The Nevada Stock Appreciation Rights Plan (SARS) of The Todd-AO Corporation is a compensation program designed to incentivize and reward employees for their contributions to the company's growth and success. SARS is a type of equity-based compensation plan that grants employees the opportunity to receive a cash payment equal to the appreciation in the company's stock price over a specified period. Under the Nevada SARS Plan, eligible employees are granted SARS as a form of additional compensation. This SARS provides employees with the right to receive a cash payment or stock equivalent based on the increase in the company's stock price between the grant date and the exercise date. The exercise price is typically set at the fair market value of the stock on the grant date. The Todd-AO Corporation offers different types of Nevada Stock Appreciation Rights Plans to cater to varying employee needs and goals. Some key types include: 1. Performance-Based SARS: This SARS is tied to specific performance goals or targets set by the company. Employees are granted SARS with the opportunity to earn a cash payment based on the achievement of these predetermined performance metrics. This type of SARS plan allows employees to align their efforts with the company's objectives and share in its success. 2. Time-Based SARS: Time-based SARS are granted to employees based on their tenure with the company. This SARS typically vest over a predetermined period, such as three to five years. Once fully vested, employees have the option to exercise their SARS and receive a cash payment or stock equivalent based on the appreciation in the company's stock price. 3. Restricted SARS: Restricted SARS are subject to certain restrictions or conditions. These conditions may include a requirement to meet specific performance targets, continued employment with the company, or a limit on the number of SARS that can be exercised at any given time. Restricted SARS provide an additional layer of motivation for employees to fulfill the predetermined conditions in order to fully benefit from the appreciation in the company's stock price. The Todd-AO Corporation's Nevada Stock Appreciation Rights Plan is a valuable tool for attracting and retaining talented employees. By aligning employee incentives with the company's performance, it encourages individuals to contribute to the long-term growth and profitability of the organization. This equity-based compensation program not only rewards employees for their efforts but also allows them to share in the company's success by reaping the benefits of increased stock value.