ESOPs drafted by award-winning online lawyers

An Employee Share Option Plan (ESOP) is a system used by companies to incentivise and retain valuable employees.

Under an ESOP, companies offer employees rights to buy shares in the company. These rights are usually provided with certain attached conditions, such as minimum employment periods and/or minimum KPIs which the employee much meet.

Our expert lawyers will take your instructions and draft an ESOP according to your specific needs.

An ESOP is a common arrangement with startups that allows team members to receive and/or purchase securities in that company.

Generally, the employer will approach the employee with the offer and it’s up to the employee to accept it or not. In Australia, a recipient of ESOP securities cannot own more than 10% of the company in total. An ESOP is used to grant equity to new team members as opposed to the founders.

Broadly, ESSs (Employee Share Schemes) directly issue employees shares, while ESOPs give employees the opportunity to acquire shares in their own company through a share option plan.

However, there are several nuanced differences between these two schemes. There are also tax and concession benefits you’ll need to be aware of, particularly in light of 2015 reforms.

Our team is happy to chat you through the differences and help you decide which option is best for your business.

Before deciding to implement an ESOP, you should consider:

• If your company qualifies for the startup tax concessions
• How big your ESOP pool should be
• What the exercise price of each option will be
• If the options should be subject to vesting
• When employees can exercise their options
  

This package starts at $1400 + GST. As part of this package, our expert lawyers will draft an ESOP to meet the requirements of your business. You’ll receive phone consults with our lawyers and a complimentary amendment to the final draft we provide to you.

We’ll also review the company constituent documents, draft the ESOP Plan Rules and advise on variables required to prepare the offer letter.

We can also assist in preparing offer letters to your first round of ESOP participants. Plus, we can prepare the required board and member resolutions.