Employee Stock Option Agreement

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This Employee Stock Option Agreement is between an employee and their employer and acts as an incentive to purchase stock in employer/company. This agreement sets out the specific details including number of shares employee may option and the price per share.

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This Employee Stock Option Agreement is between an employee (the "participant") and their employer (the "company") as an incentive to purchase company stock. This agreement sets out the number of shares the employee can option, price per share and time and method for exercising the option. It also sets out the restrictions on transfers of stock and contains information regarding taxation of the shares. A written Employee Stock OptionAgreement will prove invaluable in the event of disagreements or misunderstandings between the parties.

This Vesting Agreement contains the following provisions:
  • Parties: Sets out the name of the company and the participant who is an employee of the company;
  • Grant of Option/Exercise Price: Company gives participant the option to purchase a set number of shares at a set price once the option is exercised;
  • Time/Method to Exercise: Sets out that participant may exercise the vested portion in installments and other options in the event of termination or disability;
  • Transfer Restrictions: Specifics regarding restrictions on transferring the stock during the option period;
  • Signatures: This agreement must be signed by the company and accepted by the participant. The participant must also sign the Notice of Stock Option Exercise which is an exhibit to this agreement.

Protect yourself and your rights by purchasing this attorney-prepared form.

This attorney-prepared package includes:
  1. General Information
  2. Instructions and Checklist
  3. Employee Stock Option Agreement
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Vesting Agreement

 

 
This Stock Agreement (Agreement”) entered into as of  by and between  ____________, (Company ”), and ______________ (the Participant ”), an employee of the Company.
 
1.   Agreement Pursuant to Plan.
This Agreement is entered into pursuant to the _____ Stock Incentive Plan (Plan), is subject to and incorporates herein the provisions of the Plan. The provisions of this Agreement are qualified in their entirety by reference to the Plan and in the event of a conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall control. Capitalized terms used in this Agreement shall have the same meanings given to them in the Plan, unless otherwise indicated in this Agreement.
 
2.   Grant of Option.
The Company hereby grants to the Participant an option (Option) to purchase all or any part of an aggregate of                      shares (Optioned Shares) of the Companys Common Stock, on the terms and conditions set forth herein. The Option is not, and is not intended to meet the requirements for, an incentive stock option within the meaning of Section 422 of the Code.
 
3.   Exercise Price.
The exercise price for the purchase of the Optioned Shares purchasable upon exercise of the Option shall be $              for each of the Optioned Shares.
 
4.   Term and Vesting of Option.
(a) Term. The term of the Option shall commence on  , (the  Grant Date ) and terminate  (the  Expiration Date ), or on such earlier date as provided hereinafter. In no event shall the term of the Option be longer than ten (10) years and one (1) day from the Grant Date. The vested portion of the Option shall be exercisable as to any part or all of the aggregate number of Optioned Shares, as provided below.
(b) Vesting of Option. The Option shall vest and become exercisable as follows:                .
 
