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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12.
AMERUS LIFE HOLDING
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
AMERUS LIFE HOLDING
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(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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AMERUS LIFE
HOLDINGS, INC.
699 Walnut Street
Des Moines, IA 50309-3948
ROGER K. BROOKS
Chairman, President &
Chief Executive
Officer
[AMERUS LIFE HOLDINGS LOGO]
March 31, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
AmerUs Life Holdings, Inc. to be held on Friday, May 5, 2000, at 9:00 a.m., Des
Moines local time, at the AmerUs Conference Center, Hub Tower, 3rd Floor, 699
Walnut Street, Des Moines, Iowa.
This booklet includes the Notice of Annual Meeting and the Proxy Statement,
which contain information about the formal business to be acted on by the
shareholders. The meeting will also feature a report on the operations of your
Company, followed by a question and discussion period.
We hope that you will be able to attend the meeting. However, whether or
not you plan to attend in person, please complete, sign, date and return the
enclosed proxy card promptly to ensure that your shares will be represented. If
you do attend the meeting and wish to vote your shares personally, you may
revoke your proxy at any time before it is exercised.
Thank you for your ongoing support and continued interest in AmerUs Life
Holdings, Inc.
Very truly yours,
Roger K. Brooks
Chairman, President and
Chief Executive Officer
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[AMERUS LIFE HOLDINGS LOGO]
699 WALNUT STREET
DES MOINES, IOWA 50309-3948
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD MAY 5, 2000
------------------------------------------------------------------------
To the Shareholders:
The annual meeting of shareholders of AMERUS LIFE HOLDINGS, INC. will be
held on Friday, May 5, 2000, at 9:00 a.m., Des Moines local time, at the AmerUs
Conference Center, Hub Tower, 3rd Floor, 699 Walnut Street, Des Moines, Iowa,
for the following purposes:
1. to elect three (3) directors to serve for a three year term;
2. to approve the Company's 2000 Stock Incentive Plan and the reservation
of shares for issuance thereunder;
3. to ratify the appointment of KPMG LLP as independent auditors of the
Company for the 2000 fiscal year; and
4. to transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
The board of directors has fixed the close of business on March 15, 2000 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the annual meeting. Accordingly, only shareholders of record on that
date are entitled to vote at the annual meeting or any adjournments thereof.
All shareholders are invited to attend the meeting in person. However, to
assure your representation at the meeting, please complete, sign, date and
return the enclosed proxy card promptly in the postage prepaid enclosed
envelope. Any shareholder attending the meeting may vote in person even if he or
she has returned a proxy.
By Order of the Board of Directors
James A. Smallenberger
Senior Vice President and Secretary
March 31, 2000
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE
ENCLOSED PRE-ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
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[AMERUS LIFE HOLDINGS LOGO]
699 WALNUT STREET
DES MOINES, IOWA 50309-3948
------------------------------
PROXY STATEMENT FOR 2000
------------------------------
This Proxy Statement is furnished to shareholders by the Board of Directors
of AmerUs Life Holdings, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Shareholders of the
Company to be held at the AmerUs Conference Center, Hub Tower, 3rd Floor, 699
Walnut Street, Des Moines, Iowa, on Friday, May 5, 2000, at 9:00 a.m., Des
Moines local time, and at any adjournments thereof.
This Proxy Statement, Notice of Annual Meeting and the accompanying proxy
card are being first mailed to shareholders on or about March 31, 2000. The
Company's 1999 Annual Report is being mailed to shareholders concurrently with
this Proxy Statement.
GENERAL INFORMATION
The Board of Directors has fixed March 15, 2000 as the record date (the
"Record Date") for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournments thereof. On the Record Date,
24,997,902 shares of Class A Common Stock and five million shares of Class B
Common Stock ("Common Stock") were outstanding and entitled to vote at the
meeting. Each share of Common Stock entitles the holder thereof to one vote on
each matter to be voted on at the Annual Meeting. There were no shares of voting
preferred stock outstanding as of the Record Date.
Any shareholder giving a proxy has the power to revoke it at any time
before it is voted. Revocation of a proxy is effective upon receipt by the
Secretary of the Company of either (i) an instrument revoking it, or (ii) a duly
executed proxy bearing a later date. In addition, a shareholder who is present
at the Annual Meeting may revoke the shareholder's proxy and vote in person if
the shareholder so desires.
Proxies furnished by shareholders pursuant hereto will be voted in
accordance with the directions on such proxies. If no choice is specified, the
proxy will be voted (i) "FOR" the election of the nominees listed under
"Election of Directors"; (ii) "FOR" approval of the Company's 2000 Stock
Incentive Plan and the reservation of shares for issuance thereunder; (iii)
"FOR" ratification of the appointment of KPMG LLP as independent auditors; and
(iv) at the discretion of the proxy holders with regard to such other business
as may come before the meeting and all matters incident to the conduct of the
meeting. If for any reason, one or more of the nominees should be unable or
refuse to serve as a Director (an event which is not anticipated), the persons
named in the enclosed proxy will vote for substitute nominees of the Board of
Directors unless otherwise instructed. The Board of Directors knows of no matter
to come before the meeting other than those set forth in the Proxy Statement. If
any further business is presented at the meeting, the persons named in the proxy
will act on behalf of the shareholders according to their best judgment.
The presence at the meeting, in person or by proxy, of a majority of the
shares of Common Stock outstanding on the Record Date will constitute a quorum.
The affirmative vote of the holders of at least a majority of such quorum will
be required with respect to the election of directors, the approval of the
Company's 2000 Stock Incentive Plan, and the ratification of the appointment of
KPMG LLP as the Company's independent auditors.
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Votes cast by proxy or in person at the Annual Meeting will be counted by
the persons appointed by the Company to act as the inspectors of election for
the meeting. The inspectors of election will treat shares represented by proxies
that reflect abstentions or include "broker non-votes" as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions or brokers non-votes" do not constitute a vote "for" or
"against" any matter and thus will be disregarded in any calculation of "votes
cast". However, abstentions and "broker non-votes" will have the effect of a
negative vote if an item requires the approval of a majority of a quorum or of a
specified proportion of all issued and outstanding shares.
Proxies are being solicited by the Board of Directors of the Company. The
cost of preparing, printing and mailing this Proxy Statement, the accompanying
notice and the enclosed proxy card, and all other costs in connection with the
solicitation of proxies, will be paid by the Company.
BENEFICIAL OWNERSHIP OF COMMON STOCK
PRINCIPAL HOLDERS
The following table sets forth the beneficial ownership as of February 29,
2000 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 PERCENT OF
NAME AND ADDRESS CLASS OF STOCK BENEFICIALLY OWNED CLASS
---------------- -------------- ------------------ ----------
AmerUs Group Co. ................................ Class A Common 12,390,165 49.4%
699 Walnut Street
Des Moines, IA 50309
AmerUs Group Co. ................................ Class B Common 5,000,000 100%
699 Walnut Street
Des Moines, IA 50309
American Mutual Holding Company.................. Class A Common 12,390,165(1) 49.4%
699 Walnut Street
Des Moines, IA 50309
American Mutual Holding Company.................. Class B Common 5,000,000(1) 100%
699 Walnut Street
Des Moines, IA 50309
- ---------------
(1) Indirect beneficial owner due to ownership of 100% of the capital stock of
AmerUs Group Co.
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DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of the Company's
Class A Common Stock as of February 29, 2000 of each of the directors and
director nominees, the executive officers named in the Summary Compensation
Table on page 9, and all directors and executive officers as a group (which
includes executive officers not named in the Summary Compensation Table). The
percentage of Class A Common Stock owned by all directors and executive officers
as a group as of February 29, 2000 was 3.94%. No shares of Class B Common Stock
were owned by any director, director nominee or executive officer of the Company
as of such date.
AMOUNT
AND NATURE
OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(2)
---- ------------- ----------
John R. Albers(3)(13)....................................... 22,500 *
Roger K. Brooks(3)(4)(5)(6)(11)(14)......................... 291,258 1.16%
Malcolm Candlish(3)(12)(13)................................. 9,930 *
Maureen M. Culhane(12)(13).................................. 7,593 *
Thomas F. Gaffney(3)(9)(12)(13)............................. 19,134 *
Sam C. Kalainov(3)(4)(5)(7)(11)............................. 49,705 *
Ralph W. Laster, Jr.(8)..................................... 9,404 *
John W. Norris, Jr.(3)(12)(13).............................. 6,459 *
Jack C. Pester(3)(12)(13)................................... 6,361 *
John A. Wing(12)(13)........................................ 13,364 *
Michael G. Fraizer(3)(4)(5)(11)............................. 62,336 *
Thomas C. Godlasky(3)(4)(5)(10)(11)......................... 104,439 *
Mark V. Heitz(5)(11)........................................ 251,511 1.00%
Gary R. McPhail(4)(11)...................................... 88,224 *
Directors and executive officers as a group (16 persons).... 1,002,652 3.94%
- ---------------
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares shown. Some directors and executive
officers share the voting and dispositive power over their shares with
their spouses as community property, joint tenants or tenants in common.
(2) An (*) indicates that the individual's ownership interests of AmerUs Life
Holdings, Inc.'s Class A Common Stock is less than one percent.
(3) Messrs. Albers, Brooks, Candlish, Gaffney, Kalainov, Norris and Pester are
directors of AmerUs Group Co., which owns 12,390,165 shares of Class A
Common Stock and 5,000,000 shares of Class B Common Stock, and of American
Mutual Holding Company ("AMHC"), which beneficially owns such shares
through its 100% ownership of the capital stock of AmerUs Group Co. In
addition, Mr. Brooks is Chairman, President and Chief Executive Officer of
AmerUs Group Co. and AMHC, Mr. Fraizer is Executive Vice President, Chief
Financial Officer and Treasurer of AmerUs Group Co. and AMHC, Mr. Godlasky
is Executive Vice President and Chief Investment Officer of AmerUs Group
Co. and AMHC. All of the foregoing persons have disclaimed beneficial
ownership of all shares of the Company's Common Stock which are
beneficially owned by AmerUs Group Co. or AMHC.
(4) Includes shares of restricted stock which has vesting and transfer
restrictions for three (3) years from the date of grant: Mr. Brooks, 6,000;
Mr. Kalainov, 3,000; Mr. Godlasky, 2,000; Mr. McPhail, 2,000; Mr. Fraizer,
600; and all executive officers as a group, 14,600.
(5) Includes beneficial interest in shares of the Company's Class A Common
Stock held pursuant to the Company's Savings & Retirement Plan (as defined
on page 12). The attributed shares owned by the Company's Savings &
Retirement Plan are voted by the trustees as directed by their respective
participants.
(6) Includes 6,000 shares owned by his spouse.
(7) Includes 36,800 shares owned by his spouse.
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(8) Includes 7,156 shares owned by the Jerri S. Laster Trust, of which Mr.
Laster is a co-trustee.
(9) Includes 14,017 shares owned by his spouse through the Donna L. Gaffney
Trust.
(10) Includes 12,063 shares and 669 shares of Class A Common Stock owned by his
spouse and his daughter, respectively.
(11) Includes shares of Class A Common Stock that may be purchased upon the
exercise of employee stock options exercisable on February 29, 2000 or
within sixty (60) days thereafter: Mr. Heitz, 148,759; Mr. Brooks, 110,000;
Mr. McPhail, 46,667; Mr. Godlasky, 40,000; Mr. Fraizer, 15,000; and all
executive officers as a group, 387,093.
(12) Includes shares of Class A Common Stock that were granted pursuant to the
Company's Non-Employee Stock Option Plan and may be purchased upon the
exercise of stock options exercisable on February 29, 2000 or within sixty
(60) days thereafter: Mr. Albers, 2,500; Mr. Candlish, 2,500; Ms. Culhane,
2,500; Mr. Gaffney, 2,500; Mr. Norris, 2,500; Mr. Pester, 2,500; Mr. Wing,
2,500; and Mr. Laster, 834.
(13) Includes shares of Class A Common Stock that were acquired through the
Non-Employee Director Stock Plan which has vesting and transfer
restrictions for two (2) years after the date of purchase: Ms. Culhane,
4,593; Mr. Gaffney, 2,617; Mr. Norris, 2,480; Mr. Candlish, 2,430; Mr.
Pester, 2,325; and Mr. Wing, 864.
(14) Includes 336 shares of Class A Common Stock that were acquired pursuant to
the Company's Warrant Agreement and may be purchased upon the exercise of
warrants exercisable on February 29, 2000 or sixty (60) days thereafter.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of ten members,
divided into three classes. Each class serves for three years on a
staggered-term basis. There are three nominees for election to the Company's
Board of Directors this year.
The terms of the following directors expire at the annual meeting to be
held on May 5, 2000: Malcolm Candlish, Ralph W. Laster, Jr., and John W. Norris,
Jr. The Board of Directors' nominees to positions on the Board expiring in May
2003 are: Malcolm Candlish, Ralph W. Laster, Jr., and John W. Norris, Jr.
The following paragraphs set forth the principal occupation of, and certain
other information relating to, each director, nominee for director and executive
officer for the last five years. Directors who are nominees for election at the
2000 annual meeting are listed first. Ages shown for all directors are as of
March 1, 2000. There are no family relationships among the Company's directors
or any executive officer.
