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Exhibit 99.4
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
Reference is hereby made to that certain Employment Agreement dated as
of September 19, 1997 (the "Employment Agreement"), by and between AmVestors
Financial Corporation ("AmVestors"), American Investors Life Insurance Company,
Inc., AmVestors Investment Group, Inc. and American Investors Sales Group, Inc.,
all Kansas corporations (collectively, the "Companies") and Xxxx X. Xxxxx, an
individual ("Xx. Xxxxx"). AmerUs Life Holdings, Inc., an Iowa corporation
("ALH"), joined the Employment Agreement for the purposes set forth therein.
This First Amendment to Employment Agreement (this "Amendment") is made and
entered into by and among the Companies, Xx. Xxxxx and ALH and shall amend and
supplement the Employment Agreement as set forth below. In the event of any
inconsistency between the Employment Agreement and this Amendment, this
Amendment shall govern. Terms used in this Amendment and not defined herein
shall have the meanings ascribed to them in the Employment Agreement.
In consideration of the promises and covenants contained herein, the
receipt and sufficiency of which are hereby acknowledged, the Companies, Xx.
Xxxxx and ALH hereby agree as follows:
1. The Employment Agreement shall amended by inserting the following
provision as a new Paragraph 3.1 thereof:
"3.1. Special Change of Control Provisions.
a. Termination of Employment by Xx. Xxxxx for Good
Cause.
(i) If the employment of Xx. Xxxxx is terminated by
Xx. Xxxxx for Good Cause (as that term is defined in Paragraph
3.1.g hereof), Xx. Xxxxx shall be entitled to the severance
payment described in Paragraph 3.1.c hereof and the benefits
described in Paragraph 3.1.d hereof.
(ii) Any offer of Comparable Employment (as that term
is defined in Paragraph 3.1.g hereof) following a Change of
Control (as that term is defined in Paragraph 3.1.g hereof)
shall remain open for at least fifteen (15) days after such
offer is extended to Xx. Xxxxx. If Xx. Xxxxx does not accept
an offer of Comparable Employment following a Change in
Control within fifteen (15) days after it is offered, all
rights of Xx. Xxxxx under this Agreement shall cease.
(iii) If Xx. Xxxxx timely accepts an offer of
Comparable Employment following a Change in Control and if
within two (2) years following the date such offer of
Comparable Employment is accepted either (i) the employment of
Xx. Xxxxx is terminated by AmVestors without cause (as such
term is described in Paragraph 3.b hereof) or (ii) a Material
Event (as that term is defined in Paragraph 3.1.g hereof)
occurs and Xx. Xxxxx elects to terminate his employment with
AmVestors (which will also be considered a termination of
employment by
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Xx. Xxxxx for Good Cause for purposes hereof), then Xx. Xxxxx
shall be entitled to the severance payment described in
Paragraph 3.1.c hereof and the benefits described in Paragraph
3.1.d hereof.
b. Termination of Employment by AmVestors Following Change in
Control. If the employment of Xx. Xxxxx is terminated by AmVestors
following a Change in Control, and such termination is not for cause as
described in Paragraph 3.b hereof, Xx. Xxxxx shall be entitled to the
severance payment described in Paragraph 3.1.c hereof and the benefits
described in Paragraph 3.1.d hereof; provided, however, that if Xx.
Xxxxx accepts an offer of Comparable Employment, the provisions of
Paragraph 3.1.a(iii) shall apply rather than this Paragraph 3.1.x.
