Inducement grant

Inducement grants are primarily used for hiring top executives, often when there are insufficient shares in an equity plan's reserve to accommodate large grants. The exception may also be used in M&A situations as an incentive to attract and retain employees at a target entity. 

Requirements:

New Employees Only

Independent Director Approval of Awards

Material Inducement

Inducement Awards Not Eligible for Incentive Stock Option Status

Shareholder Approval for Modifications

Disclosure, Registration, and Listing Requirements:

Press Release Following Grants

Listing Requirements

Securities Registration

Proxy/10-K Disclosure