MALCOLM CANDLISH -- NOMINEE -- OSPREY, FLORIDA.
Consultant since May 1998. Prior to that time, Mr. Candlish was Chairman of
First Alert, Inc., Aurora, Illinois from October 1992 until April 1998 and
Chairman, President and Chief Executive Officer from May 1996 to October 1996
and Chairman and Chief Executive Officer from December 1992 to May 1996. He is a
director of AMHC, AmerUs Group Co., and The Black & Decker Corporation. Mr.
Candlish has been a director of the Company since its formation in August 1996.
From February 1987 to May 1997, he was a director of American Mutual Life
Insurance Company ("AML"), one of the predecessors of AmerUs Life Insurance
Company ("AmerUs Life"), and one of the Company's principal subsidiaries. His
current term expires May 5, 2000. He is 64 years of age.
RALPH W. LASTER, JR -- NOMINEE -- TOPEKA, KANSAS.
Private Investor since December 1997. Mr. Laster served as Chief Executive
Officer of AmVestors Financial Corporation ("AmVestors") from January 1988 to
December 1997 and as Chairman of the Board from May 1988 to December 1997. He
also served as President and Chief Executive Officer of American Investors Life
Insurance from April 1991 to December 1997, as Chief Executive Officer of
Financial Benefit Life from April 1996 to December 1997, and as an executive
officer of various other subsidiaries of AmVestors. Mr. Laster has been a
director of the Company since February 1998 and a director of AmerUs Life since
December 1998. His current term expires May 5, 2000. He is 48 years of age.
JOHN W. NORRIS, JR -- NOMINEE -- DALLAS, TEXAS.
Chairman and Chief Executive Officer of Lennox International, Inc., a
manufacturer of heating and air conditioning equipment, Dallas, Texas. He is a
director of AMHC and AmerUs Group Co. Mr. Norris has been a director of the
Company since its formation in August 1996. From November 1974 to May 1997, he
was a director of AmerUs Life. His current term expires May 5, 2000. He is 64
years of age.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
EACH OF THE NOMINEES LISTED ABOVE.
THE FOLLOWING DIRECTORS, EXCEPT FOR MR. KALAINOV, SERVE FOR TERMS THAT EXPIRE
AFTER 2000:
JOHN R. ALBERS -- DALLAS, TEXAS.
President and Chief Executive Officer of Fairfield Enterprises, Inc., a holding
company for investments and real estate, Dallas, Texas, since April 1995. From
August 1988 to April 1995, Mr. Albers was Chairman, Chief Executive Officer and
President of Dr. Pepper/Seven-Up Companies, Dallas, Texas. Mr. Albers is a
director of AMAL Corporation ("AMAL"), a 34%-owned joint venture between
Ameritas Life Insurance Corp. and AmerUs Life, AMHC, and AmerUs Group Co. Mr.
Albers has been a director of the Company since its formation in August 1996.
From November 1983 to May 1997, he was a director of AmerUs Life. His current
term expires May 11, 2001. He is 68 years of age.
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ROGER K. BROOKS -- DES MOINES, IOWA.
Chairman, President and Chief Executive Officer of the Company, AMHC and AmerUs
Group Co. and Chairman of AmerUs Life, one of the Company's principal
subsidiaries, since May 1997. Previous positions with AmerUs Life include Chief
Executive Officer from December 1994 to May 1997, Chairman and Chief Executive
Officer from August 1992 to December 1994 and President and Chief Executive
Officer from February 1975 to August 1992. He is a director of AMAL, AMHC,
AmerUs Group Co., AmerUs Life, AmVestors, and Delta Life Corporation ("Delta"),
one of the Company's principal subsidiaries. Mr. Brooks has been a director of
the Company since its formation in August 1996 and of AmerUs Life since 1971.
His current term expires May 10, 2002. He is 62 years of age.
MAUREEN M. CULHANE -- CHICAGO, ILLINOIS.
Consultant, Goldman, Sachs & Co., an international investment banking firm, New
York, New York, since February 1999. Prior to that time, Ms. Culhane was Vice
President of Finance and Treasurer of Sara Lee Corporation from January 1993 to
September 1998. Ms. Culhane has been a director of the Company and AmerUs Life
since February 1997. Her current term expires May 10, 2002. She is 51 years of
age.
THOMAS F. GAFFNEY -- TIERRA VERDE, FLORIDA.
Managing Director of Raymond James Capital, Inc., a merchant banking firm, St.
Petersburg, Florida, since July 1997. From 1990 to 1997, Mr. Gaffney was a
private investor. Mr. Gaffney is a director of AMHC and AmerUs Group Co. Mr.
Gaffney has been a director of the Company since its formation in August 1996.
From November 1983 to May 1997, Mr. Gaffney served as a director of AmerUs Life.
His current term expires May 11, 2001. He is 54 years of age.
SAM C. KALAINOV -- DES MOINES, IOWA.
Chairman Emeritus of AMHC and AmerUs Group Co., since May 1998. Prior to that
time, Mr. Kalainov was Chairman of AMHC and AmerUs Group Co. from September 1996
until May 1998, Chairman of AmerUs Life from December 1994 until September 1996
and was Chairman and Chief Executive Officer of AML, from January 1983 to
December 1994. He is a director of AMHC, AmerUs Group Co. and AmerUs Life. Mr.
Kalainov has been a director of the Company since its formation in August 1996
and of AmerUs Life since June 1972. His current term expires May 5, 2000, and he
will retire from the Board on that date. He is 69 years of age.
JACK C. PESTER -- HOUSTON, TEXAS.
Chairman of Executive Committee of KFx, Inc., an energy conversion and
technology processing company, Denver, Colorado, since May 1, 1999. Previously,
Mr. Pester was Senior Vice President of The Coastal Corporation from March 1987
to May 1999. He is a director of AMHC, AmerUs Group Co., and KFx, Inc. Mr.
Pester has been a director of the Company since its formation in August 1996. He
also was a director of AmerUs Life from May 1981 to May 1997. His current term
expires May 10, 2002. He is 64 years of age.
JOHN A. WING -- CHICAGO, ILLINOIS.
Chairman and Chief Executive Officer of Market Liquidity Network L.L.C., a
holding company for broker-dealers engaged in exchange based option market
making, Chicago, Illinois, since January 1, 2000. Mr. Wing is also Executive
Director, Center for Law and Financial Markets, Illinois Institute of
Technology, Chicago, Illinois since July 1998. From January 1997 to July 1998,
Mr. Wing was Chairman and Chief Executive Officer of ABN AMRO Incorporated.
Prior to that time, Mr. Wing was Chairman and Chief Executive Officer of The
Chicago Corp. from January 1981 to January 1997. Mr. Wing is a director of the
Futures Industry Association. Mr. Wing has been a director of the Company since
its formation in August 1996 and of AmerUs Life since May 1991. His current term
expires May 10, 2002. He is 64 years of age.
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EXECUTIVE OFFICERS WHO ARE NOT ALSO DIRECTORS:
VICTOR N. DALEY -- DES MOINES, IOWA.
Executive Vice President, Chief Administration and Human Resources Officer of
the Company, AMHC, AmerUs Group Co. and AmerUs Life since February 2000.
Previously, Mr. Daley was Senior Vice President, Chief Administration and Human
Resources Officer of the Company, AMHC, AmerUs Group Co. and AmerUs Life from
February 1998 to February 2000. From August 1996 to February 1998 and from
September 1995 to February 1998, Mr. Daley was Senior Vice President and Chief
Human Resources Officer of the Company and of AmerUs Life, respectively. From
April 1989 to September 1995, Mr. Daley was Senior Vice President and Chief
Administrative Officer of Royal Insurance, Charlotte, North Carolina. He is a
director of AmerUs Life and Delta. He is 56 years of age.
MICHAEL G. FRAIZER -- DES MOINES, IOWA.
Executive Vice President, Chief Financial Officer and Treasurer of the Company,
AMHC, AmerUs Group Co. and Executive Vice President of AmerUs Life since
February 2000. Previously, Mr. Fraizer was Senior Vice President, Chief
Financial Officer and Treasurer of the Company, AMHC, AmerUs Group Co. and
Senior Vice President of AmerUs Life from January 1999 to February 2000. From
August 1996 to December 1998 and from January 1993 to December 1998, Mr. Fraizer
was Senior Vice President and Controller/ Treasurer of the Company and of AmerUs
Life, respectively. He is a director of AmerUs Life and Delta. He is 50 years of
age.
THOMAS C. GODLASKY -- DES MOINES, IOWA.
Executive Vice President and Chief Investment Officer of the Company, AMHC,
AmerUs Group Co. since August 1996 and of AmerUs Life since January 1995. From
February 1988 to January 1995, he was Manager of the Fixed Income and
Derivatives Department of Providian Corporation, Louisville, Kentucky. He is a
director of AmerUs Life, AmVestors, Ameritas Variable Life Insurance Company,
("AVLIC"), Ameritas Investment Corp. ("AIC") and Delta. He is 44 years of age.
MARK V. HEITZ -- TOPEKA, KANSAS.
President and Chief Executive Officer of AmVestors, American Investors Life
Insurance Company and Financial Benefit Life Insurance Company, Topeka, Kansas
since December 1997. Previously, Mr. Heitz served as the President, General
Counsel and Director of AmVestors from December 1986 until December 1997. Mr.
Heitz also served as President, General Counsel and Director of American
Investors Life Insurance Company from October 1986 until December 1997. He is 47
years of age.
GARY R. MCPHAIL -- DES MOINES, IOWA.
President and Chief Executive Officer of AmerUs Life since May 1997 and
Chairman, President and Chief Executive Officer of Delta since January 1999 and
Chairman and Chief Executive Officer of Delta from October 1997 until January
1999. Mr. McPhail was Executive Vice President -- Marketing and Individual
Operations of New York Life Insurance Company, New York, New York, from July
1995 to November 1996. From June 1990 to July 1995, he was President of Lincoln
National Sales Corporation, Fort Wayne, Indiana. Mr. McPhail is a director of
AMAL, AmerUs Life, AIC, AVLIC and Delta. He is 52 years of age.
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11
BOARD STRUCTURE AND COMPENSATION
The Board of Directors meets on a regularly scheduled basis. During 1999,
the Board held four regular meetings and two special meetings. Each director
attended at least 75% of all Board meetings and applicable committee meetings.
The Board of Directors has assigned certain responsibilities to committees.
The Audit Committee recommends the appointment of the independent auditors,
reviews the scope of the audits recommended by the independent auditors, reviews
internal audit reports on various aspects of corporate operations and consults
with the independent auditors on a periodic basis on matters relating to
internal financial controls and procedures. Members of the Audit Committee,
which met three times during 1999, are Ralph W. Laster, Jr. (Chairman), Malcolm
Candlish, and Jack C. Pester. All members are non-employee directors.
The Board Operations Committee reviews the organization and operation of
the Board of Directors and recommends a slate of directors for election by
shareholders at each annual meeting and/or proposes candidates to fill vacancies
on the Board of Directors. Members of the Board Operations Committee, which met
three times during 1999, are Jack C. Pester (Chairman), John R. Albers, and John
W. Norris, Jr. All members are non-employee directors.
The Finance and Strategy Committee reviews the management of the Company's
financial resources and the impact of such management on the Company's strategic
business plans and objectives. Members of the Finance and Strategy Committee,
which met three times during 1999, are Thomas F. Gaffney (Chairman), John R.
Albers, Malcolm Candlish, and John A. Wing. All members are non-employee
directors.
The Human Resources Committee reviews and recommends the compensation for
executive officers, including base salary, incentive compensation and other
benefits. The Human Resources Committee also administers the Company's stock
option plans. The Human Resources Committee has general oversight with respect
to the Company's compensation policy and employee benefit programs and
management succession planning. Members of the Human Resources Committee, which
met five times during 1999, are John W. Norris, Jr. (Chairman), Malcolm
Candlish, and Thomas F. Gaffney. All members are non-employee directors.
The Intercompany Transactions Committee reviews transactions between the
Company and its affiliates. Members of the Intercompany Transactions Committee,
which met three times during 1999, are Ralph W. Laster, Jr. (Chairman), Maureen
M. Culhane, and John A. Wing. All members are non-employee directors.
The Investment Committee oversees investments and investment policy of the
Company and its operating subsidiaries. Members of the Investment Committee,
which met four times during 1999, are John A. Wing (Chairman), Maureen M.
Culhane, and Ralph W. Laster, Jr. All members are non-employee directors.
The Executive Committee exercises the powers and authority of the Board of
Directors between board meetings, except those powers, that, by law, cannot be
delegated by the Board of Directors. Members of the Executive Committee, which
met one time during 1999, are Roger K. Brooks (Chairman), Thomas F. Gaffney and
John W. Norris, Jr.
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EXECUTIVE OFFICER/DIRECTOR COMPENSATION
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
All compensation received, earned or accrued by such officers has been from
either the Company, AmerUs Life or AmVestors.
