Document:

Exhibit 10.5

 

EMPLOYEE STOCK OPTION AGREEMENT

 

THIS
EMPLOYEE STOCK OPTION AGREEMENT, hereinafter referred to as
the “Option” or the “Agreement,” is made effective as of the 31st
day of December, 2004, between American Equity Investment Life Holding Company
(the “Company”) and, -Jim Gerlach-  (the “Optionee”).

 

The Company hereby grants an option of -17,500- shares
of common stock of the Company, $1.00 par value per share (“Stock”), to the
Optionee at the price and in all respects subject to the terms, definitions and
provisions of the Agreement, and the Employee Stock Option Plan, adopted by the
Company effective July 1, 2000, as amended (the “Plan”), the terms and
definitions of which are incorporated herein, unless the context implies
otherwise.

 

1.               Option Price.  The option price is $10.77 for each share, the price being at
least 100% of the fair market value as determined by the Board of Directors, of
a share of the Stock on the date of the grant of this Option.

 

2.               Exercise of Option and Vesting Schedule.  This Option is granted for a ten (10) year
term and, therefore, may not be exercised after the expiration of ten (10) years
from the date that it is granted.  This
Option shall become exercisable at any time subject to terms of this Agreement
and applicable law.

 

(a)                                  Vesting Schedule.  This
Option will vest on the last day of the sixth full month after the date of this
Agreement.  Should the employment of the
Optionee be terminated with or without cause (except for death or disability)
prior to the date of vesting, then Optionee will forfeit all rights under this
Agreement.

 

(b)                                 Right to Exercise. 
This Option shall be exercisable during the term of the Option, by the Optionee:

 

(i)                                   While
the Optionee is employed by the Company, or within thirty (30) days of the
termination of Optionee’s employment; provided that in the event the Optionee’s
employment with the Company is terminated because of disability, as that term
is defined in Section 105(d) (4) of the Internal Revenue Code,
as amended (the “Code”), the Option privileges, with respect to the shares
purchasable by the Optionee as of the date that the Optionee’s employment is
terminated, may be exercised by the Optionee within one (1) year after the
termination of the Optionee’s employment by the Company.  However, nothing contained within this
statement shall be construed to extend the ultimate term of this Option beyond
the period of time as set out above in paragraph 2.

 

(ii)                                If
the Optionee should die during the option period while employed by the Company,
the option privileges may be exercised in full by the legal representative of
the Optionee’s estate, or by the person or persons to whom the Optionee’s
rights under the Option shall have passed by will or the laws of descent and
distribution within one (1) year after the Optionee’s date of death.  However, nothing contained within this
statement shall be construed to extend the ultimate term of this Option beyond
the period of time as set out above in paragraph 2.

 

(c)                                  Restrictions on Exercise.  The
minimum number of shares for which this Option may be exercised is 50
shares.  In addition, as a condition to
the Optionee’s exercise of this option, the Company may require the person
exercising this Option to execute any buy-sell agreement in effect between the
Company and its shareholders and to made such representations or warranties to
the Company as may be required by applicable law or regulation.

 

1

 

(d)                                 Method of Exercise.  This
Option shall be exercisable by a written notice which shall:

 

(i)                                   State
the election to exercise the Option, the number of shares in respect of which
it is being exercised (which may be no less than 50 shares), the person in
whose name the stock certificate for such shares of Stock is to be registered,
the person’s address and social security number (or if more than one, the
names, addresses and social security numbers of such persons);

 

(ii)                                Contain
such representations and agreements as to the holder’s investment intent with respect
to such shares of Stock as may be satisfactory to the Company’s counsel; and

 

(iii)                             Be signed by the person or
persons entitled to exercise the Option and, if the Option is being exercised
by any persons other than the Optionee, be accompanied by proof satisfactory to
counsel for the Company, of the right of such person or persons to exercise the
Option.

 

Payment of the purchase price of any shares with
respect to which the Option is being exercised shall be by certified or bank
cashier check or by shares of the Company’s Stock and shall be delivered with
the notice of exercise.

 

3.               Nontransferablity of Option.  This Option may not be transferred in any
manner otherwise than by will or the laws of descent and distribution and may
be exercised during the lifetime of the Optionee only by the Optionee and after
Optionee’s death by the legal representative of the Optionee’s estate or by the
person or persons to whom the Optionee’s rights under the Option passed by will
or the laws of descent and distribution. 
This Option shall not be pledged or hypothecated in any way and shall
not be subject to executive, attachment of similar process except with the
express consent of the Committee.

 

4.              Adjustments

 

(a)                                  Whenever
a stock split, stock dividend or other relevant change in capitalization of the
Company occurs, (1) the number of shares that can thereafter be purchased
and the option price per share under each Option that has been granted and not
exercise, and (2) the number of shares used in determining whether a
particular Option is grantable thereafter shall be appropriately adjusted.

