SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
AMERUS LIFE HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / 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:
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[LOGO]
March 31, 1997
Dear Shareholder:
We are pleased to invite you to attend the 1997 Annual Meeting of
Shareholders of AmerUs Life Holdings, Inc.
As you know, this will be our first annual meeting since becoming a public
company in February 1997. We had a number of milestone events during the past 12
months, and now we look forward to another landmark event with the convening of
this annual meeting. We had an exciting year in 1996 and welcome the opportunity
to share 1996 results as well as some of our goals for the future.
Further information about the meeting and matters to be considered is
contained in the formal notice of annual meeting and proxy statement that
follow. It is important that your shares be represented at this meeting. Whether
or not you plan to attend, we hope that you will complete, sign, date and return
your proxy promptly in the enclosed envelope. If you later decide to attend the
meeting and wish to vote your shares personally, you may revoke your proxy at
any time before it is exercised.
Very truly yours,
Roger K. Brooks
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
[LOGO]
AMERUS LIFE HOLDINGS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 1997
------------------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of AMERUS
LIFE HOLDINGS, INC., an Iowa corporation (the "Company"), will be held on
Friday, May 2, 1997, at 9:00 a.m., local time, at the Des Moines Convention
Center, 501 Grand Avenue, Des Moines, Iowa, for the following purposes:
1. to elect three Class I directors to serve for a three year term;
2. to ratify the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company for fiscal year 1997; and
3. to transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Shareholders of record at the close of business on March 18, 1997 are
entitled to notice of, and to vote at, the annual meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, please complete, sign,
date and return the enclosed proxy as promptly as possible in the postage
prepaid enclosed envelope. Any shareholder attending the meeting may vote in
person even if he or she has returned a proxy.
By order of the Board of Directors
JAMES A. SMALLENBERGER
SENIOR VICE PRESIDENT AND SECRETARY
March 31, 1997
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED FORM OF PROXY IN THE
ENVELOPE PROVIDED FOR THAT PURPOSE.
AMERUS LIFE HOLDINGS, INC.
418 SIXTH AVENUE
DES MOINES, IOWA 50309
PROXY STATEMENT FOR 1997
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of
AmerUs Life Holdings, Inc. (the "Company") for use at the annual meeting of
shareholders to be held on Friday, May 2, 1997, at 9:00 a.m., local time, or at
any adjournment thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The annual meeting will
be held at the Des Moines Convention Center, 501 Grand Avenue, Des Moines, Iowa.
Shareholders of record at the close of business on March 18, 1997 will be
entitled to vote at the annual meeting.
Proxies are being solicited by the Board of Directors of the Company. The
cost of preparing, printing and mailing this Proxy Statement, the accompanying
notice and the enclosed proxy, and all other costs in connection with the
solicitation of proxies, will be paid by the Company. If the accompanying proxy
is executed and returned, the shares represented by the proxy will be voted as
specified therein, but the shareholder may revoke the proxy before the meeting
by mailing a signed instrument revoking the proxy to: James A. Smallenberger,
Senior Vice President and Secretary, AmerUs Life Holdings, Inc., 418 Sixth
Avenue, Des Moines, Iowa 50309; to be effective, a mailed revocation must be
received by the Secretary on or before May 1, 1997. A shareholder may attend the
meeting in person, withdraw the proxy and vote in person. This Proxy Statement
is being mailed to shareholders on or about March 31, 1997. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to furnish proxy material to the beneficial
owners of the Company's Class A Common Stock of whom they have knowledge and
will reimburse them for their expenses for so doing. Additional solicitation may
be made by letter, telephone or telecopier by officers and employees of the
Company and its affiliates.
The Company at March 18, 1997 had issued and outstanding 18,155,989 shares
of Class A Common Stock and 5,000,000 shares of Class B Common Stock. Each share
of common stock is entitled to one vote. There were no shares of voting
preferred stock outstanding at March 18, 1997.
The presence of a majority of the outstanding common stock represented in
person or by proxy at the meeting will constitute a quorum. Shares represented
by proxies that are marked "abstain" will be counted as shares present for
purposes of determining the presence of a quorum and will also be counted in the
total number of votes present for passage of any proposal. Proxies relating to
"street name" shares that are voted by brokers on some matters will be treated
as shares present for purposes of determining the presence of a quorum, but will
not be treated as shares entitled to vote at the annual meeting on those matters
as to which authority to vote is withheld by the broker ("broker non-votes"). If
no instructions are indicated on a duly executed and returned proxy, the shares
represented by the proxy will be voted FOR the election of the three nominees
for director proposed by the Board of Directors and set forth herein, FOR the
ratification of the appointment of KPMG Peat Marwick LLP as the independent
auditors of the Company for fiscal year 1997, and in accordance with the
judgment of the persons named in the proxy as to such other matters as may
properly come before the annual meeting.
All matters to be voted upon at the annual meeting will be decided by the
affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote. On any such matter, an abstention will have the
same effect as a negative vote. A broker non-vote will not be counted as an
affirmative vote or a negative vote because shares held by brokers will not be
considered entitled to vote on matters as to which the brokers withhold
authority.
1
BENEFICIAL OWNERSHIP OF COMMON STOCK
PRINCIPAL HOLDERS
The following table sets forth the beneficial ownership as of March 18, 1997
of the Company's Class A and Class B Common Stock of each person known by the
Company to own beneficially more than 5% of each such class:
NUMBER OF
SHARES
BENEFICIALLY PERCENT OF
NAME AND ADDRESS CLASS OF STOCK OWNED CLASS
- --------------------------------------------------------------- -------------------- --------------- -----------
AmerUs Group Co. .............................................. Class A Common 11,706,511 64%
418 Sixth Avenue
Des Moines, IA 50309
AmerUs Group Co. .............................................. Class B Common 5,000,000 100%
418 Sixth Avenue
Des Moines, IA 50309
American Mutual ............................................... Class A Common 11,706,511(1) 64%
Holding Company
418 Sixth Avenue
Des Moines, IA 50309
American Mutual ............................................... Class B Common 5,000,000(1) 100%
Holding Company
418 Sixth Avenue
Des Moines, IA 50309
- ------------------------
(1) Indirect beneficial owner due to ownership of 100% of the capital stock of
AmerUs Group Co.
2
DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of the Company's
Class A Common Stock as of March 18, 1997 of each of the directors, the
executive officers named in the Summary Compensation Table on page 7, and all
directors and executive officers as a group (which includes executive officers
not named in the Summary Compensation Table). No director or executive officer
beneficially owned 1% or more of the Company's Class A Common Stock as of such
date. The percentage of Class A Common Stock owned by all directors and officers
as a group as of such date was .19%. No shares of Class B Common Stock were
owned by any director or executive officer of the Company as of such date.
