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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
2000 DIRECTOR STOCK OPTION PLAN
WHEREAS, the Board of Directors of American Equity Investment Life
Holding Company (the "Company") deem it in the best interest of the Company
that persons who serve on the Board of Directors of the Company but who are
not employees of the Company be given an opportunity to acquire an interest
in the operation and growth of the Company as a means of assuring their
maximum effort and continued association with the Company; and
WHEREAS, the Board has determined to grant certain directors of the
Company compensation in the form of non-qualified stock options pursuant to
this Plan;
NOW, THEREFORE, the Board does hereby adopt this 2000 Director Stock
Option Plan, subject to approval, within twelve (12) months of the date of
adoption, by at least a majority of the shares voting at a stockholder's
meeting, and subject to any necessary authorizations from any governmental
authority.
ARTICLE I
DEFINITIONS
Except where the context otherwise indicates, the following definitions
apply:
1.1 " Affiliate" means parent or subsidiary corporations of the
Company, as defined in Sections 424(e) and (f) of the Code (but substituting the
Company for employer corporation), including parents or subsidiaries of the
Company which become such after adoption of the Plan.
1.2 "Agreement" means a written agreement granting an Option that is
executed by the Company and the Optionee.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 " Committee" means the Board.
1.6 "Common Stock" means the Common Stock, par value $1.00 per share,
of the Company.
1.7 "Company" means American Equity Investment Life Holding Company, an
Iowa corporation.
1.8 "Date of Exercise" means the date on which the Company receives
notice of the exercise of an Option and payment of the exercise price in
accordance with the terms of Article VII.
1.9 "Date of Grant" means the date on which an Option is granted under
the Plan.
1.10 "Director" means a member of the Board of Directors of the
Company.
1.11 "Disability" means permanent and total disability within the
meaning of Section 22(e)(3) of the Code, as determined by the Committee.
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1.12 "Eligible Individual means any Director of the Company who is
not also an Employee and has not been an Employee at any time during the
two-year period preceding the date on which an Option is granted to such
Director.
1.13 "Employee" means any employee of the Company or an Affiliate or
any person who has been hired to be an employee of the Company or an
Affiliate.
1.14 "Fair Market Value" means the fair market value of a Share as
determined by the Committee pursuant to a reasonable method adopted in good
faith for such purpose.
1.15 "Non-qualified Stock Option" means an Option granted under the
Plan that does not qualify as an incentive stock option under Section 422 of
the Code.
1.16 "Option" means an option to purchase Shares granted under the
Plan.
1.17 "Option Period" means the period during which an Option may be
exercised.
1.18 "Option Price" means the price per Share at which an Option may
be exercised; provided, however, the Option Price shall be not less than the
Fair Market Value of a Share as of the Date of Grant. The Option Price of any
Option shall be subject to adjustment to the extent provided in Article IX
hereof, subject to Section 6.3 hereof.
1.19 "Optionee" means an Eligible Individual to whom an Option has
been granted.
1.20 "Plan" means the American Equity Investment Life Holding
Company 2000 Director Stock Option Plan.
1.21 "Share" means a share of Common Stock.
ARTICLE II
PURPOSE
The Plan is intended to assist the Company in attracting and
retaining Eligible Individuals of outstanding ability and to promote the
identification of their interests with those of the stockholders of the
Company.
ARTICLE III
ADMINISTRATION
The Committee shall administer the Plan and shall have plenary
authority and discretion, subject to the provisions of the Plan, to determine
the terms (which terms need not be identical) of all Options including, but
not limited to, which Eligible Individuals shall be granted Options, the time
or times at which Options are granted, the Option Price, the number of Shares
subject to an Option, any provisions relating to vesting, any circumstances
in which Options terminate or Shares may be repurchased by the Company, the
period during which Options may be exercised and other restrictions on
Options. Subject to the provisions of the Plan, the Committee shall have
plenary authority to construe and interpret the Plan and the Agreements, to
prescribe, amend and rescind rules and regulations relating to the Plan and
to make all other determinations deemed necessary or advisable for the
administration of the Plan, including, but not limited to, any determination
to accelerate the vesting of outstanding Options. The determinations of the
Committee on the matters referred to in this Article III shall be binding and
final.
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ARTICLE IV
ELIGIBILITY
Options may be granted only to Eligible Individuals.
