levels and benefit
programs. The Committee each year reviews and approves salaries
for the Company's Board of Directors and executive personnel and
administers incentive compensation programs. The report of the
Compensation Committee on these compensation and benefit programs
is provided below.
The Audit Committee is composed of four directors, Messrs.
Heskett, Ingham, Jr., Urban, and White, who are not Company
employees. The Committee met three times in 1994 with the
Company's independent auditors, internal auditors, and other
personnel to review internal financial controls, the principles
and practices of financial reporting, contingencies which might
affect the Company's financial position, the impact of regulatory
requirements, and the adequacy of the Company's disclosure. The
Committee reviews the application of accounting principles and
practices, including adequacy of disclosure, and the work of
internal auditors and comments and recommendations of the
independent auditors. The Committee also nominates the
independent auditors, reviews the independent auditors'
examination and reports and the Company's system of internal
controls, and determines whether the independent auditors have
access to all necessary data.
The Board also has an Executive Committee whose members are
Messrs. Covey, Heskett, Hubbell, Lee, and Urban.
Compensation of the Board of Directors
The Board of Directors held four meetings during 1994. All
members attended at least 75% of the total number of meetings of
the Board and committees of the Board on which they served,
except Mr. Wachtmeister. In 1994 compensation of the non-
employee directors of the Company consisted of an annual fee of
$16,000 and $1,000 for each Board and $750 for each Committee
meeting attended, and an additional $750 was paid to the Chair of
each Committee. The Company has a program by which non-employee
directors may receive restricted stock in lieu of their annual
fees. The restricted stock vests prorata at the end of each year of
service on the Board of Directors and entitles the director to
all incidents of ownership including the payment of dividends.
All eligible directors have elected to participate in this
program.
Executive Officers of the Company
Executive officers of the Company do not have fixed terms but
serve until removed by the Board of Directors. The principal
occupations of each of the persons named below are their
respective offices with the Company or its subsidiaries for more
than the past five years unless otherwise noted. The executive
officers of the Company are:
Lawrence V. Durland, Jr. Age 48. Senior Vice President of the
Company, Equitable American and Equitable Life.
William E. Heng. Age 49. Senior Vice President-Administration
of Equitable Life and USG.
Fred S. Hubbell. Age 43. Chairman, President and Chief Executive
Officer of the Company, Equitable American, Equitable Life, and
Chairman of EISI and USG.
Susan M. Jordan. Age 37. Vice President and Chief Information
Officer of the Company (since July, 1994); Assistant Vice
President of Chicago Board of Options Exchange (August, 1987 to
July, 1994).
Paul E. Larson. Age 42. Executive Vice President, Treasurer and
Chief Financial Officer of the Company, Equitable American and USG,
and Executive Vice President and Chief Financial Officer of Equitable
Life.
John A. Merriman. Age 52. Secretary and General Counsel of the
Company, Equitable American, USG, and Equitable Life.
Beth B. Neppl. Age 37. Vice President of Human Resources of the
Company.
Jon P. Newsome. Age 52. Executive Vice President-Sales and
Marketing of the Company and Equitable Life and President,
Chief Executive Officer of USG.
Paul R. Schlaack. Age 48. President and Chief Executive Officer
of EISI, the Company's investment management subsidiary.
David A. Terwilliger. Age 37. Vice President and Controller of
the Company, Equitable American, EISI, Equitable Life, and USG.
Security Ownership of Management
The following sets forth, as of March 9, 1995, the beneficial
security ownership of the Company's Common Stock by the directors
and named executive officers individually and the directors and
executive officers as a group:
<TABLE>
<CAPTION>
Name Number of Shares(1) Percent of Class (2)
<S> <C> <C>
Mr. Covey 20,468 *
Dr. Drury 9,628 *
Mr. Heskett 12,428 *
Mr. Hubbell 670,536 2.1%
Mr. Ingham, Jr. 25,843 *
Mr. Lee 7,982 *
Mr. Luhrs 141,660 *
Mr. Rehm 16,377 *
Mr. Urban 3,128 *
Mr. Wachtmeister 1,924,469 6.1%
Mr. White 1,488 *
Mr. Durland, Jr. 80,244 *
Mr. Heng 21,294 *
Ms. Jordan 0 *
Mr. Larson 114,630 *
Mr. Merriman 97,256 *
Ms. Neppl 3,175 *
Mr. Newsome 80,157 *
Mr. Schlaack 232,617 *
Mr. Terwilliger 10,333 *
All directors
and executive
officers as a
group (20) 3,473,713 10.9%
<FN>
(1) Included are shares held beneficially or of record by
spouses and shares held by a fiduciary, but the directors
disclaim beneficial ownership of such shares as follows:
Hubbell, 158,851; and Wachtmeister, 1,840,003. Beneficial owners
have sole voting and investment power with respect to all shares
except for those held by trustees. Includes shares subject to
exercisable options: Durland, Jr., 15,600; Heng, 4,900; Hubbell,
113,700; Larson, 70,360; Luhrs, 50,000; Merriman, 15,000;
Newsome, 22,500; Schlaack, 20,000; Terwilliger, 1,700; and all
directors and executive officers as a group, 313,760. Includes
shares held in Company 401(k) Savings Plan by the following
persons: Durland, Jr., 11,944; Heng, 7,673; Hubbell, 19,344;
Larson, 8,328; Luhrs, 16,668; Merriman, 13,917; Neppl, 2,709;
Schlaack, 19,676; Terwilliger, 5,775; and all directors and
executive officers as a group, 106,034.
(2) An (*) indicates that the individual's ownership interests
of the Company's Common Stock is less than one percent.
</TABLE>
EXECUTIVE COMPENSATION AND BENEFITS
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries
for the last three fiscal years with respect to Mr. Hubbell, as
the Company's Chief Executive Officer, and each of the next four
most highly compensated executive officers (the "named executive
officers"):
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
Name and Principal
Position Year Salary($) Bonus($)
__________________________________________________________
<S> <C> <C> <C>
Fred S. Hubbell 1994 468,750 408,500
President & CEO 1993 395,833 320,000
1992 345,000 210,000
Paul R. Schlaack 1994 296,583 265,220
President & CEO 1993 279,917 281,000
EISI 1992 264,250 265,320
Jon P. Newsome 1994 298,333 156,000
President & CEO 1993 266,539 119,250
USG 1992 227,750 101,640
Paul E. Larson 1994 227,917 119,600
Executive V.P. 1993 193,583 85,950
Treas. & CFO 1992 170,250 77,850
Lawrence V. Durland, Jr. 1994 192,667 82,990
Sr. V.P. 1993 188,333 75,600
1992 180,500 48,870
</TABLE>
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
Awards Payouts
Restricted LTIP
Name and Principal Stock Options Payouts All Other
Position Year Awards (#)(2) ($)(3) Compensation
($)(1) ($)(4)
_____________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Fred S. Hubbell 1994 339,600 30,000 -0- 13,000
President & CEO 1993 267,600 34,000 27,073 14,497
1992 -0- 38,000 113,366 9,364
Paul R. Schlaack 1994 264,074 18,000 39,345 13,000
President & CEO 1993 223,000 18,000 34,330 14,497
EISI 1992 -0- 20,000 79,968 9,364
Jon P. Newsome 1994 75,702 21,000 46,165 13,000
President & CEO 1993 98,008 29,000 23,214 14,497
USG 1992 -0- 22,000 9,600 9,364
</TABLE>
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
Awards Payouts
Restricted LTIP
Name and Principal Stock Options Payouts All Other
Position Year Awards (#)(2) ($)(3) Compensation
($)(1) ($)(4)
_____________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Paul E. Larson 1994 55,256 15,000 4,500 13,000
Executive V.P. 1993 78,997 21,000 11,018 14,497
Treas. & CFO 1992 -0- 16,800 18,092 9,368
Lawrence V. Durland, 1994 54,831 6,000 -0- 3,000
Jr., Sr. V.P. 1993 68,294 8,000 -0- 4,283
1992 -0- 8,000 -0- 4,364
<FN>
(1) In 1993 and 1994 awards were granted equal to 20% of the
increase in ownership of Company stock by the named executive
officers during the year to encourage ownership of Company stock.
Valuation of awards is based upon fair market value stock price of
$27.875 on May 1, 1993 and $35.375 on May 2, 1994. 1993 and 1994
restricted stock awards vest 10% after 2nd year, an additional 20%
after 3rd year, an additional 30% after 4th year, and the final
40% after 5th year. At December 31, 1994 (based upon the fair
market value stock price of $28.25) the number and market value of
shares of restricted stock held by each of the named executive
officers in all restricted stock programs were as follows: Mr.
Hubbell (91,200; $2,576,400), Mr. Schlaack (63,465; $1,792,886),
Mr. Newsome (35,656; $1,007,282), Mr. Larson (32,396; $915,187),
Mr. Durland, Jr. (28,000; $791,000). Restricted stock awards will
vest in the event of a change of control of the Company. The
shareholder is entitled to receive cash dividends and has all
other rights as a shareholder as to such shares prior to vesting,
however upon voluntary termination by the shareholder prior to
vesting the full award is forfeited. Any future grants of
restricted shares to the named executive officers will be
consistent with the compensation philosophy of the Company
discussed below.
(2) Awards comprised of qualified and non-qualified stock
options. All options were granted with an exercise price equal to
the then fair market value of the underlying stock and have a five
year vesting period with 20% exercisable after 3rd year, an additional
30% after 4th year, and the final 50% after 5th year. Unvested
options are forfeited upon voluntary termination of employment
with the Company. All options will vest in the event of a change
of control of the Company.
(3) Payments represent cash bonus received by the named
executive officer upon the achievement of specified three year
cumulative performance goals. The earned bonus vests consistent
with the option to which it is associated and is paid only upon
the exercise of the option held by the named executive officer.
(4) This compensation includes the payment of $10,000 to each
named executive officer in lieu of typical perquisite payments
except for Mr. Durland, Jr. who was not eligible to receive these
payments. The payments are classified as taxable income and are
required to be applied to specified business expenses of the named
executive. Additionally, this compensation includes contributions
to the Company's 401(k) Plan on behalf of each named executive
officer to match a portion of their pre-tax deferral contributions
(included under the Salary column) made by each to such plan.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of
stock options during the last fiscal year to the named executive
officers under the Company's 1992 Stock Incentive Plan:
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options
Underlying Granted to Exercise Grant Date
Options Employees or Base Expiration Present
Granted(#)(1) in Fiscal Year Price Date Value $ (2)
($/sh)
______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Fred S. 30,000 14.8% 32.50 2-16-04 365,700
Hubbell
Paul R. 18,000 8.9% 32.50 2-16-04 219,420
Schlaack
Jon P. 21,000 10.4% 32.50 2-16-04 255,990
Newsome
Paul E. 15,000 7.4% 32.50 2-16-04 182,850
Larson
Lawrence V. 6,000 3.0% 32.50 2-16-04 73,140
Durland, Jr.
<FN>
(1) Options were granted with exercise price equal to the then fair
market value of the underlying stock and have a five year vesting
period with 20% exercisable after 3rd year, an additional 30%
after 4th year, and the final 50% after 5th year. Unvested options
are forfeited upon a voluntary termination of employment with the
Company. The options will vest in the event of a change of control
of the Company. One-half of each option grant expiring on February 16,
2004 is an incentive stock option.
(2) Value of $12.19 per share is derived through application of the
Black-Scholes option pricing model. 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, so
there is no assurance the value realized by the named individual
will be at or near the value estimated by the Black-Scholes model.
The estimated values derived are based on assumptions of a 6% risk-
free rate of return, an expected stock price volatility of .415
calculated using stock prices for 5 years prior to the grant date,
a 2.7% future dividend yield which is approximately equal to the
Company's Common Stock historical dividend yield, and 10 years to
time of exercise. A downward adjustment of 13% was made to the
valuation to reflect the risk of forfeiture characteristics of the
options. If there is no stock price appreciation above the option
exercise price, the option will have no value. If the stock price
appreciates at levels equal to that determined by the Black-Scholes
model, the value appreciation realized by all shareholders will be
$380 million of which the named executive officers would receive
.3% or approximately $1,100,000 of such increase in value.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table provides information, with respect to
named executive officers, concerning the exercise of options
during the last fiscal year and value of unexercised options
held as of the end of the fiscal year:
<TABLE>
<CAPTION>
Number of
securities Value of
underlying unexercised
unexercised in-the-money
Shares options/SARs options/SARs
Acquired Value at Fy-End(#) at Fy-End($)
Name on Exer- Realized exercisable/ exercisable/
cise(#) ($)(1) unexercisable unexercisable (2)
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Fred S. Hubbell 4,000 114,000 89,300/ 1,970,962/
152,800 1,818,359
Paul R. Schlaack 20,000 592,750 0/ 0/
82,000 956,866
Jon P. Newsome 24,700 697,243 4,700/ 108,245/
94,400 600,767
Paul E. Larson 3,000 87,375 52,200/ 1,154,119/
75,600 824,967
Lawrence V.
Durland, Jr. 12,000 347,400 6,600/ 143,198/
33,400 405,942
<FN>
(1) Value realized determined from market price on date
of exercise less the exercise price.
(2) Value determined from market price at fiscal year end
($28.25) less exercise price. The actual value, if any, an
executive may realize will depend on the stock price on date
of exercise of option, so there is no assurance the value
stated will be equal to the value realized by the executive.
</TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
EIC, S&P 500 COMPOSITE INDEX, VALUE LINE INSURANCE: LIFE INDEX
The following performance graph provides comparative cumulative,
five year shareholder returns on an indexed basis of the Company's
Common Stock with the Standard & Poor's 500 Composite Index and the
Value Line Insurance: Life Index. This latter published industry
index reflects the analysis of the performance of fifteen life
insurance companies selected by Value Line Institutional Services.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
EIC $100.00 $ 57.23 $148.33 $326.68 $498.61 $421.52
S&P 500 $100.00 $ 96.83 $126.41 $136.26 $150.01 $151.73
Life Index $100.00 $ 85.87 $125.82 $165.54 $166.78 $153.14
</TABLE>
*Assumes $100 invested on December 31, 1989, in
EIC Common Stock, S&P 500 Composite Index,
and Value Line Insurance: Life Index.
Cumulative total return assumes reinvestment
of dividends.
RETIREMENT PLANS
The Company and its wholly owned subsidiaries maintain a qualified
defined benefit pension plan ("Pension Plan") for substantially all
their employees, as well as two nonqualified pension plans ("Excess
Plan" and "Supplemental Plan") for certain employees. The Pension
Plan and the Excess and Supplemental Plans are actuarial plans and
the amount of the contribution with respect to a specific person
cannot readily be separately calculated by the actuaries for the
plans.
Under the Pension Plan, employees receive an annual pension for life
payable on a monthly basis at normal retirement age (65) equal to
1.75% of the average monthly compensation over the last 60 months
of service (including base pay and bonuses) multiplied by months of
service (up to 300 months), plus an additional 0.50% of the average
monthly compensation in excess of covered compensation (the average
of Social Security taxable wage bases in effect for the 35 calendar
years ending with the calendar year in which the current plan year
began) multiplied by months of service (up to 300 months). Reduced
benefits are paid if an employee elects early retirement (between
ages 55 and 64 with at least 5 years of service).
The Excess Plan and the Supplemental Plan provide benefits for any
employee equal to the additional benefits he or she would have
received under the qualified Pension Plan if the maximum benefit
limit (Excess Plan) and compensation limit (Supplemental Plan) under
Sections 415 and 401(a)(17) of the Internal Revenue Code did not
apply ( $150,000 compensation limit and $120,000 benefit limit for
1995).
Messrs. Hubbell, Schlaack, Larson, Durland, Jr. and Newsome have 12,
10, 18, 9 and 7 years of credited service respectively.
Compensation under the qualified Pension Plan and the Excess and
Supplemental Plans for the five named executives includes the
compensation shown in the Summary Compensation Table under the
headings "Salary" and "Bonus".
In 1994 no contribution was required to fund the qualified Pension
Plan. The Excess Plan and the Supplemental Plan are unfunded plans,
with benefits paid out of general assets of the Company.
The following Table sets forth the annual retirement benefits under
the formula based on a straight life annuity, assuming retirement at
age 65, currently payable for the indicated combinations of salary
and years of service. The table shows the combined amount that
would be payable from the qualified Pension Plan and the Excess and
Supplemental Plans.
<TABLE>
<CAPTION>
Years of Service
Final Five-Year ________________________________________________
Average Annual
Compensation 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$125,000 $ 40,364 $ 53,819 $ 67,273 $ 67,273 $ 67,273
$150,000 48,801 65,069 81,336 81,336 81,336
$175,000 57,239 76,319 95,398 95,398 95,398
$200,000 65,676 87,569 109,461 109,461 109,461
$225,000 74,114 98,819 123,523 123,523 123,523
$250,000 82,551 110,069 137,586 137,586 137,586
$300,000 99,426 132,569 165,711 165,711 165,711
$400,000 133,176 177,569 221,961 221,961 221,961
$450,000 150,051 200,069 250,086 250,086 250,086
$500,000 166,926 222,569 278,211 278,211 278,211
$600,000 200,676 267,569 334,461 334,461 334,461
$700,000 234,426 312,569 390,711 390,711 390,711
$800,000 268,176 357,569 446,961 446,961 446,961
$900,000 301,926 402,569 503,211 503,211 503,211
$1,000,000 335,676 447,569 559,461 559,461 559,461
</TABLE>
OTHER COMPENSATION ARRANGEMENTS
The named executive officers are participants in the Company's
Executive Severance Pay Plan. This Plan provides benefits,
depending upon length of service but limited to one year's salary.
Benefits accrue to eligible employees under the Plan on termination
of employment but compensation from other employment is deducted from
benefits otherwise payable. The Plan provides that upon a change of
control of the Company, benefits will vest if the named executives are
terminated within two years of the occurrence of such an event.
The named executive officers are participants in the Company's Key
Employee Incentive Plan. As discussed below, this Plan is a means
for the Company to provide incentives and rewards to those persons
who are in a position to contribute significantly to the long term
profits and growth of the Company. An annual bonus plan is
administered by the Compensation Committee under this Plan. The
Plan also provides acceleration of awards at specified target levels
in the event of a change of control of the Company.
Various award programs under the Company's 1982 and 1992 Stock
Incentive Plan have been established in which the named executive
officers are participants. These Plans contain provisions which
allow for vesting of awards upon termination of employment, as a
result of designated events, and for acceleration of awards upon a
change of control of the Company.
REPORT OF COMPANY'S COMPENSATION COMMITTEE
Under rules established by the Securities and Exchange Commission,
the Company is required to provide certain data and information in
regard to the compensation and benefits provided to the Company's
Chief Executive Officer and the next four most highly compensated
executive officers. The disclosure requirements for these five
individuals (the "named executive officers") include the use of
tables set forth above and a report explaining the rationale and
considerations that led to fundamental executive compensation
decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee has prepared the following
report.
Compensation Philosophy. This report describes the compensation
philosophy followed by the Committee and resulting actions taken by
the Company for the reporting periods shown in the various
compensation tables supporting this report. The Committee approves
payment amounts and award levels for executive officers of the
Company and its subsidiaries. In its analysis and in reaching
compensation related decisions, the Committee has direct access to
both competitive data and an independent compensation consultant.
The executive compensation program of the Company has been designed
to:
_ Provide a pay for performance policy that differentiates
compensation amounts based upon corporate and individual performance
as compared to the life insurance industry;
_ Motivate key senior officers to achieve strategic business
initiatives and reward them for such achievement;
_ Provide compensation opportunities which are comparable to
those offered by other leading companies, thus allowing the Company
to compete for and retain talented executives who are important to
the Company's long-term success; and
_ Align the interests of executives with the long-term interests
of stockholders through award opportunities that can result in
ownership of Common Stock.
At present, the executive compensation program is comprised of
salary, annual cash incentive opportunities, long-term incentive
opportunities in the form of cash incentives, stock options and
restricted stock and benefits typically offered to executives by
similar corporations. Salary and standard annual incentive payouts
are targeted at the 50th percentile of industry surveys. These
independently prepared surveys provide specific data on compensation
paid at various executive levels of life insurance companies of
comparable asset size, and include many companies included in the
published industry index presented in the Performance Graph on page
12, but are not limited to them. An individual's total cash
compensation can exceed industry averages when cash bonus payouts
are greater than targeted levels based on the performance of the
Company exceeding that of the industry on average. Stock options
and restricted stock are used to align managers' interests with
those of the shareholders but significant vesting periods are also
used to encourage long term stock ownership and retention as
employees. To further the philosophy of pay for performance, it is
the intent of the Committee to develop stock programs that are tied
not only to vesting periods, but also to performance goals.
As an executive's level of responsibility increases, a greater
portion of his or her potential total compensation opportunity is
based upon performance incentives and less on salary and employee
benefits, causing greater potential variability in the individual's
absolute compensation level from year-to-year. In addition, the
higher that one rises in the organization, the greater the mix of
compensation shifts to stock-based awards.
CEO's Compensation. Mr. Hubbell's base salary was increased from
$400,000 to $475,000 (18.8%) effective February 1, 1994. This
increase reflected consideration of (1) compensation data provided
by comparative industry surveys, (2) the Committee's assessment of
performance over the previous one-year period which exceeded or met
agreed upon objectives including, in order of importance, increased
operating earnings, return on equity, growth of assets, achievement
of a return on assets objective while maintaining adequate
capitalization to retain current ratings from the A.M. Best and
Standard & Poors rating agencies, maintaining adequate spreads
consistent with insurance product pricing, and reducing
delinquencies, reducing higher risk assets and increasing life
insurance and annuity sales, and (3) a comparison of the financial
performance of the Company for the previous one year period which
exceeded or met that of comparable life insurance companies. While
the relative weight assigned to each factor, or component thereof,
is not quantified, significant weight is given to comparative
compensation industry data. The independently prepared industry
surveys utilized are national in scope and include information from
nationally recognized compensation consulting firms. These surveys
include many of the companies in the index shown on page 12, but are
not limited to them. These surveys are used to define the midpoint
of Mr. Hubbell's salary range for his base salary whereas his level
of performance, along with the performance of the Company compared
to the companies in the index and other life insurance and annuity
companies, determines his comparative position within the salary
range. The base salary was set close to the 50% level shown by the
surveys after consideration of all of the factors. The cash bonus
if earned may increase Mr. Hubbell's total compensation above the
50% level relative to the industry survey data.
Mr. Hubbell earned a cash bonus for 1994 in the amount of $408,500
based on a statistical review of predetermined targets for the
Company's 1994 performance. This review included an assessment of
how the Company's operating earnings and return on equity compared
with established objectives based upon expected industry performance
in those same performance measures. Mr. Hubbell's incentive
opportunity may range from 0% - 100% of his base salary. In 1994
Mr. Hubbell earned an 86% incentive bonus payment for the Company's
1994 performance. The performance of the Company considerably
exceeded the target level and industry average, hence Mr. Hubbell's
bonus payment exceeded target.
In 1994 Mr. Hubbell was granted an option to purchase 30,000 shares
of the Company's Common Stock at an exercise price of $32.50 per
share which was equal to the market value of the stock on the date
of grant. The amount of the option granted was determined by the
practices of other comparable companies as verified by external
surveys and outside consultants, as well as Mr. Hubbell's level of
responsibilities, amounts of options and restricted stock awards
previously granted, number of options exercised and held, and past
and expected contributions to the Company.
In 1994 Mr. Hubbell received 9,600 shares of restricted stock under
the 1992 Stock Purchase Incentive Program for increasing his direct
holdings by a pre-established target set by the Committee prior to
the commencement of the Plan. This award represents 20% of the
amount by which his shareholdings increased over the 12 month
period. These shares are reported in the Summary Compensation Table
and vest over a 5 year period.
Mr. Hubbell also received $10,000 in lieu of typical perquisite
payments. This payment is classified as taxable income and is
applied directly to business expenses. In addition the Company
contributed $3,000 to Mr. Hubbell's 401(k) account.
Salaries. Effective February 1, 1994, the Committee increased the
salaries paid to the other executive officers. Those individuals
were granted salary increases based on individual performance
compared to their agreed upon objectives and national insurance
industry compensation data for executive officers with similar
levels of responsibilities at life insurance companies of comparable
asset size. As considered in establishing Mr. Hubbell's
compensation, the compensation survey data is used to define the
competitive midpoint of each executive's salary range and individual
and Company performance determines comparative position within the
range.
Bonus Awards for 1994. In 1994, the named executive officers of the
Company earned cash bonuses based on a review of the Company's 1994
performance compared to predetermined targets. This review included
an assessment of how the Company's operating earnings and return on
equity compared with established objectives based upon expected
industry performance in those same performance measures. Payment
was based on the degree of statistical achievement of the above
mentioned performance objectives which the Committee established in
February, 1994. The performance of the Company considerably
exceeded the target level and industry averages, hence each
executive officer's bonus payment exceeded target.
Stock Awards in 1994 . The Company's stock incentive plans are
designed to align a significant portion of the executive
compensation program with shareholder interests. These shareholder
approved plans permit the granting of several different types of
stock-based awards. Two types of awards have been granted to
executive officers and other key employees under the 1992 Stock
Incentive Plan. Substantially all awards have been in the form of
stock options which grant the participant a right to purchase shares
of common stock, subject to a significant vesting period, over a ten-
year period. The exercise price of the options is equal to the fair
market value per share as of the date the option is granted. The
amount of options granted is determined by the practices of other
comparable companies as verified by external surveys and outside
consultants, as well as each executive officer's level of
responsibilities, amounts of options and restricted stock awards
previously granted, number of options exercised and held, and past
and expected contributions to the Company. Additionally restricted
stock has been awarded to participants. These are awards of shares
of common stock which cannot be sold or otherwise disposed of until
the applicable restriction period lapses and which are forfeited if
the participant terminates employment for any reason other than
retirement, disability or death prior to the lapsing of the
restriction period (or applicable portion of such period). This
Stock Purchase Incentive Program is designed to increase
management's ownership of Company stock over a five year period.
Under this program the Committee awards restricted stock equal to
20% of the amount of increased individual ownership of the Company's
stock.
All stock awards granted in 1994 did not exceed 1% of the total
outstanding stock of the Company. The Committee intends to maintain
this annual award limit over time. In granting stock options and
restricted stock, the Committee took into account the practices of
other comparable companies as verified by external surveys and
outside consultants, as well as the executive's level of
responsibility, number of options exercised and held, and past and
expected contributions to the Company.
In 1993 Section 162(m) of the Internal Revenue Code was amended to
place limitations on the deductibility to the Company of
compensation paid to the named executive officers. The current
policy of the Committee is to establish executive compensation
levels and programs that will be competitive within the industry and
attract highly talented individuals. It is the goal of the
Committee that executive compensation will be structured so as not
to be subject to the deductibility limitations of Section 162(m) to
the extent practical and consistent with its compensation policy.
