Exhibit 10.2

 

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

2009 EMPLOYEE INCENTIVE 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 certain
employees and officers of the Company and its affiliates be provided an
incentive to generate stockholder value by contributing to the appreciation of
the Company and its affiliates, to provide an incentive for them to generate
stockholder value by contributing to the appreciation of the Company’s stock
price and to enable them to participate in the growth of the Company by granting
awards with respect to the Company’s Common Stock, as a means of assuring their
maximum effort and continued association with the Company; and

 

WHEREAS, the Board believes that the Company can best obtain these and other
benefits by providing for the grant of equity awards consisting of or based on
the Common Stock of the Company, pursuant to this Plan;

 

NOW, THEREFORE, the Board does hereby adopt this 2009 Employee Incentive 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 subsidiaries 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 Award that is executed by the Company and the Participant.

 

1.3.                              “Award” means any Option, SAR, RSA, or RSU
convertible into or otherwise based on Common Stock granted under the Plan.

 

1.4.                              “Beneficial Owner” shall have the meaning set
forth in Rule 13d-3 under the Exchange Act, except that a Person who is properly
reporting on Schedule 13G shall not be treated as a Beneficial Owner for
purposes of the Plan.

 

1.5.                              “Board” means the Board of Directors of the
Company.

 

1.6.                              “Code” means the Internal Revenue Code of
1986, as amended from time to time, or any successor law.

 

1.7.                              “Committee” means the committee of the Board
appointed by the Board to administer the Plan. Unless otherwise determined by
the Board, the Compensation Committee of the Board shall be the Committee. When
awards intended to qualify under 162(m) of the Code are granted, the Committee
will be comprised solely of 2 or more independent directors.

 

1.8.                              “Common Stock” or “Stock” means the common
stock, par value $1.00 per share of the Company.

 

1.9.                              “Company” means American Equity Investment
Life Holding Company, an Iowa corporation.

 

1.10.                        “Competitive Activity” shall include: (i) the
rendering of services for any organization or engaging directly or indirectly in
any business which is or becomes competitive with the Company, or

 

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which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company; (ii) the disclosure to anyone outside the
Company, or the use in other than the Company’s business, without prior written
authorization from the Company, of any confidential information or material
relating to the business of the Company, acquired by the Participant either
during or after employment with the Company or (iii) any attempt directly or
indirectly to induce any employee or agent of the Company to be employed or
perform services elsewhere or any attempt directly or indirectly to solicit the
trade or business of any current or prospective customer, supplier or partner of
the Company.

 

1.11.                      “Corporate Change in Control” shall be deemed to have
occurred upon the first of the following events:

 

(1)                                  any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any securities acquired
directly from the Company or its subsidiaries) representing 50% or more of the
combined voting power of the Company’s then outstanding securities, excluding
any Person who becomes such a Beneficial Owner in connection with a transaction
which is a merger or consolidation;

 

(2)                                  the election to the Board, without the
recommendation or approval of a majority of the incumbent Board (as of the date
of approval of the Plan by the Board of Directors), of Directors constituting a
majority of the number of Directors of the Company then in office, provided,
however, that Directors whose election or appointment following the effective
date of the Plan is approved by a majority of the members of the incumbent Board
shall be deemed to be members of the incumbent Board for purposes hereof,
provided further that Directors whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of Directors of the Company will not be considered as members of the
incumbent Board for purposes of this paragraph (2); or the occurrence of any
other event which a majority of the incumbent Board in its sole discretion
determines should be considered a Corporate Change in Control.

 

1.12.                      “Corporate Transaction” means any of (i) a
consolidation, merger or similar transaction or series of related transactions,
including a sale or other disposition of stock, in which the Company (or an
Affiliate) is not the surviving corporation or which results in the acquisition
of all or substantially all of the then outstanding Common Stock by a single
person or entity or by a group of persons and/or entities acting in concert;
(ii) a sale or transfer of all or substantially all of the Company’s assets or
(iii) a dissolution or liquidation of the Company. Where a Corporate Transaction
involves a tender offer that is reasonably expected to be followed by a merger
described in clause (i) as determined by the Committee, the Corporate
Transaction shall be deemed to have occurred upon consummation of the
transaction.

 

1.13.                      “Covered Employee” means a “covered employee” as set
forth in Section 162(m).

 

1.14.                      “Covered Transaction” means a Corporate Change in
Control or a Corporate Transaction.

 

1.15.                      “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 VI hereof.

 

1.16.                      “Date of Grant” means the date on which an Award is
granted under the Plan.

 

1.17.                      “Designated Beneficiary” means the beneficiary as
designated in writing by a Participant.

 

1.18.                      “Designated Employee” means an employee designated by
the Committee, in its sole discretion, as a “Designated Employee” for purposes
of the Plan at any time prior to the effective date of a Corporate Transaction.

 

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1.19.                      “Detrimental Activity” shall include any action or
failure to act that, in the sole determination of the Committee:
(i)(a) constitutes financial malfeasance that is materially injurious to the
Company, (b) violates the Company’s Code of Conduct, (c) results in the
Company’s restatement of its earnings, financial results or financial statements
or (d) results in a violation or breach of law or contract that is materially
injurious to the Company or (ii) violates any non-competition, non-disclosure or
non-solicitation agreement with the Company, or in the event that the
Participant has not entered into any such agreement with the Company, the
Participant engages in any “Competitive Activity”.