ARTICLE V
STOCK SUBJECT TO THE PLAN.
5.1 NUMBER OF SHARES RESERVED. Subject to adjustment provided in
Article IX hereof, the maximum number of Shares that may be issued under the
Plan is 75,000 Shares (to be adjusted to 225,000 shares if the Board
authorizes a three-for-one stock split at its May 5, 2000 meeting).
5.2 TERMINATED OPTIONS AVAILABLE FOR GRANT. If an Option expires or
terminates for any reason without having been fully exercised, the unissued
Shares which had been subject to such Option shall become available for the
grant of additional Options.
ARTICLE VI
OPTIONS
6.1 NON-QUALIFIED STOCK OPTIONS. All Options granted under the Plan
shall be Non-qualified Stock Options. Each Option granted under the Plan
shall be evidenced by an Agreement that specifies the terms and conditions of
the grant. Options granted to Eligible Individuals shall be subject to the
terms and conditions set forth in this Article VI hereof and such other terms
and conditions not inconsistent with the Plan as the Committee may specify.
6.2 OPTION PERIOD. The Option Period for Options granted to Eligible
Individuals shall be determined by the Committee and specifically set forth
in the Agreement; provided, however, that (a) an Option shall not be
exercisable after ten years from its Date of Grant; and (b) in the case of
the termination as Director of an Optionee, or the death or disability of an
Optionee, the Option Period shall be as follows:
a. TERMINATION AS DIRECTOR. Upon termination of an Optionee's
service as a Director of the Company, his or her Option
privileges, shall be limited to the shares purchasable by him
or her as of the date that his or her directorship was
terminated, and such Option privileges shall expire sixty (60)
days from the date that his or her directorship was
terminated. Nothing contained herein shall be construed to
extend the ultimate term of the Option beyond the period of
time as set out above.
b. DISABILITY OR DEATH OF OPTIONEE. If an Optionee's directorship
is terminated because of his death or disability, his Option
privileges shall expire unless exercised within one (1) year
after the date that his directorship was terminated. In the
event of the death of the Optionee, his Options may be
exercised by the Optionee's designated beneficiary. Nothing
contained herein shall be construed to extend the ultimate
term of the Option beyond the period of time as set out above.
6.3 NO REISSUANCE AT REDUCED PRICE. Notwithstanding anything to the
contrary in this Plan, without the approval of the stockholders of the
Company, no Option shall be issued in exchange for or as a reissuance of any
outstanding Option or the Option Price for any
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outstanding Option shall not be changed, if the effect of such exchange or
change would be to reduce the Option Price for any outstanding Option, except
as necessary to reflect the effect of a stock split, stock dividend or
similar event as described in Article IX hereof.
6.4 MAXIMUM OPTIONS PER DIRECTOR. The maximum number of Options
which may be granted to any Eligible Individual in any one fiscal year is
3,500 (subject to adjustment to reflect the effect of a stock split, stock
dividend or similar event, as described in Article IX hereof).
ARTICLE VII
EXERCISE OF OPTIONS
7.1 NOTICE OF EXERCISE. An Option may, subject to the terms of the
applicable Agreement under which it is granted, be exercised in whole or in
part by the delivery to the Company of written notice of the exercise, in
such form as the Committee may prescribe, accompanied by full payment of the
Option Price for the Shares with respect to which the Option is exercised as
provided in Section 7.2 hereof.
7.2 PAYMENT OF EXERCISE PRICE Payment of the aggregate Option Price
for the Shares with respect to which an Option is being exercised shall be
made in cash; provided however, that the Committee, in its sole discretion,
may provide in an Agreement that part or all of such payment may be made by
the Optionee in one or more of the following manners:
(i) By delivery (including constructive delivery) to the Company
of Shares valued at Fair Market Value on Date of Exercise; or
(ii) By delivery on a form prescribed by the Committee of a
properly executed exercise notice and irrevocable instructions
to a registered securities broker approved by the Committee to
sell Shares and promptly deliver cash to the Company.
7.3 MINIMUM EXERCISE. No Option may be exercised for less than
fifty(50) shares.
7.4 MINIMUM VESTING PERIOD. In the absence of a specified vesting
schedule established by the Committee and set forth in the applicable
agreement evidencing the grant of any options, all options will vest six
months after the date of grant. Should the directorship of any Optionee be
terminated for any reason (except death or disability) with or without cause,
prior to the expiration of six months or the vesting schedule established by
the Committee, which ever is the later, the Optionee will forfeit all options
not fully vested on the effective date of such termination.
