SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934 (Amendment No. )
![[MISSING IMAGE: lg_americanequity-pn.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/lg_americanequity-pn.jpg){kind=small}
INVESTMENT LIFE HOLDING COMPANY
West Des Moines, Iowa 50266
| | ||
| | ||||||||
| Telephone | | | Internet | | | | ||
 | ![[MISSING IMAGE: tm212400d1-icon_phonepn.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/tm212400d1-icon_phonepn.jpg){kind=icon} | |  | ![[MISSING IMAGE: tm212400d1-icon_internetpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/tm212400d1-icon_internetpn.jpg){kind=icon} | |  | ![[MISSING IMAGE: tm212400d1-icon_mailpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/tm212400d1-icon_mailpn.jpg){kind=icon} | |
| By telephone; | | | Through the Internet; or | | | If you received a paper copy of the proxy statement, by completing, signing and promptly returning the enclosed proxy card in the enclosed postage-paid envelope. | |
We intend to hold our Annual Meeting in person. However, as part of our precautions regarding the coronavirus or COVID-19 pandemic, we are planning for the possibility that the Annual Meeting may be held by means of remote communication. If we take this step, we will announce the decision to do so in advance, and details on how to participate will be available on our website at www.american-equity.com and filed with the Securities and Exchange Commission as proxy material.
![[MISSING IMAGE: sg_phyllisjzanghi-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/sg_phyllisjzanghi-bw.jpg){kind=small}
Renee D. Montz
Secretary
April
| | ||||||||
| | | | | 1 | | | ||
| | | | | | 1 | | | |
| | | | | | 1 | | | |
| | | | | | 1 | | | |
| | Voting
| | | | | | | |
| | | | | | 3 | | ||
| | |||||||
| | | | | | 3 | | | |
| | | | | | 4 | | | |
| | | | | | 4 | | | |
| | | | | | 5 | | | |
| | | | | | 6 | | ||
| | |||||||
| | | | ||||||
| ||||||||
| | 7 | | | ||||
| | | | | | 7 | | | |
| | | | | | 7 | | | |
| | | | | | 7 | | | |
| | | | | | 8 | | | |
| | | | | | | | ||
| | | | ||||||
| | 10 | | | ||||
| | | | | | 11 | | | |
| | | | | | | | ||
| | | | | | | | ||
| | | | ||||||
| | 14 | | | ||||
| | Audit Committee Disclosures
| | | | | 15 | | |
| | |||||||
| | | | | | 16 | | | |
| | | | | | 16 | | | |
| | | | | | 17 | | | |
| | | | | | 25 | | | |
| | | | | | 26 | | | |
| | | | | | | | ||
| | | | | | | | ||
| | | | | | | | ||
| | | | | | | | ||
| | Additional Information
| | | | | | | |
| | Human Capital
| | | | | | | |
| | | | | | 37 | | | |
| | | | | | 38 | | | |
| | | | | | 39 | | | |
| | Section 16(a) Beneficial Ownership Reporting Compliance
| | | | | 40 | | |
| | Shareholder Proposals for 2022 Annual Meeting
| | | | | | | |
| | Shareholder Communications
| | | | | | | |
| | |||||||
| ||||||||
Householding; Annual Report on Form 10-K | | | | | | |||
| | |||||||
28, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
If you vote by proxy, the individuals named on the proxy card (your proxies) will vote your shares in the manner you indicate. If you sign, date and return the proxy card without indicating your instructions on how to vote your shares, the proxies will vote your shares as follows:
| | | | | | | | | | | 2021 Proxy Statement | | | 1 | |
.
| 2 | | | 2021 Proxy Statement | | | | | | | | | | |
|
|
|
|
|
|
|
|
|
|
Meeting. Class III Director. Brenda J. Cushing, Nominating & Corporate Governance Meyer is independent from the The Innovation & Technology Committee is governed by a written charter approved by the Board of Directors. Under an arrangement between the parties, the restricted stock granted in respect of Mr. Shah’s service on the Board of Directors is granted to Brookfield or its affiliate. quarter, respectively. was not an employee of the Company. Compensation for Mr. Matovina, who was an employee director Joyce A. Chapman Alexander M. Clark(3) Brenda J. Cushing James M. Gerlach Robert L. Howe William R. Kunkel Alan D. Matula David S. Mulcahy Gerard D. Neugent Debra J. Richardson(4) A. J. Strickland, III Joyce A. Chapman Brenda J. Cushing James M. Gerlach Robert L. Howe William R. Kunkel Alan D. Matula David S. Mulcahy Gerard D. Neugent Debra J. Richardson A. J. Strickland, III Audit fees(1) Audit-related fees(2) Tax fees All other fees(3) Total (age 43) has served as President of the Company since January 27, 2020 and as Chief Executive Officer of the Company since March 1, 2020. Prior to that, Mr. Bhalla was a partner of Bhalla Capital Partners from March 2019 to January 2020. From 2016 until 2019, he served as Executive Vice President and Chief Financial Officer of Brighthouse. From 2014 until 2016, he served as Chief Financial Officer of Retail business for MetLife. Prior to MetLife, Mr. Bhalla served in numerous senior roles including Chief Risk Officer, Treasurer and other management roles at Fortune 500 companies, including American International Group, Lincoln National Corporation, and Ameriprise Financial. Mr. Bhalla has over 20 years of experience in the life insurance industry. the Company following the end of the fiscal year ended December 31, 2020. Mr. Uzuner has served as Chief Investment Officer, Asset Management since January 2021. From May 2018 to January 2021, Mr. Uzuner was Chief Investment Officer of Austra Global, an investment management outsourcing company. Mr. Uzuner was a partner of Apollo Global Management from August 2013 to May 2018. Mr. Uzuner has over 20 years of investment management experience. lapse and partial withdrawal assumptions. Compensation Philosophy and Overview decisions. traded insurance companies and compensation surveys, with a focus on financial services and insurance companies. The twelve insurance companies included in our peer group are shown below: report. In addition, as part of the inducement for him to join the Company, Mr. Bhalla was granted (i) an option to purchase 50,000 shares of the Company’s Common Stock which vests on the fifth anniversary of the date of grant, and (ii) a grant of time-based RSUs with an aggregate value of $500,000, which vest in two equal annual installments on the first and second anniversaries of his commencement of employment, each subject to his continued employment through the applicable anniversary date. John M. Matovina Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz losses as a performance measure. The determination to exclude the impact of actuarial assumption updates when determining non-GAAP operating income per share was made by the Compensation Committee in September 2020 due to changes in interest rates which are not within the control of management and have significant impact on actuarial assumptions. Annuity Deposits Non-GAAP Operating Income Per Share Investment Spread OTTI and Realized Losses Annuity Deposits Non-GAAP Operating Income Per Share Investment Spread OTTI and Realized Losses The following table shows our targets and achievement for the Company Goals for Annuity Deposits ($ millions) Non-GAAP Operating Income Per Share Investment Spread ($ millions) OTTI and Realized Losses ($ millions) Book Value Per Share Growth Return on Average Equity The Book Value Per Share Growth performance measure used in our Ms. Montz. Book Value Per Share Growth ROAE Aggregate Percentage Achievable at Each Performance Level Time-Based RSU Mr. Hamalainen received a time-based option grant of 36,249 options as part of his employment arrangement sign-on bonus that he received when he joined the Company in July 2020. These time-based options vest on the third anniversary of the date of grant. Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz index credits. December 31, employment. The executive officers are required to retain 100%, of the net after-tax shares acquired from the vesting, settlement or exercise of equity awards until they meet the stock ownership level. Common Stock ownership levels are measured annually on December 31 and shares will be valued at the highest per share price over the prior 12-month period. Once an executive officer meets the applicable stock ownership level, no further investment in Common 2020. ” Other Compensation Considerations The Compensation Committee, with the assistance of Pearl Meyer, reviewed the Company’s compensation policies and practices and concluded that for 2020 the risks arising from the Company’s policies and practices are not reasonably likely to have a material adverse effect on the Company. John M. Matovina Chief Executive Officer and President Ted M. Johnson Chief Financial Officer and Treasurer Ronald J. Grensteiner Exec. Vice President Jeffrey D. Lorenzen Exec. Vice President and Chief Investment Officer Renee D. Montz Exec. Vice President, General Counsel and Secretary John M. Matovina Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz The following table provides information about John M. Matovina Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz the grant date, the entire option award is forfeited. If the Stock Price Hurdle is met, 50% of the option award will vest on the date the Stock Price Hurdle is satisfied or, if later, on the one-year anniversary of the grant date. The remaining 50% of the option award will vest on the one-year anniversary of the date the first 50% of the option award vested. John M. Matovina Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz A these agreements. amounts are included for the year of termination since such bonus amounts are earned for a termination occurring on December 31. John M. Matovina Ted M. Johnson Ronald J. Grensteiner Jeffrey D. Lorenzen Renee D. Montz 2019. This vote is advisory and not binding on the Company, the Compensation Committee or the Board of Directors. The Board of Directors and Compensation Committee value the opinions of the Security Ownership of Management and Certain Beneficial Owners John M. Matovina(3) Ted M. Johnson(3) Ronald J. Grensteiner(3)(4) Jeffrey D. Lorenzen(3) Renee D. Montz(3) Anant Bhalla Joyce A. Chapman Brenda J. Cushing James M. Gerlach Robert L. Howe Michelle M. Keeley William R. Kunkel Alan D. Matula David S. Mulcahy Gerard D. Neugent(5) Debra J. Richardson(3) A. J. Strickland, III All executive officers, directors and nominees for director as a group (19 persons) 5% Owners: BlackRock, Inc The Vanguard Group Dimensional Fund Advisors LP Macquarie Group Limited Equity compensation plans approved by shareholders Equity compensation plans not approved by shareholders Total through the use of stock options. The circumstances, taking into consideration the Transaction: 29, 2021. Investment Life Holding Company Board of Directors, c/o Corporate Secretary, 6000 Westown Parkway, West Des Moines, Iowa 50266. 10-K twelvefourteen members. Each member of the Board of Directors has been appointed to one of three classes with three-year terms expiring on a staggered basis. The terms of the five directors presently serving as the Class IIIII Directors expire at the Annual Meeting, along with the term of one director presently serving as a Class I Director.IIIII Directors are Joyce A. Chapman, James M. Gerlach, Robert L. Howe, Michelle M. Keeley,Brenda J. Cushing, Douglas T. Healy, David S. Mulcahy, and William R. Kunkel.Sachin Shah. Each is nominated for a term of three years expiring at the annual meeting of shareholders in 2023,2024, or until their respective successors are elected and qualified, subject to their prior death, resignation or removal. Ms. Keeley is standing for election as a Class II Director to replace Debra J. Richardson,IIIII Director, and is not standingnominated to serve as a Class I Director for reelectiona term of one year expiring at the Annual Meeting.Mses. Chapmanannual meeting of shareholders in 2022, or until his successor is elected and Keeleyqualified, subject to his prior death, resignation or removal. In August 2020, the Company adopted a tenure/retirement provision in its Corporate Governance Guidelines that no person may be elected or reelected to the Board of Directors for a term during which that person would attain the age of eighty (80). While Mr. Strickland will attain his 80th birthday prior to the annual meeting of shareholders in 2022, the Board of Directors believes the Company and the Company’s shareholders would benefit from continuing to have Mr. Strickland’s knowledge and experience available through the date of such meeting and has agreed to waive this policy for Mr. Strickland for one year, in deference to, and completion of, the review discussed in the Corporate Governance section of this document.Gerlach, HoweHealy, Mulcahy, Shah, and KunkelStrickland are independent under the requirements of the Sarbanes-Oxley Act of 2002 ("SOX"(“SOX”), and rules adopted by the SEC, as well as the corporate governance listing standards of the NYSE ("(“NYSE Rules"Rules”).January 8,August 26, 2020, the Board of Directors increased its size from eleventwelve to twelvethirteen directors effective January 27,September 8, 2020. Anant BhallaDouglas T. Healy was appointed by the Board of Directors to fill the vacancy created by the increase in the number of directors and to serve on the ExecutiveInvestment and InvestmentRisk Committees. Mr. Bhalla'sHealy’s initial term expires on the date of the Annual Meeting and he serves as a Class III Director.Director. He is nominated forLtd. (collectively “Brookfield”) dated October 17, 2020, Brookfield received the right to appoint an individual to the Company’s Board of Directors. On November 30, 2020, the Board of Directors increased its size from thirteen to fourteen directors effective contemporaneously therewith. Brookfield’s designee, Sachin Shah, was appointed by the Board of Directors to fill the vacancy created by the increase in the number of directors. Mr. Shah’s initial term expires on the date of the Annual Meeting and he serves as a term of two years expiring at the annual meeting of shareholders in 2022, or until his successor is elected and qualified, subject to his prior death, resignation or removal.I Director Nominated for a Term that Expires at the 2022 Annual MeetingAnant Bhalla, 42, has served as a Director since January, 2020. Effective January 27, 2020, Mr. Bhalla was appointed President of the Company, and effective March 1, 2020, he was appointed Chief Executive Officer. Prior to that, Mr. Bhalla was a partner of Bhalla Capital Partners from March 2019 to January 2020. From 2016 until 2019, he served as Executive Vice President and Chief Financial Officer of Brighthouse Financial, Inc. From 2014 until 2016, he served as Chief Financial Officer of Retail business for MetLife. Prior to MetLife, Mr. Bhalla served in numerous senior roles including Chief Risk Officer, Treasurer and other management roles at Fortune 500 companies, including American International Group, Lincoln National Corporation, and Ameriprise Financial. Mr. Bhalla's financial expertise, proven public company strategic leadership, and extensive knowledge of, and background in, the Company's industry and business led the Board of Directors to conclude that Mr. Bhalla should serve as a director of the Company.Member: Executive and Investment Committees Class IIIII Directors Nominated for a Term that Expires at the 20232024 Annual MeetingJoyce A. Chapman, 75, has served as a director since 2008. She worked for over 35 years with West Bank, West Des Moines, Iowa until her retirement in 2006. While at West Bank, Ms. Chapman served in various capacities related to bank administration and operations. From 1975 until her retirement from the board in 2018, Ms. Chapman served as a director for West Bank and West Bancorporation, Inc. Ms. Chapman has served in numerous positions of leadership in philanthropic and banking industry organizations. Ms. Chapman's leadership experience in various organizations and her experience in the banking industry led the Board of Directors to conclude that Ms. Chapman should serve as a director of the Company.Member: Compensation and Nominating and Corporate Governance Committees2020 Proxy Statement3James M. Gerlach, 78, has served as a director since 1996. He served as Executive Vice President of the Company from 1996 until his retirement in 2011. Prior to joining the Company, Mr. Gerlach served as Executive Vice President of American Life and Casualty Insurance Company, a wholly-owned subsidiary of The Statesman Group, Inc. ("Statesman"), and as Executive Vice President and Treasurer of Vulcan Life Insurance Company, a subsidiary of American Life and Casualty Insurance Company. Mr. Gerlach was active in the insurance industry for over 45 years. Mr. Gerlach's knowledge of the Company's operations as well as his years of experience in the insurance industry led the Board of Directors to conclude that Mr. Gerlach should serve as a director of the Company.Member: Investment and Nominating and Corporate Governance CommitteesRobert L. Howe, 77, has served as a director since 2005. He is our Lead Independent Director. He served the State of Iowa Insurance Division from 1964 to 2002 in various capacities. He was named Deputy Commissioner and Chief Examiner in 1985 and served in that position until his retirement in 2002. During this time, Mr. Howe was responsible for the financial oversight of 220 domestic insurance companies. Since his retirement, Mr. Howe has been a self-employed insurance consultant. Mr. Howe served as a director of EMC National Life Company from 2003 until 2007, and, from 2007 until 2018, Mr. Howe served as a director of EMC Insurance Group. He also served as the designated financial expert on the board of directors of EMC Insurance Group. Mr. Howe is a certified financial examiner, certified insurance examiner, certified government financial manager and accredited insurance receiver. Mr. Howe's experience in the financial oversight of insurance companies and his expertise in finance led the Board of Directors to conclude that Mr. Howe should serve as a director of the Company.Member: Executive and Audit CommitteesMichelle M. Keeley, 55, is a retired Executive Vice President of equities and fixed income investments for RiverSource Investments, LLC, the asset management division of Ameriprise Financial Services. Ms. Keeley worked for American Express and its publicly-traded spin-off, Ameriprise Financial Services, from 2002 to 2010. Prior to joining American Express, Ms. Keeley was a managing director with Zurich Global Assets from 1990 to 2002. In November 2014, Ms. Keeley was elected to serve as an independent director on the board of the Federal Home Loan Bank of Des Moines. Currently, she serves as chair of the human resources and compensation committee and a member of the finance and planning and executive committees for the board of the Federal Home Loan Bank of Des Moines. In 2015, Ms. Keeley became a director of the Bridge Builder Mutual Fund Series, an affiliated company of Edward Jones Financial Services. Ms. Keeley serves on all committees of the board of the Bridge Builder Mutual Fund Series. Ms. Keeley's executive experience in capital markets and financial services, as well as her board experience with a bank and a mutual fund company led the Board of Directors to conclude that Ms. Keeley should serve as a director of the Company.William R. Kunkel, 63, has served as a director since June 2016. He has served as General Counsel of the Archdiocese of Chicago since November 2016. From 2012 through April 1, 2016, he served as the Company's Executive Vice President, Legal and General Counsel. Prior to joining the Company, Mr. Kunkel was a partner at the international law firm of Skadden, Arps, Slate, Meagher & Flom LLP for over 25 years, where he focused his practice on mergers and acquisitions, corporate finance and other corporate governance and securities matters. Mr. Kunkel's experience as an executive of the Company and as legal counsel to the Company as well as his expertise in corporate governance and corporate finance led the Board of Directors to conclude that Mr. Kunkel should serve as a director of the Company.Member: Risk Committee Class III Directors Whose Terms Expire at the 2021 Annual Meeting56,57, has served as a director since March 2017. Ms. Cushing has been an independent insurance consultant since August 2015. From August 2014 to August 2015, Ms. Cushing served as Executive Vice President and Chief Financial Officer of Athene Holding Ltd., a retirement services company, and from October 2013 to August 2014, Ms. Cushing served as Executive Vice President and Chief Financial Officer of Athene USA Corp., a subsidiary of Athene Holding Ltd. From 2008 until its acquisition by Athene Holding Ltd. in 2013, Ms. Cushing served as Executive Vice President and Chief Financial Officer of Aviva USA Corp., a diversified financial company that offered long-term savings, insurance and retirement income products. Ms. Cushing is a certified public accountant and has been involved in the insurance industry for over 2025 years. Ms. Cushing'sCushing’s financial expertise and insurance company financial leadership for over two decades led the Board of Directors to conclude that Ms. Cushing should serve as a director of the Company. 420202021 Proxy Statement3Company'sCompany’s Vice Chairman from 2003 to April 2017. Mr. Matovina was a private investor and a financial consultant to us from 1997 to 2003. From 1983 through 1996, he was a senior financial officer of The Statesman Group, Inc. (“Statesman”) and many of its subsidiaries, and, prior to Statesman'sStatesman’s acquisition in 1994, he served as Statesman'sStatesman’s Chief Financial Officer, Treasurer and Secretary. Mr. Matovina is a certified public accountant and has more than 30 years of experience in the life insurance industry. Mr. Matovina'sMatovina’s former role as Chief Executive Officer of the Company as well as his years of experience in, and extensive knowledge of, the life insurance industry led the Board of Directors to conclude that Mr. Matovina should serve as a director of the Company.InvestmentRisk Committees59,60, has served as a director since December 2015. He has served as the Chief Information Officer of Weber-Stephen Products LLC, a privately owned company which manufactures charcoal, gas and electric outdoor grills and accessories, since December 2015. Mr. Matula worked for the Royal Dutch Shell plc organization for over 30 years. During that time, he served in various information technology capacities for the parent company and several of its subsidiaries, including chief information officerChief Information Officer for Royal Dutch Shell plc from 2006 to 2015. Mr. Matula'sMatula’s experience as chief information officerChief Information Officer overseeing technology and cyber-related risks as well as his deep business experience led the Board of Directors to conclude that Mr. Matula should serve as a director of the Company. Risk and Innovation & Technology and Risk Committees68,69, has served as a director since 2010. He has served as Co-Chairman of Knapp Properties, L.C. since 2017 and served as Chief Executive Officer of Knapp Properties, Inc. ("(“Knapp Properties"Properties”) from 2014 until 2020 and President from 2014 to 2017 and served as President and Chief Operating Officer of Knapp Properties from 1993 until 2014. His primary duties include real estate transactions, development and management. Mr. Neugent received his law degree from Drake University. Mr. Neugent'sNeugent’s experience in real estate and business management as well as his legal background led the Board of Directors to conclude that Mr. Neugent should serve as a director of the Company. Bhalla Chapman Cushing Gerlach Healy Howe Keeley Kunkel Matovina Matula Mulcahy Neugent Shah Strickland ✓2020 ✓ ✓ ✓ ✓ ✓ ✓ Insurance ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Risk Management ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Financial Reporting/Accounting ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Brand and Marketing ✓ ✓ ✓ ✓ ✓ Executive Compensation ✓ ✓ ✓ ✓ ✓ ✓ Human Resources/Talent Management ✓ ✓ ✓ ✓ ✓ ✓ Information Technology/Cybersecurity ✓ ✓ ✓ Investment Management/Asset Allocation ✓ ✓ ✓ ✓ Legal/Insurance Regulatory ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Other Public Company Board Experience ✓ ✓ ✓ ✓ ✓ ✓ 6 2021 Proxy Statement 5 with each otherinternally and with our customers, distributors, agents, national marketing organizations, suppliers, shareholders and others.outside parties. This requires conducting our business in accordance with all applicable laws and regulations and in accordance with the highest standards of business conduct. The Company has established a Code of Business Conduct and Ethics (the "Code“Code of Conduct"Conduct”) to assure uniformity in standards of conduct. The Code of Conduct applies to the Company'sCompany’s directors, officers and employees. The Code of Conduct is available as "Code“Code of Conduct"Conduct” under "Corporate Governance"“Corporate Governance” accessible through the "Investor Relations"“Investor Relations” link on the Company'sCompany’s website at www.american-equity.com. A copy of the Code of Conduct is available in print. Requests should be sent to the Corporate Secretary at 6000 Westown Parkway, West Des Moines, Iowa 50266.MatovinaMulcahy serves as Chairman of the Board of Directors.Directors and Lead Independent Director. As Chairman of the Board of Directors, Mr. Matovina'sMulcahy’s focus is on board effectiveness, governance and processes and facilitating the strategic directionBoard of Directors' oversight of company strategy, risks and performance management. Mr. Mulcahy’s long-term service as a member of the Company. Mr. Matovina's former serviceBoard of Directors, as our Chief Executive Officerwell as his other public company board leadership, accounting, business building and President and his substantial industrygeneral management experience make him the appropriate leader of the Board.Board of Directors. Mr. Howe serves as Lead Independent Director andMulcahy works with the Chairman and other members of the Board of Directors to provide independent oversight of the Company. Among other things, Mr. HoweMulcahy serves as principal liaison among the Chairman, the independent directors and senior management. Mr. HoweMulcahy also chairs executive sessions of the independent and non-management directors.Directors'Directors’ Oversight of Risk ManagementThe Company's Board of Directors administers its risk oversight function directly and through its committees. participates in settingoversees the Company's businessCompany’s strategy and plays a key role in the assessment of management's approachrisk framework, as effective risk oversight is fundamental to risk. Through this process, thedelivering long-term value to shareholders. The Board of Directors, better understandswith the assistance of its committees, oversees that the Company’s business plans align to the Company’s overall risk appetite. The Board of Directors and determines what level ofthe committees review and approve the Company’s risk is appropriate forappetite statement, review significant risk policies and regularly discuss with management the Company.Company’s performance risk targets. While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board of Directors also have responsibility for risk management. For example, the Audit Committee focuses on financial reporting risk, including internal controls. The Risk Committee focuses on non-financial risks, liquidity risk and insurance risk. Additionally, the Compensation Committee is responsible for creating incentives that encourage a level of risk-taking behavior consistent with the Company'sCompany’s business strategy. Finally, the Investment Committee focuses on credit risk and market risk and investment policies and activities.("ERM"(“ERM”) policy approved by the Board of Directors and implemented by an ERM Committee comprised of the Chief Risk Officer and other members of senior management who, among other things, review and discuss reports from other members of management regarding the Company'sCompany’s risk management activities, including the areas management has identified as our major risk exposures, and the steps taken to monitor and manage those exposures. The Chief Executive Officer, Chief Risk Officer and ERM Committee are responsible for reporting the risk profile, risk trends and key risk metrics to the Risk Committee.Company'sCompany’s and their responsibilities regarding the identification and disclosure of material information about the Company and the accuracy, completeness and timeliness of the Company'sCompany’s financial reports, SEC reports and press releases. 620202021 Proxy Statement7twelvefourteen members, and it has affirmatively determined the following tentwelve are independent under applicable requirements:
