EMPLOYMENT AGREEMENT
                         THIS AGREEMENT ["Agreement"] is
          made and  entered  into this 1ST day of APRIL,  1997,  by and  between
          AMVESTORS   FINANCIAL   CORPORATION   [hereinafter   referred   to  as
          "AmVestors"],   AMERICAN  INVESTORS  LIFE  INSURANCE   COMPANY,   INC.
          [hereinafter  referred to as "American"],  AMVESTORS INVESTMENT GROUP,
          INC. and AMERICAN INVESTORS SALES GROUP, INC., all Kansas corporations
          [the latter three hereinafter collective referred to as "Affiliates"],
          parties of the first part  [hereinafter  referred to as  "Companies"],
          and RALPH W. LASTER JR. [hereinafter  referred to as "Mr. Laster"], an
          individual, party of the second part.

                                   WITNESSETH:
                                              WHEREAS, Mr. Laster has been
          employed for many years by AmVestors and its  affiliates  and has been
          employed  since 1988 as Chief  Executive  Officer and  Chairman of the
          Board of AmVestors;

                                              and

                                              WHEREAS, Mr. Laster has also
          been employed by, associated with or has acted as a consultant to, and
          may in the  future,  at the  request of  AmVestors,  be  employed  by,
          associated  with  or  act  as  a  consultant  to,  the  affiliates  of
          AmVestors; and

                                              WHEREAS, AmVestors desires to
          continue to have the benefit of Mr. Laster's  knowledge and experience
          and considers  such a vital  element in  protecting  and enhancing the
          best  interests of  AmVestors  and its  shareholders  and in providing
          management for AmVestors.
42<PAGE>
                               NOW, THEREFORE, in
          consideration  of  the  mutual  agreements  and  conditions  contained
          herein, the parties hereto agree as follows:
                                              1. FULL-TIME EMPLOYMENT OF
          EXECUTIVE.
                              a. DUTIES AND STATUS.
                                              (1) AmVestors hereby employs
          Mr.  Laster  as its  Chairman  of the  Board of  Directors  and  Chief
          Executive  Officer  and  American  hereby  employs  Mr.  Laster as its
          President and Chief Executive  Officer to provide certain services set
          forth  herein and to provide  certain  other  employment  services  to
          affiliates for the employment period as defined in paragraph 3(a), and
          Mr. Laster  accepts such  employment,  on the terms and conditions set
          forth in this  Agreement.  During the  employment  period,  Mr. Laster
          shall  perform  such  managerial  duties  and   responsibilities   for
          AmVestors and affiliates as may be assigned to him in accordance  with
          the bylaws, which duties and  responsibilities  shall be substantially
          the same character as or equivalent character to those required by his
          assigned offices and functions during 1996.
                                              (2) During the employment
          period, Mr. Laster shall devote his full time and efforts to the
          business of AmVestors and its affiliates and shall not engage in
          consulting work or any trade or business for his own account or for
          or on behalf of any other person, firm or corporation which
          competes, conflicts or interferes with the performance of his
          duties hereunder in any way. Mr. Laster shall be entitled to
          reasonable vacations and to such personal and sick leave as may be
          established by AmVestors' and affiliates corporate policies. Mr.
          Laster shall perform his
43<PAGE>

                    duties  while  employed  in good  faith  and  shall  observe
          faithfully the covenants and agreements made by him herein.

                                              b. COMPENSATION AND GENERAL
          BENEFITS.
                                              (1) During the employment
          period, AmVestors shall pay Mr. Laster a base salary to be established
          annually  by  the  Boards  of  Directors,  payable  in  twice  monthly
          installments  (or on such other basis as may be mutually agreed upon).
          The salary  shall be  reviewed  annually  by the  respective  Board of
          Directors  and  may be  increased,  but  not  diminished,  during  the
          employment period.
                                              (2) In addition to the salary
          provided by  subparagraph  (1) of this paragraph  1(b),  AmVestors and
          affiliates  shall provide  benefits and other  perquisites  reasonably
          comparable to, and no less favorable than, those provided by AmVestors
          and its  affiliates  to Mr.  Laster  during 1996,  including,  but not
          limited to, an  automobile  suitable for the business and personal use
          of Mr. Laster.
                                              2. COMPETITION; CONFIDENTIAL
          INFORMATION.
                                              The parties recognize that, due
          to the nature of Mr. Laster's prior association with the Companies and
          of his engagement hereunder,  and as a consequence of his relationship
          to Companies,  both in the past and in the future , Mr. Laster has had
          access to and has  acquired,  and has  assisted  in and may  assist in
          developing  confidential and proprietary  information  relating to the
          business and operations of the Companies.  Mr. Laster  recognizes that
          such  information  has  been  and  will  continue  to  be  of  central
          importance to the business of the Companies and that
44<PAGE>