x. Xxxxxxxxx Payment. In the event the employment of Xx. Xxxxx
is terminated by Xx. Xxxxx for Good Cause as described in Paragraph
3.1.a(i) or by AmVestors following a Change of Control as described in
Paragraph 3.1.b hereof, AmVestors shall pay to Xx. Xxxxx the following
severance payment, which shall be paid in a lump sum within thirty-five
(35) days following the Termination Date (as that term is defined in
Paragraph 3.1.g hereof):
(i) Any amount of Xx. Xxxxx'x Base Compensation
earned but unpaid through the Termination Date; and
(ii) In lieu of any further salary, bonus,
compensation or other payments of any kind to Xx. Xxxxx for
periods after the Termination Date, an amount equal to:
(a) the sum of:
(A) Xx. Xxxxx'x Base Compensation,
plus
(B) the greater of (I) the amount of
Xx. Xxxxx'x bonuses (whether in cash, stock
or otherwise) under the AmerUs Group
Management Incentive Plan, the AmerUs Group
MIP Deferral Plan and any similar or
successor plans providing bonuses on
deferred compensation during the twelve (12)
months immediately preceding the Termination
Date (including any portion of such bonuses
that were deferred by Xx. Xxxxx, but not
including any employer match on any such
deferred amount); (II) the amount of such
bonuses (as described in clause (I)) during
the twenty-four (24) months immediately
preceding the Termination Date divided by
the number two (2); or (III) the amount of
the bonuses (as described in clause (A))
that would have been paid during the
twenty-four (24) months immediately
preceding the Termination Date if the Plan
Target Level (as defined by the Plans) had
been achieved divided by the number two (2);
(b) multiplied by the number two (2); and
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(iii) An amount equal to the contributions from
AmVestors Xx. Xxxxx would have otherwise been entitled to
under the Plans if Xx. Xxxxx had remained an employee of
AmVestors until and including December 31 of the calendar year
in which Xx. Xxxxx'x employment terminates and Xx. Xxxxx had
earned the amounts set forth in Section 3.1.c(ii) above
through said December 31st;
provided, however, if Section 280G(a) of the Internal Revenue Code of
1986, as amended (the "Code"), is applicable, amount of all payments
made under this Agreement shall be limited to the extent necessary so
that, within the meaning of Section 280G(b)(2)(A)(ii) of the Code, the
aggregate present value of the payments in the nature of compensation
to (or for the benefit of) Xx. Xxxxx which are contingent on a Change
of Control (with a Change of Control for this purpose being defined in
terms of a "change" described in either Section 280G(b)(2)(A)(i)(I) or
(II) of the Code) are limited to an amount equal to 2.999 multiplied by
the "base amount," as such term is defined in Section 280G(b)(3) of the
Code.
d. Continued Benefits. In the event the employment of Xx.
Xxxxx is terminated by Xx. Xxxxx for Good Cause as described in
Paragraph 3.1.a(i) hereof or by AmVestors following a Change of Control
as described in Paragraph 3.1.b hereof, AmVestors shall continue to
provide to Xx. Xxxxx the benefits described in this Paragraph 3.1.d.
AmVestors shall maintain in full force and effect, for the benefit of
Xx. Xxxxx for two (2) years after the Termination Date, all employee
welfare benefit plans and programs or arrangements in which Xx. Xxxxx
was entitled to participate immediately prior to the Termination Date;
provided, however, that Xx. Xxxxx'x continued participation is possible
under the general terms and provisions of such plans, programs and
arrangements. In the event that Xx. Xxxxx'x continued participation in
any such plan, program or arrangement is not possible, AmVestors shall
arrange to provide Xx. Xxxxx with substantially equivalent benefits. At
the end of the period of coverage, Xx. Xxxxx shall have the option to
have assigned to Xx. Xxxxx at no cost and with no apportionment of
prepaid premiums any assignable insurance policy owned by AmVestors and
relating specifically to Xx. Xxxxx. Notwithstanding the foregoing, Xx.