NAME NUMBER OF SHARES
- ------------------------------------------------------------------------------------- -----------------
Roger K. Brooks(1)(2)................................................................ 5,000
D T Doan(1)(2)....................................................................... 5,000
Thomas C. Godlasky(1)(2)............................................................. 5,000
Sam C. Kalainov(1)(2)(3)............................................................. 5,000
Michael E. Sproule(1)(2)............................................................. 5,000
John R. Albers(2)(4)................................................................. 0
Malcolm Candlish(2)(4)............................................................... 0
Maureen M. Culhane(4)................................................................ 0
Thomas F. Gaffney(2)(4).............................................................. 0
Ilene B. Jacobs(4)................................................................... 0
John W. Norris, Jr.(2)(4)............................................................ 0
Jack C. Pester(2)(4)................................................................. 0
John A. Wing(4)...................................................................... 0
Directors and executive officers as a group (15 persons)............................. 35,000
- ------------------------
(1) Share ownership reflects the purchase of 5,000 shares in the individual's
capacity as a policyowner in the Company's subscription offering to
policyowners of the Company's subsidiary, AmerUs Life Insurance Company,
which was completed on February 3, 1997. Under regulations promulgated by
the Iowa Insurance Division, except for shares purchased in the subscription
offering in their capacities as policyowners, directors and officers are
prohibited from purchasing shares of the Company's common stock for a period
of six months following the first date on which the Company's Class A Common
Stock was publicly traded, which occurred on January 28, 1997.
(2) Mr. Brooks, Mr. Doan, Mr. Kalainov, Mr. Albers, Mr. Candlish, Mr. Gaffney,
Mr. Norris and Mr. Pester are directors of AmerUs Group Co., which owns
11,706,511 shares of Class A Common Stock and 5,000,000 shares of Class B
Common Stock, and of American Mutual Holding Company ("AMHC") , which
beneficially owns such shares through its 100% ownership of the capital
stock of AmerUs Group Co. In addition, Mr. Brooks is the President and Chief
Executive Officer of AmerUs Group Co. and AMHC, Mr. Doan is Vice Chairman of
AmerUs Group Co. and AMHC, Mr. Godlasky is Executive Vice President and
Chief Investment Officer of AmerUs Group Co. and AMHC, Mr. Kalainov is
Chairman of AmerUs Group Co. and AMHC and Mr. Sproule is Executive Vice
President and Chief Financial Officer of AmerUs Group Co. and AMHC. All of
the foregoing persons have disclaimed beneficial ownership of all shares of
the Company's common stock which are beneficially owned by AmerUs Group Co.
or AMHC.
(3) All shares reported are owned by Mr. Kalainov's spouse.
(4) Under regulations promulgated by the Iowa Insurance Division, directors and
officers are prohibited from purchasing shares of the Company's common stock
for a period of six months following the first date on which the Company's
Class A Common Stock was publicly traded, which occurred on January 28,
1997.
3
ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of eleven members,
divided into three classes. Each class serves for three years on a
staggered-term basis.
The terms of the following Class I directors expire at the annual meeting to
be held on May 2, 1997: Malcolm Candlish, Sam C. Kalainov and John W. Norris,
Jr. The Board of Directors is nominating Messrs. Candlish, Kalainov and Norris
for reelection at the 1997 annual meeting to fill the Class I positions on the
Board. The directors elected at the 1997 annual meeting will hold office until
the annual meeting in 2000 or until their successors are duly elected and
qualified. Unless otherwise instructed by the shareholders, it is the intention
of the persons named in the accompanying proxy to vote the proxies held by them
for the election of the nominees named in the "Nominees for Directors" table.
However, if any of the nominees shall not be a candidate for election at the
time of the meeting (a contingency which the Board of Directors does not expect
to happen), it is intended that such shares will be voted for such substitute
nominee as may be selected by the Board of Directors.
The following paragraphs set forth the principal occupation of, and certain
other information relating to, each director for the last five years. Directors
who are nominees for election at the 1997 annual meeting are listed first.
MALCOLM CANDLISH - Nominee - Osprey, Florida.
Chairman of First Alert, Inc., Chicago, Illinois since October 1996. Previous
positions with First Alert include Chairman, President and Chief Executive
Officer from May 1996 to October 1996 and Chairman and Chief Executive Officer
from December 1992 to May 1996. From 1989 to 1992, Mr. Candlish was the Chairman
and Chief Executive Officer of Sealy, Inc. He is a director of American Mutual
Holding Company, AmerUs Group Co., AmerUs Life Insurance Company, the Company's
principal subsidiary, ("AmerUs Life") and Black & Decker Corporation. Mr.
Candlish has been a director of the Company since its formation in August 1996.
From February 1987 to June 1996 he was a director of American Mutual Life
Insurance Company ("AML"), the predecessor to AmerUs Life. His current term
expires May 2, 1997. He is 61 years of age.
SAM C. KALAINOV - Nominee - Des Moines, Iowa.
Chairman of American Mutual Holding Company and AmerUs Group Co. since September
1996. Mr. Kalainov was Chairman of AmerUs Life from December 1994 until
September 1996 and was Chairman and Chief Executive Officer of one of the
predecessors of AML ("Old AML") from 1983 to December 1994. He is a director of
American Mutual Holding Company, AmerUs Group Co. and AmerUs Life. Mr. Kalainov
has been a director of the Company since its formation in August 1996. From 1972
to June 1996 he was a director of AML. His current term expires May 2, 1997. He
is 66 years of age.
JOHN W. NORRIS, JR. - Nominee - Dallas, Texas.
Chairman and Chief Executive Officer of Lennox International, Inc., Dallas,
Texas. He is a director of American Mutual Holding Company, AmerUs Group Co.,
AmerUs Life and ATMOS Energy Corporation. Mr. Norris has been a director of the
Company since its formation in August 1996. From November 1974 to June 1996 he
was a director of AML. His current term expires May 2, 1997. He is 61 years of
age.
THE FOLLOWING DIRECTORS SERVE FOR TERMS THAT EXPIRE AFTER 1997:
JOHN R. ALBERS - Dallas, Texas.
President and Chief Executive Officer of Fairfield Enterprises, Inc., Dallas,
Texas since April 1995 and Chairman, Chief Executive Officer and President of
Dr. Pepper/Seven-Up Companies, Dallas, Texas from August 1988 to April 1995. Mr.
Albers is a director of American Mutual Holding Company, AmerUs Group Co.,
AmerUs Life, Recovery Engineering, Inc. and First Alert, Inc. He is also a
director of AMAL Corporation ("AMAL"), a 34%-owned joint venture between AmerUs
Life and Ameritas Life Insurance Corp. Mr. Albers has been a director of the
Company since its formation in August 1996. From
4
November 1983 to June 1996 he was a director of AML. His current term expires
May 8, 1998. He is 65 years of age.
ROGER K. BROOKS - Des Moines, Iowa.
Chairman, President and Chief Executive Officer of the Company since its
formation in August 1996 and Chief Executive Officer of AmerUs Life since
December 1994. Previous positions with AmerUs Life include Chairman and Chief
Executive Officer from 1992 to 1994 and President and Chief Executive Officer
from 1975 to 1992. He is a director of AMAL, American Mutual Holding Company,
AmerUs Group Co. and AmerUs Life. Mr. Brooks has been a director of the Company
since its formation in August 1996. From February 1971 to June 1996 Mr. Brooks
was a director of AML. His current term expires May 7, 1999. He is 59 years of
age.