EQUITABLE OF IOWA COMPANIES
COMPENSATION COMMITTEE
By: Robert E. Lee, Chairman
Richard B. Covey
Doris M. Drury
Jack D. Rehm
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Hubbell Realty Company ("Hubbell Company") was a one-third partner
and managing general partner in a partnership owning an office and
retail complex in downtown Des Moines, Iowa. The Company is the
primary guarantor of the partnership's $25,925,988 permanent
financing for which it received an annual fee of $148,322. On
December 31, 1994 the partnership was dissolved, splitting the
facility and related debt between Hubbell Company and the other partner,
Midwest Resources, Inc., a Des Moines, Iowa based public utility holding
company. As a result of this dissolution Hubbell Company no longer
guarantees any portion of the $25,925,988 permanent financing on the
office and retail complex. The Company's guarantee is now secured by
a mortgage on the office portion of the facility and a full guarantee
by the other partner. The Company is a tenant in the office portion of
the property. Company subsidiaries have also leased other properties
managed by Hubbell Company. In 1994 the Company paid rent on such
partnership and managed properties totaling $372,285. The Board of
Directors believes that these lease terms are comparable to those which
would have been paid to an unrelated party. Messrs. Ingham, Jr., Hubbell
and Wachtmeister are directors and/or shareholders of Hubbell Company,
all of whose voting securities are owned by Hubbell family members who are
descendants of the founder of the Company.
Compensation Committee Interlocks and Insider Participation
Mr. Hubbell serves as the Chairman of the Compensation Committee of
Pioneer Hi-Bred International, Inc. Mr. Urban, who is the Chairman
and President of Pioneer Hi-Bred International, Inc., serves as a
member of the Board of Directors of the Company. The Board of
Directors does not believe that this relationship has provided Mr.
Hubbell with any favorable compensation arrangements or authority
which would not have otherwise been granted to him by the Board of
Directors as the Chief Executive Officer of the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock, to file initial
reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission. These persons are required to
furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms
furnished to the Company and written representations from these
persons, the Company believes that all Section 16(a) filing
requirements applicable to its executive officers, directors and
greater than ten percent beneficial owners were complied with, with
one exception. Mr. Covey failed to timely report two purchase
transactions of Company shares.
PROPOSAL TO APPROVE EQUITABLE OF IOWA COMPANIES
RESTATED AND AMENDED KEY EMPLOYEE INCENTIVE PLAN
The Board of Directors recommends the approval of the Equitable of
Iowa Companies Restated and Amended Key Employee Incentive Plan (the
"Plan") under which certain key employees, including senior
executive officers, of the Company and its subsidiaries will be
eligible to receive bonuses upon the satisfaction of certain
performance goals, as more fully explained hereafter. The Plan
will be approved if, upon determination of a quorum at the Meeting,
the votes cast favoring the Plan exceed the votes cast opposing the
Plan.
Section 162(m) of the Internal Revenue Code ("Code") enacted in
1993, generally limits the Company's federal income tax deduction
for compensation paid to the Company's chief executive officer and
four other highest paid executives in excess of $1 million to any
executive. However, to the extent compensation is "performance-
based compensation" within the meaning of Code Section 162(m), it
will not be subject to the Code Section 162(m) deduction limitation.
The Company has attempted to structure its annual bonus program for
key employees in a manner that would permit the bonuses paid to the
Chief Executive Officer and four other highest paid executives to
qualify as "performance-based compensation". Accordingly, the
Compensation Committee of the Board of Directors (the "Committee")
has established, and the Board of Directors has approved, an incentive
program that allows the Committee to award cash bonuses to certain
executives based on the attainment of performance goals. Awards will
not be made under the Plan unless at the Meeting a majority of the
votes are cast in favor of the material terms of the performance
goals as described in this proxy statement. For purposes of Code
Section 162(m), the material terms include a description of (i) the
class of employees who are eligible to receive compensation under the
arrangement, (ii) the business criteria on which performance goals are
based, and (iii) the maximum amount of compensation to be paid if the
performance goals are attained.
The Plan in the form submitted for approval to stockholders, is
substantially the same plan that has been in effect for several
years. It is being modified in certain respects to meet the
requirements of Code Section 162(m) so as to qualify the bonuses
paid under the Plan as "performance-based compensation".
The Plan allows the Committee to award cash bonuses to any
individual holding one of the following positions within the
Company: Chairman, Chief Executive Officer, President, Chief
Financial Officer, any Senior Vice President, the Secretary and
General Counsel, and any Vice President. In addition, the Chief
Executive Officer may recommend for inclusion such other employees,
subject to selection by the Committee, who the Chief Executive
Officer deems to have a substantial opportunity to influence the
long-term growth in earnings of the Company. Under this program,
the Committee will establish objective performance goals, within the
meaning of Code Section 162(m), relating to each award period. The
performance goals for a particular award period will be based on one
or more of the following business criteria: operating earnings per
share, total operating earnings, return on equity, return on assets,
growth in assets, total shareholder return, net income, expenses as
a percentage of assets, premium income, and customer satisfaction.
If the Committee establishes performance goals for an award period
relating to more than one of these business criteria, the Committee
may determine to make awards under the program for that particular
award period upon attainment of the performance goal relating to any
one or more of such criteria.
Awards will be made under this program only in the event the
Committee certifies in writing prior to payment of an award that the
performance goal or goals under which the award is to be paid have
been attained. Under no circumstances will an award be payable for
an award period if none of the performance goals for that period
have been attained.
The maximum amount of compensation that any executive may receive
under the Plan for any award period is $750,000 multiplied by the
number of years in the award period. The Committee has the sole and
absolute discretion to reduce the amount of an award that would
otherwise be payable to an executive upon the attainment of
performance goals.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
THE RESTATED AND AMENDED KEY EMPLOYEE INCENTIVE PLAN
The full text of the Equitable of Iowa Companies Restated and
Amended Key Employee Incentive Plan is attached to this Proxy
Statement as Exhibit A and reference is hereby made thereto for a
complete description thereof. The following is a summary of the
major provisions of the Plan and is qualified in its entirety by the
full text thereof.
Purpose. The purposes of the Plan are to encourage outstanding
performances from certain key employees, including senior executives
of Equitable of Iowa Companies (the "Company") and its subsidiaries,
to attract and retain key employees, including exceptional senior
executives, and to provide a direct incentive to the Participants to
achieve the Company's strategic and financial goals.
Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the
"Committee").
The Committee shall interpret the Plan, prescribe, amend and rescind
rules relating to the Plan, select eligible Participants, grant
incentive awards thereto, and take all other actions necessary for
the administration of the Plan.
Participants. The Committee shall designate the key employees who
are eligible to receive awards under the Plan ("Participants"). The
Committee may designate Participants from among the group of
individuals who hold the following positions within the Company and
its subsidiaries:
Chairman
Chief Executive Officer
President
Chief Financial Officer
Secretary and General Counsel
Any Senior Vice President
Any Vice President
In addition, the Chief Executive Officer may recommend for inclusion
such other employees, subject to selection by the Committee, who the
Chief Executive Officer deems to have a substantial opportunity to
influence the long-term growth in earnings of the Company.
Award Period. The term "Award Period" as used in this Plan shall
mean the period of time during which participant awards shall be
measured. An Award Period shall be based on one or more consecutive
twelve month periods beginning on January 1 and ending on December
31, but the Award Period shall not exceed five years.
Performance Goals.
(a) The Committee shall establish performance goals
applicable to a particular Award Period in writing prior to or
shortly after the commencement of a relevant Award Period.
(b) Each performance goal applicable to an Award Period
shall identify one or more business criteria that are to be monitored
during the Award Period. Such business criteria include any of the
following:
operating earnings per share total shareholder return
total operating earnings net income
return on equity expenses as a percentage of assets
return on assets premium income
growth in assets customer satisfaction
(c) With respect to each business criterion that is
identified in a performance goal for a particular Award Period, the
Committee shall determine the target level of performance that must
be achieved in order for a performance goal to be treated as
attained.
(d) The Committee may base performance goals for a
particular Award Period on one or more of the business criteria set
forth above. In the event the Committee based performance goals for
an Award Period on more than one business criterion, the Committee
may determine to make awards upon attainment of the performance goal
relating to any one or more of such criteria.
Performance Goal Certification. The Committee shall make an award
to a Participant only in the event the Committee certifies in
writing prior to payment of the award that the performance goal or
goals under which the award is to be paid has or have been attained.
Under no circumstances shall an award be payable under this Plan if
none of the performance goals for a particular Award Period are
attained.
Maximum Award Payable. The maximum award payable under this Plan to
any Participant for any Award Period shall be $750,000 multiplied by
the number of years in the Award Period.
Absolute Discretion to Reduce Awards. The Committee in its sole and
absolute discretion may reduce the amount of an award otherwise
payable to a Participant upon attainment of the performance goal or
goals established for an Award Period. A Participant's performance
must be satisfactory, regardless of Company performance, before he
or she may be granted an incentive award.
Stockholder Approval of Goals Required. Awards shall not be payable
under this Plan unless the material terms (as defined in proposed or
final regulations issued by the Treasury Department with respect to
Code Section 162(m)) of the performance goal or goals under which
the award is to be paid are approved by the Company's stockholders
at the Meeting. Once the material terms have been approved by
stockholders, resubmission to stockholders for approval will occur
every fifth year thereafter, unless the Committee changes any of the
material terms of the performance goals, in which case approval of
stockholders will be requested at the annual meeting following the
change.
Retirement, Permanent Disability, Death or Termination of
Employment. To the extent permitted under proposed or final
regulations issued by the Treasury Department with respect to Code
Section 162(m), in the event the performance goals for an Award
Period are attained, the Committee shall grant a portion of an
incentive award for the Award Period to a Participant (or
Beneficiary in the case of death) who is covered by this Plan during
an Award Period, and whose employment is terminated during the Award
Period because of his or her death, discharge or requested
resignation, or who suffers a permanent disability, the portion to
be based on the period of time of service during an Award Period
compared to the total Award Period. No incentive award shall be
granted for an Award Period in the event of resignation which is not
requested by the Company. In the event of retirement under the
terms of the Company's pension plan during an Award Period, no
incentive award will be paid for an Award Period in the event of
retirement before the last July 1 within such Award Period. In the
event of retirement on or after the last July 1 within an Award
Period, but on or before the last day of an Award Period, payment of
an incentive award will be made at the time of retirement based upon
the target percentage applicable to the Participant's level of
participation for each performance objective and his or her annual
base salary. This amount shall then be prorated based on the period
of active service during the Award Period. This payment is in lieu
of any payment that would have been based on actual corporate
results.
Immediate Payment. Each Participant shall receive his or her
incentive award for the Award Period solely in cash as soon as
practicable following verification of the amount of the award by the
Committee, subject to the Participant's right to elect to defer
receipt of payment as provided below.
Deferred Payment. Prior to the final December 15 in an Award
Period, each Participant may elect to have the payment of all or a
portion of his or her incentive award, if any, deferred until the
latest to occur of (1) his or her retirement, death, permanent
disability, resignation, termination or (2) a date specified by the
Participant in his or her written election to defer.
Deferred Account. The Company shall establish a ledger account (the
"Deferred Account") for each Participant who has elected to defer
the payment of his or her incentive award for the purpose of
reflecting the Company's obligation to pay the deferred incentive
award as provided in the Plan. Interest shall accrue on the deferred
incentive award to the date of distribution, and shall be credited
to the Deferral Account at the end of each calendar year. The Committee
shall annually, prior to December 15, determine a reasonable rate of
interest for the following calendar year.
Payment of Deferred Incentive Award. Within sixty (60) days
following the latest to occur of (1) the retirement, death,
permanent disability, resignation, termination of employment or (2)
the date specified by the Participant in his or her election to
defer, the Participant (or his or her Beneficiary in the case of his
or her death) shall have the balance of his or her Deferred Account,
plus interest on the outstanding account balance paid to him or her
in periodic, monthly installments over a period of ten (10) years.
Acceleration of Payment of Deferred Incentive Award. The Committee,
in its sole discretion, may accelerate the payment of the unpaid
balance of a Participant's Deferred Account upon its determination
that the Participant (or his or her Beneficiary in the case of his
or her death) has incurred a severe and unexpected financial
hardship.
Unfunded Obligation. The incentive awards to be paid to
Participants pursuant to this Plan are an unfunded obligation of the
Company. The Committee, in its sole discretion, may direct the
Company to share with its subsidiaries the costs of a portion of the
incentive awards paid to Participants who are executives of those
companies. The Company is not required to segregate any monies from
its general funds, to create any trusts, or to make any special
deposits with respect to this obligation. Title to and beneficial
ownership of any investments which the Company may make to fulfill
this obligation shall at all times remain in the Company.
Beneficiary. The term "Beneficiary" shall mean the person or
persons to whom payments are to be paid pursuant to the terms of the
Plan in the event of the Participant's death. A Participant may
change his or her beneficiary designation at any time. If no
beneficiary is designated, the designation is ineffective, or in the
event the Beneficiary dies before the balance of the Deferred
Account is paid, the balance shall be paid to the Participant's
spouse, or if there is no surviving spouse, to the Participant's
estate.
Permanent Disability. For purposes of the Plan, a permanent
disability shall mean a disability which would qualify a Participant
to receive benefits under the Equitable Life Insurance Company of
Iowa Long-Term Disability Plan (after satisfying the elimination
period thereunder) as now or hereafter in effect.
Withholding Taxes. Appropriate payroll and income taxes shall be
withheld from payments made to Participants pursuant to this Plan.
No Right to Continued Employment. Nothing in the Plan shall be
construed to confer upon any Participant any right to continue
employment with the Company or a subsidiary.
