What Conditions Must Be Met in Order for a Share

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Examlex · Accepted Answer

The Answer is For the share purchase plan to be considered noncompensatory, the plan must meet all
of the following conditions:
All employees meeting minimum qualifications are eligible to participate on an equal basis.
The discount does not exceed the per share amount of issuance costs that would not have been avoided if the stock had been issued to the public. A 5% purchase discount usually satisfies this requirement.
The plan only has two options features which employees only have 31 days in which to enroll and the purchase price is set to market price on the date of the purchase. Employees can decide prior to the purchase to cancel and obtain a full refund.
If a plan does not meet all of the criteria it is considered compensatory.

What Conditions Must Be Met in Order for a Share

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