 

1.20.                      “Director” means a member of the Board of Directors
of the Company or any Affiliate.

 

1.21.                      “Disability”means permanent and total disability
within the meaning of Section 22(e)(3) of the Code, as determined by the
Committee.

 

1.22.                      “Eligible Individual” means any Employee or Director
who is also an Employee. Persons who are Directors of the Company who are not
also Employees shall not be Eligible Individuals.

 

1.23.                      “Employee” means any employee of the Company or an
Affiliate.

 

1.24.                      “Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, or any successor law.

 

1.25.                      “Expiration Date” means the latest date on which an
Award requiring exercise may be exercised pursuant to the Award agreement.

 

1.26.                      “Fair Market Value” means, (i) with respect to Stock,
(a) for so long as such Stock is readily tradable on an established securities
market (within the meaning of Section 409A), the closing price on the day of the
grant or measurement or, if the applicable date is not a trading day, on the
most recent trading day immediately prior to the applicable date, and
(b) otherwise, the fair market value of such Stock determined by the Committee
by a reasonable application of a reasonable valuation method (within the meaning
of Section 409A); and, (ii) with respect to any other property, the fair market
value of such property as determined by the Committee pursuant to a reasonable
method adopted in good faith for such purpose from time to time.

 

1.27.                      “For Cause” shall be deemed to include, but is not
limited to, dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, breach by a Participant of any provision
of any employment, nondisclosure, non-competition or similar agreement between
the Participant and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or an Affiliate. The determination of
the Committee as to the existence of circumstances warranting a termination For
Cause shall be conclusive. Notwithstanding the foregoing, in the event that the
Participant is a party to an effective employment or similar agreement with the
Company or an Affiliate which contains a “cause” definition, such definition
shall be controlling for purposes of the Plan.

 

1.28.                      “Incentive Stock Option” or “ISO” means an Option
granted under the Plan that qualifies as an incentive stock option under
Section 422 of the Code and that the Company designates as such in the Agreement
granting the Option.

 

1.29.                      “Involuntary Employment Action” as to a Participant
means the involuntary termination of a Participant’s employment with the Company
following a Covered Transaction, other than For Cause, upon the occurrence of
any of the following circumstances: (i) any adverse and/or material alteration
and diminution in the Participant’s authority, duties or responsibilities (other
than a mere change in title or reporting relationship) as they existed
immediately prior to the Covered Transaction or as the same may be increased
from time to time thereafter, (ii) a reduction of the Participant’s base salary
or a reduction in targeted bonus opportunity, in each case as in effect on the
date prior to the Covered Transaction or as the same may be increased from time
to time thereafter; or (iii) relocation of the

 

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offices at which the Participant is employed which increases his or her daily
commute by more than 100 miles on a round trip basis; provided, however, that in
any case the Participant notifies the Chief Legal Officer or the Vice President
of Human Resources of the Company in writing of the basis for his or her
involuntary termination within thirty (30) days of the occurrence of the
circumstances and the Company does not cure such circumstance within thirty
(30) days thereafter. A broad Company restructuring and/or reduction in
workforce which affects more than five percent (5%) of the then currently
employed Employees will not constitute an Involuntary Employment Action,

 

1.30.                      “Non-qualified Stock Option” means an Option granted
under the Plan that is not an Incentive Stock Option.

 

1.31.                      “Option” means an option to purchase Shares for a
specified period of time at a specified price.

 

1.32.                      “Option Period” means the period during which an
Option may be exercised.

 

1.33.                      “Option Price” means the price per Share at which an
Option may be exercised, provided, however, that the Option Price shall not be
less than the Fair Market Value of a Share as of the Date of Grant.
Notwithstanding the foregoing, in the case of an Incentive Stock Option granted
to an Optionee who is a Ten-percent Stockholder, the Option Price shall not be
less than one hundred and ten percent (110%) of the Fair Market Value on the
Date of Grant. The Option Price of any Option shall be subject to adjustment to
the extent provided in Article X hereof, subject to Section 6.3 hereof.

 

1.34.                      “Optionee” means an Eligible Individual to whom an
Option has been granted.

 

1.35.                      “Participant” means a person selected by the
Committee to receive an Award under the Plan.

 

