Simulated Equity Plans are long-term programs designed to reward participants for contributing to the organization’s future success.  Plans are designed to resemble stock options or grant programs in every way possible (without the use of real stock).  How it works:

• Awards are made to participants in paper unit “shares” with a given dollar value at the beginning of a performance period (usually two to five years).
• Unit/Share price values fluctuate in the future based upon predetermined performance factors.
• Participants receive deferred cash compensation based upon increased value of “share price” and are taxed at ordinary income tax rates.
• Company must accrue participant gain as contingent liability expense which is charged to earnings.

Simulated Equity Plan features include internally valued stock which vary in future prices based upon :

• Corporate Performance
• Share Grants
• Performance Cycles
• Vesting Schedules