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Model Equity Compensation Plans

3rd Edition

by David R. Johanson

$25.00 for NCEO members; $35.00 for nonmembers

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This book provides sample plan documents for incentive stock option (ISO) plans, nonqualified stock option (NSO) plans, and tax-qualified ("Section 423") employee stock purchase plans (ESPPs). The plans were updated in 2008 by the author. This publication will not eliminate the need for nonprofessionals to hire an advisor to help set up their plans (no publication could do that); rather, it will help readers understand how stock option and stock purchase plans really work and what their choices are, and give them plan language they might use.

Publication Details

Format: Zip file containing book PDF and CD contents, 254 pages
Dimensions: 6 x 9 inches
Edition: 3rd (June 2008)
Status: Available for electronic delivery

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Contents

Preface
PART 1: EMPLOYEE STOCK OPTION PLANS
Sample Company 2___ Equity Incentive Plan
Incentive Stock Option Agreement
Nonqualified Stock Option Agreement
Restricted Incentive (or Nonqualified) Stock Option Purchase Agreement
Action by Unanimous Written Consent of the Board of Directors of Sample Company, Inc.
Action by Unanimous Written Consent of the Shareholders of Sample Company, Inc.
Summary Memorandum
Explanation of Equity Incentive Plan
Explanation of Incentive Stock Option Agreement
Explanation of Nonqualified Stock Option Agreement
Explanation of Restricted Incentive (or Nonqualified) Stock Option Purchase Agreement

PART 2: EMPLOYEE STOCK PURCHASE PLAN
2___ Sample Company Employee Stock Purchase Plan
Stock Option Agreement
Action by Unanimous Written Consent of the Board of Sample Company, Inc.
Action by Unanimous Written Consent of the Shareholders of Sample Company, Inc.
Memorandum
Security Pledge Agreement
Promissory Note
Sample Company, Inc., Restricted Stock Purchase Agreement Pursuant to the 2___ Sample Company Employee Stock Purchase Plan
Summary Memorandum
List of Financial Consultants
Explanation of Employee Stock Purchase Plan

APPENDIX
Files on the Accompanying CD

Excerpts

Changes in the Third Edition

For this edition, the following plan documents were updated in Part 1 (Employee Stock Option Plans): the Sample Company 2___ Equity Incentive Plan, the Incentive Stock Option Agreement, the Nonqualified Stock Option Agreement, the Restricted Incentive (or Nonqualified) Stock Option Purchase Agreement, and the Summary Memorandum. In Part 2 (Employee Stock Purchase Plan), the following plan documents were updated: the 2___ Sample Company Employee Stock Purchase Plan, the Stock Option Agreement, the Memorandum, the Summary Memorandum, and the Restricted Stock Purchase Agreement.

From "Incentive Stock Option Agreement"

Effective as of ______________, 2____, the Corporation grants to Employee, subject to the terms and provisions set forth hereinafter and in the Plan, the right and option to purchase all or any part of the number of shares set forth in Exhibit A of the presently authorized but unissued [common stock ("Common Stock")][preferred stock ("Preferred Stock")] of the Corporation at the purchase price per share set forth as the Option Price in Exhibit A (the option hereby granted being hereinafter referred to as the "Option").

The Option shall not be considered granted (as of the effective date described above) or become exercisable unless and until Employee delivers to the Corporation a fully executed counterpart hereof. Thereafter, the Option shall be exercisable in accordance with the Exercise Schedule set forth on Exhibit A, subject to any termination, acceleration or change in such Exercise Schedule set forth in this Agreement apart from Exhibit A.

Neither the Option nor any other rights granted under this Agreement may be exercised after the Expiration Date set forth on Exhibit A and, before that time, the Option may be terminated as hereinafter provided. If Employee does not purchase the full number of shares to which he is entitled in any one year, he may purchase such shares in the next year specified in the Exercise Schedule hereto, in addition to the shares which he is otherwise entitled to purchase in the next year.