1.36.                      “Performance Criteria” means specified criteria the
satisfaction of which is a condition to the grant, exercisability, vesting,
payment or full enjoyment of an Award. For purposes of Performance Awards that
are intended to qualify for the performance-based compensation exception under
Section 162(m), a Performance Criterion shall be based on objectively
determinable measures of performance relating to any of or to any combination of
the following (measured either absolutely or by reference to an index or indices
and determined either on a consolidated basis or, as the context permits, on a
divisional, functional, subsidiary, line of business, project or geographical
basis or in combinations thereof); sales; revenues; assets; expenses; earnings
before or after deduction for all or any portion of interest, taxes,
depreciation, or amortization or other items, whether or not on a continuing
operations or an aggregate or per share basis; return on equity, investment,
capital or assets; one or more operating ratios; borrowing levels, leverage
ratios or credit rating; market share; capital expenditures; cash flow; stock
price; stockholder return; sales of particular products or services;
acquisitions and divestitures(in whole or in part); joint ventures and strategic
alliances; spin-offs, split-ups and the like; reorganizations; or
recapitalizations, restructurings, financings (issuance of debt or equity) or
refinancings. A Performance Criterion and any targets with respect thereto
determined by the Committee shall be based on achievement of an objectively
determinable performance goal. To the extent consistent with the requirements
for satisfying the performance-based compensation exception under
Section 162(m), the Committee may provide in the case of any Award intended to
qualify for such exception that one or more of the Performance Criteria
applicable to such Award will be adjusted in an objectively determinable manner
to reflect events (for example, but without limitation, acquisitions or
dispositions) occurring during the performance period that affect the applicable
Performance Criterion or Criteria. Prior to the grant, exercisability, vesting,
payment or full enjoyment of the Performance Award, as the case may be, the
Committee will determine whether the Performance Criteria have been attained,
will certify the determination in writing, and such determination will be
conclusive. If the Performance Criteria are not attained, no other Award will be
provided in substitution of the Performance Award with respect to which such
Performance Criteria have not been met.

 

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1.37.                      “Person” shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include: (i) the Company or any
of its Affiliates; (ii) a trustee or other fiduciary holding securities under an
employee benefits plan of the Company or any of its Affiliates; (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities or (iv) a corporation or other business entity owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

 

1.38.                      “Plan” means the American Equity Investment Life
Holding Company 2009 Employee Incentive Plan.

 

1.39.                      “Restricted Period” has the meaning set forth in
Section 8.2.

 

1.40.                      “Restricted Stock Award” or “RSA” has the meaning set
forth in Section 8.2.

 

1.41.                      “Restricted Stock Unit” or “RSU” has the meaning set
forth in Section 8.1.

 

1.42.                      “Retirement” as to any employee of the Company or any
of its Affiliates shall mean such person’s leaving the employment of the Company
and its Affiliates after reaching age 55 with ten (10) years of service with the
Company or its Affiliates, but not including pursuant to any termination For
Cause or pursuant to any termination for insufficient performance, as determined
by the Company.

 

1.43.                      “Section 162(m)” means Section 162(m) of the Code,
including the Treasury Regulations thereunder and other applicable Internal
Revenue Service guidance.

 

1.44.                      “Section 409A” means Section 409A of the Code,
including the Treasury Regulations thereunder and other applicable Internal
Revenue Service guidance.

 

1.45.                      “Section 422” means Section 422 of the Code,
including the Treasury Regulations thereunder and other applicable Internal
Revenue Service guidance.

 

1.46.                      “Stock Appreciation Right” or “SAR” has the meaning
set forth in Section 7.1.

 

1.47.                      “Share” means a share of Common Stock.

 

1.48.                      “Ten-percent Stockholder” means, in accordance with
the rules of Section 424(d) of the Code, a person owning stock with more than
ten percent of the total combined voting power of all classes of stock of the
Company or an Affiliate.

 

ARTICLE II

Purpose

 

2.1.                            The Plan is intended to assist the Company and
its Affiliates 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

 

3.1.                            The Committee shall administer the Plan and
shall have plenary authority and discretion, subject to the provisions of the
Plan, to select the Participants to receive Awards and shall determine the terms
and conditions of the Awards. The Committee has discretionary authority, subject
only to the express provisions of the Plan, to interpret the Plan, determine
eligibility for and grant Awards, determine, modify or waive the terms and
conditions of any Award, prescribe forms, rules and procedures and otherwise do
all things necessary to carry out the purposes of the Plan. In the case of any
Award intended to be eligible for the performance-based compensation exception
under Section 162(m), the Committee will exercise its discretion consistent with
qualifying the Award for that

 

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exception. In making these determinations, the Committee may take into account
the nature of the services rendered by the Participants, their present and
potential contributions to the success of the Company and its Affiliates, and
such other factors as the Committee in its discretion shall deem relevant. The
determinations of the Committee on the matters referred to in this Article III
shall be binding and final.

 

Notwithstanding anything else, transactions under this Plan, to the extent they
would otherwise be subject to Section 16 of the Exchange Act, are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under
Section 16 of the Exchange Act (“Rule 16b-3”). To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

 

In the case of an Award intended to be eligible for the performance-based
compensation exception under Section 162(m), the Plan and such Award shall be
construed to the maximum extent permitted by law in a manner consistent with
qualifying the Award for such exception. Consistent with the above requirements,
the Committee may delegate such of its duties, powers and responsibilities as it
may determine (and in the event of any such delegation, references herein to the
Committee shall include the person or persons so delegated to the extent of such
delegation).

 

In the case of an Award intended to be eligible for the performance-based
compensation exception under Section 162(m), to the extent necessary, the
Committee shall establish in writing Performance Criteria no later than the
latest time permitted by Section 162(m) of the Code (generally, for performance
periods of one year of more, no later than 90 days after the commencement of the
performance period; and, for periods of less than one year, before twenty-five
percent (25%) of the performance period has elapsed); provided, however, that
goals so established by the Committee may be adjusted by the Committee after the
initial determination only to the extent permitted under Section 162(m).

