March 14, 1998
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders, which will be
held at 9:30 a.m., Central time, on Tuesday, May 5, 1998 at ALLIED Life
Financial Corporation's offices at 701 Fifth Avenue, Des Moines, Iowa. The
matters expected to be acted on at the meeting are described in detail in the
attached Notice of the Annual Meeting and the Proxy Statement.
At this year's meeting, I will review the Company's results of operations
for 1997 and our plans for 1998 and beyond. Members of the Board of Directors,
officers of the Company, and representatives of our independent auditors, KPMG
Peat Marwick LLP, will be available to answer your questions.
If you will be unable to attend this meeting, I ask you to complete the
enclosed proxy and return it promptly. A pre-addressed, postage-paid envelope is
enclosed. You may withdraw your proxy in writing at any time prior to the
meeting by delivering a new proxy. If your schedule changes, you may revoke your
proxy and vote your shares in person at the meeting.
John E. Evans
/s/ John E. Evans
Chairman of the Board
1
<PAGE>
ALLIED LIFE FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of ALLIED Life Financial Corporation:
The Annual Meeting of Stockholders of ALLIED Life Financial Corporation
will be held Tuesday, May 5, 1998, beginning at 9:30 a.m., Central time, at the
Company's offices at 701 Fifth Avenue, Des Moines, Iowa for the following
purposes, all as set forth in the accompanying Proxy Statement:
1. The election of two directors to serve for a three-year period until the
2001 Annual Meeting of Stockholders as set forth in the accompanying Proxy
Statement.
2. To act upon such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the 25th day of February, 1998, as the
date of record for determination of stockholders entitled to notice of and to
vote at the meeting and any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE ENCOURAGED
TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IMMEDIATELY. AN ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THIS PURPOSE.
YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON SHOULD YOU ATTEND THE MEETING.
701 Fifth Avenue
Des Moines, Iowa 50391-2003
March 14, 1998 By order of the Board of Directors
Sally J. Malloy
Secretary
2
<PAGE>
ALLIED Life Financial Corporation
701 Fifth Avenue
Des Moines, Iowa 50391-2003
PROXY STATEMENT
1998 Annual Meeting of Stockholders
May 5, 1998
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of ALLIED Life Financial Corporation ("Company") of
proxies from the holders of the Company's stock for use at the Annual Meeting of
Stockholders ("Annual Meeting") to be held on May 5, 1998 and at any adjournment
thereof. Proxy cards properly executed and received by the Company prior to the
time of the Annual Meeting will be voted as directed. A stockholder voting by
means of a proxy card has the power to revoke it at any time before the Annual
Meeting by giving written notice of the revocation thereof to the Secretary of
the Company, by filing with the Secretary another later dated proxy, or by
attending the meeting and voting in person. The Annual Report to Stockholders
for the fiscal year ended December 31, 1997 is enclosed. This Proxy Statement
and the accompanying form of proxy were first sent to stockholders on or about
March 14, 1998.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
Stockholders of record at the close of business on February 25, 1998 will
be entitled to vote at the meeting. As of that date, the outstanding securities
of the Company consisted of 4,403,049 shares of no par common stock ("Common
Stock"), 2,292,093 shares of no par 6.75% Series Preferred Stock ("6.75%
Preferred"), and 112,863 shares of no par Series A ESOP Convertible Preferred
Stock ("ESOP Preferred"). Each share of Common Stock, 6.75% Preferred, and ESOP
Preferred is entitled to one vote on each matter submitted at the meeting. The
Common Stock, 6.75% Preferred, and ESOP Preferred (collectively, the "Stock")
will vote together on all matters contained in this Proxy Statement as one
class. A majority of the outstanding shares will constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence of a quorum. A proposal
will be adopted or a director will be elected if the votes cast for the proposal
or for the director equal a majority of the shares which are both represented at
the meeting and entitled to vote on the subject matter. Abstentions are counted
in tabulations of the votes cast on proposals presented to the stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
As of February 25, 1998, the following are the only stockholders known to
management who may be deemed to beneficially own more than 5% of any class of
the Company's voting securities:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent Percent of Total
Title of Class of Beneficial Owner of Beneficial Ownership of Class Voting Securities
- ---------------- ------------------- ----------------------- -------- ----------------
<S> <C> <C> <C> <C>
Preferred Stock
6.75% Preferred ALLIED Mutual 2,292,093 shares (2) 95.3% 33.7%
Insurance Company (1)
701 Fifth Avenue
Des Moines, IA 50391-2000
ESOP Preferred State Street Bank and 112,863 shares (3) 4.7% 1.7%
Trust Company, Trustee
of The ALLIED Life
Financial Corporation
Employee Stock
Ownership Trust
200 Newport Avenue
North Quincy, MA 02171
Common Stock ALLIED Mutual 1,521,006 shares 34.5% 22.1%
Insurance Company (1)
701 Fifth Avenue
Des Moines, IA 50391-2000
3
<PAGE>
Fenimore Asset Management, Inc. 548,650 shares (4) 12.5% 8.1%
118 North Grand Street
P.O. Box 310
Cobleskill, NY 12043
Brinson Partners, Inc. 382,600 shares (5) 8.7% 5.6%
209 South LaSalle
Chicago, IL 60604-1295
Franklin Advisory Services, Inc. 257,500 shares (6) 5.8% 3.8%
777 Mariners Island Blvd.
San Mateo, CA 94404
Royce & Associates, Inc. 249,650 shares (7) 5.7% 3.7%
1414 Avenue of the Americas
New York, NY 10019
Royce Management Company 38,000 shares (7) 0.9% 0.6%
1414 Avenue of the Americas
New York, NY 10019
<FN>
(1) The Company and ALLIED Mutual Insurance Company ("ALLIED Mutual") are
parties to a Stock Rights Agreement which expires in 2008. Under the
Stock Rights Agreement, ALLIED Mutual is entitled to nominate and the
Company is required to use its best efforts to cause the election or
retention of a number of members of the Company's Board of Directors in
proportion to ALLIED Mutual's percentage ownership of the total number
of shares of the Company's voting stock outstanding at the time of
nomination. In addition, the Company is required to elect to its
Executive Committee at least one Company director who has been
nominated by ALLIED Mutual but who is not an officer or employee of
ALLIED Mutual, and the Company must limit the number of directors
serving on the Executive Committee to five at any time. The Stock
Rights Agreement restricts the ability of ALLIED Mutual to grant
proxies to other than affiliated individuals and to solicit other
stockholders of the Company. ALLIED Mutual also is prohibited from
initiating or accepting a tender offer for shares of the Common Stock
except under certain conditions. The Company has a right of first
refusal with respect to any sale by ALLIED Mutual of the Common Stock,
subject to certain exceptions, including a distribution of such stock
to the public in a registered public offering or an offering pursuant
to Rule 144. ALLIED Mutual has incidental registration rights and three
demand registration rights with respect to the 6.75% Preferred and
Common Stock owned by ALLIED Mutual. For a further description of the
relationship between ALLIED Mutual and the Company, see "Certain
Transactions and Relationships."
