Compensation Glossary

Stock Purchase Plan (Nonqualified)

A plan that allows senior management or other key personnel to purchase employer stock. Certain restrictions apply: (1) the stockholder must be employed for a particular length of time, (2) the employer has the right to buy back the stock and (3) stockholders cannot sell the stock for a specific time period. (Qualified) A program under which employees buy shares in the employer's stock. The employer contributes a certain amount for each unit of employee contribution. Also, stock may be offered at a fixed price (usually below market) and paid for in full by the employees.