Brenda J. Cushing
James M. Gerlach
Douglas T. Healy
Robert L. Howe
Michelle M. Keeley
William R. Kunkel
Alan D. Matula
David S. Mulcahy
Gerard D. NeugentDebra J. RichardsonSachin Shah
A. J. Strickland, IIIThe Board has also determined that Michelle M. Keeley, who is nominated for election, is independent under the applicable requirements.Company'sCompany’s offices is immaterial in amount to both the Company and to Knapp Properties. Mr. Neugent isowns through a member/managerfamily trust 4.72% of William C. Knapp, L.C., which is a 50% owner of West Lake Properties, L.C. West Lake Properties, L.C. owns a warehouse building, a portion of which is leased to the Company. The aggregate amount of rent and expenses relating to the warehouse space is immaterial in amount to both the Company and William C. Knapp, L.C.non-executiveindependent Chairman of the Board, a director and shareholder of Workiva Inc. The Company has entered into a subscription agreement with Workiva Inc. to utilize certain software. The fees paid to Workiva Inc. in 20192020 pursuant to the subscription agreement are immaterial to the Company and to Workiva Inc."Guidelines"“Guidelines” under "Corporate Governance"“Corporate Governance” accessible through the "Investor Relations"“Investor Relations” link on our website at www.american-equity.com and are also available in print for any shareholder upon request.twelvefifteen times in 2019,2020, and each of the directors attended at least 75% of the meetings of the Board of Directors and the committee meetings for any committee on which he or she served during 2019.2020. We currently have seven permanent committees, as described below. Under our Corporate Governance Guidelines, a8 2021 Proxy Statement 2020 Proxy Statement7with the exception of A. J. Strickland, III attended the 20192020 Annual Meeting of Shareholders. Board Committee Current Members Board CommitteeCurrent MembersMeetings
During 2019 2020 Audit Cushing, Howe, Mulcahy 810 Compensation Compensation Chapman, Cushing, Strickland 712 Chapman, Gerlach, Kunkel, Neugent 7 ExecutiveBhalla(1), Howe, Matovina, Mulcahy1 InvestmentBhalla(1), Howe, Matovina, Mulcahy4 RiskKunkel, Matula, Richardson(2) 4 Executive Bhalla(1), Howe, Matovina, Mulcahy 2 Investment Bhalla(1), Gerlach, Healy(2), Keeley(3), Matovina 3 Risk Healy(2), Keeley(3), Kunkel, Matovina, Matula 8 Innovation & Technology Matula, Mulcahy, Strickland 2 (2)Richardson, who presently serves asKeeley was appointed to the Board of Directors and became a Class II Director, will not stand for reelection atmember of the Annual Meeting.Investment and Risk Committees on June 4, 2020.Directors'Directors’ oversight of (a) the integrity of our financial statements and systems of internal control over financial reporting; (b) our compliance with legal and regulatory requirements as they pertain to the financial statements and annual audit process; (c) our independent registered public accounting firm'sfirm’s qualifications and independence; and (d) the performance of our independent registered public accounting firm and our internal audit function; and (ii) prepares the annual report on audit disclosures required to be prepared by the Audit Committee pursuant to the rules of the SEC. The Audit Committee is governed by a written charter approved by the Board of Directors. The charter is available under "Corporate Governance"“Corporate Governance” accessible through the "Investor Relations"“Investor Relations” link on our website at www.american-equity.com and is also available in print for any shareholder upon request. The annual report of the Audit Committee is set forth below."audit“audit committee financial experts,"” as that term is defined under SOX.Company'sCompany’s Chief Executive Officer; (ii) oversees the compensation payable to those executive officers identified in the Company'sCompany’s proxy statement who report directly to the Chief Executive Officer; (iii) administersoversees the Company'sCompany’s compensation plans including cash incentive and equity-based plans; and (iv) reviews and recommends to the Board of Directors the compensation of the Company'sCompany’s non-employee directors; and (v) produces an annual report on executive compensation required to be prepared by the Compensation Committee pursuant to the rules of the SEC.directors. The Compensation Committee is governed by a written charter approved by the Board of Directors. The charter is available under "Corporate Governance"“Corporate Governance” accessible through the "Investor Relations"“Investor Relations” link on our website at www.american-equity.com and is also available in print for any shareholder upon request. The annual report of the Compensation Committee is set forth below.("(“Pearl Meyer"Meyer”), to provide advice and data with respect to compensation benchmarking and market practices. In 2019,2020, Pearl Meyer advised the Compensation Committee regarding (i) base salaries of executive officers, (ii) short-term incentive compensation awards and (iii) long-term incentive compensation awards. In performing the annual assessment of the compensation consultant'sconsultant’s independence, the Compensation Committee has reviewed, among other items, a letter from Pearl Meyer addressing its independence and the independence of the members of the consulting team serving the Compensation Committee, including the following factors: (i) the nature of any services provided to the Company by Pearl Meyer other than as described above; (ii) the amount of fees paid by the Company in relation to Pearl Meyer'sMeyer’s total revenue; (iii) Pearl Meyer'sMeyer’s policies and procedures designed to prevent conflicts of interest; and (iv) the existence of any business or personal relationship or stock ownership that could impact the adviser'sadviser’s independence. Pursuant to SEC and NYSE Rules, the Compensation Committee assessed the independence of Pearl Meyer in February 20192020 and determined Pearl82020 Proxy StatementCompany'sCompany’s management and that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant for the Compensation Committee. 2021 Proxy Statement 9 Company'sCompany’s management. The Nominating and Corporate Governance Committee is governed by a written charter approved by the Board of Directors. The charter is available under "Corporate Governance"“Corporate Governance” accessible through the "Investor Relations"“Investor Relations” link on our website at www.american-equity.com and is also available in print for any shareholder upon request.ourthe Company's general investment strategies, objectives, standards and limitations; (ii) oversees ourthe use of derivatives and the Company's general hedging strategy; and (iii) reviews and monitors investment performance. The Investment Committee is governed by a written charter approved by the Board of Directors.Company'sCompany’s (i) risk management governance structure; (ii) risk management taxonomy and risk assessment guidelines for risks that could have a material impact on the Company; and (iii) risk tolerance. The Risk Committee is governed by a written charter approved by the Board of Directors.and& Technology Committee reviews, evaluates and makes recommendations concerning the Company'sCompany’s innovation and technology strategy and capabilities in light of the Company'sCompany’s long-term business strategy and goals.Company'sCompany’s Process for Identifying Director NomineesDirectors'Directors’ oversight of the business and affairs of the Company and have an impeccable record and reputation for honest and ethical conduct. The Nominating and Corporate Governance Committee will consider candidates recommended by shareholders. In considering candidates submitted by shareholders, the Nominating and Corporate Governance Committee will take into consideration the needs of the Board of Directors and the qualifications of the candidate. The Nominating and Corporate Governance Committee may also take into consideration the number of shares held by the recommending shareholder and the length of time the shares have been held.Directors'Directors’ oversight of our business and affairs and (ii) the nominee'snominee’s reputation for honesty and ethical conduct in his or her personal and professional activities. Additional factors the Nominating and Corporate Governance Committee may consider include a candidate'scandidate’s specific experiences and skills, relevant industry background and knowledge, time availability in light of other commitments, potential conflicts of interest, material relationships with us and independence from management. The Nominating and Corporate Governance Committee also seeks to have the Board of Directors representcomprised of a diversity of backgrounds and experience.10 2021 Proxy Statement 2020 Proxy Statement9Company'sCompany’s Compensation Committee members has ever been an officer or employee of the Company or any of its subsidiaries, and during our last fiscal year, none of our executive officers served on the compensation committee or board of directors of any company that had one or more executive officers who served on our Board of Directors or our Compensation Committee."Ownership Guidelines"“Ownership Guidelines”) requiring the directors to own Common Stock equal in value to three times the director'sdirector’s annual cash retainer. Directors have seven years from the later of:of (i) the date of adoption of the Ownership Guidelines; and (ii) the date of the director'sdirector’s appointment to the Board of Directors to obtain the required Common Stock ownership. Directors are required to retain 100% of the net after-tax shares acquired from the vesting, settlement or exercise of equity awards until they meet the stock ownership level. Common stockStock ownership levels are measured annually on December 31 and shares will be valued at the highest per share price over the prior 12-month period. Once a director meets the applicable stock ownership level, no further investment in Common Stock is required to compensate for a subsequent decline in the market value of those shares or a change in director annual cash retainer. All non-employee directors except Mr. Healy and Ms. Keeley, who were appointed in 2020, have met the requirements of the Ownership Guidelines.Director'sDirector’s independent compensation consultant, Pearl Meyer, to provide advice and data with respect to non-employee director compensation, including retainers and equity awards. Pearl Meyer last provided a report in May 20182020 which included recommendations for increases in non-employee director compensation based on an evaluation of the compensation practices and data from the same peer group companies used to evaluate executive compensation. Non-employee director compensation is intended to approximate the 25th percentile of the peer group. Non-employee director compensation for 2019 was unchanged from the non-employee director compensation implemented in June and July 2018.18,00020,000 per quarter as the cash retainer•$1,500 per meeting for attending meetings of the Board of Directors, $1,000 per meeting if attended by phone and the meeting is otherwise an in-person meeting or $500 per meeting for telephonic meetings, plus reimbursement of expenses for attending such meetings•Lead Independent Directorindependent Chairman receives an additional $5,000$30,000 per quarter.••2,2503,000•2,2503,000•and Technology Committee—& Technology—$2,250and& Technology Committee receive an additional $3,000, $1,500, $750, $750$1,000, $1,000 and $750 per quarter, respectively. Non-employee members of the Investment Committee and the Executive Committee receive an additional $1,000 and $750 per quarter. 2021 Proxy Statement 11 20192020 for each member of the Board of Directors who served as a director for any part of such fiscal year and who102020 Proxy Statementin 2019,for part of 2020 and who was a non-employee director for part of 2020, is fully reflected in the Summary Compensation Table of this proxy statement: Name Fees Earned or
Paid in Cash
($)
($)(1) All Other
Compensation
($) Total
($) Joyce A. Chapman 97,500 96,390 — 193,890 Brenda J. Cushing 99,000 96,390 — 195,390 James M. Gerlach 88,000 96,390 — 184,390 Douglas T. Healy 22,000 73,238 — 95,238 Robert L. Howe 116,000 96,390 — 212,390 Michelle M. Keeley 44,000 96,390 — 140,390 William R. Kunkel 93,500 96,390 — 189,890 Alan D. Matula 93,500 96,390 — 189,890 David S. Mulcahy 129,000 96,390 — 225,390 Gerard D. Neugent 84,500 96,390 — 180,890 Debra J. Richardson(2) 41,000 — — 41,000 Sachin Shah(3) — 55,188 — 55,188 A. J. Strickland, III 99,000 96,390 — 195,390 Name Fees Earned or
Paid in Cash
($) Stock Awards
($)(1) All Other
Compensation
($)(2) Total
($) 100,500 96,384 960 197,844 41,500 — — 41,500 102,000 96,384 960 199,344 91,000 96,384 960 188,344 120,500 96,384 960 217,844 94,000 96,384 960 191,344 93,000 96,384 960 190,344 130,000 96,384 793,148 1,019,532 89,000 96,384 960 186,344 85,000 96,384 960 182,344 100,500 96,384 960 197,844 (1)("FASB"(“FASB”) Accounting Standards Codification ("ASC"(“ASC”) Topic 718. For further information, please see Footnote 11 Retirement and Share-Based Compensation Plans in the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2019.2020. On June 6, 2019,4, 2020, each non-employee director nominee or non-employee director continuing to serve,then serving was granted 3,2004,200 shares of time-based restricted stock, all of which remain outstanding as of December 31, 2019.2020. The per share fair value at the grant date of June 4, 2020 was $30.12.$22.95. The equity awards listed for Mr. Healy and Mr. Shah, each of whom were elected to the Board of Directors after June 4, 2020, reflect a pro-rated award granted in respect of each of their services anticipated from the dates of their election to the Board of Directors to the date of the 2021 annual meeting. The per share fair values at the grant date for Mr. Healy and Mr. Shah were $23.25 and $26.28, respectively. The vesting period for the restricted stock is the earlier of (a) one year from the grant date or (b) the date of the next annual meeting. There was no other unvested restricted stock held by the non-employee directors as of December 31, 2019.2020.(2)Amounts reflect dividends paid on unvested restricted stock awards. For Mr. Mulcahy, amount also reflects the value of a distribution of 28,125 shares of common stock and related dividends under a non-qualified deferred compensation arrangement pursuant to which he received shares on a deferred payment basis for services rendered during our initial start-up period.(3)Mr. Clark did not stand for reelection at the 2019 Annual Meeting.(4)who currently serves as a Class II Director, willdid not stand for reelection at the 2020 Annual Meeting.12 2021 Proxy Statement 2020 Proxy Statement112019.2020. There were no unexercisable options held by a non-employee director as of such date. Name Number of Shares of
Unvested Restricted
Stock (#) Number of Shares
Underlying Unexercised
Options (#) Joyce A. Chapman 4,200 29,000 Brenda J. Cushing 4,200 — James M. Gerlach 4,200 — Douglas T. Healy 3,150 — Robert L. Howe 4,200 29,000 Michelle M. Keeley 4,200 — William R. Kunkel 4,200 — Alan D. Matula 4,200 — David S. Mulcahy 4,200 — Gerard D. Neugent 4,200 29,000 Sachin Shah(1) 2,100 — A. J. Strickland, III 4,200 — Name Number of Shares of
Unvested Restricted
Stock (#) Number of Shares
Underlying Unexercised
Options (#) 3,200 39,000 3,200 — 3,200 — 3,200 36,500 3,200 — 3,200 — 3,200 — �� 3,200 29,000 3,200 27,750 3,200 39,500 1220202021 Proxy Statement13KPMGEY as our independent registered public accounting firm for 2020.2021. The Board of Directors requests that the shareholders ratify the appointment of KPMG.EY. If the appointment of KPMGEY is not ratified by shareholders, our Audit Committee may investigate the reasons and consider approving another independent registered public accounting firm. 2020 2019 Audit fees(1) $ 2,271,483 $ 2,558,817 Audit-related fees(2) 238,545 291,865 Tax fees — — All other fees(3) 3,560 1,780 Total $ 2,513,588 $ 2,852,462 2019 2018 $ 2,558,817 $ 1,995,511 291,865 89,375 — — 1,780 — $ 2,852,462 $ 2,084,886 (1)(2)(3)KPMG'sKPMG’s Accounting Research Website.auditors'auditors’ independence. These services may include audit services, audit-related services, tax services and other services. Permissible non-audit services are usually limited to fees for accounting assistance or audits in connection with acquisitions and other services specifically related to accounting or audit matters such as comfort letters related to equity or debt offerings, audits of employee benefit plans and tax services. Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee. The Audit Committee has delegated to the Chairman of the Audit Committee specific pre-approval authority provided the estimated fee for any such engagement does not exceed $25,000. The Chairman of the Audit Committee must report, for information purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. Requests to provide services that require separate approval by the Audit Committee will be submitted to the Audit Committee by both the independent registered public accounting firm and ourthe Chief Financial Officer and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC'sSEC’s rules on auditor independence. In fiscal year 2019,2020, all of the services and fees described above were pre-approved by the Audit Committee.20192020 audit and are permitted to make a statement if they so desire.KPMGEY as our independent registered public accounting firm for 2020.14 2021 Proxy Statement 2020 Proxy Statement13Company'sCompany’s financial reporting process on behalf of the Board of Directors. Management is responsible for the Company'sCompany’s financial reporting process, the preparation, presentation and integrity of the Company'sCompany’s financial statements and the systems of internal control, including disclosure controls and procedures and internal control over financial reporting. The Company'sCompany’s independent registered public accounting firm is responsible for performing an independent audit of the Company'sCompany’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing an opinion on the fair presentation of those financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"(“GAAP”), as well as issuing an opinion on the effectiveness of internal control over financial reporting. The Audit Committee is responsible for monitoring and overseeing the conduct of these activities, appointing the Company'sCompany’s independent registered public accounting firm and for supervising the relationship between the Company and the independent registered public accounting firm. In fulfilling its oversight responsibilities, the Audit Committee meets regularly with management and the independent registered public accounting firm, both jointly and separately.Company'sCompany’s audited consolidated financial statements for the year ended December 31, 20192020 with management and KPMG, the Company'sCompany’s independent registered public accounting firm. The Audit Committee also reviewed Management'sManagement’s Report on Internal Control over Financial Reporting and KPMG'sKPMG’s Report of Independent Registered Public Accounting Firm included in the Company'sCompany’s Annual Report on Form 10-K for 20192020 filed with the SEC.firm'sfirm’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence. KPMG confirmed in its letter that it is independent of the Company under all relevant professional and regulatory standards.Company'sCompany’s audited consolidated financial statements for the year ended December 31, 20192020 be included in the Company'sCompany’s Annual Report on Form 10-K for 20192020 filed with the SEC.Company'sCompany’s financial statements are complete and accurate and in accordance with U.S. generally accepted accounting principles. Such matters are the responsibility of management, and where applicable, the independent registered public accounting firm. In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management'smanagement’s representation that such consolidated financial statements have been prepared with integrity and objectivity and in conformity with U.S. generally accepted accounting principles and (ii) the report of KPMG with respect to such consolidated financial statements.David S, Mulcahy, Chair
Robert L. Howe
David S. Mulcahy 1420202021 Proxy Statement152019,2020, our executive officers are:65)66) served as Chief Executive Officer and President of the Company sincefrom 2012 until he resigned from those positions on March 1, 2020 and January 27, 2020, respectively. He has served as Chairman of the Company sincefrom April 2017 until April 15, 2020, and is currently servingserved as non-executive Chairman following his termination of employment with the Company. Hefrom April 16, 2020 until April 1, 2021. Prior to becoming Chief Executive Officer and President, he served as Chief Financial Officer and Treasurer of the Company from 2009 until 2012 and as the Company'sCompany’s Vice Chairman from 2003 until April 2017. Mr. Matovina is a certified public accountant and has more than 30 years of experience in the life insurance industry.50)51) has served as Chief Financial Officer and Treasurer of the Company since 2012. He served as Vice President-Controller of the Company from 2001 to 2012. Mr. Johnson is a certified public accountant and has over 25 years of experience in the life insurance industry.57)58) has served as President of American Equity Investment Life Insurance Company, the Company'sCompany’s primary wholly-owned life insurance subsidiary ("(“American Equity Life"Life”), since 2009 and is an Executive Vice President of the Company. He has more than 2535 years of experience in the life insurance industry.54)55) has served as Executive Vice President and Chief Risk Officer since January 2021. Prior to that, Mr. Lorenzen served as Executive Vice President and Chief Investment Officer since June 2015, and served as Senior Vice President and Chief Investment Officer since 2009. Mr. Lorenzen has more than 20 years of experience in the life insurance industry.48) has49) served as Executive Vice President and General Counsel sincefrom April 2016 to April 1, 2021 and as Corporate Secretary sincefrom July 2016.2016 to April 1, 2021. She previously served aswas Vice President and Deputy General Counsel sincefrom June 2014.2014 to April 2016. Prior to joining the Company, Ms. Montz served in various roles at AEGON Asset Management, a global asset management company, from 2004 to 2014, including as General Counsel, AEGON USA Investment Management, LLC from January 2012 to June 2014. She has over 2025 years of legal experience and over 15 years of experience in the life insurance industry.48)49) has served as Executive Vice President and Chief Human Resource Officer of American Equity Life since June 2017 and was Senior Vice President and Chief Human Resource Officer from October 2016 to June 2017. From May 2013 to October 2016, Ms. Bryant was Senior Vice President, Human Resources of Bankers Trust Company, a banking and financial institution. Ms. Bryant served as Human Resources Business Partner at Aviva USA from December 2008 to May 2013. She has over 20 years of human resources experience.47)48) has served as Vice President and Chief Accounting Officer of the Company since June 2017. Prior to that, Mr. Samuelson served as Vice President-Controller of the Company since 2012. Mr. Samuelson is a certified public accountant and has over 20 years of experience in the life insurance industry.Additionally,Anant Bhalla (age 42)56) has served as Executive Vice President and Chief Investment Officer, Insurance since January 2021 and Client Solutions Officer of American Equity Life since July 2020. Prior to joining the Company, Mr. Hamalainen was Executive Vice President, Chief Risk Officer of Brighthouse from December 2016 to May 2020. Mr. Hamalainen served as Senior Vice President, Treasury and Investment Management at Ameriprise Financial from September 1991 to May 2016. He has over 25 years of experience in financial services.2019. Please refer2020. Ms. Zanghi has served as Executive Vice President, Chief Legal Officer and Secretary since April 1, 2021 and was Senior Vice President and General Counsel, U.S. Life Companies since October 2020. Prior to Proposal 1—Electionjoining the Company, Ms. Zanghi was Head of Directors—Class I Director Nominated forTax and Associate General Counsel of Brighthouse from August 2017 to October 2020 and held various positions at Metropolitan Life Insurance Company, including Senior Vice President of Tax and ERISA, from September 1998 until August 2017. She has over 20 years experience as a Term that Expires atlegal advisor in the 2022 Annual Meeting for Mr. Bhalla's biographical information.16 2021 Proxy Statement 2020 Proxy Statement15Tolga UzunerTable (age 47) became an executive officer of ContentsCompany'sCompany’s compensation objectives and philosophy and our 20192020 compensation program. It also reviews the outcomes, including the Company'sCompany’s financial performance in 2019.2020. Our named executive officers in 20192020 were: Name: Name:Title: Title: John M. Matovina Chairman, Chief Executive Officer and President(1) Anant Bhalla Chief Executive Officer and President(1) Ted M. Johnson Chief Financial Officer and Treasurer Ronald J. GrensteinerPresident, American Equity Life and Executive Vice President Jeffrey D. Lorenzen Executive Vice President and Chief Investment Officer(2) Renee D. Montz Executive Vice President, General Counsel and Secretary(3) James L. Hamalainen Executive Vice President and Chief Client Solutions Officer, American Equity Life(4) 2019We delivered strong financial performance2019significant sales of our products despite the continuationimpact of a challengingthe COVID-19 pandemic. In 2020, the Company’s sales environment. We continued to grow ourwere $3.7 billion which resulted in policyholder funds under management which increased 4.3% to $53.2of $54.1 billion at the end of 2019.December 31, 2020. We delivered net income available to common stockholders of $246$637.9 million, or $2.68$6.90 per common share-assuming dilution. Our netNet income available to common stockholders was negativelypositively impacted by revisionsassumption updates related to the calculation of assumptions usedthe change in fair value of embedded derivatives which was partially offset by the negative impact of assumption updates related to determinethe calculations of deferred sales inducements, deferred policy acquisition costs and reserves held for lifetime income benefit ridersriders. The most significant assumption updates in 2020 were to investment spread assumptions, including the net investment earned rate and by decreases increditing rates on policies due to the discount rates usedlow interest rate environment experienced during 2020 and to compute the embedded derivative liability related to our fixed index annuities.20192020 Annual Meeting of Shareholders, our shareholders cast an advisory vote (a "say-on-pay"“say-on-pay” vote) to approve the compensation of our named executive officers as disclosed in our proxy statement. Shareholders approved the say-on-pay proposal by an affirmative vote of 75.5%96% of the shares cast on that proposal. Prior to 2019,affirmative vote2020 performance incentive cash payout for the say-on-pay proposal ranged from 94.1%-96.9% of the shares cast on that proposal. The Compensation Committee is unaware of any shareholder concerns with respect to the Company's executive compensation as no shareholders have contacted the Company or the Compensation Committee and the Company's executive compensation is not excessive. The Compensation Committee did note that a proxy advisory firm had issued a new voting recommendation report in 2019 to certain clients in which the firm recommended the clients vote against the Company's say-on-pay proposal due to certain elements of the Company's executive compensation program. The Company has modified several of its executive compensation practices which are responsive to the concerns identified in the proxy advisory firm's voting recommendation. Specifically, the Company no longer has any compensation agreements with excise tax gross-up provisions and the Company has added the following risk-mitigating features to its executive compensation program: stock ownership guidelines, post-vesting stock holding period requirements and a robust clawback policy.The Compensation Committee reviewed the executive compensation program and made the following changes: (i) increased the target equity awards for Mr. Matovina from 150% to 225%our Chief Executive Officer was 145% of his base salary on the grant date; (ii) increased the target equity awardsamount and for theour other named executive officers from 105% to 135% of base salary on the grant date; and (iii) changed the form of time-based equity awards from shares of restricted stock to restricted stock units ("RSUs"). 