MAUREEN M. CULHANE - Chicago, Illinois.
Vice President of Finance and Treasurer of Sara Lee Corporation since 1993.
Partner, Richards & Tierney from 1990 to 1993 and Vice President, Investment
Banking - Financial Institutions, Goldman Sachs & Co. from 1985 to 1990. Ms.
Culhane has been a director of the Company since February 1997. Her current term
expires May 7, 1999. She is 48 years of age.
D T DOAN - Des Moines, Iowa.
Vice Chairman of the Company since its formation in August 1996 and Vice
Chairman and President- Life Operations of AmerUs Life since October 1995.
Previous positions with AmerUs Life include Vice Chairman from December 1994 to
October 1995, President - Insurance Operations from 1992 to 1994 and Executive
Vice President - Corporate from 1987 to 1992. Mr. Doan has announced his
intention to retire from his position as President-Life Operations of AmerUs
Life effective March 31, 1997. His duties in such capacity will be assumed by
Roger K. Brooks. Mr. Doan is a director of AMAL Corporation, American Mutual
Holding Company, AmerUs Group Co. and AmerUs Life. He has been a director of the
Company since its formation in August 1996. From December 1994 to June 1996 Mr.
Doan served as a director of AML. His current term expires May 8, 1998. He is 64
years of age.
THOMAS F. GAFFNEY - Tierra Verde, Florida.
Private investor since 1990. Mr. Gaffney is a director of American Mutual
Holding Company, AmerUs Group Co. and AmerUs Life. Mr. Gaffney has been a
director of the Company since its formation in August 1996. From November 1983
to June 1996 Mr. Gaffney served as a director of AML. His current term expires
May 8, 1998. He is 51 years of age.
ILENE B. JACOBS - Maynard, Massachusetts.
Vice President, Business Development - Office of Chairman of Digital Equipment
Corporation since 1996. From 1985 to 1996, Vice President and Treasurer of
Digital Equipment Corporation. Ms. Jacobs has been a director of the Company
since February 1997. She is also a director of Little Switzerland, Inc. and
Arkwright Mutual Insurance Co. Her current term expires May 8, 1998. She is 49
years of age.
JACK C. PESTER - Houston, Texas.
Senior Vice President of The Coastal Corporation. He is a director of American
Mutual Holding Company, AmerUs Group Co., AmerUs Life and KFX, Inc. Mr. Pester
has been a director of the Company since its formation in August 1996. He also
was a director of Old AML from May 1981 to December 1994. From December 1994 to
June 1996 Mr. Pester served as a director of AML. His current term expires May
7, 1999. He is 62 years of age.
JOHN A. WING - Chicago, Illinois.
Chairman and Chief Executive Officer of ABN AMRO Chicago Corporation. Mr. Wing
is a director of AmerUs Life and The Chicago Board Options Exchange. His current
term expires May 7, 1999. Mr. Wing has been a director of the Company since its
formation in August 1996. From May 1991 to June 1996 he was a director of AML.
He is 61 years of age.
5
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES
LISTED HEREIN.
BOARD MEETINGS AND COMMITTEES
The Board of Directors meets on a regularly scheduled basis. The Board of
Directors met on two occasions during 1996 subsequent to the Company's
incorporation in August. Each director attended at least 75% of the total number
of meetings of the Board and the Committees on which the director served.
The Board of Directors has assigned certain responsibilities to committees.
The Audit Committee recommends the appointment of the independent public
accountants, reviews the scope of the audits recommended by the independent
public accountants, reviews internal audit reports on various aspects of
corporate operations and consults with the independent public accountants on a
periodic basis on matters relating to internal financial controls and
procedures. The Audit Committee, which did not meet during 1996, is composed of
Thomas F. Gaffney (Chairman), Maureen M. Culhane, Jack C. Pester and John A.
Wing.
The Affiliate Transactions Committee reviews transactions between the
Company and its affiliates. The Affiliate Transactions Committee, which was
formed in February of 1997, is composed of Maureen M. Culhane, Ilene B. Jacobs
and John A. Wing.
The Board Operations Committee reviews the organization and operation of the
Board of Directors and recommends nominees for membership on the Board of
Directors. The Board Operations Committee, which met once during 1996, is
composed of Malcolm Candlish (Chairman), John R. Albers and Jack C. Pester.
The Finance and Strategy Committee reviews the management of the Company's
financial resources and the impact of such management on the Company's long-term
objectives and plans. The Finance and Strategy Committee, which was formed in
February of 1997, is composed of John W. Norris, Jr. (Chairman), Malcolm
Candlish, Thomas F. Gaffney and Ilene M. Jacobs.
The Human Resources Committee reviews and approves the compensation of
employees above a certain salary level, reviews management proposals relating to
incentive compensation and benefit plans and administers compensation plans
presently in effect. The Human Resources Committee, which did not meet during
1996, is composed of John R. Albers (Chairman), Malcolm Candlish, Ilene B.
Jacobs and John W. Norris, Jr.
The Investment Committee oversees the Company's investments and investment
policy. The Investment Committee, which was formed in February of 1997, is
composed of John A. Wing (Chairman), Maureen M. Culhane and Thomas F. Gaffney.
The Executive Committee exercises the authority of the Board of Directors
from time to time and exercises the authority of the Board between meetings of
the Board of Directors. The Executive Committee, which was formed in February of
1997, is composed of Roger K. Brooks (Chairman), Thomas F. Gaffney and John W.
Norris, Jr.
6
EXECUTIVE OFFICER/DIRECTOR COMPENSATION
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
None of the officers listed below received any compensation during 1995 or
1996 from the Company. All compensation received, earned or accrued by such
officers has been from AmerUs Life.
The following Summary Compensation Table sets forth certain information
concerning compensation for services rendered in all capacities awarded or paid
by the Company (including compensation paid by AmerUs Life) to its Chief
Executive Officer and the other named executive officers (collectively, the
"Named Executive Officers") during the years ended December 31, 1996 and 1995:
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION
NAME AND ---------------------- LTIP ALL OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS(A)($) PAYOUTS(B)($) COMPENSATION(C)($)
- --------------------------------------- ----------- --------- ----------- ------------- ------------------
Roger K. Brooks ....................... 1996 455,000 415,000 290,400 90,446
Chairman, President and Chief 1995 440,000 300,000 352,000 --
Executive Officer of the Company and
Chairman of AmerUs Life
D T Doan .............................. 1996 287,500 150,000 113,400 39,859
Vice Chairman of the Company and 1995 275,000 132,500 137,600 --
President of AmerUs Life
Thomas C. Godlasky .................... 1996 262,500 110,000 103,070 26,202(D)
Executive Vice President and Chief 1995 239,600 125,000 204,000
Investment Officer of the Company and
AmerUs Life
Michael E. Sproule .................... 1996 262,500 200,000 103,070 24,921
Executive Vice President and Chief 1995 250,000 200,000 125,000 --
Financial Officer of the Company and
AmerUs Life
Sam C. Kalainov ....................... 1996 455,000 215,000 290,400 33,604
Former Chairman (E) 1995 440,000 300,000 352,000 --
- ------------------------
(A) Pursuant to the Management Incentive Plan. Bonuses indicated were earned in
1995 and 1996 and were payable in 1996 and 1997, respectively. In addition
to bonuses paid under the Management Incentive Plan, Mr. Brooks and Mr.
