Document:

Exhibit 10.4

 

AMERICAN
EQUITY INVESTMENT

2003 NMO DEFERRED STOCK COMPENSATION PLAN

 

WHEREAS,  the Board of Directors of American Equity
Investment Life Holding Company (the “Company”)
deems it in the best interest of the Company and its
subsidiary, American Equity Investment Life Insurance Company (“American
Equity”), that certain agents and brokers who solicit
business on behalf of the Company and American Equity 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 establishing a deferred stock compensation
plan pursuant to which agents and brokers meeting certain production goals can
earn credits payable in Common Stock of the Company;

 

NOW,
THEREFORE,  the
Board does hereby adopt this 2003 NMO Deferred Stock Compensation Plan, subject
to the terms and conditions hereinafter set forth.

 

ARTICLE I

GENERAL

 

1.01         Purpose.  The
American Equity Investment 2003 NMO Deferred Stock Compensation Plan (the “Plan”)  is intended to advance the
interests of the Company and its agency force by encouraging and enabling
selected agents and brokers meeting certain production goals to earn credits
payable in Common Stock of the Company.

 

1.02         Definitions.

 

(a)          “Board” means the Board of Directors
of the Company.

 

(b)         “Common Stock” means shares of common stock, $1 par value,
of the Company.

 

(c)          “Deferred Stock Account” shall mean a
bookkeeping entry made by the Company on its books of account, which reflects
the value of the Stock Credits earned by each NMO hereunder. Each NMO shall
have a separate Deferred Stock Account.

 

(d)         “NMO” shall mean each agent or broker
who, at all times during the Qualification Period, has an agency agreement with
American Equity under which the agent or broker is classified as a National
Marketing Organization within American Equity’s hierarchy of agents.

 

(e)          “Participant” shall mean an NMO which
meets the eligibility requirements set forth in Article II below.

 

(f)          “Production” shall mean first year
annuity premiums on new annuity policies of American Equity produced by or
through an NMO, including (i) 100% of all annuity premiums collected on
all annuity policies other than the

SPDA-6, Guarantee Plus 1 and Guarantee Plus 2, (ii) 20% of first year
annuity premiums collected on the SPDA-6 and (iii) 40% of first year
annuity premiums collected on the Guarantee Plus 1 and Guarantee Plus 2.

 

(g)         “Qualification Period” shall mean the
12-month period beginning on January 1, 2003 and ending on December 31,
2003.

 

1

 

(h)           “Stock Credit” shall mean the right to receive shares of
Common Stock at the time specified for distribution thereof in Article IV
below. Stock Credits shall be distributed at the rate of one share of Stock per
each $9.97 (closing price at December 31, 2003) in Stock Credits earned by
a Participant under this Plan.

 

(i)            “Vesting Period” shall mean the
four-year period beginning January 1, 2004 and ending on December 31,
2007.

 

ARTICLE II

ELIGIBILITY

 

An NMO shall be a Participant under this Plan if,
and so long as, such NMO satisfies all of the eligibility requirements set
forth in this Article II:

 

2.01     Valid NMO Contract.     On January 1, 2004, the NMO must
have a valid NMO agency agreement
with American Equity under which no default or other event of termination has
occurred prior to that date.

 

2.02     Minimum Production.     During the Qualification Period, the NMO must
have Production of at least Forty Million Dollars ($40,000,000).

 

ARTICLE III

AWARDS OF STOCK CREDITS

 

3.01     Stock Credits to Deferred Stock Account.   A
Participant shall receive Stock Credits based upon the following formula:

 

	
  Stock Credits:

  	
   

  	
  Participant’s Production during the Qualification Period (as defined
  above)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Multiplied by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One (1) basis point for every million dollars of paid annuity
  premium produced during the qualification period. Minimum premium is $40
  million for 20 basis points and maximum is 40 basis points on $60 million and
  above.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Example: $50 million earns 30 basis points on full $50 million; $60
  million earns 40 basis points on full $60 million.

  

 

3.02     Initial Vesting.   A Participant
who satisfies the Minimum Production requirements set forth in Article II
above shall become vested in his Deferred Stock Account to the extent of
twenty-five percent (25%) on January 1, 2004.

 

3.03     Vesting Period — Production Requirements.   A
Participant who has at least Twenty-Five Million Dollars in new Production per
calendar year within the Vesting Period shall become vested in his Deferred
Stock Account to the extent of an additional twenty-five percent (25%) per year
for up to three (3) years.

 

3.04     Automatic Vesting.   In the event
of the Participant’s death or disability within the Vesting Period, the
Participant automatically shall become One Hundred Percent (100%) vested in
Participant’s Deferred Stock Account. Disability shall be deemed to have
occurred upon the written certification of

 

2

 

Participant’s physician that Participant is and will
be permanently and continuously disabled, either mentally or physically, and,
as a result, is unable to carry out Participant’s duties as an NMO of American
Equity.