Termination and Amendment. The Committee may from time to time
amend, suspend or terminate the Plan, in whole or in part,
including, but not limited to, any amendment necessary to ensure
that the Company may obtain any required regulatory approvals. No
amendment, suspension or termination may impair the right of a
Participant or his or her designated Beneficiary to receive the
incentive award under an established award program. In addition, no
amendment, suspension or termination may change the program target
for a program after it has been established prior to the later of
the date of adoption or the effective date of such amendment,
suspension or termination. The Plan shall be construed and governed
in accordance with the laws of the State of Iowa.
Change in Control. Upon the occurrence of a Change in Control, any
award then outstanding held by a Participant shall be immediately
vested and will remain so until distributed in accordance with the
Plan, and any performance standards related to any incentive award
shall be deemed achieved at the target level and restrictions
otherwise applicable shall lapse. See Section 8(f) of the full text
of the Plan for a definition of Change in Control.
PROPOSAL TO APPROVE EQUITABLE OF IOWA COMPANIES
RESTATED AND AMENDED 1992 STOCK INCENTIVE PLAN
The Board of Directors of the Company believes that the Company's
1992 Stock Incentive Plan, as amended, (the "Original 1992 Plan"),
has proven to be an effective means of attracting, retaining and
motivating individuals possessing exceptional ability and encourag-
ing increased efforts by such individuals to promote the best
interests of the Company. The Board of Directors also believes the
Company should continue to provide long-term compensation incentives
to its present and future officers and key employees in order to
assure the Company's continued success and progress. The Original
1992 Plan has been the subject of amendments in 1993.
To continue the objectives of the Original 1992 Plan, the
Shareholders are being asked to approve the adoption of the Restated
and Amended 1992 Stock Incentive Plan (the "Restated Plan"). The
Board of Directors recommends the approval of the Restated Plan.
The Restated Plan will be approved if, upon determination of a
quorum at the Meeting, the votes cast favoring the Plan exceed the
votes cast opposing the Restated Plan.
The number of shares of the Company's Common Stock reserved for the
Restated Plan is not being increased from the number of shares
reserved in the Original 1992 Plan (2,240,000 shares, plus 7.5% of
any increase in the number of shares of the Company's Common Stock
outstanding). It has been, and will continue to be, the policy of
the Compensation Committee of the Board of Directors that
the maximum number of shares which may be made available for
granting Awards under the Plan shall not exceed, on average over
time per year, 1% of the total outstanding shares of the Company.
The principal reason for restating and amending the Original 1992
Plan is to permit certain compensation and awards paid to the chief
executive officer and four other highest paid executives to qualify
as "performance-based compensation" within the meaning of Section
162(m) of the Internal Revenue Code of 1986 ("Code").
Section 162(m) of the Code, enacted in 1993, generally limits the
Company's federal income tax deduction for compensation paid to the
Company's chief executive officer and four other highest paid
executives in excess of $1 million to any executive. However, to
the extent compensation is "performance-based compensation" within
the meaning of Code Section 162(m), it will not be subject to the
Code Section 162(m) deduction limitation. The Company has modified
the Original 1992 Plan in a manner that would permit awards under
plan sections authorizing stock options, stock appreciation rights
and performance awards to qualify as "performance-based
compensation". Awards will not be made under any of these sections
of the Restated Plan unless at the Meeting a majority of the votes
are cast in favor of the material terms of the performance goals as
described in this proxy statement. For purposes of Code Section
162(m), the material terms for stock option and stock appreciation
rights awards include a description of (1) the class of employees
who are eligible to receive compensation under the arrangement, and
(2) the maximum number of shares which may be granted during a
specified period to an employee. The material terms for performance
awards include a description of (i) the class of employees who are
eligible to receive compensation under the arrangement, (ii) the
business criteria on which performance goals are based, and (iii)
the maximum number of shares which may be granted during a specified
period if the performance goals are attained.
The class of employees who are eligible to receive awards under the
Restated Plan is described in the first paragraph of General
Description of the Restated Plan. The maximum number of shares
which may be granted during a specified period to any employee for
stock options, stock appreciation rights and performance awards are
set forth in the descriptions of each of these programs. The
business criteria on which performance goals are based are set forth
in the description of performance awards.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
THE RESTATED AND AMENDED 1992 STOCK INCENTIVE PLAN
The full text of the Equitable of Iowa Companies Restated and
Amended 1992 Stock Incentive Plan is attached to this Proxy
Statement as Exhibit B and reference is hereby made thereto for a
complete description thereof. The following is a summary of the
major provisions of the Plan and is qualified in its entirety by the
full text thereof.
General Description
Participants in the Plan shall consist of such directors, officers
and other key employees of the Company and its affiliates as the Com-
pensation Committee of the Board of Directors (the "Committee") may
select from time to time. The eligible officers from whom the
Committee may make its selection include the Chairman, the Chief
Executive Officer, the President, the Chief Financial Officer, any
Senior Vice President, any Vice President, and the Secretary and
General Counsel. Other key employees include those employees
recommended by the Chief Executive Officer, and selected by the
Committee, who are deemed to have a substantial opportunity to
influence the long-term growth in earnings of the Company. The Plan
will permit the granting of: (1) stock options, including incentive
stock options meeting the requirements of Section 422 of the
Internal Revenue Code ("ISO's"), (2) stock appreciation rights, (3)
restricted stock and restricted stock units, (4) performance awards,
(5) dividend equivalents, and (6) other stock-based awards. The
Plan will be administered by the Committee. The Committee will have
the authority to establish rules for the administration of the Plan,
to select the key employees to whom awards are granted, to determine
the types of awards to be granted and the number of shares covered
by such awards, and to set the terms and conditions of such awards.
The Committee may also determine whether the payment of any proceeds
of any award shall or may be deferred and may authorize payments
representing dividends or interest or their equivalents in connection
with any deferred award. The Plan provides that in the event
of a change of control of the Company, as defined in the Plan, the
Committee may take various actions to maintain the participant's
rights. Determinations and interpretations with respect to the Plan
will be in the sole discretion of the Committee, whose determinations
and interpretations will be binding on all interested parties. The
Committee may delegate to one or more officers or managers the right
to grant awards and to cancel or suspend awards with respect to
individuals who are not subject to Section 16 of the Securities
Exchange Act of 1934. The Board may amend, alter or discontinue
the Plan at any time provided that shareholder approval must be
obtained for any change as required by the Securities Exchange Act
of 1934 or the regulations promulgated thereunder or other applicable
statutes or regulations, including, as the Board deems necessary,
stockholder approval under Section 162(m) of the Code so as to
qualify certain compensation as performance-based.
Awards shall be granted for no cash consideration or for such
minimal cash consideration as may be required by applicable law.
Awards may provide that upon their exercise the holder will receive
cash, stock, other securities, other awards, other property or any
combination thereof, as the Committee shall determine. Any shares
of stock deliverable under the Plan may consist in whole or in part
of authorized and unissued shares or treasury shares. No award
granted under the Plan may be assigned, transferred, pledged or
otherwise encumbered by the individual to whom it is granted,
otherwise than by will, by designation of a beneficiary, or by the
laws of the descent and distribution or pursuant to the operation of
applicable law. Each award shall be exercisable, during such
individual's lifetime, only by such individual, or, if permissible
under applicable law, by such individual's guardian or legal
representative. The types of Awards which may be granted under the
Plan are briefly described as follows:
Stock Options. Options to purchase shares of common stock,
including ISO's within the meaning of Section 422 of the Code, as
amended, may be awarded under the Plan. The exercise price per
share of stock purchasable under any stock options shall not be less
than 100% of the fair market value of the stock on the date of the
grant of such option. The Committee will determine the number of
shares subject to each stock option and the manner and time of
exercise. The term of each option shall be fixed by the Committee.
Options shall be exercised by payment in full of the purchase price,
either in cash or, at the discretion of the Committee, in whole or
in part by the tendering of stock of the Company or other
consideration having a fair market value on the date the option is
exercised equal to the exercise price. Determinations of fair market
value under the Plan shall be made in accordance with methods and
procedures established by the Committee. The maximum number of
Options which may be granted to any individual during any five year
consecutive period is 350,000.
Stock Appreciation Rights. Rights may be granted under the Plan
which would allow participants to receive, upon exercise, the excess
of (i) the fair market value of the stock of the Company on the date
of exercise or any other specified time, over (ii) the grant price
of the right as specified by the Committee, which shall not be less
than the fair market value of the stock of the Company. The maximum
number of rights which may be granted to any individual during any
five year consecutive period shall be 200,000.
Restricted Stock/Restricted Stock Units. Restricted stock awards
consisting of shares of common stock of the Company may be made
under the Plan. Such awards shall be contingent on the employee's
continuing employment with the Company or its subsidiaries for a
period to be specified in the award, and shall be subject to such
additional terms and conditions, including performance requirements,
as the Committee deems appropriate. To the extent performance
requirements are imposed, such performance awards of restricted
stock shall meet the requirements of the section of the Restated
Plan on Performance Awards described below. Restricted stock may
provide the recipient all of the rights of a shareholder of the
Company, including the right to vote the shares and to receive any
dividends, provided however, that restricted stock may not be
transferred by the recipient until certain restrictions established
by the Committee lapse. Restricted stock units may also be awarded
under the Plan and are the right to receive an amount equal to one
share of common stock of the Company. Restricted stock units do not
involve actual shares of stock, however, and have no voting rights.
Dividend equivalents may be paid on restricted stock units subject
to such terms and conditions as the Committee may establish. Like
restricted stock, restricted stock units shall be contingent on the
employee's continuing employment with the Company for a period
specified in the award and shall be subject to such additional terms
or conditions including performance requirements the Committee deems
appropriate. Upon termination of employment during the restriction
period, all restricted stock and restricted stock units shall be
forfeited, unless the Committee determines otherwise. Payment of a
restricted stock unit may be made in cash, shares of common stock,
or a combination thereof, as determined by the Committee. Any
payment made in common stock shall be based on the fair market value
of such stock on the payment date. In the case of any payment made
in whole or in part in cash (other than dividend equivalents payable
in cash), the number of shares of stock which may be issued pursuant
to the Plan shall be reduced by that number of shares having a fair
market value that is equal to the amount of such cash.
Performance Awards. Awards to participants, payable in cash or
shares of stock of the Company, based upon the achievement of
performance goals may be granted by the Committee. Each performance
goal applicable to a performance period (a minimum of one twelve
month period up to a maximum of five consecutive twelve month
periods) shall identify one or more business criteria that are to be
monitored during a performance period. Such business criteria
include any of the following:
operating earnings per share total shareholder return
total operating earnings net income
return on equity expenses as a percentage of assets
return on assets premium income
growth in assets customer satisfaction
With respect to each business criterion that is identified in a
performance goal for a particular performance period, the Committee
shall determine the target level of performance that must be
achieved in order for a performance goal to be treated as attained.
The Committee may base performance goals for a particular perform
ance period on one or more of the business criteria set forth above.
In the event the Committee bases performance goals for a performance
period on more than one business criterion, the Committee may
determine to make awards upon attainment of the performance goal
relating to any one or more of such criteria.
The Committee shall make an award to a participant only in the event
the Committee certifies in writing prior to payment of the award
that the performance goal or goals under which the award is to be
paid has or have been attained. Under no circumstances shall an
award be payable under this Plan if none of the performance goals
for a particular performance period are attained.
The maximum award payable under this Restated Plan to any Participant
with respect to a performance award for any performance period shall
be 30,000 shares of the Common Stock of the Company times the number
of consecutive twelve month periods within the performance period.
The Committee in its sole and absolute discretion may reduce the
amount of an award otherwise payable to a participant upon
attainment of the performance goal or goals established for a
performance period. A participant's performance must be
satisfactory, regardless of Company performance, before he or she
may be granted an incentive award.
Performance awards shall not be payable under the Restated Plan
unless the material terms, as defined in proposed or final
regulations issued by the Treasury Department with respect to Code
Section 162(m), of the performance goal or goals under which the
award is to be paid are approved by the Company's stockholders at
the Meeting. Once the material terms have been approved by
stockholders, resubmission to stockholders for approval will occur
every fifth year thereafter, unless the Committee changes any of the
material terms of the performance goals, in which case approval of
stockholders will be requested at the annual meeting following the
change.
Dividend Equivalents. Dividend equivalents will entitle the holders
thereof to receive payments equivalent to dividends paid with
respect to a specified number of shares. The payment of dividend
equivalents shall be subject to such terms and conditions, including
performance requirements, as the Committee may establish.
Other Stock-Based Awards. Under the Plan the Committee will have
authority to grant awards denominated, payable, or valued in whole
or in part by reference to the stock of the Company. Such awards
may include, without limitation, reload stock options. The terms of
any such award to be established by the Committee shall be subject
to the terms of the Plan and must be in compliance with applicable
statutes and regulations.
Adjustments. If any dividend or other distribution, recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, repurchase, or exchange of shares or other
securities of the Company, issuance of warrants or other rights to
purchase shares or other securities of the Company, or other similar
corporate transaction or event affects the shares so that an adjustment
is appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under
the Plan, then the Committee may, in such manner as it deems equitable,
adjust (1) the number and type of shares which thereafter may be made
the subject of awards, (2) the number and type of shares subject to
outstanding awards, and (3) the grant, purchase or exercise price
with respect to any award, or may make provision for a cash payment
to the holder of any outstanding award. The Committee will also be
authorized, for similar purposes, to make adjustments in performance
criteria or in the terms and conditions of other awards in recognition
of unusual or nonrecurring events affecting the Company or its financial
statements or of changes in applicable laws, regulations or
accounting principles. The Committee may correct any defect, supply
any omission, or reconcile any inconsistency in the Plan or any
award in the manner and to the extent it shall deem desirable to
carry the Plan into effect. Nothing contained in the Plan shall
prevent the Company or any affiliate from adopting or continuing in
effect other or additional compensation arrangements.
