Exhibit 10.4
EMPLOYEE STOCK OPTION AGREEMENT
THIS EMPLOYEE STOCK OPTION AGREEMENT, hereinafter referred to as the “Option” or
the “Agreement,” is made effective as of the [____] day of [___________],
between American Equity Investment Life Holding Company (the “Company”) and,
[___________] (the “Optionee”).
The Company hereby grants an option of [_______] shares of common stock of the
Company, $1.00 par value per share (“Stock”), to the Optionee at the price and
in all respects subject to the terms, definitions and provisions of the
Agreement, and the 2009 Employee Incentive Plan, adopted by the Company
effective June 4, 2009, the terms and definitions of which are incorporated
herein, unless the context implies otherwise.
1.
Option Price. The option price is [$ ____] for each share, the price being at
least 100% of the fair market value of a share of the Stock on the date of the
grant of this Option.

2.
Exercise of Option and Vesting Schedule. This Option is granted for a ten (10)
year term and, therefore, may not be exercised after the expiration of ten (10)
years from the date that it is granted. This Option shall become exercisable at
any time subject to terms of this Agreement and applicable law.

(a)
Vesting Schedule. This option will vest on the earlier of [___________] or the
date Optionee retires from the Company if such retirement date occurs after the
age of 65 and following 10 years of service with the Company. Should the
Optionee be terminated (except for death, disability or retirement after the age
of 65 and following 10 years of service with the Company), then Optionee will
forfeit all rights under this agreement.

(b)
Right to Exercise. This Option shall be exercisable during the term of the
Option, by the Optionee:

(i)
While the Optionee is an employee of the Company, or within sixty (60) days of
the termination of Optionee as an employee; provided that in the event
Optionee’s employment by the Company is terminated because of disability, as
that term is defined in Section 105(d) (4) of the Internal Revenue Code, as
amended (the “Code”), the Option privileges, with respect to the shares
purchasable by the Optionee as of the date that the Optionee terminated, may be
exercised by the Optionee within one (1) year after the date of termination of
the Optionee’s employment by the Company. However, nothing contained within this
statement shall be construed to extend the ultimate term of this Option beyond
the period of time as set out above in paragraph 2.

(ii)
If the Optionee should die during the option period while employed by the
Company, the option privileges may be exercised in full by the legal
representative of the Optionee’s estate, or by the person or persons to whom the
Optionee’s rights under the Option shall have passed by will or the laws of
descent and distribution within one (1) year after the Optionee’s date of death.
However, nothing contained within this statement shall be construed to extend
the ultimate term of this Option beyond the period of time as set out above in
paragraph 2.

(c)
Restrictions on Exercise. The minimum number of shares for which this Option may
be exercised is 100 shares. In addition, as a condition to the Optionee’s
exercise of this option, the Company may require the person exercising this
Option to execute any buy-sell agreement in effect between the Company and its
shareholders and to make such representations or warranties to the Company as
may be required by applicable law or regulation.

(d)
Method of Exercise. This Option shall be exercisable by a written notice which
shall:

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(i)
State the election to exercise the Option, the number of shares in respect of
which it is being exercised (which may be no less than 100 shares), the person
in whose name the stock certificate for such shares of Stock is to be
registered, the person’s address and social security number (or if more than
one, the names, addresses and social security numbers of such persons);

(ii)
Contain such representations and agreements as to the holder’s investment intent
with respect to such shares of Stock as may be satisfactory to the Company’s
counsel; and

(iii)
Be signed by the person or persons entitled to exercise the Option and, if the
Option is being exercised by any persons other than the Optionee, be accompanied
by proof satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option.

(e)
Payment of Option Price. Payment of the aggregate Option Price for the shares of
Stock with respect to which an Option is being exercised shall be made by the
Optionee in cash or in one of the following manners:

(i)
By certified or bank cashier check or wire transfer;

(ii)
By delivery (including constructive delivery) to the Company of shares of Stock
having an aggregate Fair Market Value on Date of Exercise equal to the aggregate
Option Price; or

(iii)
 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 of Stock and promptly deliver cash to
the Company.

(f)
Withholding. The Company’s obligation to deliver shares of Stock or pay any
amount pursuant to the terms of any Option shall be subject to satisfaction of
applicable federal, state and local tax withholding requirements.. 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 of Stock otherwise issuable to the Optionee valued at
Fair Market Value on Date of Exercise, or (iii) delivering to the Company
already owned and unencumbered shares of Stock valued at Fair Market Value on
Date of Exercise.

3.
Nontransferablity of Option. This Option may not be transferred in any manner
otherwise than by will or the laws of descent and distribution and may be
exercised during the lifetime of the Optionee only by the Optionee and after
Optionee’s death by the legal representative of the Optionee’s estate or by the
person or persons to whom the Optionee’s rights under the Option passed by will
or the laws of descent and distribution. This Option shall not be pledged or
hypothecated in any way and shall not be subject to executive, attachment of
similar process except with the express consent of the Committee.

4.
Adjustments:

(a)
Whenever a stock split, stock dividend or other relevant change in
capitalization of the Company occurs, (1) the number of shares that can
thereafter be purchased and the option price per share under each Option that
has been granted and not exercise, and (2) the number of shares used in
determining whether a particular Option is grantable thereafter shall be
appropriately adjusted.

(b)
In the event of the dissolution or liquidation of the Company, any Option
granted under the Plan shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days’ written notice of the date so
fixed shall be given to each Optionee and each such Optionee shall have the
right during such period to exercise Optionee’s Option as to all or

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any part of the shares covered thereby, including shares as to which such Option
would not otherwise be exercisable by reason of an insufficient lapse of time.
(c)
Adjustments and determinations under this paragraph 3 shall be made by the Board
of Directors of the Company, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final, binding
and conclusive.

5.
Notices. Each notice relating to this Agreement shall be in writing and
delivered in person or by certified mail to the proper address, and shall be
deemed to have been given on the date it is received. Each notice to the Company
shall be addressed to it at its principal office, attention of the Secretary.
Each notice to the Optionee or other person or person then entitled to exercise
the Option shall be addressed to the Optionee or such other person or persons at
the Optionee’s address set forth in the heading of this Agreement. Anyone to
whom a notice may be given under this Agreement may designate a new address by
written notice to that effect.

6.
Benefits of Agreement. This Agreement shall inure to the benefit of and be
binding upon each successor of the Company. All obligations imposed upon the
Optionee and all rights granted to the Company under this Agreement shall be
binding upon the Optionee’s heir, legal representatives and successors. This
Agreement shall be the sole and exclusive source of any and all rights which the
Optionee, the Optionee’s heirs, legal representatives, or successors may have in
respect to the Plan or any options or Stock granted or issued thereunder whether
to the Optionee or to any other person.

7.
Resolution of Disputes. Any dispute or disagreement which should arise under, or
as a result of, or in any way relate to, the interpretation, construction or
applicability of this Agreement will be determined by the Board of Directors of
the Company. Any determination made hereunder shall be final, binding, and
conclusive for all purposes.

IN WITNESS WHEREOF, the Company and the Optionee have caused this Agreement to
be executed effective as of the day, month and year first above written.

 
AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY
 
 
 
 
By:
 
 
 
[Name and Title]
 
 
 
ATTEST:
 
 
 
 
 
 
 
 
[Name and Title]
 
 
 
 
 
 
OPTIONEE:
 
 
 
 
By:
 
 
 
 

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