7.5 MINIMUM VESTING PERIOD. In the absence of a specified vesting
schedule established by the Committee and set forth in the applicable
agreement evidencing the grant of any options, all options will vest one year
after the date of grant. Should the Optionee cease to serve as a Director of
the Company for any reason (except death or disability) with or without
cause, prior to the expiration of one year or the vesting schedule
established by the Committee, which ever is the later, the Optionee will
forfeit all options not fully vested on the effective date of such
termination.
7.5 ACCELERATION OF VESTING. If an Option contains a vesting
schedule or has not become totally exercisable as of the date of any of the
following events, such vesting schedule may be accelerated, and/or any other
restrictions to exercise may be removed upon delivery to the Committee of a
written election of such acceleration by the Optionee (or the designated
beneficiary of a deceased Optionee):
(i) The death of the Optionee;
(ii) The Disability of the Optionee;
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(iii) A "change of control" as hereinafter defined.
7.6 CHANGE OF CONTROL. For purposes of this Plan, a "change in
control" shall be deemed to have occurred on such date if:
(i) Any person, organization or association of persons or
organizations acting in concert, excluding Affiliates of the
Company itself, shall acquire more than twenty percent (20%)
of the outstanding voting stock of the Company in whole or in
part by means of an offer made publicly to the holders of all
or substantially all of the outstanding shares of any one or
more classes of the voting securities of the Company to
acquire such shares for cash, other property or a combination
thereof; or
(ii) Any person, organization or association of persons or
organizations acting in concert shall succeed in electing two
or more directors in any one election in opposition to those
proposed by management; or
(iii) The Company transfers all or substantially all of its
operating properties and assets to another person,
organization or association of persons or
organizations, excluding affiliates of the Company
itself; or
(iv) The Company shall consolidate with or merge into any person,
firm or corporation unless the Company or Affiliate shall be
the continuing corporation or the successor corporation;
ARTICLE VIII
RESTRICTIONS ON TRANSFER
Options shall not be transferable other than by will or the laws of
descent and distribution. An Option may be exercised during the Optionee's
lifetime only by the Optionee or, in the event of his or her legal
disability, by his or her legal representative. The Shares acquired pursuant
to the Plan shall be subject to such restrictions and agreements regarding
sale, assignment, encumbrances, or other transfers or dispositions thereof
(i) as are in effect among the stockholders of the Company at the time such
Shares are acquired or (ii) as the Committee shall deem appropriate or as are
required by applicable law.
ARTICLE IX
CAPITAL ADJUSTMENTS
In the event of any change in the outstanding Common Stock by reason
of any stock dividend, split-up (or reverse stock split), recapitalization,
reclassification, reorganization, reincorporation, combination or exchange of
shares, merger, consolidation, liquidation or similar change in corporate
structure, the Committee may, in its discretion and to the extent necessary
to compensate for the effect thereof, provide for a substitution for or
adjustment in (i) the number and class of Shares subject to outstanding
Options, (ii) the Option Price of outstanding Options, and (iii) the
aggregate number and class of Shares that may be issued under the Plan.
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ARTICLE X
TERMINATION OR AMENDMENT
The Board may amend, alter, suspend or terminate the Plan in any
respect at any time; provided, however, that after the Plan has been approved
by the stockholders of the Company, no amendment, alteration, suspension or
termination of the Plan shall be made by the Board without approval of (i)
the Company's stockholders to the extent stockholder approval is required by
applicable law or regulations and (ii) each affected Optionee if such
amendment, alteration, suspension or termination would adversely affect his
or her rights or obligations under any Option granted prior to the date of
such amendment, alteration, suspension or termination. No Option may be
granted nor any Shares issued under the Plan during any suspension or after
termination of the Plan.
ARTICLE XI
MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS; SUBSTITUTED OPTIONS
Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew the terms of any outstanding Options, or accept the
surrender of outstanding Options granted under the Plan or options and stock
appreciation rights granted under any other plan of the Company or an
Affiliate (to the extent not theretofore exercised) and authorize the
granting of new Options in substitution therefor (to the extent not
theretofore exercised). Subject to Section 6.3 hereof, any such substituted
Options may specify a longer term than the surrendered options and stock
appreciation rights, or have any other provisions that are authorized by the
Plan. Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the Optionee, alter or impair any of the
Optionee's rights or obligations under such Option.