The following Summary Compensation Table sets forth certain information
concerning compensation for services rendered in all capacities awarded or paid
by the Company (including compensation paid by AmerUs Life and AmVestors) to its
Chief Executive Officer and the other named executive officers (collectively,
the "Named Executive Officers") during the years ended December 31, 1999, 1998,
and 1997:
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ------------------------------------
----------------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND FISCAL BONUS(A) COMPENSATION($) AWARD(S) OPTIONS/ PAYOUTS(D) COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($) ($) ($)(B) SARS(#)(C) ($) (E)($)
------------------ ------ --------- -------- --------------- ---------- ---------- ---------- ------------
Roger K. Brooks........... 1999 500,000 990,000 -- 69,000 70,000 47,924 100,325
Chairman, President and 1998 500,000 100,000 -- 69,000 -- 352,000 181,773
Chief Executive Officer 1997 480,000 520,000 -- -- 165,000 258,133 157,220
of the Company
Mark V. Heitz(F).......... 1999 337,500 490,000 670,000(G) -- 20,000 -- 51,969
President and Chief 1998 337,500 200,000 -- -- 18,500 -- 24,202
Executive Officer of 1997 -- -- -- -- 20,000 -- 21,074
AmVestors Financial
Corporation,
American Investors Life
Insurance Company
and Finance
Benefit Life Insurance
Company
Gary R. McPhail(H)........ 1999 335,000 365,000 -- 23,000 10,000 21,395 38,419
President and Chief 1998 335,000 110,000 -- 23,000 -- 24,400 47,794
Executive Officer of 1997 325,000 162,500 -- -- 70,000 11,953 250,015(I)
AmerUs Life and Chairman,
President and Chief
Executive
Officer of Delta Life
and Annuity
Thomas C. Godlasky........ 1999 315,000 490,000 -- 23,000 10,000 18,103 61,304
Executive Vice President 1998 300,000 75,000 -- 23,000 -- 125,000 46,436
and Chief Investment 1997 275,000 200,000 -- -- 60,000 91,667 35,418
Officer of the Company
Michael G. Fraizer........ 1999 240,000 390,000 -- 6,900 7,500 6,583 75,275
Executive Vice President, 1998 210,000 50,000 -- 6,900 -- 50,000 28,722
Chief Financial Officer 1997 210,000 100,000 -- -- 22,500 35,787 30,092
and Treasurer of the
Company
- ---------------
(A) In 1999, a new Senior Executive Incentive Plan ("SEIP") was recommended by
the outside executive compensation consultant hired by the Human Resources
Committee of the Board to replace the Management Incentive Plan ("MIP") for
this group. The SEIP provides for an incentive pool of money calculated
using a formula driven by increasing the Company's Earnings Per Share
("EPS"). Pursuant to the MIP and the SEIP, bonuses shown for 1997, 1998 and
1999 were paid in 1998, 1999 and 2000, respectively. In addition to bonuses
paid under the Management Incentive Plan, Mr. Brooks, and Mr. Godlasky
received discretionary bonuses for 1997 of $280,000 and $90,000
respectively. In 1998 and 1999, the MIP and the SEIP, respectively, were
amended to provide that employees participating in both plans were eligible
to defer a portion of their annual bonus to purchase phantom stock units at
a price per unit equal to the fair market value of the Company's Common
Stock on the date of purchase. The
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Company will match a specified percentage of the phantom stock units purchased
pursuant to the deferral program. On the third anniversary of the employee's
deferral, the Company will pay to the employee an amount in cash determined by
multiplying the number of units times the fair market value of the
Company's Common Stock on that date, provided the employee continues to be
employed by the Company or one of its subsidiaries on that date. The entire
Company match is forfeited if the employee's employment terminates prior to
the third anniversary of the employee's deferral. The Human Resources
Committee of the Board of Directors determines on an annual basis the
maximum amount of bonus that can be deferred and the percentage match of
the Company. For the 1999 bonus paid in 2000, the following amounts were
deferred: Mr. Brooks -- $100,000; Mr. Heitz -- $130,000; Mr. McPhail --
$100,000; Mr. Godlasky -- $100,000; and Mr. Fraizer -- $100,000. The
Company match was 50%.
(B) Restricted Stock is valued without regard to restrictions on transfer. The
awards will not vest until the third anniversary of the date the award was
granted. At December 31, 1999 (based upon a fair market value stock price on
that date of $23.00) the number and market value of shares of restricted
stock held by each of the named executive officers were as follows: Mr.
Brooks (6,000; $138,000), Mr. Heitz (0;$0), Mr. McPhail (2,000; $46,000),
Mr. Godlasky (2,000; $46,000) and Mr. Fraizer (600; $13,800). The
shareholder is entitled to receive cash dividends and has all other rights
as a shareholder as to such shares prior to vesting. However, the entire
award is forfeited if the shareholder's employment terminates prior to
vesting.
(C) The options were granted with an exercise price equal to the fair market
value of the underlying stock on the date of grant.
(D) Long term incentive compensation pursuant to the Performance Share Plan (the
"LTIP"). LTIP payouts indicated were earned over periods ending December 31
for each of 1997, 1998 and 1999 and were payable in 1998, 1999 and 2000,
respectively. The LTIP was discontinued as of 1998 and no awards were made
in 1998 or 1999. The final payout for awards granted in previous years
occurred in 2000.
(E) Amounts shown as "Other Compensation" for 1997, 1998 and 1999 are comprised
of the items set forth in the table below. Contributions recorded for Mr.
Heitz, prior to January 1, 1999, under "Basic Contributions" represent
monies funded to his account under the former AmVestors Employee Stock
Ownership Plan and contributions recorded under "Benefit Supplement"
represent monies funded to his account under the former AmVestors Money
Purchase Pension Plan.
QUALIFIED PLAN
---------------------------------------------------
401(K)
MATCHING BASIC BENEFIT
CONTRIBUTIONS($) CONTRIBUTIONS($) SUPPLEMENT($)
---------------- ---------------- -------------
Roger K. Brooks....... 1999 8,000 6,400 5,600
1998 8,000 6,400 5,600
1997 8,000 6,400 6,100
Mark V. Heitz......... 1999 8,000 6,400 5,600
1998 -- 12,202 12,000
1997 -- 9,415 11,659
Gary R. McPhail....... 1999 8,000 6,400 --
1998 8,000 6,400 --
1997 8,000 6,400 --
Thomas G. Godlasky.... 1999 8,000 6,400 9,702
1998 8,000 6,400 --
1997 8,000 6,400 --
Michael G. Fraizer.... 1999 8,000 6,400 23,510
1998 8,000 6,400 --
1997 8,000 6,400 --
SUPPLEMENTAL EXECUTIVE EXCESS BENEFIT
RETIREMENT PLAN PLAN
----------------------------------------------- --------------
INTERIM
SERP MATCHING BASIC BENEFIT BENEFIT
CONTRIBUTION($) CONTRIBUTION SUPPLEMENT($) SUPPLEMENT($)
--------------- ------------ ------------- -------------
Roger K. Brooks....... 22,297 15,604 34,056 8,368
44,338 34,271 74,796 8,368
35,805 29,237 63,810 7,868
Mark V. Heitz......... 12,656 10,300 9,013 --
-- -- -- --
-- -- -- --
Gary R. McPhail....... 14,815 9,204 -- --
19,957 13,437 -- --
7,453 3,162 -- --
Thomas G. Godlasky.... 13,135 7,608 16,459 --
18,599 13,437 -- --
12,014 9,004 -- --
Michael G. Fraizer.... 6,005 4,204 24,584 2,572
8,318 6,004 -- --
8,755 6,937 -- --
(F) Mr. Heitz became affiliated with the Company in December 1997 as a result of
its acquisition of AmVestors.
(G) Mr. Heitz received a Special Performance bonus in 1999.
(H) Mr. McPhail commenced employment with AmerUs Life in April 1997.
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(I) The amount shown includes payment of a $225,000 sign-on bonus for Mr.
McPhail in 1997, of which a pro-rata portion is repayable in the event of
termination during the initial 36 months of employment.
OPTION GRANTS TABLE
The following table presents information as to stock options granted during
the year ended December 31, 1999. The two columns on the right project the
amount that could be earned if the Class A Common Stock price appreciates at the
annual rates indicated and if the options are held until the expiration dates
shown. There is no assurance that any particular level of potential realizable
value will actually be earned.
OPTION GRANTS FOR FISCAL YEAR 1999
INDIVIDUAL GRANTS
----------------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM($)(3)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------------
NAME GRANTED YEAR ($/SH) DATE 5% 10%
---- ---------- ---------- -------- ---------- -- ---
Roger K. Brooks...... 70,000(1) 28.69% $23.6875 4/8/2009 1,042,786 2,642,624
Mark V. Heitz........ 20,000(2) 8.20% 20.5000 2/17/2009 257,847 653,434
Gary R. McPhail...... 10,000(2) 4.10% 20.5000 2/17/2009 128,923 326,717
Thomas C. Godlasky... 10,000(2) 4.10% 20.5000 2/17/2009 128,923 326,717
Michael G. Fraizer... 7,500(2) 3.07% 20.5000 2/17/2009 96,693 245,038
- ---------------
(1) These options were granted on April 8, 1999 at the then fair market value of
the Company's Class A Common Stock. The options vest and become exercisable
in equal installments on July 31, 2000, July 31, 2001, and July 31, 2002.
(2) These options were granted on February 17, 1999 at the then fair market
value of the Company's Class A Common Stock. The options vest and become
exercisable on July 31, 2000, July 31, 2001, and July 31, 2002 in increments
as follows, respectively: Mr. Heitz -- 6,800, 6,600, 6,600; Mr.
McPhail -- 3,400, 3,300, 3,300; Mr. Godlasky -- 3,400, 3,300, 3,300; and Mr.
Fraizer -- 2,550, 2,475, 2,475.
(3) Potential realizable value is based on the assumption that the Common Stock
price appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the ten-year option period. The Company's
stock price at the end of the ten-year term for the options granted to Mr.
Brooks are $38.58 and $61.44, for 5% and 10% appreciation, respectively and
for all other executive officers are $33.39 and $53.17, for 5% and 10%
appreciation, respectively. The numbers are calculated based on requirements
promulgated by the Securities and Exchange Commission. The actual value, if
any, an executive may realize will depend on the excess of the stock price
over the exercise price on the date the option is exercised (if the
executive were to sell the shares on the date of exercise), so there is no
assurance that the value realized will be at or near the potential
realizable value as calculated in this table. The total gain to all
shareholders using Mr. Brooks' values would be $447,994,261 and
$1,135,305,416 at 5% and 10% annual appreciation, respectively. The total
gain to all shareholders using all other executive officers' values would be
$387,710,073 and $982,533,447 at 5% and 10% annual appreciation,
respectively. The aggregate gains for the above officers represent less than
0.41% of the gain to all shareholders.
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OPTION EXERCISES AND VALUES TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#) AT FY-END($)(1)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Roger K. Brooks.............. -- -- 110,000 125,000 -- --
Mark V. Heitz................ -- -- 148,759 44,221 684,235 70,116
Gary R. McPhail.............. -- -- 46,667 33,333 --
Thomas G. Godlasky........... -- -- 40,000 30,000 -- --
Michael G. Fraizer........... -- -- 15,000 15,000 -- --
- ---------------
(1) Based on a closing stock price of $23.00 per share on December 31, 1999, the
last business day of the Company's fiscal year and the exercise price of
in-the-money options multiplied by the number of shares subject to
in-the-money options. None of the options were in-the-money at the end of
the last completed fiscal year except for Mr. Heitz.
Long-Term Incentive Compensation Plan
AmerUs Life established a long-term incentive compensation performance
share plan effective January 1, 1995 (the "LTIP"). While there was a payout in
1999 to certain Named Executive Officers for awards granted in previous years,
the LTIP was discontinued as of 1998 and no awards were made in 1998 or 1999.
The final payout for awards granted in previous years occurred in 2000.
Stock Incentive Plan
On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Holdings, Inc. Stock Incentive Plan (the "Stock Plan"). The Stock Plan was
approved by the Company's shareholders and became effective on December 4, 1996.
No grants were made under the Stock Plan until July 28, 1997. The purpose of the
Stock Plan is to enable the Company to attract and retain employees and to align
employees' interest with the performance of the Company.
The Stock Plan provides for the grant of options (including incentive stock
options and non-qualified stock options), stock appreciation rights and
restricted stock awards. Options were granted to all Executive Officers in 1999.
Restricted stock awards were granted to all Executive Officers in 1999, except
for Mr. Heitz.
Executive Stock Purchase Plan
In November 1998, the Company adopted the AmerUs Life Holdings, Inc.
Executive Stock Purchase Plan (the "Stock Purchase Plan") to encourage direct,
long-term ownership of the Company's securities by executive officers and
certain senior officers. Under the Purchase Plan, up to $25 million of Class A
Common Stock or the Company's 7.00% Adjustable Conversion-rate Equity Securities
Units ("ACES Units") could be purchased in open market or negotiated
transactions with independent parties. Purchases are to be financed by full
recourse personal loans at market interest rates to the participants from a
bank. The Company has agreed to guarantee the loans in the event of default, but
has recourse to the participants if it incurs a loss under the guarantee.