(2) The 6.75% Preferred is voting stock so long as it is held by ALLIED
Mutual.
(3) Shares reported as owned by the ESOP Trustee are also reported as
beneficially owned by the executive officers. Allocated shares are
voted by the ESOP Trustee in accordance with the direction of the ESOP
participants. Generally, unallocated shares and allocated shares as to
which no direction is made by the participants are voted by the ESOP
Trustee in the same percentage as the allocated shares as to which
directions are received by the ESOP Trustee.
(4) Fenimore Asset Management, Inc., an investment adviser, filed a
Schedule 13G jointly with Thomas O. Putnam with the Securities and
Exchange Commission ("SEC") on February 12, 1998 indicating shared
voting and dispositive power for 548,650 shares, beneficially owned as
of December 31, 1997.
(5) Brinson Partners, Inc., an investment adviser, together with its parent
holding companies Brinson Holdings, Inc., SBC Holding (USA), Inc., and
Swiss Bank Corporation, filed a Schedule 13G with the Securities and
Exchange Commission ("SEC") on February 10, 1998 indicating shared
voting and dispositive power for 382,600 shares, beneficially owned as
of December 31, 1997.
(6) Franklin Advisory Services, Inc., an investment advisor, filed a
Schedule 13G with the SEC on January 26, 1998, indicating sole voting
power for 116,000 shares and sole dispositive power for 257,500 shares,
beneficially owned as of December 31, 1997. Also filing the Schedule
13G were the parent holding company, Franklin Resources, Inc., and the
principal shareholders of the parent holding company, Charles B.
Johnson and Rupert H. Johnson, Jr.
(7) Royce Associates, Inc. ("Royce") and Royce Management Company ("RMC")
filed a Schedule 13G with the SEC on February 5, 1998 indicating sole
voting and dispositive power for 249,650 and 38,000 shares,
respectively, beneficially owned as of December 31, 1997. As members of
a group with Royce and RMC, Charles M. Royce also filed a Schedule 13G
with the SEC but disclaimed beneficial ownership of such shares held by
Royce and RMC.
</FN>
</TABLE>
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The Company presently has five directors. The Company's articles of
incorporation and bylaws provide for a Board of Directors of not less than three
nor more than twenty-one members. The exact number of directors within such
limits is fixed by the Board of Directors. The Board has set the current number
of directors at five. The terms of the Board members are staggered with each
member serving a three-year term. Executive officers of the Company are elected
annually by the Board of Directors of the Company, and in some cases, by a
subsidiary of the Company. Several persons whose activities are significant to
the business of the Company are executive officers of the Company's
subsidiaries. The Company's subsidiaries are ALLIED Life Insurance Company
("ALLIED Life"), ALLIED Life Brokerage Agency, Inc., and ALLIED Group Merchant
Banking Corporation.
ITEM NO. 1--ELECTION OF TWO DIRECTORS UNTIL 2001
Two nominees for a three-year term ending 2001
At the 1998 Annual Meeting, the stockholders will elect two members of the
Board of Directors to serve until the 2001 Annual Meeting. Proxies received by
management in response to this solicitation will be voted for the election of
the nominees listed below, unless otherwise instructed on the proxy card. The
nominees presently serve as members of the Board of Directors of the Company.
Pursuant to the Stock Rights Agreement between the Company and ALLIED Mutual,
James W. Callison was nominated by ALLIED Mutual to serve as a Director of the
Company, and the Company is required to use its best efforts to cause his
election. If you do not wish your shares to be voted for a particular nominee,
please so indicate as provided on the proxy card.
James W. Callison, age 71, has been a Director of the Company since 1993
and a director of ALLIED Life since 1973. He has been a director of ALLIED
Mutual since 1972 and a director of ALLIED Group, Inc. since 1974. He is also a
member of the Board of Directors of certain other affiliates of the Company. Mr.
Callison has been employed by Midwest Wheel Companies since 1948, serving as
Chairman of the Board since January 1998 and as President from 1970 to 1997.
Dennis H. Kelly, Jr., age 71, has been a Director of the Company and ALLIED
Life since 1993. From 1958 to 1990, he practiced internal medicine in Des
Moines, Iowa. He has been retired since 1990.
Required Stockholder Vote
The affirmative vote of the holders of at least a majority of the shares of
Stock of the Company represented at the Annual Meeting is required for approval
of this proposal. ALLIED Mutual, as of February 28, 1998, owned approximately
56% of the outstanding voting stock of the Company. ALLIED Mutual intends to
vote FOR these nominees.
The Board of Directors of the Company recommends a vote FOR these nominees.
Current director whose term expires in 1999
John E. Evans, age 70, has been Chairman of the Board and a Director
of the Company since 1993. He has been a director and Chairman of ALLIED Life
since 1970, serving as President from 1965 to 1988. Mr. Evans has served as
Chairman of the Board of ALLIED Group, Inc. since 1975, President of ALLIED
Group, Inc. from 1975 to 1994, and has been a director of ALLIED Mutual since
1961. Mr. Evans also serves on the Board of Directors of other affiliates of the
Company. Mr. Evans is a brother of Harold S. Evans, a Director of the Company.
Pursuant to the Stock Rights Agreement and the Consulting Agreement with Mr.
Evans, he was nominated by ALLIED Mutual to serve as a Director of the Company.
Current directors whose terms expire in 2000
Harold S. Evans, age 65, has been a Director of the Company since 1993 and
a director of ALLIED Life since 1965. He has been a director of ALLIED Group,
Inc. since 1974 and a director of ALLIED Mutual since 1965, and he is also a
member of the Board of Directors of certain other affiliates of the Company. He
was employed by Aluminum Company of America beginning in 1955, serving as a
Group Vice President-International until his retirement in 1989. Mr. Evans is a
brother of John E. Evans, Chairman of the Board and a Director of the Company.
