ESOP Documentation (Employee Share Option Plan)
This ESOP (Employment Share Option Plan) Documentation is suitable for employees of small businesses in Australia.
Last updated May 5, 2025
Suitable for Australia
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Frequently asked questions
What is included in this ESOP Documentation
- Company details
- Employee details
- Offer letter and acceptance of offer letter
- Administration of option plan and delegation
- Treatment of options for leavers
- Issue of ordinary shares in respect of exercising options
- Procedure on exit event
- Listings
- Reorganisation event
- No effect
- Exercise price of options and market value of shares
- Number of options
- Default vesting conditions or customised vesting conditions
- Restrictions on disposal of options
- Board resolution to approve participation
- Option exercise notice
Further information:
View Sample ESOP Documentation (Employee Share Option Plan)
The Legal Risk Score of a ESOP Documentation (Employee Share Option Plan) Template is Medium
Our legal team have marked this document as medium risk considering:
- The document grants significant discretionary powers to the Board, including the ability to determine the terms of offers, amend offers, and decide on the vesting and exercise conditions of options, which could lead to decisions that might not always align with the interests of all participants.
- The options and their benefits are subject to specific conditions such as vesting periods and employment status, which means that if these conditions are not met, participants might lose their entitlements without compensation.
- The ESOP must be negotiated with other stakeholders, particularly existing investors, as it may dilute their holding
Participants with a basic understanding of equity options and employment-related incentives should find this document manageable but are advised to consider the implications of the Board's discretionary powers carefully.
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What is Share Vesting?
There are many types of shares and ways to invest. Read this article to find out more about share vesting, and how you can use it for your business.
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