LOAN AGREEMENT
1. PARTIES. The parties to this Agreement are Xxxxx X. Xxxxx ("XXXXX") and
American Equity Investment Life Holding Company (the "COMPANY"), an
Iowa corporation, headquartered in West Des Moines, Iowa.
2. PURPOSE. The Company is an insurance holding company group engaged
primarily in the sale of annuities and other life insurance products.
Noble is the President and Chairman of the Company. Noble and the Company
believe it is mutually advantageous to provide for a loan by the Company
to Noble as an inducement to him to remain employed by the Company in his
present capacities. The purpose of this Agreement is to specify the terms
and conditions under which the loan is to be repaid.
3. DURATION OF AGREEMENT. This Agreement shall commence on May 1, 2000 and
expire on April 30, 2005, unless terminated or extended in writing by the
parties.
4. LOAN. The Company shall loan to Noble Eight Hundred Thousand Dollars
($800,000) pursuant to the attached Promissory Note. Noble is obligated to
repay that Promissory Note unless he continues as President and Chairman
of the Company for the entire term of the Note. If certain conditions are
met, the Company shall forgive amounts due under the Promissory Note to
the extent specified herein.
4.1 INTEREST RATE. The principal balance of the Note will bear
interest at the rate of 6.50% per
annum.
4.2 ANNUAL INSTALLMENT PAYMENTS. Payments shall be made in 5 equal
annual installments of principal and interest, each in the
amount of $192,508, with the first such payment due April 30,
2001, and continuing thereafter on April 30 of each year
through and including April 30, 2005.
4.3 SCHEDULED FORGIVENESS. If Noble is continuously employed by
the Company through each of the dates specified below, then
the following payments on the Promissory Note shall be
forgiven on the following dates:
On April 30, 2001, the Company shall forgive the amount of
$192,508.
On April 30, 2002, the Company shall forgive the amount of
$192,508.
On April 30, 2003, the Company shall forgive the amount of
$192,508.
On April 30, 2004, the Company shall forgive the amount of
$192,508.
On April 30, 2005, the Company shall forgive the amount of
$192,508.
4.4 CONTINUOUS EMPLOYMENT. The forgiving of any debt described in
Section 4.3 above shall occur only if Noble is continuously
employed by the Company from the date hereof through and
including the dates on which such forgiveness is scheduled, or
in accordance with Section 4.5 or Section 4.6 below.
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4.5 DEATH OR DISABILITY. In the event Noble should die or become
permanently disabled (as hereinafter defined) prior to April
30, 2005, then any remaining balance of principal and interest
on the Promissory Note shall be forgiven in full as of the
date of death or determination of permanent disability. For
purposes of this Agreement, Noble shall be deemed to be
"permanently disabled" upon the written certification of his
physician that he is unable to perform his essential functions
as President and Chairman of the Company and that such
disability will prevent him from performing such functions for
an indefinite period expected to exceed at least 180 days.
4.6 CHANGE OF CONTROL. In the event of a "change of control" as
hereinafter defined, then: (i) any remaining balance of
principal and interest on the Promissory Note shall be
forgiven in full on the effective date such change of control;
and (ii) Company shall reimburse Noble for up to $500,000 of
the amount of excise taxes under Section 280G of the Internal
Revenue Code (as amended) as may be payable by him, if any, in
connection with the forgiveness of the balance of the
Promissory Note pursuant to subclause (i) of this Section 4.6.