Pursuant to the Stock Rights Agreement, Mr. Evans was nominated by ALLIED Mutual
to serve as a Director of the Company.
5
<PAGE>
George D. Milligan, age 41, has been a Director of the Company and ALLIED
Life since 1993. For the past five years, Mr. Milligan has been President of The
Graham Group, Inc., a Des Moines, Iowa based real estate development and
property management company with activities in other areas, including property
acquisition and sales, general contracting, and investments.
Meetings and Committees of the Board of Directors
During 1997, there were five meetings of the Board of Directors. All
directors attended more than seventy-five percent of the aggregate committee and
Board meetings during 1997.
The Board has established Executive, Audit, Investment, Compensation, and
Coordinating Committees. The Company does not have a standing nominating
committee, and the functions that are normally performed by such a committee are
carried out by the Executive Committee. The Executive Committee will consider
nominees recommended by stockholders. Such recommendations for nominees for
election at the 1999 Annual Meeting should be submitted in writing to the
Executive Committee in care of the Secretary of the Company, 701 Fifth Avenue,
Des Moines, Iowa 50391-2003, no later than February 4, 1999.
The Executive Committee members are John E. Evans, James W. Callison, and
Harold S. Evans. The Executive Committee has the authority, with certain
exceptions, to exercise the powers of the full Board of Directors. The Board of
Directors reviews and approves the minutes of all meetings of the Executive
Committee. The Executive Committee met two times in 1997.
The Audit Committee members consist of outside directors Dennis H. Kelly,
Jr. and George D. Milligan. The Committee selects and retains the Company's
independent certified public accountants and approves the staffing and budgets
of the internal audit department. Both the internal auditors and the independent
certified public accountants periodically meet with the Audit Committee and have
access to the members of the Committee. The Audit Committee met two times in
1997.
The Investment Committee is a committee authorized to direct and approve
investment activities of the Company. The members of the Investment Committee
are John E. Evans, Harold S. Evans, and James W. Callison. The Investment
Committee met eight times in 1997.
The Compensation Committee of the Board has the authority to establish all
compensation and benefits for all of the executive officers and employees of the
Company and its subsidiaries. The members of the Compensation Committee, Harold
S. Evans and James W. Callison, met four times in 1997.
The Coordinating Committee is a committee responsible for matters involving
actual or potential conflicts of interest, if and when they arise, between the
Company, ALLIED Mutual, and ALLIED Group, Inc. The Company committee members,
Dennis H. Kelly, Jr. and George D. Milligan, are outside directors of the
Company who are not also members of the Board of Directors of ALLIED Mutual or
ALLIED Group, Inc. The Coordinating Committee did not meet in 1997.
Compensation of the Members of the Board of Directors and the Director Purchase
Plan
Directors who are not officers or employees of the Company received an
annual retainer in 1997 of $20,000 plus expenses incurred in attending Board
meetings. Directors were also paid $1,000 per Board meeting and $750 per
committee meeting. Directors who are executive officers of the Company do not
receive any fees in addition to their remuneration as officers. The annual
retainer is split among the Company, ALLIED Mutual, and ALLIED Group, Inc. for
James W. Callison, Harold S. Evans, and John E. Evans (each of whom are also
directors of ALLIED Mutual and ALLIED Group, Inc.), and many of the meeting fees
are also split for these three individuals in the event the companies have
meetings on the same day. In addition, George D. Milligan receives from the
Company $750 per committee meeting for sitting as a Company representative and
nonvoting member of the ALLIED Mutual Contributions Committee.
The Company's directors who are not employees or officers of the Company
may elect to receive all or a portion of their director fees in the form of
Common Stock obtained under the ALLIED Life Financial Corporation Outside
Director Stock Purchase Plan ("Director Purchase Plan"). Under the Director
Purchase Plan, a participant may not purchase Common Stock with a fair market
value of more than $25,000 per calendar year. The price per share paid to the
Company is 100% of the fair market value of shares of Common Stock. The director
fees that are withheld are applied to 85% of the price per share, with the
remainder being paid proportionally by the Company, its subsidiaries, ALLIED
Mutual, and/or the majority-owned subsidiaries of ALLIED Mutual to whom the
participant's director fees are allocated. A participant may not dispose of the
Common Stock purchased under the Director Purchase Plan for a period of one year
from the purchase date. An Administrative Committee composed of employees of the
Company or its subsidiaries administers the Director Purchase Plan. During 1997,
the following directors participated in the Director Purchase Plan purchasing
the number of shares and receiving the dollar value of discount for all shares
purchased as indicated: James W. Callison, 880 shares, $2,697; John E. Evans,
816 shares, $2,498; George D. Milligan, 1,262 shares, $3,747.
6
<PAGE>
John E. Evans has a Consulting Agreement with the Company, ALLIED Mutual,
and ALLIED Group, Inc. pursuant to which he performs certain consulting services
for the companies until such agreement is terminated by Mr. Evans or the
companies. Mr. Evans is to be paid an annual fee which is to be prorated among
the Company, ALLIED Mutual, and ALLIED Group, Inc. The annual fee was $250,000
for the first six months of 1997 and $180,000 for the latter six months. The
Company's portion of the fee for 1997 was $12,062. ALLIED Mutual agreed to
nominate Mr. Evans for re-election to the Board of Directors of the Company in
accordance with ALLIED Mutual's nomination rights under the Stock Rights
Agreement between ALLIED Mutual and the Company.
Executive Officers
The following are the executive officers of the Company and its
subsidiaries as of March 14, 1998.
Samuel J. Wells, age 51, has been President of the Company since 1993 and
President of ALLIED Life since 1988. Previously, he was Vice President and
General Manager of Farm Progress Insurance Services, Inc. a subsidiary of
Capital Cities/ABC Inc., where he had been employed since 1984. Farm Progress
Insurance Services, Inc. has had a relationship with ALLIED Life as an
independent marketing organization since 1984. Prior to that, Mr. Wells was with
Farm Bureau of Michigan and Volunteer State Life Insurance Company of
Chattanooga, Tennessee.