 

3.05         Non-transferability.  No Stock Credit
shall be transferable or assignable by a Participant, otherwise than by will or
the laws of descent and distribution. No Stock Credit shall be pledged or
hypothecated in any way and no Stock Credit shall be subject to execution,
attachment or similar process.

 

ARTICLE IV

DISTRIBUTION

 

4.01           Distribution
of Stock.  Within ninety (90) days after the occurrence of the earlier of the
following, the Company will issue and distribute to Participant or Participant’s
designated beneficiary the number of shares of Common Stock equal to the
quotient of the vested portion of the Participant’s Deferred Stock Account
divided by $9.97, which is the value per share of the Common Stock as of December 31,
2003.

 

	
  (a)

  	
   

  	
  As determined by
  the Board of Directors;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  The expiration of
  five years after the end of the Vesting Period;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Participant’s
  death or disability, as defined above.

  

 

4.02           Taxation.  Each
Participant and/or Participant’s heirs, executors or administrators shall be
responsible for payment of all taxes of any kind, whenever such taxes may be
imposed, on the value of the Common Stock to which Participant may become
entitled under this Plan.

 

ARTICLE V

MISCELLANEOUS

 

5.01         Independent
Agency Relationship.  Nothing in this Plan shall be
interpreted as changing the independent contractor status of the NMO as to NMO’s
relationship with the Company and American Equity nor shall this Plan be
interpreted as altering in any manner the contractual relationships the NMO has
entered into with the Company separate from this Plan, except as specifically
provided herein.

 

5.02         No
Rights to Assets.  Nothing in this Plan shall be
interpreted as giving the NMO any rights to any assets of the Company,
including any assets the Company may acquire to assist in funding its
obligations hereunder. The NMO’s status with respect to any amount due NMO
under this Plan from the Company shall be that of a general creditor of the
Company.

 

5.03         Severability.  Any
provision of this Plan which shall prove to be invalid, void or illegal shall
in no way affect, impair or invalidate any other provision contained herein,
and such other provisions shall remain in full force and effect.

 

5.04         Binding
Effect.  This Plan shall be binding upon the parties
hereto, their heirs, assigns, successors, executors and administrators. None of
the payments provided for in this Plan, nor the Deferred  Compensation Account, shall be subject to
seizure for payment of any debts or judgments against the NMO or any
beneficiary, nor shall the NMO or any beneficiary have any right to transfer,
modify, anticipate, assign or encumber any rights or benefits hereunder.

 

5.05         Governing
Law.  This Plan shall be governed and interpreted in
accordance with the laws of the State of Iowa.

 

3

 

5.06         Amendment.  This Plan may be amended at any time
by the Board effective upon written notification to the Participants of any
such amendments. No amendment shall impair any Participant’s vested rights
hereunder.

 

5.07         Adjustments.  Whenever a stock split, stock dividend or other similar change in
capitalization of the Company occurs, the Stock Credits of the NMO and the
applicable rate of distribution of such Stock Credits shall be appropriately
adjusted to maintain the NMO’s proportionate amount of Stock Credit in an
amount and at a value equivalent to that which would have been distributable
prior to the applicable change in capitalization.

 

5.08         Right of Offset.  In the event that a Participant, or the NMO with which the Participant is associated,
owes any amount to the Company or any of its subsidiaries, or has any other
outstanding indebtedness or obligation to the Company or its subsidiaries, then
Company, in its sole discretion, may (i) withhold any distribution of
Stock to Participant until such amount, indebtedness or obligation is satisfied
in full or (ii) apply as an offset the value of Participant’s Stock
Credits and/or, the value of Participant’s Stock, if distributable, against all
or any part of such amount, indebtedness or obligation. For purposes of the
proceeding sentence, the Company in its sole discretion shall determine the
value of Stock Credits or Stock.

 

 

	
   

  	
  AMERICAN EQUITY INVESTMENT

  
	
   

  	
  LIFE HOLDING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  D.J. Noble,
  Chairman & President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  

 

SCHEDULE OF STOCK CREDIT

PARTICIPATION

 

	
   

  	
   

  	
   

  	
  Percentage of Total

  	
   

  	
   

  	
   

  
	
  Participant’s Name

  	
   

  	
  Stock Credit 

  	
   

  	
  Participant’s Beneficiary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Total 

  	
  100

  	
  %

  	
   

  	
   

  
								

 

4Exhibit 10.5

 

AMERICAN
EQUITY INVESTMENT

2002 NMO
DEFERRED STOCK COMPENSATION PLAN

 

WHEREAS, the Board of
Directors of American Equity Investment Life Holding Company (the “Company”) deems it in the best interest of
the Company and its subsidiary, American Equity Investment Life Insurance
Company (“American Equity”), that
certain agents and brokers who solicit business on behalf of the Company and
American Equity 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 establishing a
deferred stock compensation plan pursuant to which agents and brokers meeting
certain production goals can earn credits payable in Common Stock of the
Company;

 

NOW, THEREFORE, the Board
does hereby adopt this 2002 NMO Deferred Stock Compensation Plan, subject to
the terms and conditions hereinafter set forth.

