Arkansas Directors Stock Appreciation Rights Plan is a compensation program designed by American Annuity Group, Inc. to reward its directors based on the appreciation of the company's stock value. This plan allows the participating directors to receive additional compensation in the form of stock appreciation rights (SARS) that will vest and be payable upon the achievement of predetermined performance goals. The Arkansas Directors Stock Appreciation Rights Plan aims to align the interests of directors with the company's shareholders by linking the value of their compensation directly to the increase in the company's stock price. Through this plan, directors have the opportunity to directly benefit from the success and growth of American Annuity Group, Inc. The plan operates by granting SARS to participating directors, allowing them to receive cash or stock payments equal to the appreciation in the company's stock price over a specified period. This SARS typically vest over time or upon the attainment of specific performance milestones, ensuring that directors remain committed to the long-term success of the company. American Annuity Group, Inc. offers different types of Arkansas Directors Stock Appreciation Rights Plans tailored to the needs and goals of its directors. These may include: 1. Performance-based SARS: This type of plan grants SARS based on the achievement of predefined performance targets, such as revenue growth, earnings per share, or other measurable financial objectives. Directors receive compensation only if the company successfully meets or surpasses these targets. 2. Time-based SARS: Under this plan, SARS vest over a specified period of time, regardless of the company's performance. Directors are rewarded simply for their continued service and contribution to the company. 3. Hybrid SARS: This plan combines elements of performance-based and time-based SARS, where a portion of SARS vest based on the achievement of specific performance targets, while the remaining SARS vest over time. 4. Phantom SARS: This variant of the plan does not involve actual stock issuance. Instead, directors receive cash payments equal to the appreciation in the company's stock value. Phantom SARS allow for flexibility and can be used when the company prefers to avoid diluting its existing shares. It is important to note that the specifics of the Arkansas Directors Stock Appreciation Rights Plan may vary depending on the terms and conditions set by American Annuity Group, Inc. Additionally, legal and regulatory considerations specific to Arkansas state law should also be taken into account when implementing and operating such a plan.