Xxxxx'x period of continued coverage under any such plan, program or
arrangement (or any Companies-arranged provision of such benefits)
shall terminate as of the date Xx. Xxxxx becomes eligible to
participate in a similar plan, program or arrangement of another
employer. Xx. Xxxxx shall be deemed to be "eligible to participate" for
this purpose even if Xx. Xxxxx is required to pay an employee premium
and even if the new plan, program or arrangement imposes preexisting
condition limitations or restrictions. In addition, Xx. Xxxxx shall be
fully vested in all of his account in the All*AmerUs Savings &
Retirement Plan and the All*AmerUs Supplemental Executive Retirement
Plan.
e. No Mitigation. Xx. Xxxxx shall not be required to mitigate
the amount of any severance payment or continued benefits by seeking
other employment or otherwise, nor shall the amount of any severance
payment or continued benefits (other than the earlier termination of
certain employee benefits as described in Paragraph 3.1.d hereof) be
reduced by any compensation earned by Xx. Xxxxx as a result of
employment by another employer after termination of this Agreement or
otherwise. AmVestors' obligation to pay Xx. Xxxxx the compensation and
make the arrangements provided herein shall be absolute and
unconditional and, following any Change in Control, shall not be
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affected by any circumstances, including without limitation any set-off
(except as provided in Paragraph 3.1.f hereof), counterclaim,
recoupment, defense or other rights which AmVestors may have. Except as
otherwise provided herein, all amounts payable by AmVestors shall be
paid without notice or demand.
f. Any termination of the employment of Xx. Xxxxx shall be
communicated by a Notice of Termination to the other party hereto. If
there is any dispute or controversy under this Agreement with respect
to Xx. Xxxxx'x entitlement to the severance payment described in
Paragraph 3.1.c hereof) or the benefits described in Paragraph 3.1.d
hereof, or the amount of same, except in the event of a termination for
cause by AmVestors, AmVestors shall continue to pay Xx. Xxxxx the full
compensation and benefits in effect when the Notice of Termination was
given (including without limitation Base Compensation and payments
under any bonus and incentive plans in which Xx. Xxxxx participates),
until the earlier of the date when the dispute is finally resolved or
twelve (12) months from the date when the Notice of Termination was
given. Amounts paid under the preceding sentence shall be offset
against and shall reduce any other amounts due under this Agreement,
including any severance payment or benefits and any arbitration award
under Paragraph 13 hereof.
g. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(i) "Affiliated Company" shall mean with respect to
any Person, any Person which, directly or indirectly, through
one or more intermediaries, controls, is controlled by or is
under common control with such entity; provided, however, that
any Person which owns directly or indirectly ten percent (10%)
or more of the securities having ordinary voting power for the
election of directors or any other governing body of a
corporation or ten percent (10%) or more of the partnership or
other ownership interests of any other Person (other than as a
limited partner of such Person) will be deemed to control such
Person.
(ii) "AMHC" shall mean American Mutual Holding
Company.
(iii) "Base Compensation" shall mean the greater of
(i) the semi-monthly salary paid to Xx. Xxxxx by AmVestors
which was in effect immediately prior to the Termination Date
or (ii) the semi-monthly salary paid to Xx. Xxxxx by AmVestors
which was in effect prior to any reduction thereof made
without the written consent of Xx. Xxxxx, in either case
multiplied by twenty-four (24).
(iv) "Change of Control" shall mean any Transaction
or series of Transactions involving AmVestors or any
Affiliated Company of AmVestors which results in either (i)
AMHC not directly or indirectly owning or controlling shares
of stock of ALH sufficient to cast a majority of the votes
necessary to elect members of the Board of Directors of ALH
("Voting Control"); (ii) the individuals who, prior to such
Transaction, constituted the board of directors of AMHC
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 (2) years
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following the consummation of such 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; (iii) the individuals who, prior to such
Transaction, constituted the board of directors of ALH ceasing
to constitute at least a majority thereof, unless the
election, or the nomination for election of each director of
ALH for a period of two (2) years following the consummation
of such Transaction was approved by a vote of at least
two-thirds of the directors of ALH then still in office who
were directors of ALH prior to such Transaction; or (iv) the
acquisition by any Person other than AMHC or its subsidiaries
of the beneficial ownership, as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, of more than twenty-five
percent (25%) of the shares of stock of ALH which are entitled
to elect the board of directors of ALH at any time that AMHC
does not have beneficial ownership of the Voting Control of
ALH; provided, however, that in the case of (i), (ii) and
(iii), a Transaction which is a Demutualization shall not
constitute a Change of Control if the directors elected or
nominated for election to either AMHC's or ALH's respective
board of directors by AMHC's or ALH's respective stockholders
following the Demutualization were the directors of AMHC or
ALH, respectively, prior to such Demutualization, or if the
election, or the nomination for election, by AMHC's or ALH's
respective stockholders, of each director of AMHC or ALH,
respectively, for a period of two (2) years following the
consummation of such Demutualization was approved by a vote of
at least two-thirds of the directors of AMHC or ALH then still
in office who were the respective directors of AMHC or ALH
prior to such Demutualization.