100% of Mr. Matovina's increase was performance-based RSUs. The increases to the other named executive officers were split between performance-based RSUs (80%) and time-based RSUs (20%).Based on our 2019 annual performance achievements, 2019 performance incentive cash payouts for our named executive officers were 167%131%-142% of their target amounts. Based on our three-year performance achievements, our named executive officers (other than Messrs. Bhalla and Hamalainen) earned 136%128% of the target number of performance-based RSUs awarded to them for the 2017-20192018-2020 three-year performance period. 2020 Appointment of CEO & PresidentAnant Bhalla joined the Company as an executive officer in January 2020. Mr. Bhalla's compensation arrangement with the Company takes effect in 2020 and includes an annual base salary of $850,000 and participation in the Short-Term Plan and the Company's long-term equity incentive compensation program as described in "Compensation Decisions Relating to 2020 Compensation." Mr. Bhalla was granted (i) an option to purchase 50,000 shares of Common Stock, which has a five-year vesting period and (ii) 18,727 RSUs with an aggregate value of $500,000 with 50% of the grant subject to a one-year vesting period and the remaining 50% subject to a two-year vesting period.162020 Proxy StatementMr. Bhalla also entered into a change in control agreement with the Company, pursuant to the same form of change in control agreement that exists with the named executive officers other than Mr. Matovina and is described under "Potential Payments Upon Termination or a Change in Control." If the Company terminates Mr. Bhalla's employment other than for Cause or due to death or disability, and subject to his execution and non-revocation of a release of claims, he is entitled to a lump sum severance payment consisting of (i) twenty-four months of his base salary and (ii) his target bonus opportunity under the Short-Term Plan for the year in which his employment terminates.•• 2021 Proxy Statement 17 20192020 include: base pay; annual cash incentive compensation under our Short-Term Performance Incentive Plan (the "Short-Term Plan"“Short-Term Plan”); and long-term equity incentive compensation through performance-based RSUs, time-based RSUs, performance-based options and time-based RSUsoptions granted under our 2016 Employee Incentive Plan (the "2016“2016 Employee Incentive Plan"Plan”) and our Amended and Restated Equity Incentive Plan (the “Amended and Restated Equity Incentive Plan”). Element ElementDescriptionPurpose Description Purpose Base Salary Fixed level of annual cash compensation and basis for target incentive compensation awards Compensate for job duties based on skill, tenure and market information Annual Incentive Targeted variable/at-risk compensation expressed as a percentage of base salary Focus executives on annual corporate goals through performance-based pay Long-Term Incentive Long-Term Incentive Variable/at-risk equity compensation in the form of RSUs based on three-year performance, time-based RSUs and time-based RSUsand performance-based stock options. Align executives'executives’ interests with shareholder interests and long-term results and promote retention and three-year performance-based RSUs.RSUs, and performance-based stock options granted to drive achievement of AEL 2.0 strategy.••••••2019,2020, the Compensation Committee engaged Pearl Meyer to conduct a study and provide advice and data with respect to compensation benchmarking and market practices for the Company'sCompany’s named executive officers. Pearl Meyer provided a new complete study and report in the fourth quarter of 20182019 for use with all 20192020 compensation decisions, including the new cadence for base salary increases. Beginning in 2019, base salary increases take effect at the beginning of the fiscal year, rather than in the middle of the fiscal year.2020 Proxy Statement17 American Financial Group, Inc. Globe Life Inc. American National Group, Inc. Horace Mann Educators Corp.Corporation Athene Holding Ltd. American National Insurance Co. Kemper Corporation CNO Financial Group, Inc. Athene Holding Ltd. National Western Life Group, Inc. CNO Financial Group, Inc.Primerica, Inc. FBL Financial Group, Inc. Reinsurance Group of America,Primerica, Inc. FGL Holdings Torchmark Corporation (now known as Globe Life, Inc.) Reinsurance Group of America, Incorporated 18 2021 Proxy Statement $62$67 billion. Pearl Meyer uses a variety of surveys with industry specific pay data for companies of similar size, but neither management nor the Compensation Committee is aware of the specific surveys used or the specific companies that participate in the surveys.Committee'sCommittee’s pay positioning strategy is anchored at the 50th percentile of market consensus for base salary, target total cash compensation and target total direct compensation, but with competitive ranges that are wider for target total cash compensation and target total direct compensation. The competitive range is 90%-110%90-110% of the 50th percentile for base salary and 80%-120% of the 50th percentile for target total cash compensation and target total direct compensation. This strategy helps achieve pay and performance alignment with pay above the 50th percentile when performance goals are exceeded and below the 50th percentile when performance goals are not achieved. The competitive ranges allow for various levels of experience and tenure. This external market data is only one of many factors reviewed and considered by the Compensation Committee, with other relevant factors including company performance, individual executive performance, individual executive experience, internal pay equity, executive retention, and succession planning. Accordingly, not every pay element or individual executive pay level is at the targeted market level.2019, approximately 69%2020, with respect to each of our named executive officers in office on the last day of the Chief Executive Officer's target annual compensation and 58%year other than Mr. Bhalla, 68%-69% of each other named executive officer's target annual compensation is considered variable based on achieving performance objectives. Variable forms of compensation includeincluded in setting target annual compensation included amounts payable under the Short TermShort-Term Plan, performance-based RSUs and performance-based RSUs.options. In addition, the mix of compensation for 20192020 for the named executive officers other than the Chief Executive Officer and the other named executive officers as a group is well aligned with market data included in Pearl Meyer's 2018Meyer’s 2019 report. The Chief Executive Officer's base salary is slightly more than market (24% compared to 20%) with target long-term equity compensation slightly less than market (52% compared to 56%). The other named executive officers as a group have slightly more base salary than market with the offset in target annual cash incentive compensation. Beginning with our 2019 fiscal year, base salary increases take effect at the beginning of the fiscal year, rather than in the middle of the fiscal year. In addition to the data provided by Pearl Meyer, in determining specific salaries for the named executive officers for 2019,2020, the Compensation Committee considered each executive'sexecutive’s performance, length of service in the position and experience. In November 2018,2019, the Compensation Committee182020 Proxy StatementTable approved modest increases of Contentsapproved increases toapproximately 3% in the base salaries of all of the named executive officers (other than Mr. Matovina) then in office to be effective January 1, 2019, as shown in the table below: Name Base Salary % Increase(1) $ 900,000 5.9 % $ 556,000 4.9 % $ 566,000 4.8 % $ 493,000 4.9 % $ 458,000 5.3 % (1)Increases are calculated based on the named executive officer's base salary that was effective as of January 1, 2018, which were as follows: John M. Matovina $850,000, Ted M. Johnson $530,000, Ronald J. Grensteiner $540,000, Jeffrey D. Lorenzen $470,000, and Renee D. Montz $435,000. The salaries in effect as of January 1, 2018 were initially made effective July 1, 2017.The2020. These increases in base salary for our named executive officers between the beginning of 2018 and the beginning of 2019 were at levels consistent with thosethe percentage increase provided to our employees generally. Consistent withgenerally, and the Compensation Committee's objective, Mr. Matovina's base salaryincreased amounts for 2019 was 91% of the 50th percentile of the market consensus level and base salaries for our other named executives wereremained within the competitive range of the 50th percentile of the market consensus levels.Short-TermShort-Term Incentive Compensation for 2019.2020. In November 2018,2019, the Compensation Committee approved the structure of the short-term cash incentive compensation program for 20192020 (the "2019 Program"“2020 Program”). Under the 20192020 Program, each named executive officer had a threshold, target and maximum incentive opportunity expressed as a percentage of base salary as of December 31, 2019. The 2019 Program threshold, target and maximum award opportunities remained the same as the prior year and are shown in the tables below.2020. Mr. Matovina'sBhalla’s target total cash compensation for 20192020 was 82% 2021 Proxy Statement 19 The Compensation Committee believes these award opportunities are appropriate, competitive and do not create an incentive to take undue or unnecessary risk that could materially harm the Company.20192020 was paid based on achievement of threshold, target and maximum performance goals approved by the Compensation Committee established with respect toCommittee. The 2020 Performance Measures were annuity deposits, non-GAAP operating income per share, and investment spread (the “2020 Company Performance Measures”) and for each named executive officer other than temporary impairments ("OTTI") and realized losses (the "2019 Company Performance Measures").Mr. Bhalla, individual performance goals. Each 20192020 Company Performance Measure wasis weighted at 33 1/3% for Mr. Bhalla, and at 25% and measured independently and afor each other named executive officer received anentitled to a short-term incentive, with the remaining 25% of the award if the threshold for a particular 2019 Company Performance Measure was achieved.opportunity based on individual goals related to their respective areas of responsibility. The 2019 Company Performance Measures were the same performance measures used in the prior year except non-GAAP operating income was replaced with non-GAAP operating income per share. These measures are essentially the same, however the per share measure provides better alignment with shareholder value. The 20192020 Company Performance Measures encompass key areas of Company performance that drive shareholder value and focus on growth in policyholder funds under management (annuity deposits) and financial performance.(non-GAAPmeasures used in the prior year, with the exception of excluding the impact of actuarial assumption updates when determining non-GAAP operating income per share investment spread and OTTIthe elimination of other than temporary impairments and realized losses).20192020 Program which is not a financial measure prepared in accordance with GAAP. For information on how we compute this non-GAAP financial measure please refer to Item 6. Selected Consolidated Financial Data and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2019.2020 Proxy Statement19The 2019 Program designbase salary, respectively, for Mr. Bhalla and 35%, 70% and 140% of base salary, respectively, for each other named executive officer asentitled to receive a percentage of his or her base salary, was:Mr. Matovina Metric Threshold Target Maximum 12.5 % 25 % 50 % 12.5 % 25 % 50 % 12.5 % 25 % 50 % 12.5 % 25 % 50 % 50 % 100 % 200 % Mr. Johnson, Mr. Grensteiner, Mr. Lorenzen and Ms. Montz Metric Threshold Target Maximum 8.75 % 17.5 % 35 % 8.75 % 17.5 % 35 % 8.75 % 17.5 % 35 % 8.75 % 17.5 % 35 % 35 % 70 % 140 % 2019: Metric Threshold Target Maximum Actual Annuity Deposits ($ millions) $ 2,588 $ 3,450 $ 4,313 $ 3,682 Non-GAAP Operating Income Per Share
Excluding the Impact of Actuarial Assumption Updates $ 2.72 $ 3.63 $ 4.54 $ 4.44 Investment Spread ($ millions) $ 1,086 $ 1,237 $ 1,387 $ 1,266 Metric Threshold Target Maximum Actual $ 4,000 $ 4,800 $ 5,600 $ 4,963 $ 3.30 $ 3.95 $ 4.60 $ 5.97 $ 1,090 $ 1,250 $ 1,410 $ 1,325 $ 45 $ 37.5 $ 30 $ 26.53 These outcomesFor Mr. Bhalla, actual performance resulted in an award of 216% of his base salary as of December 31, 2020. For each of the followingnamed executive officers with individual performance objectives, such objectives resulted in awards expressed as a percentage of base salary as of December 31, 2019: Mr. Matovina-167%; each of the other named executive officers-117%2020 ranging from 91%-99%. The amounts awarded to each named executive officer for 20192020 are included in the Summary Compensation Table appearing in the Executive Compensation Tables section of this proxy statement.LongSpecial Bonus Award for Mr. Bhalla. In November 2020, the Compensation Committee awarded Mr. Bhalla a one-time special achievement cash bonus of $1,000,000. In awarding the 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 cash compensation in 2020 being low when benchmarked against other chief executive officers at industry peers. In addition to rewarding Mr. Bhalla for his performance in 2020, the award serves as a retention incentive by stipulating that the full amount is subject to repayment if Mr. Bhalla were to voluntarily resign within 12 months, thereby reducing risk for the Company.-TermLong-Term Equity Compensation for the Three-YearThree-Year Performance Period Ended December 31, 2019.2020. In February 2020,2021, the Compensation Committee certified the results for the performance-based RSUs granted to the named executive officers in March 20172018 for the three-year performance period ended December 31, 2019.2020. As indicated in the table that follows, the Company'sCompany’s actual performance was between target and maximum for one of the performance measures and above maximum for the other performance measure. This resulted in 136.03%128.44% of the performance-based RSUs granted in 20172018 being earned. TheUnder the terms of the awards, if the performance level achieved for a performance measure is at target, 100% of the performance-based RSUs are earned for that 20 2021 Proxy Statement Matovina-23,347;Matovina-31,006; Mr. Johnson-16,090;Johnson-18,045; Mr. Grensteiner-16,405; Mr. Lorenzen-14,355;Lorenzen-16,001; and Ms. Montz-13,251.Montz-14,809. In addition, each of these named executive officerofficers received a cash payment equivalent to the cumulative cash dividends on the number of shares of Common Stock earned for 2017-2019.2018-2020. As they were each hired in 2020, neither Mr. Bhalla nor Mr. Hamalainen held awards for the 2018-2020 performance period. Metric Threshold Target Maximum Actual Book Value Per Share Growth 6.3% 11.3% 16.3% 17.09% Return on Average Equity 6.7% 12.1% 17.5% 12.84% Metric Threshold Target Maximum Actual 5 % 9 % 13 % 10.77 % 5 % 9 % 13 % 16.46 % 2017-20192018-2020 performance-based RSU program, is based on book value per share excluding AOCI,accumulated other comprehensive income (“AOCI”), which is not a non-GAAP financial measure prepared in accordance with202020 Proxy StatementGAAP.measure. For information on how we compute this non-GAAP financial measure please refer to Item 6. Selected Consolidated Financial Data included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2019.2020. Return on Average Equity is determined by dividing non-GAAP operating income by average stockholders'stockholders’ equity excluding AOCI and fair value changes in derivatives and embedded derivatives.Long-TermLong-Term Equity Compensation Awarded for 2019.2020. In February 2019,2020, the Compensation Committee awarded the named executive officersofficers’ performance-based RSUs and time-based RSUs under the 2016 Employee Incentive Plan. The time-based RSUs were substitutedIn accordance with his offer letter, the total target award opportunity for time-base restricted stock granted in prior years.Mr. Bhalla was set at 275% of his base salary at the date of grant. In accordance with his July 2020 offer letter, the total target award opportunity for Mr. Hamalainen was set at 145% of his base salary at the date of grant. Mr. Hamalainen’s award was made under the Amended and Restated Employee Incentive Plan. The total target incentive opportunity awarded for 20192020 was equal to 225%145% of base salary at the date of grant date for Mr. MatovinaMessrs. Johnson and Lorenzen and 135% of base salary at the date of grant date for the other named executive officers, compared to 150% of base salary at the grant date for Mr. Matovina and 105% of base salary at the grant date for each other named executive officer for 2018. These increases were consistent with Pearl Meyer's recommendations and were made by the Compensation Committee to improve the overall competitive positioning of target total direct compensation for each named executive officer. Mr. Matovina's target total direct compensation increased from 61% to 76% of the 50th percentile of the market consensus level and resulted in target total direct compensation that was slightly below the Compensation Committee's competitive range for the 50th percentile of the market consensus level. The target total direct compensation for each of the other named executive officers was within the competitive range of the 50th percentile of the market consensus level. The entire increase in Mr. Matovina's long-term equity compensation was allocated to performance-based equity compensation increasing the percentage of his target annual compensation that was variable or performance-based to 69% from 62% and resulting in a mix of performance-based (87%) and time-based (13%) long-term equity compensation that was slightly different than Pearl Meyer's recommended mix of 80% performance-based and 20% time-based. The mix of 80% performance-based and 20% time-based long-term equity compensation for the other named executive officers for 2019 was the same mix as 2018 consistent with Pearl Meyer's recommendation.are tied tomay pay out at threshold, target and maximum based upon performance goals approved by the Compensation Committee for the three-year period ending December 31, 2021, established with respect to2022. The performance-based RSUs performance measures are Book Value Per Share Growth, based on book value per share excluding accumulated other comprehensive income ("AOCI"),AOCI and fair value changes in derivatives and embedded derivatives, and Return on Average Equity ("ROAE"(“ROAE”), based on non-GAAP operating income excluding the impact of actuarial assumption updates and average stockholders'stockholders’ equity excluding AOCI and fair value changes in derivatives and embedded derivatives, each weighted at 50% and measured independently. The target number of performance-based RSUs granted to Mr. Matovina and the other named executive officersBhalla was equal to 195%220%, to Messrs. Johnson and Lorenzen was equal to 116%, to Ms. Montz was equal to 108%, and to Mr. Hamalainen was equal to 48%, respectively, of base salary on the grant date divided by the closing price of the Common Stock on the grant date. The award to Mr. Hamalainen was adjusted to reflect that he was hired in July 2020. The threshold, target and maximum numbers for performance-based RSUs that can be earned are included in the 20192020 Grants of Plan-Based Awards table appearing in the Executive Compensation Tables section of this proxy statement. If the threshold performance level is not reached for a performance measure, none of the performance-based RSUs will be earned for that performance measure. If the threshold performance level is achieved for a performance measures, 50% of the performance-based RSUs will be earned for that performance measure. If the target performance level is achieved for a performance measure, 100% of the performance-based RSUs will be earned for that performance measure. If the maximum performance level is achieved for a performance measure, 150% of the performance-based RSUs will be earned for that performance measure. For performance between two stated levels of performance, the level of achievement is determined by mathematical interpolation. The performance-based RSUs are eligible for dividends, but dividends will only be paid on the performance-based RSUs that are earned. Earned dividends will be paid in cash. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the 2016 Employee Incentive Plan)Long-Term Plans), the performance-based RSUs are forfeited without consideration upon termination of employment. Performance-based RSUs granted in 20192020 are earned based on performance against the following performance metrics: Metric Below Threshold Threshold Target Maximum Book Value Per Share Growth —% 25% 50% 75% ROAE —% 25% 50% 75% Aggregate Percentage Achievable at Each Performance Level —% 50% 100% 150% 2021 Proxy Statement 21 Metric Below Threshold Threshold Target Maximum — % 25 % 50 % 75 % — % 25 % 50 % 75 % — % 50 % 100 % 150 % 20212022 will be disclosed in the proxy statement for 2022.2023. At the time the performance goals were approved by the Compensation Committee, it was believed that they reflected an appropriate degree of stretch but that they were attainable based on successful execution of the Company'sCompany’s business plan and the realization of macro-economic and financial market conditions reasonably aligned with the Company'sCompany’s expectations.2020 Proxy Statement21Grant:and Option Grants: In 2019,2020, the number of time-based RSUs awarded to Mr. Matovina and the other named executive officersBhalla was equal to 30%55%, Mr. Hamalainen was equal to 48%, Messrs. Johnson and Lorenzen was equal to 29% and Ms. Montz was equal to 27%, respectively, of base salary on the grant date divided by the closing price of the Common Stock on the grant date. Mr. Hamalainen’s time-based RSU grant includes RSUs Mr. Hamalainen received as part of his employment arrangement sign-on bonus that he received when he joined the Company in July 2020. The number of time-based RSUs awarded to the named executive officers is included in the 20192020 Grants of Plan-Based Awards table appearing in the Executive Compensation Tables section of this proxy statement. The time-based RSUs vest on the earlier of: (i) three years after the grant date; and (ii) attainment of age 65 and following 10 years of service with the Company. Pursuant to this provision,Company for awards granted under the 2016 Employee Incentive Plan. The time-based RSUs vest on the earlier of: (i) three years after the grant date; and (ii) attainment of age 55 and following 10 years of service with the Company for Mr. Matovina vested in 2019.awards granted under the Amended and Restated Employee Incentive Plan. The time-based RSUs are eligible for dividends, but dividends will only be paid on the time-based RSUs that vest. Vested dividends will be paid in cash. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the 2016 Employee Incentive Plan)Long-Term Plans), theany unvested time-based RSUs are forfeited without consideration upon termination of employment. Compensation Decisions Relating to 2020 CompensationSpecial Performance Vesting Stock Option Grants.Base Salaries. In addition, in November 2019,2020, the Compensation Committee approved increases to the base salariesawarded Mr. Bhalla, each of the named executive officers and certain other employees a one-time stock option award. The one-time stock option award was granted to Mr. Bhalla, each of the named executive officers and certain other employees, to encourage their 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 named executive officers and other employees in 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 an incentive award (such as options linked with a performance target) that provides a reward for performance based exclusively on stock price appreciation in the annual equity grant mix that creates greater alignment with shareholders. These options are subject to both performance and service vesting conditions. None of these options will vest unless 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, an increase of 37% over the closing price of the Company's Common Stock on the date the options were granted (the “Stock Price Hurdle”). If the Company does not achieve the Stock Price Hurdle on or before the fifth anniversary of the grant date, the entire option award is forfeited. If the Stock Price Hurdle is met, 50% of these option awards will vest on the date the Stock Price Hurdle is satisfied or, if later, on the one-year anniversary of the grant date. The remaining 50% of these option awards will vest on the one-year anniversary of the date the first 50% of the option award becomes vested.2020 as shown2021. The increase in base salary reflected that Mr. Bhalla’s total compensation was below the table below. Name Base Salary $ 573,000 $ 580,000 $ 508,000 $ 472,000 Short-TermShort-Term Incentive Compensation. In November 2019,January 2021, the Compensation Committee approved the structure of the short-term incentive compensation program for 2020.2021. The short-term incentive compensation for fiscal year 20202021 will be paid, if earned, in cash, subject to the achievement of threshold, target and maximum performance goals approved by the Compensation Committee established with respect to annuity deposits (which includes a sales mix target, or alternatively, a reduced payout factor), non-GAAP operating income per share (excluding index credits, certain adjustments and notable items), and investment spread (excluding the impact of index credits) (the “2021 22 2021 Proxy Statement (the "2020 Company Performance Measures") and for each named executive officer other than Mr. Bhalla, individual performance goals. Each 2020 Company Performance Measure is weighted at 331/3% for Mr. Bhalla and 25% for each named executive officer. Forof the named executive officers other than Mr. Bhalla, 25%award opportunity, respectively. The remaining 30% of the award opportunity is based on individual goals related to theirMr. Bhalla’s and each other named executive officer’s respective areas of responsibility. Attainment of each 20202021 Company Performance Measure and individual goal is measured independently. Target and maximum award opportunities for fiscal year 20202021 are 150% and 300% of base salary, respectively, for Mr. Bhalla and 70% and 140% of base salary, respectively, for each other named executive officer.20202021 Company Performance Measures are the same measures used in the 20192020 Program except that non-GAAP operating income per share excludes index credits, certain adjustments and notable items and investment spread excludes the OTTI and realized losses performance measure is not a performance measure for 2020. The Compensation Committee decided to remove this measure at its meeting in late February. In making this determination the Compensation Committee considered that while this performance measure was aligned with the Company's business strategy, the outcome for this performance measure had resulted in a payout at maximum for eachimpact of the three years the measure was part of the Short-Term Plan (despite the establishment of target and maximum performance goals that reflected an appropriate degree of stretch) and the challenges in establishing threshold, target and maximum goals for a performance measure whose outcome could have significant variability from factors outside the control of management. early April, the Compensation Committee approved threshold, target and maximum performance goals for the 20202021 Company Performance Measures. The specific performance goals approved reflect consideration of the anticipated impact on the Company's business and financial results from the COVID-19 pandemic. The Compensation Committee is sensitive to having performance goals that reflect the appropriate balance between employee retention, motivation and reward and the interests of shareholders. As the year progresses, the Compensation Committee will assess the reasonableness of assumptions underlying the approved performance goals compared to actual outcomes with the objective of ensuring that final outcomes for the 2020 short-term incentive compensation program do not result in a windfall to or unduly penalize the participants. Consistent with prior practice, the specific performance goals for the 20202021 Company Performance Measures will be disclosed in next year'syear’s proxy statement.Long-TermLong-Term Incentive Compensation. In January 2021, the Compensation Committee approved the structure of the long-term incentive compensation program for 2021 and in February 2020,2021, the Compensation Committee granted performance-based RSUs and options to the named executive officers. The Compensation Committee set the applicable performance goals in April 2021. The performance-based RSUs will be tied tomay pay out at threshold, target and maximum based upon performance goals approved by the Compensation Committee for the three-year period ending222020 Proxy Statement2022 established with respect to Book Value Per Share Growth (based on book value per share excluding2023. The performance-based RSUs performance measures are ROAE (excluding index credits, certain adjustments, notable items, AOCI and fair value changes in derivatives and embedded derivatives) and ROAE (basedReturn of Capital to Shareholders, based on non-GAAP operating incomedividends, stock buybacks and average stockholders' equity excluding AOCI and fair value changesacquisitions made in derivatives and embedded derivatives),lieu of returning capital to shareholders, each weighted at 50% and measured independently. ROAE is the same performance measure used for performance-based RSUs for the three-year period ending December 31, 2022 except that it excludes index credits, certain adjustments and notable items. Return of Capital to Shareholders is replacing Book Value per Share to directly align with the AEL 2.0 strategy and associated guidance with respect to return of capital to shareholders. Consistent with prior practice, the specific performance goals for the 2021 long-term equity incentive compensation program will be disclosed in the proxy statement for 2024.Bhalla-220%Bhalla-150%; Messrs. Hamalainen, Johnson and Lorenzen-116%Lorenzen-73%; and Mr. Grensteiner and Ms. Montz-108%Montz-67%. If the threshold performance level is not reached for a performance measure, none of the performance-based RSUs will be earned for that performance measure. If the threshold performance level is achieved for a performance measure, 50% of the performance-based RSUs will be earned for that performance measure. If the target performance level is achieved for a performance measure, 100% of the performance-based RSUs will be earned for that performance measure. If the maximum performance level is achieved for a performance measure, 150%200% of the performance-based RSUs will be earned for that performance measure. For performance between two stated levels of performance, the level of achievement is determined by mathematical interpolation. The performance-based RSUs are eligible for dividends, but dividends will only be paid on the time-basedperformance-based RSUs that vest. Vested dividends will be paid in cash. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the 2016 EmployeeAmended and Restated Equity Incentive Plan), the performance-based RSUs are forfeited without consideration upon termination of employment.The performance measures for the three-year period ending December 31, 2022 are the same measures used for the three-year period ending December 31, 2021 with the exception that actual results for the three-year period ending December 31, 2022 will be computed without regard to any changes in accounting standards that might be implemented within the three-year performance period.In early April, the Compensation Committee approved threshold, target and maximum performance goals for the 2020 long-term equity incentive compensation program. The specific performance goals approved reflect consideration of the anticipated impact on the Company's business and financial results from the COVID-19 pandemic. As the performance period progresses, the Compensation Committee will assess the reasonableness of assumptions underlying the approved performance goals compared to actual outcomes with the objective of ensuring that final outcomes for the 2020 long-term equity incentive compensation program do not result in a windfall to or unduly penalize the participants. Consistent with prior practice, the specific performance goals for the 2020 long-term equity incentive compensation program will be disclosed in the proxy statement for 2023.2020,2021, the Compensation Committee granted time-based RSUs to the named executive officers. The number of time-based RSUs granted to the named executive officers was equal to the following percentages of their base salary on the grant date divided by the closing price of the Common Stock on the grant date; Mr. Bhalla-55%Bhalla-75%; Messrs. Hamalainen, Johnson and Lorenzen-29%Lorenzen-36%; and Mr. Grensteiner and Ms. Montz-27%Montz-34%. The time-based RSUs vest on the earlier of: (i) three years after the grant date; and (ii) attainment of age 65 and following 10 years of service with the Company.date. The time-based RSUs are eligible for dividends, but dividends will only be paid on the time-based RSUs that vest. Vested dividends will be paid in cash. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the 2016 EmployeeAmended and Restated Equity Incentive Plan), the time-based RSUs are forfeited without consideration upon termination of employment.The financial markets have experienced significant disruption since 2021 Proxy Statement 23 approved the equity awards described above for 2020. The Compensation Committee met in early April 2020 and considered whether the closing price of the Common Stock which was $26.80 on the February 2020 grant date had resulted in an undue benefitgranted time-based options to the named executive officers. The number of time-based options granted to the named executive officers receiving equity awardswas equal to the following percentages of their base salary on the grant date.date; Mr. Bhalla-75%; Messrs. Hamalainen, Johnson and Lorenzen-36%; and Ms. Montz-34%. The Compensation Committee concluded no adjustmentstime-based options have an exercise price of $27.40 per share, three year ratable vesting and a ten-year exercise term. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the numberAmended and Restated Equity Incentive Plan), the time-based options are forfeited without consideration upon termination of shares were warranted as a result of market developments following the February 2020 grant date.Company'sCompany’s executive officers. The Chief Executive Officer is required to own Common Stock with a value equal to five times the Chief Executive Officer'sOfficer’s base annual salary. Each other executive officer is required to own Common Stock with a value equal to three times the executive officer'sofficer’s base annual salary. Executive officers have seven years from the later of:of (i) the date of adoption of the Stock Ownership Guidelines; and (ii) the date they become an executive officer subject to Section 16 of the Securities Exchange Act of 1934, as amended, to obtain the required Common Stock ownership.2020 Proxy Statement23StocksStock is required to compensate for a subsequent decline in the market value of those shares or a change in salary. All named executive officers other than Ms. Montz,Mr. Bhalla and Mr. Hamalainen, have met the requirements of the Stock Ownership Guidelines. Ms. Montz became an executive officerMessrs. Bhalla and Hamalainen were hired in April 2016 and is on pace for compliance based on outstanding equity awards that are not vested."Repayment Policy"“Repayment Policy”) covering cash and equity incentive compensation earned on the basis of performance. The Repayment Policy covers current and former employees of the Company who are or were subject to Section 16 of the Securities Exchange Act of 1934, as amended, at the time the incentive compensation was earned by such individual (the "Covered Individual"“Covered Individual”). In the event of a restatement of the financial statements of the Company due to material non-compliance with any financial reporting requirements under the federal securities laws due to an act of embezzlement, fraud, breach of fiduciary duty, misconduct or gross negligence by a Covered Individual that results in a performance measure or specified performance target being restated, the Board of Directors may lower the amount of incentive compensation that would have been earned by the Covered Individual and require reimbursement or forfeiture of such amounts in excess of the lowered amount."Potential“Potential Payments Upon Termination or a Change in Control.""Potential“Potential Payments Upon Termination or a Change in Control"Control”. We have no other written employment contracts or separation agreements with any of our named executive officers, other than with respect to Mr. Bhalla'sBhalla’s offer letter.employee'semployee’s total eligible compensation and match 50% of employee contributions up to the next 2% of the employee'semployee’s total eligible compensation, subject to the limitations specified in the Internal Revenue Code of 1986 (the "Code"“Code”). 24 2021 Proxy Statement ("ESOP"(“ESOP”). The principal purpose of the ESOP is to provide each eligible employee with an equity interest in the Company. Employees become eligible once they have completed a minimum of six months of service and their interests in the ESOP become 100% vested after two years of their service to the Company. The Company makes semi-annual discretionary contributions to the ESOP.20192020 was limited personal travel on the Company'sCompany’s aircraft.242020 Proxy Statementits November meeting.meetings held in the fourth quarter of the calendar year and the first two quarters of the next calendar year. Annual grants of equity awards are typically approved by the Compensation Committee at its first regularly scheduled meeting of the calendar year which is typically in late February or early March. The grant date for equity awards is the same day as the Compensation Committee meeting and the number of shares for each equity grant is computed using the closing price of our Common Stock on the date of the Compensation Committee meeting. This timing and process is designed to ensure that our fourth quarter and full year financial results (typically released by mid-February) are fully disseminated in the market by the time the number of shares for equity grants is determined. income tax law limits a public company's income tax deduction for compensation in excess of $1 million paid to certain named executive officers. For taxable years prior to 2018, the limitation did not apply to compensation that qualified as "performance-based compensation" under applicable federal income tax rules. However, federal tax legislation passed in December 2017 repealed the "performance-based"“performance-based” exemption andthat previously allowed compensation over $1 million paid to certain executive officers to be deductible. In addition, the limitation on deductibility of compensation was expanded to include executive officers previously not subject to the limitation. As a result, for taxable years after December 31, 2017, compensation paid to our named executive officers in excess of $1 million will not be deductible unless it qualifies for limited transition relief applicable to certain arrangements in place as of November 2, 2017.Historically, the Company and the Compensation Committee have designed the Company's executive compensation programs to qualify for deductibility under applicable income tax laws. officers'officers’ compensation should be tied to measures of performance of our business and intends to continue to implement compensation programs that it believes are competitive and in the best interests of the Company and its shareholders. Accordingly, while the Compensation Committee considers the deductibility of compensation as one factor in determining executive compensation, it also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be appropriate for achieving the Company's business plans, goals and objectives, even if such compensation is not tax deductible.
Joyce A. Chapman
Brenda J. Cushing 20202021 Proxy Statement25 Name and Principal Position Year Salary
($) Bonus
($)
Awards(1)(2)
($)
Incentive Plan
Compensation(3)
($)
Compensation(4)
($) Total
($) John M. Matovina
Chief Executive Officer
and President 2020(5) 407,949 853,125 96,392 — 20,504 1,377,970 2019 900,000 — 2,024,999 1,502,034 32,639 4,459,672 2018 863,500 — 1,275,015 1,372,568 41,452 3,552,535 Anant Bhalla Chief Executive Officer and President 2020 795,512 1,107,681 5,751,942 1,716,537 45,488 9,417,160 Ted M. Johnson
Chief Financial Officer
and Treasurer 2020 573,000 — 1,320,777 536,247 32,483 2,462,507 2019 556,000 — 750,611 649,546 31,121 1,987,278 2018 538,500 — 780,668 594,283 36,702 1,950,153 Jeffrey D. Lorenzen
Exec. Vice President and
Chief Investment Officer 2020 508,000 — 1,226,548 464,304 39,778 2,238,630 2019 493,000 — 665,568 575,947 30,325 1,764,840 2018 477,500 — 624,268 543,899 35,237 1,680,904 Renee D. Montz
Exec. Vice President,
General Counsel and Secretary 2020 472,000 — 1,094,477 434,842 30,923 2,032,242 2019 458,000 — 618,283 535,058 29,686 1,641,027 2018 442,500 — 680,908 473,148 30,503 1,627,059 James L. Hamalainen Exec. Vice President and Chief Client Solutions Officer, American Equity Life 2020 242,939 107,412 1,704,977 497,096 12,562 2,564,986 Name and Principal Position Year Salary
($) Stock
Awards(1)(2)
($) Non-Equity
Incentive Plan
Compensation3)
($) Bonus(4)
($) All Other
Compensation(5)
($) Total
($) 2019 900,000 2,024,999 1,502,034 — 32,639 4,459,672 2018 863,500 1,275,015 1,372,568 — 41,452 3,552,535 2017 795,000 592,009 1,318,515 — 32,368 2,737,892 2019 556,000 750,611 649,546 — 31,121 1,987,278 2018 538,500 780,668 594,283 — 36,702 1,950,153 2017 520,000 407,995 570,745 127,500 29,605 1,655,845 2019 566,000 764,094 661,229 — 31,209 2,022,532 2018 548,500 697,758 575,905 — 36,663 1,858,826 2017 530,000 415,989 586,351 130,000 29,772 1,692,112 2019 493,000 665,568 575,947 — 30,325 1,764,840 2018 477,500 624,268 543,899 — 35,237 1,680,904 2017 462,500 363,991 475,288 113,750 29,624 1,445,153 2019 458,000 618,283 535,058 — 29,686 1,641,027 2018 442,500 680,908 473,148 — 30,503 1,627,059 2017 427,500 336,000 468,441 98,750 24,791 1,355,482 (1)AmountsExcept for 2019Mr. Matovina, amounts for 2020 reflect grant date fair value pursuant to FASB ASC Topic 718 of performance-based RSUs (assuming target performance is the probable outcome), and time-based RSUs, granted,options and performance-based options, each as previously described above under "Long-Term“CEO Transition”, “Long-Term Equity Compensation Awarded for 2019"2020” or “Special Performance Vesting Stock Option Grants” in the Compensation Discussion and Analysis. For further information, please see Note 11 Retirement and Share-based Compensation Plans in the Notes to Consolidated Financial Statements of the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2019.2020. Grant date fair value for the 20192020 performance-based RSUs is $1,754,993$1,869,997 for Mr. Matovina, $600,495Bhalla, $664,667 for Mr. Johnson, $611,288 for Mr. Grensteiner, $532,448$589,278 for Mr. Lorenzen, and $494,626$509,763 for Ms. Montz.Montz, and $240,022 for Mr. Hamalainen. Grant date fair value assuming payout at maximum performance would be $2,632,490$2,804,995 for Mr. Matovina, $900,743Bhalla, $997,000 for Mr. Johnson, $916,932 for Mr. Grensteiner, $798,672$883,917 for Mr. Lorenzen, and $741,939$764,644 for Ms. Montz. In addition, amountsMontz, and $360,033 for 2019Mr. Hamalainen. Amounts for 2020 include awards of time-based RSUs with a grant date fair value of $270,006$967,510 for Mr. Matovina, $150,116Bhalla, $166,160 for Mr. Johnson, $152,806 for Mr. Grensteiner, $133,120$147,320 for Mr. Lorenzen, and $123,657$127,434 for Ms. Montz.Montz, and $240,022 for Mr. Hamalainen. In addition, amounts for 2020 include options for Mr. Bhalla with a grant date fair value of $502,000 and for Mr. Hamalainen with a grant date fair value of $245,043 and performance-based options with a grant date fair value of $2,412,435 for Mr. Bhalla, $489,950 for Messrs. Johnson and Lorenzen, $457,280 for Ms. Montz and $979,890 for Mr. Hamalainen. See 20192020 Grants of Plan-Based Awards below for additional information on the 20192020 stock awards. For Mr. Matovina, the amount for 2020 reflects grant date fair value of time-based RSUs granted for his service as a non-employee director and its value is based on the fair market value of the stock on the date of grant.(2)20182019 and 20172018 reflect grant date fair value pursuant to FASB ASC Topic 718 of performance-based RSUs (assuming target performance is the probable outcome), time-based RSUs and restricted stock granted under the long-term equity compensation programs for those years.(3)20192020 consist of cash awards earned under the Short-Term Plan previously described above under "Short-Term“Short-Term Incentive Compensation for 2019"2020” in the Compensation Discussion and Analysis. Amounts for 20182019 and 20172018 consist of cash awards earned under the short-term incentive compensation programs applicable for 20182019 and 2017.2018.(4)In March 2017, the Compensation Committee awarded discretionary bonuses in an amount equal to 25% of base salary to each of Mr. Johnson, Mr. Grensteiner, Mr. Lorenzen and Ms. Montz.(5)20192020 include $17,354$17,100 for each named executive officer (except Mr. Matovina $17,349 forand Mr. Johnson, $17,354 for Mr. Grensteiner, $17,313 for Mr. Lorenzen and $17,276 for Ms. MontzHamalainen) for Company contributions to the ESOP. In addition, amounts for 20192020 include $11,200$11,400 for each named executive officer (except Mr. Matovina) for the Company match of 401k contributions.26 2021 Proxy Statement 262020 Proxy Statement2019.
Payouts Under
Non-Equity Incentive Plan
Awards(1)
Payouts Under
Equity Incentive Plan
Awards(2) All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
Date Fair
Value of
Stock
Awards(8)
($) Name Grant
Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) John M. Matovina 6/4/2020(3) — — — — — — 4,200 96,392 Anant Bhalla 1/27/2020(4) — — — — — — 9,364 250,019 1/27/2020(4) — — — — — — 9,363 249,992 1/27/2020(5) — — — — — — 50,000 502,000 2/27/2020 — — — 17,444 69,776 104,664 — 1,869,997 2/27/2020(6) — — — — — — 17,444 467,499 11/19/2020(7) — — — — — — 122,025 1,193,405 11/19/2020(7) — — — — — — 122,025 1,219,030 N/A 212,500 1,275,000 2,550,000 — — — — — Ted M. Johnson 2/27/2020 — — — 6,200 24,801 37,202 — 664,667 2/27/2020(6) ��� — — — — — — 6,200 166,160 11/19/2020(7) — — — — — — 24,783 242,378 11/19/2020(7) — — — — — — 24,782 247,572 N/A 50,138 401,100 802,200 — — — — — Jeffrey D. Lorenzen 2/27/2020 — — — 5,497 21,988 32,982 — 589,278 2/27/2020(6) — — — — — — 5,497 147,320 11/19/2020(7) — — — — — — 24,783 242,378 11/19/2020(7) — — — — — — 24,782 247,572 N/A 44,450 355,600 711,200 — — — — — Renee D. Montz 2/27/2020 — — — 4,755 19,021 28,532 — 509,763 2/27/2020(6) — — — — — — 4,755 127,434 11/19/2020(7) — — — — — — 23,130 226,211 11/19/2020(7) — — — — — — 23,130 231,069 N/A 41,300 330,400 660,800 — — — — — James L. Hamalainen 7/7/2020 — — — 2,730 10,920 16,380 — 240,022 7/7/2020(6) — — — — — — 10,920 240,022 7/7/2020(5) — — — — — — 36,249 245,043 11/19/2020(7) — — — — — — 49,565 484,746 11/19/2020(7) — — — — — — 49,564 495,144 N/A 43,750 350,000 700,000 — — — — — Estimated Future
Payouts Under
Non-Equity Incentive Plan
Awards(1) Estimated Future
Payouts Under
Equity Incentive Plan
Awards(2) All Other
Stock
Awards:
Number of
Shares of
Stock or Grant
Date Fair
Value of
Stock Name Grant
Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Units(3)
(#) Awards(4)
($) 2/28/2019 — — — 13,863 55,450 83,175 — 1,754,993 2/28/2019 — — — — — — 8,531 270,006 N/A 112,500 900,000 1,800,000 — — — — — 2/28/2019 — — — 4,743 18,973 28,460 — 600,495 2/28/2019 — — — — — — 4,743 150,116 N/A 48,650 389,200 778,400 — — — — — 2/28/2019 — — — 4,829 19,314 28,971 — 611,288 2/28/2019 — — — — — — 4,828 152,806 N/A 49,525 396,200 792,400 — — — — — 2/28/2019 — — — 4,206 16,823 25,235 — 532,448 2/28/2019 — — — — — — 4,206 133,120 N/A 43,138 345,100 690,200 — — — — — 2/28/2019 — — — 3,907 15,628 23,442 — 494,626 2/28/2019 — — — — — — 3,907 123,657 N/A 40,075 320,600 641,200 — — — — — (1)20192020 previously described above under "Short-Term“Short-Term Incentive Compensation for 2019"2020” in the Compensation Discussion and Analysis. The actual cash incentive compensation earned is reflected above in the Summary Compensation Table in the column titled "Non-Equity“Non-Equity Incentive Plan Compensation."”(2)20192020 previously described above under "Long-Term“Long-Term Equity Compensation Awarded for 2019"2020” in the Compensation Discussion and Analysis. The number of performance-based RSUs granted that will be earned is dependent on the achievement of certain threshold, target and maximum performance goals for the three year period ending December 31, 2021.2022. 50% of the performance-based RSUs granted will be earned if the Company meets threshold for each performance goal, 100% of the performance-based RSUs will be earned if the Company meets target for each performance goal and 150% of the performance-based RSUs will be earned if the Company meets maximum for each performance goal. The performance-based RSUs are eligible for dividends, but dividends will only be paid on the performance-based RSUs that vest. Vested dividends will be paid in cash.(3)20192020 that were granted to Mr. Bhalla previously described above under "Long-Term“CEO Transition” in the Compensation Discussion and Analysis. These time-based RSUs vest on the first and second anniversaries of Mr. Bhalla’s commencement of employment.2019"2020” in the Compensation Discussion and Analysis. Mr. Hamalainen’s stock options have a three-year vesting period. These options were granted to Mr. Bhalla and Mr. Hamalainen as inducements for them to join the Company. 2021 Proxy Statement 27 ofof: (i) three years after the grant datedate; and (ii) attainment of age 65 and following 10 years of service with the Company. Pursuant to this provision,Company for awards granted under the 2016 Employee Incentive Plan. The time-based RSUs vest on the earlier of: (i) three years after the grant date; and (ii) attainment of age 55 and following 10 years of service with the Company for Mr. Matovina vested in 2019.awards granted under the Amended and Restated Employee Incentive Plan. The time-based RSUs are eligible for dividends, but dividends will only be paid on the time-based RSUs that vest. Vested dividends will be paid in cash.(4)and time-based RSUs and stock options pursuant to FASB ASC Topic 718. Grant date fair value was calculated using the closing market price of the Common Stock of $31.65.$26.70 for awards granted on 1/27/2020, $26.80 for awards granted on 2/27/2020, $22.95 for awards granted on 6/4/2020 and $21.98 for awards granted on 7/7/2020. Amounts for the performance-based RSUs assume target performance is the probable outcome.2020 Proxy Statement27unexercisedunvested stock options to acquire Common Stock, unvested performance-based RSUs, unvested time-based restricted stock and unvested time-based RSUs granted to named executive officers. Vesting schedules applicable to such awards are as follows:All unexercised••the date three years followingafter the grant date; and (ii) attainment of age 65 and following 10 years of service with the Company.Company for awards granted under the 2016 Employee Incentive Plan; and (iii) attainment of age 55 and following 10 years of service with the Company for awards granted under the Amended and Restated Employee Incentive Plan. Subject to certain limited exceptions, including but not limited to, change in control, death, disability and retirement (as defined in the 2016 Employee Incentive Plan and the Amended and Restated Equity Incentive Plan), the time-based restricted stock and time-based RSUs are forfeited without consideration upon termination of employment. 28 2021 Proxy Statement Outstanding Equity Awards at December 31, 2020 Outstanding Equity Awards at December 31, 2019 Option Awards Stock Awards Option Awards Stock Awards Name Grant