Sproule received one-time discretionary bonuses for 1996 of $200,000 and
$100,000, respectively, for their services in connection with the Company's
initial public offering of its Class A Common Stock.
(B) Long term incentive compensation pursuant to the Performance Share Plan (the
"LTIP"). LTIP payouts indicated were earned in 1995 and 1996 and were
payable in 1996 and 1997, respectively.
7
(C) Amounts shown as "Other Compensation" for 1996 are comprised of the items
set forth in the table below. Except for Mr. Godlasky, de minimis benefits
and perquisites were paid in 1995.
QUALIFIED PLAN SUPPLEMENTAL EXECUTIVE
----------------------------------------------- RETIREMENT PLAN
INTERIM --------------------------------
401(K) MATCHING BASIC BENEFIT BASIC INTERIM BENEFIT
CONTRIBUTION CONTRIBUTION SUPPLEMENT CONTRIBUTION SUPPLEMENT
--------------- --------------- ------------- ------------- -----------------
Roger K. Brooks................. $ 7,500 $ 6,000 13,065 20,104 43,777
D T Doan........................ 7,500 6,000 5,145 11,421 9,793
Thomas G. Godlasky.............. 7,500 6,000 -- 12,702 --
Michael E. Sproule.............. 7,500 6,000 -- 11,421 --
Sam C. Kalainov................. 7,500 6,000 -- 20,104 --
(D) The amount shown reflects payment of a $204,000 sign-on bonus of which a
pro-rata portion is repayable in the event of termination during the initial
36 months of employment.
(E) Mr. Kalainov served as Chairman of AmerUs Life until September 1996. In
August 1996, Mr. Kalainov became Chairman of AMHC and AmerUs Group. Mr.
Kalainov is no longer an officer of the Company.
MANAGEMENT INCENTIVE PLAN
AmerUs Life sponsors a Management Incentive Plan ("MIP") for officers and
key management employees of the Company and its subsidiaries. On an annual
basis, AmerUs Life establishes various and distinct goals for its executives and
key managers. Goals generally relate to objectives such as increased revenue,
expense levels and earnings. Attainment of individual and AmerUs Life goals can
generate payment of cash bonuses ranging from 15% to 70% of an executive's base
salary. Payment of these annual incentives is approved by the Board of Directors
of AmerUs Life and made in a separate lump-sum on or before the end of February
of the ensuing year.
LONG-TERM INCENTIVE COMPENSATION PLAN
AmerUs Life established a long-term incentive compensation Performance Share
Plan effective January 1, 1995 (the "LTIP"). Under the LTIP, the Human Resources
Committee of the AmerUs Life Board of Directors has the authority to grant
Performance Shares to eligible employees on such dates as the Human Resources
Committee shall determine. Performance Shares which were granted to the Named
Executive Officers under the LTIP during 1996 are shown in the following table.
LONG-TERM INCENTIVE PLANS - AWARDS
FOR FISCAL YEAR 1996
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
NUMBER OF SHARES, OTHER PERIOD -----------------------------------
UNITS OR OTHER UNTIL MATURATION THRESHOLD TARGET
RIGHTS(#) OR PAYOUT ($) ($) MAXIMUM ($)
----------------- ---------------- ----------- --------- -----------
Roger K. Brooks............................. 3,520 1/96 - 12/98 176,000 352,000 704,000
D T Doan.................................... 1,375 1/96 - 12/98 68,750 137,500 275,000
Thomas C. Godlasky.......................... 1,250 1/96 - 12/98 62,500 125,000 250,000
Michael E. Sproule.......................... 1,250 1/96 - 12/98 62,500 125,000 250,000
Sam C. Kalainov............................. 3,520 1/96 - 12/98 176,000 352,000 704,000
8
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The Internal Revenue Code of 1986, as amended (the "Code"), was amended in
1993, adding Section 162(m), which establishes limits on the extent to which
compensation of a corporation's executives may be deducted by the employer
corporation. Compensation that is "performance-based," as that term is defined
in Section 162(m) and the regulations thereunder, is not subject to these
deductibility limits. The Company's policy is to qualify, to the extent
reasonable, its executive officers' compensation for deductibility under
applicable tax laws. However, the Human Resources Committee believes that its
primary responsibility is to provide a compensation program that will attract,
retain and reward the executive talent necessary to the Company's success.
Consequently, the Human Resources Committee recognizes that the loss of a tax
deduction could be necessary in some circumstances.
STOCK INCENTIVE PLAN
On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Holdings, Inc. Stock Incentive Plan (the "Stock Plan"). The Stock Plan was
approved by the Company's sole shareholder and became effective on December 4,
1996. The purpose of the Stock Plan is to enable the Company to attract and
retain employees who will contribute to the Company's long-term success by
enabling such employees to participate in the long-term success and growth of
the Company through an equity interest in the Company.
The Stock Plan provides for the grant of options (including incentive stock
options and non-qualified stock options), stock appreciation rights and
restricted stock awards. To date, no options or other awards have been granted
under the Stock Plan and, consistent with rules promulgated by the Iowa
Insurance Division, no options or awards will be granted by the Company during
the six-month period following the first date on which the Company's Class A
Common Stock was publicly traded, which occurred on January 28, 1997.
SAVINGS AND PROFIT SHARING PLANS
Each of the Named Executive Officers participates in the All*AmerUs Savings
& Retirement Plan for Employees of AML (the "Savings & Retirement Plan"), a
profit sharing plan containing a qualified cash or deferred arrangement and the
All*AmerUs Supplemental Executive Retirement Plan (the "Supplemental Plan").
Each of the Named Executive Officers also has a frozen benefit under either the
American Mutual Life Insurance Company Employees' Pension Plan (the "AML
Employees' Frozen Pension Plan") or the American Mutual Life Insurance (formerly
Central Life Assurance) Company Pension Plan (the "AML (formerly Central Life)
Frozen Pension Plan") (the AML Employees' Frozen Pension Plan and the AML
(formerly Central Life) Frozen Pension Plan are hereinafter sometimes
collectively referred to as the "Frozen Pension Plans"). Certain of the Named
Executive Officers additionally have a frozen benefit under the American Mutual
Life Insurance Company Supplemental Executive Retirement Plan (the "AML Frozen
SERP").
The employer will contribute 4% of each eligible participating employee's
compensation as of the end of a plan year in accordance with the provisions of
the Saving and & Retirement Plan ("Basic Contributions"). In addition, the
employer will make a matching contribution of 125% of an employee's before tax
contribution, up to a maximum of 4% of an employee's compensation ("Matching
Contributions").
