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Employee Share Option Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Employee Share Option Agreement

"I need an Employee Share Option Agreement for our Hong Kong tech startup, covering a standard 4-year vesting schedule with a one-year cliff, to be implemented from January 2025 for our senior software engineers."

Document background
The Employee Share Option Agreement is a crucial document used by Hong Kong companies to provide employees with the right to purchase company shares at a predetermined price within a specified timeframe. This agreement is commonly used as part of employee retention and incentivization strategies, particularly in growth-stage companies and established corporations. It must comply with Hong Kong's legal framework, including the Companies Ordinance (Cap. 622), Securities and Futures Ordinance (Cap. 571), and relevant employment laws. The document typically forms part of a broader employee compensation package and includes detailed information about vesting periods, exercise conditions, tax implications, and procedures for various scenarios such as employment termination or company restructuring.
Suggested Sections

1. Parties: Identification of the company granting the options and the employee receiving them

2. Background: Context of the option grant and reference to any employee share option plan

3. Definitions: Definitions of key terms including Option, Exercise Price, Shares, Vesting Date, etc.

4. Grant of Option: Details of the option grant including number of shares, exercise price, and grant date

5. Vesting of Option: Vesting schedule and conditions for option vesting

6. Exercise of Option: Procedures and conditions for exercising the option

7. Taxation: Tax obligations and responsibilities of both parties

8. Restrictions on Transfer: Limitations on transfer or assignment of the option

9. Termination of Employment: Effect of employment termination on the option

10. Confidentiality: Confidentiality obligations regarding the agreement and option details

11. Notices: Process for giving notices under the agreement

12. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction

Optional Sections

1. Change of Control: Provisions dealing with company merger, acquisition, or restructuring - include if company anticipates such events

2. Clawback Provisions: Provisions allowing company to recoup benefits in case of misconduct - include for senior executives

3. Market Stand-off Agreement: Restrictions on sale during IPO or other public offerings - include if company plans to go public

4. Shareholder Rights: Rights attached to shares post-exercise - include if different from standard shares

5. Data Privacy Consent: Specific consent for data processing - include if extensive personal data processing is involved

6. Non-Competition: Restrictions on competing activities - include for senior positions

7. International Supplement: Additional terms for international employees - include if employee works across jurisdictions

Suggested Schedules

1. Option Certificate: Formal certificate detailing the option grant

2. Exercise Notice: Form for exercising the option

3. Vesting Schedule: Detailed breakdown of vesting dates and quantities

4. Share Option Plan: Copy or summary of the company's share option plan

5. Tax Summary: Summary of tax implications and filing requirements

6. Regulatory Disclaimers: Required regulatory statements and disclaimers

7. Acceptance Form: Form for accepting the option grant

Authors

Alex Denne

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

Relevant legal definitions




















































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Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Retail

Healthcare

Telecommunications

Real Estate

E-commerce

Biotechnology

Consulting

Media and Entertainment

Relevant Teams

Human Resources

Legal

Finance

Company Secretarial

Executive Management

Operations

Sales

Engineering

Research and Development

Product Development

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Senior Executive

Department Head

Manager

Software Engineer

Sales Executive

Research Scientist

Product Manager

Business Development Manager

Legal Counsel

Human Resources Director

Company Secretary

Financial Controller

Operations Manager

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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