Federal Tax Consequences. The following is a summary of the
principal Federal income tax consequences generally applicable to
awards under the Plan. The grant of an option will create no tax
consequences for the recipient or the Company. The holder of an ISO
generally will have no taxable income upon exercising the ISO
(except that the alternative minimum tax may apply), and the employer
generally will receive no tax deduction when an ISO is exercised.
Upon exercising a stock option other than an ISO, the optionee must
recognize ordinary income equal to the excess of the fair market
value of the shares acquired on the date of exercise over the option
price, and the employer will then be entitled to a tax deduction for
the same amount. The tax consequence to an optionee of a
disposition of shares acquired through the exercise of an option
will depend on how long the shares have been held and upon whether
such shares were acquired by exercising an ISO or a stock option
other than an ISO. Generally, there will be no tax consequence to
the employer in connection with a disposition of shares acquired
under an option except that the employer may be entitled to a tax
deduction in the case of a disposition of shares acquired under an
ISO before the applicable ISO holding periods have been satisfied.
With respect to other awards granted under the Plan that are settled
either in cash or in shares that are either transferable or not
subject to substantial risk of forfeiture, the holder of an award
must recognize ordinary income equal to the excess of (a) the cash
or the fair market value of the shares or other property received
(determined as of the date of such settlement) over (b) the amount,
if any, paid for such shares or other property by the holder of the
award, and the employer will then be entitled to a deduction for the
same amount. With respect to awards that are settled in shares or
other property that is restricted as to transferability and subject
to substantial risk of forfeiture, the holder of the award must
recognize ordinary income equal to the excess of (a) the fair market
value of the shares or other property received (determined as of the
first time the shares or other property become transferable or not
subject to substantial risk of forfeiture, whichever occurs earlier)
over (b) the amount, if any, paid for such shares or other property
by the participant, and the employer will then be entitled to a
deduction for the same amount.
RESTATED AND AMENDED KEY EMPLOYEE INCENTIVE
AND 1992 STOCK INCENTIVE PLAN BENEFITS
In the event that the Restated and Amended Key Employee Incentive Plan
is approved by stockholders, as recommended by the Board of Directors,
the following named executive officers and certain other key employees
of the Company could receive benefits not to exceed the amounts shown in
the following table for the two bonus programs adopted by the Committee
in February 1995; however, actual bonuses may be less depending on actual
results of the performance criteria, and the Committee, in its sole and
absolute discretion, may reduce the amount of any award otherwise payable
to an executive. In addition, the following named executive officers and
certain other key employees of the Company have been granted by the
Committee the following stock options under the 1992 Stock Incentive Plan
in effect prior to the effective date of the Restated and Amended 1992
Stock Incentive Plan.
<TABLE>
<CAPTION>
Equitable of Iowa
Equitable of Iowa Companies Restated
Companies Restated and Amended 1992
and Amended Key Stock Incentive Plan
Employee Incentive # of Securities
Plan Benefits(1) Underlying Options
Granted(2)
1995 1995-97
Annual Bonus Three Year Ten Year Four Year
Name and Position Program Bonus Program Options Options
<S> <C> <C> <C> <C>
Fred S. Hubbell
President & Chief
Executive Officer $ 515,000 $ 372,000 34,000 10,000
Paul R. Schlaack
President & Chief
Executive Officer
EISI $ 313,000 $ 148,800 19,000 4,000
Jon P. Newsome
President & Chief
Executive Officer
USG $ 188,100 $ 223,200 22,000 6,000
Paul E. Larson
Executive Vice
President, Treasurer
& Chief Financial
Officer $ 146,400 $ 148,800 16,000 4,000
Lawrence V. Durland, Jr.
Senior Vice President $ 98,500 $ 55,800 7,000 1,500
Executive Group(3) $1,559,830 $1,190,400 133,000 32,000
All other Eligible
Employees(4) $1,849,965 $ -0- 108,750 -0-
___________
<FN>
(1) Commencing in 1995, the maximum amount payable to each of the
Executive Officers in the Executive Group under each Award
Program adopted by the Committee is $750,000 times the number
of years in the Award Period.
(2) Options were granted with an exercise price of the then fair
market value of the underlying stock ($31.00). The ten year
options have a five-year vesting period with 20% exercisable
after third year, an additional 30% after fourth year, and the
final 50% after fifth year. One-half of the ten year option is
an incentive stock option. The four year options will vest on
February 15, 1998. The ten year options expire on February 15,
2005. The four year options expire on February 15, 1999. Unvested
options are forfeited upon a voluntary termination of employment
with the Company. The options will vest in the event of a change
of control of the Company.
(3) The Executive Group includes 10 eligible executive officers for the
1995 Annual Bonus Program and the Ten Year Stock Options and 9
eligible executive officers for the 1995-97 Three Year Bonus Program
and the Four Year Stock Options.
(4) The category of All Other Eligible Employees includes 95 individuals
eligible for the 1995 Annual Bonus Program and 34 individuals under
the Ten Year Stock Options.
</TABLE>
RATIFICATION OF APPOINTMENT OF AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors
has appointed the accounting firm of Ernst & Young LLP to act as
independent auditors for the Company during 1995 and is requesting
ratification by the shareholders. The Company knows of no direct or
material indirect financial interest of this accounting firm in the
Company. Representatives of Ernst & Young LLP are expected to be
present at the Meeting and may make a statement, if they desire to
do so, and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
To be included in the Proxy Statement and form of proxy for the 1996
Annual Meeting of Shareholders, shareholder proposals intended to be
presented at that meeting must be received by the Company at its
principal office no later than December 1, 1995 and otherwise be in
compliance with applicable securities laws. In addition, the
Company's Amended and Restated Bylaws ("the Bylaws") provide certain
procedures that a shareholder must follow to nominate persons for
election as directors or to introduce an item of business at the
Meeting, even if such item is not to be included in the Company's
Proxy Statement and form of proxy. Such procedural requirements are
fully set forth in the Company's Bylaws, a copy of which may be
obtained without charge by any shareholder by contacting the
Secretary of the Company at the address set forth on the cover of
this Proxy Statement.
OTHER MATTERS
Management does not know of any matters to be presented at the
meeting other than those stated above. If any other business should
come before the meeting, the persons named in the enclosed proxy
will vote thereon as he or they determine to be in the best
interests of the Company.
A copy of the Annual Report to Shareholders for 1994 is mailed to
shareholders together with this Proxy Statement. Such report is not
incorporated in this Proxy Statement and is not to be considered a
part of the proxy soliciting material.
By Order of the Board of Directors.
John A. Merriman
Secretary
Des Moines, Iowa
March 14, 1995
EXHIBIT A
EQUITABLE OF IOWA COMPANIES
RESTATED AND AMENDED
KEY EMPLOYEE INCENTIVE PLAN
Section 1. Purpose
The purpose of this Plan is to further the long-term growth in
net income of the Company by providing incentives and rewards to
executives and key employees of the Company, or of any Affiliate
or Subsidiary, who are in a position to contribute significantly
to the achievement by the Company of such growth and to associate
more closely the interests of such persons with the interests of
the Company's stockholders.
Section 2. Definitions
(a) "Plan" shall mean the Equitable of Iowa Companies
Restated and Amended Key Employee Incentive Plan.
(b) "Affiliate" shall mean any entity that, directly or
through one or more intermediaries, is controlled by the Company,
and any entity in which the Company has a significant equity
interest, as determined by the Committee.
(c) "Award Period" shall mean the period of time during which
Participant Awards shall be measured. An Award Period shall be
based on one or more consecutive Fiscal Years, but no Award
Period shall exceed five (5) years.
(d) "Base Salary" shall mean the base compensation paid to
the Participant during a Fiscal Year, including deferrals to a
Company sponsored plan that qualifies under either Code Section
401(k) or Code Section 125.
(e) "Board of Directors" shall mean the Board of Directors of
Equitable of Iowa Companies.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(g) "Company" shall mean Equitable of Iowa Companies and its
Subsidiaries and Affiliates.
(h) "Committee" shall mean the Compensation Committee of the
Board of Directors of the Company (the "Board") as designated by
the Board to administer the Plan.
(i) "Fiscal Year" shall mean the twelve months period used as
the annual accounting period by the Company and shall be
designated according to the calendar year in which such period
ends.
(j) "Participant" shall mean an individual selected by the
Committee pursuant to Section 4(a) from the following group of
officers and employees of the Company: the Chairman, the Chief
Executive Officer, the President, the Chief Financial Officer,
any Senior Vice President, the Secretary and General Counsel, and
any Vice President, and in addition, the Chief Executive Officer
is authorized to recommend for inclusion in a Program such other
salaried employees of the Company, subject to selection by the
Committee, who the Chief Executive Officer deems to have a sub-
stantial opportunity to influence the long-term growth in
earnings of the Company.
(k) "Participant Award" shall mean the cash compensation to
be earned by achieving each Program Target after the conclusion
of any Award Period.
(l) "Program" shall mean the separate plan established by the
Committee under which a Participant may earn a predetermined
Target Award for each Program Target during an Award Period.
(m) "Program Target" shall mean performance goals established
by the Committee to be achieved by a Participant during an Award
Period. Each performance goal applicable to an Award Period
shall identify one or more business criteria that are to be
monitored during the Award Period. Such business criteria are
limited to the following: operating earnings per share, total
operating earnings, return on equity, return on assets, growth in
assets, total shareholder return, net income, expenses as a
percentage of assets, premium income, and customer satisfaction.
With respect to each business criteria that is identified in a
Program Target for a particular Award Period, the Committee shall
determine the target level of performance that must be achieved
in order for a performance goal to be treated as attained. The
Committee may base performance goals for an Award Period on one
or more of the business criteria set forth above. In the event
the Committee bases its performance goals for an Award Period on
more than one business criteria, the Committee may determine to
make awards upon attainment of the performance goal relating to
any one or more of such criteria, provided the performance goals
established within the Award Period of the Plan Program are
stated as alternatives to one another. Awards shall not be
payable under this Plan unless the material terms, as defined in
proposed or final regulations issued by the U.S. Treasury
Department with respect to Code Section 162(m), of this Plan,
including the performance goal or goals, have been disclosed to
and subsequently approved by the Company's shareholders in
accordance with Code Section 162(m) and any regulations issued
thereunder.
(n) "Subsidiary" shall mean a corporation in which the
Company owns at least 50% of the outstanding voting stock, and
which the Committee has designated to participate in the Plan.
(o) "Target Award" shall mean the value expressed as a per-
centage of the Participant Award, which has been determined for
each Program Target that may be earned by each Participant.
Section 3. Administration
The Plan shall be administered by the Committee. No director
shall be eligible to receive a Participant Award pursuant to a
Program which was established or administered by the Committee of
which he or she was a member. A majority of the Committee shall
constitute a quorum. Any decision in writing signed by all
members shall be as fully effective as if made by a majority vote
at a meeting duly called and held. Such Committee shall have
sole power to:
(a) determine whether to establish a Program for any
Participant, designate the applicable Award Period, and the
Program Target and Target Award to be earned in such Program by
each Participant, subject only to the limitations otherwise
prescribed in this Plan;
(b) determine the amount of maximum (subject to the
limitation in Section 4(b) below) and minimum Participant Awards
which may be earned by each Participant;
(c) construe and interpret the Plan and make and amend such
rules and regulations for the administration of the Plan as the
Committee may deem desirable;
(d) determine the Base Salary to be used in calculating
Target Awards and the portions, if any, of an award which may be
earned if employment commences or terminates or a Participant's
position changes during an Award Period; and
(e) determine in its sole discretion whether or not, and the
degree to which, Program Targets for any Participant have been
achieved; in making such determinations in connection with
financial goals the Committee may include or exclude in financial
results as it deems appropriate, the whole or any part of
realized capital gains and losses and extraordinary (no matter
how they are characterized for accounting purposes) gains,
losses, charges or credits.
Actions, determinations and decisions of the Committee respecting
the Plan, the granting of awards thereunder and the
administration thereof shall be final, conclusive and binding
upon all parties concerned, including the Company, its
stockholders, and any employee of the Company; provided, however,
that any Program approved by the Committee prior to the annual
stockholder meeting held in 1995 shall be subject to the approval
at the 1995 annual stockholder meeting of the material terms (as
defined in proposed and final regulations issued by the Treasury
Department with respect to Code Section 162(m)) of this Plan in
accordance with Code Section 162(m) and any regulations issued
thereunder.
Section 4. Program Establishment
(a) Participants in a Program shall be selected by the
Committee from the list of employees as set forth in Section 1(j)
of this Plan and who, in the opinion of the Committee, have a
substantial opportunity to influence the long-term growth in
earnings of the Company. In determining the Program Target for
any Participant, the Committee may take into account the Partici-
pant's level of responsibility, performance, potential, cash
compensation, salary, unexercised stock options and such other
considerations as it deems appropriate.
(b) Programs with respect to an Award Period shall be estab-
lished by resolution of the Committee selecting Participants and
the related Program Targets, Target Awards, and the maximum and
minimum Participant Awards for each Participant. The maximum
Participant Awards for all Programs during each separate Award
Period for any Participant shall not exceed $750,000 multiplied
by the number of years in the Award Period.
(c) Programs, including specific Program Targets, shall be
established by the Committee as soon as practicable in writing
prior to the commencement of a relevant Award Period, provided,
however, that such Programs may be established after the
commencement of the relevant Award Period but while the outcome
of the Program Target is substantially uncertain if such a method
of establishing Programs is permitted under proposed or final
regulations issued by the U.S. Treasury Department with respect
to Code Section 162(m).