Date Vesting
Date Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Option
Exercise
Price ($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1) Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested (#)
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($)(1) Name Grant
Date Vesting
Date Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Option
Exercise
Price ($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested (#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1) Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested (#) Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($)(1) 2/27/2018 —(2) — — — — — 48,281 1,335,452 6/11/2010 6/11/2013 27,750 9.27 6/10/2020 — — — — 3/9/2017 — (2) — — — — — 25,745 770,548 2/27/2018 — (3) — — — — — 48,281 1,445,050 2/28/2019 — (4) — — — — — 83,175 2,489,428 2/28/2019 —(3) — — — — — 55,450 1,533,747 3/9/2017 — (2) — — — — — 17,742 531,018 3/9/2017 3/9/2020 — — — 2,957 88,503 — — 2/27/2018 — (3) — — — — — 21,074 630,745 2/27/2018 2/27/2021 — — — 3,512 105,114 — — 2/28/2019 — (4) — — — — — 28,460 851,808 2/28/2019 2/28/2022 — — — 4,743 141,958 — — 6/4/2020 6/4/2021 — — — 4,200 116,172 — — 3/9/2017 — (2) — — — — — 18,090 541,434 3/9/2017 3/9/2020 — — — 3,015 90,239 — — 2/27/2018 — (3) — — — — — 21,471 642,627 2/27/2018 2/27/2021 — — — 3,578 107,090 — — 2/28/2019 — (4) — — — — — 28,971 867,102 2/28/2019 2/28/2022 — — — 4,828 144,502 — — Anant Bhalla 1/27/2020 1/27/2025 50,000 26.70 1/27/2030 — — — — 3/9/2017 — (2) — — — — — 15,830 473,792 3/9/2017 3/9/2020 — — — 2,638 78,955 — — 2/27/2018 — (3) — — — — — 18,687 559,302 2/27/2018 2/27/2021 — — — 3,115 93,232 — — 2/28/2019 — (4) — — — — — 25,235 755,284 2/28/2019 2/28/2022 — — — 4,206 125,886 — — Anant Bhalla 1/27/2020 1/27/2021 — — — 9,364 259,008 — — 3/9/2017 — (2) — — — — — 14,612 437,337 3/9/2017 3/9/2020 — — — 2,435 72,880 — — 2/27/2018 — (3) — — — — — 17,295 517,639 2/27/2018 2/27/2021 — — — 2,883 86,288 — — 2/28/2019 — (4) — — — — — 23,442 701,619 2/28/2019 2/28/2022 — — — 3,907 116,937 — — Anant Bhalla 1/27/2020 1/27/2022 — — — 9,363 258,981 — — 2/27/2020 —(4) — — — — — 69,776 1,930,004 2/27/2020 2/27/2023 — — — 17,444 482,501 — — 11/19/2020 11/19/2021(7) 122,025 27.05 11/19/2030 — — — — 11/19/2020 11/19/2022(7) 122,025 27.05 11/19/2030 — — — — 2/27/2018 — (2) — — — — — 21,074 582,907 2/27/2018 2/27/2021 — — — 3,512 97,142 — — Ted M. Johnson 2/28/2019 —(3) — — — — — 18,973 524,793 2/28/2019 2/28/2022 — — — 4,743 131,191 — — 2/27/2020 —(4) — — — — — 24,801 685,996 2/27/2020 2/27/2023 — — — 6,200 171,492 — — 11/19/2020 11/19/2021(7) 24,783 27.05 11/19/2030 — ��� — — — 11/19/2020 11/19/2022(7) 24,782 27.05 11/19/2030 — — — — 2/27/2018 — (2) — — — — — 18,687 516,882 2/27/2018 2/27/2021 — — — 3,115 86,161 — — Jeffrey D. Lorenzen 2/28/2019 —(3) — — — — — 16,823 465,324 2/28/2019 2/28/2022 — — — 4,206 116,338 — — 2/27/2020 —(4) — — — — — 21,988 608,188 2/27/2020 2/27/2023 — — — 5,497 152,047 — — 11/19/2020 11/19/2021(7) 24,783 27.05 11/19/2030 — — — — 11/19/2020 11/19/2022(7) 24,782 27.05 11/19/2030 — — — — 2/27/2018 — (2) — — — — — 17,295 478,380 2/27/2018 2/27/2021 — — — 2,883 79,744 — — 2/28/2019 —(3) — — — — — 15,628 432,270 2/28/2019 2/28/2022 — — — 3,907 108,068 — — 2/27/2020 —(4) — — — — — 19,021 526,121 2/27/2020 2/27/2023 — — — 4,755 131,523 — — 11/19/2020 11/19/2021(7) 23,130 27.05 11/19/2030 — — — — 11/19/2020 11/19/2022(7) 23,130 27.05 11/19/2030 — — — — 7/7/2020 7/7/2023 36,249 21.98 7/7/2030 — — — — 7/7/2020 —(4) — — — — — 10,920 302,047 James L. Hamalainen 7/7/2020 2/27/2023 — — — 10,920 302,047 — — 11/19/2020 11/19/2021(7) 49,565 27.05 11/19/2030 — — — — 11/19/2020 11/19/2022(7) 49,564 27.05 11/19/2030 — — — — 2019,2020, which was $29.93.$27.66.(2)2017.2018. As our performance as of the end of 20192020 for the related performance period exceeded the target performance goals, these awards are shown at maximum (150% of target). These awards vested at 136%128.44% of target based on actual performance over the three-year period ended December 31, 20192020, as certified by the Compensation Committee on February 27, 2020.2021.(3)The unearned shares included in this row represent performance-based RSUs awarded during 2018. As our performance as of the end of 2019 for the related performance period exceeded the target performance goals, these awards are shown at maximum (150% of target). However, the amount, if any, of these awards that will be paid out will depend upon the actual performance over the full three-year performance period ending December 31, 2020, and the Compensation Committee's certification of the performance.(4)20192020 for the related performance period would have resulted in a payout in excess ofnear target, these awards are shown at maximum (150% of target).target. However, the amount, if any, of these awards that will be paid out will depend upon the actual performance over the full three-year performance period ending December 31, 2021, and the Compensation Committee'sCommittee’s certification of the performance. 2820202021 Proxy Statement29TableContents2019.2020. Option Awards Stock Awards Name Number of
Shares
Acquired
on
Exercise
(#) Value
Realized
on Exercise
($) Number of
Shares
Acquired
on Vesting
(#) Value
Realized
on Vesting
($) John M. Matovina 27,750 660,772 23,347 625,700 Anant Bhalla — — — — Ted M. Johnson — — 19,047 485,567 Jeffrey D. Lorenzen — — 16,993 434,097 Renee D. Montz — — 15,686 400,710 James L. Hamalainen — — — — Option Awards Stock Awards Name Number of
Shares
Acquired
on
Exercise
(#) Value
Realized
on Exercise
($) Number of
Shares
Acquired
on Vesting
(#) Value
Realized
on Vesting
($) 40,000 927,600 53,581 1,593,411 30,000 625,151 28,419 833,675 — — 26,376 792,060 — — 23,402 699,259 — — 22,470 648,041 Messrs.Johnson, Grensteinerreceived a stay retention bonus of $853,125 pursuant to his retirement and Lorenzenseparation agreement with the Company. Mr. Matovina’s change in control agreement, including his right to receive an amount equal to a full gross-up for any excise tax incurred by him as a result of receiving change in control payments, terminated upon his retirement on April 16, 2020. Since he has ceased his service as an officer and Ms. Montzemployee, Mr. Matovina is not eligible for any additional termination or change in control payments other than those that may apply pursuant to the terms of any award agreement under the 2016 Employee Incentive Plan. Accordingly, references to the named executive officers under this heading, Potential Payments Upon Termination or a Change in Control, do not include Mr. Matovina.Company'sCompany’s severance plan if they are terminated because of a reduction of or realignment in the Company'sCompany’s workforce or elimination of their position, function or operation. They are not eligible for such severance benefits if they take a comparable job with the Company, fail to sign a release of claims, do not remain in compliance with Company policies, fail to abide by all applicable confidentiality, non-solicitation, non-disclosure and non-compete policies, as applicable, and/or other specified reasons. The severance payable under the severance plan is two weeks of base pay for each year of the eligible recipient'srecipient’s service with the Company. The severance plan has a minimum benefit of twelve weeks and a maximum benefit of 26 weeks of base pay. The following is the severance benefit that the named other executive officers would have received had they qualified for such benefits on December 31, 2019: Mr. Matovina-$450,000;2020: Mr. Johnson-$278,000; Mr. Grensteiner-$283,000;286,500; Mr. Lorenzen-$189,615 and214,923; Ms. Montz-$105,692.If127,077 and Mr. Hamalainen-$115,384. 30 2021 Proxy Statement Company'sCompany’s severance plan as describe above, the named executive officer would be entitled only to the following payments and benefits, which are provided pursuant to the terms of the plan or contract governing such payment or benefit or are otherwise applicable to all Company employees (such payments and benefits, the "Accrued Amounts"“Accrued Amounts”):••executive'sexecutive’s 401(k) account and ESOP account;••executive'sexecutive’s ongoing expense."change“change in control" (ascontrol” (as defined below) of the Company. Such circumstance includes the executive'sexecutive’s discharge without "Cause" (as“Cause” (as defined below) or voluntary resignation by the executive for "Good Reason" (as“Good Reason” (as defined below). We refer to such a termination of employment as a "Qualifying“Qualifying Change in Control Termination"Termination”. If any of the named executive officers receive change in control payments, they are ineligible to receive severance under the Company'sCompany’s severance plan.2020 Proxy Statement29"change“change in control"control” is defined to include: (i) the acquisition by any person of 35% of the combined voting power of the Company; (ii) a majority of the directors originally on the Board of Directors (and with certain designated successors) ceasing to constitute a majority of the Board of Directors; (iii) a merger with another entity in which the Company'sCompany’s voting securities cease to represent at least 50% of the combined voting power of the surviving entity; or (iv) the sale of substantially all of the assets of the Company."Cause"executive'sexecutive’s willful and continued failure to substantially perform the executive'sexecutive’s duties (other than a failure resulting from the executive'sexecutive’s incapacity due to physical or mental illness), after a written demand for substantial performance from the Board of Directors; (ii) the conviction of the executive of, or an entering of a guilty plea or a plea of no contest by the executive to, a felony; or (iii) the willful engaging by the executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company."Reason"Reason” generally means any of the following without the executive'sexecutive’s consent and subject to certain notice and cure periods: (i) subject to certain exceptions, the assignment to the executive of any duties inconsistent with the executive'sexecutive’s position, including any change in status, authority, duties or responsibilities or any other action that results in a material diminution in such status, authority, duties or responsibilities; (ii) a reduction in the executive'sexecutive’s base salary; (iii) the relocation of the executive'sexecutive’s office to a location more than 50 miles outside West Des Moines, Iowa;from the executive's current office location; (iv) unless a plan providing a substantially similar compensation or benefit is substituted, (a) the Company'sCompany’s failure to continue in effect any fringe benefit or compensation plan, retirement plan, life insurance plan, health and accident plan or disability plan in which the executive is participating prior to the change in control which adversely affects the executive'sexecutive’s total compensation in a material manner, or (b) the Company'sCompany’s action that adversely affects the executive'sexecutive’s participation in or materially reduces or deprives him of his benefits under, such plans; or (v) the Company'sCompany’s failure to obtain the assumption of the change in control agreement by a successor.continuedreceive base salary payments, the executive may not (i) solicit or entice any other employee to leave us or our affiliates 2021 Proxy Statement 31 Salary continuationMatovinaBhalla and payable in a lump sum for Mr. Johnson, Mr. Grensteiner,Lorenzen, Ms. Montz and Mr. Lorenzen and Ms. Montz;Hamalainen;•executive'sexecutive’s termination occurs, prorated through the date of termination;•executive'scase of Mr. Hamalainen) the executive’s target annual bonus;••Mr. Johnson's, Mr. Grensteiner's, Mr. Lorenzen's and Ms. Montz's"excess“excess parachute payment"payment” for purposes of Section 280G of the Code, they would have their payments and benefits reduced to the highest amount that could be paid without triggering Section 280G of the Code or, if greater, receive the after-tax amount of the payment taking into account the excise tax imposed under Section 4999 of the Code and any applicable federal, state and local taxes.Mr. Matovina's change in control agreement None of the named executive officers is no longer in effect following his retirement on April 16, 2020. Mr. Matovina's change in control agreement provided that he would also receiveentitled to an amount equal to a full gross-up for any excise tax incurred by him as a resultgross-up under the terms of receiving change in control payments.2019.2020. No target annual bonus302020 Proxy Statement Potential Payments Upon Termination or Change in Control Name Base
Salary Payment
($)
($)
Acceleration
of Stock
Options(2)
($)
Acceleration
of Restricted
Stock and
Restricted
Stock Units(3)
($) Excise Tax
Gross Up
($) Group
Insurance
Benefits
($) Total
($) Anant Bhalla 2,550,000 3,825,000 196,871 2,084,112 — 99,452 8,755,435 Ted M. Johnson 1,719,000 1,203,300 30,235 1,661,250 — 90,447 4,704,232 Jeffrey D. Lorenzen 1,524,000 1,066,800 30,235 1,472,955 — 87,445 4,181,435 Renee D. Montz(4) 1,416,000 991,200 28,219 1,325,796 — 87,445 3,848,660 James L. Hamalainen 1,000,000 700,000 266,363 378,730 — 58,521 2,403,614 Potential Payments Upon Termination or Change in Control Name Base
Salary
Continuation
($) Bonus(1)
($) Value of
Acceleration
of Restricted
Stock and
Restricted
Stock Units(2)
($) Excise Tax
Gross Up(3)
($) Group
Insurance
Benefits
($) Total
($) 2,700,000 2,700,000 3,136,664 3,824,424 99,970 12,461,058 1,668,000 1,167,600 1,401,663 — 82,874 4,320,137 1,698,000 1,188,600 1,427,825 — 97,646 4,412,071 1,479,000 1,035,300 1,224,835 — 86,935 3,826,070 1,374,000 961,800 1,153,191 — 80,196 3,569,187 (1)The2020 bonus amount is three times (two times for Mr. Hamalainen) the target annual bonus under the 20192020 Program described above under "Short-Term“Short-Term Incentive Compensation for 2019"2020” in the Compensation Discussion and Analysis.(2)"Outstanding“Outstanding Equity Awards at December 31, 2019"2020” in the Executive Compensation Tables. These values were calculated based on the closing market price of the Common Stock on December 31, 20192020 and the assumption that the target number of shares for performance-based RSUs vest.(3)This calculation assumes a total effective ratestate and federal income taxes of 48%.her separation agreement.2019.2020, and have compared the median employee’s compensation with that payable to Mr. Bhalla. The median employee was determined using a consistently applied compensation measure, which was total cash compensation from January 1, 20192020 through December 31, 2019.2020. Total cash compensation included salary, bonus and holiday gift 32 2021 Proxy Statement 2019.2020. The median employee for 20192020 was different from the median employee for 20182019 following a comprehensive review of all employee job classifications and corresponding salary and bonus market data for each job classification. Adjustments were made to individual employee salaries and bonuses as necessary to reflect current salary and bonus market data.significant hiring by the Company in 2020. The consistently applied compensation measure, total cash compensation, was identical for 20192020 and 2018.2019,2020, the annualized compensation of our Chief Executive Officer was $4,459,672$9,609,258 and the compensation of our median employee was $76,795,$83,924, resulting in a CEO pay ratio of 58:114:1. 20202021 Proxy Statement3133 "Compensation“Compensation Discussion and Analysis",” our compensation policies and programs are designed to attract and retain highly qualified and motivated executive officers and employees, encourage and reward achievement of our annual and long-term goals and encourage executive officers and employees to become shareholders with interests aligned with those of other shareholders. The primary elements of compensation for most of our executive officers include: (1) base pay; (2) annual cash incentive compensation; and (3) long-term equity compensation. A substantial portion of the compensation awarded each year to our executive officers is variable based on achieving performance objectives. This compensation structure is central to the Company'sCompany’s ability to attract, retain and motivate individuals who can achieve superior financial results. Please refer to "Compensation“Compensation Discussion and Analysis"Analysis” for an overview of the compensation of the Company'sCompany’s named executive officers.Company'sCompany’s executive compensation program serves the best interests of the Company'sCompany’s shareholders. At the Company's 2019Company’s 2020 Annual Meeting, 75%96% of the votes cast by shareholders approved the executive compensation program described in the proxy statement for that meeting. This outcome was appreciably below the average affirmative vote of 95% for the preceding five years. Please refer to "2019 Compensation Performance and Compensation Highlights" in the "Compensation Discussion and Analysis" for additional commentary on the prior year vote and the modifications to the Company's executive officer compensation program and practices that have been made since that vote."Exchange Act"“Exchange Act”), we are asking for shareholder approval of the compensation of our named executive officers as disclosed in this proxy statement in accordance with SEC rules under "Compensation“Compensation Discussion and Analysis",” the related compensation tables and the narrative discussion following the compensation tables. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this proxy statement. Accordingly, we ask our shareholders to vote on the following resolution:"RESOLVED, the shareholders of American Equity Investment Life Holding Company approve, on an advisory basis, the compensation of the Company's named executive officers as disclosed in the Company's Proxy Statement for the 2020 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2019 Summary Compensation Table and the other related tables and disclosures."Company'sCompany’s shareholders. To the extent there is a significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider those shareholders'shareholders’ concerns, and the Board of Directors and Compensation Committee will evaluate whether any actions are necessary to address those concerns. We currently provide our shareholders with the opportunity to vote on the compensation of our named executive officers at each annual meeting.34 2021 Proxy Statement 322020 Proxy StatementTableContentsProposal 4—Approvalour founder, “It’s not about the building, the charter or the policy form… it’s about the people.” In 2020, the Company began an exciting journey with a new chief executive officer and a new strategy, AEL 2.0. The Company leveraged its people-first focus with commitments to hiring, developing and retaining talented team members as evidenced by the Company’s 7.7% year over year increase in full time employees, diversification of its employee base from 10 states to 27, and a 92% retention rate.AmericanCompany’s employees are located in Iowa with 5% employed at locations outside of Iowa. All Company employees are located in the United States, and none are represented by a labor union or covered by a collective bargaining agreement. As of December 31, 2020, the Company engaged 38 independent contractors.Investment Life Holding Company AmendedChallenge and Restated Equity Incentive PlanTheoffered Unconscious Bias training. This work culminated in insights that inspired the expansion of our mission with a long-term commitment to reinforcing societal equity and a holistic approach to inclusion. This starts with a commitment to playing a pivotal role in transforming the local communities in addition to enhancing the Company’s recruiting, retention and development practices. As of December 31, 2020, 36% of the Company’s Board of Directors (the "Board") is requesting shareholder approval of amending and restating the Company's 2016 Employee Incentive Plan (the "Plan") including renaming the Plan the American Equity Investment Life Holding Company Amended and Restated Equity Incentive Plan.The Plan was approved by shareholders on June 2, 2016. The Compensation Committee of the Board (the "Compensation Committee") approved certain amendments to the Plan on September 2, 2016 and February 28, 2019 regarding the Compensation Committee's authority to delegate certain administrative powers to one or more officers of the Company and the satisfaction of the Company's obligations to withhold taxes with respect to awards under the Plan. The amendments were not subject to shareholder approval. On April 6, 2020, the Board adopted the amended and restated Plan, subject to shareholder approval.The purpose of the amended and restated Plan is to attract, retain and motivate certain highly qualified employees and directors with outstanding ability by providing competitive equity compensation opportunities. Awards under the amended and restated Plan are also intended to align such employees' and directors' interests with shareholder interests. Proposed Amendments to the PlanMaterial amendments to the Plan would (a) increase the number of shares of common stock of the Company ("Shares") reserved for issuance under the Plan; (b) extend the termination date of the Plan; (c) allow for awards to be granted to members of the Board or members of the Board of Directors of any Affiliate (as defined in the amended and restated Plan) of the Company (such awards, "Director Awards", and such individuals "Directors"); (d) increase the annual individual award limit for employee participants; (e) address changes in the federal income tax laws; and (f) reflect general updates to align with current compensation and benefits best practices (such amendments described in (a)-(f) are referred to herein as the "Proposed Amendments").Increase in Number of Shares. The Proposed Amendments increase the number of Shares reserved for issuance under the Plan by 3,000,000 from 2,500,000 to 5,500,000. These 3,000,000 shares represent 3.3% of our outstanding Shares at December 31, 2019. We carefully manage share usage under the Plan; over the last three calendar years, our annual burn rate has averaged 0.38%. For the twelve months ended March 31, 2020, we granted annual equity awards to employees and non-employee directors covering 325,000 shares. If approved, the additional Shares will help ensure that a sufficient reserve of Shares remains available for issuance to allow us to continue to use equity awards to attract and retain the services of key employees and Directors who are essential to the Company's long-term success.Extend Termination Date. The Proposed Amendments extend the termination date of the Plan from June 30, 2026 to May 31, 2030. This extension will permit the Compensation Committee to continue to utilize equity-based compensation as part of our employee and non-employee Director compensation program.Awards Granted to Members of the Board of Directors. The Proposed Amendments allow for awards under the amended and restated Plan to be granted to non-employee Directors. If shareholders approve the amended and restated Plan, no new awards will be granted to non-employee Directors under the 2013 Director Equity and Incentive Plan and Director awards will instead be granted under the amended and restated Plan, provided that the termination of our grant authority under the Director Plan will not affect outstanding awards.Increase in Annual Individual Award Limit for Employee Participants. The Proposed Amendments increase the maximum number of Shares that may be subject to awards granted to any employee participant in any calendar year to 400,000 Shares from 300,000 Shares. This increase will provide the Compensation Committee with additional flexibility over the term of the amended and restated Plan.Changes in Federal Tax Laws. The Proposed Amendments address changes in federal income tax laws with respect to compensation in excess of $1 million paid to certain executive officers of public companies. For taxable years prior to 2018, compensation paid to our executive officers in excess of $1 million was not deductible unless it qualified as "performance-based compensation" under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The "performance-based compensation" exemption was repealed as part of federal tax2020 Proxy Statement33legislation passed in December 2017. Accordingly, the amended and restated Plan removes certain provisions and requirements that were included in the Plan for equity awards to qualify as "performance-based compensation" under the prior version of Section 162(m). Additional Information Regarding Share IncreaseThe Company relies on equity awards generally in the form of performance-based and time-based RSUs and time-based RSAs. Please see "Long-Term Equity Compensation Awarded for 2019" and "Compensation Decisions Relating to 2020 Compensation" in the Compensation Discussion and Analysis of this proxy statement for information on the Company's equity awards to named executive officers for 2019 and 2020, respectively, and Director Compensation of this proxy statement for information on the Company's equity awards to non-employee Directors. Please also see Note 11 Retirement and Share-based Compensation Plans in the Notes to Consolidated Financial Statements of the Company's Annual Report on Form 10-K for the year-ended December 31, 2019 for information on the Company's share-based compensation plans for the previous three fiscal years.In determining the scope of the proposed Share increase from 2,500,000 Shares to 5,500,000 Shares, management and the Board evaluated share usage, burn rate, overhang (dilution), and the existing terms of outstanding equity awards. If approved, there will be approximately 4,350,000 Shares, or less than 5% of the 91,107,555 Shares outstanding at December 31, 2019, available for issuance under the amended and restated Plan. The Board, the Compensation Committee and management believe the increased dilution that may result from the Share increase remains consistent with shareholder interests.Two metrics the Company uses to assess the impact56.4% of its equityemployees, including 47.9% of manager and above employees, self-identified as women and minority individuals.burn ratefoundational to creating strategy alignment, activating performance, and overhang. Burn rate, celebrating collective success with every team member. The Company’s employee benefits package and engagement programs send a strong message of company commitment to team members. 