TODO.LAW

Equity incentive plan

The plan under which a startup or growth company rewards people with equity, through options, restricted stock units (RSUs) or share appreciation rights (SARs), with rules on vesting, exercise, departures, change of control and tax.

Jurisdictions
California, England and Wales, Spain
Contract languages
English, Spanish

What it is and when it is used

An equity incentive plan is the document under which a startup or growth company rewards people with a stake in its value. Instead of agreeing equity terms one person at a time, the company sets the rules once in the plan, and each award then follows those rules.

The Dealroom skill covers the following subjects:

  • plan type: stock options, restricted stock units (RSUs) or share appreciation rights (SARs);
  • the share pool, the part of the company's equity reserved for the plan;
  • vesting, the schedule over which awards are earned;
  • exercise pricing, the price paid to exercise an option;
  • post-termination windows, the time a person has to act after leaving;
  • change of control acceleration, earlier vesting if the company is sold;
  • clawback, the recovery of awards in defined cases;
  • transferability of awards; and
  • tax treatment.

The skill negotiates 10 clauses.

Who signs it

The plan is a company document: the company puts it in place, and its rules then apply to the people who receive awards under it. For an individual advisor arrangement see the advisory agreement; for Spanish companies that use phantom shares instead, see the phantom shares plan.

Jurisdictions and languages

Dealroom offers the plan under three laws:

  • California;
  • England and Wales; and
  • Spain.

The plan can be drafted in English or Spanish.

Frequently asked questions

What is an equity incentive plan?

It is the document under which a company sets aside part of its equity and grants it to the people it wants to reward and retain. It fixes the type of award, the size of the pool and the rules that apply to every award.

Can the plan use options, RSUs or SARs?

Yes. The plan type is one of the points the Dealroom skill covers: options, restricted stock units (RSUs) or share appreciation rights (SARs).

Which laws does the Dealroom equity incentive plan follow?

California, England and Wales or Spain, including the tax treatment of awards. The plan can be drafted in English or Spanish.

How many points does the skill cover?

The skill negotiates 10 clauses, from the plan type and share pool to clawback, transferability and tax treatment.

Two ways to make it

Create it in Dealroom

Choose the jurisdiction and language, answer a few questions and negotiate each clause with the other side, or prepare it alone.

Start in Dealroom

Have your agent draft and negotiate it

Your AI agent can read the clause library and create the contract through the agent API or the MCP server. A short example:

MCP: list_templates (query: "EQUITY_INCENTIVE"), get_template, create_playbook, initiate_negotiation.

Read the agent API guide
# 1. Read the clauses, options and the facts it needs
curl https://dealroom.todo.law/api/v1/agent/templates/EQUITY_INCENTIVE \
  -H "Authorization: Bearer drk_YOUR_KEY"

# 2. Create the contract (clauses you leave out take the default option)
curl -X POST https://dealroom.todo.law/api/v1/agent/deals \
  -H "Authorization: Bearer drk_YOUR_KEY" \
  -H "Content-Type: application/json" \
  -H "Idempotency-Key: $(uuidgen)" \
  -d '{
    "schema": "dealroom.solo-intake/1",
    "contractType": "EQUITY_INCENTIVE",
    "governingLaw": "ENGLAND_WALES",
    "language": "en",
    "dealName": "Example EQUITY_INCENTIVE",
    "selectionPolicy": "defaults"
  }'

Drafting and negotiating are free.

Related contracts

This page explains how the contract usually works. It is general information, not legal advice.

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