(v) "Comparable Employment" shall mean employment
with AmVestors, an Affiliated Company thereof or a third party
involved in any Change of Control on terms and conditions
(including without limitation geographic location) which in
the aggregate are at least substantially comparable to the
terms and conditions of employment prevailing with respect to
Xx. Xxxxx immediately preceding a Change of Control.
(vi) "Demutualization" shall mean any transaction in
which more than fifty percent (50%) of the assets of AMHC are
(i) distributed or otherwise transferred to the members of
AMHC or (ii) are offered to the members of AMHC.
(vii) "Good Cause" shall mean the occurrence of both
(i) a Change of Control without Xx. Xxxxx being offered
Comparable Employment and (ii) a Material Event.
(viii) "Material Event" shall mean the occurrence of
any one of the following events following a Change of Control
without Xx. Xxxxx'x express written consent:
(a) The assignment to Xx. Xxxxx of duties
substantially inconsistent with Xx. Xxxxx'x position,
duties, responsibility or status with AmVestors or a
substantial reduction of Xx. Xxxxx'x duties or
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responsibilities, as compared with Xx. Xxxxx'x duties
or responsibilities prior to such reduction, or any
removal of Xx. Xxxxx from, or any failure to re-elect
Xx. Xxxxx to, the position Xx. Xxxxx held at the time
of such removal or failure to re-elect, except in
connection with termination of employment for cause;
or
(b) A reduction in the amount of Xx. Xxxxx'x
Base Compensation, a material reduction in payments
received by Xx. Xxxxx under any bonus or incentive
plans in which Xx. Xxxxx participates or a material
reduction in any other employee perquisites to which
Xx. Xxxxx is entitled; or
(c) The relocation of Xx. Xxxxx'x principal
office to a location more than thirty-five (35) miles
from the location of such office immediately prior to
such relocation; or
(d) Any material breach by AmVestors of any
of the provisions of this Agreement.
(viii) "Notice of Termination" shall mean written
notice of the termination of the employment of Xx. Xxxxx.
(ix) "Person" shall mean an individual, corporation,
partnership, joint venture, association, joint-stock company,
limited liability company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
(x) "Plans" shall mean, collectively, the All*AmerUs
Savings & Retirement Plan, the All*AmerUs Supplemental
Executive Retirement Plan, the All*AmerUs Excess Benefit Plan,
the Interim Benefit Supplement, any trust agreements related
to the foregoing and any successor plans.
(xi) "Termination Date" shall mean the date on which
the employment of Xx. Xxxxx with AmVestors terminates.
(xii) "Transaction" shall mean any merger,
consolidation, tender or exchange offer, dissolution,
liquidation, sale or exchange of stock, business combination,
sale or exchange of all or substantially all assets,
demutualization or other similar transaction or combination of
the foregoing by or between persons who were not under common
control prior to such transaction."