Participants in the Stock Purchase Plan are fully liable for any losses, as well
as for the repayment of the loan when it comes due. A total of 49 officers of
the Company and its subsidiaries, including the Named Executive Officers,
elected to participate in the Stock Purchase Plan.
Savings and Profit Sharing Plans
Each of the Named Executive Officers participates in the All*AmerUs Savings
& Retirement Plan (the "Savings & Retirement Plan"), a profit sharing plan
containing a qualified cash or deferred arrangement and the nonqualified
All*AmerUs Supplemental Executive Retirement Plan (the "Supplemental Plan"). Of
the
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Named Executive Officers, Messrs. Brooks and Fraizer also participate in the
nonqualified All*AmerUs Excess Benefit Plan (the "Excess Plan"). Each of the
Named Executive Officers, except Messrs. Heitz and McPhail, also had a frozen
benefit under the qualified American Mutual Life Insurance Company Pension Plan
(the "AML Frozen Pension Plan"). Additionally, the Named Executive Officers,
except Messrs. Heitz and McPhail, have a frozen benefit under the nonqualified
American Mutual Life Insurance Company AML Frozen SERP (the "AML Frozen SERP").
Under the Savings & Retirement Plan, the Company will contribute 4% of each
eligible participating employee's compensation as of the end of a plan year in
accordance with plan provisions ("Basic Contributions"). With the merger of the
AmVestors Employee Stock Ownership Plan (the "AmVestors' ESOP"), beginning with
the 1999 Plan year, this Basic Contribution will be made in the form of cash and
shares of the Company's common stock; the portions of cash and stock will be
determined at the end of each year and may vary year to year. The shares of
stock contributed as part of the Basic Contribution will be made in accordance
with the plan provision of the Employee Stock Ownership Plan (ESOP) component of
the Savings & Retirement Plan. In addition, the Company will make a maximum
matching contribution equal to 5% of an employee's compensation for the first 4%
of salary deferral ("Matching Contributions").
The Company may also contribute to the Savings and Retirement Plan and
Supplemental Plan, on behalf of each participating employee who was, as of
December 31, 1995, an active participant in either the AML Frozen Pension Plan
or AML Frozen SERP (hereafter jointly referred to as the "Frozen Pension
Plans"), 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 and Supplemental Plan. The amount of the Interim Benefit Supplement made on
behalf of any eligible employee is reduced by any discretionary profit sharing
contribution allocated to such employee under the Savings & Retirement Plan and
the Supplemental Plan. Each of the Named Executive Officers, except Messrs.
Heitz and McPhail, receive an Interim Benefit Supplement.
When the Frozen Pension Plans were frozen in 1995, the AML Frozen SERP
provided eligibility to board-appointed executives only. In May, 1999, a
decision was made to expand eligibility to include executives who, as of
December 31, 1995, received a reduction in qualified pension accrual(s) as a
result of IRS imposed compensation limits (e.g. $150,000 in 1995). Messrs.
Fraizer and Godlasky qualified for retroactive participation in the AML Frozen
SERP. All benefits accrued under this plan were frozen as of December 31, 1995.
Mr. Fraizer's and Mr. Godlasky's participation in the AML Frozen SERP was not
anticipated when their Interim Benefit Supplement percentages were calculated.
Mr. Fraizer's and Mr. Godlasky's benefit at normal retirement age was projected
to be higher if accruals continued under the Frozen Pension Plans, compared to
the projected benefit provided under the Savings & Retirement Plan.
Subsequently, they each receive a specified, recalculated Interim Benefit
Supplement percentage. The Interim Benefit Supplement contributions were
initiated with the 1996 Plan year. Applying the recalculated Interim Benefit
Supplement percentages to Messrs. Fraizer's and Godlasky's compensation from
January 1, 1996, resulted in one-time true up amounts which were funded to their
respective qualified and nonqualified plans during 1999.
Under the AmVestors' Money Purchase Pension Plan (the "AmVestors' MPPP"),
AmVestors Financial Corp. contributed on behalf of each eligible participant a
percentage of compensation (ranging from 5-15%) based on age at plan entry. Mr.
Heitz qualified for a 7.5% annual contribution. AmVestors Financial Corp. also
made a contribution of company stock to the AmVestors' ESOP of an amount
determined by the Board not less than the amount needed to provide the trustee
with cash consistent to pay maturing obligations under the loan. Effective
January 1, 1999, the AmVestors' MPPP and AmVestors' ESOP merged into the Savings
& Retirement Plan, and all Named Executive Officers participate in the restated
Savings & Retirement Plan and Supplemental Plan.
As a result of the plan mergers, the Company may also contribute to the
Savings & Retirement Plan and Supplemental Plan, on behalf of each AmVestors
employee who was, as of January 1, 1999, an active qualifying AmVestors employee
for the AmVestors MPPP, a certain percentage of such employee's
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17
compensation (the "Benefit Supplement") in order to make up any shortfall
between the projected benefits such employee would have had under the AmVestors
MPPP as compared to such employee's projected benefits under the Savings &
Retirement Plan and Supplemental Plan. The amount of the Benefit Supplement made
on behalf of any eligible AmVestors employee is reduced by any discretionary
contribution allocated to such employee under the Savings & Retirement Plan and
the Supplemental Plan. Of the Named Executive Officers, only Mr. Heitz receives
a Benefit Supplement.
Frozen Pension Plans
Prior to January 1, 1996, AmerUs Life maintained the AML Frozen Pension
Plan, which was qualified under Section 401(a) of the Code. The benefits under
this plan were curtailed as of December 31, 1995. Retirement benefits under the
AML Frozen Pension Plan were based primarily on an employee's years of service
and career compensation as of December 31, 1995. All employees' frozen accrued
benefits as of December 31, 1995 are fully vested. Active participants in the
AML Frozen Pension Plan on December 31, 1995, had the right to receive a
distribution of accrued benefits on September 26, 1997, under a one-time
irrevocable election as a result of the termination of the AmerUs Retirement
Plan. The AmerUs Retirement Plan was established as a "conduit" plan to provide
for the spin-off of accrued benefits from the AML Frozen Pension Plan. Upon
receipt of assets supporting the accrued benefits of participants electing to
receive such benefits by the AmerUs Retirement Plan from the AML Frozen Pension
Plan, the AmerUs Retirement Plan was terminated and the assets supporting the
accrued benefits were distributed to each participant in the form of: (1) an
immediate lump sum payment; (ii) an immediate annuity; or (iii) a rollover into
a qualified plan or an individual retirement account. Each of the Named
Executive Officers except Messrs. Heitz and McPhail received a distribution of
the assets supporting their respective accrued benefits as a result of their
election to have such accrued benefits transferred from the AML Frozen Pension
Plan to the AmerUs Retirement Plan.
Prior to January 1, 1996, AmerUs Life also maintained nonqualified
supplemental retirement plans for certain former employees of American Mutual
Life Insurance Company ("American Mutual") and Central Life Assurance Company
("Central Life"), predecessor companies to AmerUs Life. These plans are jointly
referred to herein as the AML Frozen SERP. The benefits under this plan for both
American Mutual and Central Life employees were also curtailed as of December
31, 1995. The following table sets forth the frozen accrued monthly benefits
payable as a straight life annuity to each of the Named Executive Officers under
the AML Frozen SERP, assuming retirement at age 65 (current normal retirement
age):
PENSION TABLE
FROZEN ACCRUED BENEFITS
MONTHLY
NAME BENEFITS
---- --------
Roger K. Brooks............................................. $17,363
Mark V. Heitz............................................... 0
Gary R. McPhail............................................. 0
Thomas C. Godlasky.......................................... 671
Michael G. Fraizer.......................................... 722
Supplemental Benefit Agreement
In April 1999, the Company entered into Supplemental Benefit Agreements
with each of its Named Executive Officers, which were amended in February 2000.
These agreements provide that in the event of (i) a change of control of the
Company (as defined below) and (ii) a termination by the Named Executive Officer
for "good reason" or a termination of the Named Executive Officer not for cause
within two years of a change of control, the Named Executive Officer shall be
entitled to: (1) a cash severance payment in an amount equal to three times such
officer's annual base compensation and bonus; (2) continuation of employee
welfare benefits for three years; and (3) immediate vesting of benefits under
the Savings and Retirement Plan, the Supplemental Plan and the Excess Plan.
Payments to any of the Named Executive Officers under the
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Supplemental Benefit Program will be increased to offset the affects of any
excise taxes payable with respect to such payments.
For purposes of the Supplemental Benefit Program, a change of control shall
be deemed to have occurred upon the happening of any one of the following
events: (1) AMHC not directly or indirectly owning or controlling shares of the
Company's common stock sufficient to cast a majority of the votes necessary to
elect members to the Company's board of directors ("Voting Control") other than
in a demutualization of AMHC; (2) the individuals who, prior to any merger,
consolidation, dissolution or similar transaction ("Transaction"), constituted
the AMHC's board of directors, ceasing to constitute at least a majority
thereof, unless the election, or the nomination for election of each director of
AMHC for a period of two years following consummation of the Transaction was
approved by a vote of at least two-thirds of the directors of AMHC then still in
office who were directors of AMHC prior to such Transaction; (3) the individuals
who, prior to a Transaction, constituted the Company's board of directors,
ceasing to constitute at least a majority thereof, unless the election, or the
nomination for election of each director of the Company for a period of two
years following consummation of the Transaction was approved by a vote of at
least two-thirds of the directors of the Company then still in office who were
directors of the Company prior to such Transaction; or (4) any acquisition of
twenty five percent or more of the Company's common stock by any person other
than AMHC at any time AMHC does not have Voting Control of the Company.
Also, for purposes of the Supplemental Benefit Program, termination for
"good reason" means a change of control and the occurrence of any one of the
following events without the Named Executive Officer's consent: (1) the
assignment to such officer of duties substantially inconsistent with such
officer's position, duties, responsibility or status with the Company or a
substantial reduction of such officer's duties or responsibilities, as compared
with such officer's duties or responsibilities prior to such reduction, or any
removal of such officer from, or any failure to re-elect the officer to, the
position such officer held at the time of such removal or failure to re-elect,
except in connection with termination of employment for cause; (2) a reduction
in the amount of such officer's base compensation, a material reduction in
payments received by such officer under any bonus or incentive plans in which
the such officer participates or a material reduction in any other perquisites
to which such officer is entitled; (3) the relocation of such officer's
principal office to a location more than thirty-five miles from the location of
such office immediately prior to such change of control; or (4) any material
breach by the Company of any of the provisions of the Supplemental Benefit
Agreement.
Employment Agreement
Mr. Heitz currently is employed pursuant to an employment agreement dated
September 19, 1998, which provides a base compensation of $28,125 per month, an
annual incentive bonus of up to 100% of annual base compensation assuming
certain performance targets are met (up to $150,000 of which can be deferred to
purchase stock units with a 100% company match on the third anniversary date of
the deferral if Mr. Heitz continues to be employed by AmVestors or an affiliate
company), annual stock option grants targeted to produce a Black-Scholes value
of approximately 40% of annual base compensation and certain insurance and other
fringe benefits. The agreement continues until December 31, 2000.
The agreement includes a provision pursuant to which Mr. Heitz may elect to
receive, in the event of a termination of the agreement by AmVestors or an
affiliated company without cause or by Mr. Heitz for "Good Reason", a severance
allowance equal to 48 months of his base compensation in effect on the date of
termination. For such purposes, a termination by Mr. Heitz for "Good Reason"
includes the following reasons: (1) his duties or responsibilities, or his
reporting responsibilities, titles or offices are changed or terminated; (2) his
monthly base compensation is reduced or (3) he is required without his agreement
to be based anywhere other than Topeka, Kansas.
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DIRECTOR COMPENSATION
For their services on the Board, non-employee directors are paid $10,000
per year and $2,000 for each meeting attended. The chairman of each of the
Audit, Board Operations, Finance and Strategy, Human Resources, Intercompany
Transaction and Investment Committees receives an additional $2,000 per year.
Members of the Intercompany Transactions Committee receive an additional $16,000
per year for services on such committee. The schedule of fees paid to
non-employee directors in 1999 remained unchanged from 1998.
During 1999, the Company's board of directors appointed a Special Committee
of Independent Directors ("Special Committee") to consider and make
recommendation to the Company's board of directors concerning the financial
terms of the proposed merger transaction between the Company and AMHC in
connection with the demutualization of AMHC. For their services on the Special
Committee, members will receive an additional one-time fee of $17,500.
Non-employee directors participate in the Non-Employee Director Stock Plan
("Director Plan"), which was approved by the Company's shareholders on December
4, 1996. Under the Director Plan, options to purchase 2,500 shares of the
Company's Class A Common Stock are automatically granted to each non-employee
director on the first business day of each year beginning in 1998. The exercise
price for all non-employee director options granted under the Director Plan is
100% of the fair market value of the shares on the date of grant. All such
options vest and become exercisable in equal installments on the first, second
and third anniversary of the date of grant, assuming continued service on the
Board of Directors.
The Director Plan also provides that non-employee directors may elect to
take all or part of their director fees in the Company's Class A Common Stock.
