Docstoc

Stock Incentive Agreement

Document Sample
Stock Incentive Agreement Powered By Docstoc
					A Stock Incentive Agreement is an agreement between an employee and a company
whereby the employee is compensated for their services with shares in the company.
Upon adequate performance by the employee, the company provides the employee with
a pre-determined amount of shares. Additionally, this agreement provides a non-
competition and non-solicitation clause which prevents the employee from directly
competing with the company. This agreement can be used by small businesses or
other entities that want to provide stock incentives to employees.
                     STOCK INCENTIVE AGREEMENT
        This Stock Incentive Agreement (this “Agreement”) is hereby made and entered into on
this __________ day of __________, _____ by and between _____________________________
(“Company”) and __________________ (“Employee”).

                                          RECITALS

     WHEREAS, Company is in the business of ___________________________ [BRIEF
DESCRIPTION OF COMPANY’S ACTIVITIES];

        WHEREAS, Company is desirous to provide stock purchase incentives to Employee in
respect of Employee’s performance and future performance as an employee of Company; and

       WHEREAS, Employee is desirous to provide services to Company.

        NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, Company and Employee hereby acknowledge and agree as follows:

                                            TERMS

1.00   PERFORMANCE BY EMPLOYEE

1.01 Employee hereby acknowledges and agrees that he/she will use all of his/her reasonable
best efforts in the performing, executing, and carrying out Employee’s duties and responsibilities
throughout Employee’s continuous employment with Company to enhance, improve, and
otherwise increase the profitability of Company.

1.02 Employee shall fulfill and of his/her responsibilities as set forth and required by
Company and shall be under the supervision and direction of Company’s Board of Directors.
Employee hereby agrees that he/she shall carry out his/her responsibilities and duties in a
professional, quality, and skillful manner and shall devote as much of his/her time and attention
and services to Company as reasonably requested or required by Company.

1.03 Employee hereby acknowledges and agrees that he/she shall not at any time or times seek
or become employed or engage in any business endeavor that may be deemed in direct
competition with Company, while Employee is employed by Company.

2.00   STOCK INCENTIVE

2.01 Company hereby acknowledges and agrees that it shall provide to Employee __________
[AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) shares (the “Shares”) in the
capital stock of Company in respect of Employee’s performance and service to Company.
2.02 Employee shall be entitled to all rights and privileges associated with the Shares issued to
Employee by Company, which may include voting rights and the eligibility to receive dividends
and bonuses.

2.03 In the event Employee terminates his/her employment with Company for any reason
whatsoever, prior to the first anniversary of this Agreement, ________ (___) of the Shares issued
to Employee by Company pursuant to this Agreement shall be forfeited back to Company.

2.04 In the event Employee terminates his/her employment with Company after the first
anniversary of the Agreement, __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
NUMERALS]) of the Shares shall be forfeited to Company.

2.05 In the event Employee terminates his/her employment with the Company after
__________ [AMOUNT IN WORDS] (___ [AMOUNT IN NUMERALS]) years from the date
of this Agreement but before __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
NUMERALS]) years from the date of this Agreement, __________ [AMOUNT IN WORDS]
(___ [AMOUNT IN NUMERALS]) of the Shares shall be forfeited to Company.

2.06 In the event that forfeiture would result in the creation of fractional shares, the number of
shares to be forfeited shall be rounded to the nearest whole number.

2.07 Any and all shares issued to Employee pursuant to this Agreement shall be adjusted to
preserve the value of the bonus in the event of a stock dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, reorganization, cash or property dividend, exchange of
shares, repurchase of shares, or any other change in corporate structure of or by Company that in
any such event materially affects the outstanding shares in the capital stock of Company.
[OPTIONAL CLAUSE: All stock distributed under this Agreement shall be subject to the
Shareholders Agreement, a copy of which is attached hereto as Exhibit “A.”]

3.00     NON-COMPETITION AND NON-SOLICITATION

3.01     Employee hereby acknowledges and agrees with Company as follows:

         (i)       Employee shall not, for a period of __________ [AMOUNT IN WORDS] (___
                   [AMOUNT IN NUMERALS]) years from the date of this Agreement, or for a
                   period of __________ [AMOUNT IN WORDS] (___ [AMOUNT IN
                   NUMERALS]) years after the Employee terminates his/her employment with
                   Company, own or have an interest of any kind in any business that may be
                   deemed to be similar or in direct competition with Company;

         (ii)      Employee shall not directly or indirectly persuade any former or current employee
                   of Company to terminate its employment with Company; and




© 2011 by Docstoc®, Inc. registered document proprietary, copy not
                   Employee shall not at any time use any proprietary information, confidential
                   information, customer information, goodwill, or intellectual property owned or
                   used by Company or associated with Company’s business.

4.00     COMPANY STOCK OPTION

4.01 Employee shall have the option to purchase __________ [AMOUNT IN WORDS] (___
[AMOUNT IN NUMERALS]) shares (the “Optioned Shares”) in the capital stock of Company
for a purchase price of __________ [AMOUNT IN WORDS] dollars ($_________ [AMOUNT
IN NUMERALS]).

4.02 Any and all shares purchased under Company’s stock option offered to Employee shall
be adjusted to preserve the value of the bonus in the event of a stock dividend, stock split or
reverse stock split, recapitalization, merger, consolidation, reorganization, cash or property
dividend, exchange of shares, repurchase of shares, or any other change in the corporate structure
of or by Company that in any such event materially affects the outstanding shares of stock.

4.03 Optional Clause: All stock purchased under this Option shall be subject to the terms of
the Shareholders Agreement set forth in Exhibit “A.”

4.04 The purchase price payable for the Optioned Shares purchased by Employee from
Company shall be payable at the closing of the purchase in cash or by certified check made
payable to Company.

4.05 Employee shall exercise Company’s stock option by giving Company written notice of
his/her intent to exercise the stock option prior to the __________ day of __________, _____. In
the event Employee does not exercise Company’s stock option by the date referred to herein, this
option offered by Company to Employee shall cease and become null and void.

       IN WITNESS WHEREOF, Company and Employee have executed the Agreement on the
  day and year first above written.


                                                         COMPANY
                                                         Per:

                                                         Name:
                                                         Title:
                                                         I have authority to bind Company.

                                                         EMPLOYEE



                                                         WITNESS



© 2011 by Docstoc®, Inc. registered document proprietary, copy not
                                                SCHEDULE “A”
                              COPY OF SHAREHOLDERS AGREEMENT




© 2011 by Docstoc®, Inc. registered document proprietary, copy not

				
DOCUMENT INFO
Description: A Stock Incentive Agreement is an agreement between an employee and a company whereby the employee is compensated for their services with shares in the company. Upon adequate performance by the employee, the company provides the employee with a pre-determined amount of shares. Additionally, this agreement provides a non-competition and non-solicitation clause which prevents the employee from directly competing with the company. This agreement can be used by small businesses or other entities that want to provide stock incentives to employees.
This document is also part of a package Employee Hiring Documents for your Business 31 Documents Included