Equity Award Grant Policy
(Public Company)

Summary

Use this template to establish procedures that public companies should follow when granting equity awards to employees and consultants. Careful implementation of the procedures before awarding equity-based compensation is a best practice to conform to tax laws, securities laws, and accounting rules companies must navigate when awarding equity. This template includes practical guidance, drafting notes, and alternate and optional clauses. Equity award grant policies have become more popular in recent years due to guidance issued by the Securities and Exchange Commission (SEC), including regulations finalized in 2022 (the Disclosure Rule), which targets insider trading and which scrutinizes the granting of stock options, stock appreciation rights (SARs), and other option-like instruments close-in-time to individuals who may be privy to material nonpublic information (MNPI). For a full listing of key content covering equity incentive plan considerations, see the Equity Incentive Plan Resource Kit. For a list of titles that can be used by in-house counsel to develop, revise, and implement a company's employee and third-party policies, see the In-House Company Policies Resource Kit. For more information on the Disclosure Rule, see New Conditions, Limitations, and Disclosure Requirements for 10b5-1 Plans and Equity-Based Compensation. For additional related content, seeEquity Award Grant Policy (Non-employee Director), Restricted Stock Award (Employee), Restricted Stock Award (Non-employee Director), Restricted Stock Unit Award (Non-employee Director), Equity Compensation Plan Design for Public Companies, Board Resolutions: Equity Incentive Plan Approval, Equity Incentive Compensation Plans for Start-Ups, and Equity Compensation Tax Treatment Chart.