This equity incentive plan template has 15 pages and is a MS Word file type listed under our finance & accounting documents.
Sample of our equity incentive plan template:
Equity Incentive Plan Your business slogan here. Prepared By: [YOUR NAME] [YOUR JOB TITLE] Phone 555.555.5555 Email info@yourbusiness.com www.yourbusiness.com Table of Contents Letter from the CEO 3 Executive Summary 4 1. Purpose of the Equity Incentive Plan 5 1.1 Purpose 5 1.2 Why Do We Need a Plan? 5 2. Administration of the Plan 6 2.1 General 6 2.2 Committee 6 2.3 Powers of the Administrator 6 2.4 Effects of Administrator's Decision 7 2.5 Indemnification 7 3.Eligibility 8 4. Grant of Options 9 5. Stock Subject to Plan 10 6. Aggregate Fair Market Value 11 7. Exercise of Option 12 8. Option Price 13 9. Option Non-Transferable 14 9.1 Other Option Terms 14 10. Amendment and Termination of Plan 15 Letter from the CEO Every company needs to show value and appreciation for its employees. For this reason, equity-based incentive compensation becomes highly imperative. The core purpose of the Equity Incentive Plan is to appropriately attract, retain and incentivize employees. At [COMPANY NAME], rewarding employees, directors, contractors, and partners is a priority. It's also important for us in granting them necessary shares or units in the Equity Incentive Plan. With equity Awards, the Company can successfully align its interests with that of the recipient. Based on history, equity plans were limited to the enterprise market and the professional management of significant corporations. Equity plans were originally directed to the issuance of options. However, these plans have expanded to other sectors, including privately owned businesses. With our [COMPANY NAME] Equity Incentive Plan, we can rightfully attract the best available personnel for positions with major responsibilities. Options granted under the Equity Incentive Plan may include Incentive Stock Options or No Statutory Stock Options, depending on the Administrator at the period of granting. There's also a possibility of granting Restricted Stock under the Plan. In the following pages, you will discover how [COMPANY NAME] plans to grant equity-based incentives to employees. It's in everyone's interest that they stay aware of the Plan in order to be prepared. Enjoy your reading and thank you for your participation. [CEO NAME] Executive Summary [COMPANY NAME] has developed an Equity Incentive Plan to compensate employees and other important individuals in the organization. This could include directors, consultants, partners, and contractors. [Write more content under the executive summary that provides a brief, but descriptive breakdown of the key components of the Equity Incentive Plan. In order to ensure that this summary is clear and comprehensive, it's advisable to write the content after the other sections of the document have been written. A first-time reader should be able to read the executive summary by itself and comprehend what the Equity Incentive Plan involves. Ensure that the summary stands alone and doesn't directly refer to any part of the Plan. The executive summary should motivate readers to continue reading the rest of the document. It should be one to three pages in length.] 1. Purpose of the Equity Incentive Plan 1.1 Purpose The purpose of this Equity Incentive Plan is to help strengthen [COMPANY NAME] by providing adequate Incentive Stock Options to key personnel, officers, employees, directors, consultants, advisors, contractors, and other individuals. These individuals are usually expected to provide major services to [COMPANY NAME] and its subsidiaries, including officers and directors of the participating companies. This Equity Incentive Plan also functions to encourage a proprietary interest in the Company. Hence, it aligns the significant interests of service providers in [COMPANY NAME] with that of significant stockholders in [COMPANY NAME]. With this Plan, there can be Awards of equity-based incentives to major personnel, employees, officers, directors, and other providers of services to the Company. These Awards can either be through a participating company or directly. [ADD ANY ADDITIONAL CONTENT HERE] 1.2 Why Do We Need a Plan? An Equity Incentive Plan is an important component in an employee's overall compensation package that helps employees own a portion of the Company they work for. These equity incentives can either be shares or incentives. We need a Plan for: Promoting the Company's long-term success Attracting and retaining talent Improving a compensation package without reducing cash flow [ADD ANY ADDITIONAL CONTENT HERE] 2. Administration of the Plan 2.1 General This Plan will be appropriately administered by the Board or Committee, or a combination thereof, as determined by the Board of [COMPANY NAME]