 

ARTICLE I

GENERAL

 

1.01           Purpose.  The
American Equity Investment 2002 NMO Deferred Stock Compensation Plan (the “Plan”) is intended to advance the interests
of the Company and its agency force by encouraging and enabling selected agents
and brokers meeting certain production goals to earn credits payable in Common
Stock of the Company.

 

1.02           Definitions.

 

(a)           “Board”
means the Board of Directors of the Company.

 

(b)           “Common
Stock” means shares of common stock, $1 par value, of the Company.

 

(c)           “Deferred
Stock Account” shall mean a bookkeeping entry made by the Company on its books
of account, which reflects the value of the Stock Credits earned by each NMO
hereunder. Each NMO shall have a separate Deferred Stock Account.

 

(d)           “NMO”
shall mean each agent or broker who, at all times during the Qualification
Period, has an agency agreement with American Equity under which the agent or
broker is classified as a National Marketing Organization within American
Equity’s hierarchy of agents.

 

(e)           “Participant”
shall mean an NMO which meets the eligibility requirements set forth in Article II
below.

 

(f)            “Production”
shall mean first year annuity premiums on new annuity policies of American
Equity produced by or through an NMO, including (i) 100% of all annuity
premiums collected on all annuity policies other than the SPDA-6 and (ii) 20%
of first year annuity premiums collected on the SPDA-6.

 

(g)           “Qualification
Period” shall mean the 12-month period beginning on January 1, 2002 and
ending on December 31, 2002.

 

(h)           “Stock
Credit” shall mean the right to receive shares of Common Stock at the time

 

1

 

specified for distribution thereof in Article IV
below. Stock Credits shall be distributed at the rate of one share of Stock per
each $6.50 in Stock Credits earned by a Participant under this Plan.

 

(i)            “Vesting
Period” shall mean the four-year period beginning January 1, 2003 and ending
on December 31, 2006.

 

ARTICLE II

ELIGIBILITY

 

An NMO shall be a
Participant under this Plan if, and so long as, such NMO satisfies all of the
eligibility requirements set forth in this Article II:

 

2.01           Valid
NMO Contract.  On January 1, 2003, the NMO must have a valid NMO agency
agreement with American Equity under which no default or other event of termination
has occurred prior to that date.

 

2.02           Minimum
Production.  During the Qualification Period, the NMO must
have Production of at
least Twenty-Five Million Dollars ($25,000,000).

 

ARTICLE III

AWARDS OF STOCK CREDITS

 

3.01           Stock
Credits to Deferred Stock Account.  A Participant shall
receive Stock Credits based upon the following formula:

 

	
  Stock Credits:

  	
   

  	
  Participant’s Production during the
  Qualification Period (as defined above)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Multiplied
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One (1) basis point for every million
  dollars of paid annuity premium produced during the qualification period.
  Minimum premium is $25 million for 25 basis points and maximum is 40 basis
  points on $40 million and above.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Example:  $25 million earns 25 basis points on full
  $25 million; $40 million earns 40 basis points on full $40 million.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note:     Only 20% of
  first-year premiums on the SPDA-6 are included in Production and only 40% of
  first year annuity premiums on the Guarantee Plus 1 and Guarantee Plus 2 are
  included in the Production.

  
	
   

  	
   

  	
   

  

3.02           Initial
Vesting.  A Participant who satisfies the Minimum
Production requirements set forth in Article II above shall become vested
in his Deferred Stock Account to the extent of twenty-five percent (25%) on January 1,
2003.

 

3.03           Vesting
Period – Production Requirements.  A Participant who has
at least Twenty-Five Million Dollars in new Production per calendar year within
the Vesting Period shall become vested in his Deferred Stock Account to the
extent of an additional twenty-five percent (25%) per year for up to three (3) years.

 

3.04           Automatic
Vesting.  In the event of the Participant’s death or
disability within the Vesting Period, the Participant automatically shall
become One Hundred Percent (100%) vested in Participant’s

 

2

 

Deferred
Stock Account. Disability shall be deemed to have occurred upon the written
certification of Participant’s physician that Participant is and will be
permanently and continuously disabled, either mentally or physically, and, as a
result, is unable to carry out Participant’s duties as an NMO of American
Equity.