Directors making this election will receive the number of shares equal to the
dollar amount of director fees, which the director has elected to receive in the
form of stock, divided by 75% of the fair market value of the stock as of each
payment date. Each director making this election must enter into an agreement
which restricts the stock from being sold, transferred, pledged or assigned for
a period of two years from the purchase date.
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PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total shareholder
return on the Company's Class A Common Stock for the period from January 28,
1997, the date of the Company's initial public offering, through December 31,
1999 with the cumulative total return of the Russell 2000 stock index and a peer
group of companies (the "Peer Group") consisting of eleven life insurance
companies whose stock is publicly traded to which the Company has traditionally
compared its business and operations: American Annuity Group, Inc., Conseco
Inc., Delphi Financial Group, Inc., FBL Financial Group, Inc., MONY Group, Inc.,
Kansas City Life Insurance Company, Liberty Corporation, Liberty Financial
Companies, Presidential Life Corporation, Protective Life Corporation, and
Reliastar Financial Corporation. During 1999, three companies, American Heritage
Life Investment Corporation, ARM Financial Group, Inc. and Guarantee Life
Companies, Inc., were removed from the Peer Group because they were acquired by
other companies and are no longer publicly traded. In addition, MONY Group,
Inc., which first became a public company in November 1998, was added because
its operations are comparable to the Company's. The graph assumes a $100.00
investment on January 28, 1997 and the reinvestment of dividends. The return of
the Peer Group is based on the return of each company included therein weighted
to reflect each such company's stock market capitalization.
CUMULATIVE TOTAL RETURNS
PERIOD BEGINNING
JANUARY 28, 1997
AND ENDING
DECEMBER 31, 1999
TOTAL SHAREHOLDER RETURNS
TOTAL RETURNS GRAPH
AMERUS LIFE HOLDINGS, INC. PEER GROUP RUSSELL 2000
-------------------------- ---------- ------------
1/28/97 100.00 100.00 100.00
6/30/97 169.59 118.20 108.16
12/31/97 225.82 139.33 119.25
6/30/98 199.49 154.20 124.81
12/31/98 139.02 134.23 115.14
6/30/99 169.22 129.11 124.89
12/31/99 145.37 105.74 137.73
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1/28/97 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
- ----------------------------------------------------------------------------------------------------------------
AmerUs Life Holdings, Inc. $100.00 $169.59 $225.82 $199.49 $139.02 $169.22 $145.37
- ----------------------------------------------------------------------------------------------------------------
Peer Group 100.00 118.20 139.33 154.20 134.23 129.11 105.74
- ----------------------------------------------------------------------------------------------------------------
Russell 2000 100.00 108.16 119.25 124.81 115.14 124.89 137.73
- ----------------------------------------------------------------------------------------------------------------
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HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee (the "Committee") presently consists of
Messrs. Candlish, Gaffney, and Norris, none of whom is an employee of the
Company. As part of its duties, the Committee reviews compensation levels of
executive officers, evaluates management performance and administers the
Company's Senior Executive and Management Incentive Plans, Long-Term Incentive
Plan and Stock Option Plan. The Committee is assisted by the Company's Human
Resources personnel, and from time to time by compensation consulting firms
which supply the Committee statistical data and other executive compensation
information to permit the Committee to compare the Company's compensation
policies against compensation levels nationwide and against programs of other
companies of similar size in the Company's industry and geographic area.
The Company's executive compensation programs are designed to attract and
retain executives who will contribute to the Company's long-term success, to
reward executives for achieving the Company's short- and long-term strategic
goals, to link executive compensation and shareholder interests through Company
performance- and equity-based plans, and to recognize individual contributions
to Company performance.
Compensation for the Company's Executive Officers consists of three
principal elements: base salary, annual incentive, and long-term incentive. The
combination and relative weighting of these elements reflect the Committee's
belief that executive compensation should be closely tied to the Company's
profitability.
Base Salary. Executive Officer salaries are initially determined by
evaluating the responsibilities of the position held and the experience and
performance of the individual, with reference to the competitive marketplace for
executive talent, including a comparison to base salaries for comparable
positions based on statistical data provided by the Company's compensation
consultants. Executive Officer base salaries are targeted at the 25th 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 not increased for fiscal 1999. The Committee has
increased Mr. Brooks base salary to $575,000 effective March 1, 2000.
Annual Incentive. The Company's annual incentive program acknowledges
Company and individual performance. Generally, awards under the annual program
can be paid only if the Company achieves certain pre-approved targets
established by the Committee. The annual program is intended to bring the
executives' total cash compensation (base salary and annual incentive) to the
50th percentile established by reference to the statistical data discussed above
when all Company profitability and individual performance criteria are met. In
those circumstances where performance significantly exceeds pre-approved
targets, the total cash compensation could exceed the 50th percentile.
For fiscal 1999, the Committee established a new incentive program based on
an EPS objective. A pool was generated based on a pre-established formula
developed with the assistance of an outside consultant, The Hay Group. The CEO's
bonus under the incentive program was based on a fixed percentage of the
calculated pool. Once eligibility was established, other executive's awards were
recommended by the CEO and adjusted and approved at the Committee's discretion
based on individual performance and other Company performance criteria. Based on
results of the Company against the pre-determined targets, an award of $990,000
was granted for 1999 performance to Mr. Brooks.
Long-Term Incentive. The Company has established two separate long-term
incentive plan programs -- a Long-Term Incentive Plan based on strategic
performance and a Stock Incentive Plan designed to align the interests of
Executive Officers with those of the Company's shareholders. Under the Company's
Stock Incentive Plan, stock options may be granted to Executive Officers and
other key employees of the Company and its subsidiaries and affiliates. Upon
joining the Company, an individual's initial option grant will be based on the
individual's responsibilities and position and upon competitive market
information provided by the Company's compensation consultants. Thereafter, the
size of any annual stock option award will be based
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primarily on an individual's responsibilities and the individual's performance
and position with the Company. All stock options granted to the Company's
Executive Officers will be granted with an exercise price equal to the fair
market value of the Company's Class A Common Stock on the date of grant and will
generally vest over three years. Vesting is designed to encourage the creation
of stockholder value over the long term since no benefit will be realized from
the stock option grant unless the price of the Class A Common Stock rises over a
number of years. No grant was made to Mr. Brooks in 1998. Mr. Brooks was granted
70,000 share options on April 8, 1999 and 195,000 share options on February 11,
2000.
The Long-Term Incentive Plan was implemented in January 1995 for certain
senior executive officers of the Company to align the executives' interest and
reward with the Company's cumulative GAAP Net Worth growth. Notional shares with
a value of $100 as of January 1995 were granted based on a percentage of base
salary tied to competitive industry market data provided by compensation
consultants. With the adoption of the Stock Incentive Plan, the Committee ceased
granting new shares in 1998. Payout in 2000 for shares granted in 1997 under the
Long-Term Incentive Plan formula (based upon fiscal year 1999 results of
operations) was $47,924 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. In 2000, a portion of the core contribution of 4% will
be offset by the implementation of an ESOP component in the 401(k).
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 W. Norris, Jr., Chairman
Malcolm Candlish
Thomas F. Gaffney
CERTAIN TRANSACTIONS AND RELATIONSHIPS
AmerUs Life, Delta and AmVestors are wholly-owned direct subsidiaries of
the Company. The Company is a direct subsidiary of AmerUs Group Co. ("AmerUs
Group"), which in turn is a wholly-owned direct subsidiary of AMHC. As a result
of such ownership, AMHC, AmerUs Group, the other subsidiaries of AmerUs Group
and the Company and its subsidiaries, including AmerUs Life, Delta and
AmVestors, have a variety of relationships, certain of which are summarized
below. Management believes that the terms of the agreements and transactions
described herein are on a basis no less favorable than could be obtained from
unaffiliated third parties. As used herein, "AmerUs Affiliated Group" means AMHC
and its direct and indirect subsidiaries now or hereafter existing, other than
the Company and its subsidiaries.
OWNERSHIP OF VOTING INTERESTS OF THE COMPANY
AMHC is required by Iowa law to own, directly or indirectly through one or
more intermediate holding companies, shares of capital stock of the Company
which carry the right to cast a majority of the votes entitled to be cast by all
of the outstanding shares of the capital stock at a shareholders' meeting of the
Company. All
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of the issued and outstanding shares of the Company's Class B Common Stock are
owned by AmerUs Group. Additionally, the Company's Amended and Restated Articles
of Incorporation provide that no shares of its Class B Common Stock may be owned
by any person other than AMHC, a subsidiary of AMHC or another mutual insurance
holding company or intermediate holding company as expressly authorized by Iowa
law or by the Iowa Commissioner (a "Permitted Class B Holder"). Any proposed
amendments to the Company's Amended and Restated Articles of Incorporation are
subject to approval by the Iowa Commissioner and the Iowa Attorney General.
INTERCOMPANY AGREEMENT
AMHC, AmerUs Group and the Company entered into an Amended and Restated
Intercompany Agreement dated as of December 1, 1996 (the "Intercompany
Agreement"). Pursuant to the Intercompany Agreement, AmerUs Group and certain
members of the AmerUs Affiliated Group agreed to, among other things, the
following: (i) the grant to the Company and certain of its subsidiaries of a
non-exclusive, revocable license to use the AmerUs name and certain trademarks
solely in connection with the Company's life insurance business and activities
related to such life insurance business; (ii) the indemnification by the Company
of members of the AmerUs Affiliated Group and each of their respective officers,
directors, employees and agents against certain losses; (iii) the grant by the
Company to certain members of the AmerUs Affiliated Group of registration rights
with respect to the Class A Common Stock owned by such entities; (iv) the grant
of equity purchase rights, under certain conditions, to certain members of the
AmerUs Affiliated Group; and (v) the agreement by the Company to provide to the
AmerUs Affiliated Group certain management and administrative services with
respect to aspects of the business and affairs of the AmerUs Affiliated Group in
exchange for payment by AmerUs Group to the Company of $2 million per year in
consideration for such services.
AGREEMENTS INVOLVING REAL ESTATE
The Company leased facilities owned by AmerUs Affiliated Group which serve
as the Company's executive and home offices. The Company occupied approximately
220,000 square feet of office space under the lease arrangements with AmerUs
Affiliated Group for an aggregate monthly cost of approximately $0.3 million.
Two of the leased facilities were sold by the AmerUs Affiliated Group to
unaffiliated third parties; one before year end 1999 and the other in early
2000. The other leases expire in 2001 and 2002. Total rental expense paid to
AmerUs Affiliated Group during the year ended December 31, 1999 was $3.5
million.
The Company has entered into various limited partnership and joint venture
agreements in which AmerUs Affiliated Group or an affiliate has an interest. As
of December 31, 1999, the Company's total investment was $5.8 million.
In 1999, the Company purchased limited partnership interests and notes
receivable from a member of the AmerUs Affiliated Group for $8.8 million. The
purchase price was determined by a committee of independent directors of each of
the Company and the AmerUs Affiliated Group who utilized a third party to value
the assets. The carrying value of the assets on the AmerUs Affiliated Group's
books was $5.5 million.
LOAN SERVICING AGREEMENTS
The Company has entered into various mortgage loan servicing agreements
with members of the AmerUs Affiliated Group. The aggregate expense incurred by
the Company for such services was approximately $1.2 million for the year ended
December 31, 1999.
SERVICE AGREEMENTS
The Company has entered into cost reimbursement and services agreements
with members of the AmerUs Affiliated Group. Pursuant to such agreements, the
Company provides certain communication, tax, legal, accounting, real estate
management, internal audit, human resources, administrative and data processing
services to such other parties to the agreements, as requested. The aggregate
revenue earned for services
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performed by the Company in accordance with such agreements was approximately
$5.4 million for the year ended December 31, 1999.
PURCHASE OF LOANS AND SECURITIZATION
The Company has a master agreement of purchase and sale with AmerUs Home
Equity, dated as of March 5, 1997, under which the Company would purchase home
equity mortgage loans from AmerUs Home Equity. The Company records the purchases
of such loans at their purchase price which represents fair market value, which
may be different from the seller's carrying value. AmerUs Home Equity would
accordingly recognize gain or loss on such transactions. During 1999, the
Company acquired loans with aggregate principal balances at the time of purchase
of $13.1 million.
AmerUs Life entered into an origination agreement with AmerUs Home Equity,
dated August 1, 1998, under which AmerUs Life reimburses AmerUs Home Equity for
costs to originate home equity loans for AmerUs Life. During 1999, AmerUs Life
reimbursed AmerUs Home Equity $0.1 million for the origination of $9.9 million
of loans.
LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP
The Company provided mortgage and construction loan financing to members of
the AmerUs Affiliated Group or to a partnership in which a member of the AmerUs
Affiliated Group has an ownership interest. The outstanding balance of all such
financings was $22.1 million as of December 31, 1999. The Company recorded
interest income of $1.3 million for the year ended December 31, 1999.
The Company guaranteed various borrowings of members of the AmerUs
Affiliated Group with an outstanding balance of approximately $6.6 million at
December 31, 1999.
