ex10-2.htm


     

    Exhibit
10.2

     

    AMERICAN
EQUITY INVESTMENT

    1996
STOCK OPTION PLAN

     

    (Amended
December 29, 2008)

     

    WHEREAS,
the Board of Directors of the Company deems it in the best interest of the
Company that certain employees and officers of the Company and its Subsidiary 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 incentive or nonqualified stock options to employees and officers
designated from time to time, pursuant to this Plan; and

     

    WHEREAS,
the Board has determined to grant certain directors of the Company compensation
in the form of nonqualified stock options pursuant to separate provisions within
this Plan;

     

    NOW,
THEREFORE, the Board does hereby adopt this Stock Option Plan, subject to
approval, within twelve (12) months of the date of adoption, by at least a
majority of the shares voting at a shareholder's meeting, and subject to any
necessary authorizations from any governmental authority.

     

    ARTICLE I

     

    GENERAL

     

    1.01    
Purpose. American Equity Investment 1996 Stock
Option Plan (the "Plan") is intended to advance the interests of American Equity
Investment Life Holding Company (the "Company"), its shareholders and its
Subsidiary by encouraging and enabling selected employees and officers upon whose judgment, initiative
and effort the Company is largely dependent for the successful conduct of its
business, to acquire and retain a proprietary interest in the Company by
ownership of its stock. The Plan also contains separate provisions under which directors are entitled to
acquire stock ownership through options granted on a formula
basis.

     

    1.02    
Definitions.

     

    (a)         "Board" means the Board of Directors of
the Company.

     

    (b)         "Code" shall mean the Internal Revenue
Code of 1986, as amended.

     

    (c)         "Committee" means the body administering the
Plan.

     

    (d)         "Common Stock" means shares of common
stock, $1 par value, of the Company.

     

    (e)         "Date of Grant" means the date on which
an option is granted under the Plan.

     

    (f)         "Incentive Stock Option" means an option
granted under Article II of the Plan. Incentive Stock Options granted
under the Plan are intended to be options which meet the requirements of Section
422A of the Internal Revenue Code of 1986 (the "Code"), as
amended.

     

    (g)         "Option" means any option granted under
the Plan.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)         "Optionee" means a person to whom an Option, which has
not expired, has been granted under the Plan.

     

    (i)         "Participant" means a person to whom one
or more Options have been granted that have not been forfeited or terminated
under the Plan.

     

    (j)         "Nonqualified Stock Option" means an
option granted under
Article III of the Plan.

     

    (k)         "Subsidiary" or "Subsidiaries" means a
subsidiary corporation or corporations of the Company as defined in Section 424
of the Code.

     

    (l)         All personal pronouns used herein are
intended to be gender
neutral.

     

    1.03     Administration of Plan.

     

    (a)         The Plan shall be administered by the
Board, if all members of the Board are disinterested persons, as hereinafter
defined, or by a Committee of two or more members of the Board, each of whom is
a disinterested person. If the Plan is administered by a Committee, it shall report all
action taken by it to the Board. The Committee shall have full and final
authority in its discretion, subject to the provisions of the Plan, to determine
the individuals to whom and the time or times at which Options shall be granted; to determine the
number of shares and the purchase price of the Common Stock covered by each such
Option; to construe and interpret the Plan; to determine the terms and
provisions of the Option agreements, which need not be identical, including, but without limitation, the
time and manner in which each Option shall be exercisable, and the terms
covering the payment of the Option price; and to make all other determinations
and take all other actions deemed necessary or advisable for the proper administration of the Plan. All
such actions and determinations shall be conclusively binding for all purposes
and upon all persons.

     

    (b)         For purposes of this Agreement, the term
"disinterested person" shall mean a member of the Board who was not, during
the one-year period prior
to service as an administrator of the Plan, or during such service, granted or
awarded equity securities pursuant to the Plan or any other plan of the Company,
or any of its affiliates, except that:

     

    (i)     
 participation in a formula
plan meeting the conditions
of Rule 16b-3(c)(2)(ii) (formula awards) promulgated by the Securities and
Exchange Commission ("SEC") shall not disqualify a director from being a
disinterested person;

     

    (ii)      participation in an ongoing securities
acquisition plan meeting
the conditions of Rule 16b-3(d)(2)(i) (thrift and savings plans) shall not
disqualify a director from being a disinterested person;

     

    (iii)     an election to receive an annual
retainer fee either in cash or in an equivalent amount of securities, or partly
in cash and partly in
securities, shall not disqualify a director from being a disinterested
person;

     

    (iv)     administering another plan that does not
permit participation by members of the Board shall not disqualify a director
from administering this Plan.

