Equity Incentive Plan Agreement Law and Legal Definition

Equity Incentive Plan Agreement (“Agreement”) is a legal contract between a Corporation and its employees to provide the employee with an interest in the Corporation. The purpose of an Equity Incentive Plan is to strengthen the financials of the Corporation by providing incentive stock options to its employees. The Plan serves as a means to attract, retain, and motivate corporate personnel. Generally, the Plan is administered by a Compensation Committee composed of members selected by, and serving at the pleasure of, the Board of Directors. The Committee is empowered to make all determinations necessary for the administration of the Plan. The Committee determines the total fair market value of the stock at the time the option is granted. The option granted under this plan is nontransferable by the Employee.