 

ARTICLE IV

Eligibility

 

4.1.                            All Eligible Individuals are eligible to be
Participants in the Plan.

 

ARTICLE V

Stock Subject to the Plan

 

5.1.                            Number of Shares Reserved.  Subject to
adjustment as provided in Article X hereof, the maximum number of Shares that
may be delivered under or in satisfaction of Awards under the Plan is 2,500,000
Shares.

 

5.2.                            Unvested Awards Available for Grant.  If an
Award expires or terminates for any reason without having been fully exercised,
the unissued Shares which had been subject to such Award shall become available
for the grant of additional Awards.

 

5.3.                            Reversion to the Plan.  For the avoidance of
doubt, if an outstanding Award for any reason expires or is terminated or
canceled without having been exercised or settled in full, or if shares of Stock
acquired pursuant to an Award subject to forfeiture or repurchase are forfeited
or repurchased by the Company for an amount not greater than the Participant’s
purchase price, the shares of Stock allocable to the terminated portion of such
Award or such forfeited or repurchased shares of Stock shall again be available
for issuance under the Plan in an amount determined in accordance with
Section 5.1. Shares of Stock shall not be deemed to have been issued pursuant to
the Plan with respect to any portion of an Award that is settled in cash or
other property (other than shares of Stock) and shall be treated as forfeited
and shall again be available for issuance under the Plan. Upon payment in shares
of Stock pursuant to the exercise of an SAR, the number of shares available for
issuance under

 

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the Plan shall be reduced as provided in Section 7. Shares of Stock withheld
from an Award in satisfaction of withholding taxes as described in Section XV or
in payment of the exercise price of any Award requiring exercise shall not again
be available for issuance under the Plan.

 

5.4.                            Certain Other Company Awards.  Common Stock
issued under awards granted by another company (“other company awards”) and
assumed by the Company in connection with a merger, consolidation, stock
purchase or similar transaction, or issued by the Company under awards
substituted for other company awards in connection with a merger, consolidation,
stock purchase or similar transaction, shall not reduce the shares available for
Awards under the Plan; provided, that the maximum number of shares that may be
issued pursuant to Incentive Stock Options (as defined below) shall be
determined in a manner consistent with Section 422 and the rules thereunder.

 

5.5.                            Limit on Individual Grants.  The following
limits on individual Awards shall apply: The maximum number of shares of Common
Stock subject to Options granted to any Participant, and that may be granted as
SARs, RSUs and RSAs pursuant to Sections 7 or 8 to any Participant, shall not
exceed an aggregate of 75,000 in any calendar year, subject in each case to
adjustment under Section X.

 

ARTICLE VI

Stock Options

 

6.1.                            Designation of Options as Incentive or
Non-qualified.  Options granted under the Plan shall be either Incentive Stock
Options (“ISOs”) or Non-qualified Stock Options (“NQSOs”), as designated by the
Committee. Each Option granted under the Plan shall be clearly identified either
as an ISO or a NQSO and shall be evidenced by an Agreement that specifies the
terms and conditions of the grant. In the event the Committee shall fail to
identify any Option granted as an ISO or NQSO, such Option shall be a NQSO.
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 this Plan as the Committee may specify. All
ISOs shall comply with the provisions of the Code governing incentive stock
options and with all other applicable rules and regulations. The Committee shall
determine the number of shares subject to each Option and the exercise price
therefore, which shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of grant. An ISO granted to an employee described in
Section 422(b) of the Code must have an exercise price that is not less than
110% of such fair market value.

 

6.2.                            Option Period.  The Option Period for Options
granted to Eligible Individuals shall be determined by the Committee, subject to
such terms and conditions as the Committee may specify in the Award Agreement or
thereafter; provided, however, that (a) an Option shall not be exercisable after
ten years (five years in the case of an ISO granted to a Ten-Percent
Stockholder) from its Date of Grant; and (b) in the case of the termination of
employment of an Optionee, or the death or disability of an Optionee, the Option
Period shall be as set forth in Section 9.7 below. Notwithstanding anything
contained herein to the contrary, an ISO may not be exercised after the period
provided in Treas. Reg. Section 1.422-2(a)(2)(iii) and Treas. Reg.
Section 1.422-2(d).

 

6.3.                            Notice of Exercise.  An Option may, subject to
the terms of the applicable Award 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 6.4 hereof.

 

6.4.                            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

 

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Committee, in its sole discretion, may provide in an Award 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.

 

6.5.                            Minimum Exercise.  No Option may be exercised
for less than one hundred (100) shares.

 

6.6.                            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 employment 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, whichever is the later, the Optionee will forfeit all options not
fully vested on the effective date of such termination.

 

6.7.                              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 will automatically be
accelerated, and/or any other restrictions to exercise may be removed upon the
happening of any of the following events:

 

(i)

 

The death of the Optionee;

 

 

 

(ii)

 

The Disability of the Optionee;

 

 

 

(iii)

 

A Corporate Change of Control as defined herein.