5.   Time and Method for Exercising the Option.
(a) Time. The Participant may exercise the vested portion of the Option in one or more installments from time to time prior to the Expiration Date. Exercisability is cumulative, and after the Option becomes exercisable as to any portion of the Optioned Shares, it shall continue to be exercisable with respect to that portion of the Optioned Shares until the Option expires.
(b) Termination of Employment.
    (1) Termination of Status as Employee. If the Participant shall cease to be an employee for any reason other than permanent or total disability (within the meaning of Section 22(e)(3) of the Code, as determined in the sole discretion of the Committee), retirement, death or a termination by the Company for Cause, the Option shall automatically terminate ninety (90) days following the date he/she ceases to be an employee. Prior to such termination of the Option, the Participant may exercise the Option to the extent that the Option was vested as of the termination date; provided, however , that no Option shall be exercised after the Expiration Date.
(2) Disability. In the event of the permanent and total disability (within the meaning of Section 22(e)(3) of the Code, as determined in the sole discretion of the Committee) of the Participant who is at the time of commencement of such disability, or was within the 90-day period prior thereto, an employee and who was continuously employed as such from the Grant Date until the date of disability or termination, the Option may be exercised at any time within one (1) year following the date of disability, but only to the extent that the Option was vested at the time of the termination or disability, whichever comes first; provided , however , that no Option shall be exercised after the Expiration Date.
(3) Retirement. In the event of the retirement of the Participant who is at the time of such retirement, or was within the 90-day period prior thereto, an employee and who was continuously employed as such from the Grant Date until the date of the retirement, then the Option may be exercised by the Participant at any time within ninety (90) days following the retirement date, but only to the extent that the Option was vested at the time of the retirement; provided , however , that no Option shall be exercised after the Expiration Date. For purposes of this Agreement, the term retirement shall mean a voluntary termination of employment by an employee under conditions that would qualify the Participant for retirement benefits under the Companys tax-qualified retirement plans.
(4) Death. In the event of the death of the Participant who at the time of his/her death is, or was within the 30-day period immediately prior thereto, an employee and who was continuously employed as such from Grant Date until the date of death, the Option may be exercised for a period of up to one (1) year following the date of death, at any time prior to the expiration of the Term, by the Participant or, if applicable, the Participants estate or by a person who acquired the right to exercise the Option by bequest, inheritance or otherwise as a result of the Participants death, but only to the extent that the Option was vested at the time of death; provided , however , that no Option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.
 
6.   Tax Matters.
(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.
 
7.   Transfer Restrictions.
(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b) The Participant agrees that he or she will not transfer any Shares issued pursuant to the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Agreement.
 
8.   Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this Agreement.
 
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed under its corporate seal by its duly authorized officer. This Agreement shall take effect as a sealed instrument.
 
By:
Name:  ________________
Title:  _________________
 
PARTICIPANT'S ACCEPTANCE
 
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company's __________ Stock Incentive Plan.
 
Participant: _______________________________________
Address:  ________________________________________
________________________________________________
EXHIBIT A
 
NOTICE OF STOCK OPTION EXERCISE
 
Date:                     
 
Dear Sir or Madam:
 
I am the holder of an Incentive Stock Option granted to me under the ______________ (the "Company") 2012 Stock Incentive Plan on              for the purchase of              shares of Common Stock of the Company at a              purchase price of $             per share.
 
I hereby exercise my option to purchase              shares of Common Stock (the "Shares"), for which I have enclosed                      in the amount of $            . Please register my stock certificate as follows:
 
 
 
 
Name(s) to appear on stockcertificate:
 
                                                                                  
 
 
 
 
                                                                                  
Address:
 
                                                                                   
 
 
Tax I.D. #:
 
                                                                                  
 
 
 
Very truly yours,
 
 
(Signature)
 
 
 
Number of Pages8
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#43540
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Vesting Agreement

 

 
This Stock Agreement (Agreement”) entered into as of  by and between  ____________, (Company ”), and ______________ (the Participant ”), an employee of the Company.
 
1.   Agreement Pursuant to Plan.
This Agreement is entered into pursuant to the _____ Stock Incentive Plan (Plan), is subject to and incorporates herein the provisions of the Plan. The provisions of this Agreement are qualified in their entirety by reference to the Plan and in the event of a conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of the Plan shall control. Capitalized terms used in this Agreement shall have the same meanings given to them in the Plan, unless otherwise indicated in this Agreement.
 
2.   Grant of Option.
The Company hereby grants to the Participant an option (Option) to purchase all or any part of an aggregate of                      shares (Optioned Shares) of the Companys Common Stock, on the terms and conditions set forth herein. The Option is not, and is not intended to meet the requirements for, an incentive stock option within the meaning of Section 422 of the Code.
 
3.   Exercise Price.
The exercise price for the purchase of the Optioned Shares purchasable upon exercise of the Option shall be $              for each of the Optioned Shares.
 
4.   Term and Vesting of Option.
(a) Term. The term of the Option shall commence on  , (the  Grant Date ) and terminate  (the  Expiration Date ), or on such earlier date as provided hereinafter. In no event shall the term of the Option be longer than ten (10) years and one (1) day from the Grant Date. The vested portion of the Option shall be exercisable as to any part or all of the aggregate number of Optioned Shares, as provided below.
(b) Vesting of Option. The Option shall vest and become exercisable as follows:                .
 