                    disclosure of such information to others or its use by
          others could cause substantial irreparable loss to the Companies.
          Mr. Laster and Companies also recognize that an important part of
          Mr. Laster's duties will be to develop good will for the Companies t
hrough    his personal  contact with others having business  relationships  with
          Companies  and  within  the  insurance  industry,  and that there is a
          danger that this good will, a proprietary asset of the Companies,  may
          follow  him if  and  when  his  relationship  with  the  Companies  is
          terminated. Mr. Laster accordingly agrees as follows:

                                              a. NON-COMPETITION DURING
          EMPLOYMENT  PERIOD.  During the employment period he will not directly
          or  indirectly,  either  individually  or as  owner,  partner,  agent,
          employee,  consultant or  otherwise,  except for the account of and on
          behalf of  Companies,  engage  in any  activity  competitive  with the
          business of Companies,  nor will he be in competition  with Companies,
          solicit or otherwise  attempt to establish any business  relationships
          with any person, firm or corporation which was, at any time during the
          employment  period,  a customer  or supplier  of  Companies.  However,
          nothing  in this  Section 2 shall be  construed  to  prevent  him from
          owning, as an investment,  up to one percent (1%) of a class of equity
          securities issued by any competitor of Companies.

                                              b. NON-COMPETITION AFTER PERIOD
          OF EMPLOYMENT.
                                              Mr. Laster agrees that during
          the term of this
                                              Agreement, and as long as
          required payments are being
                                              made under the provisions of
          paragraphs 3(c) and
                                              (f) (36 months), he will not,
          without the
45<PAGE>
                    Companies prior written  permission,  attempt to entice away
          from the  Companies or  affiliates  or  subsidiaries  on behalf of any
          party whatsoever,  or employee or otherwise  engage,  contract with or
          retain  directly or  indirectly,  any  employee  then  employed by the
          Companies,  affiliates or subsidiaries or employed by them at any time
          during the  previous two (2) years.  Mr.  Laster  further  agrees that
          during such period he will not do anything to impair the  Companies or
          their  affiliates  or  subsidiaries'  prospects  of sales or  business
          retention,  and shall not solicit for any reason any of the  Companies
          or its  employees,  agency  personnel,  insureds  or  applicants,  nor
          knowingly  accept  commissions  directly or  indirectly  on any policy
          written  in  replacement  of any  policy  produced  or  written by the
          Companies or any of their  affiliates  or  subsidiaries  nor shall Mr.
          Laster in any way derogate the Companies, its products or personnel.

                                              c. CONFIDENTIAL INFORMATION.
          Mr. Laster will not disclose any confidential information of Companies
          which is now known to him or which  hereafter  may become known to him
          as a result of his employment or association  with Companies and shall
          not at any time directly or indirectly  disclose any such  information
          to any person,  firm or corporation,  or use the same in any way other
          than in  connection  with the business of  Companies  and at all times
          after the expiration of the employment period.

                                              d. COMPANIES' REMEDIES FOR
          BREACH. It is
                                              recognized that damages in the
          event of breach of
                                              this Section 2 by Mr. Laster
          would be difficult, if
                                              not impossible, to ascertain
          and it is, therefore,
                                              agreed that Companies, in
          addition to and
46<PAGE>
                    without  limiting  any  other  remedy  or right it may have,
          shall have the right to an injunction or other equitable relief in any
          court of competent  jurisdiction,  enjoining any such breach,  and Mr.
          Laster hereby waives any and all defenses he may have on the ground of
          lack of  jurisdiction  or  competence  of the  court to grant  such an
          injunction  or other  equitable  relief.  The  existence of this right
          shall not  preclude  Companies  from  pursuing  any other  rights  and
          remedies at law or in equity which Companies may have.

