Stock Option Agreement- Long Form
Form reviewed by Bahman Eslamboly, Attorney at FindLegalForms
This Stock Option Agreement is between a corporation and an employee for the purchase of stock under an existing stock option plan. This agreement sets out how many shares the employee may purchase and what will happen if the employee leaves the company. This form is for use in all states.
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This Stock Option Agreement includes the following provisions:
- Name of Corporation: Sets out the name and address of the corporation issuing the shares and the date of the agreement;
- Purchase Information: Sets forth the name of purchaser, total price and the number of shares purchased;
- Grant of Options: Specifies the number of shares optioned and the purchase price per share;
- Term: Sets forth the earliest purchase date and the expiration date of the option agreement;
- Expiry Event: Sets out the optionee’s options regarding the stock if employee is terminated or voluntary leaves the corporation;
- Class of Shares: Sets out the specific class of the optioned shares (common, preferred, Class A);
- Non-Assignable: This option is not assignable except through a Will or laws of intestacy;
- Signatures: This agreement must be signed by the corporation and the option holder.
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This attorney-prepared packet contains:
- General Instructions
- Stock Option Agreement – Long Form
Stock Option Agreement- Long Form
Product Details
| Product | Stock Option Agreement- Long Form |
| Country | United States |
| Pages | 9 |
| Dimensions | Designed for Letter Size (8.5" x 11") |
| Printer compatibility | Designed to print on all ink-jet and laser printers |
| Editable | Yes (.doc, .wpd and .rtf) |
| Format |
Microsoft Word Adobe PDF WordPerfect Rich Text Format |
| Platform |
Windows Compatible Mac Compatible Linux Compatible |
| Availability | In Stock. Instant Download |
| Usage | Unlimited number of prints |
| Category | Stock Options & Warrants |
| Product number | #28548 |
| Download time | Less than 1 minute (approx.) |
| Document Access |
Via secret online address Email with download links Email with attachment upon request |
| Refund Policy | 60 days, no-questions asked, 100% money back guarantee |
Frequently Asked Questions
A Stock Option Agreement is a legal document that outlines the terms under which an employee can purchase shares of a company's stock. It specifies details such as the number of shares, purchase price, and the conditions under which the options can be exercised.
Typically, employees of a corporation are eligible to enter into a Stock Option Agreement. However, eligibility may depend on the specific terms of the company's stock option plan.
The agreement details the options available to the employee if they leave the company, whether voluntarily or involuntarily. This may include the ability to exercise vested options or the expiration of unvested options.
Generally, stock options are non-assignable and cannot be transferred except through a Will or laws of intestacy. This means that the option holder must exercise their rights personally.
The tax implications of exercising stock options can vary based on the type of options granted and the individual's tax situation. It is advisable to consult a tax professional to understand the potential tax consequences.
The expiration date is crucial as it defines the last date on which the option holder can exercise their options. After this date, any unexercised options will become void.
In the event of a disagreement, it is important to refer to the terms outlined in the agreement. If necessary, seeking legal counsel can help resolve disputes effectively.
Yes, this Stock Option Agreement is designed to comply with the laws of all states, making it a versatile option for corporations across the United States.
Is This Form Right For You?
Use This Form If:
- Corporations often utilize this Stock Option Agreement to incentivize employees by allowing them to purchase shares at a predetermined price, fostering loyalty and performance. This arrangement is particularly beneficial in startups where cash flow may be limited but equity can be offered as a form of compensation.
- Individuals who are offered stock options as part of their employment package will need this agreement to understand their rights and obligations regarding the purchase of shares. It clarifies the terms under which they can exercise their options, which is crucial for financial planning.
- Situations requiring clarity on the consequences of leaving a company can be addressed with this agreement. It outlines what happens to the stock options if the employee resigns or is terminated, helping both parties avoid disputes in the future.
- For those involved in mergers or acquisitions, this Stock Option Agreement can be essential in determining how existing stock options will be treated. It ensures that employees understand their rights in the context of corporate changes, which can affect their financial interests.
- Startups looking to attract top talent may use this agreement to outline the specifics of their stock option plan. By clearly defining the terms, they can effectively communicate the value of equity compensation to potential hires.
Do Not Use If:
- – This form is not appropriate for independent contractors or consultants, as it is specifically designed for employees of a corporation. Independent workers typically do not receive stock options as part of their compensation package.
- – If the corporation does not have an existing stock option plan, this agreement cannot be used. It is essential that a stock option plan is in place to provide the necessary framework for the agreement.
- – In situations where the employee is not eligible for stock options, such as part-time employees or interns, this form would not be applicable. Eligibility criteria must be met for the agreement to be valid.
- – For companies that are not publicly traded, additional considerations may need to be addressed that are not covered by this standard agreement. Private companies may have unique requirements that necessitate a tailored agreement.
- – If the stock options being offered are part of a merger or acquisition, a different set of legal documents may be required to address the complexities of the transaction. This agreement may not adequately cover those scenarios.
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