The Company has outstanding loan commitments to various partnerships in
which AmerUs Affiliated Group has an ownership interest. At December 31, 1999,
the outstanding loan commitments were approximately $6.9 million.
LOAN GUARANTEE
Pursuant to the Stock Purchase Plan, the Company guaranteed personal loans
in the aggregate amount of approximately $24.4 million made by a bank to certain
members of the Company's management, including the Named Executive Officers.
Each participant has agreed to repay the Company for any amounts paid by the
Company under the guarantee in accordance with a reimbursement agreement entered
into between the participant and the Company. During 1999, participants
purchased approximately $24.4 million of the Company's securities. As of
February 29, 2000, the outstanding principal balances of the bank loans to the
Named Executive Officers which are guaranteed by the Company were as follows:
Mr. Brooks -- $4,017,660; Mr. Heitz -- $1,674,722; Mr. McPhail -- $1,004,379;
Mr. Godlasky -- $1,504,759; and Mr. Fraizer -- $1,205,196.
MERGER WITH AMHC
On December 17, 1999, the board of directors of AMHC adopted a plan of
conversion to convert AMHC from a mutual insurance holding company that is owned
by its members to a stock company that is owned by shareholders (the
"Conversion"). Simultaneous with the Conversion, the Company has agreed pursuant
to an Agreement and Plan of Merger dated December 17, 1999, to merge the Company
with and into AMHC (the "Merger"). The Merger is subject to a number of
conditions, including regulatory, member and shareholder approvals. At a later
date, the Company's shareholders will be asked to consider and vote to approve
the Merger.
INDIANAPOLIS LIFE TRANSACTION
AMHC and the Company entered into an agreement with Indianapolis Life
Insurance Company ("ILICO"), an Indiana mutual insurance company, and its
subsidiary, the Indianapolis Life Group of
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Companies, Inc. ("ILGOC"), on February 18, 2000. The agreement provides that
ILICO will be combined with AMHC after the Conversion and Merger are completed
(the "Combination"). In connection with the Combination, AMHC invested $100
million in ILGOC for a 45% equity interest in ILGOC and the Company agreed with
AMHC pursuant to an agreement dated February 18, 2000 to purchase those ILGOC
shares for $100 million plus interest at 8% per annum, among other
circumstances, upon the written notice of AMHC prior to the effective date of
the Conversion and Merger. The Combination is subject to a number of conditions,
including regulatory, members and shareholder approvals. At a later date, AMHC
shareholders will be asked to consider and vote to approve the Combination.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and 10 percent holders of the Company's Class A
Common Stock to file reports concerning their transactions in, and ownership of
the Company's equity securities. Based solely on the review of the Forms 3, 4
and 5 furnished to the Company and certain representations made to the Company,
the Company believes that there were no filing deficiencies under Section 16(a)
by its directors and executive officers during 1999.
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PROPOSAL 2
APPROVAL OF THE AMERUS LIFE HOLDINGS, INC.
2000 STOCK INCENTIVE PLAN
On February 11, 2000, the Board of Directors adopted the AmerUs Life
Holdings, Inc. 2000 Stock Incentive Plan (the "Stock Plan") and reserved
1,600,000 shares of common stock for issuance thereunder, subject to shareholder
approval. As of the present date, no awards have been granted pursuant to the
Stock Plan nor has any employee or director been specifically identified to
receive an award in the future.
At the annual meeting, the shareholders are being asked to approve the
Stock Plan and the reservation of shares for issuance thereunder for the purpose
of qualifying such shares for special tax treatment under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL
VOTE REQUIRED
Approval of the Stock Plan requires the affirmative vote of a majority of
the shares of common stock present or represented by proxy and entitled to vote
at the meeting.
SUMMARY OF THE 2000 STOCK PLAN
General. The purpose of the Stock Plan is to attract and retain individuals
who contribute to the Company's success, and to enable such individuals to
participate in the long-term success and growth of the Company through an equity
interest in the Company. Stock options, stock awards and stock appreciation
rights may be granted under the Stock Plan. Options granted under the Stock Plan
may be either "incentive stock options," as defined in Section 422 of the Code,
or non-qualified stock options. At February 29, 2000, there were available for
awards under existing plans approximately 98,158 shares of common stock which
shares will remain available for award.
Administration. The Stock Plan will be administered by the Human Resources
Committee (the "Committee") appointed by the Board. The Committee shall have
full and exclusive power to interpret the Stock Plan, to grant waivers of
restrictions set forth in the Stock Plan and to adopt such rules and regulations
and guidelines for carrying out the Stock Plan as it may deem necessary or
proper. The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Stock Plan or in any award in the manner and to the
extent the Committee deems necessary or desirable to carry it into effect. All
decisions made by the Committee pursuant to the provisions of the Stock Plan
shall be final and binding on all persons including the Company.
Eligibility. Non-qualified stock options, stock awards and stock
appreciation rights may be granted under the Stock Plan to employees, directors
and consultants of the Company, its affiliates and subsidiaries. Incentive stock
options may be granted only to employees of the Company or its subsidiaries. The
Administrator, in its discretion, selects the employees, directors and
consultants to whom options, stock awards and stock appreciation rights may be
granted, the time or times at which such awards are granted, the terms and
conditions of any such awards including the exercise price, any vesting periods
or vesting acceleration features or waiver of forfeiture restrictions and the
number of shares subject to each grant.
Shares Subject to the Stock Plan. The total number of shares of common
stock reserved and available for distribution under the Stock Plan shall be
1,600,000. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares. The maximum number of shares subject to
awards which may be granted under the Stock Plan in any one year is 1,000,000,
and the maximum number of shares subject to awards which may be granted under
the Stock Plan to any individual in any one year is 250,000. Any shares subject
to awards which, for any reason, expire or are terminated or forfeited, become
available again for grant of awards under the Stock Plan. On February 29, 2000,
the closing price of the common stock on the NYSE was $20.3125 per share. In the
event of any merger, reorganization, consolidation, stock dividend or other
change in corporate structure affecting the common stock, the Committee in its
sole discretion shall make such adjustment to outstanding awards and shares
available for future grant as it deems appropriate in order to reflect any such
event.
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Stock Options. The Committee is authorized to determine the terms and
conditions of all option grants, subject to the limitations that the option
price per share may not be less than the fair market value of a share of the
Company's common stock on the date of grant and the term of an option may not be
longer than ten (10) years. Payment of the option price may be made in any
manner specified by the Committee (which may include cash or common stock of the
Company, or by "cashless exercise").
Stock Appreciation Rights. The Committee is authorized to grant stock
appreciation rights either in tandem with options under the Stock Plan or for
cash compensation alone. A stock appreciation right issued in connection with an
option can be exercised only to the extent the option with respect to which it
is granted is not exercised, and is subject to the same terms and conditions as
the option to which it relates. Upon exercise of a stock appreciation right, the
holder will be entitled to receive, for each share with respect to which the
stock appreciation right is exercised, an amount (the "appreciation") equal to
the difference between the option price of the related option and the fair
market value of a share of common stock of the Company on the date of exercise
of the stock appreciation right. The appreciation will be payable in cash or
common stock, at the discretion of the Committee. For stock appreciation rights
not issued in tandem with options, the holder will be entitled to receive for
each right which is exercised a cash amount equal to the difference between the
fair market value on the date of grant and the fair market value on the date of
exercise.
Restricted Stock. The Committee is authorized to award restricted stock
under the Stock Plan subject to such terms and conditions as the Committee may
determine. The Committee has the authority to determine the number of shares of
restricted stock to be awarded, the price, if any, to be paid by the recipient
of the restricted stock, and the date or dates on which the restricted stock
will vest. The vesting of restricted stock may be conditioned upon the
completion of a specific period of service with the Company, upon the attainment
of specified performance goals, or upon such other criteria as the Committee may
determine. The Stock Plan gives the Committee discretion to make loans to the
recipients for the purchase price of restricted stock and to accelerate the
vesting of restricted stock on a case by case basis at any time.
Termination of Employment. All of the terms relating to the exercise,
cancellation or other disposition of an option, stock appreciation right or
restricted stock upon a termination of employment with or service to the
Company, its affiliates or subsidiaries, whether by reason of disability,
retirement, death or other termination will be determined by the Committee. Such
determination will be made at the time of such award and shall be specified in
the written agreement evidencing the award. Unless otherwise determined by the
Committee at grant, if a recipient of an award is involuntarily terminated for
cause or, in the case of restricted stock which is subject to a restricted
period, the award or portion of the award of restricted stock in the restricted
period shall terminate immediately as of the date of the termination of
employment.
Amendment and Termination of the Plan. The Board may amend, alter, suspend
or terminate the Stock Plan, or any part thereof, at any time and for any
reason. However, the Company shall obtain shareholder approval for any amendment
to the Stock Plan to the extent necessary and desirable to comply with
applicable laws. No such action by the Board or shareholders may alter or impair
any option or award previously granted under the Stock Plan without the written
consent of the awardee. Unless terminated earlier, the Stock Plan shall
terminate ten years from the date of its approval by the shareholders.
New Plan Benefits. Because benefits under the Stock Plan will depend on the
Administrator's actions and the fair market value of common stock at various
future dates, it is not possible to determine the benefits that will be received
by directors, consultants, executive officers and other employees if the Stock
Plan is approved by the shareholders.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated as
long-term capital gain or loss. Net capital gains on shares held more than 12
months are generally taxed at a maximum federal rate of 20%. Capital losses are
generally allowed in full
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against capital gains and up to $3,000 against other income. If the above
holding periods are not satisfied, the optionee recognizes ordinary income at
the time of disposition equal to the difference between the exercise price and
the lower of (i) the fair market value of the shares at the date of the option
exercise or (ii) the sale price of the shares. Any gain or loss recognized on
such a premature disposition of the shares in excess of the amount treated as
ordinary income is treated as long-term or short-term capital gain or loss,
depending on the holding period. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director or 10% shareholder of the Company. Unless limited by Section 162(m) of
the Code, the Company is entitled to a deduction in the same amount as and at
the time the optionee recognizes ordinary income.
Non-statutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a non-qualified stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as and at the time the optionee recognizes ordinary income. Upon a
disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, to the extent not recognized as taxable
income as provided above, is treated as long-term or short-term capital gain or
loss, depending on the holding period. Net capital gains on shares held more
than 12 months may be taxed at a maximum federal rate of 20% (lower rates may
apply depending upon when the stock is acquired and the applicable income tax
bracket of the taxpayer). Capital losses are generally allowed in full against
capital gains and up to $3,000 against other income.
Stock Awards. Stock awards will generally be taxed in the same manner as
non-qualified stock options. However, a stock award is subject to a "substantial
risk of forfeiture" within the meaning of Section 83 of the Code to the extent
the award will be forfeited in the event that the service provider ceases to
provide services to the Company. As a result of this substantial risk of
forfeiture, the service provider will not recognize ordinary income at the time
of award. Instead, the service provider will recognize ordinary income on the
dates when the stock is no longer subject to a substantial risk of forfeiture,
or when the stock becomes transferable, if earlier. The service provider's
ordinary income is measured as the difference between the amount paid for the
stock, if any, and the fair market value of the stock on the date the stock is
no longer subject to forfeiture.
The service provider may accelerate the date of award his or her
recognition of ordinary income, if any, and begin his or her capital gains
holding period by timely filing (i.e., within thirty days of the award) an
election pursuant to Section 83(b) of the Code. In such event, the ordinary
income recognized, if any, is measured as the difference between the amount paid
for the stock, if any, and the fair market value of the stock on the date of
award, and the capital gain holding period commences on such date. The ordinary
income recognized by a service provider who is an employee will be subject to
tax withholding by the Company. Unless limited by Section 162(m) of the code,
the Company is entitled to a deduction in the same amount as and at the time the
service provider recognizes ordinary income.
Cash Awards. Upon receipt of cash, the recipient will have taxable ordinary
income, in the year of receipt, equal to the cash received. In the case of a
recipient who is also an employee, any cash received will be subject to tax
withholding by the Company. Unless limited by section 162(m) of the Code, the
Company will be entitled to a tax deduction in the amount and at the time the
recipient recognizes compensation income.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES AND THE COMPANY WITH RESPECT TO THE GRANT AND/OR EXERCISE OF
OPTIONS AND AWARDS UNDER THE STOCK PLAN. IT DOES NOT PURPORT TO BE COMPLETE AND
DOES NOT DISCUSS THE TAX CONSEQUENCES ARISING IN THE CONTEXT OF THE EMPLOYEE'S
OR CONSULTANT'S DEATH OR THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH THE EMPLOYEE'S OR CONSULTANT'S INCOME OR GAIN MAY BE
TAXABLE.
INCORPORATION BY REFERENCE
The foregoing is only a summary of the Stock Plan and is qualified in its
entirety by reference to its full text, a copy of which is attached hereto as
Appendix A.