     

    The
foregoing definition of a "disinterested person" is intended to comply with the
requirements of Rule 16b-3(c)(2) and shall be deemed automatically amended to
comply with any changes in such Rule which may hereafter be adopted by the
SEC.

     

     

    
      
        
        

      

      
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    (c)         Administration of the Plan by
the Committee is applicable
only to grants and awards of Options made pursuant to Articles II and III below.
Directors who are not otherwise employed by the Company are not entitled to
participate in grants and awards made under such Articles.

     

    1.04     Stock Subject to Options. The maximum number of
shares of Common Stock which may be issued upon the exercise of Options granted
under the Plan shall be 400,000, subject to adjustment under the provisions of
Section 5.03. The shares of Common Stock to be issued upon the exercise of Options may be authorized
but unissued shares, shares issued and reacquired by the Company or shares
bought on the market for the purposes of the Plan. In the event any Option
shall, for any reason, terminate or expire or be surrendered without having been exercised in full, the
shares subject to such Option but not purchased thereunder shall again be
available for Options to be granted under the Plan.

     

    1.05    
Participants. Except with respect
to Directors Options granted pursuant to Article IV below, Participants in the Plan shall be
selected by the Committee from the officers and other key employees of the
Company and/or its Subsidiaries who occupy responsible managerial or
professional positions and who have the capability of making a substantial
contribution to the success of the
Company. In making this selection and in determining the form and amount of
awards, the Committee shall consider any factors deemed relevant, including the
individual's functions, responsibilities, value of services to the Company in the past and potential
contributions to the Company's profitability and sound growth. The Committee's
determinations under the Plan (including without limitation determinations of
the persons to receive awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing same) need not be uniform and may be
made by it selectively among persons who receive or are eligible to receive
awards under the Plan whether or not such persons are similarly situated.

     

    1.06     Types of Awards under Plan. Awards under
the Plan may be in the form of any one or more of the
following:

     

    (a)         Incentive Stock Options as described in
Article II;

     

    (b)         Nonqualified Stock Options as described
in Article III;

     

    The
formula grant of Options to Directors under Article IV shall be treated as a
separate part of this Plan.

     

    ARTICLE II

     

    INCENTIVE STOCK
OPTIONS

     

    2.01     Award of Incentive Stock Options. The
Committee may, from time to time and subject to the provisions of the Plan and
such other terms and conditions as the Committee may prescribe, grant to
any Participant in the Plan one or more Incentive Stock Options (intended to
qualify as such under the provisions of Section 422A of the Code) to purchase
the number of shares of Common Stock designated in the Options allotted by the Committee. Any Option
granted pursuant to this Article II shall be designated as an "Incentive Stock
Option."

     

    2.02     Terms and Conditions of Incentive Stock
Options. Any Incentive Stock Option granted under the Plan shall be evidenced by
an agreement executed by
the Company and the applicable employee and shall contain such terms and be in
such form as the Committee may from time to time approve, subject to the
following limitations and conditions:

     

    (a)         Option Price. The option price per share
with respect to each
Incentive Stock Option shall be determined by the Committee but shall in no
instance be less than 100% of the fair market value of a share of Common Stock
on the Date of Grant and shall be paid in either cash or Common Stock. For the
purpose hereof, fair market value shall be the
last sale price on any national exchange or 

     

     

    
      
        
        

      

      
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    quotation system on the Date of Grant
or, if the shares are not so traded, a similar measure of value as may be
determined by the Committee in its sole discretion.

     

    (b)         Exercise of Options. An Option shall be exercised
by a Participant by giving written notification to the Secretary of the Company
(or other person designated by the Committee to receive such notice) of the
Participant's exercise of such Option. Such notice shall specify the number of shares and the Date of
Grant of the Option being exercised.

     

    (c)         Option Term. Options may be granted for
a ten (10) year term. Each Option may be exercisable from time to time over a
period commencing six (6) months after the Date of Grant and ending ten (10) years after the Date of
Grant.