ARTICLE XII
EFFECTIVENESS OF THE PLAN
The Plan and any amendment thereto shall be effective on the date on
which it is adopted by the Board, provided that any such adoption requiring
stockholder approval is subject to approval by vote of the stockholders of
the Company within 12 months after such adoption by the Board.
ARTICLE XIII
WITHHOLDING
The Company's obligation to deliver Shares or pay any amount
pursuant to the terms of any Option shall be subject to the satisfaction of
applicable federal, state and local tax withholding requirements. To the
extent provided in the applicable Agreement and in accordance with rules
prescribed by the Committee, an Optionee may satisfy any such withholding tax
obligation by any of the following means or by a combination of such means:
(i) tendering a cash payment, (ii) authorizing the Company to withhold Shares
otherwise issuable to the Optionee, or (iii) delivering to the Company
already owned and unencumbered Shares.
ARTICLE XIV
TERM OF THE PLAN
Unless sooner terminated by the Board pursuant to Article X hereof,
the Plan shall terminate on June 30, 2010, and no Options may be granted
after such date. The termination of the Plan shall not affect the validity of
any Option outstanding on the date of termination.
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ARTICLE XV
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have
as Directors or as members of the Committee, the members of the Committee
shall be indemnified by the Company against the reasonable expenses,
including attorneys' fees, actually and reasonably incurred in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
Option granted hereunder, and against all amounts reasonably paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, if such members acted in good faith and in a
manner which they believed to be in, and not opposed to, the best interests
of the Company.
ARTICLE XVI
GENERAL PROVISIONS
16.1 NO OTHER RIGHTS CONFERRED. The establishment of the Plan shall
not confer upon any Eligible Individual any legal or equitable right against
the Company, any Affiliate or the Committee, except as expressly provided in
the Plan.
16.2 NO CONTRACT RIGHTS. The Plan does not constitute inducement or
consideration for the service of any Eligible Individual, nor is it a
contract between the Company or any Affiliate and any Eligible Individual.
Participation in the Plan shall not give an Eligible Individual any right to
be retained in the service of the Company.
16.3 NO LIMITATION ON OTHER STOCK OPTION, ETC. Neither the adoption
of this Plan nor its submission to the stockholders, shall be taken to impose
any limitations on the powers of the Company or its Affiliates to issue,
grant or assume options, warrants, rights, or restricted stock, otherwise
than under this Plan, or to adopt other stock option or restricted stock
plans or to impose any requirement of stockholder approval of the same.
16.4 PLAN INTEREST NOT SUBJECT TO CREDITOR CLAIMS. The interests of
any Eligible Individual under the Plan are not subject to the claims of
creditors and may not, in any way, be assigned, alienated or encumbered
except as provided in an Agreement.
16.5 APPLICABLE LAW. The Plan shall be governed, construed and
administered in accordance with the laws of the State of Iowa.
16.6 REPRESENTATIONS REGARDING INVESTMENT INTENT; RESTRICTIVE
LEGENDS. The Committee may require each person acquiring Shares pursuant to
Options hereunder to represent to and agree with the Company in writing that
such person is acquiring the Shares without a view to distribution thereof.
The certificates for such Shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer. All certificates
for Shares issued pursuant to 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 Securities and
Exchange Commission, any stock exchange or interdealer quotation system upon
which the Common Stock is then listed or quoted, and any applicable federal
or state securities laws. The Committee may place a legend or legends on any
such certificates to make appropriate reference to such restrictions. The
certificates for Shares acquired pursuant to an option may also include any
legend which the Committee deems appropriate to reflect restrictions
contained in this Plan or in the applicable Agreement or to comply with the
Iowa Business Corporation Act.
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16.7 REGULATORY APPROVALS. The Company shall not be required to
issue any certificate or certificates for Shares upon the exercise of
Options, or record any person as a holder of record of Shares, without
obtaining, to the complete satisfaction of the Committee, the approval of all
regulatory bodies deemed necessary by the Committee, and without complying to
the Committee's complete satisfaction, with all rules and regulations, under
federal, state or local law deemed applicable by the Committee.
