Maryland Stock Option Plan which provides for grant of Incentive Stock Options and Nonqualified Stock Options to executive officers

• Category: Corporations - Public - Stock Options
• State: Multi-State
• Control #: US-CC-18-210C
• Format: Word; Rich Text

Description

18-210C 18-210C . . . Stock Option Plan which provides for grant of Incentive Stock Options and Non-qualified Stock Options to executive officers of corporation and (b) Non-qualified Stock Options to outside directors on following basis: an initial grant of option to purchase 10,000 shares of the stock plus annual grants of options to purchase 5,000 shares, provided outside director continues to serve as outside director. Each outside director also receives annual option grant of 2,000 shares for each committee on which he or she serves. Outside directors' options are not exercisable during first 12 months of their term. After 12 months they become exercisable as to 24% plus 2% for each complete month of continuous service in excess of 12 months until fully vested. Options may also be granted to executive officers residing in foreign jurisdictions. Board of Directors may adopt such supplements to Plan as may be necessary to comply with applicable laws of such foreign jurisdictions and to afford participants favorable treatment under such laws The Maryland Stock Option Plan is a comprehensive program designed specifically for executive officers of companies incorporated in Maryland. This plan offers two types of stock options: Incentive Stock Options (SOS) and Nonqualified Stock Options (Nests). Incentive Stock Options are one type of stock option granted under the Maryland Stock Option Plan. These options provide executive officers with certain tax advantages compared to Nests. SOS are granted with a specific exercise price, which is the fair market value of the underlying stock at the time of grant. The executive officer has the right to exercise their SOS within a designated period, usually after a specified vesting period. If the executive officer sells the shares acquired through ISO exercise after an additional holding period, they may qualify for favorable tax treatment, where the difference between the exercise price and the market value at the time of sale is taxed as a long-term capital gain. The second type of stock option available under the Maryland Stock Option Plan is Nonqualified Stock Options. Nests are also granted with an exercise price, but there are no special tax benefits associated with them. Unlike SOS, the exercise price for Nests can be at a discount from the fair market value at the time of grant. Nests typically have a shorter vesting period and can be exercised immediately or at any time during a predetermined exercise window. When an executive officer exercises their Nests, the difference between the exercise price and the market value is taxed as ordinary income. The Maryland Stock Option Plan provides executive officers with a valuable compensation tool, aligning their interests with the company's financial performance and long-term success. By granting SOS and Nests, companies can attract and motivate highly skilled and talented individuals to their executive team.

The Maryland Stock Option Plan is a comprehensive program designed specifically for executive officers of companies incorporated in Maryland. This plan offers two types of stock options: Incentive Stock Options (SOS) and Nonqualified Stock Options (Nests). Incentive Stock Options are one type of stock option granted under the Maryland Stock Option Plan. These options provide executive officers with certain tax advantages compared to Nests. SOS are granted with a specific exercise price, which is the fair market value of the underlying stock at the time of grant. The executive officer has the right to exercise their SOS within a designated period, usually after a specified vesting period. If the executive officer sells the shares acquired through ISO exercise after an additional holding period, they may qualify for favorable tax treatment, where the difference between the exercise price and the market value at the time of sale is taxed as a long-term capital gain. The second type of stock option available under the Maryland Stock Option Plan is Nonqualified Stock Options. Nests are also granted with an exercise price, but there are no special tax benefits associated with them. Unlike SOS, the exercise price for Nests can be at a discount from the fair market value at the time of grant. Nests typically have a shorter vesting period and can be exercised immediately or at any time during a predetermined exercise window. When an executive officer exercises their Nests, the difference between the exercise price and the market value is taxed as ordinary income. The Maryland Stock Option Plan provides executive officers with a valuable compensation tool, aligning their interests with the company's financial performance and long-term success. By granting SOS and Nests, companies can attract and motivate highly skilled and talented individuals to their executive team.