5.   Time and Method for Exercising the Option.
(a) Time. The Participant may exercise the vested portion of the Option in one or more installments from time to time prior to the Expiration Date. Exercisability is cumulative, and after the Option becomes exercisable as to any portion of the Optioned Shares, it shall continue to be exercisable with respect to that portion of the Optioned Shares until the Option expires.
(b) Termination of Employment.
    (1) Termination of Status as Employee. If the Participant shall cease to be an employee for any reason other than permanent or total disability (within the meaning of Section 22(e)(3) of the Code, as determined in the sole discretion of the Committee), retirement, death or a termination by the Company for Cause, the Option shall automatically terminate ninety (90) days following the date he/she ceases to be an employee. Prior to such termination of the Option, the Participant may exercise the Option to the extent that the Option was vested as of the termination date; provided, however , that no Option shall be exercised after the Expiration Date.
(2) Disability. In the event of the permanent and total disability (within the meaning of Section 22(e)(3) of the Code, as determined in the sole discretion of the Committee) of the Participant who is at the time of commencement of such disability, or was within the 90-day period prior thereto, an employee and who was continuously employed as such from the Grant Date until the date of disability or termination, the Option may be exercised at any time within one (1) year following the date of disability, but only to the extent that the Option was vested at the time of the termination or disability, whichever comes first; provided , however , that no Option shall be exercised after the Expiration Date.
(3) Retirement. In the event of the retirement of the Participant who is at the time of such retirement, or was within the 90-day period prior thereto, an employee and who was continuously employed as such from the Grant Date until the date of the retirement, then the Option may be exercised by the Participant at any time within ninety (90) days following the retirement date, but only to the extent that the Option was vested at the time of the retirement; provided , however , that no Option shall be exercised after the Expiration Date. For purposes of this Agreement, the term retirement shall mean a voluntary termination of employment by an employee under conditions that would qualify the Participant for retirement benefits under the Companys tax-qualified retirement plans.
(4) Death. In the event of the death of the Participant who at the time of his/her death is, or was within the 30-day period immediately prior thereto, an employee and who was continuously employed as such from Grant Date until the date of death, the Option may be exercised for a period of up to one (1) year following the date of death, at any time prior to the expiration of the Term, by the Participant or, if applicable, the Participants estate or by a person who acquired the right to exercise the Option by bequest, inheritance or otherwise as a result of the Participants death, but only to the extent that the Option was vested at the time of death; provided , however , that no Option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.
 
6.   Tax Matters.
(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.
(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.
 
7.   Transfer Restrictions.
(a) This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.
(b) The Participant agrees that he or she will not transfer any Shares issued pursuant to the exercise of this option unless the transferee, as a condition to such transfer, delivers to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Agreement.
 
8.   Provisions of the Plan.
This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this Agreement.
 
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed under its corporate seal by its duly authorized officer. This Agreement shall take effect as a sealed instrument.
 
By:
Name:  ________________
Title:  _________________
 
PARTICIPANT'S ACCEPTANCE
 
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company's __________ Stock Incentive Plan.
 
Participant: _______________________________________
Address:  ________________________________________
________________________________________________
EXHIBIT A
 
NOTICE OF STOCK OPTION EXERCISE
 
Date:                     
 
Dear Sir or Madam:
 
I am the holder of an Incentive Stock Option granted to me under the ______________ (the "Company") 2012 Stock Incentive Plan on              for the purchase of              shares of Common Stock of the Company at a              purchase price of $             per share.
 
I hereby exercise my option to purchase              shares of Common Stock (the "Shares"), for which I have enclosed                      in the amount of $            . Please register my stock certificate as follows:
 
 
 
 
Name(s) to appear on stockcertificate:
 
                                                                                  
 
 
 
 
                                                                                  
Address:
 
                                                                                   
 
 
Tax I.D. #:
 
                                                                                  
 
 
 
Very truly yours,
 
 
(Signature)
 
 
 

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