     

    (d)         Limitation on Exercise of Options. No
Option may be exercised for less than ten (10) shares, subject to adjustment
under Section 5.03. The aggregate fair market value (determined as of the time
the Option is granted) of
all shares of Common Stock which may be acquired upon the exercise of Options
which first become exercisable in any calendar year pursuant to the terms of an
Incentive Stock Option granted to an Optionee under the Plan or any other
incentive stock option plan of the Company, shall
not exceed $100,000, as set forth in §422A of the Code, as amended. In
addition, the Committee may, in its discretion, set additional restrictions with
respect to the exercise of Options.

     

    (e)         Nontransferability of
Options. No Option shall be
transferable or assignable by an Optionee, otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code. Each Option shall be exercisable, during the
Optionee's lifetime, only by the Optionee, his
guardian or legal representative. No Option shall be pledged or hypothecated in
any way and no Option shall be subject to execution, attachment or similar
process except with the express consent of the Committee.

     

    (f)         Termination of Employment. Unless otherwise
determined by the Committee, upon termination of an Optionee's employment with
the Company, or the relevant Subsidiary, his or her Option 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 Option 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 Option beyond the period of time as set out above in
Section 2.02(c).

     

    (g)         Disability or Death of Optionee. If an
Optionee's employment with the Company is terminated because of his death or
disability, his Option privileges shall expire unless exercised within one (1)
year after the date that
his employment was terminated. In the event of the death of the Optionee, his
Options may be exercised by the Optionee's designated beneficiary. Nothing
contained herein shall be construed to extend the ultimate term of the Option
beyond the period of time as set out above in
Section 2.02(c).

     

     

    ARTICLE III

     

    NONQUALIFIED STOCK
OPTIONS

     

    3.01     Award of Nonqualified Stock Options. The
Committee may, from time to time, and subject to the provisions of the Plan, and
such other terms and conditions as the Committee may prescribe, grant to any Participant
in the Plan one or more Nonqualified Stock Options to purchase the number of
shares of Common Stock designated in the Options allotted by the Committee. Any
Option granted pursuant to this Article III shall be designated as a "Nonqualified Stock
Option."

     

    3.02    
Terms and Conditions of
Nonqualified Stock Options. Any Nonqualified Stock Option granted under the Plan
shall be evidenced by an agreement executed by the Company and the applicable
employee and shall contain such terms and be in such form as the Committee
may from time to time approve, subject to the following limitations and
conditions:

     

     

    
      
        
        

      

      
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    (a)         Option Price. The option price per share
with respect to each Option shall be determined by the Committee but shall in no
instance be less than 100%
of the fair market value of a share of Common Stock on the Date of Grant and
shall be paid in either cash or Common Stock. For the purpose hereof, fair
market value shall be the last sale price on any national exchange or quotation
system on the Date of Grant or, if the shares
are not so traded, a similar measure of value as may be determined by the
Committee in its sole discretion.

     

    (b)         Exercise of Options. An Option shall be
exercised by a Participant by giving written notification to the
Secretary of the Company
(or other person designated by the Committee to receive such notice) of the
Participant's exercise of such Option. Such notice shall specify the number of
shares and the Date of Grant of the Option being exercised.

     

    (c)         Option Term. Options may be granted for a ten (10) year
term. Each Option may be exercisable from time to time over a period commencing
six (6) months after the Date of Grant and ending ten (10) years after the Date
of Grant.

     

    (d)         Limitation on Exercise of Options. No
Option may be exercised for
less than ten (10) shares, subject to adjustment under Section 5.03. In
addition, the Committee may, in its discretion, set additional restrictions with
respect to the exercise of the Options.

     

    (e)         Nontransferability of Options. No Option
shall be transferable or
assignable by an Optionee, otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code. Each Option shall be exercisable, during the Optionee's lifetime,
only by the Optionee, his guardian or legal
representative. No Option shall be pledged or hypothecated in any way and no
Option shall be subject to execution, attachment or similar process except with
the express consent of the Committee.

     

    (f)         Termination of Employment. Unless otherwise determined by the
Committee, upon termination of an Optionee's employment with the Company, or the
relevant Subsidiary, his or her Option 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
Option 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 Option beyond the period of time as set out above in Section
3.02(c).

