The Arizona Share Appreciation Rights Plan (SHARP) is a type of employee compensation plan that offers employees the opportunity to receive appreciation rights for the company's stock. The plan is structured to encourage employee retention and motivate exceptional performance by providing them with an opportunity to share in the company's success. The main idea behind the Arizona SHARP is to grant employees the right to receive cash or stock-based rewards equal to the increase in the value of the company's stock over a specified period. This means that if the company's stock price increases during the given period, employees are entitled to receive a predetermined portion of that stock price appreciation. The Arizona SHARP often includes an amendment clause that allows for modifications and adjustments to be made to the plan as circumstances change over time. This amendment clause enables companies to adapt the plan to align with evolving market conditions or changes within the organization itself. There are different types of Arizona SHARP with amendments that companies can choose from, depending on their specific objectives and requirements. Some common variations include: 1. Performance-based SHARP: This type of plan establishes specific performance criteria that employees must meet to be eligible for appreciation rights. It aims to incentivize and reward employees for achieving predetermined goals and targets. 2. Time-based SHARP: In contrast to the performance-based plan, the time-based SHARP distributes appreciation rights to employees based on their length of service or a specified period. This design encourages employee loyalty and long-term commitment to the company. 3. Cash-based SHARP: While most SHARP plans provide employees with stock-based rewards, some companies may opt for a cash-based approach. In this case, employees receive cash payments equal to the increase in the value of the company's stock. 4. Restricted SHARP: This type of plan includes certain restrictions or conditions that must be met before employees can exercise their appreciation rights. For example, employees may need to achieve specific milestones or fulfill certain criteria before accessing their rewards. 5. Phantom SHARP: A phantom SHARP replicates the economic benefits of a traditional SHARP plan without granting actual ownership of company stock. Instead, employees receive cash payments based on the increase in the stock price, providing them with a sense of ownership while avoiding actual share transfers. The Arizona SHARP with amendments offers companies flexibility in designing and implementing an employee compensation plan that aligns with their specific goals and objectives. By providing employees with the opportunity to share in the company's success, the plan aims to foster loyalty, enhance motivation, and ultimately drive organizational growth.