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Option Grant Agreement

Option Grant Agreement Template for Australia

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Key Requirements PROMPT example:

Option Grant Agreement

"I need an Option Grant Agreement for our Senior Software Developer, granting 10,000 options with a 4-year vesting period starting March 1, 2025, with standard good/bad leaver provisions and ASX-compliant terms for our listed company."

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Document background
Option Grant Agreements are essential instruments used by Australian companies to provide individuals, typically employees or contractors, with the right to purchase company shares at a predetermined price within a specified period. These agreements are commonly used as part of employee incentivization strategies, particularly in growth-oriented companies and startups. The Option Grant Agreement must comply with Australian corporate and tax laws, including the Corporations Act 2001 (Cth) and relevant tax legislation. It includes detailed terms about option vesting, exercise conditions, and share rights, while also addressing important matters such as confidentiality, non-competition, and share transfer restrictions. This document is crucial for companies looking to align stakeholder interests with company growth and success through equity participation.
Suggested Sections

1. Parties: Identification of the company granting the options and the option holder

2. Background: Context of the option grant, including reference to any relevant employee share scheme or board approvals

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Grant of Options: Core terms of the option grant including number of options, grant date, and exercise price

5. Vesting Conditions: Conditions that must be met before options can be exercised, including time-based vesting schedule

6. Exercise of Options: Process and requirements for exercising options, including exercise period and payment mechanisms

7. Lapse of Options: Circumstances under which options will lapse or be forfeited

8. Rights and Restrictions: Rights attached to options and any restrictions on transfer or dealing

9. Taxation: Tax obligations and responsibilities of the option holder

10. Compliance with Laws: Requirements to comply with relevant laws, regulations, and company policies

11. Notices: How formal communications between parties should be made

12. General Provisions: Standard legal provisions including governing law, amendments, and entire agreement

Optional Sections

1. Performance Conditions: Additional performance-based vesting conditions, used when options are linked to specific performance targets

2. Change of Control Provisions: Special provisions for what happens to options in a change of control event, used for senior executives or when specifically required

3. Clawback Provisions: Provisions allowing the company to recoup options or proceeds in certain circumstances, typically used for senior executives

4. Employee Share Scheme Provisions: Additional provisions required when the options are part of an employee share scheme

5. Bad Leaver Provisions: Specific consequences for option holders who leave the company under negative circumstances

6. Nominee Provisions: Provisions allowing options to be held by a nominee, used when required by tax or other structural considerations

7. Market Stand-off Agreement: Restrictions on selling shares post-exercise during specific periods, typically used for listed companies

Suggested Schedules

1. Option Terms Schedule: Detailed terms of the options including number, exercise price, grant date, and vesting dates

2. Exercise Notice: Form to be completed by option holder when exercising options

3. Acceptance Form: Form for formal acceptance of the option grant

4. Tax Summary: Summary of tax implications and obligations (non-binding)

5. Shareholders Agreement Deed of Accession: Form for option holder to accede to shareholders agreement upon exercise

6. Performance Metrics Schedule: Detailed description of any performance-based vesting conditions and measurement criteria

7. Employee Share Scheme Rules: Full rules of the employee share scheme if options are granted under such a scheme

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions













































Clauses






























Relevant Industries

Technology

Financial Services

Professional Services

Healthcare

Mining and Resources

Retail

Manufacturing

Biotechnology

Software Development

E-commerce

Consulting

Telecommunications

Relevant Teams

Legal

Human Resources

Finance

Corporate Secretariat

Executive Leadership

Compensation & Benefits

Payroll

Investor Relations

Corporate Governance

Tax

Relevant Roles

CEO

CFO

CTO

Senior Executive

Director

Board Member

Senior Manager

Department Head

Key Employee

Startup Founder

Technical Lead

Sales Executive

Product Manager

Research Director

Principal Engineer

General Counsel

HR Director

Company Secretary

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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