AMERICAN EQUITY INVE

AEL
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AMERICAN EQUITY INVESTMENT LIFE HOLDING CO : Change in Directors or Principal Officers (form 8-K)

11/25/2020 | 06:13am


Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 19, 2020, the Compensation Committee of the Board of Directors
("Compensation Committee") of American Equity Investment Life Holding Company
(the "Company") awarded the Company's Chief Executive Officer, Anant Bhalla, a
one-time special achievement cash bonus of $1,000,000 pursuant to the terms of
the Letter Agreement filed as Exhibit 10.1 hereto, which is incorporated herein
by reference. In awarding this compensation, the Compensation Committee
considered a variety of factors including (i) the exceptional level at which Mr.
Bhalla
performed in his first year as Chief Executive Officer, especially during
the very challenging business environment in 2020, (ii) Mr. Bhalla's significant
contributions to the accelerated achievement of Company near term and long-term
objectives in 2020, and (iii) Mr. Bhalla's total compensation in 2020 relative
to other CEOs among industry peers. In addition to rewarding Mr. Bhalla for his
performance in 2020, the award also provides a retention incentive by
stipulating that the full amount is subject to repayment if Mr. Bhalla were to
voluntarily resign within 12 months.
In addition, on November 19, 2020 (the "Grant Date"), the Compensation Committee
awarded Mr. Bhalla and certain named executive officers (the "NEOs") of the
Company each a one-time stock option award (the "Option Award") pursuant to the
terms of the Employee Stock Option Agreement filed as Exhibit 10.2 hereto, which
is incorporated herein by reference. The Option Award was granted to Mr. Bhalla
and each of the NEOs to encourage their focused and swift execution of the
Company's AEL 2.0 strategy without incenting undue risk taking. In awarding
these options, the Compensation Committee considered a variety of factors
including (i) the importance of the NEOs to leading and executing the AEL 2.0
strategy, (ii) the need for additional retention strength for key talent in a
highly competitive and acquisitive industry, and (iii) the absence of a pure,
shareholder aligned incentive like options in the annual equity grant mix for
executives. Additionally, in order to further enhance shareholder alignment,
these options only vest if, and after, the Company's stock price reaches $37.00
(based on a 30-day trading average) on or before the fifth anniversary of the
Grant Date; otherwise the options expire upon the fifth anniversary of the Grant
Date.
More specifically, fifty percent (50%) of the Option Award granted to each of
Mr. Bhalla and the NEOs vests upon the later of: (i) the Company attaining a
$37.00 per share common stock price (based on a 30-day trading average); and
(ii) the one year anniversary of the Grant Date. The remaining fifty percent
(50%) of the Option Award vests on the one year anniversary of the vesting of
the initial fifty percent (50%) of the Option Award. If the Company does not
achieve the $37.00 per share common stock price on or before the fifth
anniversary of the Grant Date, the Option Award shall be forfeited.
Under the terms of this special incentive, Mr. Bhalla received an Option Award
of 244,050 options with a Grant Day fair value of $1,846,454. Mr. Ted M.
Johnson
, the Company's Chief Financial Officer & Treasurer received an Option
Award of 49,565 options with Grant Day fair value of $375,000. Mr. Jeffrey D.
Lorenzen
, the Company's Chief Investment Officer received an Option Award of
49,565 options with a Grant Day fair value of $375,000. Ms. Renee D. Montz, the
Company's Executive Vice President, General Counsel & Secretary received an
Option Award of 46,260 options with a Grant Day fair value of $350,000.
Mr. Bhalla's award was limited to 244,050 options by the annual award limitation
to any single individual during any single calendar year within the Company's
Amended and Restated Equity Incentive Plan. An additional Option Award will be
made to Mr. Bhalla in 2021 with a Grant Date fair value of $653,546 (the
difference between his target Grant Date fair value of $2,500,000 and his actual
Grant Date fair value of $1,846,454). The Compensation Committee intends to
factor the size of these awards into Mr. Bhalla's annualized compensation when
making future pay determinations with respect to Mr. Bhalla.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following exhibits are being furnished with this Form 8-K.
Exhibit
Number Description
10.1 Letter Agreement dated November 19, 2020 by and


between American Equity



Investment Life Holding Company and Anant Bhalla
10.2 Form of Employee Stock Option Agreement with Respect


to Common Stock of American



Equity Investment Life Holding Company of Employee


Stock Option Agreement with



Respect to Common Stock of American Equity Investment Life Holding Company
104 The cover page from this Current Report on Form 8-K,


formatted in Inline XBRL.



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