Wendell P. Crosser, age 38, has been Vice President and Treasurer of the
Company and ALLIED Life since 1993. Previously, he had been Assistant Vice
President of ALLIED Group, Inc. since 1990 and held various accounting positions
with ALLIED Group, Inc. since being employed there in 1987. From 1981 to 1987,
Mr. Crosser was employed by KPMG Peat Marwick LLP. Mr. Crosser is a Certified
Public Accountant.
Donald J. Iverson, age 42, has been Vice President and Chief Actuary of
ALLIED Life since 1995. Mr. Iverson joined the Company as a financial actuary in
1993 and was previously Vice President and Actuary with Employers Modern Life
Company from 1990 to 1993. Prior to 1990, he was First Vice President and
Actuary for Integrated Resources Life Insurance Company and Second Vice
President and Product Actuary for General American Life Insurance Company. Mr.
Iverson is a Fellow of the Society of Actuaries and a Member of the American
Academy of Actuaries.
Joseph P. Ross, age 35, has been Vice President, Marketing of ALLIED Life
since 1996. Previously, he was Vice President with Life Partners Group in
Englewood, Colorado, where he held various positions since 1991. Prior to that
he was with Merrill Lynch Life Agency, Northbrook, Illinois, Insurance
Associates, Inc., Dyersville, Iowa, and Independent Agent Center, Dyersville,
Iowa.
E. Robert Bejcek, age 52, has been Vice President of ALLIED Life since
1997. Previously, he was Vice President with U.S. Life/All American Life
Insurance Company from 1991 to 1997. Prior to that, Mr. Bejcek was Regional
Director for Kemper Life Insurance Company.
William D. Whitsell, age 34, has been Vice President of Underwriting of
ALLIED Life since 1996. Previously, he was the Chief Underwriter with Life USA
Insurance Company from 1991 to 1995 and held various underwriting positions with
ITT Life Insurance Company prior to 1991.
George T. Oleson, age 50, has been Vice President of the Company, ALLIED
Life, ALLIED Group, Inc., and ALLIED Mutual since 1997. Previously, Mr. Oleson
was Secretary of such companies since 1993. He also serves as Corporate Counsel
for the Company and ALLIED Group, Inc. and their affiliates.
7
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
As of February 28, 1998, the directors, the executive officers named in the
Summary Compensation Table, and the directors and executive officers as a group
beneficially owned shares of the ESOP Preferred and Common Stock as set forth
below. The issued and outstanding Common Stock, ESOP Preferred, and 6.75%
Preferred as of February 28, 1998 was 4,403,172 shares, 112,863 shares, and
2,882,060 shares, respectively.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1) Percent of Class (1)
ESOP Combined Preferred
Name of Beneficial Owner Preferred (2) Common Stock Classes Stock Common Stock Combined Classes
<S> <C> <C> <C> <C> <C> <C>
James W. Callison -0- 5,368 5,368 -0- * *
Harold S. Evans -0- 15,456 15,456 -0- * *
John E. Evans -0- 30,258 30,258 -0- * *
Dennis H. Kelly, Jr. -0- 12,096 12,096 -0- * *
George D. Milligan -0- 7,077 7,077 -0- * *
Samuel J. Wells 10,047 77,587(3) 87,634(3) * 1.8% *
Wendell P. Crosser 8,209 30,856(3) 39,064(3) * * *
Donald J. Iverson 1,519 4,688(3) 6,207(3) * * *
Joseph P. Ross 341 399 740 * * *
All Directors and
Executive Officers
as a Group (13 persons) (4) 22,903 195,580(3) 218,483(3) * 4.4% 3.2%
<FN>
(1) Except as noted, all persons have sole voting and investment power with
respect to the shares reported; asterisks indicate ownership of less than
1%.
(2) Shares reported as beneficially owned by executive officers are also
reported as owned by the ESOP Trustee. Allocated shares are voted by the
ESOP Trustee in accordance with the direction of the ESOP participant.
Generally, unallocated shares and allocated shares as to which no direction
is made by the participant are voted by the ESOP Trustee in the same
percentage as the allocated shares as to which directions are received by
the ESOP Trustee.
(3) Includes the following number of shares which the following persons have
the right to acquire within 60 days of February 28, 1998 pursuant to stock
options granted under the ALLIED Life Financial Corporation Long-Term
Management Incentive Plan and the Executive Stock Option Plan: Mr. Wells,
21,766 shares; Mr. Crosser, 20,473 shares; Mr. Iverson, 4,421 shares; and
all executive officers as a group, 57,462 shares.
(4) Includes shares owned by John S. Duffy who was an executive officer as of
February 28, 1998.
</FN>
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is responsible for establishing and administering the compensation
policies which govern annual compensation, stock ownership programs, and
employee benefit programs for the executive officers as well as other employees
of the Company and its subsidiaries. Since the Company is a holding company
without operations, corporate performance and compensation policies are highly
dependent upon the operation of ALLIED Life, its principal subsidiary.
Compensation Criteria
In making compensation determinations, the Committee considers and
endeavors to attain the following goals:
1) attract and retain highly qualified and motivated executive
officers and employees,
2) encourage and reward achievement of annual and long-term financial
goals and operating plans of the Company,and
3) encourage executive officers and employees to become stockholders
with interests aligned with those of other stockholders.
8
<PAGE>
The Committee's policy with regard to the compensation of executive
officers is to meet the foregoing goals through a combination of base salary,
annual bonus, stock ownership, and other benefits with a particular focus on
encouraging executive officers to attain individual performance goals that are
designed to favorably impact overall Company performance.
Compensation Components
The basic components of compensation for executive officers, including
those individuals listed in the Summary Compensation Table, are in four areas:
Base Salary: The Committee sets salary ranges annually which are intended
to reflect the median level of base pay for comparable positions at companies of
similar size and complexity. The Committee reviews salary survey data provided
by independent survey consultants including an annual survey provided by the
Life Office Management Association, an industry trade association whose survey
covers a wide cross-section of stock and mutual life insurance companies. Based
on the scope and responsibility of the position in the survey compared to the
scope and responsibility of the position at the Company, the Committee
determines whether the officer's salary range should be set at, above, or below
the median level of the industry. To determine the level of a specific salary
within its range, the Committee considers management input regarding the
officer's length of service in the position, experience, and management skills
in handling short and long range issues. In addition, the Committee reviews the
officer's performance during the prior year measured against predetermined
corporate and individual plans and objectives approved by the Board.
