Compensation Flashcards
Resigning executive wants to remain eligible for equity after ceasing employment, via consulting agreement?
Check the option agreement, does it specify that equity will continue to vest and remain outstanding if consulting agreement is entered? Confirm with benefits specialists. Check this was the drafting intent.
(E.g. Precision “A. Ansari and Equity Awards” / Compensation - Consulting after Termination)
What is an “evergreen”?
An evergreen option gives a publicly traded company a way to attract and retain top managers and employees by providing them with additional compensation above and beyond a salary.
Company advises that S-8 has registered X shares for future issuance, including Y shares initially “available for issuance” under their plan and Z additional shares “that may become issuable” under the plan. Company has now issued an amount exceeding Z, do they need to register the excess on S-8?
Yes, they should register the excess shares and could include a cushion again to avoid needing annual filings. Latham can prepare the filing if needed. Options don’t count against the S-8 until exercised, so they likely have some time before needing to file and could wait until their 10-K/next filing to piggyback on the auditor consent.
(E.g. Meira “2018 Incentive Award Plan” / S-8)
