Harris Texas Stock Appreciation Rights Plan is a compensation program implemented by The Todd-AO Corporation, a leading company in the entertainment industry. This Plan is designed to reward and retain talented employees, providing them with an opportunity to benefit from the company's stock performance. Under Harris Texas Stock Appreciation Rights Plan, eligible employees are granted stock appreciation rights (SARS). SARS is a form of compensation that allows employees to receive additional value based on the increase in the company's stock price over a specified period. This unique incentive aims to align employee interests with those of the company and offer them a sense of ownership in Todd-AO's success. The Plan is customized to provide various types of SARS to cater to different employee groups within the organization. These different types may include: 1. Executive Stock Appreciation Rights: Reserved for top-level executives and key decision-makers within Todd-AO. Executive SARS enable these employees to benefit significantly from the company's stock price growth, enhancing their overall compensation package and aligning their incentives with shareholders' interests. 2. Management Stock Appreciation Rights: This category encompasses SARS offered to mid-level managers and other managerial positions. This SARS is aimed at recognizing their contributions to the company's performance and fostering a sense of ownership and commitment to long-term success. 3. Employee Stock Appreciation Rights: The employee SARS are designed for the broader workforce, including non-executive, non-managerial employees. This type of SARS ensures that all employees have an opportunity to share in the company's growth, promoting loyalty and incentivizing engagement at all levels of the organization. Harris Texas Stock Appreciation Rights Plan has specific guidelines, terms, and conditions that determine the eligibility, vesting period, exercise price, and allocation of SARS for each employee category. These provisions aim to strike a balance between rewarding employees fairly and driving performance-driven behavior that contributes to Todd-AO's overall success. By implementing the Harris Texas Stock Appreciation Rights Plan, The Todd-AO Corporation provides a valuable compensation mechanism that motivates and retains its employees. Through the different types of SARS available, the company ensures that all employees have an opportunity to participate in the growth of the company, fostering a culture of shared success and long-term commitment.
Harris Texas Stock Appreciation Rights Plan of The Todd-AO Corporation
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Typically, a vested SAR may be exercised, in whole or in part, at any time during the period commencing on the date of vesting and ending on the SAR's expiration date. Upon exercise, an SAR may be paid in cash (e.g., cash-settled SAR) or stock (e.g., stock-settled SAR) or a combination of the two.
Stock Appreciation Rights plans do not result in equity dilution because actual shares are not being transferred to the employee. Participants do not become owners. Instead, they are potential cash beneficiaries in the appreciation of the underlying company value.
Stock Appreciation Rights and its Nuances AdvantagesDisadvantagesSaves employees from having to buy stock optionsLack of additional cash infusion when employees buy stockLesser compliance required as compared to ESOPs and ESPPsFunds are required to finance rights being exercised which may cause liquidity issues2 more rows
A stock appreciation right (SAR) entitles an employee to the appreciation in value of a specified number of shares of employer stock over an exercise price or grant price over a specified period of time. The base price generally is equal to the underlying stock's fair market value on the date of grant.
Stock Appreciation Rights Overview Instead, employees are simply entitled to the difference between the exercise price and the market value of the stock. For example, an employee with a stock appreciation right exercise price of $15 for one stock could exercise his rights when the stock price is $20 and reap $5.
Stock appreciation rights are a type of incentive plan based on your stock's value. Employees receive a bonus in cash or equivalent number of shares based on how much the stock value increases over a set period of time - usually from the date of granting the right up until the right is exercised.
A stock appreciation right is a form of incentive or deferred compensation that ties part of your income to the performance of your company's stock. It gives you the right to the monetary equivalent of the appreciation in the value of a specified number of shares over a specified period of time.
The primary benefit of stock appreciation rights is that employees can receive proceeds from stock price increases without having to buy stock.
Stock options are often given at a discounted price by the employer. With stock options, you assume the full value of the shares. With SARs, your reward is based on any increases in the value of the shares.