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


 


9

















 


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.


 


11

















 


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,


 


12

















 


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


 


13

















 


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.


 


14

















 


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.


 


15