2021 Proxy Statement 35 percentage obtained by dividingCompany sponsored dental plan; and 74% of employees elected coverage through the total equity awards granted in a fiscal year by the weightedCompany sponsored vision plan. The Company pays an average shares of common stock outstanding for the fiscal year used in the computation of earnings per common share—assuming dilution, is a measure that shows how rapidly a company is depleting the shares reserved for its equity compensation plans. Our burn rate averaged 0.38% over the last three fiscal years. Our burn rate, using the Institutional Shareholder Services formula which applies an adjustment factor based on annual volatility to full value awards, averaged 0.96% over the last three fiscal years.Overhang measures potential shareholder dilution and is equal to the number of shares subject to outstanding equity awards, plus the number of shares available to be granted, divided by the total shares of common stock outstanding at the end84% of the year. Overmonthly medical premium.last three fiscal years, our overhang has averaged 5.4% (4.3% forCompany updated its free mental and behavioral health resources in 2020, including on-demand webinars through a web-based vendor. As of December 31, 2019). If2020, 27% of team members had utilized the 3,000,000 additional Shares requested in this Proposal are added to the number of shares available for grant at March 31, 2020, our overhang as of that date would be 6.3%. Material Features of the Amended and Restated PlanThe following is a summary of certain provisions of the amended and restated Plan and is qualified by reference to the complete text of the amended and restated Plan, which is included as Appendix A to this proxy statement and is incorporated herein by reference.Administration. The amended and restated Plan will continue to be administered by the Compensation Committee. The Compensation Committee has discretionary authority, subject only to the express provisions of the amended and restated Plan, to (i) interpret the amended and restated Plan; (ii) determine eligibility and grant awards; (iii) determine, modify or waive the terms and conditions of any award; (iv) prescribe forms, rules and procedures; and (v) otherwise do all things necessary to fulfill the purposes of the amended and restated Plan.Subject to certain limitations, the Compensation Committee may delegate to one or more officers of the Company the authority to select participants to receive awards under the amended and restated Plan and to grant such employee participants awards on such terms and conditions, not inconsistent with the terms of the amended and restated Plan, as such officer or officers will determine.Participation and Eligibility. The Compensation Committee will continue to select employees and will be permitted to select non-employee Directors who will be granted awards under the amended and restated Plan on the basis of their past, current and anticipated contributions to the creation of value for the Company and its shareholders. Such employees and non-employee Directors include employees and non-employee Directors of the Company and our Affiliates. No other service providers, such as independent contractors,program.amendedCompany’s 401(k) plan once they have completed thirty days of employment and restated Plan.As of April 9, 2020,attained age 18. The Company matches 100% of our employees wereteam member contributions to the 401(k) plan up to 3% of the employee’s total eligible compensation and matches 50% of employee contributions up to participatethe next 2% of the employee’s total eligible compensation, subject to the limitations specified in the Plan and 55 were participating, including two employees who are also Directors. Non-employee Directors, of which there are currently 10, would342020 Proxy Statementalso be eligible to participate in the amended and restated Plan and 100% of our employees would continue to be eligible to participate in the amended and restated Plan.Number of Shares and Share Recycling.The amended and restated Plan provides for issuance of up to 5,500,000 Shares, which includes 3,000,000 new Shares. Each Share issued pursuant to an award under the amended and restated Plan will be counted against the shares authorized for issuance under the amended and restated Plan. Awards may consist of stock options, stock appreciation rights ("SARs"), restricted stock awards ("RSAs") or restricted stock units ("RSUs") to employees or non-employee Directors, provided that non-employee Directors are not eligible to receive incentive stock options ("ISOs"). The maximum number of Shares subject to stock options granted to any participant, and that may be granted as SARs, RSAs and RSUs to any participant, will not exceed an aggregate of 400,000 Shares in any calendar year for employee participants and an aggregate of 25,000 Shares in any calendar year for non-employee Director participants.The amended and restated Plan provides for the reversion of SharesCompany makes semi-annual discretionary contributions to the amended and restated Plan only if awards expire, are terminated or are canceled without having been exercised or settledESOP, which creates shareholder aligned equity interest in full, or if Shares are forfeited or repurchased by the Company for an amount not greater thaneligible employees. Employees become eligible once they have completed a minimum of six months of service, and their interests in the participant's purchase price. Awards settledESOP become 100% vested after two years of service to the Company.cash or other property (other than Shares) will continue to result in Shares not being deemed to have been issued,reaching their full potential and such Shares will again be available for issuance under the amended and restated Plan. Shares withheld from an award to satisfy tax obligations or pay the exercise price of an award will not be available for issuance under the amended and restated Plan. Additionally, any Shares that are repurchased bybuilding progressive careers, the Company using proceeds received byencourages and invests in a wide variety of professional development opportunities and in-role stretch assignments. Approximately 6600 hours of training were delivered internally through the Company’s Academy for Excellence. In addition, team members accessed 794 hours of real-time LinkedIn Learning Content. The Company from the exercisealso provides access to a wide variety of any stock options or SARs or from the payment of any purchase price with respect to any other award will not be addedexternal seminars, degree and certificate programs.aggregate numberchief executive officer had a portion of Shares available for awards undertheir short-term incentive tied to maximizing the amendedimpact of their function by establishing and restated Plan.In the event ofimplementing a stock dividend or other similar distribution of Company securities, a stock split or other combination of shares, recapitalization, conversion, reorganization, consolidation, spin-off, merger, exchange of stock, or certain other changes in the capital structure of the Company or other occurrences or events, the Compensation Committee will continue to make appropriate adjustments to the maximum number of Shares that may be delivered with respect to awards under the amendedtarget operating model, building team capacity, capability and restated Plan, the numbersuccession, and kind of Shares or securities subject to awards then outstanding or subsequently granted, the exercise prices or base values relating to outstanding awards, and any other provision of awards affected by such change.Stock Options. Stock options granted under the amended and restated Plan will be either ISOs or Non-Qualified Stock Options ("NQSOs") as designated by the Compensation Committee. The exercise price of stock options may not be less than 100% of the fair market value of a Share on the date of grant, and may not be less than 110% of fair market value of a Share on the date of grant for ISOs granted to employees described in Section 422(b) of the Code. The option period for options granted to participants will be determined by the Compensation Committee subject to certain statutory requirements for ISOs and provided that an option shall not be exercisable after ten years from its date of grant. Up to 3,000,000 Shares available under the amended and restated Plan may be made subject to the grant of ISOs.SARs. The Compensation Committee may grant rights to receive any excess in value of Shares over the base value of the rights. SARs will be settled in cash, Shares or other securities of the Company. The base value of each SAR will not be less than 100% of the fair market value of a Share on the date of grant. The expiration date for each SAR shall not be more than ten years from the date of grant.RSAs. The Compensation Committee may grant awards of Shares subject to forfeiture and determine the duration of the period during which, and the conditions under which, the Shares may be forfeited and the other terms and conditions of such awards.RSUs. The Compensation Committee may grant awards consisting of units representing Shares. Each RSU represents the unfunded and unsecured commitment of the Company to deliver to the participant at a specified future date or dates one or more Shares or, if specified in the award, cash equal to the fair market value of the award, subject to the satisfaction of any vesting and other terms and conditions established with respect to the award by the Compensation Committee.Dividends and Cash Settlement. The Compensation Committee may provide that any award includes dividends or dividend equivalents payable (in cash or in the form of awards under the amended and restated Plan) currently or deferred with or without interest and may also provide for cash settlement of awards. Under the Proposed Amendments, dividends or dividend equivalents may only become payable if (and to the extent that) the underlying award vests.36 2021 Proxy Statement 2020 Proxy Statement35Vesting. The Compensation Committee will establish a specific vesting schedule in the applicable agreement evidencing the grant of any awards. Subject to the provisions of the amended and restated Plan, vesting generally will automatically accelerate upon termination due to the participant's death, disability or retirement.Minimum Vesting Period. The amended and restated Plan generally requires a minimum vesting period of one year from the date of grant for awards granted under the amended and restated Plan. The Compensation Committee may grant awards that vest within a year due to certain circumstances as specified in the amended and restated Plan. Additionally, up to 5% of the Shares authorized for issuance under the amended and restated Plan can be granted with a vesting period of less than one year.Termination of Employment or Director Service. Unless expressly provided otherwise by the Compensation Committee, upon a participant's termination other than by reason of death, disability, retirement (with respect to RSAs and RSUs), or certain events in connection with a Change in Control, as described in the amended and restated Plan, a participant's awards requiring exercise will generally cease to be exercisable and will terminate to the extent such awards are unvested, will be limited to the shares purchasable as of the date of the termination and, to the extent not already fully vested, will be forfeited. Generally, award privileges expire sixty days from the date of termination unless modified by the Compensation Committee. Upon a termination of an employee for cause, awards terminate at the commencement of business on the date of such termination.Performance-Based Awards. Awards may be granted subject to the achievement of pre-determined performance criteria, as may be determined by the Compensation Committee. Performance objectives may be described in terms of Company (consolidated), Affiliate or business unit performance, either absolute or by relative comparison to other companies or any other external measure of the selected criteria.Change in Control. Unless otherwise provided in the applicable award agreement, in the event of a Change in Control, the Compensation Committee will provide for the assumption, substitution or continuance of some or all of the outstanding awards under the amended and restated Plan or, alternatively, the cash out and termination of such awards, pursuant to the terms of the amended and restated Plan.Employee Awards. Awards then outstanding under the amended and restated Plan that have been granted to employees will not be subject to cancellation, acceleration of vesting, lapse of restrictions, payment or settlement so long as such awards are honored, assumed or substituted by a successor in accordance with the amended and restated Plan (such honored, assumed or substituted awards are hereinafter called "Alternative Awards"). Alternative Awards must have substantially equivalent economic value as the original award and must satisfy several conditions including providing the participant with rights and entitlements that are substantially equivalent or better than the rights, terms and conditions applicable under the original award.If outstanding employee awards are not honored, assumed or substituted, unless otherwise provided in the applicable award agreement or specifically prohibited under law or by the rules and regulations of the applicable exchange on which the Shares are then publicly traded, the vesting or exercisability of each outstanding award will automatically accelerate and become fully vested or exercisable for the full number of Shares purchasable or cash payable under the award to the extent not previously exercised and will remain exercisable for the original term of the award. For awards with performance periods that have been completed as of the date of the Change in Control but not yet paid, performance criteria will be deemed to be achieved at actual performance. Unless otherwise provided in the applicable award agreement, for awards with performance periods that are in progress as of the date of the Change in Control, performance goals will be deemed to be achieved at 100% of target levels for the entire performance period (not pro-rata).Non-employee Director Awards. Unless otherwise provided in the applicable award agreement, each award then outstanding under the amended and restated Plan that was granted to a non-employee Director, will become fully vested and, if applicable, exercisable and the restrictions, payment conditions and forfeiture conditions applicable to any such award will lapse.Successors. Any obligations of the Company or an Affiliate under the amended and restated Plan with respect to awards granted thereunder will be binding on any successor to the Company or Affiliate, respectively, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company or Affiliate, as applicable.Limited Transferability of Awards. No award may be transferred other than by will or the laws of descent and distribution and may be exercised during the life of a participant only by the participant, except that, as to stock options other than ISOs, the Compensation Committee may in its sole discretion permit certain transfers to the participant's family members, to certain entities controlled by the participant or his or her family members or to a362020 Proxy Statementtrust or similar vehicle for the benefit of the participant's family members. Moreover, RSUs may not be sold, assigned, pledged or otherwise encumbered and RSAs may not be sold, assigned, pledged or otherwise encumbered before their restrictions lapse.Repricing Prohibited. The repricing of stock options or SARs, including canceling an outstanding stock option or SAR grant in exchange for cash, other property or awards or providing a new grant in substitution, is prohibited by the amended and restated Plan. This provision cannot be amended without shareholder approval.Cancellation and Rescission of Awards and Forfeiture Events. Unless otherwise specified in an applicable award agreement, the Compensation Committee may cancel, rescind, withhold or otherwise limit or restrict any unexpired or unpaid award at any time if the participant is not in compliance with all applicable provisions of the award agreement and the amended and restated Plan, or in the case of an employee participant, if the employee participant engages in any detrimental activity. In addition to any forfeiture provisions otherwise applicable to an award, an employee participant's right to any payment or benefits with respect to an award is subject to reduction, cancellation, forfeiture, clawback or recoupment (a) in accordance with any clawback, recoupment or similar policy of the Company as in effect from time to time or (b) as required by applicable law.Amendment. The Compensation Committee may amend, suspend or terminate the amended and restated Plan or any portion thereof at any time, subject to any shareholder approval the Compensation Committee deems necessary to comply with any law or the listing standards and rules of the applicable exchange on which the Shares are then publicly traded. No such amendment, modification or termination may materially and adversely affect the rights of any participant under any award previously granted without his or her consent, with limited exceptions, such as upon a change in control.Term. Unless sooner terminated by the Board, the amended and restated Plan will expire on May 31, 2030, and no awards may be granted after such date.Federal Tax Consequences. The following paragraphs are a summary of the general federal tax consequences to U.S. taxpayers and the Company of equity awards granted under the amended and restated Plan. Tax consequences for any particular individual may be different. As the rules governing the tax treatment of such awards are quite technical, the following discussion of tax consequences is necessarily general in nature and does not purport to be complete. In addition, statutory provisions and their interpretations are subject to change, and their application may vary in individual circumstances. This discussion does not address the tax consequences under applicable state and local law.NQSOs. Under current federal income tax regulations, no income tax consequences will be recognized by either the participant or the Company upon the grant of a NQSO. Upon the exercise of an NQSO, the participant will realize ordinary income in an amount equal to the excess of the fair market value of the Shares on the date of exercise over the exercise cost of the NQSO. The gain or loss realized by the participant upon the subsequent sale of the Shares acquired upon exercise of an NQSO will constitute short- or long-term capital gain or loss, depending on the length of time the Shares were held after exercise.ISOs. Under current federal income tax regulations, no taxable income is generally reportable when an ISO is granted or exercised (except for purposes of the alternative minimum tax, in which case taxation is the same as for NQSOs). If the participant exercises the ISO and then later sells or otherwise disposes of the Shares more than two years after the grant date and more than one year after the exercise date, the difference between the sale price and the exercise cost will be taxed as capital gain or loss. In such case, the Company is not entitled to a corresponding income tax deduction.If the participant exercises the ISO and then later sells or otherwise disposes of the Shares before the end of the two- or one-year holding periods described above (a "disqualifying disposition"), the participant generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise cost of the option. In no event, however, will the amount of this ordinary income exceed the difference between the exercise cost of the ISO and the amount realized on such disqualifying disposition. Any remaining gain or loss will be treated as a short- or long-term capital gain or loss, depending upon how long the participant holds the Shares.SARs. Under current federal income tax regulations, no income tax consequences will be recognized by either the participant or the Company upon the grant of a SAR. Upon exercise of a SAR, the participant will recognize ordinary income in an amount equal to the fair market value of any cash, Shares or other securities of the Company received. The gain or loss, realized by the participant upon the subsequent sale of any Shares acquired upon exercise of a SAR2020 Proxy Statement37will constitute short- or long-term capital gain or loss, depending on the length of time the Shares were held after exercise.RSAs. Under current federal income tax regulations, unless a participant who receives an RSA makes an election under Section 83(b) of the Code ("Section 83(b)"), generally no income tax consequences will be recognized by either the participant or the Company upon the grant of an RSA. On the date the restrictions lapse and the Shares vest (that is, become transferable and no longer subject to a substantial risk of forfeiture), the participant will recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the Shares on that date over the amount, if any, paid for those Shares.If a participant makes a Section 83(b) election to recognize ordinary income on the date the RSA is granted, the amount of ordinary income recognized is an amount equal to the excess, if any, of the fair market value of the Shares on the date of grant over the amount, if any, paid for those Shares. In that case, the participant will not be required to recognize additional ordinary income when the restrictions lapse and the Shares vest.The gain or loss realized by the participant upon a subsequent sale of the Shares after the vesting date of the RSAs, will constitute short- or long-term capital gain or loss, depending on the length of time the Shares were held after the vesting date if no Section 83(b) election was made and after the grant date if a Section 83(b) election was made.RSUs. Under current federal income tax regulations, generally no income tax consequences will be recognized by either the participant or the Company upon the grant of an RSU. On the date the RSU settles, the participant will recognize ordinary income in an amount equal to the fair market value of the RSU as of the vesting date or the date of the Compensation Committee's certification of the performance. The gain or loss, realized by the participant upon a subsequent sale of the Shares after the vesting date of the RSUs, will constitute short- or long-term capital gain or loss, depending on the length of time the Shares were held after the settlement date.Dividends and Dividend Equivalents. Dividend and dividend equivalents are generally taxable as compensation (ordinary income), and not dividend income, when received by the participant.General Tax Effect for the Company or an Affiliate. The Company or an Affiliate generally will be entitled to an income tax deduction in connection with an award under the amended and restated Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, upon the exercise of an NQSO). Moreover, if a participant recognizes ordinary income due to a disqualifying disposition of an ISO, the Company would generally be entitled to an income deduction in the same amount.Tax Withholding. Any ordinary taxable income realized by an employee participant will generally be subject to income and payroll tax withholding by the Company at the time the taxable income is recognized by the employee participant. The Compensation Committee may allow for the satisfaction of such tax withholding obligations with Shares, including Shares retained by the Company from the settlement of an award.Section 409A. Awards under the amended and restated Plan are intended either to be exempt from the rules of Section 409A of the Code ("Section 409A") or to satisfy those rules and will be construed accordingly. Granted awards may be modified at any time, in the Compensation Committee's discretion, so as to increase the likelihood of exemption from or compliance with the rules of Section 409A. New Plan BenefitsAwards under the amended and restated Plan are discretionary and depend on a number of factors including the fair market value of a Share on future dates. Accordingly, the benefits that will be granted or paid under the amended and restated Plan are not currently determinable. Registration with the SEC and Listing with the NYSEWe intend to file a registration statement on Form S-8 with the SEC and a listing application with the New York Stock Exchange covering the 3,000,000 additional Shares that will be reserved for issuance under the amended and restated Plan.If a quorum exists, action on this proposal will be approved if the votes cast favoring the proposal exceed the votes cast opposing the proposal.The Board of Directors unanimously recommends you vote FOR approval of the American Equity Investment Life Holding Company Amended and Restated Equity Incentive Plan.382020 Proxy Statement20202021 by: (i) each director and nominee for director; (ii) our chief executive officer, our chief financial officer and each of our other three most highly compensated executive officers; (iii) all executive officers, directors and nominees for directors as a group; and (iv) each shareholder known by us to be the beneficial owner of more than 5% of our Common Stock. On March 31, 2020,2021, there were 91,522,42395,482,733 shares of Common Stock outstanding.
Owned(1)
Number of Shares
Beneficially Owned(2) Name of Beneficial Owner Number Percent John M. Matovina 257,903 * — Ted M. Johnson(3) 127,753 * — Jeffrey D. Lorenzen(3) 81,910 * — Renee D. Montz(3) 54,268 * — Anant Bhalla(3) 73,884 * — Jim L. Hamalainen(3) 20,535 * — Joyce A. Chapman 52,114 * 14,000 Brenda J. Cushing 13,000 * — James M. Gerlach 229,667 * — Douglas T. Healy 3,150 * — Robert L. Howe 84,500 * 29,000 Michelle M. Keeley 4,200 * — William R. Kunkel 56,225 * — Alan D. Matula 26,220 * — David S. Mulcahy 118,439 * — Gerard D. Neugent(4) 102,522 * 14,000 Sachin Shah(5) 2,100 * — A. J. Strickland, III 290,100 * —
group (22 persons)(3) 1,819,786 1.90% 57,000 5% Owners:
55 East 52nd Street
New York, NY 10055(6) 13,524,283 14.16%
100 Vanguard Blvd.
Malvern, PA 19355(7) 10,323,472 10.81%
Building One
6300 Bee Cave Road Austin, TX 78746(8) 7,246,887 7.59%
50 Martin Place
Sydney, New South Wales, Australia(9) 5,017,811 5.26%
Brookfield Place
18 Bay Street, Suite 300 Toronto,
Ontario M5J 2T3(10) 9,106,042 9.54% Shares Beneficially
Owned(1) Options included in
Number of Shares
Beneficially Owned(2) Name of Beneficial Owner Number Percent 255,603 * — 111,000 * — 141,231 * — 64,118 * — 40,892 * — 50,171 * — 53,950 * 29,000 8,800 * — 225,467 * — 80,300 * 29,000 — * — 52,025 * — 22,020 * — 104,239 * — 104,603 * 29,000 131,810 * 27,750 285,900 * 29,000 1,780,822 1.94% 143,750
