The Vermont Stock Appreciation Rights Plan of The Todd-AO Corporation is a comprehensive and rewarding incentive program designed to provide eligible employees with the opportunity to benefit from the corporation's success and stock appreciation. By granting stock appreciation rights (SARS) to employees, The Todd-AO Corporation aims to align their interests with the long-term growth and prosperity of the company. Under this plan, eligible employees are awarded a specified number of SARS, which represent the right to receive a cash payment equal to the appreciation in the value of a certain number of shares of the corporation's common stock. SARS are typically subject to certain vesting requirements, ensuring that employees remain committed to the corporation and its objectives for a defined period. The Vermont Stock Appreciation Rights Plan of The Todd-AO Corporation offers different types of SARS, including: 1. Performance-Based SARS: This SARS is granted to employees based on pre-determined performance goals and metrics. Employees are entitled to receive cash payments if the corporation achieves or exceeds these performance targets, aligning their efforts with the company's strategic objectives. 2. Time-Based SARS: This SARS become exercisable over time, usually in incremental installments. By vesting these rights gradually, the plan incentivizes employees to remain with the corporation and contribute to its long-term success. 3. Cash-Settled SARS: Instead of receiving actual shares of stock, employees with cash-settled SARS are paid the appreciation in cash, providing them with immediate liquidity. 4. Full-Value SARS: With full-value SARS, employees are granted rights equivalent to the full value of common stock shares. This type of SAR may be awarded in the form of restricted stock units (RSS) or phantom stock grants. The Todd-AO Corporation's Vermont Stock Appreciation Rights Plan is an effective tool for attracting, motivating, and retaining top talent within the organization. Given the potential financial rewards associated with SARS, employees are encouraged to drive the corporation's growth and profitability, thereby creating a win-win situation for both the company and its workforce.