Annual Bonus: The Committee believes that a significant portion of
management's annual cash compensation should be variable ("at risk") and tied to
the Company's financial results. The Short Term Management Incentive
Compensation Plan (the "Short Term Plan") is administered by the Committee which
annually establishes goals for diluted operating earnings per share ("EPS") and
growth. Depending upon attainment of Short Term Plan goals for 1997,
participants may receive a bonus amount equal to 3-19% of base salary if the
minimum EPS goal is attained, and up to 8-75% of base salary if both EPS and
growth goals are maximized. Growth is measured as the percentage increase in
GAAP insurance revenues (excluding single premium annuities with life
contingencies) plus 2% of first year annuity premiums. The goals are established
annually by the Committee. Goals are set to significantly exceed expected growth
performance of the industry. The potential total award is weighted so that 75%
of the award may come from attainment of EPS goal and 25% from attainment of the
growth goal. No incentive for growth is given if the minimum EPS target is not
met. The Committee may use its discretion to modify a portion of a participant's
award, either upward or downward, based on management's recommendation of the
participant's contribution to the achievement of goals. The annual bonus for
marketing executives of the Company is dependent upon the attainment of growth
goals.
Stock Ownership: The Committee believes that a fundamental goal of
executive compensation is to encourage and create opportunities for long-term
executive stock ownership. Stock ownership guidelines for officers were
established by the Committee in 1994. Over a period of ten years, the following
ownership levels of Company Common Stock should be attained:
President 50,000 - 75,000 shares
Key Vice Presidents 20,000 - 35,000 shares
Other Vice Presidents 5,000 - 10,000 shares
The Long-Term Management Incentive Plan (the "Long-Term Plan") provides for
the award of stock options (nonqualified and incentive stock options), stock
appreciation rights ("SARs"), and shares of restricted stock. The Committee
encourages ownership of Company stock through the grant of options to
participants in the Long-Term Plan. In determining who will participate and the
amount of awards, the Committee selects key management employees, and based on
their position, salary, performance, and previous grants, the Committee
determines the amount of awards to be given to each participant. Generally, the
amount increases with the level of position. The Committee intends to make
grants on an annual basis and establish a vesting schedule at each grant date.
The 1997 option grants vest in 33-1/3% increments on the third, fourth, and
fifth anniversary of the grant date. In 1997, 38,000 options were awarded to
nine executive officers, and 108,202 shares remain available for award under the
Long-Term Plan. Under the Executive Stock Option Plan, 31,167 shares remain
available for future grants.
9
<PAGE>
Employee Benefits: The Company offers benefit plans such as vacation,
medical, life and disability insurance to executive officers on the same basis
as offered to all employees. In keeping with the Company's commitment to align
employee interests with those of stockholders, employees may acquire shares of
stock through the Employee Stock Purchase Plan ("ESPP"), and all eligible
employees are allocated shares through the Employee Stock Ownership Plan
("ESOP"). The ESPP allows employees to purchase stock at 85% of its fair market
value, and the ESOP is discussed in note 5 to the Summary Compensation Table in
this Proxy Statement. Executive officers are eligible for these programs on the
same basis as other employees.
PRESIDENT'S COMPENSATION
The rules of the Securities and Exchange Commission require a discussion of
the CEO compensation. Since the Company does not have an elected CEO, this
Report will focus on the compensation of the President who acts in a similar
capacity. The compensation of the President includes the above four components.
In addition to the subjective considerations of Mr. Wells' leadership and
effectiveness in dealing with major corporate challenges and opportunities, the
Committee considers the financial performance of the Company and the performance
of the stock price in determining his total compensation. In 1997, the Committee
increased Mr. Wells' base salary by 8% based on the Committee's assessment of
his performance. Mr. Wells will not receive an annual bonus award for 1997. In
March of 1997, the Committee granted to Mr. Wells 9,000 shares subject to option
under the Long-Term Plan.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code (the "Code") generally limits
to $1 million per individual per year the federal income tax deduction for
compensation paid by a publicly-held company to the company's chief executive
officer and its other four highest paid executive officers. Compensation that
qualifies as performance-based compensation for purposes of Section 162(m) is
not subject to the $1 million deduction limitation. Options and stock
appreciation rights granted under the Long-Term Plan and options granted under
the Executive Stock Option Plan satisfy the requirements for performance-based
compensation. The Committee presently does not intend to seek to qualify other
components of the Company's incentive compensation for executive officers as
performance-based compensation under Section 162(m) of the Code, such as the
Short Term Plan. However, the Committee currently does not anticipate that any
executive officer will be paid compensation from the Company in excess of $1
million in any year (including amounts that do not qualify as performance-based
compensation under the Code), and accordingly, the Committee anticipates that
all amounts paid as executive compensation will be deductible by the Company for
federal income tax purposes.
COMPENSATION COMMITTEE
James W. Callison
Harold S. Evans
10
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative stockholder return (assuming
reinvestment of dividends) to the holders of Common Stock, a broad equity market
index (Index for NASDAQ Stock Market), and a peer group index (Index for NASDAQ
Insurance Stocks), during the period beginning November 17, 1993 (date Company
went public) and ending December 31, 1997. The stock performance graph assumes
$100 was invested on November 17, 1993. The lines represent monthly index levels
derived from compounded daily returns that include all dividends. The indexes
are reweighted daily, using the market capitalization on the previous trading
day. If the monthly interval (based on the fiscal year end) is not a trading
day, the preceding trading day is used.