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PROPOSAL 3
SELECTION OF AUDITORS
The Board of Directors, acting upon recommendation of the Audit Committee,
has appointed the firm of KPMG LLP to examine the financial statements of the
Company and its subsidiaries for the fiscal year ending December 31, 2000. The
same firm conducted the fiscal 1999 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 LLP will be present at the 2000 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 THAT YOU VOTE "FOR" THIS PROPOSAL
OTHER MATTERS
Neither the Board of Directors nor management intends to bring any matter
for action at the 2000 annual meeting of shareholders other than those matters
described above. If any other matter or any proposal should be presented and
should properly come before the meeting for action, the persons named in the
accompanying proxy will vote upon such matter and upon such proposal in
accordance with their best judgment.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Under the rules of the Securities and Exchange Commission (the "SEC"),
proposals of shareholders intended to be presented at the 2001 annual meeting of
shareholders (May 2001) must be received by the Company no later than December
1, 2000, as well as meet the other SEC requirements, in order to be considered
for inclusion in the Company's 2001 Annual Meeting Proxy Statement and form of
proxy to be mailed in March 2001.
The Company's By-laws set forth certain procedures which shareholders must
follow in order to nominate a director or present any other business at an
annual meeting of shareholders. Generally, a shareholder must give timely notice
to the Secretary of the Company. To be timely, a shareholder's notice must be
delivered or mailed to and received by the Secretary of the Company at the
principal office of the Company not less than thirty (30) days prior to the date
of the annual meeting; provided, however, that, in the event that less than
forty (40) days' notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder to be timely must be
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the meeting was mailed or such
public disclosure was made. A shareholder's notice to the Secretary shall set
forth as to each matter that such shareholder proposes to present before the
meeting (i) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (ii) the
name and address, as they appear on the Company's books, of the shareholder
proposing such business, (iii) the class and number of the Company's capital
stock that are beneficially owned by such shareholder and (iv) any material
interest of such shareholder in such business.
By Order of the Board of Directors
James A. Smallenberger
Senior Vice President
and Secretary
Dated: March 31, 2000
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APPENDIX A
AMERUS LIFE HOLDINGS, INC. 2000 STOCK INCENTIVE PLAN
SECTION I. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this Plan is the AmerUs Life Holdings, Inc. 2000 Stock
Incentive Plan. The purpose of the Plan is to enable AmerUs Life Holdings, Inc.,
its Subsidiaries and Affiliates to attract and retain individuals who contribute
to the Company's success by their ability, ingenuity and industry, and to enable
such individuals to participate in the long-term success and growth of the
Company through an equity interest in the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
a. "Affiliate" means any Person that, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
the Person specified.
b. "Award" means a Stock Appreciation Right, Restricted Stock Award, or
Option granted in accordance with the terms of the Plan.
c. "Board" means the Board of Directors of the Company.
d. "Cause" means the willful and continued failure to substantially perform
the duties with the Company (other than a failure resulting from the
Participant's Disability), the willful engaging in conduct which is demonstrably
injurious to the Company or any Subsidiary or Affiliate, monetarily or
otherwise, including any act of dishonesty, commission of a felony, or a
significant violation of any statutory or common law duty of loyalty to the
Company.
e. "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
f. "Committee" means the Human Resources Committee of the Board of
Directors of the Company. If at any time there is no Committee, then the
functions of the Committee specified in the Plan shall be exercised by the
Board.
g. "Commission" means the Securities and Exchange Commission.
h. "Company" means AmerUs Life Holdings, Inc., a corporation organized
under the laws of the State of Iowa (or any successor corporation).
i. "Consultant" means any person, including an advisor, engaged by the
Company or a Subsidiary or Affiliate to render services to such entity or any
person who is an advisor, director or consultant of an Affiliate.
j. "Director" means a member of the Board.
k. "Disability" means total and permanent disability as determined under
the Company's long term disability program.
l. "Early Retirement" means retirement from active employment with the
Company, any Subsidiary, and any Affiliate under the terms of the All*AmerUs
Savings & Retirement Plan adopted by the Company.
m. "Employee" means a regular employee of the Company, any Subsidiary or
any Affiliate, including Officers and Directors, who is treated as a full time
employee in the personnel records of the Company or its Subsidiary or its
Affiliates for the relevant period, but shall exclude individuals who are
classified by the Company or its Subsidiary or its Affiliates as (A) leased from
or otherwise employed by a third party; (B) independent contractors; or (C)
intermittent or temporary, even if any such classification is changed
retroactively as a result of an audit, litigation or otherwise. An individual
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or its Subsidiary or its Affiliates or (ii) transfers
between locations of the Company or between the Company or its Subsidiary or its
Affiliates or (iii) transfers between locations of the Company or between the
Company, any Subsidiary, or any successor. Neither service as a Director nor
payment of a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
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n. "Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and any successor thereto.
o. "Fair Market Value" means, as of any date, the closing price of the
Stock as of such date (or if no sales were reported on such date, the closing
price on the last preceding day a sale was made) as quoted on the stock exchange
or a national market system, with the highest trading volume, as reported in
such source as the Administrator shall determine.
p. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code and the requirements promulgated thereunder.
q. "Non-Employee Director" means a director who is a Non-Employee Director
under Rule 16b-3 under Section 16 of the Exchange Act and is an outside director
under Section 1.162-27(e)(3) of the regulations promulgated under the Code.
r. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
s. "Normal Retirement" means retirement from active employment with the
Company, any Subsidiary, and any Affiliate as this term is defined in the
All*AmerUs Savings & Retirement Plan adopted by the Company.
t. "Optionee" means a Participant who receives a Stock Option.
u. "Participant" means an Employee, Director or Consultant of the Company,
its Subsidiary or its Affiliate.
v. "Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, trust, union,
association, court, tribunal, agency, government, department, commission,
self-regulatory organization, arbitrator, board, bureau, instrumentality, or
other entity, enterprise, authority, or business organization.
w. "Plan" means this Stock Incentive Plan.
x. "Restricted Stock Award" means an Award of shares of Stock that are
subject to restrictions under Section 7 below.
y. "Retirement" means Normal or Early Retirement as those terms are defined
in the All*AmerUs Savings & Retirement Plan adopted by the Company.
z. "Stock" means the Class A Common Stock of the Company.
aa. "Stock Appreciation Right" means (i) a right granted under Section 6
below, to surrender to the Company all or a portion of a Non-Qualified or
Incentive Stock Option in exchange for an amount in cash or shares of Stock
equal to the difference between (a) the Fair Market Value, as of the date such
Stock Option or such portion thereof is surrendered, of the shares of Stock
covered by such Stock Option or such portion thereof, and (b) the aggregate
exercise price of such Stock Option, or such portion thereof or (ii) a right
granted under Section 6 which is not in conjunction with a stock option to
receive a cash payment equal in value to the appreciation on a designated number
of shares of stock between the aggregate price of the Stock Appreciation Right
(or such portion thereof) set by the Committee, which shall not be less than the
Fair Market Value on the date on which the Stock Appreciation Right was granted
and the Fair Market Value on the date on which the Participant exercises the
Stock Appreciation Right.
bb. "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5 below.
cc. "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.
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dd. "Ten Percent Shareholder" means a person who owns (after taking into
account the attribution rules of Code Section 424(d) more than ten percent (10%)
of the total combined voting power of all classes of stock of the company.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Committee which shall at all times
consist solely of not less than two Non-Employee Directors.
The Committee shall have the power and authority to grant to eligible
Participants, pursuant to the terms of the Plan: Non-Qualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, and/or Restricted Stock
Awards.
In particular, the Committee shall have the authority:
a. To select Participants to whom Non-Qualified or Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock or a combination of the foregoing
from time to time will be granted hereunder;
b. To determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights or a combination of the
foregoing, are to be granted hereunder;
c. To determine the number of shares of Stock or Stock Appreciation Rights
to be covered by each such Award granted hereunder;
d. To determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when an Award may
be exercised (which may or may not be based on performance criteria), any
vesting periods, or vesting acceleration features or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
e. To construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan;
f. To adopt rules and procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local
laws and procedures.
g. To prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plan and Plan addenda;
h. To modify or amend each Award, including the discretionary authority to
extend the post-termination exercisability period of Options or Stock
Appreciation Rights longer than is otherwise provided for in the Plan, provided,
however, that any such amendment is subject to Section 15(c) of the Plan and may
not impair any outstanding Award unless agreed to in writing by the Participant;
i. To authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Administrator;
j. To make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted hereunder.
k. The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan (and any agreements relating thereto); and to otherwise supervise the
administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and the
Participants.
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SECTION 3. STOCK SUBJECT TO PLAN; LIMITATIONS.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 1,600,000 (subject to appropriate adjustments to reflect
changes in capitalization of the Company). Such shares may consist, in whole or
in part, of authorized and unissued shares or treasury shares. If any shares of
Stock that have been optioned cease to be subject to option, or if any shares
subject to a Restricted Stock Award granted hereunder are forfeited or such
Award otherwise terminates, such shares shall again be available for
distribution in connection with future Awards under the Plan.
The maximum total number of shares subject to Awards which may be granted
under the Plan in any one year will be 1,000,000, and the maximum number of
shares subject to Awards which may be granted under the Plan to any individual
in any one year is 250,000 (in both cases, subject to appropriate adjustments to
reflect changes in capitalization of the Company).
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in the corporate structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under the Plan, in the number and option
price of the shares subject to outstanding Stock Options granted under the Plan,
in the number and price of any Stock Appreciation Right granted under the plan
and in the number of shares subject to Restricted Stock Awards granted under the
Plan as may be determined to be appropriate by the Committee in its sole
discretion, provided that the number of shares subject to any Awards shall
always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock
Appreciation Rights associated with any Stock Option.
SECTION 4. ELIGIBILITY.
Participants who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company, its Subsidiaries, or
its Affiliates are eligible to be granted Stock Options, Stock Appreciation
Rights, or Restricted Stock Awards. The options and Participants under the Plan
shall be selected from time to time by the Committee, in its sole discretion,
from among those eligible, and the Committee shall determine, in its sole
discretion, the number of shares covered by each Award or grant.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted either alone or in addition to other Awards
granted under the Plan. Any Stock Option granted under the Plan shall be in such
form as the Committee may from time to time approve, and the provisions of Stock
Option Awards need not be the same with respect to each Optionee.
The Stock Options granted under the Plan may be of two types: Incentive
Stock Options and Non-Qualified Stock Options.
The Committee shall have the authority to grant any Optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights). To the extent that any
Stock Option does not qualify as an Incentive Stock Option, it shall constitute
a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. Notwithstanding the foregoing, in the event an Optionee voluntarily
disqualifies an option as an Incentive Stock Option within the meaning of
Section 422 of the Code, the Committee may, but shall not be obligated to, make
such additional grants, Awards or bonuses as the Committee shall deem
appropriate, to reflect the tax savings to the Company which result from such
disqualification.
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Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
a. Option Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant but shall
not be less than the Fair Market Value of the Stock on the date of grant of the
Stock Option; provided, however, if the Option is an Incentive Stock Option
granted to a Ten Percent Shareholder, the option price per each share of stock
subject to such Incentive Stock Option shall be no less than one hundred ten
percent (110%) of the Fair Market Value of a share of Stock on the date such
Incentive Stock Option is granted.
b. Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10) years
after the date such Stock Option is issued.
c. Exercisability. Subject to paragraph (g) of this Section 5 with respect
to Incentive Stock Options, Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the time of the grant; provided, however, that, unless otherwise
determined by the Committee at the time of the grant, no Stock Option shall be
exercisable prior to the first anniversary date of the granting of the option.
If the Committee provides, in its discretion, that any Stock Option is
exercisable only in installments, the Committee may waive such installment
exercise provisions at any time, in whole or in part, based on performance
and/or such factors as the Committee may determine in its sole discretion.
d. Method of Exercise. Stock Options which are then exercisable may be
exercised in whole or in part at any time during the option period by Optionee,
the legal representative of the Optionee, or the legatee under the Optionee's
will through the giving of written notice of exercise to the Company specifying
the number of shares to be purchased, accompanied by payment in full of the
purchase price, in cash, by check or such other instrument as may be acceptable
to the Committee. As determined by the Committee, in its sole discretion, at or
after grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the Optionee, Restricted Stock or with the
value of a Non-Qualified Stock Option equal to the difference between the Fair
Market Value on the date of payment and the exercise price of such Non-Qualified
Stock Option (based, in each case, on the Fair Market Value of the Stock on the
date the option is exercised, as determined by the Committee). If payment of the
option exercise price of a Non-Qualified Stock Option is made in whole or in
part in the form of Restricted Stock Award, the shares received upon the
exercise of such Stock Option shall be restricted in accordance with the
original term of the Restricted Stock Award in question, except that the
Committee may direct that such shall apply only to the number of such shares
equal to the number of shares of Restricted Stock surrendered upon the exercise
of such option. No shares of unrestricted Stock shall be issued until full
payment thereof has been made. An Optionee shall have the rights to dividends or
other rights of a stockholder with respect to shares subject to the option when
the Optionee has given written notice of exercise and has paid in full for such
shares.
e. Non-Transferability of Options. Except as otherwise set forth in the
Section 5(e), no Stock Option shall be transferable by the Optionee otherwise
than by will or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the Optionee's lifetime, only by the Optionee. The
Committee shall have the discretionary authority, however, to grant
Non-Qualified Stock Options which would be transferable to members of an
Optionee's immediate family, including trusts for the benefit of such family
members and partnerships in which such family members are the only partners. In
exercising such discretionary authority, the Committee may take into account
whether the granting of such transferable options would require registration
with the Securities and Exchange Commission under a form other than Form S-8. A
transferred Stock Option may be exercised by the transferee only to the extent
that the Optionee would have been able to exercise such Stock Option had the
option not been transferred.
f. Termination of Employment for Cause. Unless otherwise determined by the
Committee at grant, if an Optionee's employment with the Company, any
Subsidiary, or any Affiliate terminates or is involuntarily terminated with
Cause, the Stock Option shall terminate immediately at the date of the
termination of employment.