 

(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 30 days’ written notice of the date so fixed shall
be given to each Optionee and each such Optionee shall have the right during
such period to exercise Optionee’s Option as to all or any part of the shares
covered thereby, including shares as to which such Option would not otherwise
be exercisable by reason of an insufficient lapse of time.

 

(c)                                  Adjustments
and determinations under this paragraph 3 shall be made by the Board of
Directors of Life Company, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final, binding
and conclusive.

 

5.               Notices.  Each notice relating to this Agreement shall
be in writing and delivered in person or by certified mail to the proper
address, and shall be deemed to have been given on the date it is
received.  Each notice to the Company
shall be addressed to it as its principal office, attention of the
Secretary.  Each notice to the Optionee
or other person or person then entitled to exercise the Option shall be addressed
to the Optionee or such other person or persons at the Optionee’s address set
forth in the

 

2

 

heading
of this Agreement.  Anyone to whom a
notice may be given under this Agreement may designate a new address by written
notice to that effect.

 

6.               Benefits of Agreement.  This Agreement shall inure to the benefit of
and be binding upon each successor of the Company.  All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be binding upon
the Optionee’s heir, legal representatives and successors.  This Agreement shall be the sole and
exclusive source of any and all rights which the Optionee, the Optionee’s
heirs, legal representatives, or successors may have in respect to the Plan or
any options or Stock granted or issued thereunder whether to the Optionee or to
any other person.

 

7.               Resolution of Disputes.  Any dispute or disagreement which should
arise under, or as a result of, or in any way relate to, the interpretation,
construction or applicability of this Agreement will be determined by the Board
of Directors of the Company.  Any
determination made hereunder shall be final, binding, and conclusive for all
purposes.

 

IN
WHITNESS WHEREOF, the Company and the Optionee have cased
this Agreement to be executed effective as of the day, month and year first
above written.

 

	
   

  	
  AMERICAN
  EQUITY INVESMENT

  
	
   

  	
  LIFE
  HOLDING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D.J. Nobel

  	
   

  
	
   

  	
   

  	
  D.J.
  Noble, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Debra J.
  Richardson

  	
   

  
	
  Debra
  J. Richardson, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim Gerlach

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jim
  Gerlach

  
							

 

3Exhibit 10.6

 

EMPLOYEE STOCK OPTION AGREEMENT

 

THIS
EMPLOYEE STOCK OPTION AGREEMENT, hereinafter referred to as
the “Option” or the “Agreement,” is made effective as of the 31st
day of December, 2004, between American Equity Investment Life Holding Company
(the “Company”) and, -John Matovina- (the
“Optionee”).

 

The Company hereby grants an option of -20,000- shares of common stock of the Company, $1.00
par value per share (“Stock”), to the Optionee at the price and in all respects
subject to the terms, definitions and provisions of the Agreement, and the
Employee Stock Option Plan, adopted by the Company effective July 1, 2000,
as amended (the “Plan”), the terms and definitions of which are incorporated
herein, unless the context implies otherwise.

 

1.               Option Price.  The option price is $10.77  for each share, the price being at least 100%
of the fair market value as determined by the Board of Directors, of a share of
the Stock on the date of the grant of this Option.

 

2.               Exercise of Option and Vesting Schedule.  This Option is granted for a ten (10) year
term and, therefore, may not be exercised after the expiration of ten (10) years
from the date that it is granted.  This
Option shall become exercisable at any time subject to terms of this Agreement
and applicable law.

 

(a)                                  Vesting Schedule.  This
Option will vest on the last day of the sixth full month after the date of this
Agreement.  Should the employment of the
Optionee be terminated with or without cause (except for death or disability)
prior to the date of vesting, then Optionee will forfeit all rights under this
Agreement.

 

(b)                                 Right to Exercise. 
This Option shall be exercisable during the term of the Option, by the Optionee:

 

(i)                                   While
the Optionee is employed by the Company, or within thirty (30) days of the
termination of Optionee’s employment; provided that in the event the Optionee’s
employment with the Company is terminated because of disability, as that term
is defined in Section 105(d) (4) of the Internal Revenue Code,
as amended (the “Code”), the Option privileges, with respect to the shares
purchasable by the Optionee as of the date that the Optionee’s employment is
terminated, may be exercised by the Optionee within one (1) year after the
termination of the Optionee’s employment by the Company.  However, nothing contained within this
statement shall be construed to extend the ultimate term of this Option beyond
the period of time as set out above in paragraph 2.

