A Share Option Plan Will Be Defined as Compensatory If

question 6

Multiple Choice

A share option plan will be defined as compensatory if it has which one of the following characteristics?

• A) The discount from market price for the stock option is greater than either what would be reasonable in an offer of stock to stockholders or others or the per-share amount of issuance costs avoided by not issuing the stock to the public.
• B) Employees have 31 days or less from the date the purchase price is set to decide whether or not to enroll in the plan.
• C) Almost all full-time employees are able to participate in the plan.
• D) The purchase price is based solely on the market price of the stock on the purchase date.

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