The employer may also contribute, on behalf of each participating employee
who was, as of December 31, 1995, an active participant in either Frozen Pension
Plan, a certain percentage of such employee's compensation ("Interim Benefit
Supplement") in order to make up any shortfall between the amount to which such
employee would have been entitled under either of the Frozen Pension Plans as
compared to such employee's projected benefits under the Savings & Retirement
Plan. The amount of the Interim Benefit Supplement made on behalf of any
eligible employee is reduced by any discretionary profit sharing contribution
allocated to such employee under the Savings & Retirement Plan.
9
FROZEN PENSION PLANS
Prior to January 1, 1996, AmerUs Life maintained the Frozen Pension Plans,
which were qualified under Section 401(a) of the Code. The benefits under both
such plans were curtailed as of December 31, 1995 and the Frozen Pension Plans
were merged into the surviving American Mutual Life Insurance Company Pension
Plan (the "Surviving AML Pension Plan"). Retirement benefits under the
predecessor AML Employees' Frozen Pension Plan were based primarily on an
employee's years of service and compensation during the highest five consecutive
plan years of employment or the last 60 months, if greater, as of December 31,
1995; retirement benefits under the predecessor AML (formerly Central Life)
Frozen Pension Plan were based primarily on an employee's years of service and
career compensation as of December 31, 1995. All employees' frozen accrued
benefits as of December 31, 1995 are fully vested.
Prior to January 1, 1996, AmerUs Life also maintained the AML Frozen SERP
and a supplemental retirement plan for certain former employees of Central Life
Assurance Company, one of the predecessors to AmerUs Life (the "Central Life
Frozen SERP"), which plans were similar in operation to the Supplemental Plan
currently in effect. The benefits under these plans were also curtailed as of
December 31, 1995.
The following table sets forth the frozen accrued monthly benefits payable
as a straight life annuity to each of the Named Executive Officers under the
Surviving AML Pension Plan, including the AML Frozen SERP and the Central Life
Frozen SERP, assuming retirement at age 65 (current normal retirement age):
PENSION TABLE
FROZEN ACCRUED BENEFITS
NAME MONTHLY BENEFITS
- ------------------------------------------------------------------------------------------------ ----------------
Roger K. Brooks................................................................................. $ 27,550
D T Doan........................................................................................ 15,640
Thomas C. Godlasky.............................................................................. 321
Michael E. Sproule.............................................................................. 1,360
Sam C. Kalainov................................................................................. 37,788(1)
- ------------------------
(1) Included in this amount is $15,411 in monthly benefits due under the terms
of an Employment Agreement, dated February 1, 1995, between AML and Sam C.
Kalainov. See "--Employment Agreement."
EMPLOYMENT AGREEMENT
AmerUs Life entered into an employment agreement (the "Employment
Agreement") with Mr. Kalainov, dated February 1, 1995, under which he served as
the Chairman of the Board of Directors of AmerUs Life and Chairman of AmerUs
Life's Charitable Foundation. The term of the Employment Agreement was to
continue until May 15, 2000, but could expire earlier if Mr. Brooks ceased to
perform the duties of Chief Executive Officer of AmerUs Life. If Mr. Kalainov's
service as Chairman was terminated prior to May 15, 2000, AmerUs Life was
required to execute a consulting contract with him pursuant to which, among
other things, AmerUs Life was obligated to pay the difference between the
benefits Mr. Kalainov received under AmerUs Life's pension plans and the sum of
his base salary plus incentive compensation for the preceding 12 months. The
Employment Agreement provided that Mr. Kalainov would serve as Chairman of the
Foundation until May 15, 2000.
Pursuant to the Employment Agreement, Mr. Kalainov received the annual
salary and incentive compensation described in the Summary Compensation Table.
Mr. Kalainov participated in AmerUs Life's employee benefit plans and was also
entitled to certain perquisites and other incidental expenses. Mr. Kalainov was
also entitled to certain retirement benefits and health insurance coverage upon
his
10
retirement. In December 1996 Mr. Kalainov's employment agreement was terminated
by mutual agreement and Mr. Kalainov entered into an employment agreement with
AmerUs Group.
DIRECTOR COMPENSATION
CASH COMPENSATION
For their services on the Board, non-employee directors are paid $10,000 per
year and $2,000 for each meeting attended. The chairman of each of the Audit,
Board Operations, Finance and Strategy, Investment and Human Resources
Committees receives an additional $2,000 per year. Members of the Affiliate
Transactions Committee receive an additional $16,000 per year for services on
such committee.
NON-EMPLOYEE DIRECTOR STOCK PLAN
On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Non-Employee Director Stock Plan (the "Director Plan"). The Director Plan
was approved by the Company's sole shareholder and became effective on December
4, 1996. The purpose of the Director Plan is to provide stock-based compensation
to eligible non-employee Directors of the Company in order to encourage a high
level of Director performance and to provide non-employee Directors with a
proprietary interest in the Company's success.
The Director Plan provides for grants of restricted shares of the Company's
Class A Common Stock ("Restricted Shares") and for the grant of options to
purchase shares of Class A Common Stock. To date, no Restricted Shares or
options have been granted and, consistent with rules promulgated by the Iowa
Insurance Division, no Restricted Shares or options will be granted under the
Director Plan during the six-month period following the first date on which the
Company's Class A Common Stock was publicly traded, which occurred on January
28, 1997.
The Director Plan is administered by the Human Resources Committee. The
total number of shares of Class A Common Stock reserved and available for
distribution under the Director Plan is 150,000. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
Each Non-Employee Director of the Company is eligible to participate in the
Director Plan. A "Non-Employee Director" for this purpose means Directors who
are not officers for purposes of Section 16 of the Securities Exchange Act of
1934, as amended, or otherwise employed, or a consultant to, the Company or any
of its affiliates, and who is an outside director under Section 1.162-27(e)(3)
of the regulations promulgated under the Code.
11
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee (the "Committee") presently consists of
Messrs. Albers, Candlish and Norris and Ms. Jacobs, none of whom is an employee
of the Company. As part of its duties, the Committee reviews compensation levels
of executive officers, evaluates management performance and administers the
Company's Management Incentive Plan, Long-Term Incentive Plan and Stock Option
Plan. The Committee is assisted by the Company's Human Resources personnel, and
from time to time by compensation consulting firms which supply the Committee
statistical data and other executive compensation information to permit the
Committee to compare the Company's compensation policies against compensation
levels nationwide and against programs of other companies of similar size in the
Company's industry and geographic area.
The Company's executive compensation programs are designed to attract and
retain executives who will contribute to the Company's long-term success, to
reward executives for achieving the Company's short- and long-term strategic
goals, to link executive compensation and shareholder interests through Company
performance- and equity-based plans, and to recognize individual contributions
to Company performance.
Compensation for the Company's executive officers consists of three
principal elements; base salary, annual incentive, and long-term incentive.
Stock options, stock appreciation rights and restricted stock awards may also be
offered. The combination and relative weighting of these elements reflect the
Committee's belief that executive compensation should be closely tied to the
Company's profitability.
