Document:

Exhibit

Exhibit 10.1

RETIREMENT AND TRANSITION AGREEMENT

RETIREMENT AND TRANSITION AGREEMENT (this “Agreement”) made and entered into by and between American Equity Investment Life Holding Company (the “Company”) and John M. Matovina (the “Executive”), dated February 28, 2020 (the “Effective Date”).  For purposes of this Agreement, “Company” shall be deemed to include the Company and its affiliated entities.
WHEREAS, the Executive has been employed with the Company since June 2003; and
WHEREAS, the Executive has determined that he wishes to retire from the Company; and 
WHEREAS, the Executive and the Company wish to set forth the terms and conditions under which he will retire from the Company and transition to non-executive Chairman of the Company’s Board of Directors (the “Board”).
NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions and conditions set forth in this Agreement, the parties hereby agree as follows:
		
	1.
	Resignation and Transition Period.    The Executive resigns as Chief Executive Officer and President of the Company and all officer positions Executive holds in any of the Company’s subsidiaries effective on or before March 1, 2020.  From March 1, 2020 through April 15, 2020 (the “Transition Period”), Executive will remain an employee of the Company.  During the Transition Period, the Company will pay the Executive a semi-monthly amount of $28,125.00 in accordance with the Company’s usual payment practices, and the Executive will remain eligible for health and life insurance coverage on the same terms and conditions (including payment by Executive of his portion of the premiums) as in effect at the Company from time to time.   The Executive will be entitled to receive a stay bonus in the amount of $853,125.00 for services provided to the Company from January 1, 2020 through April 15, 2020 (the “Stay Bonus”).  The Stay Bonus will be paid to the Executive no later than April 25, 2020.

		
	2.
	Effect of Retirement.

		
	(a)
	As of April 16, 2020 (the “Retirement Date”), the Executive shall no longer be an employee of the Company.

		
	(b)
	RSUs.  Subject to Sections 3 and 4 hereof, each outstanding restricted stock unit (“RSU”) granted to the Executive by the Company before the Transition Period will be treated pursuant to Section 2(e)(iii) of the relevant Performance Restricted Stock Unit Award Agreement (“Award Agreement”) between the Company and the Executive.  For purposes of calculating awards under all outstanding Award Agreements as of the Retirement Date, the Executive’s employment shall be deemed to have terminated on April 16, 2020. 

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	(c)
	Non-Executive Chairman. Following the Retirement Date, the Executive will serve as non-executive Chairman of the Board.  The Executive will be paid $30,000 per quarter for service as non-executive Chairman.  Amounts paid for the Executive’s service as non-executive Chairman will be in addition to any cash retainer, meeting fees and equity awards generally paid or awarded to the Company’s directors.  Executive will not receive a pro-rata equity award for the period from the Retirement Date to the date of the Company’s 2020 Annual Meeting of Shareholders.  

		
	3.
	Release of Claims.

The Executive shall receive the compensation and benefits as set forth in this Agreement from the Company only if the Executive executes and delivers to the Company on or before the Retirement Date a release in form and substance satisfactory to the Company (and does not revoke such release during the applicable revocation period). 
		
	4.
	Confidentiality.

The Executive acknowledges that (a) while employed by the Company, the Executive has had, and may continue to have, access to and/or acquired and assisted, or will acquire and assist, in the development of confidential and proprietary information, inventions, and trade secrets relating to the present and anticipated business and operations of the Company and its affiliates which is not generally known to the public, including without limitation: research projects; sales and marketing methods; business opportunities; marketing plans; sales forecasts and product plans; distributor and customer pricing information; personnel data regarding employees of the Company and its affiliates, including salaries; and other information of a similar confidential nature not available to the public (collectively, “Confidential Information”); and (b) such Confidential Information has been disclosed to the Executive in confidence and only for the use of the Company.  The Executive agrees that at all times following the Transition Period, the Executive shall keep secret and retain in strictest confidence, and shall not use or disclose, directly or indirectly, any Confidential Information; provided, however, that nothing in this Agreement shall prevent the Executive from disclosing Confidential Information (i) that becomes publicly available or (ii) in response to any subpoena or court order, provided, however, that prior to making any such disclosure, the Executive shall provide the Company with written notice of the subpoena, court order or similar legal process sufficiently in advance of such disclosure to afford the Company a reasonable opportunity to challenge the subpoena, court order or similar legal process.
The Executive acknowledges and agrees that (1) the business in which the Company and its affiliates are engaged is intensely competitive, (2) the Executive has had access to and developed, and may have access to and develop, Confidential Information and (3) the confidentiality covenant set forth in this Section 4 is reasonable and necessary for the protection and continuity of the business and goodwill of the Company and its affiliates.  The Executive further acknowledges and agrees that irreparable injury will result to the Company if the Executive breaches such covenant, and that in the event of the Executive’s actual or threatened breach of such covenant, the Company will have no adequate remedy at law.  The Executive accordingly agrees that in the event of an actual or threatened breach or non-performance by the 

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Executive of such covenant, (A) the Company shall be entitled to injunctive and other equitable relief in perpetuity from any court of competent jurisdiction, without the necessity of showing actual monetary damages or the posting of a bond or other security and (B) the RSUs in Section 2(b), to the extent unvested, shall terminate and be forfeited immediately.  Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.
		
	5.
	General Provisions.

		
	(a)
	Severability.  It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible.  In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of this Agreement shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law.  

		
	(b)
	Notices.  Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person, consigned to a reputable national or international courier service (including Federal Express), and addressed to the Executive at the last known address on the books of the Company or, in the case of the Company, at the Company’s principal place of business, attention of the Secretary of the Company, or to such other address as either party may specify by notice to the other actually received.