55 East 52nd Street
New York, NY 10055(6) 12,662,119 13.83%
100 Vanguard Blvd.
Malvern, PA 19355(7)
10,606,919 11.59%
Building One
6300 Bee Cave Road
Austin, TX 78746(8) 7,578,938 8.28%
50 Martin Place
Sydney, New South Wales, Australia(9)
5,688,984 6.22% * 20202021 Proxy Statement3937 (2)2000 Directors Stock Option Plan, the 2009 Employee Incentive Plan, the 2011 Directors Stock Option Plan and the 2016 Employee Incentive Plan.that are exercisable within sixty (60) days of March 31, 2021.(3)Matovina—12,703Bhalla—625 shares; Mr. Johnson—13,236; Mr. Grensteiner—12,655Hamalainen—0 shares; Mr. Johnson—14,139 shares; Mr. Lorenzen—11,62512,496 shares; Ms. Montz—4,0024,776 shares. Ms. Richardson'sThe total ownership includes 26,479of shares held in the American Equity Officers Rabbi Trust.(4)In addition toESOP by the shares reflected in this table, Mr. Grensteiner has a non-qualified deferred compensation agreement with us pursuant to which he will receive shares of Common Stock on a deferred payment basis for services rendered during our initial start-up period. Under this agreement, Mr. Grensteinerexecutive officers is entitled to receive 4,50056,872 shares.(5)(6)February 4, 2020,January 26, 2021, by BlackRock, Inc., BlackRock, Inc. reported sole voting power with respect to 12,469,99213,388,796 shares, sole dispositive power with respect to 12,662,11913,524,283 shares and no shared voting or dispositive power.(7)2020, by The Vanguard Group, The Vanguard Group reported sole voting power with respect to 86,530 shares, sole dispositive power with respect to 10,503,824 shares, shared dispositive power with respect to 103,095 shares and shared voting power with respect to 27,457 shares.(8)Based on the Schedule 13G/A filed with the SEC on February 12, 2020,2021, by Dimensional Fund Advisors LP, Dimensional Fund Advisors LP reported sole voting power with respect to 7,407,6867,054,028 shares, sole dispositive power with respect to 7,578,9387,246,887 shares and no shared voting or dispositive power.(9)13G13G/A filed with the SEC on February 13, 2020,12, 2021, by Macquarie Group Limited, Macquarie Group Limited reported sole voting power of Macquarie Investment Management Holdings Inc. with respect to 5,661,625 shares, sole voting power of Macquarie Investment Management Austria Kapitalanlage AG with respect to 3,5134,995,065 shares, sole voting power of Macquarie Investment Management Group Limited with respect to 5,9004,006 shares, sole dispositive power of Macquarie Investment Management Holdings Inc. with respect to 5,661,625 shares, sole dispositive power of Macquarie Investment Management Austria Kapitalanlage AG with respect to 3,5134,995,065 shares, sole dispositive power of Macquarie Investment Management Group Limited with respect to 5,9004,006 shares and no shared voting or dispositive power.20192020 concerning plans and arrangements the Company has with its directors, officers, employees and independent insurance agents under which they have received equity-based rights to receive shares of Common Stock. The Company has granted or reserved options, restricted stock and RSUs under the 2000 Directors Stock Option Plan, the 2009 Employee Incentive Plan, the 2010 Independent Insurance Agent Stock Option Plan ("2010 Agent Plan"), the 2011 Directors Stock Option Plan, the 2012 Independent Insurance Agent Stock Option Plan ("(“2012 Agent Plan"Plan”), the 2013 Director Plan, the Amended and Restated 2014 Independent Insurance Agent Restricted Stock and Restricted Stock Unit Plan ("(“2014 Agent Plan"Plan”) and the 2016 Employee Incentive Plan. This table excludes the proposed share increase under the American Equity Investment Life Holding Company Amended and Restated Equity Incentive Plan included in Proposal 4 of this proxy statement, but includes information about securities previously authorized for issuance under, the 2016 Employee Incentive Plan and remaining available for future issuance under the 2016 EmployeeAmended and Restated Equity Incentive Plan. Equity Plan Information Plan Category
to be issued
upon exercise of
outstanding options,
warrants and rights(1)
(#)
exercise price of
outstanding options,
warrants and rights(2)
($) Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a))
(#) (a) (b) (c) Equity compensation plans approved by shareholders 1,597,722 25.23 3,485,509 Equity compensation plans not approved by
shareholders 355,150 24.79 — Total 1,952,872 25.10 3,485,509 Equity Plan Information Plan Category Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights(1)
(#) Weighted-average
exercise price of
outstanding options,
warrants and rights(2)
($) Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a))(3)
(#) (a) (b) (c) 843,271 10.47 2,464,825 621,413 23.07 — 1,464,684 19.91 2,464,825 (1)20192020 as well as RSUs granted under the 2014 Agent Plan that have not been earned as of December 31, 2019.2020.(2)2019.(3) 2014 Agent Plan terminated as to future awards on February 1, 2020 without affecting the validity of any unvested restricted stock or RSUs. The number of securities remaining available for future issuance under equity compensation plans approved by shareholders includes 711,011 securities under the 2014 Agent Plan.The 2010 Agent Plan and the 2012 Agent Plan (the "Agent Plans") included in the "Equity“Equity compensation plans not approved by shareholders"shareholders” line in the table above areis intended to benefit the Company and its shareholders by assisting the Company'sCompany’s wholly-owned operating subsidiary, American Equity Life, in attracting and retaining certain independent agents of outstanding ability and to align the interests of such independent agents with those of the Company'sCompany’s shareholders by increasing their long-term financial stake in the Company'sCompany’s continued success402020 Proxy Statement2010 Agent Plan and the 2012 Agent Plan both provided for the issuance of up to an aggregate of 5,500,000 shares of Common Stock. Each of theThe 2012 Agent PlansPlan has terminated as to future awards without affecting the validity of options outstanding. The 2012 Agent Plans arePlan is administered by the Company'sCompany’s Executive Committee. The Executive Committee has the authority to determine sales production criteria for the receipt of awards, the terms of all awards and provisions relating to vesting and any other terms and conditions or restrictions the Executive Committee deems appropriate. Options awarded under the 2012 Agent PlansPlan are not transferable other than by will or the laws of descent and distribution. If there is a Change in Control, as defined in the 2012 Agent Plans,Plan, or the independent insurance agent dies, the vesting of all outstanding options will accelerate and any other restrictions will lapse. 38 2021 Proxy Statement arm'sarm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally. Therefore, the Company has adopted the procedures below for the review, approval or ratification of Related Person Transactions."Related“Related Person Transaction"Transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which the Company was, is, or will be a participant and the amount involved exceeds $120,000, and in which any related person had, has, or will have a direct or indirect material interest, and a "related person"“related person” means:•••••director'sdirector’s independence in the event the related person is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder, or executive officer; (iii) the availability of other suppliers or customers for comparable products or services; (iv) the terms of the transaction; and (v) the terms available to unrelated third parties or to employees generally.•Committee'sCommittee’s first meeting of each fiscal year, the committee shall review any previously approved Related Person Transactions that remain ongoing and have a remaining term of more than six months or remaining amounts payable to or receivable from the Company of more than $120,000. Based on all relevant facts and2020 Proxy Statement41Company'sCompany’s contractual obligations, the committee shall determine if it is in the best interests of the Company and its shareholders to continue, modify, or terminate the Related Person Transaction.2019,2020, the Company had the following Related Person Transactions:("BlackRock"(“BlackRock”) provides investment management services and licenses a risk management analytics tool to the Company. BlackRock is a shareholder known by the Company to be the beneficial owner of more than 5% of the Company'sCompany’s Common Stock as set forth in the Security Ownership of Management and Certain Beneficial Owners section of this proxy statement. For 2019,2020, the Company paid BlackRock and its affiliates an aggregate of $1,551,225$2,095,893 in the form of investment management and license fees.Knapp Properties provides property management services to the owner of the building where the Company has its principal executive offices in West Des Moines, Iowa and an affiliate of Knapp Properties owns a warehouse building, a portion of which is leased to the Company. Gerard Neugent, who serves as a director, is the Co-Chairman of Knapp Properties, L.C. and a member/manager of a company that is a 50% owner of the affiliate that owns the warehouse building. For 2019, the Company paid Knapp Properties and its affiliates an aggregate of $154,571 in the form of fees and rent. 2021 Proxy Statement 39 company'scompany’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Based solely on our review of the copies of such reports received by us, or upon written representations received from certain reporting persons, we believe that during 2019,2020, our officers, directors and ten-percent shareholders complied with all Section 16(a) filing requirements applicable to them other than one late Form 4 filing by each of David S. Mulcahy and Jennifer L. Bryant.20212022 Annual Meeting20212022 or shareholder proposals to be presented from the floor of the meeting must be submitted in writing to the Corporate Secretary, 6000 Westown Parkway, West Des Moines, Iowa 50266, and must comply with SEC rules to be eligible for inclusion in our proxy materials for our 20212022 meeting.24, 2020.20212022 Annual Meeting of Shareholders must submit the proposal to the Corporate Secretary, and such proposal must be delivered (or mailed and received) between March 8, 202111, 2022 and April 7, 2021.11, 2022. Any such proposal must set forth as to each matter such shareholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such shareholder, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such shareholder, (iv) a description of all arrangements or understandings between such shareholder and any other person or persons (including their names) in connection with the proposal of such business by such shareholder and any material interest of such shareholder in such business and (v) a representation that such shareholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.422020 Proxy Statement10-K"householding,"“householding,” can effectively reduce our printing and postage costs.20192020 Annual Report and Form 10-K to shareholders of record on April 24, 2020.28, 2021. The Annual Report and Form 10-K are available online at www.american-equity.com.20192020 (including our audited consolidated financial statements and financial statement schedules), as filed with the SEC, may contact Investor Relations, at 6000 Westown Parkway, West Des Moines, Iowa 50266 (1-888-221-1234, ext. 3602).40 2021 Proxy Statement 2020 Proxy Statement43 AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANYAMENDED AND RESTATED EQUITY INCENTIVE PLAN1.1 In an effort to maintain a position of leadership in the industry in which![[MISSING IMAGE: tm212400d1-proxy_1annualbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/tm212400d1-proxy_1annualbw.jpg)
Company (the "Company") competes, it is necessary to promote financial interests of the Company and its Affiliates, including its growth, by attracting and retaining certain highly qualified employees and members of our board of directors possessing outstanding ability, motivating such individuals by means of equity incentives, providing incentive compensation opportunities competitive with those of major corporations and aligning the interests of such employees and directors with those of our shareholders. The American Equity Investment Life Holding Company Amended and Restated Equity Incentive Plan (the "Plan") is designed to assist the Company in attaining these objectives.Unless the context requires otherwise, the following terms when used with initial capitalization have the following meanings:2.1 "Affiliate" means a parent or subsidiary of the Company, as defined in Sections 424(e) and (f) of the Code (but substituting "the Company" for "employer corporation"), including any parent or subsidiary of the Company after adoption of the Plan.2.2 "Alternative Award" has the meaning set forth in Section 10.1.2.3 "Award Agreement" means a written agreement granting an Award executed by the Company and the Participant.2.4 "Award" means any Option, SAR, RSA, or RSU convertible into or otherwise based on Common Stock granted under the Plan, including Director Awards and Employee Awards.2.5 "Beneficial Owner" (or any variant thereof) means a "beneficial owner" as defined in Rule 13d-3 under the Exchange Act.2.6 "Board" means the Board of Directors of the Company.2.7 "Change in Control" means the occurrence of any of the following:(1)any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person or any securities acquired directly from the Company or its Affiliates) representing 35% or more of the combined voting power of the Company's then outstanding securities, excluding any person who becomes such a Beneficial Owner in connection with a transaction described in paragraph (3) below;(2)the following individuals cease for any reason to constitute a majority of the number of Directors then serving: individuals who, on the date hereof, constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company's shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended;(3)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary thereof with any other corporation, other than (i) a merger or consolidation immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities2020 Proxy StatementA-1acquired directly from the Company or its Affiliates) representing 35% or more of the combined voting power of the Company's then outstanding securities; or(4)the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.For each Award that constitutes deferred compensation under Section 409A, to the extent required to avoid additional income or other tax under Section 409A, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award, only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A. A Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.2.8 "Change in Control Price" means the highest price per share of Shares offered and accepted in conjunction with any transaction resulting in a Change in Control (as determined in good faith by the Committee if any part of the offered price is payable other than in cash) or, in the case of a Change in Control occurring solely by reason of a change in the composition of the Board, the highest Fair Market Value of the common stock on any of the thirty (30) trading days immediately preceding the date on which a Change in Control occurs.2.9 "Code" means the Internal Revenue Code of 1986, as from time to time amended, including any related regulations.2.10 "Committee" means the Compensation Committee of the Board of Directors of the Company, comprised, to the extent deemed necessary or appropriate by the Board to administer performance-based compensation, solely of two or more Directors meeting the requirements of the New York Stock Exchange and qualifying as "non-employee directors" within the meaning of Rule 16b-3 promulgated under the Exchange Act.2.11 "Common Stock" or "Stock" means the common stock, par value $1.00 per share of the Company.2.12 "Company" means American Equity Investment Life Holding Company.2.13 "Competitive Activity" shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company's business, without prior written authorization from the Company, of any confidential information or material relating to the business of the Company, acquired by the Employee Participant either during or after employment with the Company or (iii) any attempt directly or indirectly to induce any employee or agent of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company.2.14 "Date of Exercise" means the date on which the Company receives notice of the exercise of an Option and payment of the exercise price in accordance with the terms of Article VI hereof.2.15 "Date of Grant" means the date on which an Award is granted under the Plan.2.16 "Designated Beneficiary" means the beneficiary as designated in writing by a Participant.2.17 "Detrimental Activity" shall include any action or failure to act that, in the sole determination of the Committee: (i)(a) constitutes financial malfeasance that is materially injurious to the Company, (b) violates the Company's Code of Conduct, (c) results in the Company's restatement of its earnings, financial results or financial statements or (d) results in a violation or breach of law or contract that is materially injurious to the Company or (ii) violates any non-competition, non-disclosure or non-solicitation agreement with the Company, or in the event that the Employee Participant has not entered into any such agreement with the Company, the Employee Participant engages in any "Competitive Activity".2.18 "Director" means a member of the Board of Directors of the Company or any Affiliate. A-22020 Proxy Statement2.19 "Director Award" means an Award granted to a Director Participant.2.20 "Director Participant" means a Non-Employee Director who is also a Participant.2.21 "Disability" means permanent and total disability within the meaning of Section 22(e)(3) of the Code, as determined by the Committee.2.22 "Employee" means any employee of the Company or an Affiliate.2.23 "Employee Award" means an Award granted to an Employee Participant.2.24 "Employee Participant" means an Employee who is also a Participant, including any Participants who are both Employees and Directors.2.25 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor law.2.26 "Expiration Date" means the latest date on which an Award requiring exercise may be exercised pursuant to the Award Agreement.2.27 "Fair Market Value" means, (i) with respect to Stock, (a) for so long as such Stock is readily tradable on an established securities market (within the meaning of Section 409A), the closing price on the day of the grant or measurement or, if the applicable date is not a trading day, on the most recent trading day immediately prior to the applicable date, and (b) otherwise, the fair market value of such Stock determined by the Committee by a reasonable application of a reasonable valuation method (within the meaning of Section 409A); and, (ii) with respect to any other property, the fair market value of such property as determined by the Committee pursuant to a reasonable method adopted in good faith for such purpose from time to time.2.28 "For Cause" shall be deemed to include, but is not limited to, dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by an Employee Participant of any provision of any employment, nondisclosure, non-competition or similar agreement between the Employee Participant and the Company or any Affiliate, and conduct substantially prejudicial to the business of the Company or an Affiliate. The determination of the Committee as to the existence of circumstances warranting a termination For Cause shall be conclusive. Notwithstanding the foregoing, in the event that the Employee Participant is a party to an effective employment or similar agreement with the Company or an Affiliate which contains a "cause" definition, such definition shall be controlling for purposes of the Plan.2.29 "Incentive Stock Option" or "ISO" means an Option granted under the Plan that qualifies as an incentive stock option under Section 422 of the Code and that the Company designates as such in the Award Agreement granting the Option.2.30 "Non-Employee Director" means a Director who is not an Employee.2.31 "Non-qualified Stock Option" means an Option granted under the Plan that is not an Incentive Stock Option.2.32 "Option" means an option to purchase Shares for a specified period of time at a specified price.2.33 "Option Period" means the period during which an Option may be exercised.2.34 "Option Price" means the price per Share at which an Option may be exercised, provided, however, that the Option Price shall not be less than the Fair Market Value of a Share as of the Date of Grant. Notwithstanding the foregoing, in the case of an Incentive Stock Option granted to an Optionee who is a Ten-percent Shareholder, the Option Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value on the Date of Grant. The Option Price of any Option shall be subject to adjustment to the extent provided in Section 10.1 and Section 10.4 hereof.2.35 "Optionee" means a Participant to whom an Option has been granted.2.36 "Participant" means a person selected by the Committee to receive an Award under the Plan, including Employee Participants and Director Participants.2.37 "Performance Objectives" means one or more measures of performance, which may be related to invested assets, total assets, gross or net production, commissions, gross or net sales, revenues, operating income before income taxes, operating income, income before income taxes, net income, operating income or net income per share (basic or diluted), return ratios (including return on assets or net assets, return on average equity, return on investment, return on capital and return on sales), cash flows (including but not limited to operating cash flows,2020 Proxy StatementA-3investing cash flows or financing cash flows), market share, cost or expense reduction goals, margins (including one or more of gross, operating and net income margins), one or more operating ratios, borrowing levels, debt or leverage ratios, cost of capital, credit ratings, stock price, total return to shareholders, total shareholders' equity, book value or book value per share, economic value added, working capital and productivity improvements, acquisitions or divestitures (in whole or in part), joint ventures and strategic alliances, spin-offs or split-ups and the like, reorganizations or recapitalizations, restructurings, financings (issuance of equity or debt), refinancings, regulatory achievements and implementation or completion of critical projects including business expansions, product diversification and new or expanded market penetration or any other measures as may be determined by the Committee. Performance Objectives may be described in terms of Company (consolidated), Affiliate or business unit performance, either absolute or by relative comparison to other companies or any other external measure of the selected criteria.2.38 "Performance Period" means the time period during which the Performance Objectives must be met with respect to an Award.2.39 "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14 (d) thereof, except that such term shall not include: (i) the Company or any of its Affiliates; (ii) a trustee or other fiduciary holding securities under an employee benefits plan of the Company or any of its Affiliates; (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation or other business entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Common Stock.2.40 "Plan" means the American Equity Investment Life Holding Company Amended and Restated Equity Incentive Plan, as may be amended from time to time.2.41 "Restricted Period" has the meaning set forth in Section 8.2.2.42 "Restricted Stock" means an Award of Shares made under Section 8.2.2.43 "Restricted Stock Award" or "RSA" has the meaning set forth in Section 8.2.2.44 "Restricted Stock Unit" or "RSU" has the meaning set forth in Section 8.1.2.45 "Retirement" as to any Employee Participant shall mean such person's Termination after reaching age 55 with at least ten (10) years of service with the Company or its Affiliates, but not including pursuant to any Termination For Cause or pursuant to any Termination for insufficient performance, as determined by the Company. For the avoidance of doubt, this Retirement definition, and any corresponding provision relating to Retirement in the Plan or any Award Agreement, shall not apply to Director Participants.2.46 "Section 409A" means Section 409A of the Code, including the Treasury Regulations thereunder and other applicable Internal Revenue Service guidance.2.47 "Section 422" means Section 422 of the Code, including the Treasury Regulations thereunder and other applicable Internal Revenue Service guidance.2.48 "Share" means a share of Common Stock.2.49 "Stock Appreciation Right" or "SAR" has the meaning set forth in Section 7.1.2.50 "Ten-percent Shareholder" means, in accordance with the rules of Section 424(d) of the Code, a person owning stock with more than ten percent of the total combined voting power of all classes of stock of the Company or an Affiliate.2.51 "Termination" means the cessation of a Participant's employment and service with the Company and its Affiliates.3.1 The Committee shall administer the Plan and shall have plenary authority and discretion, subject to the provisions of the Plan, to select the Participants to receive Awards and shall determine the terms and conditions of the Awards. The Committee has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan, determine eligibility for and grant Awards, determine, modify or waive the terms and conditions of any Award, prescribe forms, rules and procedures and otherwise do all things necessary to carry out the purposes of the Plan. In making these determinations, the Committee may take into account the nature of the services rendered by the Participants, their present and potential contributions to the success of the Company and its A-42020 Proxy StatementAffiliates, and such other factors as the Committee in its discretion shall deem relevant. The determinations of the Committee on the matters referred to in this Article III shall be binding and final.3.2 Notwithstanding anything else, transactions under this Plan, to the extent they would otherwise be subject to Section 16 of the Exchange Act, are intended to comply with all applicable conditions of Rule 16b-3 or its successors under Section 16 of the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.3.3 The Committee may delegate to one or more officers of the Company the authority to select Employee Participants to receive Awards under the Plan and to grant such Employee Participants one or more Awards on such terms and conditions, not inconsistent with the terms of the Plan, as such officer or officers shall determine, provided that no such Award shall be made to any individual who in respect of the Company is an officer within the meaning of Rule 16a-1 promulgated under the Exchange Act, be made in respect of Shares exceeding in number any limit as may be specified by the Committee from time to time for such purpose, or be inconsistent with any other limitations on such delegation as may be specified by the Committee from time to time. When and to the extent exercising the authority described in the preceding sentence, such officer or officers shall be deemed for purposes of the Plan (including without limitation Article XIII) to be acting as the Committee under the Plan.4.1 Participants will be selected by the Committee and shall include individuals who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the creation of value for the Company and its shareholders. Designation as a Participant will apply only for the year or Award for which the designation is made and may include a partial year.ARTICLE VSTOCK SUBJECT TO THE PLAN5.1 Number of Shares Reserved. Subject to adjustment as provided in Section 10.4 hereof, the maximum number of Shares that may be delivered under or in satisfaction of Awards under the Plan is 5,500,000 Shares. The maximum number of Shares that may be delivered under or in satisfaction of Incentive Stock Options is 3,000,000 Shares.5.2 Unvested Awards Available for Grant. If an Award expires or terminates for any reason without having been fully exercised, the unissued Shares which had been subject to such Award shall become available for the grant of additional Awards.5.3 Reversion to the Plan. For the avoidance of doubt, if an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if Shares acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company for an amount not greater than the Participant's purchase price, the Shares allocable to the terminated portion of such Award or such forfeited or repurchased Shares shall again be available for issuance under the Plan. Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash or other property (other than Shares) and shall be treated as forfeited and shall again be available for issuance under the Plan. Upon payment in Shares pursuant to the exercise of an SAR, the number of Shares available for issuance under the Plan shall be reduced as provided in Section 7. Shares withheld from an Award in satisfaction of withholding taxes as described in Section 9.8 or in payment of the exercise price of any Award requiring exercise shall not again be available for issuance under the Plan. Any Shares that are repurchased by the Company using the proceeds received by the Company from the exercise of any Option or SAR or from the payment of any purchase price with respect to any other Award shall not be added to the aggregate number of Shares available for Awards under the Plan.5.4 Certain Other Company Awards. Common Stock issued under awards granted by another company ("other company awards") and assumed by the Company in connection with a merger, consolidation, stock purchase or similar transaction, or issued by the Company under awards substituted for other company awards in connection with a merger, consolidation, stock purchase or similar transaction, shall not reduce the Shares available for Awards under the Plan; provided, that the maximum number of Shares that may be issued pursuant to Incentive Stock Options (as defined below) shall be determined in a manner consistent with Section 422 and the rules thereunder.5.5 Limit on Individual Grants. The following limits on individual Awards shall apply: (i) the maximum number of Shares subject to Options granted to any Employee Participant, and that may be granted as SARs, RSUs and RSAs2020 Proxy StatementA-5pursuant to Sections 7 or 8 to any Employee Participant, shall not exceed an aggregate of 400,000 in any calendar year and (ii) the maximum number of Shares subject to Non-qualified Stock Options granted to any Director Participant, and that may be granted as SARs, RSUs and RSAs pursuant to Sections 7 or 8 to any Director Participant, shall not exceed an aggregate of 25,000 in any calendar year, subject in each case to adjustment under Section 10.4.6.1 Designation of Options as Incentive or Non-qualified. Options granted under the Plan shall be either Incentive Stock Options ("ISOs") or Non-qualified Stock Options ("NQSOs"), as designated by the Committee. All Participants are eligible to receive NQSOs. Only Employee Participants are eligible to receive ISOs. Each Option granted under the Plan shall be clearly identified either as an ISO or a NQSO and shall be evidenced by an Award Agreement that specifies the terms and conditions of the grant. In the event the Committee shall fail to identify any Option granted as an ISO or NQSO, such Option shall be a NQSO. Options granted shall be subject to the terms and conditions set forth in this Article VI and such other terms and conditions not inconsistent with this Plan as the Committee may specify. All ISOs shall comply with the provisions of the Code governing incentive stock options and with all other applicable rules and regulations. The Committee shall determine the number of Shares subject to each Option and the exercise price therefore, which shall not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant. An ISO granted to an employee described in Section 422(b) of the Code must have an exercise price that is not less than 110% of such fair market value.6.2 Option Period. The Option Period for Options granted shall be determined by the Committee, subject to such terms and conditions as the Committee may specify in the Award Agreement or thereafter; provided, however, that (a) an Option shall not be exercisable after ten years (five years in the case of an ISO granted to a Ten-Percent Shareholder) from its Date of Grant; and (b) in the case of the Termination of an Optionee, or the death or Disability of an Optionee, the Option Period shall be as set forth in Section 9.6 below. Notwithstanding anything contained herein to the contrary, an ISO may not be exercised after the period provided in Treas. Reg. Section 1.422-2(a) (2)(iii) and Treas. Reg. Section 1.422-2(d).6.3 Notice of Exercise. An Option may, subject to the terms of the applicable Award Agreement under which it is granted, be exercised in whole or in part by the delivery to the Company of written notice of the exercise, in such form as the Committee may prescribe, accompanied by full payment of the Option Price for the Shares with respect to which the Option is exercised as provided in Section 6.4 hereof.6.4 Payment of Exercise Price. Payment of the aggregate Option Price for the Shares with respect to which an Option is being exercised shall be made in cash; provided, however, that the Committee, in its sole discretion, may provide in an Award Agreement that part or all of such payment may be made by the Optionee in one or more of the following manners:(1)By delivery (including constructive delivery) to the Company of Shares (including the surrender of Shares held by the Participant or those that would otherwise be issued upon exercise of the Option) valued at Fair Market Value on Date of Exercise; or(2)By delivery on a form prescribed by the Committee of a properly executed exercise notice and irrevocable instructions to a registered securities broker approved by the Committee to sell Shares and promptly deliver cash to the Company.6.5 Minimum Exercise. No Option may be exercised for fewer than one hundred (100) Shares.6.6 Vesting Period. Each Award evidencing the grant of any Options shall set forth a specified vesting schedule established by the Committee.6.7 Acceleration of Vesting. If an Option contains a vesting schedule or has not become fully exercisable as of the date of the Optionee's death or Disability, such vesting schedule will automatically be accelerated, and/or any other restrictions to exercise may be removed upon the death or Disability of the Optionee.ARTICLE VIISTOCK APPRECIATION RIGHTS7.1 Grant of SARs. Subject to the provisions of the Plan, the Committee may grant rights to receive any excess in value of Shares over the base value of the rights ("SARs"). The Committee shall determine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards, or other A-62020 Proxy Statementproperty, and may define the manner of determining the excess in value of the Shares. The Committee shall fix the base value of each SAR, which shall not be less than 100% of the Fair Market Value of the Common Stock at the Date of Grant.7.2 Terms and Conditions. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the Award Agreement or thereafter. The Committee may impose such conditions with respect to the exercise of SARs, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. At the time of the grant of an SAR, the Committee may impose such restrictions or conditions to the vesting of such SAR as it, in its absolute discretion, deems appropriate, including requiring the achievement of Performance Objectives. The Expiration Date of each SAR shall be ten (10) years from the Date of Grant thereof, or at such earlier time as the Committee shall state in the Award Agreement.7.3 No Net Share Counting. SARs to be settled in Shares shall be counted in full against the number of Shares available for award under the Plan under Section 5.1 regardless of the number of Shares issued upon settlement of the SAR.ARTICLE VIIIRESTRICTED STOCK UNITS AND RESTRICTED STOCK AWARDS8.1 Restricted Stock Units. The Committee may grant Awards consisting of units representing Shares ("RSUs"). Each RSU shall represent the unfunded and unsecured commitment of the Company to deliver to the Participant at a specified future date or dates one or more Shares or, if specified in the Award Agreement, cash equal to the Fair Market Value of the Award, in any case subject to the satisfaction of any vesting or other terms and conditions established with respect to the Award as the Committee may determine. No Participant or Designated Beneficiary holding RSUs shall be treated as a shareholder with respect to the Shares subject to the Award unless and until such Shares are actually delivered under the Award Agreement. RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered. The Committee may make Awards of RSUs that are subject to restrictions or forfeiture on such terms and conditions as the Committee may determine from time to time.8.2 Restricted Stock Awards. The Committee may grant Awards of Shares subject to forfeiture ("RSAs") and determine the duration of the period (the "Restricted Period") during which, and the conditions under which, the Shares may be forfeited to the Company and the other terms and conditions of such Awards. RSAs may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Period. RSAs shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of RSAs shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company. At the expiration of the Restricted Period, the Company shall deliver such Shares, along with any certificates, to the Participant or if the Participant has died, to the Participant's Designated Beneficiary. If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.8.3 Terms and Conditions. At the time of the grant of RSUs or RSAs, the Committee shall determine the price, if any, to be paid by the Participant for each Share subject to the Award. At the time of the grant of RSUs or RSAs the Committee may impose such restrictions or conditions to the vesting of such Shares as it, in its absolute discretion, deems appropriate, including requiring the achievement of Performance Objectives. To the extent that a grant of Awards is to vest based solely upon the continued employment or Director service of the Participant, such Award shall vest pursuant to a schedule as the Committee may determine.ARTICLE IXGENERAL PROVISIONS APPLICABLE TO AWARDS9.1 Documentation and Legal Conditions on Delivery of Stock. Each Award shall be evidenced by a written document delivered to the Participant or agreement executed by the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable tax and regulatory laws and accounting principles. The Company will not be obligated to deliver any Shares pursuant to the Plan or to remove any restriction from Shares previously delivered under the Plan until: (i) the Company's counsel has approved all legal matters in connection with the issuance and delivery of such Shares; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the Shares2020 Proxy StatementA-7to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, or if the Company determines that the registration statement covering the sale of Stock is not available, the Company may defer the sale until such time as it determines that the registration statement is available and may delay the applicability of any provisions of the Award during any period of unavailability. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock.9.2 Application of Code Section 409A. Awards under the Plan are intended either to be exempt from the rules of Section 409A or to satisfy those rules, and shall be construed accordingly. Granted Awards may be modified at any time, in the Committee's discretion, so as to increase the likelihood of exemption from or compliance with the rules of Section 409A. Each amount to be paid or benefit to be provided to a Participant pursuant to the Plan which constitutes deferred compensation subject to Section 409A shall be construed as a separate identified payment for purposes of Section 409A. To the extent that any Award is payable upon a "separation from service" and such payment would otherwise result in the imposition of any individual tax and penalty interest charges imposed under Section 409A, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six (6) months following such "separation from service" (or death, if earlier) to the extent necessary to avoid such taxes or charges. In the event a Participant is prohibited from executing market trades by reason of the application of the federal securities laws or for any other reason determined by the Committee, the Committee may extend the exercise period of an Award to the extent permitted by Section 409A.9.3 Committee Discretion. Awards may be made alone or in combination with other Awards, including Awards of other types. The terms of Awards of the same type need not be identical, and the Committee need not treat Participants uniformly (subject to the requirements of applicable law). Except as otherwise expressly provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of grant or any time thereafter.9.4 Dividends and Cash Settlement. In the discretion of the Committee, any Award under the Plan may provide the Participant with dividends or dividend equivalents payable (in cash or in the form of Awards under the Plan) currently or deferred with or without interest; provided, however, that any such dividends or dividend equivalents shall only become payable if (and to the extent) that such Award vests. Notwithstanding anything to the contrary herein, unless otherwise determined by the Committee, Awards may be settled in cash rather than Shares.9.5 Employee Leaves of Absence. Awards held by an Employee Participant on an approved leave of absence shall continue to vest in accordance with their terms during the leave of absence as if the Employee Participant was an active Employee unless otherwise agreed to in writing between the Company and the Employee Participant or otherwise set forth in the Award Agreement; provided, however, in the event of an ISO, such leave of absence shall not exceed ninety (90) days unless reemployment is guaranteed by law or contract.9.6 Termination of Employment or Director Service. Unless the Committee expressly provides otherwise, the following rules shall apply in connection with the Participant's Termination. Immediately upon a Participant's Termination, an Award requiring exercise will cease to be exercisable and all Awards to the extent not already fully vested will be forfeited, except that:(1)Disability or Death of Participant. If a Participant's Termination is due to the Participant's death or Disability, such Participant's Awards, including any Awards the vesting of which have been accelerated pursuant to Section 6.7 herein, shall expire unless exercised by the earlier of (i) expiration of the term of the Award and (ii) the date that is one (1) year after the effective date of such Termination. In the event of the death of a Participant, such Participant's Awards may be exercised by the Participant's designated beneficiary. Nothing contained herein shall be construed to extend the ultimate term of the Award beyond the period of time as set out above;(2)Other Termination. Upon a Participant's Termination other than due to (i) the Participant's death or Disability or (ii) termination of an Employee Participant's employment by the Company or the relevant Affiliate For Cause, such Participant's rights with respect to any Awards shall be limited to Shares purchasable by such Participant as of the date of such Termination, and such Award shall expire on the earlier of (x) expiration of the term of the Award and (y) sixty (60) days after the date of such Termination. Nothing contained herein shall be construed to extend the ultimate term of the Award beyond the period of time as set out above;(3)All Options and SARs held by an Employee Participant or an Employee Participant's permitted transferees, if any, immediately prior to the cessation of the Employee Participant's employment For A-82020 Proxy StatementCause (including any portion of the Award that is then exercisable) shall terminate at the commencement of business on the date of such Termination;(4)All RSUs and RSAs, in each case held by (i) an Employee Participant immediately prior to the Employee Participant's Retirement or (ii) a Participant immediately prior to the Participant's death or Termination as a result of Disability, to the extent not previously vested, shall vest and become non-forfeitable; provided, however, that the applicable grants with respect to such Awards shall provide for payment terms that comply with, or are exempt from, the requirements of Section 409A; and(5)All RSUs and RSAs held by a Participant or a Participant's permitted transferees, if any, immediately prior to a Termination of a Participant other than due to (i) the Participant's death or Disability, (ii) an Employee Participant's Retirement or (iii) termination of an Employee Participant's employment by the Company or the relevant Affiliate For Cause, shall terminate at the close of business on the effective date of such Termination.Unless the Committee expressly provides otherwise, an Employee Participant's employment with the Company and its Affiliates will be deemed to have ceased upon termination of the Employee Participant's employment with the Company and its Affiliates (whether or not the Employee Participant continues in the service of the Company or its Affiliates in some capacity other than that of an employee of the Company or its Affiliates); provided that any payments to be made or benefits to be provided upon a termination of employment under the Plan or any Award Agreement may be made only upon a "separation from service" under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on any Employee Participant pursuant to Section 409A of the Code. Moreover, unless the Committee expressly provides otherwise, a Director Participant's service with the Company and its Affiliates will be deemed to have ceased upon termination of the Director Participant's Director service with the Company and its Affiliates (whether or not the Director Participant continues in the service of the Company or its Affiliates in some capacity other than that of a Director of the Company or its Affiliates); provided that any payments to be made or benefits to be provided upon a termination of service under the Plan or any Award Agreement may be made only upon a "separation from service" under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on any Director Participant pursuant to Section 409A of the Code.9.7 Transferability. No Award may be transferred other than by will or the laws of descent and distribution and may be exercised during the life of a Participant only by the Participant, except that, as to Options other than ISOs, the Committee may in its sole discretion permit certain transfers to the Participant's family members, to certain entities controlled by the Participant or his or her family members or to a trust or similar vehicle for the benefit of the Participant's family members.9.8 Withholding Taxes. The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes or social insurance contributions required by law to be withheld with respect to an Award under the Plan no later than the date of the event creating tax liability (as determined without regard to any potential application of Section 83(c)(3) of the Code). The Company and its Affiliates may, to the extent permitted by law, deduct any such tax or social insurance obligations from any payment of any kind due the Participant hereunder or otherwise. In the Committee's discretion, the minimum tax or social insurance obligations required by law to be withheld in respect of Awards, or, if applicable, such other withholding amount (a "Greater Amount") as mutually agreed upon by the Company and the Participant, up to the sum of all applicable statutory maximum rates (provided, in the case of a Participant who is an "officer" of the Company as defined in Rule 16a-1(f) promulgated pursuant to the Exchange Act (or any successor rule), that such other amount is approved in advance by the Committee or the Board), may be paid in whole or in part in Shares, including Shares retained by the Company from the Award creating the obligation, valued at their Fair Market Value on the date of retention or delivery. In particular, but not in limitation of the foregoing, with respect to Awards of RSUs and RSAs, if applicable, the Company shall withhold from the payment of an Award and shall retain that number of Shares the Fair Market Value of which is equal to the amount of tax required to be withheld and paid, or any applicable Greater Amount, on the date of retention or delivery.9.9 Option or SAR Repricing. Without the affirmative vote of holders of a majority of the Shares in person or by proxy at a meeting of the shareholders of the Company at which a quorum representing a majority of all outstanding Shares is present or represented by proxy, neither the Board nor the Committee shall approve either (a) the cancellation of outstanding Options or SARs in exchange for cash, other property or Awards or the grant in substitution therefore of new Options or SARs having a lower exercise prior or base value, as the case may be, or (b) the amendment of outstanding Options or SARs to reduce the exercise price or base value, as the case may be, thereof. This paragraph shall not be construed to apply to: (i) "issuing or assuming a stock option in a transaction to2020 Proxy StatementA-9which Section 424(a) applies" within the meaning of Section 424 of the Code; or (ii) adjustments made pursuant to Section 10.1 or Section 10.4.9.10 Amendment of Award. Except as otherwise expressly provided in the Plan, and subject to the provisions contained in this Section 9.10, the Committee may amend, modify or terminate any outstanding Award, including substituting therefore another Award of the same or a different type, changing the date of exercise or realization and converting an ISO to an NQSO; provided, however, that if shareholder approval is required by law or the rules of the applicable exchange on which common stock of the Company is then publicly traded, such amendment shall not become effective until such shareholder approval is obtained. Any such action shall require the Participant's consent unless the Committee determines that the action would not materially and adversely affect the Participant.9.11 Cancellation and Rescission of Awards. Unless the Award Agreement specifies otherwise, the Committee may cancel, rescind, withhold or otherwise limit or restrict any unexpired or unpaid Award at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or, in the case of Employee Participants, if the Employee Participant engages in any Detrimental Activity.9.12 Minimum Vesting. An Award granted under the Plan after the effective date of the Plan as defined in Section 11.1 shall not vest prior to the first anniversary of the Date of Grant of the Award. Notwithstanding the foregoing, the Committee may grant Awards that vest within one year following the Date of Grant (a) due to an Employee Participant's Retirement, death, Disability, leave of absence, Termination, or upon the sale or other disposition of the Employee Participant's employer or any other similar event, as determined by the Committee, (b) due to a Director Participant's death or Disability, (c) as otherwise provided in Section 10.1 or (d) of an Award described in Section 5.4. In addition, up to 5% of the Shares authorized for issuance under the Plan pursuant to Section 5.1 (as adjusted in accordance with Section 10.4) may be granted as Awards that provide for vesting within one year following the Date of Grant.9.13 Post-Vesting/Delivery Holding Period. A Participant, or a Participant's permitted transferees, if any, shall, unless otherwise determined by the Committee, hold all Shares acquired pursuant to an Award granted under the Plan until the earliest to occur of: (a) twelve (12) months following (i) the date Shares are delivered in respect of an RSU, (ii) the date on which the Restricted Period applicable to an RSA lapses; or (iii) the vesting date in respect of any Option or SAR; (b) such Participant's termination of employment or (c) such Participant's satisfaction of any applicable share ownership guidelines of the Company. This holding period shall not apply to Shares sold or tendered by a Participant or withheld by the Company to pay any applicable Option Price or to settle tax liabilities related to such Awards.ARTICLE XEFFECT OF CERTAIN TRANSACTIONS10.1 Alternative Awards to Employee Participants. Unless otherwise provided in the applicable Award Agreement, and notwithstanding Section 10.2 below, no cancellation, acceleration of vesting, lapsing of restrictions, payment of an Employee Award, cash settlement or other payment shall occur with respect to any Employee Award if the Committee reasonably determines in good faith prior to the occurrence of a Change in Control that the Employee Award shall be honored or assumed, or new rights substituted therefor (such honored, assumed or substituted Award hereinafter called an "Alternative Award") by any successor as described in Section 10.5 herein; provided that any additional terms and conditions under the applicable Award Agreement under which the Employee Award was originally granted are met, and provided further that any such Alternative Award must:(1)Be based on stock that is traded on an established U.S. securities market, or that the Committee reasonably believes will be so traded within sixty (60) days after the Change in Control;(2)Provide such Employee Participant with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Employee Award, including, but not limited to, an identical or better exercise or vesting schedule and identical or better timing and methods of payment; and(3)Have substantially equivalent economic value to such Employee Award (determined at the time of the Change in Control).10.2 Accelerated Vesting and Payment of Employee Awards. If for any reason outstanding Employee Awards are not honored, assumed or substituted in accordance with Section 10.1, unless otherwise provided in the applicable Award Agreement or specifically prohibited under law or by the rules and regulations of a national security A-102020 Proxy Statementexchange, such outstanding Employee Awards will be subject to the following rules in each case effective immediately prior to such Change in Control but conditioned upon completion of such Change in Control, with any corresponding payments made as soon as reasonably practicable after the Change in Control, but no later than within thirty (30) days following the date of the Change in Control:(1)Such outstanding Options and SARs shall become fully vested and exercisable;(2)Any Restricted Period and other restrictions and vesting conditions imposed on such outstanding Restricted Stock Awards or Restricted Stock Units shall lapse, and such outstanding Restricted Stock Units shall become immediately vested and payable, with the manner of payment to be made in cash or Shares at the Committee's discretion, provided, however, that if any such payment is to be made in Shares, the Committee, may in its reasonable discretion, provide such holders the consideration provided to other similarly-situated shareholders in such Change in Control.(3)All such outstanding Employee Awards that are subject to Performance Objectives and for which the Performance Period has been completed as of the date of the Change in Control but have not yet been paid will vest and be paid in cash and/or Shares at such time at the Committee's discretion, with all Performance Objectives to be deemed achieved at actual performance and all other vesting criteria satisfied. Unless otherwise provided in the applicable Award Agreement, all such outstanding Employee Awards that are subject to Performance Objectives for which the Performance Period has not been completed as of the date of the Change in Control will, with respect to each Performance Objective or other vesting criteria, be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met, and vest and be paid out for the entire Performance Period (and not pro rata), with the manner of payment to be made in cash or Shares at the Committee's discretion, provided, however, that if any such payment is to be made in Shares, the Committee, may in its reasonable discretion, provide such holders the consideration provided to other similarly-situated shareholders in such Change in Control.(4)The Committee shall have the ability to unilaterally determine that all outstanding Employee Awards that are not honored, assumed or substituted in accordance with Section 10.1 are canceled upon a Change in Control, and the value of such Employee Awards, as determined by the Committee in accordance with the terms of the Plan and the Award Agreement, be paid out in cash in an amount based on the Change in Control Price within a reasonable time subsequent to the Change in Control; provided, however, that no such payment shall be made on account of an Option or SAR using a value higher than the Fair Market Value on the date of settlement. In the event the Change in Control Price is less than or equal to the Option Price of an Option or the base value of a SAR, such Option or SAR may be canceled without payment.10.3 Accelerated Vesting and Payment of Director Awards. In the event of a Change in Control:(1)Unless otherwise set forth in an Award Agreement, each Director Award that is outstanding immediately prior to such Change in Control shall, effective immediately prior to such Change in Control but conditioned upon completion of such Change in Control, become fully vested and, if applicable, exercisable and the restrictions, payment conditions and forfeiture conditions applicable to any such Award granted shall lapse.(2)The Committee shall have the ability to unilaterally determine that all outstanding Director Awards are canceled upon a Change in Control, and the value of such Director Awards, as determined by the Committee in accordance with the terms of the Plan and the Award Agreement, be paid out in cash in an amount based on the Change in Control Price within a reasonable time subsequent to the Change in Control; provided, however, that no such payment shall be made on account of an Option or SAR using a value higher than the Fair Market Value on the date of settlement. In the event the Change in Control Price is less than or equal to the Option Price of an Option or the base value of a SAR, such Option or SAR may be canceled without payment.10.4 Changes In, Distributions With Respect To and Redemptions of Stock.(1)In the event of any stock dividend or other similar distribution of stock or other securities of the Company, stock split or other combination of shares (including a reverse stock split), recapitalization, conversion, reorganization, consolidation, split-up, spin-off, combination, merger, exchange of stock, redemption or repurchase of all or part of the shares of any class of stock or any change in the capital structure of the Company or an Affiliate or other transaction or event, the following shall be equitably adjusted (a) the number of Shares that may be delivered as per Article V, (b) the number and kind of2020 Proxy StatementA-11Shares or securities subject to Awards then outstanding or subsequently granted, (c) exercise prices or base values, as the case may be, relating to outstanding Awards, and (d) any other provision of Awards affected by such change shall be adjusted by the Company to the extent the Committee shall determine, in good faith, that such adjustment is appropriate.(2)The Committee shall also make equitable or proportionate adjustments of the type described in Section 10.4.(1) above to take into account distributions to shareholders other than stock dividends or normal cash dividends, material changes in accounting practices or principles, extraordinary dividends, mergers, consolidations, acquisitions, dispositions or similar transaction involving Stock, or any other event, if the Committee determines that the adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value and equity of Awards made hereunder, having due regard for: (i) the qualification of ISOs under Section 422; and (ii) the continued exemption of the Awards from (or satisfaction by the Awards of the rules of) Section 409A, where applicable.(3)References in the Plan to Shares will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 10.4 or Section 10.1.10.5 Successors. Any obligations of the Company or an Affiliate under the Plan with respect to Awards granted hereunder, shall be binding on any successor to the Company or Affiliate (a "Successor"), respectively, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company or Affiliate, as applicable.11.1 The Plan and any amendment thereto shall be effective on the date on which it is adopted by the Board; provided, that the effective date of any such adoption requiring shareholder approval shall be the date it is approved by the shareholders of the Company within 12 months after such adoption by the Board. Awards (other than RSAs) may be granted prior to shareholder approval of the Plan, and the date of shareholder approval shall be the Date of Grant for all purposes;provided, that (a) each such Award shall be subject to shareholder approval of the Plan, (b) no such Award may be exercised prior to such shareholder approval, and (c) any such Award shall be void ab initio if such shareholder approval is not obtained.12.1 Unless sooner terminated by the Board pursuant to Section 14.6, the Plan shall expire on May 31, 2030, and no Awards may be granted after such date. Expiration of the Plan shall not affect the validity of any Award outstanding on the expiration date.13.1 In addition to such other rights of indemnification as they may have as Directors or as members of the Committee, the Directors shall be indemnified by the Company against the reasonable expenses, including attorneys' fees, actually and reasonably incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted hereunder, and against all amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if such Directors acted in good faith and in a manner which they believed to be in, and not opposed to, the best interests of the Company; provided, however, that the Director gives the Company an opportunity, at its own expense, to handle and defend the same before such Director undertakes to handle and defend it on the Director's own behalf. For the avoidance of doubt, the foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled pursuant to the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. A-122020 Proxy Statement14.1 No Other Rights Conferred. The establishment of the Plan shall not confer upon any Employee or Director any legal or equitable right against the Company, any Affiliate or the Committee, except as expressly provided in the Plan.14.2 No Right to Employment. The Plan does not constitute inducement or consideration for the employment of service of any Employee. Participation in the Plan shall not give an Employee any right to be retained in the service of the Company or any Affiliate.14.3 No Limitation on Other Stock Option, Etc.. Neither the adoption of this Plan nor its submission to the shareholders, shall be taken to impose any limitations on the powers of the Company or its Affiliates to issue, grant, or assume options, warrants, rights, or restricted stock, otherwise than under this Plan, or to adopt other stock option or restricted stock plans or to impose any requirement of shareholder approval upon the same.14.4 Plan Interest Not Subject to Creditor Claims. The interests of any Participant under the Plan are not subject to the claims of creditors and may not, in any way, be assigned, alienated or encumbered except as provided in an Award Agreement.14.5 No Rights as a Shareholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a shareholder with respect to any Shares to be issued under the Plan until he or she becomes the holder thereof. A Participant to whom an RSA is awarded shall be considered a shareholder of the Company at the time of the Award except as otherwise expressly provided in the Plan or the applicable Award Agreement.14.6 Amendment of the Plan. The Committee may amend, suspend or terminate the Plan or any portion thereof at any time, subject to such shareholder approval as the Committee determines to be necessary or advisable. Further, under all circumstances, the Committee may, but shall not be required to, make non-substantive administrative changes to the Plan in order to conform with or take advantage of governmental requirements, statutes or regulations. Except as provided herein, no such amendment, modification or termination will adversely affect the rights of any Participant (without his or her consent) under any Award previously granted and no amendment will, without the approval of the shareholders of the Company, effectuate a change for which shareholder approval is required in order for the Plan to qualify or to continue to qualify under Section 422. In addition, the Committee may not amend the Plan to remove the requirement for shareholder approval of any form of Option or SAR repricing as specified in Section 9.9 herein.14.7 Governing Law. The Plan shall be governed, construed and administered in accordance with the laws of the State of Iowa and it is the intention of the Company that Incentive Stock Options granted under the Plan qualify as such under Section 422 of the Code.14.8 Representations Regarding Investment Intent; Restrictive Legends. The Committee may require each person acquiring Shares pursuant to Options hereunder to represent to and agree with the Company in writing that such person is acquiring the Shares without a view to distribution thereof. The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. All certificates for Shares issued pursuant to the Plan shall be subject to such stock transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or interdealer quotation system upon which the Common Stock is then listed or quoted, and any applicable federal or state securities laws. The Committee may place a legend or legends on any such certificates to make appropriate reference to such restrictions. The certificates for Shares acquired pursuant to an Option may also include any legend which the Committee deems appropriate to reflect restrictions contained in this Plan or in the applicable Award Agreement or to comply with the Iowa Business Corporation Law.14.9 Regulatory Approvals. The Company shall not be required to issue any certificate or certificates for Shares upon the exercise of Options, or record any person as a holder of records of such Shares, without obtaining, to the complete satisfaction of the Committee, and without complying to the Committee's complete satisfaction, with all rules and regulations, under federal, state or local law deemed applicable by the Committee.14.10 Forfeiture Events; Clawback. In addition to any forfeiture provisions otherwise applicable to an Award, an Employee Participant's right to any payment or benefits with respect to an Employee Award shall be subject to reduction, cancellation, forfeiture, clawback or recoupment (a) in accordance with any clawback, recoupment or similar policy of the Company as in effect from time to time or (b) as required by applicable law.2020 Proxy StatementA-13Proxy — A^umerican Equity Investment Life Holding Company ProxyCompanyProxy Solicited by Board of Directors for Annual Meeting - June 4, 2020 Anant10, 2021Anant Bhalla, John M. MatovinaDavid S. Mulcahy and Renee D. Montz,Phyllis J. Zanghi, or any one of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of American Equity Investment Life Holding Company to be held on June 4, 202010, 2021 or at any postponement or adjournment thereof. Thisthereof.This proxy when properly executed will be voted in the manner you direct on the reverse side. If you sign this proxy but provide no directions as to how to vote your shares for one or more of the proposals, then we will cast your votes under this proxy FOR all of the nominees listed in Proposal 1 and FOR Proposals 2 3, and 4. In3.In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Continued(Continued and to be voted on reverse side.)PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. ImportantPROVIDED.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held June 4, 2020. The10, 2021.The Proxy Statement and our 20192020 Annual Report are available at: http://viewproxy.com/americanequity/2020
![[MISSING IMAGE: tm212400d1-proxy_2annualbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-056542/tm212400d1-proxy_2annualbw.jpg)
Card UsingCardUsing a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. ProposalsinProposals — The Board recommends a vote “FOR” all nominees listed in Proposal 1 and “FOR” Proposals 2 3 and 4. 1. Election of Directors: 01 – Anant Bhalla 02 – Joyce A. Chapman 03 – James M. Gerlach 04 – Robert L. Howe 05 – Michelle M. Keeley 06 – William R. Kunkel FOR WITHHOLD 2. To3.2.To ratify the appointment of KPMGErnst & Young LLP as our independent registered public accounting firm for 2020.2021. FOR AGAINST ABSTAIN To ABSTAIN3.To approve, on an advisory basis, the compensation of our named executive officers. FOR AGAINST ABSTAIN To approve the Company's Amended and Restated Equity Incentive Plan. FOR AGAINST ABSTAIN 3. 4. Note: ABSTAINNote: To transact such other business as may properly come before the meeting. Imeeting.I plan on attending the meeting PleasePlease sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If signing for a corporation or partnership, authorized person should sign full corporation or partnership name and indicate capacity in which they sign. Date: Signaturesign.Date: CONTROL NUMBER SignatureSignatureSignature (if held jointly) PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. VIEW MATERIALS & VOTE PROXYPROVIDED.PROXY VOTING INSTRUCTIONS PleaseINSTRUCTIONSPlease have your 11 digit control number ready when voting by Internet or Telephone InternetTelephoneInternet voting is available through 1:00 A.M. Central Time on June 4, 2020. MAIL Vote10, 2021.INTERNETVote Your Proxy on the Internet:Go to www.AALvote.com/AELHave your proxy card available when you access the above website. Follow the prompts to vote your shares.TELEPHONEVote Your Proxy by Mail: Mark, sign, and date your proxy card, then detach it, and return it in the postage-paid envelope provided. TELEPHONE Vote Your Proxy by Phone:Call 1 (866) 804-9616 Use804-9616Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares. INTERNET Voteshares.MAILVote Your Proxy on the Internet: Go to www.AALvote.com/AEL Haveby Mail:Mark, sign, and date your proxy card, available when you accessthen detach it, and return it in the above website. Follow the prompts to vote your shares. CONTROL NUMBER SCAN TO