BASE SALARY
Executive officer salaries are initially determined by evaluating the
responsibilities of the position held and the experience and performance of the
individual, with reference to the competitive marketplace for executive talent,
including a comparison to base salaries for comparable positions based on
statistical data provided by the Company's compensation consultants. Executive
officer base salaries are targeted at or below the 50th percentile established
by such data in order to place a greater emphasis on Company performance-based
components of the compensation package. The Committee reviews executive salaries
annually and adjusts them as appropriate to reflect changes in market conditions
and individual performance and responsibilities. Base compensation for Mr. Roger
K. Brooks, the Company's Chairman, President and Chief Executive Officer, was
increased from $440,000 in fiscal 1995 to $455,000 for fiscal 1996, and from
$455,000 to $480,000 for fiscal 1997.
ANNUAL INCENTIVE
The Company's annual incentive program acknowledges Company and individual
performance. Awards under the annual program can be paid only if the Company
achieves certain pre-approved targets agreed to by the Committee. The annual
program is intended to bring the executives' total cash compensation (base
salary and annual incentive) to the 50th percentile established by reference to
the statistical data discussed above when all Company profitability and
individual performance criteria are met. In those circumstances where
performance is superlative, the total cash compensation could exceed the 50th
percentile.
For fiscal 1996, each executive's target bonus under the management
incentive program was based on a percentage of the executive's base salary. Once
eligibility was established, actual awards are adjusted at the Committee's
discretion for individual performance and other Company performance criteria.
Based on results of the Company against the pre-determined targets, an award was
granted for 1996 performance of $215,000 to Mr. Brooks. In addition, Mr. Brooks
received a one-time discretionary bonus of $200,000 for his services in
connection with the Company's initial public offering of its Class A Common
Stock.
12
LONG-TERM INCENTIVE
The Company has established two separate long-term incentive plan
programs--a Long-Term Incentive Plan based on strategic performance and a Stock
Option Plan designed to align the interests of executive officers with those of
the Company's shareholders. Under the Company's Stock Option Plan, stock
options, stock appreciation rights or restricted stock awards may be granted to
executive officers and other key employees of the Company and AmerUs Life. Upon
joining the Company, an individual's initial grant will be based on the
individual's responsibilities and position and upon information provided by the
Company's compensation consultants. Therefore, the size of any annual award will
be based primarily on an individual's responsibilities and the individual's
performance and position with the Company. All stock options granted to the
Company's executive officers will be granted with an exercise price equal to the
fair market value of the Company's Class A Common Stock on the date of grant and
will generally vest over four years. Vesting will be designed to encourage the
creation of shareholder value over the long term since no benefit will be
realized from the stock option grant unless the price of the Class A Common
Stock rises over a number of years. No options, stock appreciation rights or
restricted stock awards have been granted to date.
The Long-Term Incentive Plan was implemented in January 1995 for certain
senior executive officers of the Company. The plan is designed to align the
executives' interests and reward them based on growth of the Company's
cumulative GAAP Net Worth. Notional shares with a value of $100 as of January
1995 and 1996 were granted based on a percentage of base salary tied to
competitive industry market data provided by compensation consultants. This plan
will continue to grant shares on a limited basis to the Company's senior
executive officers in conjunction with the Stock Option Plan. Payout in 1997
under the Long-Term Incentive Plan formula (based upon fiscal year 1995 and 1996
combined results of operations) was $290,400 for Mr. Brooks.
Other elements of executive compensation include participation in a
Company-wide medical and insurance benefits plan, and the ability to defer
compensation pursuant to a 401(k) plan. The Company presently makes matching
contributions for all participants in the 401(k) plan subject to a maximum
Company match of 5% for the first 4% of salary deferral. Additionally, a core
contribution of 4% of base salary plus annual incentive is contributed to all
participants' accounts.
Mr. Brooks receives no other material compensation or benefits not provided
to all executive officers.
The Committee has considered the potential impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1 million in any taxable year
for any of the Named Executive Officers, unless such compensation is
performance-based. The Company's policy is to qualify, to the extent reasonable,
its executive officers' compensation for deductibility under applicable tax
laws. However, the Committee believes that its primary responsibility is to
provide a compensation program that will attract, retain and reward the
executive talent necessary to the Company's success. Consequently, the Committee
recognizes that the loss of a tax deduction could be necessary in some
circumstances.
HUMAN RESOURCES COMMITTEE OF THE
BOARD OF DIRECTORS
John R. Albers, Chairman
Malcolm Candlish
Ilene B. Jacobs
John W. Norris, Jr.
13
CERTAIN TRANSACTIONS AND RELATIONSHIPS
AmerUs Life is a wholly-owned direct subsidiary of the Company. The Company
is a direct subsidiary of AmerUs Group Co. ("AmerUs Group"), which in turn is a
wholly-owned direct subsidiary of AMHC. As a result of such ownership, AMHC,
AmerUs Group, the other subsidiaries of AmerUs Group and the Company and its
subsidiaries, including AmerUs Life, have a variety of relationships, certain of
which are summarized below. Management believes that the terms of the agreements
and transactions described herein are on a basis no less favorable than could be
obtained from unaffiliated third parties. As used herein, "AmerUs Affiliated
Group" means AMHC and its direct and indirect subsidiaries now or hereafter
existing, other than the Company and its subsidiaries.
OWNERSHIP OF VOTING INTERESTS OF THE COMPANY
AMHC is required by Iowa law to own, directly or indirectly through one or
more intermediate holding companies, shares of capital stock of the Company
which carry the right to cast a majority of the votes entitled to be cast by all
of the outstanding shares of the capital stock at a shareholders' meeting of the
Company. All of the issued and outstanding shares of the Company's Class B
Common Stock are owned by AmerUs Group, a wholly-owned subsidiary of AMHC and
the Company's immediate parent. Additionally, the Company's Articles of
Incorporation provide that no shares of its Class B Common Stock may be owned by
any person other than AMHC, a subsidiary of AMHC or another mutual insurance
holding company or intermediate holding company as expressly authorized by Iowa
law or by the Iowa Commissioner. Any proposed amendments to the Company's
Articles of Incorporation are subject to approval by the Iowa Commissioner and
the Iowa Attorney General.
INTERCOMPANY AGREEMENT
AMHC, AmerUs Group and the Company entered into an Amended and Restated
Intercompany Agreement dated as of December 1, 1996 (the "Intercompany
Agreement"). Pursuant to the Intercompany Agreement, AmerUs Group and certain
members of the AmerUs Affiliated Group agreed to, among other things, the
following: (i) the grant to the Company and certain of its subsidiaries of a
non-exclusive, revocable license to use the AmerUs name and certain trademarks
solely in connection with the Company's life insurance business and activities
related to such life insurance business; (ii) the indemnification by the Company
of members of the AmerUs Affiliated Group and each of their respective officers,
directors, employees and agents against certain losses; (iii) the grant by the
Company to certain members of the AmerUs Affiliated Group of registration rights
with respect to the Class A Common Stock owned by such entities; (iv) the grant
of equity purchase rights, under certain conditions, to certain members of the
AmerUs Affiliated Group; (v) the agreement by the Company to pay certain costs
associated with its formation and related transactions; and (vi) the agreement
by the Company to provide to the AmerUs Affiliated Group certain management and
administrative services with respect to aspects of the business and affairs of
the AmerUs Affiliated Group in exchange for payment by AmerUs Group to the
Company of $2.0 million per year in consideration for such services.