 

(ii)                                If
the Optionee should die during the option period while employed by the Company,
the option privileges may be exercised in full by the legal representative of
the Optionee’s estate, or by the person or persons to whom the Optionee’s
rights under the Option shall have passed by will or the laws of descent and
distribution within one (1) year after the Optionee’s date of death.  However, nothing contained within this
statement shall be construed to extend the ultimate term of this Option beyond
the period of time as set out above in paragraph 2.

 

(c)                                  Restrictions on Exercise.  The
minimum number of shares for which this Option may be exercised is 50
shares.  In addition, as a condition to
the Optionee’s exercise of this option, the Company may require the person
exercising this Option to execute any buy-sell agreement in effect between the
Company and its shareholders and to made such representations or warranties to
the Company as may be required by applicable law or regulation.

 

1

 

(d)                                 Method of Exercise.  This
Option shall be exercisable by a written notice which shall:

 

(i)                                   State
the election to exercise the Option, the number of shares in respect of which
it is being exercised (which may be no less than 50 shares), the person in
whose name the stock certificate for such shares of Stock is to be registered,
the person’s address and social security number (or if more than one, the
names, addresses and social security numbers of such persons);

 

(ii)                                Contain
such representations and agreements as to the holder’s investment intent with
respect to such shares of Stock as may be satisfactory to the Company’s
counsel; and

 

(iii)                             Be signed by the person or
persons entitled to exercise the Option and, if the Option is being exercised
by any persons other than the Optionee, be accompanied by proof satisfactory to
counsel for the Company, of the right of such person or persons to exercise the
Option.

 

Payment of the purchase price of any shares with
respect to which the Option is being exercised shall be by certified or bank
cashier check or by shares of the Company’s Stock and shall be delivered with
the notice of exercise.

 

3.               Nontransferablity of Option.  This Option may not be transferred in any
manner otherwise than by will or the laws of descent and distribution and may
be exercised during the lifetime of the Optionee only by the Optionee and after
Optionee’s death by the legal representative of the Optionee’s estate or by the
person or persons to whom the Optionee’s rights under the Option passed by will
or the laws of descent and distribution. 
This Option shall not be pledged or hypothecated in any way and shall
not be subject to executive, attachment of similar process except with the
express consent of the Committee.

 

4.              Adjustments

 

(a)                                  Whenever
a stock split, stock dividend or other relevant change in capitalization of the
Company occurs, (1) the number of shares that can thereafter be purchased
and the option price per share under each Option that has been granted and not
exercise, and (2) the number of shares used in determining whether a
particular Option is grantable thereafter shall be appropriately adjusted.

 

(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 30 days’ written notice of the date so fixed shall
be given to each Optionee and each such Optionee shall have the right during
such period to exercise Optionee’s Option as to all or any part of the shares
covered thereby, including shares as to which such Option would not otherwise
be exercisable by reason of an insufficient lapse of time.

 

(c)                                  Adjustments
and determinations under this paragraph 3 shall be made by the Board of
Directors of Life Company, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final, binding
and conclusive.

 

5.               Notices.  Each notice relating to this Agreement shall
be in writing and delivered in person or by certified mail to the proper
address, and shall be deemed to have been given on the date it is
received.  Each notice to the Company
shall be addressed to it as its principal office, attention of the
Secretary.  Each notice to the Optionee
or other person or person then entitled to exercise the Option shall be addressed
to the Optionee or such other person or persons at the Optionee’s address set
forth in the

 

2

 

heading
of this Agreement.  Anyone to whom a
notice may be given under this Agreement may designate a new address by written
notice to that effect.

 

6.               Benefits of Agreement.  This Agreement shall inure to the benefit of
and be binding upon each successor of the Company.  All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be binding upon
the Optionee’s heir, legal representatives and successors.  This Agreement shall be the sole and
exclusive source of any and all rights which the Optionee, the Optionee’s
heirs, legal representatives, or successors may have in respect to the Plan or
any options or Stock granted or issued thereunder whether to the Optionee or to
any other person.

 

7.               Resolution of Disputes.  Any dispute or disagreement which should
arise under, or as a result of, or in any way relate to, the interpretation,
construction or applicability of this Agreement will be determined by the Board
of Directors of the Company.  Any
determination made hereunder shall be final, binding, and conclusive for all
purposes.

 

IN
WHITNESS WHEREOF, the Company and the Optionee have cased
this Agreement to be executed effective as of the day, month and year first
above written.

 

 

	
   

  	
  AMERICAN
  EQUITY INVESMENT

  
	
   

  	
  LIFE
  HOLDING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ D.J. Nobel

  	
   

  
	
   

  	
   

  	
  D.J.
  Noble, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Debra J.
  Richardson

  	
   

  
	
  Debra
  J. Richardson, Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Matovina

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John
  Matovina

  
							

 

3

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