Exhibit 10.26


AMERICAN EQUITY INVESTMENT LIFE HOLDING
COMPANY

INDEPENDENT INSURANCE AGENT STOCK OPTION PLAN


WHEREAS, the Board of
Directors of American Equity Investment Life Holding Company (the “Company”)
deems it in the best interest of the Company that independent insurance agents
(“Agents”) who are significant producers for the Company’s wholly owned
operating subsidiary, American Equity Investment Life Insurance 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
believes that the Company can best obtain these and other benefits by granting
stock options to Agents designated from time to time, pursuant to this Plan;


NOW, THEREFORE, the Board
does hereby adopt this Independent Insurance Agent Stock Option Plan, effective
as of January 1, 2007, with such terms and conditions set forth below.


ARTICLE
I



DEFINITIONS


Except where the context otherwise indicates,
the following definitions apply:


1.1                                 “Agent” means an
individual who has been validly appointed by American Equity as a sales agent
for American Equity’s products in applicable jurisdictions and who has a valid
and existing agent’s contract with American Equity in effect and not terminated
prior to any grant of Options under this Plan.


1.2                                 “Agreement”
means a written agreement granting an Option that is executed by the Company
and the Optionee.


1.3                                 “American Equity”
means American Equity Investment Life Insurance Company, a life insurance
company domiciled in the State of Iowa.


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


1.5                                 “Code” means the
Internal Revenue Code of 1986, as amended.


1.6                                 “Committee”
means the Executive Committee of the Board.


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


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

















 


1.9                                 “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 hereof.


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


1.11                           “Director” means
a member of the Board of Directors of the Company.


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


1.13                           “Fair Market Value”
of a Share as of a particular date means (1) the closing sale price reported
for such Share on the national securities exchange or national market system on
which such stock is principally traded as of such date, or (2) if the
Shares are not then listed on a national securities exchange or national market
system, or the value of such Shares is not otherwise determinable, such value
as determined by the Committee in good faith in its sole discretion.


1.14                           “Option” means
an option to purchase Shares granted under the Plan.


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


1.16                           “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. The Option Price of any Option shall be
subject to adjustment to the extent provided in Article IX hereof, but subject
to Section 6.2 hereof.


1.17                           “Optionee” means
an Agent to whom an Option has been granted under this Plan.


1.18                           “Plan” means the
American Equity Investment Life Holding Company Independent Insurance Agent
Option Plan.


1.19                           “Share” means a
share of Common Stock.


ARTICLE
II



PURPOSE


The Plan is intended to assist the Company
and American Equity in attracting and retaining Agents of outstanding ability
and to promote the identification of their interests with those of the
stockholders of the Company.


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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 Agents 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 any other terms, conditions or
restrictions on Options. In making these determinations, the Committee may
adopt rules from time to time regarding sales production criteria for the
granting of Options, and such other factors as the Committee in its discretion
shall deem relevant. 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 or exercisability of outstanding Options. The
determinations of the Committee on the matters referred to in this Article III
shall be binding and final.


ARTICLE
IV



ELIGIBILITY


Options may be granted only to Agents who
meet the requirements established by the Committee from time to time, including
without limitation rules regarding sales production criteria.


ARTICLE
V



STOCK SUBJECT TO THE PLAN


5.1           Number of Shares Reserved.  Subject to adjustment as provided in Article
IX hereof, the maximum number of Shares that may be issued under the Plan is
2,500,000 Shares.


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           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; (b) an Option granted to an
Agent whose agent’s contract with American Equity is terminated for any


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reason,
with or without cause, shall expire upon such termination and shall thereby be
forfeited; and (b) in the case of the death or Disability of an Optionee, the Option
Period shall expire unless exercised within one (1) year after the date of
death or the cessation of service by the Optionee by reason of the
Disability.  In the event of the death of
the Optionee, his or her 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.


6.2           No Reissuance at Reduced Price.  Notwithstanding anything to the contrary in
this Plan, no Option shall be issued in exchange for or as a reissuance of any
outstanding Option or the Option Price for any 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 or a “Change of Control,” as hereinafter defined.


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:


a.                                       By delivery (including constructive delivery) to the Company
of Shares valued at Fair Market Value on Date of Exercise;


b.                                      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 together with prompt
delivery of cash to the Company.


7.3           Minimum Exercise.  No Option may be exercised for less than one
hundred (100) shares or, if fewer, the number of Shares remaining subject to
the Option.


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.  However, should the agent’s
contract of any Optionee be terminated for any reason (except to the extent
provided in Section 7.6, by reason of death or Disability) with or without
cause, prior to the expiration of six months


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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.


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 shall be accelerated, and/or any other
restrictions on exercise shall be removed:


(i)         The
death of the Optionee;


(ii)        The
Disability of the Optionee;


(iii)       A “Change
of Control” as hereinafter defined.


7.6           Change of Control.  For purposes of this Plan, unless otherwise
defined in an Agreement, a “Change of 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 or
any benefit plan of the Company or any affiliate thereof, 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, corporation or other entity unless the Company or one of its affiliates
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 as are in effect among the stockholders of the Company at the time such
Shares are acquired or as the Committee shall deem appropriate or as are
required by applicable law.