     

    (g)         Disability or Death of Optionee. If an
Optionee's employment with the Company is terminated because of his death or
disability, his Option privileges shall expire unless exercised within one (1)
year after the date that his employment was terminated. In the
event of the death of the Optionee, his Options may be exercised by the
Optionee's designated beneficiary. Nothing contained herein shall be construed
to extend the ultimate term of the Option beyond the period of time as set out above in Section
3.02(c).

     

     

    ARTICLE IV

     

    DIRECTORS
OPTIONS

     

    4.01     Grant of Options to Directors. Any
person who is a Director of the Company but not also an employee of the Company
shall be entitled to receive a grant of nonqualified stock options for -0-
shares of Common Stock per
year, subject to adjustment under Section 5.03. Each grant of such Options shall
be made on the first business day of the month following the month in which the
Company's Annual Meeting of Stockholders is held.

     

    4.02     Terms and Conditions of Options. Any Option granted under the Plan
shall be evidenced by an agreement executed by the Company and the applicable
Director and shall contain the following limitations and
conditions:

     

     

    
      
        
        

      

      
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    (a)         Option Price. The option price per share
with respect to each Option
shall be the fair market value of a share of the Common stock on the Date of
Grant and shall be paid in either cash or Common Stock. For the purpose hereof,
fair market value shall be the last sale price on any national exchange or
quotation system on the Date of Grant or, if not so traded, a
similar measure of value as determined by the Committee in its sole
discretion.

     

    (b)         Option Term. Options may be granted for
a ten (10) year term. Each Option may be exercisable from time to time over a
period commencing six (6)
months after the Date of Grant and ending ten (10) years after the Date of
Grant.

     

    (c)         Limitation on Exercise of Options. No
Option may be exercised for less than ten (10) shares.

     

    (d)         Nontransferability of Option. No Option
shall be transferable or assignable by an Optionee, otherwise than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code. Each Option shall be exercisable, during
the Optionee's lifetime, only by the Optionee, his guardian or legal representative. No Option
shall be pledged or hypothecated in any way and no Option shall be subject to
execution, attachment or similar process except with the express consent of the
Board.

     

    (e)         Termination of Directorship. Upon
termination of an Optionee's directorship with the Company
for any reason, including without limitation the Optionee's death or disability,
his Option privileges shall expire one (1) year from such date. In the event of
the death of the Optionee, his Options may be exercised by 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 in Section
4.02(b).

     

     

    ARTICLE V

     

    MISCELLANEOUS

     

    5.01    
Acceleration of
Vesting.

     

    (a)         If an Option contains a vesting schedule or has not become totally
exercisable as of the date of any of the following events, such vesting schedule
may be accelerated, and/or any other restrictions to exercise may be removed
upon delivery to the Committee of a written election of such acceleration by the Optionee (or the
designated beneficiary of a deceased Optionee):

     

    (i)      The death of the
Optionee;

     

    (ii)      The disability of the
Optionee;

     

    (iii)     A "change of control" as hereinafter
defined.

     

    (b)         For purposes of this Agreement, a
"change in control" shall be deemed to have occurred on such date
if:

     

    (i)      any person, organization or association
of persons or organizations acting in concert, excluding affiliates of the
Company itself, shall acquire more than twenty percent (20%) of the outstanding
voting stock of the Company
in whole or in part by means of an offer made publicly to the holders of all or
substantially all of the outstanding shares of any one or more classes of the
voting securities of the Company to acquire such shares for cash, other property
or a combination thereof; or

     

     

    
      
        
        

      

      
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    (ii)      any person, organization or association
of persons or organizations acting in concert shall succeed in electing two or
more directors in any one election in opposition to those proposed by
management; or

     

    (iii)     the Company transfers all or
substantially all of its
operating properties and assets to another person, organization or association
of persons or organizations, excluding affiliates of the Company itself;
or

     

    (iv)     the Company shall consolidate with or
merge into any person, firm or corporation unless the Company or a Subsidiary
shall be the continuing corporation or the successor
corporation;

     

    5.02    
Individuals With More than 10%
Ownership. No Option will be granted to an individual who at the time of the
grant owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company.

     

    5.03     Adjustments.

     

    (a)         In the event that the outstanding shares
of Common Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares, reorganization, tender
offer or dividend or other distribution payable in capital stock,
appropriate adjustment shall be made by the
Committee in the number and kind of shares on which Options may be granted under
the Plan, including without limitation, the number of shares on which Options
are to be granted annually to Directors under Section 4.01. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which Options, or
portions thereof are then unexercised, to the end that the proportionate
interest of the holder of the Option shall, to the extent practicable, be maintained as before the
occurrence of such event. Such adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of the
Option but with a corresponding adjustment in the Option price per share.