 

ARTICLE VII

Stock Appreciation Rights

 

7.1.                            Grant of SARs.  Subject to the provisions of the
Plan, the Committee may grant rights to receive any excess in value of shares of
Common Stock over the base value of the rights (“SARs”). The Committee shall
determine at the time of grant or thereafter whether SARs are settled in cash,
Common Stock or other securities of the Company, Awards, or other property, and
may define the manner of determining the excess in value of the shares of Common
Stock. The committee shall fix the base value of each SAR, which shall not be
less than 100% of the Fair Market Value of the Common Stock at the date of
grant.

 

7.2.                            Terms and Conditions.  Each SAR shall be
exercisable at such times and subject to such terms and conditions as the
Committee may specify in the Award Agreement or thereafter. The Committee may
impose such conditions with respect to the exercise of SARs, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable. At the time of the grant of an SAR, the
Committee may impose such restrictions or conditions to the vesting of such SAR
as it, in its absolute discretion, deems appropriate, including requiring the
achievement of Performance Criteria. To the extent that a grant of an SAR is to
vest based solely upon the continued employment of the Participant, such SAR
shall vest six months after the date of the grant. The Expiration Date of each
SAR shall be ten (10) years from the date of grant thereof, or at such earlier
time as the Committee shall state in the Award Agreement.

 

7.3.                            No Net Share Counting.  SARs to be settled in
shares of Common Stock shall be counted in full against the number of shares
available for award under the Plan under Section 5.1 regardless of the number of
shares of Common Stock issued upon settlement of the SAR.

 

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ARTICLE VIII

RESTRICTED STOCK UNITS, RESTRICTED STOCK AWARDS AND

OTHER AWARDS

 

8.1.                            Restricted Stock Units.  The Committee may grant
Awards consisting of units representing shares of Common Stock (“RSUs”). Each
RSU shall represent the unfunded and unsecured commitment of the Company to
deliver to the Participant at a specified future date or dates one or more
shares of Common Stock or, if specified in the Award, cash equal to the Fair
Market Value of the Award, in any case subject to the satisfaction of any
vesting or other terms and conditions established with respect to the Award as
the Committee may determine. No Participant or Designated Beneficiary holding
RSUs shall be treated as a stockholder with respect to the shares of Common
Stock subject to the Award unless and until such shares are actually delivered
under the Award. RSUs may not be sold, assigned, transferred, pledged or
otherwise encumbered. The Committee may make Awards of RSUs that are subject to
restrictions or forfeiture on such terms and conditions as the Committee may
determine from time to time.

 

8.2.                            Restricted Stock Awards.  The Committee may
grant Awards of shares of Common Stock subject to forfeiture (“RSAs”) and
determine the duration of the period (the “Restricted Period”) during which, and
the conditions under which, the shares may be forfeited to the Company and the
other terms and conditions of such Awards. Shares of RSAs may not be sold,
assigned, transferred, pledged or otherwise encumbered during the Restricted
Period. Shares of RSAs shall be evidenced in such manner as the Committee may
determine. Any certificates issued in respect of shares of RSAs shall be
registered in the name of the Participant and unless otherwise determined by the
Committee, deposited by the Participant, together with a stock power endorsed in
blank, with the Company. At the expiration of the Restricted Period, the Company
shall deliver such shares, along with any certificates, to the Participant or if
the Participant has died, to the Participant’s Designated Beneficiary.

 

8.3.                            Terms and Conditions.  At the time of the grant
of RSUs or RSAs, the Committee shall determine the price, if any, to be paid by
the Participant for each share subject to the Award. At the time of the grant of
RSUs or RSAs the Committee may impose such restrictions or conditions to the
vesting of such shares as it, in its absolute discretion, deems appropriate,
including requiring the achievement of Performance Criteria. To the extent that
a grant of Awards is to vest based solely upon the continued employment of the
Participant, such Award shall vest pursuant to a schedule as the Committee may
determine.

 

ARTICLE IX

GENERAL PROVISIONS APPLICABLE TO AWARDS

 

9.1.                            Documentation and Legal Conditions on Delivery
of Stock.  Each Award shall be evidenced by a written document delivered to the
Participant or agreement executed by the participant specifying the terms and
conditions thereof and containing such other terms and conditions not
inconsistent with the provisions of the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or to comply with
applicable tax and regulatory laws and accounting principles. The Company will
not be obligated to deliver any shares of Stock pursuant to the Plan or to
remove any restriction from shares of Stock previously delivered under the Plan
until: (i) the Company’s counsel has approved all legal matters in connection
with the issuance and delivery of such shares; (ii) if the outstanding Stock is
at the time of delivery listed on any stock exchange or national market system,
the shares to be delivered have been listed or authorized to be listed on such
exchange or system upon official notice of issuance; and (iii) all conditions of
the Award have been satisfied or waived. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, or if the Company
determines that the registration statement covering the sale of Stock is not
available, the Company may defer the sale until such time as it determines that
the registration statement is available and may delay the applicability of any
provisions of the Award during any period of unavailability. The Company may

 

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require that certificates evidencing Stock issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such
Stock.

 

9.2.                            Performance Criteria.  The Committee may
establish Performance Criteria on which the granting of Awards, or the vesting
of Awards, will be subject. The Committee shall determine whether any
Performance Criteria so established have been achieved, and if so to what
extent, and its determination shall be binding on all persons.

