How does SAR (share appreciation rights) work?

Question

Law in IT

There is a clause in the contract

SAR's (share appreciation rights) corresponding to 1% of the current issued share capital of the Company. Vesting in 4 equal parts of 0.25% after 12 months, 24 months, 36 months and 48 months or vesting instantly at an exit event. A separate SAR agreement will be part of this Service Agreement.

What does this even mean and how does it work?