     

    (b)         In the event of the dissolution or
liquidation of the Company, any Option granted under the Plan shall terminate as
of a date to be fixed by the Committee, provided that not less than thirty (30)
days written notice of the date so fixed shall be given to each Optionee and each such
person shall have the right during such period to exercise his Options as to all
or any part of the shares covered thereby including shares as to which such
Options would not otherwise be exercisable by reason of an insufficient lapse of
time.

     

    (c)         Adjustments and determinations under
this Section 5.03 shall be made by the Committee, whose decisions as to what
adjustments or determinations shall be made, and the extent thereof, shall be
final, binding and conclusive.

     

    5.04     Restrictions on Issuing Shares. The exercise of
each Option shall be subject to the condition that if at any time the Company
shall determine in its discretion that the satisfaction of withholding tax or
other withholding liabilities, or that the listing, registration or qualification of any securities
exchange or under any state or federal law, or that the consent or approval of
any regulatory body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares pursuant thereto, then in any such
event, such exercise shall not be effective unless such withholding, listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.

     

    5.05     Use of Proceeds. The proceeds received
by the Company from the sale of Common Stock pursuant to the exercise of Options
granted under the Plan shall be added to the Company's general funds and used
for general corporate purposes. If stock is received, it shall be held in the treasury and used
as the Company decides.

     

     

    
      
        
        

      

      
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    5.06     Right to Terminate Employment. Nothing
in the Plan or in any agreement entered into pursuant to the Plan shall confer
upon any Participant the right to continue in the employment of the
Company or to affect any
right which the Company may have to terminate the employment of such
Participant.

     

    5.07     Amendment, Suspension and Termination of
Plan. The Board may at any time suspend or terminate the Plan or may amend it
from time to time in such respects as the Board may deem advisable in order
that the Options granted thereunder may conform to any changes in the law or in
any other respect which the Board may deem to be in the best interests of the
Company; provided, however, that the Plan may not be amended more than once during any six-month
period, except if necessary to comply with the Code or ERISA, and that, without
approval by the shareholders of the Company representing a majority of the
voting power present at a duly called meeting, no such amendment shall (a) except as specified in
Section 5.03, increase or decrease the number of shares for which Options may be
granted under the Plan; (b) change the provisions of Section 1.05 relating to
whom may be granted Options; (c) change the provisions of Sections 1.02(a), 1.02(k), 2.02(a) and
3.02(a) relating to the establishment of the Option price; (d) change the
provisions of Sections 2.02(c) or 3.02(b) relating to the expiration date of
each Option; (e) change the provisions of this Section relating to
the term of this Plan, or (f) otherwise
materially increase the benefits accruing to Participants under the Plan. Unless
the Plan shall theretofore have been terminated by the Board, the Plan shall
terminate on the 18th day of January, 2006. No Option may be granted during any suspension or after
the termination of the Plan. No amendment, suspension, or termination of the
Plan shall, without a Participant's consent, alter or impair any of the rights
or obligations under any Option theretofore granted to such Participant under the
Plan.

     

    5.08     Cash or Property Bonus. The Board, in
its sole and absolute discretion, may at any time including but not limited to
the time of exercise, authorize a taxable cash or property bonus to be paid a
Participant who is not a Director. The amount of the bonus, if any, shall
be determined by the Board. The property transferred at exercise is subject to
Section 61 and Section 83 of the Code, as amended.

     

    5.09     Effective Date of Plan and Shareholder
Approval. The effective date of the Plan is the 18th day of January, 1996, the date of
its approval by the Board; however, if the Plan is not approved and ratified by
the shareholders of the Company within twelve (12) months from the date the Plan
was adopted and approved by the Board, the Plan shall terminate and any Options granted
thereunder shall be void and have no force or effect.

     

    Dated this 18th day of January,
1996.

    
    

     

    
      	 	 	
              By:   

            	/s/
      D.J. Noble	 
	 	 	 	D.J.
      Noble, President	 


    

     

     

    ATTEST:

     

    /s/ Wendy L.
Carlson                                           

     

     

     

     

     

     

     

     

     

     

     

     

    


     

    
      	
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