		
	(c)
	Successors and Assigns.  This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

		
	(d)
	Governing Law; Captions; Amendment.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Iowa, without reference to principles of conflict of laws.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives.

		
	(e)
	Code Section 409A Compliance.  The Company and the Executive each hereby affirm that it is their mutual view that the provision of payments and benefits described or referenced herein are exempt from or in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury regulations relating thereto (“Section 409A”) and that each party’s tax reporting shall be completed in a manner consistent with such view.  The Company and the Executive each agree that upon the Retirement Date, the Executive shall experience a “separation from service” for purposes of Section 

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409A.  Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception.  For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Transition Period shall instead be paid on the first business day after the date that is six months following the Retirement Date (or death, if earlier).  Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (x) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (y) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (z) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.  Neither the Company nor its affiliates shall be liable in any manner for any federal, state or local income or excise taxes (including but not limited to any taxes under Section 409A), or penalties or interest with respect thereto, as a result of the payment of any compensation or benefits hereunder or the inclusion of any such compensation or benefits or the value thereof in the Executive’s income.  The Executive acknowledges and agrees that the Company shall not be responsible for any additional taxes or penalties resulting from the application of Section 409A. 
		
	(f)
	Withholding.  Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all amounts that are required or authorized to be withheld, including, but not limited to, federal, state, local and foreign taxes to be withheld by applicable laws or regulations.

		
	(g)
	Entire Agreement.  This Agreement constitutes the entire agreement between the Executive and the Company with respect to the subjects addressed herein and supersedes all prior agreements, understandings and representations, written or oral, with respect to those subjects.  

		
	(h)
	Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, and which together shall be deemed to be one and the same instrument.

SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the date first set forth above, to be effective as of the Effective Date.
	
						
	ACCEPTED AND AGREED TO:
	 
	ACCEPTED AND AGREED TO:
	 

	 
	 
	 
	 

	Executive
	 
	American Equity Investment Life
Holding Company
	 

	 
	 
	 
	 

	By:
	John M. Matovina
	 
	By:
	Anant Bhalla
	 

	Date:
	February 28, 2020
	 
	Date:
	February 28, 2020
	 

5Exhibit

Description of Capital Stock
The authorized capital stock of Harmonic Inc. (“we”, “us”, “our” or “Harmonic”) consists of 150,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value, 100,000 of which have been designated as Series A Participating Preferred Stock. The following description of our capital stock does not purport to be complete and is subject to, and qualified in its entirety by, our restated certificate of incorporation, as amended, our amended and restated bylaws, and the certificate of designation of rights, preferences and privileges of Series A Participating Preferred Stock.
Common Stock
The holders of our common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board of Directors (our “Board”) out of funds legally available therefore. In the event of a liquidation, dissolution or winding up of Harmonic, the holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding shares of our preferred stock. Holders of our common stock have no preemptive or conversion rights or other subscription rights. Our common stock is not subject to any redemption or sinking fund provisions. All of the outstanding shares of our common stock are fully paid and non-assessable. The rights, preferences, and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of holders of shares of our preferred stock, as discussed below.
Preferred Stock
No shares of preferred stock are outstanding. Pursuant to our restated certificate of incorporation, as amended, our Board has the authority, without further action by the stockholders, to issue from time to time up to 5,000,000 shares of preferred stock in one or more series. Our Board may designate the rights, preferences, privileges, and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, redemption rights, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the common stock, diluting the voting power of the common stock, impairing the liquidation rights of the common stock, or delaying, deterring, or preventing a change in control. Such issuance could have the effect of decreasing the market price of the common stock. 
Anti-Takeover Provisions
Certain provisions of Delaware law and our certificate of incorporation and bylaws could make the acquisition of Harmonic by means of a tender offer, or the acquisition of control of Harmonic by means of a proxy contest or otherwise more difficult. These provisions, summarized below, are intended to discourage certain types of coercive takeover practices and inadequate takeover bids, and are designed to encourage persons seeking to acquire control of us to negotiate with our Board. We believe that the benefits of increased protection against an unfriendly or unsolicited proposal to acquire or restructure Harmonic outweigh the disadvantages of discouraging such proposals. Among other things, negotiation of such proposals could result in an improvement of their terms.
Delaware Anti-Takeover Law
We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person became an interested stockholder, unless the “business combination” or the transaction in which the person became an interested stockholder is approved by our Board in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own, 15% or more of a corporation’s voting stock. The existence of this provision may have an anti-takeover effect with respect 

to transactions not approved in advance by our Board, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by stockholders.
Other Provisions in Our Certificate of Incorporation and Bylaws
Our restated certificate of incorporation, as amended, and our amended and restated bylaws provide other mechanisms that may help to delay, defer or prevent a change in control or prevent changes in control of our management team. These include provisions:
		
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	authorizing blank check preferred stock, which could be issued by our Board, without additional stockholder approval, with voting, liquidation, dividend and other rights superior to our common stock;

		
	•
	limiting the liability of, and providing indemnification to, our directors and officers;

		
	•
	limiting the ability of our stockholders to call, and bring business before, special meetings;

		
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	requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board;

		
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	controlling the procedures for conducting and scheduling of Board and stockholder meetings; and

		
	•
	providing our Board with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings.

Transfer Agent and Registrar

Our transfer agent and registrar for common stock is Computershare Investor Services. 

Listing

Our common stock is listed on The Nasdaq Global Select Market under the symbol “HLIT.”

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