 

3.05           Non-transferability.  No
Stock Credit shall be transferable or assignable by a Participant, otherwise
than by will or the laws of descent and distribution. No Stock Credit shall be
pledged or hypothecated in any way and no Stock Credit shall be subject to
execution, attachment or similar process.

 

ARTICLE IV

DISTRIBUTION

 

4.01           Distribution
of Stock.  Within ninety (90) days after the occurrence of the earlier of the
following, the Company will issue and distribute to Participant or Participant’s
designated beneficiary the number of shares of Common Stock equal to the
quotient of the vested portion of the Participant’s Deferred Stock Account
divided by $6.50, which is the value per share of the Common Stock as of June 6,
2002.

 

	
  (a)

  	
   

  	
  As determined by the Board of Directors;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  The expiration of five years after the end
  of the Vesting Period;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Participant’s death or disability, as
  defined above.

  
	
   

  	
   

  	
   

  

 

4.02           Taxation.  Each Participant and/or Participant’s
heirs, executors or administrators shall be responsible for payment of all
taxes of any kind, whenever such taxes may be imposed, on the value of the
Common Stock to which Participant may become entitled under this Plan.

 

ARTICLE V

MISCELLANEOUS

 

5.01           Independent Agency
Relationship.  Nothing  in this Plan shall be interpreted
as changing the independent contractor status of the NMO as to NMO’s
relationship with the Company and American Equity nor shall this Plan be
interpreted as altering in any manner the contractual relationships the NMO has
entered into with the Company separate from this Plan, except as specifically
provided herein.

 

5.02           No Rights to Assets. Nothing
in this Plan shall be interpreted as giving the NMO any rights to any assets of
the Company, including any assets the Company may acquire to assist in funding
its obligations hereunder. The NMO’s status with respect to any amount due NMO
under this Plan from the Company shall be that of a general creditor of the
Company.

 

5.03           Severability. Any
provision of this Plan which shall prove to be invalid, void or illegal shall
in no way affect, impair or invalidate any other provision contained herein,
and such other provisions shall remain in full force and effect.

 

5.04           Binding Effect. This
Plan shall be binding upon the parties hereto, their heirs, assigns,
successors, executors and administrators. None of the payments provided for in
this Plan, nor the Deferred Compensation Account, shall be subject to seizure for payment of any debts or judgments against the
NMO or any beneficiary, nor shall the NMO or any beneficiary have any right to
transfer, modify, anticipate, assign or encumber any rights or benefits
hereunder.

 

5.05           Governing Law. This
Plan shall be governed and interpreted in accordance with the laws

 

3

 

of
the State of Iowa.

 

5.06           Amendment. This
Plan may be amended at any time by the Board effective upon written
notification to the Participants of any such amendments. No amendment shall
impair any Participant’s vested rights hereunder.

 

5.07           Adjustments. Whenever
a stock split, stock dividend or other similar change in capitalization of the
Company occurs, the Stock Credits of the NMO and the applicable rate of
distribution of such Stock Credits shall be appropriately adjusted to maintain
the NMO’s proportionate amount of Stock Credit in an amount and at a value
equivalent to that which would have been distributable prior to the applicable
change in capitalization.

 

5.08           Right of Offset. In
the event that a Participant, or the NMO with which the Participant is
associated, owes any amount to the Company or any of its subsidiaries, or has
any other outstanding indebtedness or obligation to the Company or its
subsidiaries, then Company, in its sole discretion, may (i) withhold any
distribution of Stock to Participant until such amount, indebtedness or
obligation is satisfied in full or (ii) apply as an offset the value of
Participant’s Stock Credits and/or, the value
of Participant’s Stock, if distributable, against all or any part of
such amount, indebtedness or obligation. For purposes of the proceeding
sentence, the Company in its sole discretion shall determine the value of Stock
Credits or Stock.

 

 

	
   

  	
   

  	
  AMERICAN EQUITY INVESTMENT

  
	
   

  	
   

  	
  LIFE HOLDING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  D.J. Noble,
  Chairman & President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NMO: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

SCHEDULE OF STOCK CREDIT

PARTICIPATION

 

	
   

  	
   

  	
   

  	
  Percentage of Total

  	
   

  	
   

  	
   

  	
   

  	 

	
  Participant’s Name

  	
   

  	
  Stock Credit

  	
   

  	
   

  	
  Participant’s Beneficiary

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  4.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  5.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Total

  	
  100

  	
  %

  	
   

  	
   

  	
   

  	
   

  
										

 

4

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