 

9.3.                            Application of Code Section 409A.  Awards under
the Plan are intended either to be exempt from the rules of Section 409A or to
satisfy those rules, and shall be construed accordingly. Granted Awards may be
modified at any time, in the Committee’s discretion, so as to increase the
likelihood of exemption from or compliance with the rules of Section 409A. In
the event a Participant is prohibited from executing market trades by reason of
the application of the federal securities laws or for any other reason
determined by the Committee, the Committee may extend the exercise period of an
Award to the extent permitted by Section 409A.

 

9.4.                            Committee Discretion.  Awards may be made alone
or in combination with other Awards, including Awards of other types. The terms
of Awards of the same type need not be identical, and the Committee need not
treat Participants uniformly (subject to the requirements of applicable law).
Except as otherwise expressly provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of grant or any time thereafter.

 

9.5.                            Dividends and Cash Awards.  In the discretion of
the committee, any Award under the Plan may provide the Participant with
(i) dividends or dividend equivalents payable (in cash or in the form of Awards
under the Plan) currently or deferred with or without interest and (ii) cash
payments in lieu of or in addition to an Award.

 

9.6.                            Leaves of Absence.  Awards held by a Participant
on an approved leave of absence shall continue to vest in accordance with their
terms during the leave of absence as if the Participant was an active employee
unless otherwise agreed to in writing between the Company and the Participant or
otherwise set forth in the Award agreement; provided, however, in the event of
an ISO, such leave of absence shall not exceed ninety (90) days unless
reemployment is guaranteed by law or contract.

 

9.7.                            Termination of Employment.  Unless the Committee
expressly provides otherwise, the following rules shall apply in connection with
the cessation of a Participant’s employment with the Company and its Affiliates.
Immediately upon the cessation of the Participant’s employment with the Company
and its Affiliates, an Award requiring exercise will cease to be exercisable and
all Awards to the extent not already fully vested will be forfeited, except
that:

 

(1)                                Disability or Death of Participant.  If a
Participant’s employment with the Company is terminated because of his death or
disability, his Award privileges, including any Awards the vesting of which have
been accelerated pursuant to Section 6.7 herein, shall expire unless exercised
within one (1) year after the date that his employment was terminated. In the
event of the death of the Participant, his Awards may be exercised by the
Participant’s designated beneficiary. With the exception of the provisions of
Section 6.7 herein, nothing contained herein shall be construed to extend the
ultimate term of the Award beyond the period of time as set out above;

 

(2)                                Termination of Employment.  Upon termination
of a Participant’s employment with the Company, or the relevant Affiliate, his
or her Award privileges shall be limited to the shares purchasable by him or her
as of the date that his or her employment was terminated, and such Award
privileges shall expire sixty (60) days from the date that his or her employment
was terminated. Nothing contained herein shall be construed to extend the
ultimate term of the Award beyond the period of time as set out above;

 

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(3)                                All Options and SARs held by a Participant or
a Participant’s permitted transferees, if any, immediately prior to the
cessation of the Participant’s employment For Cause (including any portion of
the Award that is then exercisable) shall terminate at the commencement of
business on the date of such termination;

 

(4)                                All RSUs and RSAs, in each case held by a
Participant immediately prior to the Participant’s death, retirement or
termination as a result of Disability, to the extent not previously vested,
shall vest and become non-forfeitable; provided, however, that the applicable
grants with respect to such Awards shall provide for payment terms that comply
with, or are exempt from, the requirements of Section 409A;

 

(5)                                All RSUs and RSAs held by a Participant or a
Participant’s permitted transferees, if any, immediately prior to the cessation
of the Participant’s employment for reasons other than death, Disability or
Retirement shall terminate at the close of business on the date of such
termination; and

 

(6)                                All RSUs and RSAs held by a Participant or a
Participant’s permitted transferees, if any, immediately prior to the cessation
of the Participant’s employment For Cause shall terminate at the commencement of
business on the date of such termination.

 

Unless the Committee expressly provides otherwise, a Participant’s employment
with the Company and its Affiliates will be deemed to have ceased upon
termination of the Participant’s employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the Company or its
Affiliates).

 

9.8.                            Transferability.  No Award may be transferred
other than by will or the laws of descent and distribution and may be exercised
during the life of a Participant only by the Participant, except that, as to
Options other than ISOs, the Committee may in its sole discretion permit certain
transfers to the Participant’s family members or to certain entities controlled
by the Participant or his or her family members.

 

9.9.                            Withholding Taxes.  The Participant shall pay to
the Company, or make provision satisfactory to the Committee for payment of, any
taxes or social insurance contributions required by law to be withheld with
respect to Award under the Plan no later than the date of the event creating tax
liability. The Company and its Affiliates will, to the extent permitted by law,
deduct any such tax or social insurance obligations from any payment of any kind
due the Participant hereunder or otherwise. In the Committee’s discretion, the
minimum tax or social insurance obligations required by law to be withheld in
respect of Awards may be paid in whole or in part in shares of Common Stock,
including shares retained by the Company from the Award creating the obligation,
valued at their Fair Market Value on the date of retention or delivery. In
particular, but not in limitation of the foregoing, with respect to Awards of
RSUs and RSAs`, the Company shall withhold from the payment of an Award and
shall retain that number of Shares the Fair Market Value of which is equal to
the amount of tax required to be withheld and paid on the date of retention or
delivery.