                              3. EMPLOYMENT PERIOD.
                           a. DURATION. The employment
          period  shall  commence  on April 1, 1997 and  shall be  automatically
          renewed  for  successive  three  (3)  year  periods  unless  otherwise
          terminated  as  provided  in  this   Agreement  or  unless  notice  of
          non-renewal  is  provided  Mr.  Laster  sixty  days (60)  prior to the
          expiration of any contract period.

                                              b. PERFORMANCE AND TERMINATION.
          Subject to the  performance  of the covenants and  agreements  made by
          Companies  herein,  Mr.  Laster  shall  perform his duties  during the
          employment  period  in good  faith  and will  observe  faithfully  the
          covenants and agreements  made by him herein.  Mr. Laster shall not be
          discharged  during the  employment  period except for cause  involving
          dishonesty,  moral  turpitude,  or  material  breach of any express or
          implied  condition under this  Agreement.  The discharge of Mr. Laster
          for reasons other than those specified in the preceding sentence shall
          be deemed to be a discharge without cause.

                                              c. MR. LASTER'S REMEDIES. If
          the Companies shall take any action with respect to Mr. Laster's
          employment as set
47<PAGE>
                    forth in  paragraph  3(d) and (e) thereby  entitling  him to
          terminate his  employment  as provided in paragraphs  3(d) and (e), or
          discharges  him without  cause then Mr. Laster shall be entitled to be
          paid a sum equal to three (3) years  salary  based on the salary level
          in effect on the date of termination  or discharge.  Payments shall be
          made  bimonthly  in 72 equal  installments  and shall  commence on the
          effective  date of discharge or  termination.  The parties agree that,
          payments provided  hereunder shall be deemed to constitute payment for
          the  non-compete  provisions  contained  in  paragraph  2(b) and not a
          penalty for breach by Companies  and  Companies  agree that Mr. Laster
          shall not be required to mitigate his damages.  This  paragraph  shall
          constitute  Mr.  Laster's  sole  remedy  for  compensation   upon  the
          cessation of his employment and/or breach of this Agreement.
                                              In the event Mr. Laster
          materially violates the non-compete provisions of paragraph 2(b) after
          his employment has ceased then Companies shall have the right to cease
          all payments required under the provisions of paragraph 3(c) and (f).
                                              d. TERMINATION FOR GOOD REASON.
          Mr.  Laster shall be entitled to  terminate  his  employment  for good
          reason.   Any   termination   of   employment   under  the   following
          circumstances  shall be for good  reason  and  shall be deemed to be a
          breach of this Agreement by the Companies:

                                              (1) Without the express written
          consent of Mr.
                                              Laster, he is assigned any
          duties inconsistent with
                                              his positions, duties,
          responsibilities and status with
                                              the Companies since March 1997,
          or his
                                              reporting responsibilities,
          titles or offices as in
48<PAGE>
                    effect during the period of this Agreement are changed or he
          is removed from or not reelected to any of such  positions,  except in
          connection  with the  termination of his employment for cause, or as a
          result of his substantial disability or death;
                                              (2) The annual base salary of
          Mr. Laster as in effect on the date of this Agreement, as the same
          hereafter may be increased from time to time, is reduced;
                                              (3) Companies' principal
          executive  offices are moved to a location  outside Topeka,  Kansas or
          any of the Companies  require Mr.  Laster  without his agreement to be
          based anywhere other than the principle  executive  offices except for
          required  travel on  Companies'  business  to an extent  substantially
          consistent with his business travel  obligations in effect immediately
          prior to the date of this Agreement.
                              e. CHANGE IN CONTROL.
          Notwithstanding  Mr.  Laster's  right to terminate  for good reason in
          paragraph  3(d),  Mr.  Laster shall also be entitled to terminate  his
          employment  within 13 months  following  any "change in  control"  (as
          hereafter  defined  below) of  AmVestors  for any reason by  providing
          notice  in  writing  to  AmVestors  of his  intent  to  terminate  his
          employment  effective  as of a date not earlier  than thirty (30) days
          from the date of  notice.  In such  event  Mr.  Laster  shall be fully
          entitled to three years of salary payments set forth in paragraph 3(c)
          as consideration for the non-compete  provision contained in paragraph
          2(b).

