The North Dakota Directors Stock Appreciation Rights Plan is a comprehensive compensation program offered by American Annuity Group, Inc. to its directors in North Dakota. This plan provides directors with the opportunity to receive appreciation in the company's stock value over a specified period. Stock appreciation rights (SARS) are a key component of the plan, allowing directors to benefit from the increase in the company's stock price. These rights are granted to directors as a form of incentive and are tied to the financial performance and growth of the company. Under the North Dakota Directors Stock Appreciation Rights Plan, directors have the ability to earn the appreciation in the company's stock without having to purchase actual shares. This distinguishes SARS from regular stock options, making them a desirable compensation tool for directors. One of the notable features of this plan is its flexibility. American Annuity Group, Inc. offers various types of stock appreciation rights to Directors in North Dakota, including full value SARS, indexed SARS, and tandem SARS. 1. Full Value SARS: This type of SAR provides directors with the full value of the increase in the stock price. When the rights are exercised, directors are entitled to receive the difference between the fair market value of the stock on the exercise date and the grant price. 2. Indexed SARS: This SARS is linked to specific financial benchmarks or performance goals of the company. The appreciation in stock value is calculated based on the index or target set by American Annuity Group, Inc. This type of SAR provides an additional layer of motivation for directors to strive for the company's set objectives. 3. Tandem SARS: Under this plan, directors are granted both stock options and SARS simultaneously. Tandem SARS give directors the flexibility to choose between exercising the stock options or SARS, depending on the stock price and their financial goals. This diversity offers directors additional opportunities for wealth accumulation. It is important to note that the specific terms and conditions of the North Dakota Directors Stock Appreciation Rights Plan may vary based on individual director agreements and the company's policies. American Annuity Group, Inc. meticulously designs this plan to align the interests of directors with those of shareholders, while rewarding their contribution to the company's success.