Employee Share Option Plans (ESOPs) give startups a way to issue options to purchase shares to their employees. This provides employers with a means for attracting and retaining staff in line with shareholder interests, as the better the company performs the more financial benefit the employee will receive. 

The Offer Letter is used to offer these options to eligible employees as well as outline the specific terms of the offer to each employee. The Board Resolution is required to document the approval of an employee's participation in the company's Employee Share Option Plan.

Note: in order to be eligible for the ESS Start-Up Concession, your ESOP needs to meet certain criteria. To check whether you are compliant, see ESS Start-Up Concession Eligibility Check.

Why do you need this ESOP Documentation?

An ESOP is necessary to establish your employee option plan and to set out specific terms of an offer of options to an employee. Apart from being legally compliant, it is important to clearly state any specific terms when offering options to prevent potential disputes.

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:

• Employee Share Scheme: Five Things You Should Know
• Lawpath’s Easy ESS