                                              The term "change in control" as
          used
                                              herein shall mean a change in
          control of a nature
                                              that would be required to be
49<PAGE>
                    reported  in  response  to  Item  5(f)  of  Schedule  14A of
          Regulation 14A promulgated  under the Securities  Exchange Act of 1934
          (the "Exchange Act") as in effect on the date of this Agreement or, if
          Item  5(f) is no  longer  in  effect,  any  regulations  issued by the
          Securities and Exchange  Commission pursuant to the Exchange Act which
          serve similar  purposes;  provided that,  without  limitation,  such a
          "change in control"  shall be deemed to have  occurred if and when (A)
          any "person" (as such term is used in Sections  3(a)(9),  13(d)(3) and
          14(d)(2)  of the  Exchange  Act) is or  becomes  a  beneficial  owner,
          directly or  indirectly,  of securities of AmVestors  representing  25
          percent  (25%)  or more  of the  combined  voting  power  of the  then
          outstanding securities of AmVestors or American, (B) a tender offer or
          exchange  offer is made  whereby  the  effect of such offer is to take
          over and control  AmVestors or American and such offer is  consummated
          for the ownership of securities of AmVestors or American  representing
          25  percent  (25%) or more of the  combined  voting  power of the then
          outstanding voting securities of AmVestors or American,  (C) AmVestors
          or American is merged or consolidated with another corporation or as a
          result of such merger or  consolidation  less than 75 percent (75%) of
          the then outstanding  voting  securities of the surviving or resulting
          corporation  shall  then  be  owned  in the  aggregate  by the  former
          stockholders of AmVestors or American,  other than  affiliates  within
          the  meaning  of the  Exchange  Act or any  party  to such  merger  or
          consolidation, (D)
                    individuals who were members of the Board of Directors
                    of AmVestors or American immediately prior to a meeting
                    of the shareholders of AmVestors or American
50<PAGE>

                    involving a contest for the election of directors  shall not
          constitute  a  majority  of such  Board of  Directors  following  such
          election,  or (E) AmVestors transfers  substantially all of its assets
          to  another  corporation  which is not a wholly  owned  subsidiary  of
          AmVestors or American.
                                              f. SALARY CONTINUATION IN THE
          EVENT OF  NON-RENEWAL.  In the event of non-renewal of this Employment
          Agreement by AmVestors  and/or its affiliates and in  consideration of
          Mr.  Laster's  service  to  Companies  and  in  consideration  of  the
          non-compete provisions of this Agreement, Mr. Laster shall be entitled
          to be paid a sum equal to three (3) years of continuance  salary based
          on the same  salary  level he was  receiving  on the date of notice of
          non-renewal. Payments shall be made bimonthly in 72 equal installments
          and shall  commence  thirty (30) days  following the expiration of the
          employment  period.  Mr. Laster agrees that he will faithfully observe
          the  continuing  covenants of this  Agreement  for the period in which
          payments  under this paragraph are being made and will comply with the
          provisions of paragraph 2(b).

