The Kansas Directors Stock Appreciation Rights Plan of American Annuity Group, Inc. (AAG) is an incentivizing program that allows directors of the company to receive stock appreciation rights (SARS) as a form of compensation. This plan aims to align the interests of the directors with those of the shareholders, promoting increased shareholder value and company growth. Through this plan, Kansas directors of AAG are granted SARS, which provide them the opportunity to benefit from the appreciation in the company's stock. SARS gives the directors the right to receive the equivalent value in cash or company stock, depending on the terms outlined in the plan. This serves as a motivational tool for directors to contribute to the company's success and make decisions that positively impact shareholder value. The Kansas Directors Stock Appreciation Rights Plan of AAG offers various types of SARS, including: 1. Performance-Based SARS: This SARS is granted based on the achievement of predetermined performance goals set by the company. The directors are rewarded if they meet or exceed these goals, ensuring that their compensation is tied to the company's performance. 2. Time-Vested SARS: With this type of SAR, directors receive a certain percentage of SARS annually, and these rights vest over a specific time period. The directors must remain with the company for the duration of the vesting period to fully benefit from this SARS. 3. Discretionary SARS: AAG may choose to grant discretionary SARS to directors based on their individual contributions, expertise, or exceptional performance. This SARS provides additional incentives to directors who have made significant contributions to the company. By implementing the Kansas Directors Stock Appreciation Rights Plan, AAG aims to attract and retain talented directors who are motivated to drive the company's growth and success. This plan provides the directors with a financial stake in the company's performance and aligns their interests with the shareholders'. It ensures that the directors' compensation is directly impacted by their contributions, thus encouraging long-term value creation for AAG and its stakeholders.