2. The Employment Agreement shall be amended by deleting Paragraph 12
thereof and inserting in lieu thereof the following eight new provisions as
Paragraphs 12, 13, 14, 15, 16, 17, 18 and 19 thereof:
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"12. Indemnification.
a. AmVestors shall pay, and indemnify Xx. Xxxxx
against, all costs and expenses, including without limitation
the fees and expenses of attorneys, arbitrators, experts and
witnesses, incurred by or on behalf of Employee in connection
with any arbitration or legal claim or proceeding arising from
this Agreement or the interpretation thereof, to the extent
that Employee is successful, on the merits or otherwise, in
any such claim or proceeding. If Employee is not wholly
successful in such claim or proceeding but is successful, on
the merits or otherwise, as to one or more but less than all
claims, issues or matters in such claim or proceeding, then
AmVestors shall indemnify Employee against all such costs and
expenses incurred by Employee or on Employee's behalf in
connection with each successfully resolved claim, issue or
matter.
b. AmVestors shall advance all such costs and
expenses incurred by or on behalf of Employee in connection
with any such claim or proceeding referred to in Section 9.a.
hereof within twenty (20) days after receipt by AmVestors of a
statement or statements from Employee requesting such advance
or advances, whether prior to or after final disposition of
such claim or proceeding. Such statement or statements shall
reasonably evidence the costs and expenses incurred by
Employee and shall be preceded or accompanied by an
undertaking by or on behalf of Employee to repay any costs and
expenses advanced if it shall ultimately be determined that
Employee is not entitled to be indemnified against such costs
and expenses and, furthermore, if Employee fails to repay any
costs and expenses that are advanced, then such amounts shall
be offset against and shall reduce any other amounts due to
Employee under this Agreement.
13. Arbitration. Any dispute, disagreement or other question
arising from this Agreement or the interpretation thereof shall be
settled by arbitration in accordance with the commercial rules then in
effect of the American Arbitration Association, except that the
arbitrator(s) shall be selected in accordance with the following
procedure: such dispute, disagreement or other question shall be
referred to and decided by a single arbitrator if the parties can agree
upon one within fifteen (15) days after either of the parties shall
notify the other, as provided in Paragraph 3.1.f of this Agreement,
that it wishes to avail itself of the provisions of this Paragraph 13;
otherwise, such dispute, disagreement or other question shall be
referred to and decided by three arbitrators, one to be appointed by
AmVestors and one to be appointed by Xx. Xxxxx, each such appointment
to be made within ten (10) days after the expiration of the fifteen
(15) day period referred to above, and the third arbitrator to be
appointed by the first two arbitrators within twenty (20) days after
the expiration of such ten (10) day period. If the first two
arbitrators cannot reach agreement on the third arbitrator within said
twenty (20) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration
Association within thirty (30) days after the expiration of said twenty
(20) day period. Hearings of the arbitrator(s) shall be held in Topeka,
Kansas, unless the parties agree otherwise. Judgment upon an award
rendered by the arbitrator(s) may be entered in any court of competent
jurisdiction, including courts in the State of Kansas. Any award so
rendered shall be final and binding upon the parties
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hereto. Except as otherwise provided in Paragraph 12 hereof all costs
and expenses of the arbitrator(s) shall be paid as determined by such
arbitrator(s), and all costs and expenses of experts, witnesses and
other persons retained by the parties shall be borne by them
respectively.
14. End of Employment Period. Notwithstanding anything
contained in this Agreement to the contrary, on January 1, 2001, the
provisions contained in Paragraphs 1, 2, 4 and 11 hereof shall cease to
have any force or effect and shall be deleted (except for any
definitions contained therein and used elsewhere in this Agreement),
and Paragraph 3 hereof shall be deleted and replaced with the following
new Paragraph 3:
"3. Termination of Xx. Xxxxx Without Good Cause. Xx.
Xxxxx is an "at-will" employee and his employment may be
terminated at any time with or without cause and unless the
employment of Xx. Xxxxx is terminated for Good Cause pursuant
to Paragraph 3.1.a(i) hereof or by AmVestors following a
Change of Control as described in Paragraph 3.1.b hereof, he
will not be entitled to any compensation, payments or benefits
under this Agreement."
The remaining provisions of this Agreement shall continue for so long
as Xx. Xxxxx continues to be an employee of AmVestors.