                                              4. DEATH OR DISABILITY.
                                              a. In the event Mr. Laster
          shall become so disabled  during the term of this Agreement that he is
          unable to  reasonably  perform  his duties for a period of ninety (90)
          days, either Mr. Laster or AmVestors and its Affiliates shall have the
          right to terminate this Agreement upon written notice given at the end
          of such  ninety  (90)  days  period;  provided  that,  at the  time of
          delivery of such notice, such disability shall be continuing. In
51<PAGE>
                    the event of a disagreement between Companies and/or Mr.
          Laster regarding the question of whether Mr. Laster is disabled as
          defined herein, the question shall be referred to the Companies
          physician whose decision will be conclusive and binding. In the even
t         of termination for disability, Mr. Laster shall be entitled to receive
          as a settlement  of this  contract,  an annual sum equal to the annual
          base salary as such may be increased  from time to time which shall be
          payable semimonthly,  for a period of three (3) years from the date of
          termination. If Mr. Laster dies during the term of this Agreement, and
          his  employment  has been  terminated  as a result of  disability  his
          estate or beneficiary shall receive the remaining  payments under this
          paragraph payable  semimonthly.  There shall be no further obligations
          on the part of the Companies under this Agreement.
                                               5. GOVERNING LAW. This
          Agreement shall be governed by the laws of the State of Kansas.
                                               6. BINDING EFFECT. This
          Agreement shall be binding upon the parties hereto,  their successors,
          assigns, heirs, legatees and personal representatives.
                                               7. ASSIGNABILITY. This
          Agreement shall not be assignable by the Companies, nor may his
          duties hereunder be delegated by Mr. Laster.
                                               8. NOTICES. Any notice
          required or desired to be given under this Agreement  shall be sent by
          certified  mail to Mr.  Laster's  residence  in Topeka,  Kansas and to
          AmVestors or its  affiliates at their  principal  place of business in
          Topeka, Kansas.
52<PAGE>
                                              9. ENTIRE AGREEMENT. This
          Agreement  constitutes the entire agreement of the parties hereto with
          respect  to the  subject  matter  hereof,  and  supersedes  all  prior
          agreements,  proposals  and  other  communications,  oral or  written,
          between the parties hereto relating to such subject matter.
                                              10. SEVERABILITY. If any term
          or  provision  of this  Agreement  or the  application  thereof to any
          circumstances shall, in any jurisdiction and to any extent, be invalid
          or  unenforceable,  such term of provision  shall be ineffective as to
          such jurisdiction to the extent of such invalidity or unenforceability
          without invalidating or rendering unenforceable any remaining terms or
          provisions  of this  Agreement  or the  application  of  such  term or
          provision to circumstances  other than those as to which it is invalid
          or  unenforceable.  To the extent  permitted  by  applicable  law, the
          parties hereto hereby waive any provision of law that renders any term
          or  provision  of  this  Agreement  invalid  or  unenforceable  in any
          respect.
                                              11. INTENT OF AGREEMENT. The
          Companies  intend by this  Agreement to provide for the  employment of
          Mr. Laster. While this Agreement provides for Mr. Laster's employment,
          this  Agreement  shall in no manner  ever be deemed  or  construed  as
          limiting the power of  stockholders  to elect Mr. Laster as a director
          of  Companies  or  limiting  the power of the  Companies  to elect its
          Chairman or officer(s). In like manner, if stockholders or some future
          Board of Directors of the Companies shall not reelect Mr. Laster, such
          failure to so elect Mr.  Laster shall not be deemed or considered as a
          condition precedent to the continued obligation of
53<PAGE>
                    the Companies to pay Mr. Laster the compensation as
          provided for in this Agreement.
                                               12. RECOVERY OF LEGAL FEES,
          COSTS AND EXPENSES.  In the event that Mr. Laster is terminated by the
          Companies  and Mr. Laster  retains  legal  counsel or commences  legal
          action, the costs and expenses,  including legal fees shall be paid by
          the Companies or their  affiliates in the event Mr. Laster prevails in
          such action  either by verdict or  judgment.  In the event Mr.  Laster
          prevails as defined above,  the Companies or their affiliate shall pay
          the reasonable  attorney fees,  costs and expenses  within thirty (30)
          days after the conclusion of the litigation.
                                               IN WITNESS WHEREOF, the
          parties hereto have signed this Employment  Agreement the day and year
          first above written.

          PARTY OF THE FIRST PART:

          AMVESTORS FINANCIAL CORPORATION
                                        By:  /s/ Mark V. Heitz
                          Mark V. Heitz, President and
                                        General Counsel
  ATTEST:
  /s/ Lynn F. Hammes
  CORPORATE SECRETARY


                                         AMERICAN INVESTORS LIFE INSURANCE
                                         COMPANY, INC.


                                        By: /s/ Mark V. Heitz
                           Mark V. Heitz, Chairman of
                          the Board and General Counsel
  ATTEST:
  /s/ Lynn F. Hammes
  CORPORATE SECRETARY
54<PAGE>
                                         AMVESTORS INVESTMENT GROUP, INC.
                                         AMERICAN INVESTORS SALES GROUP INC.



                                     By: /s/ Mark V. Heitz
                         Mark V. Heitz, Chief Executive
                          Officer of American Investors
                         Sales Group, Inc. and Director
                         of AmVestors Investment Group,
                                      Inc.



                                     COMPENSATION COMMITTEE --
                       AMVESTORS FINANCIAL CORPORATION and
                        AMERICAN INVESTORS LIFE INSURANCE
                                  COMPANY, INC.



                                     By: /s/ R. Rex Lee
                                     R. Rex Lee, Chairman


                                    PARTY OF THE SECOND PART:
                                    /s/ Ralph W. Laster, Jr.
                                        RALPH W. LASTER JR.
55