The Middlesex Massachusetts Directors Stock Appreciation Rights Plan is an integral component of the comprehensive compensation package offered by American Annuity Group, Inc. Located in Middlesex County, Massachusetts, this plan is specifically tailored to provide stock appreciation rights (SARS) exclusively to directors of the company. The Middlesex Massachusetts Directors Stock Appreciation Rights Plan aims to align the interests of directors with the long-term success and growth of American Annuity Group, Inc. SARS grant directors the right to receive a cash payment equal to the appreciation in value of a specified number of shares of the company's common stock over a predetermined period of time. This plan offers various types of Middlesex Massachusetts Directors Stock Appreciation Rights, customized to meet the diverse needs and goals of the directors within American Annuity Group, Inc. These may include: 1. Performance-Based SARS: Directors are granted SARS that are tied to the achievement of certain performance goals or metrics outlined by the company. These goals can be financial, operational, or market-related, providing an incentive for directors to actively contribute towards the company's overall success. 2. Time-Vested SARS: Under this type of SAR, directors are granted a predetermined number of SARS with a vesting period. As time progresses, directors become eligible to exercise these rights and receive cash payments based on the increase in stock price during the duration of the SARS. 3. Dividend Equivalent SARS: Directors may also be granted SARS that encompass both the appreciation in stock value and the equivalent value of dividends issued by American Annuity Group, Inc. This type of SAR enables directors to participate in the company's dividend distributions, enhancing the overall value of their compensation. The Middlesex Massachusetts Directors Stock Appreciation Rights Plan serves as a key tool for American Annuity Group, Inc. to attract, retain, and motivate experienced and talented directors. By offering a compelling incentive linked to the company's performance and growth, this plan strengthens the alignment between directors and shareholders, fostering a culture of shared success.