Section 5. Distribution of Awards
(a) Except as provided in Section 5(d) or as provided in
Section 8(e), no payments shall be made to Participants prior to
the end of an Award Period. The Committee shall make an award to
a Participant only in the event the Committee certifies in writing
prior to payment of the award that the Program Target or Targets
under which the award is to be paid has or have been attained.
Under no circumstances shall an award be payable under this Plan
if none of the Program Targets for a particular Award Period are
attained.
(b) Except for payments made earlier as provided in Section
5(d), or as provided in Section 8(e), distribution of Participant
Awards (except any Award or part thereof which is deferred) shall
be made as soon as practical after the independent public accoun-
tants have reported upon the financial statements for the last
fiscal year of the respective Award Period and the written
certification of the Committee as required by Section 5(a) above
has been made. A Participant may defer payment of all or part of
the Participant Award to which he or she would otherwise be
entitled at the end of the Award Period as provided in Section 6.
(c) The Committee in its sole and absolute discretion may
reduce the amount of an award otherwise payable to a Participant
upon attainment of the performance goal or goals established for
an Award Period. A Participant's performance must be
satisfactory, regardless of Company performance, before he or she
may be granted an incentive award.
(d) If a Participant's employment terminates for any of the
following reasons prior to the end of the Award Period for a
Program in which he or she was participating, distribution of
such Participant Award, if any becomes payable, shall be limited
to the following portion of the Award to which he or she would
otherwise be entitled if he or she were employed at the end of
such Award Period.
(i) Resignation -- None of the Participant Award.
(ii) Retirement under the terms of the Company's
pension plan:
A. No Award will be paid for an Award Period in
the event of retirement before the last July 1 within such Award
Period.
B. For retirement on or after the last July 1
within an Award Period, but on or before the last day of an Award
Period, payment of a Participant Award for the Award Period
during which retirement occurs will be made at the time of
retirement based upon the "Target" percentage applicable to the
Participant's level of participation for each performance
objective and his or her annual base salary. This amount shall
then be prorated based on the period of active service during the
Award Period. This payment is in lieu of any payment that would
have been made based on actual corporate results; provided,
however, that with respect to a Participant who is a "covered
employee", as defined in Code Section 162(m)(3), as of the last
day of the Fiscal Year in which the Award Period ends, a pro-rata
distribution shall be made after the Award Period based upon
actual corporate results.
C. This subsection (d)(ii) shall be effective
with respect to Participants retiring after December 31, 1993.
(iii) Disability under the terms of the Company's
long term disability plan -- A distribution in proportion to the
term of active service for the Participant during the Award
Period based upon actual corporate results.
(iv) Death -- A distribution to the beneficiary desig-
nated in writing by the Participant (or in the absence of such
designation, to his or her legal representatives) in proportion
to the term of active service of the Participant during the Award
Period based upon actual corporate results.
(v) Discharge or requested resignation -- A distri-
bution in proportion to the term of active service of the
Participant during the Award Period based upon actual corporate
results; however, no part of a Participant Award shall be
distributable if the Participant was discharged for any act of
fraud, misappropriation, embezzlement or other act of dishonesty.
Section 6. Deferred Distribution of Awards
(a) A Participant may defer payment of all or part of the
Award to which he or she would otherwise be entitled at the end
of the Award Period. A Participant's election to defer payment
must be made on or before December 15 immediately preceding the
end of the Award Period to which the election shall apply. The
election shall be in the form of a written notice and shall, if
it so states, apply to more than one Award Period unless the
Participant is not eligible for one or more Award Periods to
which the Notice purports to apply, in which case the Notice
shall apply to only those Award Periods stated therein for which
such Participant is actually eligible. The Notice shall state a
percentage of the Award to be deferred (the "Deferred Amount")
and shall state the time at which the Deferred Amount shall be
paid in accordance with the provisions of this Section. It shall
be in a form similar to that attached hereto as Exhibit A.
(b) The Deferred Amount with respect to any Award Period
shall be paid to the Participant (or, if the Participant is
deceased, to his or her beneficiary) beginning at the time
specified by the Notice applicable to such Award Period, but in
no event shall such Deferred Amount be paid before the date on
which the Participant ceased to be an employee of the Company.
Notwithstanding any of the provisions of the Plan or Notice,
however, the Committee may, in its sole discretion pay all or any
part of the Deferred Amount at any time following termination of
the Participant's status as an employee of the Company
(regardless of whether this termination is caused by death,
disability, resignation, removal or any other cause).
(c) Within sixty (60) days following the time determined
under Section 6(b), the Company shall begin payment of 120
approximately equal monthly installments adjusted for interest
changes, or any shorter period at the sole discretion of the
Committee, to the Participant (or if the Participant is deceased,
to his or her beneficiary) the Deferred Amount plus accrued
interest thereon. Interest shall be compounded annually from the
date on which the Deferred Amount would have been received by the
Participant in the absence of the election. Interest on such
Deferred Amount shall accrue at a variable rate which shall be
adjusted and determined by the Committee prior to December 15
each year for the following calendar year.
(d) Any rights accruing to a Participant who is entitled to
a Deferred Amount shall be solely those of an unsecured creditor
of the Company. The Company shall be under no obligations
whatsoever to purchase or maintain any contract, policy or other
asset of any nature to provide any payment or other benefit under
the Plan. No contract, policy or other asset of any nature which
the Company may utilize to provide funding for payments or other
benefits under the Plan shall serve in any way as security for
any obligation of the Company under the Plan.
(e) Each Participant's beneficiary under the Plan is the
individual or individuals (if any) designated as such by the
Participant in writing executed by the Participant and filed with
the Committee prior to such Participant's death. In the absence
of such designation the beneficiary shall be the spouse of the
Participant unless the Participant has no spouse in which case
the beneficiary shall be the estate of the Participant. Any
Participant may change or revoke a designation previously made
with or without consent of any beneficiary named therein by
filing a written revocation or change of beneficiary with the
Committee prior to such Participant's death.
(f) If a Participant's employment terminates prior to the
end of the Award Period for which he or she has elected to defer
compensation, the election to defer will be automatically
terminated as to the Award Period.
Section 7. Expenses
The expenses of administering this Plan shall be borne by the Com-
pany and not charged to any Participant.
Section 8. Other Conditions
(a) No person shall have any claim or right to be granted a
Participant Award under this Plan. Neither a Participant nor his
or her designated beneficiary or legal representative shall have
any right or interest in a Participant Award until a distribution
thereof shall have been made in accordance with Section 5 hereof.
(b) It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that prior to distribution
under Section 5 hereof, no right or interest of any Participant
to whom a Participant Award may be made, shall be assignable or
transferable, in whole or in part, either directly or by
operation of law or otherwise including, but not by way of
limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy, or in any other manner, but no devolution by death or
mental incompetency; and no such right or interest or any
Participant shall be liable for, or subject to any obligation or
liability of such Participant.
(c) Neither this Plan nor any action taken hereunder shall
be construed as giving to any employee the right to be retained
in the employ of the Company.
(d) The Company shall have the right to deduct from an
Award any federal, state or local taxes required by law to be
withheld with respect to such Award.
(e) Upon the occurrence of a Change in Control:
(i) any Award then outstanding held by a Participant
shall be immediately vested (without regard to any limitation
imposed by the Committee at the time the Award is granted which
permits all or any part of the Award to be received only after
the lapse of time), and will remain so until distributed in accor-
dance with the Plan; and
(ii) any performance standards related to any Award
shall be deemed achieved at the target level and restrictions
otherwise applicable shall lapse.
(f) A "Change in Control" shall be deemed to have occurred
if:
(i) any change of control occurs of a nature that
would be required to be disclosed in response to Item 6(e) of
Regulation 14A or the Securities Exchange Act of 1934;
(ii) any person or entity owns 25% or more of the com-
bined voting power of the Company's then outstanding securities
unless thereafter the Board of Directors of the Company adopts a
resolution to the effect that this provision is inoperable;
(iii) any person or entity acquires 50% or more of
the combined voting power of the Company's then outstanding
securities; or
(iv) there shall have been a change in the composition
of the Board of Directors of the Company such that any time a
majority of the Board of Directors of the Company shall have been
members of the Board of Directors for less than 24 months, unless
the election of each new director who was not a director at the
beginning of the period was approved or recommended by at least
two-thirds of the directors then still in office who were direc-
tors at the beginning of such period.
(g) All costs of Awards and compensation payable to Partici-
pants shall be charged to the entity employing the Participant.
Section 9. Amendment
The Committee shall have the right to amend, suspend or terminate
this Plan at any time; provided, however, that no such
modification of this Plan shall:
(a) without the consent of the respective Participant, oper-
ate to annul an established Program, or
(b) without the approval of the Board of Directors entitled
to vote thereon increase the maximum Participant Awards which may
be awarded during an Award Period under the Plan to any one
Participant (or increase the maximum Participant Awards which may
be awarded during an Award Period to any "covered employee", as
defined in Code Section 162(m)(3), without proper disclosure and
approval of shareholders of the Company pursuant to proposed or
final regulations of the U.S. Treasury Department issued with
respect to Code Section 162(m)), or
(c) change the Program Target for a Program after it has
been established, or
(d) make any member of the Committee eligible to receive an
award at any time while he or she is serving on the Committee.
Section 10. Code Section 280G Election.
Participants may elect to reduce or defer benefits otherwise
payable in the event total benefits payable by the Company would
result in additional taxes to the Company or Participant under
Code Section 280G.
Section 11. Effective Date
This Plan was originally effective as of January 1, 1987, and
shall continue in effect, until terminated by the Committee. The
restatement of the Plan, as approved by the Committee and the
Board of Directors, shall be effective as of January 1, 1995,
subject to its disclosure to and approval by the shareholders of
the Company at the 1995 annual shareholders meeting.
As restated and amended through February 16, 1995.
EXHIBIT A
EQUITABLE OF IOWA COMPANIES
RESTATED AND AMENDED
KEY EMPLOYEE INCENTIVE PLAN
NOTICE OF DEFERRAL
In accordance with all terms and conditions of the Equitable of
Iowa Companies Restated and Amended Key Employee Incentive Plan
(the "Plan"), the undersigned hereby notifies Equitable of Iowa
Companies as follows:
1. The undersigned hereby elects to defer receipt of ___% of
his or her award as defined in the Plan (the Deferred Amount).
2. This election is effective for the Award Period ending imme-
diately following the date of this election, or in the case of an
Award Period of longer than a one year period, the Award Period
whose final year ends immediately following this election. This
election is effective also for all Award Periods beginning with
the Award Period following the Award Period defined in the
preceding sentence. This election will remain effective until
revoked by me in writing prior to the beginning of the Award
Period to which it applies or is terminated by the terms of the
Plan.
3. The Deferred Amount will be paid in accordance with the
provisions of the Plan but shall begin on the latest of:
A. ________________________ (Date chosen by Participant)
B. Termination of employment as provided in the Plan.
__________________________
(Signature of Participant)
___________________
(Date)
EXHIBIT B
EQUITABLE OF IOWA COMPANIES
RESTATED AND AMENDED
1992 STOCK INCENTIVE PLAN
Section 1. Purpose
The purposes of this Equitable of Iowa Companies Restated and
Amended 1992 Stock Incentive Plan (the "Plan") are to encourage
selected key personnel of Equitable of Iowa Companies (together
with any successor thereto, the "Company") and its Affiliates (as
defined below), who have demonstrated ability and promise, to
acquire a proprietary interest in the growth and performance of
the Company, to generate an increased incentive to contribute to
the Company's future success and prosperity, thus enhancing the
value of the Company for the benefit of its shareholders, and to
enhance the ability of the Company and its Affiliates to attract
and retain exceptionally qualified individuals upon whom, in
large measure, the sustained progress, growth and profitability
of the Company depends.
This Plan is being restated and amended (and submitted to
stockholders for approval) so that compensation and awards paid
to the chief executive officer and four other highest paid
officers under certain programs hereunder qualify as "performance-
based" compensation under Section 162(m) of the Code.
Section 2. Definitions
As used in the Plan, the following terms shall have the meanings
set forth below:
(a) "Affiliate" shall mean any entity that, directly or
through one or more intermediaries, is controlled by the Company
and any entity in which the Company has a significant equity
interest, as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance
Award, Dividend Equivalent, or Other Stock-Based Award granted
under the Plan.
(c) "Award Agreement" shall mean any written agreement,
contract, or other instrument or document evidencing any Award
granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Committee" shall mean the Compensation Committee of
the Board of Directors of the Company (the "Board") as designated
by the Board to administer the Plan and composed of not less than
three directors, each of whom is a"disinterested person" within
the meaning of Rule 16b-3 and each of whom is an "outside
director" within the meaning of Code Section 162(m).
(f) "Director" shall mean any member of the Board of
Directors of the Company.
(g) "Dividend Equivalent" shall mean any right granted
under Section 6(e) of the Plan.
(h) "Fair Market Value" shall mean, with respect to any
property (including, without limitation, any Shares or other
securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to
time by the Committee.
(i) "Incentive Stock Option" or "ISO" shall mean an option
granted under Section 6(a) of the Plan that is intended to meet
the requirements of Section 422 of the Code, or any successor
provision thereto.
(j) "Non-Qualified Stock Option" shall mean an option
granted under Section 6(a) of the Plan that is not intended to be
an Incentive Stock Option.
(k) "Option" shall mean an Incentive Stock Option or a Non-
Qualified Stock Option.
(l) "Other Stock-Based Award" shall mean any right granted
under Section 6(f) of the Plan.