 

9.10.                      Option or SAR Repricing.  Without the affirmative
vote of holders of a majority of the shares of Stock in person or by proxy at a
meeting of the stockholders of the Company at which a quorum representing a
majority of all outstanding shares of Stock is present or represented by proxy,
neither the Board nor the Committee shall approve either (a) the cancellation of
outstanding Options or SARs and the grant in substitution therefore of new
Options or SARs having a lower exercise prior or base value, as the case may be,
or (b) the amendment of outstanding Options or SARs to reduce the exercise price
or base value, as the case may be, thereof. This paragraph shall not be
construed to apply to: (i) “issuing or assuming a stock option in a transaction
to which Section 424(a) applies” within the meaning of Section 424 of the Code;
or (ii) adjustments made pursuant to Section X.

 

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9.11.                      Amendment of Award.  Except as otherwise expressly
provided in the Plan, and subject to the provisions contained in Section 9.10
herein, the Committee may amend, modify or terminate any outstanding Award,
including substituting therefore another Award of the same or a different type,
changing the date of exercise or realization and converting an ISO to an NQSO;
provided, however, that if stockholder approval is required by law or the
rules of the applicable exchange on which common stock of the Company is then
publicly traded, such amendment shall not become effective until such
stockholder approval is obtained. Any such action shall require the
Participant’s consent unless the Committee determines that the action would not
materially and adversely affect the Participant.

 

9.12.                      Cancellation and Rescission of Awards.  Unless the
Award agreement specifies otherwise, the Committee may cancel, rescind, withhold
or otherwise limit or restrict any unexpired or unpaid Award at any time if the
Participant is not in compliance with all applicable provisions of the Award
agreement and the Plan, or if the Participant engages in any Detrimental
Activity.

 

ARTICLE X

Effect of Certain Transactions

 

10.1.                      Covered Transactions.  Except as otherwise expressly
provided in an Award:

 

(1)                                If the Covered Transaction is one in which
there is an acquiring or surviving entity other than the Company or its
Affiliate, the Committee shall provide for the assumption of some or all
outstanding Awards or for the grant of new Awards in substitution therefore or
the continuation of some of all of the Awards by the acquirer or survivor or an
affiliate of the acquirer or survivor, except to the extent that the Committee
pays out the Award pursuant to the provisions of Section 10.1.(2).

 

(2)                                If the Covered Transaction is one in which
holders of Stock will receive upon consummation a payment (whether cash,
non-cash or a combination of the foregoing), the Committee may provide for
payment (a cash-out), with respect to some or all Awards or any portion thereof
(whether or not vested), equal in the case of each affected Award or portion
thereof to the excess, if any, of (a) Fair Market Value of one share of Stock
times the number of shares of Stock subject to the Award of such portion, or
(b) the aggregate exercise or purchase price, if any, under the Award or such
portion (in the case of an SAR, the aggregate base value above which
appreciation is measured), in each case on such payment terms (which need not be
the same as the terms of payment to holders of Stock) and other terms, and
subject to such conditions, as the Committee determines; provided, that the
Committee shall not exercise its discretion under this Section 10.1.(2) with
respect to an Award or portion thereof providing for “nonqualified deferred
compensation” subject to Section 409A in a manner that would constitute an
extension or acceleration of, or other change in, payment terms if such change
would be inconsistent with the applicable requirements of Section 409A. For
avoidance of doubt, in the event that the aggregate exercise or purchase price
of the Award exceeds the aggregate Fair Market Value, the Award will be deemed
to be cashed out for a payment of zero.

 

(3)                                Each Award will terminate upon consummation
of the Covered Transaction, other than Awards assumed, substituted or continued
pursuant to Section 10.1.(1) above. For avoidance of doubt, in the event that
the Awards are not cashed out (or deemed cashed out) as provided in 10.1.(2),
such Awards shall be assumed, substituted or continued as provided in
Section 10.1.(1) above.

 

10.2.                      Corporate Transaction.  Except as otherwise provided
in the Award agreement, if at any time within one (1) year after the effective
date of a Corporate Transaction there is an Involuntary Employment Action with
respect to any Designated Employee, each then outstanding Award assumed,

 

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substituted or continued under Section 10.1.(1) and held by such Designated
Employee (or a permitted transferee of such person) shall, upon the occurrence
of such Involuntary Employment Action, automatically accelerate so that each
such Award shall become fully vested or exercisable, as applicable, immediately
prior to such Involuntary Employment Action. Upon the occurrence of an
Involuntary Employment Action with respect to a Designated Employee, any
outstanding Options or SARs held by such Designated Employee (and a permitted
transferee or such person) shall be exercisable for one (1) year following the
Involuntary Employment Action or, if earlier, within the originally prescribed
term of the Option or SAR.