15. Tax Withholding. AmVestors shall have the right to
withhold from any transfer or payment made to Xx. Xxxxx or to any other
Person hereunder, whether such payment is to be made in cash or other
property, all applicable federal, state, city or other taxes or foreign
taxes as shall be required in the determination of AmVestors pursuant
to any statute or governmental regulation or ruling.
16. Interest. AmVestors shall pay Xx. Xxxxx interest at a rate
of ten percent (10%) per annum on any benefits payable to Xx. Xxxxx
hereunder not paid by the date provided for herein from such date until
the date of payment.
17. General Creditor. Nothing contained in this Agreement and
no action taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust of any kind or a fiduciary
relationship between AmVestors and Xx. Xxxxx or any other Person, nor
shall any money or property of AmVestors be segregated for the benefit
of Xx. Xxxxx to satisfy the obligations of AmVestors hereunder. To the
extent that Xx. Xxxxx acquires a right to receive payments hereunder,
such rights shall be no greater than the right of any general unsecured
creditor of AmVestors. Except as expressly provided herein, each
payment shall be made in cash from the general assets of AmVestors.
18. No Waiver. The failure of either party to require the
performance of any term or condition of this Agreement, or the waiver
by either party of any breach of this Agreement, shall not prevent a
subsequent enforcement of any term or condition nor be deemed to be a
waiver of any subsequent breach by either party.
19. Employer After A Change of Control. Following a Change of
Control and the acceptance by Xx. Xxxxx of an offer of Comparable
Employment, the term
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AmVestors shall be deemed to mean the actual employer of Xx. Xxxxx
(which may be AmVestors, an affiliate thereof or some other Person
involved in the Change of Control)."
3. The Employment Agreement shall be amended by deleting the paragraph
entitled "Deferred Compensation" contained in the letter to Xx. Xxxxx from ALH
dated September 18, 1997 and inserting in lieu thereof the following paragraph:
"Deferred Compensation: To the extent you receive an annual
incentive payout and elect to defer up to
$150,000 each year pursuant to the AmerUs
Group MIP Deferral Plan (the "MIP Deferral
Plan"), the Company will make a 100 percent
Employer Match at the end of each
Restricted Period (as those terms are used
in the MIP Deferral Plan) provided the
terms and conditions set forth in the MIP
Deferral Plan are satisfied."
4. Except as expressly set forth in this Amendment, the execution and
delivery of this Amendment by the Companies, Xx. Xxxxx and ALH shall not be
deemed to amend or supplement the Employment Agreement and shall not be deemed a
waiver of any rights or remedies thereunder, and the rights, obligations and
liabilities of the Companies, Xx. Xxxxx and ALH under the Employment Agreement
shall remain in full force and effect. Upon execution and delivery of this
Amendment, references to the Employment Agreement shall be deemed to be
references to the Employment Agreement as amended and supplemented by this
Amendment.
5. This Amendment may be executed in any number of counterparts, and by
different parties on separate counterpart signature pages, and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.
6. The invalidity of any portion of this Amendment shall not affect the
validity of any other provision. If any provision of this Amendment is
determined to be invalid or unenforceable, the remaining provisions of this
Amendment shall not be affected thereby and shall be binding on the parties
thereto, and shall be enforceable, as though said invalid or unenforceable
provision were not contained herein.
7. This Amendment shall be binding upon the parties hereto, their
successors, assigns, heirs, legatees and personal representatives.
8. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of Kansas.
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IN WITNESS WHEREOF, the parties hereof have executed this Amendment as
of the 15th day of April, 1999.
AMVESTORS FINANCIAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its Executive Vice President
AMERCIAN INVESTORS LIFE INSURANCE COMPANY,
INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its Executive Vice President
AMVESTORS INVESTMENT GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its Executive Vice President
AMERICAN INVESTORS SALES GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Its Executive Vice President
/s/ Xxxx X. Xxxxx
------------------------------------------
XXXX X. XXXXX
AMERUS LIFE HOLDINGS, INC.
By /s/ Xxxxx X. Xxxxxx
----------------------------------------
Its Chairman
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