AGREEMENTS INVOLVING REAL ESTATE
AmerUs Life has entered into asset and property management contracts with
AmerUs Properties, Inc., a direct subsidiary of AmerUs Group and a member of the
AmerUs Affiliated Group ("API"). Pursuant to such agreements, API provides asset
and property management services to AmerUs Life with respect to certain real
estate owned by AmerUs Life. The total expenses incurred by AmerUs Life pursuant
to such agreements equaled approximately $1,108,000 for the year ended December
31, 1996.
AmerUs Life, as lessor, entered into leases of business property with
various members of the AmerUs Affiliated Group. These leases have varying terms
which call for combined monthly rentals of $36,000.
14
These leases were assigned to API during 1996 as part of a restructuring and
capital contribution (the "Capital Contribution") which preceded the Company's
initial public offering.
Total rental income earned by the Company under all agreements with members
of the AmerUs Affiliated Group was approximately $474,000 for the year ended
December 31, 1996.
The Company entered into lease agreements with API during 1996 because the
facilities occupied by the Company as its executive and home offices were
transferred to API in connection with the Capital Contribution. The lease
agreements will require monthly payments of $143,000 on a net basis for a period
of 5 years.
AmerUs Life paid rentals to AmerUs Bank, a subsidiary of AmerUs Group Co.
and member of the AmerUs Affiliated Group ("AmerUs Bank"), of $24,000 for the
year ended December 31, 1996, under the terms of a lease agreement which expired
in 1996.
AmerUs Life has entered into various limited partnership and joint venture
agreements in which API or an affiliate serves as general partner. AmerUs Life
contributed portions of its joint venture interests to API and sold several of
these partnership interests to newly formed partnerships in which API has an
interest. Total proceeds from these sales were $1,638,000 for the year ended
December 31, 1996. After such sales, AmerUs Life purchased a 9.75% limited
partnership interest in one of the newly formed partnerships for $2,160,000, of
which $1,944,000 had been contributed as of December 31, 1996. In addition,
AmerUs Life agreed to make loans to the newly formed partnerships in the
aggregate amount of up to $27,566,000, of which $26,566,000 had been loaned and
was outstanding as of December 31, 1996.
AmerUs Life has also entered into agreements with various partnerships in
which API has an interest pursuant to which AmerUs Life is obligated to make
future capital contribution to such partnerships of up to $10,473,000.
As of December 31, 1996, AmerUs Life had a total investment of $18,557,000
in various partnerships and joint ventures in which API had an interest.
LOAN SERVICING AGREEMENTS
AmerUs Life has entered into various loan servicing agreements with members
of the AmerUs Affiliated Group. The total expenses incurred by AmerUs Life for
such services were approximately $1,420,000 for the year ended December 31,
1996.
AmerUs Life has also entered into various loan servicing agreements with
AmerUs Bank. Pursuant to such agreements, AmerUs Life services certain
nonresidential mortgage loans on behalf of AmerUs Bank. The total revenues
earned by AmerUs Life for such services were approximately $28,000 for the year
ended December 31, 1996.
OTHER SERVICE AGREEMENTS
AmerUs Life has entered into various miscellaneous services agreements with
members of the AmerUs Affiliated Group. Pursuant to such agreements, AmerUs Life
provides certain communications, tax, legal, accounting, internal audit,
administrative and data processing services to such other parties to the
agreements, as requested. The aggregate revenues earned for services performed
by AmerUs Life in accordance with such agreements were approximately $7,162,000
for the year ended December 31, 1996.
PURCHASE OF LOANS AND SECURITIZATION
AmerUs Life has entered into a purchase agreement with AmerUs Bank, dated as
of June 28, 1996, pursuant to which AmerUs Life acquired an HEL Asset-Backed
Class A Note (the "Note") and Class R Certificate Series 1996-1 (the
"Certificate"). The Note has a face amount of $43,715,845 and pays interest at
the rate of 8.35% per annum. The Certificate has a face amount of $3,039,069 and
pays interest at the
15
rate of 16.81% per annum. The Note and Certificate are backed by the assets of
the AB Home Equity Loan Trust (the "AB Trust"), which consist of approximately
$47 million of second mortgage loans. Pursuant to a Pooling and Servicing
Agreement, dated as of June 28, 1996 (the "Pooling and Servicing Agreement"),
between AmerUs Bank and Boatmen's Trust Company ("Boatmen's"), and a Transfer
Agreement, dated as of June 28, 1996, between AmerUs Bank and Boatmen's, as
trustee of the AB Trust, the AB Trust acquired such loans from AmerUs Bank, and
paid a purchase price of $46,754,914, the par value of the loans. Under the
Pooling and Servicing Agreement AmerUs Bank acts as the servicer of the loans
and receives a servicing fee equivalent to the amount of all interest collected
on the loans in excess of 8.9%.
SALE OF INSURANCE POLICIES
AmerUs Life has entered into an agreement, dated January 1, 1995, with
AmerUs Investments, Inc. ("AmerUs Investments"), a wholly-owned subsidiary of
AmerUs Bank, to market products of AmerUs Life. Pursuant to this agreement,
AmerUs Life pays AmerUs Investments fees in the form of commissions in exchange
for generating sales of such products. Total commissions paid to AmerUs
Investments were $521,000 for the year ended December 31, 1996.
AmerUs Life is also party to certain Affiliated Agent Contracts with
employees of AmerUs Investments (the "Affiliated Agents") to solicit, sell and
service AmerUs Life insurance products, in addition to a Servicing Agreement,
dated March 1, 1992, with AmerUs Investments pursuant to which AmerUs
Investments agreed to service the business sold by any Affiliated Agent and
otherwise supervise its employees who are Affiliated Agents.
CAPITAL CONTRIBUTION
During 1996, AmerUs Life made a capital contribution to or for the benefit
of certain of its subsidiaries in connection with the Company's reorganization.
The capital contribution consisted of cash and other property having an
approximate net carrying value of $79 million. After making such capital
contribution, AmerUs Life caused certain of its non-life insurance subsidiaries
to be distributed to AmerUs Group, effectively separating AMHC's non-life
insurance businesses from the life insurance businesses owned by the Company.
From time to time AmerUs Life has made capital contributions to Lartnec
Investment Co. ("Lartnec"). Lartnec had previously been a subsidiary of AmerUs
Life, and AmerUs Financial Services, Inc. ("AFS") had previously been a
subsidiary of Lartnec. During 1996, AFS was merged into Lartnec and Lartnec was
then merged upstream into AmerUs Life, after which the distribution of the non-
life insurance subsidiaries to AmerUs Group was effected. During 1996, AmerUs
Life made capital contributions to Lartnec in the approximate total amount of
$4,463,000 prior to Lartnec's liquidation.
LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP
AmerUs Life has provided financing to members of the AmerUs Affiliated Group
or their affiliates for various purposes. The outstanding balance of all such
financings was $70.0 million as of December 31, 1996. AmerUs Life recorded
interest income of $6.8 million for the year ended December 31, 1996.
AmerUs Life has guaranteed various borrowings of members of the AmerUs
Affiliated Group with an outstanding balance of approximately $7.2 million at
December 31, 1996.
AmerUs Life pledged investment securities as collateral for a bank credit
facility of the AmerUs Affiliated Group. At December 31, 1996, approximately
$62.0 million was outstanding under the facility and the Company had pledged
approximately $88.0 million of its investment securities as collateral. AmerUs
Life was released from the collateral agreement under the terms of a replacement
bank credit facility entered into in February 1997.
16
AmerUs Life has outstanding loan commitments to various partnerships in
which API has an interest. At December 31, 1996, the outstanding loan
commitments were approximately $15,500,000.
SECURITY ARRANGEMENTS FOR BANK CREDIT FACILITY
In connection with the Company's bank credit facility (the "Bank Credit
Facility"), the Company has pledged to the lenders approximately 49.9% of the
common stock of AmerUs Life owned by the Company and a $50 million 9% surplus
note payable to the Company by AmerUs Life. AmerUs Group has also pledged shares
of the Company's Class A Common Stock owned by AmerUs Group in an amount which
is limited by Iowa law and which, together with the voting shares owned by
shareholders other than AmerUs Group, shall be less than 50% of the total voting
shares of the Company. Under Iowa law, AMHC and AmerUs Group are prohibited from
pledging shares of capital stock of the Company which carry the right to cast a
majority of the votes entitled to be cast by all of the outstanding shares of
the capital stock at a shareholders' meeting of the Company. In addition, the
Company is prohibited by Iowa law from pledging a majority of the shares
necessary to elect the Board of Directors of AmerUs Life. AMHC and AmerUs Group
have also guaranteed the indebtedness of the Company under the Bank Credit
Agreement.
TRANSACTIONS WITH AFFILIATES OF DIRECTORS
John A. Wing, a director of the Company, is Chairman and Chief Executive
Officer of ABN AMRO Chicago Corporation. ABN AMRO Chicago Corporation has from
time to time performed investment banking services for the Company, including
assisting the Company with its subscription offering and serving as co-manager
of the Company's initial public offering of its Class A Common Stock.
OTHER MATTERS
Neither the Board of Directors nor management intends to bring any matter
for action at the 1997 annual meeting of shareholders other than those matters
described above. If any other matter or any proposal should be presented and
should properly come before the meeting for action, the persons named in the
accompanying proxy will vote upon such matter and upon such proposal in
accordance with their best judgment.
SELECTION OF AUDITORS
The Board of Directors, acting upon recommendation of the Audit Committee,
has appointed the firm of KPMG Peat Marwick LLP to examine the financial
statements of the Company and its subsidiaries for the fiscal year ending
December 31, 1997. The same firm conducted the fiscal 1996 examination. The
favorable vote of the holders of the majority of the outstanding shares present
in person or represented by proxy and entitled to vote at the annual meeting is
required for shareholder ratification of this action.
Representatives from KPMG Peat Marwick LLP will be present at the 1997
annual meeting. The representatives will have the opportunity to make a
statement if they so desire, and will also be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
1998 SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 annual
meeting of shareholders must be received by the Company no later than December
1, 1997 in order to be considered for inclusion in the Company's 1998 Annual
Meeting Proxy Statement and form of proxy to be mailed in March 1998.
The Company's By-laws set forth certain procedures which shareholders must
follow in order to nominate a director or present any other business at an
annual meeting of shareholders. Generally, a shareholder must give timely notice
to the Secretary of the Company. To be timely, a shareholder's notice
17
must be delivered or mailed to and received by the Secretary of the Company at
the principal office of the Company not less than thirty (30) days prior to the
date of the annual meeting; provided, however, that, in the event that less than
forty (40) days' notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder to be timely must be
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the meeting was mailed or such
public disclosure was made. A shareholder's notice to the Secretary shall set
forth as to each matter that such shareholder proposes to present before the
meeting (i) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (ii) the
name and address, as they appear on the Company's books, of the shareholder
proposing such business, (iii) the class and number of the Company's capital
stock that are beneficially owned by such shareholder and (iv) any material
interest of such shareholder in such business.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
SENT TO ANY SHAREHOLDER WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO AMERUS
LIFE HOLDINGS, INC., TO THE ATTENTION OF SUSAN BOE, VICE PRESIDENT FOR INVESTOR
RELATIONS, 418 SIXTH AVENUE, DES MOINES, IA 50309-2407.
By Order of the Board of Directors
James A. Smallenberger
SENIOR VICE PRESIDENT
AND SECRETARY
18
AMERUS LIFE HOLDINGS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 2, 1997
The undersigned shareholder of AmerUs Life Holdings, Inc., an Iowa
corporation ("the Company"), hereby appoints Roger K. Brooks, Sam C.
Kalainov and James A. Smallenberger, or any of them, as the
undersigned's proxy or proxies, with full power of substitution in
each of them, to attend the annual meeting of shareholders of the
Company to be held at the Des Moines Convention Center, 501 Grand
Avenue, Des Moines, Iowa, on May 2, 1997 at 9:00 a.m., local time,
and any postponement or adjournment thereof and to vote all shares
of Class A Common Stock of the Company which the undersigned is
entitled to vote at such meeting, as fully as the undersigned could
if personally present, upon the proposals set forth on the reverse
side hereof and to transact such other business as may properly
come before the meeting, revoking any proxy or proxies heretofore
given. The undersigned acknowledges receipt of the Notice of Annual
Meeting of Shareholders and of the accompanying Proxy Statement and
revokes any proxy heretofore given with respect to such meeting.
IMPORTANT - this proxy must be signed and dated on the reverse
side.
/x/ Please mark your
votes as in this example.
The Board of Directors recommends a vote FOR items 1 and 2
ITEM 1- Election of Directors
FOR all nominees listed WITHHELD AUTHORITY
to the right (except as to vote for all nominees
marked to the contrary) listed to the right
/ / / /
NOMINEES: Malcolm Candlish, Sam C. Kalainov, John W. Norris, Jr.
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INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided above.
For Against Absent
ITEM 2 - To ratify the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company / / / / / /
for the fiscal year ending December 31, 1997.
ITEM 3 - In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
Please Mark, Sign, Date and Return this Proxy Card Promptly Using the
Enclosed Envelope.:
Please sign name exactly as it appears. If joint tenants, both should sign.
Give full title if signing as attorney, executor, administrator trustee or
guardian. If a corporation, sign full corporate name by authorized officer.
If a partnership, sign partnership name by authorized person.
Signature of Shareholder(s) -----------------------------------
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Date -------------------------, 1997