North Dakota 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 North Dakota Stock Option Plan is a comprehensive financial framework designed for executive officers in various organizations operating in North Dakota. This plan offers two distinct types of stock options, namely Incentive Stock Options (SOS) and Nonqualified Stock Options (SOS), each with their own features and benefits. Incentive Stock Options are stock options granted to executive officers that carry certain tax advantages under the Internal Revenue Code (IRC). These options are typically subject to specific holding period requirements and must be granted at or above fair market value. SOS are more favorable from a tax perspective as they qualify for preferential long-term capital gains tax rates upon the sale of the underlying stock. This type of stock option encourages executive officers to remain with the company for a longer term, as the potential financial gains are aligned with the company's success. Nonqualified Stock Options, on the other hand, are stock options granted to executive officers that do not meet the criteria set forth by the IRC for Incentive Stock Options. SOS provide more flexibility in terms of grant price, exercise price, and holding period requirements. However, unlike SOS, SOS are taxed as ordinary income at the time of exercise, subject to ordinary income tax rates. Despite this, SOS still offer valuable financial opportunities and act as incentives for executive officers to contribute to the organization's growth and success. By providing these two types of stock options, the North Dakota Stock Option Plan enables organizations to attract and retain talented executive officers by offering them a unique financial incentive that aligns their interests with the company's long-term goals. This plan fosters loyalty, motivation, and commitment among executive officers, ultimately driving the overall success of the organization. In summary, the North Dakota Stock Option Plan encompasses both Incentive Stock Options and Nonqualified Stock Options, two types of stock options tailored for executive officers. While SOS offer tax advantages and encourage long-term commitment, SOS provide flexibility and immediate financial opportunities. These options provide a valuable tool for organizations operating in North Dakota to attract, reward, and retain top-tier executive talent.