Washington Share Appreciation Rights Plan (WARP) is a type of employee benefit plan designed to motivate and incentivize employees by granting them the right to receive a share of the appreciation in the company's stock value over a certain period. It is a variation of the more common stock option plans and provides employees with a direct stake in the company's success without requiring them to purchase shares. The primary objective of the Washington Share Appreciation Rights Plan is to align the interests of employees with those of shareholders, encouraging a sense of ownership and driving employee performance. Under this plan, eligible employees are awarded a specific number of appreciation rights, which entitle them to receive a cash payment equivalent to the increase in the company's stock price during a predetermined period. WARP is governed by specific rules and regulations in the state of Washington, ensuring compliance with state laws and regulations. The plan is often structured by a company's board of directors or compensation committee, and it must adhere to the guidelines set by the Internal Revenue Code (IRC) Section 409A to preserve its favorable tax treatment for employees. The amendment of a Washington Share Appreciation Rights Plan refers to any changes made to the original plan, typically necessitated by evolving business needs, regulatory changes, or amendments to the company's compensation strategy. Amendments could include altering the vesting schedule, modifying the eligibility criteria, changing the method of calculating appreciation rights, or incorporating additional performance-based conditions. Different types of Washington Share Appreciation Rights Plans may be offered depending on the company's particular goals and circumstances. Some common variations include Full Value Appreciation Rights (FEARS), which provide employees with a cash payment equal to the full increase in stock value, and Tandem Appreciation Rights, which are granted alongside stock options and allow employees to choose between the two at a predetermined time. In summary, the Washington Share Appreciation Rights Plan (WARP) is an employee benefit plan in the state of Washington that grants employees the right to receive cash payments based on the appreciation of the company's stock value. Amendments are made to modify the plan's terms, and different types of WARP, such as FEARS and Tandem Appreciation Rights, may exist depending on the company's objectives.
Washington Share Appreciation Rights Plan with amendment
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FAQ
A SAR is very similar to a stock option, but with a key difference. When a stock option is exercised, an employee has to pay the grant price and acquire the underlying security. However, when a SAR is exercised, the employee does not have to pay to acquire the underlying security.
Stock appreciation rights (SARs) are a type of employee compensation linked to the company's stock price during a preset period. Unlike stock options, SARs are often paid in cash and do not require the employee to own any asset or contract.
How do I value it? For purposes of financial disclosure, you may value a stock appreciation right based on the difference between the current market value and the grant price. This formula is: (current market value ? grant price) x number of shares = value.
Employees can only exercise the stock appreciation rights after the shares have vested. The vesting period is the minimum period employees must hold the stocks before they can exercise the stock appreciation rights. Generally, employers offer stock appreciation rights along with stock options.
Stock Appreciation Right (SAR) entitles an employee, who is a shareholder in a company, to a cash payment proportionate to the appreciation of stock traded on a public exchange market. SAR programs provide companies with the flexibility to structure the compensation scheme in a way that suits their beneficiaries.
A UAR awards the recipient a right to receive a cash payment equal to the appreciation of a specified number of units of the partnership subject to specified vesting conditions. The value of a UAR is tied to partnership equity value rather than common stock value.
A Stock Appreciation Right (SAR) is an award which provides the holder with the ability to profit from the appreciation in value of a set number of shares of company stock over a set period of time.
Stock Appreciation Rights (SARs) are equity-based employee compensation that allow employees to benefit from the appreciation of their company's stock price. The compensation is equal to the increase in stock price during a particular period for a pre-specified number of shares.