(m) "Participant" shall mean any person designated by the
Committee to be granted an Award under the Plan. Eligible employ-
ees of the Company or an Affiliate shall include the Chairman,
the Chief Executive Officer, the President, the Chief Financial
Officer, any Senior Vice President, any Vice President, and the
Secretary and General Counsel. In addition, the Chief Executive
Officer is authorized to recommend for inclusion in a program
under this Plan such other Salaried Employees, subject to selec-
tion by the Committee, who the Chief Executive Officer deems to
have a substantial opportunity to influence the long-term growth
in earnings of the Company.
(n) "Performance Award" shall mean any right granted under
Section 6(d) of the Plan.
(o) "Person" shall mean any individual, corporation, part-
nership, association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
(p) "Released Securities" shall mean securities that were
Restricted Securities with respect to which all applicable
restrictions have expired, lapsed, or been waived.
(q) "Restricted Securities" shall mean Awards of Restricted
Stock or other Awards under which issued and outstanding Shares
are held subject to certain restrictions.
(r) "Restricted Stock" shall mean any Share granted under
Section 6(c) of the Plan.
(s) "Restricted Stock Unit" shall mean any right granted
under Section 6(c) of the Plan that is denominated in Shares.
(t) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, or any successor rule or regulation
thereto.
(u) "Salaried Employee" shall mean any salaried employee of
the Company or of any Affiliate.
(v) "Share" or "Shares" shall mean the Common Stock of the
Company, no par value, and such other securities or property as
may become the subject of Awards, or become subject to Awards,
pursuant to an adjustment made under Sections 4(a) or 4(c) of the
Plan.
(w) "Stock Appreciation Right" shall mean any right granted
under Section 6(b) of the Plan.
Section 3. Administration
The Plan shall be administered by the Committee. Subject to the
terms of the Plan, Code Section 162(m) (and regulations issued
thereunder), and other applicable law, the Committee shall have
full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to each
Participant under the Plan; (iii) determine the number of Shares
to be covered by (or with respect to which payments, rights, or
other matters are to be calculated in connection with) Awards;
(iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances
Awards may be settled or exercised in cash, Shares, other
securities, other Awards, or other property, or canceled,
forfeited, or suspended, and the method or methods by which
Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other
property, and other amounts payable with respect to an Award
under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii)
interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (viii) interpret and
administer the Plan and any instrument or agreement relating to,
or Award made under, the Plan so as to comply in all respects
with Rule 16b-3; (ix) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (x)
make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of
the Plan. No member of the Committee shall be eligible nor shall
have been eligible at any time within one year prior to
appointment to the Committee to participate in the Plan except
for awards to Directors complying with Rule 16b-3. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time, and shall
be final, conclusive, and binding upon all Persons, including the
Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any shareholder, and any employee of
the Company or of any Affiliate.
Section 4. Shares Available for Awards
(a) Shares Available. Subject to adjustment as provided in
Section 4(c), the number of Shares which may be made available
for granting Awards under the Plan beginning with the Plan's
original effective date is 2,240,000 Shares, (such amount
reflects stock splits since the Plan's original effective date),
plus 7.5 percent of any increase in the total outstanding Shares
of the Company since the original effective date of the Plan.
Further, if, after the effective date of the Plan, any Shares
covered by an Award granted under the Plan are forfeited, or if
an Award otherwise terminates without the delivery of Shares or
of other consideration, then the shares covered by such Award, or
to which such Award relates, or the number of Shares otherwise
counted against the aggregate number of Shares available under
the Plan with respect to such Award, to the extent of any such
forfeiture or termination, shall again be, or shall become,
available for granting Awards under the Plan. Further, if an
Award (other than a Dividend Equivalent) is denominated in
Shares, the number of Shares covered by such Award, or to which
such Award relates, shall be counted on the date of grant of such
Award against the authorized number of Shares available for
granting Awards under the Plan, and Dividend Equivalents and
Awards not denominated in Shares shall be counted against the
authorized number of Shares available for granting Awards under
the Plan in such amount and at such time as the Committee shall
determine under procedures adopted by the Committee consistent
with the purposes of the Plan.
(b) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part,
of authorized and unissued Shares, or Shares specifically
acquired for the purposes of this Plan in such amounts and at
such time or times as the Board may determine, subject to
restrictions, conditions or limitations as the Board may be
advised by legal counsel and required for compliance with
applicable laws and regulations.
(c) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recap-
italization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares
or other securities of the Company, or other similar corporate
transaction or event affects the Shares such that an adjustment
is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust
any or all of (i) the number and type of Shares (or other
securities or property) which thereafter may be made the subject
of Awards, (ii) the number and type of Shares (or other
securities or property) subject to outstanding Awards, and (iii)
the grant, purchase, or exercise price with respect to any Award,
or, if deemed appropriate, make provision for a cash payment to
the holder of an outstanding Award; provided, however, in each
case, that with respect to Awards of Incentive Stock Options no
such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1) of
the Code or any successor provision thereto; and provided
further, however, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.
Section 5. Eligibility
Any Director or Salaried Employee of the Company (or an
Affiliate) within the categories described in Section 2(m), who
is not a member of the Committee shall be eligible to be
designated a Participant; provided, however, that a Director of
the Company who is a member of the Committee shall be eligible to
be designated a Participant in a particular Award or program
under this Plan if such participation does not disqualify the
Director from being a "disinterested person" pursuant to Rule 16b-
3 or an "outside director" within the meaning of Code Section
162(m).
Section 6. Awards
(a) Options. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions
and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the Committee
shall determine.
(i) Exercise Price. The purchase price per Share pur-
chasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less
than the Fair Market Value of a Share on the date of grant of
such Option (or, if the Committee so determines, in the case of
any Option retroactively granted in tandem with or in
substitution for another Award or any outstanding award granted
under any other plan of the Company, on the date of grant of such
other Award or award).
(ii) Option Term. The term of each Option shall be
fixed by the Committee, which term shall in no event extend
beyond 10 years from the date such Option is granted.
(iii) Time and Method of Exercise. The Committee
shall determine the time or times at which, and other conditions
or restrictions with respect to which, an Option may be exer-
cised in whole or in part, and the method or methods by which,
and the form or forms, including, without limitation, cash,
Shares, other Awards, or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to
the relevant exercise price, in which, payment of the exercise
price with respect thereto may be made or deemed to have been
made.
(iv) Incentive Stock Options. The terms of any
Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated
thereunder. Any grant of an ISO under the Plan shall be within
10 years from the date the Plan was first adopted.
(v) Maximum Number of Shares. The maximum number of
Shares which may be issued pursuant to ISO's shall be 2,240,000
Shares. The maximum number of Options which may be granted to
any individual Participant during any five year consecutive
period shall be 350,000 Shares.
(b) Stock Appreciation Rights. The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants.
Subject to the terms of the Plan and any applicable Award Agree-
ment, a Stock Appreciation Right granted under the Plan shall
confer on the holder thereof a right to receive, upon exercise
thereof, the excess of (i) the Fair Market Value of one Share on
the date of exercise or, if the Committee shall so determine in
the case of any such right other than one related to any
Incentive Stock Option, at any time during a specified period
before or after the date of exercise over (ii) the grant price of
the right as specified by the Committee, which shall not be less
than the Fair Market Value of one Share on the date of grant of
the Stock Appreciation Right (or, if the Committee so determines,
in the case of any Stock Appreciation Right retroactively granted
in tandem with or in substitution for another Award or any
outstanding award granted under any other plan of the Company, on
the date of grant of such other Award or award). Subject to the
terms of the Plan and any applicable Award Agreement, the grant
price, term, methods of exercise, methods of settlement, and any
other terms and conditions of any Stock Appreciation Right shall
be as determined by the Committee. The Committee may impose such
conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate. The maximum
number of Stock Appreciation Rights which may be granted to any
individual Participant during any five year consecutive period
shall be 200,000.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is hereby authorized to
grant Awards of Restricted Stock and Restricted Stock Units to
Participants. Any programs involving Awards of Restricted Stock
or Restricted Stock Units that are contingent on the attainment
of any performance goal or goals shall meet the requirements of
Section 6(d).
(ii) Restrictions. Shares of Restricted Stock and
Restricted Stock Units shall be subject to such restrictions as
the Committee may impose (including, without limitation, any
limitation on the right to vote a Share of Restricted Stock or
the right to receive any dividend or other right or property),
which restrictions may lapse separately or in combination at such
time or times, in such installments or otherwise, as the
Committee may deem appropriate.
(iii) Registration. Any Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee
may deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates.
In the event any stock certificate is issued in respect of Shares
of Restricted Stock granted under the Plan, such certificate
shall be registered in the name of the Participant and shall bear
an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock.
(iv) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment (as determined under
criteria established by the Committee) for any reason during the
applicable restriction period, all Shares of Restricted Stock and
all Restricted Stock Units still, in either case, subject to
restriction shall be forfeited and reacquired by the Company; pro-
vided, however, that the Committee may, when it finds that a
waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect
to Shares of Restricted Stock or Restricted Stock Units.
Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be delivered to the holder of
Restricted Stock promptly after such Restricted Stock shall
become Released Securities.
(d) Performance Awards.
(i) General. The Committee is hereby authorized to
grant Performance Awards to Participants. Subject to the terms
of the Plan and any applicable Award Agreement, a Performance
Award granted under the Plan (1) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock),
other securities, other Awards, or other property and (2) shall
confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of
such performance goals during such performance periods as the
Committee shall establish. Subject to the terms of the Plan and
any applicable Award Agreement, the performance goals to be
achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted,
and the amount of any payment or transfer to be made pursuant to
any Performance Award shall be determined by the Committee in con-
formance with the requirements set forth below. Performance
goals established by the Committee as a condition to a Stock
Option or Stock Appreciation Right being granted, or in order for
a Stock Option or Stock Appreciation to be exercised, shall not
be considered a Performance Award under this Section 6(d), but
shall be governed by Section 6(a) or Section 6(b), as applicable.
(ii) Performance Periods. A performance period shall
be for a minimum of one twelve month period up to a maximum of
five consecutive twelve month periods.
(iii) Performance Goals. The Committee shall
establish performance goals applicable to a particular
performance period. Each performance goal applicable to a
performance period shall identify one or more business criteria
that is to be monitored during the performance period. Such
business criteria are limited to the following: operating
earnings per Share, total operating earnings, premium income,
return on equity, return on assets, growth in assets, expenses as
a percentage of assets, total shareholder return, net income and
customer satisfaction. With respect to each business criterion
that is identified in a performance goal for a particular perform-
ance period, the Committee shall determine the target level of
performance that must be achieved in order for a performance goal
to be treated as attained. The Committee may base performance
goals for a particular period on one or more of the business
criteria set forth above. In the event the Committee bases
performance goals for a performance period on more than one
business criteria, the Committee may determine to make awards
upon attainment of the performance goal relating to any one or
more of such criteria. The Committee shall establish performance
goals applicable to a particular performance period in writing
prior to the commencement of a relevant performance period,
provided, however, that such goals may be established after the
commencement of the performance period but while the outcome of
the performance goal is substantially uncertain if such a method
of establishing performance goals is permitted under proposed or
final regulations issued by the U.S. Treasury Department with
respect to Code Section 162(m).
(iv) Stockholder Approval of Goals Required. Awards
shall not be payable under this Section 6(d) unless the material
terms, as defined in proposed or final regulations issued by the
U.S. Treasury Department with respect to Code Section 162(m), of
this Plan, including the performance goal or goals, have been dis-
closed to and subsequently approved by the Company's shareholders
in accordance with Code Section 162(m) and such regulations
issued thereunder.
(v) Satisfactory Performance Requirement. A
Participant's performance must be satisfactory, regardless of
Company performance, before he or she may be granted a
performance award.
(vi) Maximum Award Payable. The maximum award payable
under this Section 6(d) to any Participant for any performance
period shall be 30,000 Shares times the number of consecutive
twelve month periods within the performance period.
(vii) Performance Goal Certification. The
Committee shall make an award to a Participant only in the event
the Committee certifies in writing prior to payment of the Award
that the performance goal or goals under which the Award is to be
paid has or have been attained. Under no circumstances shall an
Award be payable under this Section 6(d) if none of the
performance goals for a particular performance period are
attained.
(viii) Retirement, Permanent Disability, Death or
Termination of Employment. To the extent permitted under
proposed or final regulations issued by the U.S. Treasury
Department with respect to Code Section 162(m), in the event the
performance goals for a performance period are attained, the
Committee, in its discretion, may grant all or such portion of a
performance award for the performance period as it deems
advisable to a Participant (or his or her Beneficiary in the case
of his or her death) whose employment is terminated during the
performance period because of his or her retirement, death,
resignation or discharge, or who suffers a permanent disability.
(e) Dividend Equivalents. The Committee is hereby
authorized to grant to Participants Awards under which the
holders thereof shall be entitled to receive payments equivalent
to dividends or interest with respect to a number of Shares
determined by the Committee, and the Committee may provide that
such amounts (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested. Subject to the terms
of the Plan and any applicable Award Agreement, such Awards may
have such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is hereby
authorized to grant to Participants such other Awards that are
denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares
(including, without limitation, reload stock options, and
securities convertible into Shares), as are deemed by the
Committee to be consistent with the purposes of the Plan,
provided, however, that such grants must comply with Rule 16b-3
and applicable law. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the
terms and conditions of such Awards. Shares or other securities
delivered pursuant to a purchase right granted under this Section
6(f) shall be purchased for such consideration, which may be paid
by such method or methods and in such form or forms, including,
without limitation, cash, Shares, other securities, other Awards,
or other property, or any combination thereof, as the Committee
shall determine, the value of which consideration, as established
by the Committee, shall not be less than the Fair Market Value of
such Shares or other securities as of the date such purchase
right is granted (or, if the Committee so determines, in the case
of any such purchase right retroactively granted in tandem with
or in substitution for another Award or any outstanding award
granted under any other plan of the Company, on the date of grant
of such other Award or award).