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ARTICLE
IX



CAPITAL ADJUSTMENT


In the event of any change in the outstanding
Common Stock by reason of any stock dividend, splitup (or reverse stock split),
recapitalization, reclassification, reorganization, reincorporation,
combination or exchange of shares, merger, consolidation, liquidation or
similar change in corporate structure, the Committee shall, in its discretion
and to the extent necessary to compensate for the effect thereof, provide for
an equitable 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.


ARTICLE
X



TERMINATION OR AMENDMENT


The Board may amend, alter, suspend or
terminate the Plan in any respect at any time; provided, however, that no
amendment, alteration, suspension or termination of the Plan shall be made by
the Board without approval of each affected Optionee if such amendment,
alteration, suspension or termination would adversely affect his or her vested
rights or obligations under any Option granted prior to the date of such
amendment, alteration, suspension or termination or without shareholder
approval to the extent such approval is required by applicable law or an
exchange, market or other listing requirement. 
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 granted under any other plan of the Company (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 6.2 hereof, any such substituted Options may specify a longer term than
the surrendered options, 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.


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ARTICLE
XIII



TAXES PAYABLE BY AGENT


Any and all taxes and other withholding
obligations payable in connection with or relating to the grant or exercise of
an Option, and/or the sale of any Shares by Optionee, shall be the sole
responsibility of the Optionee.


ARTICLE
XIV



TERM OF THE PLAN


Unless sooner terminated by the Board
pursuant to Article X hereof, the Plan shall terminate on January 1, 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.


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, any Agreement 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 Agent any legal or equitable right against the Company or any
member of the Committee or the Board, except as expressly provided in the Plan.


16.2         No Employment Contract.  The Plan does not constitute inducement or
consideration for the services of any Agent, nor is it a contract between the
Company or American Equity and any Agent. Participation in the Plan shall not
give an Agent any right to be retained under his or her applicable agent’s
contract with American Equity.


16.3         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.


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16.4         Applicable Laws.  The Plan shall be governed, construed and
administered in accordance with the laws of the State of Iowa.


16.5         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.


16.6         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 such 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 and all
applicable listing or exchange requirements.


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AMERICAN EQUITY INVESTMENT LIFE HOLDING
COMPANY

(“AEL”)

INDEPENDENT INSURANCE AGENT STOCK OPTION PLAN


Rules for Option Grants - 2007 Annuity
Production


Qualification Period: 

January 1, 2007 through December 31, 2007


RULES:


1.                                       Plan:       AEL has adopted an Independent Insurance
Agent Stock Option Plan (the “Plan”) under
which independent sales agents of American Equity Investment Life Insurance
Company (“American Equity”) may become eligible
to receive grants of options to acquire shares of the Common Stock of AEL. All
capitalized terms used in these Rules but not defined in this document shall
have the meaning specified in the Plan. 
All provisions of these rules are subject to and governed by the Plan,
and in the event of any conflict between the provisions of these rules and
those of the Plan, the Plan will control.


2.                                       2007
Production Requirements for Option Grants:


                                                                Subject to all terms and
conditions of these Rules and the Plan, Options may be granted to Agents in
accordance with the following tables:


	
  Net Paid Annuity Production

  	
  Basic Grant Eligibility

  
	
  $1,000,000

  	
  250 options

  
	
  Each $100,000 over
  $1,000,000

  	
  25 options

  



 


	
  Net Paid Annuity Production

  	
  Basic Grant Eligibility

  
	
  $2,000,000

  	
  100 options

  
	
  Each $100,000 over
  $2,000,000

  	
  100 options

  



                                                                Net Paid Annuity Production shall include
all first year premium received during the Qualification Period in connection
with any annuity offered and sold by American Equity; provided that, (i) within
the Qualification Period all documentation required to issue any such annuity
shall have been completed and submitted in form and content satisfactory to
American Equity in its sole discretion; (ii) internal roll-over premium shall
be excluded; and (iii) any premium refunded to a policyholder by American
Equity for any reason in its sole discretion shall be excluded.


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3.                                       Conditions:


                                                a.             Agents who are eligible to receive
Options must each sign an Option Agreement in form and content approved by AEL.


                                                b.             Taxes on the exercise of any Option
or the sale of Shares acquired upon the exercise of any Option or otherwise
relating to any Option are the sole responsibility of the Agent.


                                                c.             No Option is transferable.


                                                d.             AEL has no obligation to facilitate
the payment of the exercise price by the Agent.


                                                e.             To be eligible to receive any
Option grant the Agent must have a valid and existing contract with American
Equity and be in good standing with American Equity throughout the
Qualification Period and any applicable vesting period.


6.                                       Right
of Set-Off.  AEL
reserves the right to apply all or any part of any Shares to satisfy any
indebtedness of the Agent to American Equity. Such indebtedness shall include
any debit balance, outstanding loan, indemnification obligation, or any other
debt or charge of any kind owed by the producer to American Equity whenever and
however such debt or charge is or was created.


7.                                       Interpretation.  AEL shall have the sole right to interpret
and administer these Rules, and all such interpretations and actions shall be
binding and conclusive on the Agents.


8.                                       Agents
Contracts.  All terms
and conditions of each Agent’s contract with American Equity are incorporated
by reference in these Rules, including without limitation the requirement for
arbitration of any disputes concerning the interpretation or administration of
these Rules.


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