<TABLE>
<CAPTION>
Symbol 11-17-93 12-31-93 12-30-94 12-29-95 12-31-96 12-31-97
- ------ -------- -------- -------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Company 100 100.2 113.1 145.4 142.0 179.8
NASDAQ Stock Market (U.S. Companies) 100 102.0 99.7 141.0 173.5 212.8
NASDAQ Insurance Stocks 100 99.3 94.1 133.6 152.3 223.5
(SIC 6310-6319, 6330-6339,
U.S. and Foreign Companies)
</TABLE>
11
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
All employees of the Company and its subsidiaries are employed by ALLIED
Life. For the years indicated, the following table shows the compensation earned
by Samuel J. Wells (President of the Company) and the most highly compensated
executive officers of the Company earning more than $100,000 in annual salary
and bonus for services rendered in all capacities to the Company and its
subsidiaries.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards
Restricted Securities
Stock Underlying All Other
Name and Principal Position Year Salary (1) Bonus (2) Awards (3) Options/SARs Compensation (5)
<S> <C> <C> <C> <C> <C> <C>
Samuel J. Wells 1997 $192,305 -0- -0- 9,000(4) $11,200
President of the 1996 184,536 -0- $10,400 4,700 10,500
Company and 1995 168,847 $61,547 19,200 4,700 10,500
ALLIED Life
Wendell P. Crosser 1997 $126,882 -0- -0- 7,500(4) $8,928
Vice President and 1996 119,709 -0- $6,100 2,850 10,500
Treasurer of the 1995 108,961 $37,364 11,120 2,850 10,500
Company and
ALLIED Life
Donald J. Iverson 1997 $107,885 -0- -0- 6,000(4) $6,470
Vice President of 1996 104,124 -0- -0- 16,100 7,578
the Company and 1995 95,446 $22,269 -0- 875 6,114
Vice President and
Chief Actuary of
ALLIED Life
Joseph P. Ross (6) 1997 $100,516 $4,000 -0- 5,000(4) $7,451
Vice President, 1996 45,297 35,181 -0- -0- -0-
Marketing of 1995 -0- -0- -0- -0- -0-
ALLIED Life
<FN>
(1) Includes 401(k) deferred compensation pursuant to the ALLIED Life Savings
and Investment Plan.
(2) Amounts shown were earned in the year indicated but paid in the following
year. Payments were made pursuant to the ALLIED Life Financial Corporation
Short Term Management Incentive Compensation Plan, the Management Employee
Incentive Plan, Vice President Sales Plan, and/or Regional Vice President
Plan.
(3) Awards of restricted stock were made to satisfy obligations under the
Long-term Management Incentive Compensation Plan (also known as the
Performance Unit Plan) which was discontinued in 1994. For the three-year
performance period ending in 1995 and 1996, shares of restricted stock were
awarded to satisfy prorated cash awards to which the participants were
entitled. The restricted stock vests 25% per year beginning the second year
after the award. Dividends are paid on the restricted stock awarded to
participants. The number and value of the aggregate restricted stock
holdings as of December 31, 1997 are as follows (using a market value of
$21.875 per share): Mr. Wells, 1,533 shares valued at $33,534; Mr. Crosser,
897 shares valued at $19,622. Mr. Iverson and Mr. Ross became employees of
ALLIED Life subsequent to the eligibility period and therefore did not
receive any restricted stock awards.
(4) See "Option/SAR Grants in Last Fiscal Year" for a description of the terms
and conditions of the option grants.
(5) Amounts are deferred compensation and reflect contributions made by the
Company under the Employee Stock Ownership Plan ("ESOP"), which is a defined
contribution retirement plan covering all eligible Company employees. The
amount of employer contribution is based on a percentage of annual pay
(capped at $160,000) and calculated as follows: less than 6 years of
service, 6% of pay; 6 years but less than 11 years, 7% of pay; 11 years but
less than 21 years, 8% of pay; and for 21 years or more, 9% of pay.
(6) Mr. Ross became an employee of ALLIED Life on June 10, 1996.
</FN>
</TABLE>
12
<PAGE>
Option/SAR Grants in Last Fiscal Year
The following table summarizes certain information regarding options and
SARs granted during 1997 to the named executive officers.
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term (3)
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Expiration
Name Granted Fiscal Year Price ($/Sh) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Samuel J. Wells 9,000 options(1) 24% $18.00 3/21/2007 $101,881 $258,186
Wendell P. Crosser 7,500 options(1) 20% $18.00 3/21/2007 $84,901 $215,155
Donald J. Iverson 6,000 options(1) 16% $18.00 3/21/2007 $67,921 $172,124
Joseph P. Ross 5,000 options(2) 13% $23.125 10/21/2007 $72,716 $184,276
<FN>
(1) These options will vest and become exercisable as follows: 33-1/3% as of
3-21-2000; 66-2/3% as of 3-21-2001; and 100% as of 3-21-2002.
(2) These options will vest and become exercisable as follows: 33-1/3% as of
10-21-2000; 66-2/3% as of 10-21-2001; and 100% as of 10-21-2002.
(3) These amounts represent assumed rates of stock price appreciation of 5%
and 10% which are specified in applicable federal securities regulations.
The actual value, if any, an executive officer may realize depends on the
market value of the Common Stock at a future date. There is no assurance
that the value realized by an executive officer will be at or near the
values set forth in the table.
</FN>
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option Values
The following table summarizes certain information regarding options
exercised during 1997 and presents the value of unexercised options and SARs
held at December 31, 1997. The SARs entitle the participant to receive payment
from the Company solely in cash.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at FY-End at FY-End (1)
Shares Acquired Exercisable (E)/ Exercisable (E)/
Name on Exercise Value Realized (1) Unexercisable (U) Unexercisable (U)
<S> <C> <C> <C> <C>
Samuel J. Wells 20,766 $139,170/$3,369 SARs 17,766 (E)/37,343 (U) $175,439 (E)/$274,812 (U)
Wendell P. Crosser 1,250 $ 8,805/$1,132 SARs 17,766 (E)/22,798 (U) $175,493 (E)/$155,900 (U)
Donald J. Iverson -0- -0- 1,689 (E)/21,286 (U) $ 7,504 (E)/$ 89,203 (U)
Joseph P. Ross -0- -0- -0- (E)/ 5,000 (U) -0- (E)/ -0- (U)
<FN>
(1) Values are calculated by determining the difference between the fair market
value of the Common Stock and the exercise price of the options and SARs on
the exercise date or at fiscal year end, as appropriate. The fair market
value (average of the high and low as reported on NASDAQ) as of December
31, 1997 was $21.875 per share.