(g) General.
(i) No Cash Consideration for Awards. Awards shall be
granted for no cash consideration or for such minimal cash con-
sideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together.
Awards may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for
any other Award or any award granted under any other plan of the
Company or any Affiliate. Awards granted in addition to or in
tandem with other Awards, or in addition to or in tandem with
awards granted under any other plan of the Company or any
Affiliate, may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to
the terms of the Plan and of any applicable Award Agreement,
payments or transfers to be made by the Company or an Affiliate
upon the grant, exercise, or payment of an Award may be made in
such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards,
or other property, or any combination thereof, and may be made in
a single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may
include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred
payments or the grant or crediting of Dividend Equivalents in
respect of installment or deferred payments. Any payment made in
Shares shall be based on the fair market value of such Shares on
the payment date. In the case of any payment made in whole or in
part in cash (other than Dividend Equivalents payable in cash),
the number of Shares which may be issued pursuant to the Plan
shall be reduced by that number of Shares having a fair market
value that is equal to the amount of such cash.
(iv) Limits on Transfer of Awards. No Award (other
than Released Securities), and no right under any such Award,
shall be assignable, alienable, saleable, or transferable by a
Participant otherwise than by will or by the laws of descent and
distribution (or, in the case of an Award of Restricted Secu-
rities, to the Company) or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder;
provided, however, that, if so determined by the Committee, a
Participant may, in the manner established by the Committee,
designate a beneficiary or beneficiaries to exercise the rights
of the Participant, and to receive any property distributable,
with respect to any Award upon the death of the Participant.
Each Award, and each right under any Award, shall be exercisable,
during the Participant's lifetime, only by the Participant or, if
permissible under applicable law, by the Participant's guardian
or legal representative. No Award (other than Released
Securities), and no right under any such Award, may be pledged,
alienated, attached, or otherwise encumbered, and any purported
pledge, alienation, attachment, or encumbrance thereof shall be
void and unenforceable against the Company or any Affiliate.
(v) Term of Awards. The term of each Award shall be
for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any Incentive Stock
Option exceed a period of ten years from the date of its grant.
(vi) Rule 16b-3 Six-Month Limitations. To the extent
required, including in order to comply with Rule 16b-3 only, any
equity security offered pursuant to the Plan may not be sold for
at least six months after the date of grant, and any derivative
security issued pursuant to the Plan shall not be exercisable
unless at least six months elapse from the date of acquisition to
the date of disposition of the derivative security (other than
upon exercise or conversion) or its underlying equity security.
Terms used in the preceding sentence shall, for the purposes of
such sentence only, have the meanings, if any, assigned or
attributed to them under Rule 16b-3. As to any right granted or
awarded with an exercise price that is not fixed at the time of
grant or award, such right shall not be deemed acquired until the
price is fixed, and the six month holding period of Rule 16b-3
shall not commence until such time.
(vii) Share Certificates. All certificates for
Shares or other securities delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares or other securities are then
listed, and any applicable Federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
Section 7. Amendment and Termination
Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the
Company may amend, alter, suspend, discontinue, or terminate the
Plan, including, without limitation, any amendment, alteration,
suspension, discontinuation, or termination that would impair the
rights of any participant, or any other holder or beneficiary of
any Award theretofore granted, without the consent of any share-
holders, Participant, other holder or beneficiary of an Award, or
other person; provided, however, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the
approval of the shareholders of the Company no such amendment,
alteration, suspension, discontinuation, or termination shall be
made that would:
(i) increase the total number of Shares available for
Awards under the Plan, except as provided in Section 4 hereof; or
(ii) permit Options, Stock Appreciation Rights, or
Other Stock-Based Awards encompassing rights to purchase Shares
to be granted with per Share grant, purchase, or exercise prices
of less than the Fair Market Value of a Share on the date of
grant thereof, except to the extent permitted under Section 6(a),
6(b), or 6(f) hereof; or
(iii) as to any "covered employee", as defined in
Code Section 162(m)(3),
(A) increase the maximum award that may be
awarded during any performance period to any such "covered
employee" or
(B) change any of the business criteria on which
performance goals are based as set forth in Section 6(d).
(b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore
granted, prospectively or retroactively, without the consent of
any relevant Participant or holder or beneficiary of an Award.
(c) Adjustments of Awards Upon Certain Acquisitions. In
the event the Company or any Affiliate shall assume outstanding
employee awards or the right or obligation to make future such
awards in connection with the acquisition of another business or
another corporation or business entity, the Committee may make
such adjustments, not inconsistent with the terms of the Plan, in
the terms of Awards as it shall deem appropriate in order to
achieve reasonable comparability or other equitable relationship
between the assumed awards and the Awards granted under the Plan
as so adjusted.
(d) Adjustments of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee shall be
authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events
described in Section 4(c) hereof) affecting the Company, any
Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits to be made
available under the Plan.
(e) Correction of Defects, Omissions, and Inconsistencies.
The Committee may correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or any Award in the
manner and to the extent it shall deem desirable to carry the
Plan into effect.
Section 8. Change of Control.
In order to maintain all of the Participant's rights in the event
of Change of Control of the Company, the Committee, as
constituted before such Change of Control, in its sole
discretion, may, as to any outstanding Award, either at the time
an Award is made or any time thereafter, take any one or more of
the following actions: (i) provide for the acceleration of any
time periods relating to the exercise or realization of any such
Award so that such Award may be exercised or realized in full on
or before a date fixed by the Committee; (ii) provide for the
purchase of any such Award by the Company, upon a Participant's
request, for any amount of cash equal to the amount which could
have been attained upon the exercise of such Award or realization
of such Participant's rights had such Award been currently
exercisable or payable, (iii) make adjustments to any outstanding
Awards as the Committee deems appropriate to reflect the Change
of Control; (iv) determine and be permitted to assume that any
performance goal or goals required to be met over a certain time
period have been met (or to what extent they have been met if
there are different performance target levels established), and
provide for the acceleration of any such Award; or (v) cause any
outstanding Award to be assumed, or new rights substituted
therefor, by the acquiring or surviving entity in a Change of
Control. The Committee may, in its discretion, include such fur-
ther provisions and limitations in any agreement documenting such
Awards as it deems equitable and in the best interests of the Com-
pany. A "Change of Control" of the Company shall be deemed to
have occurred if (i) any change of control occurs of a nature
that would be required to be disclosed in response to Item 6(e)
of Regulation 14A of the Securities Exchange Act of 1934; (ii)
any person or entity owns 25% or more of the combined voting
power of the Company's then outstanding securities unless
thereafter the Board of Directors of the Company adopts a
resolution to the effect that this provision is inoperable; (iii)
any person or entity acquires 50% or more of the combined voting
power of the Company's then outstanding securities; or (iv) there
shall have been a change in the composition of the Board of
Directors of the Company such that any time a majority of the
Board of Directors of the Company shall have been members of the
Board of Directors for less than 24 months, unless the election
of each new director who was not a director at the beginning of
the period was approved or recommended by at least two-thirds of
the directors then still in office who were directors at the
beginning of such period.
Section 9. General Provisions.
(a) No Rights to Awards. No Salaried Employee, Participant
or other Person shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of
treatment of Salaried Employees, Participants, or holders or
beneficiaries of Awards under the Plan. The terms and conditions
of Awards need not be the same with respect to each recipient.
(b) Delegation. The Committee may delegate to one or more
officers or managers of the Company or any Affiliate, or a com-
mittee of such officers or managers, the authority, subject to
such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend, or terminate Awards held by,
Salaried Employees who are not officers or directors of the
Company for purposes of Section 16 of the Securities Exchange Act
of 1934, as amended.
(c) Withholding. The Company or any Affiliate shall be
authorized to withhold from any Award granted or any payment due
or transfer made under any Award or under the Plan the amount (in
cash, Shares, other securities, other Awards, or other property)
of withholding taxes due in respect of an Award, its exercise, or
any payment or transfer under such Award or under the Plan and to
take such other action as may be necessary in the opinion of the
Company or Affiliate to satisfy all obligations for the payment
of such taxes. As a term of any Award under the Plan, the
Committee may provide that a Participant may elect to have the
Company withhold Shares previously owned or acquired from any
Award for payment of withholding taxes due in respect to an
Award.
(d) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate
from adopting or continuing in effect other or additional compen-
sation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
(e) No Right to Employment. The grant of an Award shall
not be construed as giving a Participant the right to be retained
in the employ of the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant
from employment, free from any liability, or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any
Award Agreement.
(f) Governing Law. The validity, construction, and effect
of the Plan and any rules and regulations relating to the Plan
shall be determined in accordance with the laws of the State of
Iowa and applicable Federal law.
(g) Severability. If any provision of the Plan or any
Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, or as to any Person or Award,
or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, including but not limited to Rule
16b-3, such provisions shall be construed or deemed amended to
conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such
provision shall be stricken and be deemed null and void as to
such jurisdiction, Person, or Award, and the remainder of the
Plan and any such Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any
Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company
or any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general
creditor of the Company or any Affiliate.
(i) No Fractional Shares. No fractional Share shall be
issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any
rights thereto shall be canceled, terminated, or otherwise
eliminated.
(j) Headings. Headings are given to the Sections and sub-
sections of the Plan solely as a convenience to facilitate refer-
ence. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any
provision thereof.
Section 10. Effective Date of the Plan.
The Plan, as restated and amended, and as approved by the
Committee, and as approved and amended by the Board of Directors,
shall be effective as of February 16, 1995, subject to its
disclosure to and approval by the shareholders of the Company at
the 1995 annual shareholders meeting. The original effective
date of the Plan is May 1, 1992.
Section 11. Term of the Plan.
No Award shall be granted under the Plan after May 1, 2002. How-
ever, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may
extend beyond such date, and the authority of the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such
Award, or to waive any conditions or rights under any such Award,
and the authority of the Board of Directors of the Company to
amend the Plan, shall extend beyond such date.
As restated and amended through February 16, 1995.
______________________
604 Locust Street
Des Moines, Iowa 50309
______________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 27, 1995
______________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
EQUITABLE OF IOWA COMPANIES will be held in the Governor's Room
of the Des Moines Club, 33rd Floor Ruan Center, Seventh and Grand
Avenue, Des Moines, Iowa, on Thursday, April 27, 1995, at 9:30
a.m., Des Moines local time, for the following purposes:
1. To elect three directors.
2. To approve the Company's Restated and Amended Key
Employee Incentive Plan.
3. To approve the Company's Restated and Amended 1992
Stock Incentive Plan.
4. To ratify the appointment of auditors for the year
1995.
5. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 9,
1995, will be entitled to notice of and to vote at the meeting or
any adjournment thereof.
Shareholders are cordially invited to attend the meeting in
person. IF YOU WILL NOT BE ABLE TO ATTEND THE MEETING IN PERSON,
PLEASE DATE, INDICATE YOUR CHOICE ON THE MATTERS TO BE VOTED
UPON, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
A copy of the Annual Report to Shareholders for 1994, including
audited financial statements, is enclosed.
By Order of the Board of Directors.
John A. Merriman
Secretary
Des Moines, Iowa
March 14, 1995
EQUITABLE OF IOWA COMPANIES
Proxy For Annual Meeting of Shareholders
April 27, 1995
This proxy is solicited by the Board of Directors
The undersigned hereby appoints FREDERICK S. HUBBELL, PAUL E. LARSON AND
JOHN A. MERRIMAN, and each of them as Proxies, with power of substitution in
each, to vote all shares of the Common Stock of Equitable of Iowa Companies
(the "Company"), which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on April 27, 1995 at 9:30
a.m., Des Moines local time, and at any adjournment thereof, on all matters
set forth in the Notice of Meeting and Proxy Statement dated March 14, 1995, a
copy of which has been received by the undersigned, as follows:
Dated _______________________________, 1995
___________________________________________
___________________________________________
Signature of Shareholder(s)
IMPORTANT: Please mark this proxy, date,
sign exactly as your name(s) appear(s) and
return in the enclosed envelope. If shares
are held jointly, signature should indicate
that status. Trustees and others signing
in a representative capacity should so
indicate.
(Please complete, date, sign and mail this Proxy Card
in the envelope provided)
PLEASE MARK VOTES [ ] OR [X]
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE
VOTED "FOR" EACH OF THE MATTERS STATED.
1. ELECTION OF DIRECTORS:
[ ] FOR electing all nominees [ ] WITHHOLD AUTHORITY to vote for
listed below (except as all nominees listed below.
marked to the contrary.)
Richard B. Covey, James L. Heskett, Robert E. Lee
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
______________________________________________________________________________
2. APPROVAL OF COMPANY'S RESTATED AND AMENDED KEY EMPLOYEE INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL OF COMPANY'S RESTATED AND AMENDED 1992 STOCK INCENTIVE PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS AUDITORS FOR THE
COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. The Proxies are authorized to vote upon such other matters as may properly
come before the meeting as they determine to be in the best interests of
the Company.
Dear Shareholder:
The annual meeting of Shareholders of Equitable of Iowa Companies
will be held in the Governor's Room of the Des Moines Club, 33rd Floor
Ruan Center, Seventh and Grand Avenue, Des Moines, Iowa, on Thursday,
April 27, 1995 at 9:30 a.m., Des Moines local time. At the meeting
Shareholders will elect three directors, act upon proposals to restate
and amend the Company's Key Employee Incentive Plan and 1992 Stock
Incentive Plan, and ratify the appointment of Ernst & Young LLP as
auditors for the Company.
It is important that your shares are represented at this meeting.
Whether or not you plan to attend the meeting, please review the enclosed
proxy materials, complete the attached proxy form below, and return it
promptly in the envelope provided.
