Skip to main content
An Option Plan, also known as an Employee Stock Option Plan (ESOP), defines how employees or other stakeholders can become owners of something in the future. Here you’ll find the legal elaboration of that promise in the form of Terms. These Terms are intentionally drafted in a general and flexible way, making them applicable to a wide variety of organizations and situations. For example, one clause states: “The Issuer determines, at its sole discretion, whether, when, and to whom Options are granted.” In practice, your organization might of course want to apply its own policies and procedures, perhaps without even modifying the Terms themselves. Most clauses are considered mandatory. Some clauses and conditions are optional, such as vesting. For the actual issuance of options, you can use the Deed of Grant.

​
The Terms

These Terms are divided into seven Articles:
  • Definitions – explanation of defined terms
  • Grant – how, when, and to whom options are granted
  • Exercise – when and how options may be exercised
  • Cancellation – circumstances under which options lapse
  • Transfer – rules regarding the transfer or succession of options
  • Special Events – what happens in case of reorganization, sale, or other extraordinary situations
  • Miscellaneous – general provisions on language, communication, governing law, and interpretation