 

10.3.                      Corporate Change in Control.  Unless otherwise
determined by the Committee at the time of grant and set forth in the Award
Agreement, in the event of a Corporate Change in Control, the exercisability or
vesting of each Award outstanding under the Plan shall be automatically
accelerated so that each such Award shall immediately prior to such Corporate
Change in Control become fully vested or exercisable for the full number of
shares of the Common Stock purchasable or cash payable under an Award to the
extent not previously exercised and may be exercised for all or any portion of
such shares or cash within the originally prescribed term of such Award. The
Committee shall, in its discretion, determine the timing and mechanics required
to implement the foregoing sentence.

 

10.4.                      Changes In, Distributions With Respect To and
Redemptions of Stock.

 

(1)                                In the event of any stock dividend or other
similar distribution of stock or other securities of the Company, stock split or
other combination of shares (including a reverse stock split), recapitalization,
conversion, reorganization, consolidation, split-up, spin-off, combination,
merger, exchange of stock, redemption or repurchase of all or part of the shares
of any class of stock or any change in the capital structure of the Company or
an Affiliate or other transaction or event, the following shall be equitably
adjusted (a) the number of shares that may be delivered as per Article 5,
(b) the number and kind of shares of stock or securities subject to Awards then
outstanding or subsequently granted, (c) exercise prices or base values, as the
case may be, relating to outstanding Awards, and (d) any other provision of
Awards affected by such change shall be adjusted by the Company to the extent
the Committee shall determine, in good faith, that such adjustment is
appropriate.

 

(2)                                The Committee shall also make equitable or
proportionate adjustments of the type described in Section 10.4.(1) above to
take into account distributions to stockholders other than stock dividends or
normal cash dividends, material changes in accounting practices or principles,
extraordinary dividends, mergers, consolidations, acquisitions, dispositions or
similar transaction involving Stock, or any other event, if the Committee
determines that the adjustments are appropriate to avoid distortion in the
operation of the Plan and to preserve the value and equity of Awards made
hereunder, having due regard for: (i) the qualification of ISOs under
Section 422; (ii) the continued exemption of the Awards from (or satisfaction by
the Awards of the rules of) Section 409A, where applicable and (iii) in the case
of Awards intended to qualify for the performance-based compensation exception
Section 162(m), having due regard for continued qualification for that
exception.

 

(3)                                References in the Plan to shares of Stock
will be construed to include any stock or securities resulting from an
adjustment pursuant to this Article X.

 

ARTICLE XI

Effective Date

 

11.1.                      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

 

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vote of the stockholders of the Company within 12 months after such adoption by
the Board. Awards may be granted prior to stockholder approval of the Plan, and
the date of stockholder approval shall be the Date of Grant for all purposes
provided that (a) each such Award shall be subject to stockholder approval of
the Plan, (b) no Award may be exercised prior to such stockholder approval, and
(c) any such Award shall be void ab initio if such stockholder approval is not
obtained.

 

ARTICLE XII

Term of the Plan

 

12.1.                      Unless sooner terminated by the Board pursuant to
Section 14.7, the Plan shall terminate on June 30, 2014, and no Awards may be
granted after such date. The termination of the Plan shall not affect the
validity of any Award outstanding on the date of termination.

 

ARTICLE XIII

Indemnification of Committee

 

13.1.                      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 Award
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 XIV

General Provisions

 

14.1.                      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.

 

14.2.                      No Right to Employment.  The Plan does not constitute
inducement or consideration for the employment of service of any Eligible
Individual. Participation in the Plan shall not give an Eligible Individual any
right to be retained in the service of the Company or any Affiliate.

 

14.3.                      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 upon the same.

 

14.4.                      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.

 

14.5.                      No Rights as a Stockholder.  Subject to the
provisions of the applicable Award, no Participant or Designated Beneficiary
shall have any rights as a stockholder with respect to any shares of Common
Stock to be issued under the Plan until he or she becomes the holder thereof. A
Participant to whom an RSA is awarded shall be considered a stockholder of the
Company at the time of the Award except as otherwise expressly provided in the
applicable Award agreement.

 

14.6.                      Effective Date.  The Plan shall be effective on the
date it is approved by the stockholders of the Company.

 

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14.7                         Amendment of the Plan.  The Committee may amend,
suspend or terminate the Plan or any portion thereof at any time, subject to
such stockholder approval as the Committee determines to be necessary or
advisable. Further, under all circumstances, the Committee may, but shall not be
required to, make non-substantive administrative changes to the Plan in order to
conform with or take advantage of governmental requirements, statutes or
regulations. Except as provided herein, no such amendment, modification or
termination will adversely affect the rights of any Participant (without his or
her consent) under any Award previously granted and no amendment will, without
the approval of the stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to qualify or to continue
to qualify under Section 422 or for Awards intended to be eligible for the
performance-based exception under Section 162(m) to qualify as such or continue
such eligibility. In addition, the Committee may not amend the Plan to remove
the requirement for shareholder approval of any form of Option or SAR repricing
as specified in Section 9.10 herein.

 

14.8.                      Governing Law.  The Plan shall be governed, construed
and administered in accordance with the laws of the State of Iowa and it is the
intention of the Company that Incentive Stock Options granted under the Plan
qualify as such under Section 422 of the Code.

 

14.9.                      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 Law.

 

14.10.                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 records of such Shares, without
obtaining, to the complete satisfaction of 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.

 

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