Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. OnNovember 19, 2020 , the Compensation Committee of the Board of Directors ("Compensation Committee") ofAmerican Equity Investment Life Holding Company (the "Company") awarded the Company's Chief Executive Officer,Anant Bhalla , a one-time special achievement cash bonus of$1,000,000 pursuant to the terms of the Letter Agreement filed as Exhibit 10.1 hereto, which is incorporated herein by reference. In awarding this compensation, the Compensation Committee considered a variety of factors including (i) the exceptional level at whichMr. Bhalla performed in his first year as Chief Executive Officer, especially during the very challenging business environment in 2020, (ii)Mr. Bhalla's significant contributions to the accelerated achievement of Company near term and long-term objectives in 2020, and (iii)Mr. Bhalla's total compensation in 2020 relative to other CEOs among industry peers. In addition to rewardingMr. Bhalla for his performance in 2020, the award also provides a retention incentive by stipulating that the full amount is subject to repayment ifMr. Bhalla were to voluntarily resign within 12 months. In addition, onNovember 19, 2020 (the "Grant Date"), the Compensation Committee awardedMr. Bhalla and certain named executive officers (the "NEOs") of the Company each a one-time stock option award (the "Option Award") pursuant to the terms of the Employee Stock Option Agreement filed as Exhibit 10.2 hereto, which is incorporated herein by reference. The Option Award was granted toMr. Bhalla and each of the NEOs to encourage their focused and swift execution of the Company's AEL 2.0 strategy without incenting undue risk taking. In awarding these options, the Compensation Committee considered a variety of factors including (i) the importance of the NEOs to leading and executing the AEL 2.0 strategy, (ii) the need for additional retention strength for key talent in a highly competitive and acquisitive industry, and (iii) the absence of a pure, shareholder aligned incentive like options in the annual equity grant mix for executives. Additionally, in order to further enhance shareholder alignment, these options only vest if, and after, the Company's stock price reaches$37.00 (based on a 30-day trading average) on or before the fifth anniversary of the Grant Date; otherwise the options expire upon the fifth anniversary of the Grant Date. More specifically, fifty percent (50%) of the Option Award granted to each ofMr. Bhalla and the NEOs vests upon the later of: (i) the Company attaining a$37.00 per share common stock price (based on a 30-day trading average); and (ii) the one year anniversary of the Grant Date. The remaining fifty percent (50%) of the Option Award vests on the one year anniversary of the vesting of the initial fifty percent (50%) of the Option Award. If the Company does not achieve the$37.00 per share common stock price on or before the fifth anniversary of the Grant Date, the Option Award shall be forfeited. Under the terms of this special incentive,Mr. Bhalla received an Option Award of 244,050 options with aGrant Day fair value of$1,846,454 . Mr.Ted M. Johnson , the Company's Chief Financial Officer & Treasurer received an Option Award of 49,565 options withGrant Day fair value of$375,000 . Mr.Jeffrey D. Lorenzen , the Company's Chief Investment Officer received an Option Award of 49,565 options with aGrant Day fair value of$375,000 . Ms.Renee D. Montz , the Company's Executive Vice President, General Counsel & Secretary received an Option Award of 46,260 options with aGrant Day fair value of$350,000 .Mr. Bhalla's award was limited to 244,050 options by the annual award limitation to any single individual during any single calendar year within the Company's Amended and Restated Equity Incentive Plan. An additional Option Award will be made toMr. Bhalla in 2021 with a Grant Date fair value of$653,546 (the difference between his target Grant Date fair value of$2,500,000 and his actual Grant Date fair value of$1,846,454 ). The Compensation Committee intends to factor the size of these awards intoMr. Bhalla's annualized compensation when making future pay determinations with respect toMr. Bhalla . Item 9.01. Financial Statements and Exhibits (d) Exhibits The following exhibits are being furnished with this Form 8-K. Exhibit Number Description 10.1 Letter Agreement dated November 19, 2020 by and
between American Equity
Investment Life Holding Company andAnant Bhalla 10.2 Form of Employee Stock Option Agreement with Respect
to Common Stock of American
Equity Investment Life Holding Company of Employee
Stock Option Agreement with
Respect to Common Stock ofAmerican Equity Investment Life Holding Company 104 The cover page from this Current Report on Form 8-K,
formatted in Inline XBRL.
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