</FN>
</TABLE>
13
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's executive officers and directors and persons who own more than 10% of
a registered class of the Company's equity securities file reports of ownership
and changes in ownership with the SEC. Officers, directors, and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based on a review of the reports, during
the fiscal year ended December 31, 1997, all Section 16(a) filing requirements
applicable to its officers, directors, and greater than 10% beneficial owners
were complied with.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Joint Marketing Agreement
ALLIED Life is a party to the ALLIED Group Joint Marketing Agreement
("JMA") with ALLIED Mutual and the property-casualty subsidiaries of ALLIED
Group, Inc. The JMA requires ALLIED Mutual and the ALLIED Group, Inc.
property-casualty subsidiaries to promote to their customers and agents the sale
of the products of ALLIED Life. The JMA provides for payment by ALLIED Life to
AMCO Insurance Company (as pool administrator for the property-casualty
affiliates) of an annual access fee of $100,000 plus an annual new production
incentive fee ("NPIF"), calculated based on the percentage increase from the
preceding year's production credit premiums for ALLIED Life produced by the
independent property-casualty agencies representing the property-casualty
affiliates of ALLIED Group, Inc. and ALLIED Mutual ("ALLIED agencies"). The
annual NPIF is not payable unless production credit premiums increase by at
least 10% over the prior year and is capped at an increase of 25% over the prior
year. The JMA also provides for joint systems development, including joint data
bases of customers and agents, multiple account billing systems, marketing plans
and promotions, and other systems to be developed. Development costs are to be
allocated on a mutually agreeable basis reflecting projected and actual
utilization of the systems. For the year ended December 31, 1997, the fees and
expenses incurred by ALLIED Life under the JMA totaled $100,000.
The JMA continues to the year 2008 and continues thereafter subject to
termination on two years notice given by any party. The JMA contains non-compete
provisions structured along product lines which are applicable during the term
of the JMA and for a period of ten years thereafter. Such non-compete provisions
prevent ALLIED Mutual and the property-casualty companies of ALLIED Group, Inc.
from selling life insurance or annuities in the states where ALLIED Life now
sells these life products (or on termination of the JMA, any states where the
life insurance and annuity products are sold by ALLIED Life). ALLIED Mutual and
the property-casualty companies, which are not licensed to sell life insurance
or annuity products, do not operate in all the states in which ALLIED Life
operates. The JMA non-compete also prevents ALLIED Life from offering
property-casualty products in states in which ALLIED Mutual and the
property-casualty companies of ALLIED Group, Inc. now operate.
In the event of a change of control of the Company or ALLIED Life (whenever
ownership of 50% or more of the voting stock is acquired by an unaffiliated
party), ALLIED Mutual or the ALLIED Group, Inc. property-casualty subsidiaries
may (i) terminate it upon six months notice; (ii) extend the term for up to ten
additional years beyond 2008; or (iii) allow the JMA to continue in effect
without change. Those three rights are also given to the Company or ALLIED Life
in the event of a change in control of ALLIED Group, Inc. or any of its
property-casualty subsidiaries. Disputes are to be resolved by a Coordinating
Committee made up of the two members of each of the coordinating committees of
the Company, ALLIED Group, Inc., and ALLIED Mutual. Decisions of the
Coordinating Committee must be unanimous and are binding on the parties. If the
Coordinating Committee fails to resolve an issue, it would be submitted to
arbitration. In arbitration, one arbitrator will be appointed jointly by ALLIED
Mutual and the property-casualty insurance affiliates and a second arbitrator
will be appointed by the Company. Both arbitrators so selected will jointly
select a third arbitrator.
Intercompany Operating Agreement
The Company and its subsidiaries are parties to the Intercompany Operating
Agreement ("IOA") with ALLIED Group, Inc., ALLIED Mutual, and each of their
respective subsidiaries. The IOA provides for the sharing of office space,
marketing services, agency forces, data processing, and other services and
facilities. The IOA extends through December 31, 2004 and continues thereafter
subject to any party providing two years notice that such party intends to cease
participation. In the event of a change of control (whenever ownership of 50% or
more of the voting stock of the Company or ALLIED Group, Inc. is acquired by a
nonaffiliated party) of the Company or ALLIED Group, Inc., the other party or
ALLIED Mutual may (i) terminate it upon six months notice; (ii) extend the term
for up to ten additional years beyond 2004; or (iii) allow the IOA to continue
in effect without change. The IOA contains a covenant not to compete that binds
each of the Company, ALLIED Group, Inc. and ALLIED Mutual not to engage in a
business that competes with the products or markets of any other party or such
party's subsidiaries for the term of the IOA and five years thereafter. Any
disputes regarding the use or occupancy of facilities or the terms on which
property is leased or used are to be referred to the Coordinating Committee for
resolution. Decisions of the Coordinating Committee must be unanimous and are
binding on the parties. If an issue is not resolved by the Coordinating
Committee, it will be submitted to arbitration. In such arbitration, each party
to the dispute selects one arbitrator, and if such dispute involves only two
parties, such arbitrators select a third arbitrator.
14
<PAGE>
Rental expense for office space allocated to the Company by ALLIED Mutual
amounted to $225,984 for the year ended December 31, 1997. ALLIED Life receives
certain services from the human resources department of ALLIED Group, Inc.,
which include but are not limited to maintaining employment documents,
administering payroll and employee benefits, keeping related records, placing
employees, and providing termination counseling and processing. For such
services, ALLIED Life pays a fee to ALLIED Group, Inc. based upon a percentage
of the Company's gross payroll. Also included in this fee is an amount that
represents ALLIED Life's share of the net periodic post-retirement benefit cost
for the ALLIED Group, Inc. medical plan. The fee incurred by ALLIED Life totaled
$161,842 for the year ended December 31, 1997.
Management Information Services Agreement
The Company, ALLIED Life, and other affiliated companies are parties to a
Management Information Services Agreement ("MIS") with AMCO Insurance Company
("AMCO"), which is a wholly-owned subsidiary of ALLIED Group, Inc. Under the
terms of the MIS, AMCO provides certain computer services, printing, equipment
leasing, and mail and communication services to ALLIED Life on a fee basis. The
annual fee is subject to renegotiation throughout the term of the MIS. The MIS
terminates on December 31, 2004 and has an extension provision and a change of
control provision similar to that in the IOA described above. Any disputes under
the MIS are to be referred to the Coordinating Committee for resolution.
Decisions of the Coordinating Committee must be unanimous and are binding on the
parties. If an issue is not resolved by the Coordinating Committee, it will be
submitted to arbitration. In such arbitration, each party to the dispute selects
a party arbitrator (and if such dispute involves only two parties, such
arbitrators select a third arbitrator), provided that if there are more than
three parties to a dispute, each of ALLIED Mutual, ALLIED Group, Inc. and the
Company appoints an arbitrator. For the year ended December 31, 1997, the fees
incurred by the Company, ALLIED Life, and their subsidiaries under the MIS
totaled $644,867.