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g. Limit on Value of Incentive Stock Option First Exercisable Annually. The
aggregate Fair Market Value (determined at the time of grant) of the Stock for
which "incentive stock options" within the meaning of Section 422 of the Code
are exercisable for the first time by an Optionee during any calendar year under
the Plan (and/or any other stock option plans of the Company, any Subsidiary and
any Affiliate) shall not exceed $100,000.
h. Termination of Employment. All of the terms relating to the exercise,
cancellation or other disposition of a Stock Option upon a termination of
employment with or service to the Company or a Subsidiary or Affiliate of the
Optionee, whether by reason of Disability, Retirement, death, or other
termination shall be determined by the Committee. Such determination shall be
made at the time of the grant of such Stock Option and shall be specified in the
written agreement evidencing such Stock Option.
SECTION 6. STOCK APPRECIATION RIGHTS.
a. Stock Appreciation Right Price. The Stock Appreciation Right price per
share of Stock shall be determined by the Committee at the time of grant, but
shall not be less than the Fair Market Value of the Stock on the date of grant
of the Stock Appreciation Right.
b. Grant and Exercise. Stock Appreciation Rights may or may not be granted
in conjunction with all or part of any Stock Option granted under the Plan. In
the case of a Non-Qualified Stock Option, such rights may be granted either at
or after the time of the grant of such Non-Qualified Stock Options. In the case
of an Incentive Stock Option, such rights may be granted only at the time of
grant of such Incentive Stock Options. A Stock Appreciation Right or applicable
portion thereof granted with respect to a given Stock Option shall terminate and
no longer be exercisable upon the termination or exercise of the related Stock
Option, except that, unless otherwise provided by the Committee at the time of
grant, a Stock Appreciation Right granted with respect to less than the full
number of shares covered by a related Stock Option shall only be reduced if and
to the extent that the number of shares covered by the exercise or termination
of the related Stock Option exceeds the number of shares not covered by the
Stock Appreciation Right.
A Stock Appreciation Right granted in conjunction with all or part of any
Stock Option may be exercised by an Optionee, in accordance with paragraph (b)
of this Section 6, by surrendering the applicable portion of the related Stock
Option. Upon such exercise and surrender, the Optionee shall be entitled to
receive an amount determined in the manner prescribed in paragraph (b) of this
Section 6. Stock Options which have been so surrendered, in whole or in part,
shall no longer be exercisable to the extent the related Stock Appreciation
rights have been exercised.
c. Terms and Conditions. Stock Appreciation Rights shall be subject to the
terms and conditions, not inconsistent with the provisions of the Plan, as shall
be determined from time to time by the Committee, including the following:
1. If granted in conjunction with a Stock Option, Stock Appreciation
Rights shall be exercised only at such time or times and to the extent that
the Stock Options to which they relate shall be exercisable in accordance
with the provisions of Section 5 and this Section 6 of the Plan.
2. Upon exercise of a Stock Appreciation right, an Optionee shall be
entitled to receive up to, but not more than, an amount in cash or shares
of Stock equal in value to the excess of the Fair Market Value of one share
of Stock over the option price per share specified in the related Stock
Option multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
3. Stock Appreciation Rights whether or not granted in conjunction
with a Stock Option shall be transferable only when and to the extent that
a Stock Option would be transferable under paragraph (e) of Section 5 of
the Plan.
4. Upon the grant of a Stock Appreciation Right granted in conjunction
with a Stock Option, the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been granted for the
purpose of the limitation set forth in Section 3 of the Plan on the maximum
number
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of shares subject to Awards which may be granted under the Plan in any one
year and the maximum number of shares subject to Awards which may be
granted to any one individual in any one year but shall not be deemed to
have been issued for purposes of the limitation set forth in Section 3 of
the Plan on the total number of shares of Stock to be issued under the Plan
to the extent the Optionee received cash to satisfy the Stock Appreciation
Right.
5. A Stock Appreciation Right granted in connection with an Incentive
Stock Option may be exercised only if and when the market price of the
Stock subject to the Incentive Stock Option exceeds the exercise price of
such Stock Option.
6. Stock Appreciation Rights not granted in conjunction with Stock
Options shall be deemed to have been granted for purposes of the
limitations set forth in Section 3 of the Plan on the total number of
shares of stock subject to Awards which may be granted under the Plan in
any one year and the maximum number of shares of stock subject to Awards
which may be granted under the Plan to any individual in any one year but
shall not be deemed to have been issued for purposes of the limitations set
forth in Section 3 of the Plan on the total number of shares of stock to be
issued under the Plan.
7. All of the terms relating to the exercise, cancellation or other
disposition of a Stock Appreciation Right upon a termination of employment
with or service to the Company or a Subsidiary or an Affiliate of the
Participant receiving the Stock Appreciation Right, whether by reason of
Disability, Retirement, death, or other termination shall be determined by
the Committee. Such determination shall be made at the time of the grant of
such Stock Appreciation Right and shall be specified in the written
agreement evidencing such Stock Appreciation Right, unless otherwise
determined by the Committee at the time of the grant. If the employment of
a Participant receiving the Stock Appreciation Right is terminated or is
involuntarily terminated for Cause, the Stock Appreciation Right shall
terminate immediately as of the date of the termination of employment.
SECTION 7. RESTRICTED STOCK.
a. Administration. Shares of Restricted Stock may be issued alone or in
addition to Awards granted under the Plan. The Committee shall determine the
Participants to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the price, if any, to be paid
by the recipient of Restricted Stock (subject to Section 7(b) hereof), the time
or times within which such Awards may be subject to forfeiture, and all other
conditions of the Awards. The Committee may also condition the grant of a
Restricted Stock Award upon the attainment of specified performance goals, or
such other criteria as the Committee may determine, in its sole discretion. The
provisions of the Restricted Stock Awards need not be the same with respect to
each recipient.
b. Awards and Certificates. The prospective Participants of an Award of
shares of Restricted Stock shall not have any rights with respect to such Award,
unless and until such recipient has executed an agreement evidencing the Award
(a "Restricted Stock Award Agreement") and has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the then applicable
terms and conditions.
1. Awards of Restricted Stock must be accepted within a period of
sixty (60) days (or such shorter period as the Committee may specify) after
the Award date by executing a Restricted Stock Award Agreement and paying
whatever price, if any, is required.
2. A stock certificate in respect of shares of restricted Stock shall
be issued in the name of each Participant who is awarded Restricted Stock.
Such certificate shall be registered in the name of the Participant, and
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following form:
3. "The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the AmerUs Life Holdings, Inc. Stock Incentive Plan and a
Restricted Stock Award Agreement entered into between the registered owner
and the Company. Copies of such Plan and Agreement are on file on in the
offices of the Company, (699 Walnut St, Des Moines, Iowa 50309)."
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4. The Committee shall require that the stock certificates evidencing
such shares be held in custody by the Company until the restrictions
thereon have lapsed, and that, as a condition of any Restricted Stock
Award, the Participant shall have delivered a stock power, endorsed in
blank, relating to the Stock covered by such Award.
5. All of the terms relating to the satisfaction of specified
performance goals and the termination of any period designated by the
Committee during which the Stock subject to the Restricted Stock Award may
not be sold, transferred, pledged or assigned, or any cancellation or
forfeiture of such Restricted Stock Award upon a termination of employment
with or service to the Company or any Subsidiary or any Affiliate of the
holder of such Restricted Stock Award, whether by reason of Disability,
retirement, death or other termination shall be set forth in the written
agreement relating to such Restricted Stock Award. Unless otherwise
determined by the Committee at grant, if a holder's employment with the
Company, any Subsidiary, or any Affiliate terminates or is involuntarily
terminated with Cause, the portion of the Restricted Stock Award which is
subject to a Restricted Period (as hereinafter defined) on the effective
date of such holders' termination of employment or service shall be
forfeited by such holder and such portions shall be canceled by the
Company.
c. Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions and
conditions:
1. Subject to the provisions of the Plan and the Restricted Stock
Award Agreements, during such period as may be set by the Committee
commencing on the grant date (the "Restriction Period"), the Participant
shall not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock awarded under the Plan. Within these limits, the Committee
may, in its sole discretion, provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or in
part based on performance and/or such factors as the Committee may
determine, in its sole discretion.
2. Except as provided in paragraph c(1) of this Section 7, the
Participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a stockholder of the Company, including the right to vote
and receive any dividends. Dividends paid in Stock or other securities of
the Company or Stock received in connection with a stock split with respect
to Restricted Stock shall be subject to the same restrictions as on such
Restricted Stock. Certificates for shares of unrestricted Stock shall be
delivered to the Participant promptly after, and only after, the period of
forfeiture shall expire without forfeiture in respect of such shares of
Restricted Stock.
SECTION 8. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the right of an
Optionee or Participant under a Stock Option, Stock Appreciation Right, or
Restricted Stock Award theretofore granted, without the Optionee's or
Participant's consent, or which without the approval of the stockholders would:
a. Except as expressly provided in this Plan, increase the total number of
shares reserved for the purpose of the Plan;
b. Decrease the option price of any Stock Option to less than fifty percent
(50%) of the Fair Market Value on the date of the granting of the option;
c. Change the employees or class of Participants eligible to participate in
the Plan; or
d. Extend the maximum option period under paragraph (b) of Section 5 of the
Plan.
The Committee may amend the terms of any Award or option theretofore
granted, prospectively or retroactively, but no amendment shall impair the
rights of any holder without his consent. The Committee may also substitute new
Stock Options for previously granted Stock Options including options granted
under other plans applicable to the Participant and previously granted Stock
Options having higher option prices.
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38
SECTION 9. UNFUNDED STATUS OF THE PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or Optionee by the Company, nothing set forth herein shall give any
such Participant or Optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu thereof with respect to Awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
SECTION 10. GENERAL PROVISIONS.
All certificates for shares of Stock delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the stock is listed, and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date that it is approved by a majority
vote of the holders of the Company's voting common stock.
SECTION 12. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, or Restricted Stock Award shall
be granted pursuant to the Plan on or after the tenth anniversary of the date of
stockholder approval, but Awards previously granted may extend beyond that
point.
* * * * * * * *
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39
AMERUS LIFE HOLDINGS, INC.
Proxy for Annual Meeting of Shareholders on May 5, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of AmerUs Life Holdings, Inc. (the "Company")
appoints Roger K. Brooks, Michael G. Fraizer and James A. Smallenberger, and
each of them, with full power of substitution, as proxy to vote all shares of
the undersigned in the Company, at the Annual Meeting of Shareholders to be held
on May 5, 2000 and at any adjournments thereof (the "Annual Meeting"), with like
effect and as if the undersigned were personally present and voting, upon the
matters set forth in this proxy card.
1. To elect three Directors:
MALCOLM CANDLISH RALPH W. LASTER, JR. JOHN W. NORRIS, JR.
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
MARK "FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
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2. Proposal to approve the Company's 2000 Stock Incentive Plan and
the reservation of shares for issuance thereunder.
[ ] For [ ] Against [ ] Abstain
3. Proposal to ratify the appointment of KPMG LLP as independent
auditors of the Company for fiscal year 2000.
[ ] For [ ] Against [ ] Abstain
4. Such other matters as may properly come before the Annual
Meeting or any adjournments thereof, at the discretion of the
proxy holders.
PROXIES WILL BE VOTED AS DIRECTED OR SPECIFIED, IF NO CHOICE IS
SPECIFIED, THIS PROXY WILL BE VOTED (1) FOR THE ELECTION OF NOMINEES MALCOLM
CANDLISH, RALPH W. LASTER, JR., AND JOHN W. NORRIS, JR. TO SERVE AS DIRECTORS,
(2) FOR APPROVAL OF THE COMPANY'S 2000 STOCK INCENTIVE PLAN, (3) FOR
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS AND (3) FOR OR AGAINST ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE ANNUAL MEETING AT THE DISCRETION OF THE PROXY HOLDERS. PLEASE BE SURE TO
SIGN AND DATE THIS PROXY BELOW.
Dated: , 2000
-------------------------
-------------------------------------
Shareholder sign above
-------------------------------------
Co-holder, if any, sign above
SIGNATURE(S) MUST CORRESPOND EXACTLY WITH NAME(S) AS IMPRINTED HEREON.
When signing as attorney, executor, administrator, trustee or guardian, please
give the full title as such, and if the signer is a corporation, please sign
with the full name by a duly authorized officer. If stock is held in the name of
more than one person, all named holders must sign the proxy.
PLEASE VOTE AT ONCE. It is important.