SARs — Stock Appreciation Rights

The difference between stock options and SARs is that you normally receive cash instead of the possibility of buying shares.

Taxation of SARs

The benefit will be taxed as ordinary income and will occur when the option can be exercised at the vesting date and at the date of exercise.

Possibility to choose between shares or payment in cash

If there is a possibility for you to choose between obtaining a share or payment in cash then the taxation will occur when you actually exercise the option regardless if you chose payment in cash or shares.

If the employer decides whether you shall receive shares or a cash payment when you exercise you SAR, the taxation takes place when the option can be exercised at the vesting date and at the date of exercise.

• Synthetic Options that qualify as securities
• Do you participate in a Stock Incentive Plan?