For purposes of this Agreement the term "change of control"
shall be deemed to have occurred if: (a) any person,
organization or association of persons or organizations acting
in concert, excluding affiliates of the Company itself, shall
acquire more than twenty percent (20%) of the outstanding
voting stock of the Company in whole or in part by means of an
offer made publicly to the holders of all or substantially all
of the outstanding shares of any one or more classes of the
voting securities of the Company to acquire such shares for
cash, other property or a combination thereof; or (b) any
person, organization or association of persons or
organizations acting in concert shall succeed in electing two
or more directors in any one election in opposition to those
proposed by management; or (c) the Company transfers all or
substantially all of its operating properties and assets to
another person, organization or association of persons or
organizations, excluding affiliates of the Company itself; or
the Company shall consolidate with or merge into any person,
firm or corporation unless the Company or a Subsidiary shall
be the continuing corporation or the successor corporation;
4.7 WITHHOLDING. Noble hereby agrees and acknowledges that the
forgiveness of any payment due under the Promissory Note will
constitute compensation subject to state and federal income
taxation and withholding requirements. Noble further agrees
and acknowledges that such withholding could amount to 40% or
more of the amounts forgiven, depending upon the amount of
Noble's other compensation from the Company. On each date
specified in Section 4.3 above on which the forgiveness of any
payment is to occur, Noble agrees to pay to the Company the
full amount of any federal, state and/or local tax which, in
the opinion of counsel for the Company, must be collected,
withheld, or paid over by the Company in connection with such
compensation, excluding the portion of FICA withholding for
which Noble is responsible. If Noble should fail to make any
payment required by this Section 4.5, then the Company, at its
option, may deduct the amount of such withholding from any
other payments due to Noble by the Company, or may declare the
Promissory Note in default.
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5. ASSIGNABILITY. No right to Noble hereunder shall be assigned or assignable
by voluntary or involuntary assignment.
6. APPLICABLE LAW. This Agreement shall be subject to and construed under the
laws of the state of Iowa.
7. CONFIDENTIALITY. It is further understood and agreed that the parties to
this Agreement shall not disclose, comment on, or publish in any manner, to
any person, association, organization or entity, the substance or the terms
and conditions of this Agreement, unless the nondisclosing party gives its
prior written consent to any instance of such disclosure, comment or
publication.
Nothing herein shall prohibit the parties from disclosing the substance
or the terms and conditions of this Agreement should such disclosure be
required for the preparation of their respective tax returns, to enforce
its terms or to respond to inquiries from taxing or other governmental
authorities, hearings, investigations, or other official proceedings.
IN WITNESS WHEREOF, the Company and Noble have caused this Agreement to
be executed on the date written below.
AMERICAN EQUITY INVESTMENT XXXXX X. XXXXX
LIFE HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxxx
Executive Vice President
Date: April 30, 2000
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PROMISSORY NOTE
$800,000.00 West Des Moines, Iowa: May 1, 2000
FOR VALUE RECEIVED, the undersigned, XXXXX X. XXXXX, an individual
residing at 0000 Xxxx xx Xxxxxx Xxxxx #000, Xxxx Xxxx Xxx, Xxxxxxx ("Borrower"),
promises to pay to the order of AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
("Lender"), an Iowa corporation with principal offices located at 0000 Xxxxxxx
Xxxxxxx, Xxxx Xxx Xxxxxx, Xxxx 00000, the principal sum of Eight Hundred
Thousand Dollars ($800,000), with interest thereon at the rate of 6.50% per
annum, in five (5) equal annual installments of principal and interest,
beginning on the 30th day of April, 2001 and continuing on the 30th day of each
April through and including April 30, 2005.
This Promissory Note is made in accordance with a Loan Agreement of
even date herewith between the parties hereto. Any event of default specified in
the Loan Agreement shall constitute an event of default hereunder. Except as to
payments forgiven in accordance with the terms of the Loan Agreement, all
payments of principal and interest under this Note shall be made in lawful money
of the United States of America in immediately available funds at such place as
may be designated by the Lender to the Borrower in writing.
Upon the occurrence of any default specified in the Loan Agreement,
then the entire balance of unpaid principal and interest hereunder shall become
immediately due and payable at the option of the Lender without further notice.
The Borrower agrees to pay all costs of collection or enforcement hereof
incurred by Lender including without limitation reasonable attorney fees.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment, demand, protest and notice of dishonor in
connection with this Note.
This Note is made under and governed by the internal laws of the
State of Iowa.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