Other Arrangements and Transactions
The Company and ALLIED Mutual are parties to a Stock Rights Agreement,
which is described in note 1 to the table in "Voting Securities and Principal
Stockholders." The Company and John E. Evans, Chairman and a Director, are
parties to a Consulting Agreement which is described under "Compensation of the
Members of the Board of Directors and the Director Purchase Plan."
The Company and its affiliates pool their excess cash into a short-term
investment fund pursuant to the Intercompany Cash Concentration Fund Agreement.
The fund, administered by AID Finance Services, Inc. (an affiliate of the
Company), also issues short-term loans (30 days or less) to affiliated companies
in accordance with the current intercompany borrowing policy. The Company and
its affiliates pay to AID Finance Services, Inc. a management fee (5 basis
points of invested assets) which is offset against investment income. At
December 31, 1997, $3,468,759 was invested in the fund, which is carried as a
short-term investment. Interest earned from the fund during 1997 was $77,594.
ALLIED Life earned premiums from ALLIED Group, Inc. for term life insurance
on its employee group in the amount of $468,222 in 1997.
The Company and its subsidiaries have from time to time borrowed funds from
affiliates as needed on an arms length basis. The Company has entered into
various note payable agreements with ALLIED Mutual. At December 31, 1997, the
outstanding balance of the notes payable was $3,567,722. In 1997, the Company
incurred interest expense of $241,420 from affiliates.
On January 2, 1997, State Street Bank and Trust Company, as ESOP Trustee,
purchased 19,143 shares of ESOP Preferred from the Company for $17.50 per share.
During 1997, directors and executive officers of the Company purchased life
insurance or annuities from the Company's subsidiaries on terms comparable to
those offered in the normal course of business to nonaffiliated customers.
15
<PAGE>
OTHER BUSINESS
The Board of Directors of the Company knows of no matters to be presented
at the Annual Meeting other than those which have been discussed above. However,
if any matters properly come before the meeting, or any adjournment thereof, it
is intended that the persons named in the enclosed Proxy will vote on such
matters in their discretion.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, 2500 Ruan Center, Des Moines, Iowa 50309, were the
auditors for the Company for the year ended December 31, 1997.
The Audit Committee of the Board of Directors of the Company approved in
advance, or has subsequently approved, all audit and non-audit related services
provided by KPMG Peat Marwick LLP and also considers the possible effect of such
services on the auditors' independence. Audit services performed by KPMG Peat
Marwick LLP for the year ended December 31, 1997 consisted of the examination of
the financial statements of the Company and its consolidated subsidiaries,
assistance and consultation concerning Securities and Exchange Commission
filings, and consultation in connection with various audit-related accounting
matters.
A representative of KPMG Peat Marwick LLP will be present at the Annual
Meeting on May 5, 1998. The representative will have the opportunity to make a
statement, if he or she so desires, and will be available to respond to
appropriate questions of the stockholders.
SOLICITATION
The Company will bear the cost of the solicitation of proxies. In addition
to solicitation by mail, the Company may request banks, brokers, and other
custodians, nominees, and fiduciaries to send proxy materials to beneficial
owners and to request voting instructions, if any. The Company reimburses them
for their expense in so doing. Officers and employees of the Company may solicit
proxies personally or by mail, telephone, or telegraph at no additional
compensation.
SUBMISSION OF STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's Proxy Statement
for the Company's Annual Meeting of Stockholders to be held in 1999, stockholder
proposals must be received by the Company on or prior to November 14, 1998. Such
proposals should be directed to the Secretary of the Company, 701 Fifth Avenue,
Des Moines, Iowa 50391-2003.
Stockholders who do not submit proposals for inclusion in the Proxy
Statement but who intend to submit a proposal at the 1999 Annual Meeting, and
stockholders who intend to submit nominations for directors at the meeting, must
provide written notice to the Company. Such notice should be addressed to the
Secretary of the Company, 701 Fifth Avenue, Des Moines, Iowa 50391-2003, and
received not later than February 4, 1999. The written notice must satisfy
certain requirements specified in the Company's By-laws. A copy of the By-laws
will be sent to any stockholder upon written request to the Secretary.
The Company will provide without charge to each stockholder, upon a written
request, a copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1997. Such requests should be directed to ALLIED Life Financial
Corporation, Stockholder Services Department, 701 Fifth Avenue, Des Moines, Iowa
50391-2003.
16
<PAGE>
APPENDIX TO PROXY STATEMENT
PROXY CARD
PROXY ALLIED LIFE FINANCIAL CORPORATION PROXY
Annual Meeting of Stockholders, May 5, 1998-- 9:30 a.m., Central Time
This Proxy is Solicited on Behalf of the Board of Directors
The undesigned hereby appoints John E.Evans, Samuel J. Wells, and Douglas L.
Anderson, and any one of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and vote all of the shares,
as designated on the reverse side of this card, of Common Stock of ALLIED Life
Financial Corporation held of record by the undersigned on February 25, 1998 at
the Annual Meeting of Stockholders to be held on May 5, 1998 or at any
adjournment thereof.
This is a revocable proxy that when properly executed will be voted in the
manner directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted for all directors listed in Item 1 and in the
discretion of the Proxies as to Item 2.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
(Continued and to be signed on reverse side.)
ALLIED Life Financial Coporation
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
<TABLE>
THE BOARD OF DIRECTORS RECEMMENDS A VOTE "FOR" PROPOSAL 1.
<CAPTION>
<S> <C> <C> <C>
FOR WITHHOLD FOR ALL those whose name(s)appear below
ALL ALL
1. Election of Directors for three-year term-- [ ] [ ] [ ]____________________________________
Nominees: James W. Callison
Dennis H. Kelly, Jr.
2. The Proxies, in their descretion, are authorized The undersigned acknowledges receipt from the Company prior to the
to vote upon such other business as may execution of this proxy of a Notice of Annual Meeting and a Proxy
properly come before the meeting. Statement dated March 14, 1998.
Dated: __________, 1998
Signature(s)____________________________________________________
Please sign exactly as name appears hereon. Joint owners should
each sign. Where applicable, indicated official position or
representative capacity.
</TABLE>
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
