Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
American Equity Investment Life Holding Company ("AEL") continues to
successfully execute its AEL 2.0 strategy, its goal to deliver significant value
to all shareholders and vigilantly drive alignment between shareholder interests
and those of its insurance affiliates' policyholders. The AEL Board of Directors
(the "Board") believes that under the leadership of Mr. Anant Bhalla, Chief
Executive Officer and President, all shareholders have significant potential for
additional value creation through both the execution of AEL 2.0 and with the
strategic optionality retained by the Company.
The Board has reaffirmed its belief in the company's strategy and the importance
of Chief Executive Officer Anant Bhalla's leading the company for the
foreseeable future to reach the objective of continued realization of
shareholder value for all shareholders.
To achieve this goal, on November 29, 2022 (the "Grant Date"), the Board
approved a strategic incentive award. Mr. Bhalla has opportunity to earn the
value of up to 1,200,000 shares of AEL common stock upon attainment of specified
significant sustained increases in AEL's common stock price (each, a "Share
Value Objective") on or before December 31, 2027 (the "End Date").
Additional Stay Requirement (from Grant
Share Value Objective (1) Total Shares Payable (2) Date) (2)
$45.00 333,333 24 months
$50.00 333,333 18 months
$55.00 333,333 12 months
$60.00 200,000 -
(1) Share Value based on AEL's 30-trading-day volume-weighted average common
(2) One-half of each set of shares payable (less the amount of tax withholding)
will be issuable as shares of AEL common stock, subject to the additional stay
requirement. AEL will pay the remaining value in cash, less tax withholding,
using the Share Value Objective price per share.
Mr. Bhalla must remain with AEL through the date the Company achieves the Share
Value Objective to receive any compensation (and satisfy the additional stay
requirement noted in order to earn shares), subject to the circumstances
Mr. Bhalla would forfeit the opportunity to earn any unearned portion of the
award as of his voluntary resignation or an involuntary termination with
In case of long-term disability, involuntarily termination without "cause,"
departure for "good reason," or death, should the Company achieve any additional
Share Value Objectives within one year following such event (and by the End
Date), Mr. Bhalla (or his heir) will earn the number of shares associated with
that Share Value Objective.
In case of an AEL change in control on or prior to the End Date, continued
service requirements would be waived and Mr. Bhalla would earn compensation
using the change in control per share price against any previously-unmet Share
Value Objective. In case of a change-in-control without achieving any Share
Value Objective, Mr. Bhalla would earn the number of shares associated with the
$45 Share Value Objective. In either case, the Company would reduce the
compensation to the extent more net-after-tax-efficient for Mr. Bhalla under the
"golden parachute excise tax" provisions of the Internal Revenue Code; no excise
tax "gross-up" applies.
The award, and any shares and cash delivered, will be subject to the Company's
performance compensation clawback policy, including any updates required by SEC
or NYSE rules.
The forward-looking statements in this disclosure, including additional,
appreciation, belief, future, goal, objective, optionality, potential, should,
strategy, will, would, and their derivative forms and similar words, as well as
any projections of future results, are based on assumptions and expectations
that involve risks and uncertainties, including the "Risk Factors" the company
describes in its U.S. Securities and Exchange Commission filings. The Company's
future results could differ, and it has no obligation to correct or update any
of these statements.
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