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Advisor Stock Option Agreement Template for India

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Key Requirements PROMPT example:

Advisor Stock Option Agreement

"I need an Advisor Stock Option Agreement under Indian law for a technical advisor being granted 10,000 stock options with a 4-year vesting period starting March 2025, including a one-year cliff and standard confidentiality provisions for our AI technology company."

Document background
The Advisor Stock Option Agreement is a crucial document used by Indian companies to attract and retain high-quality advisors by offering equity compensation in addition to or in lieu of cash compensation. This agreement is particularly relevant for startups and growing companies that want to leverage equity to access expertise while conserving cash. The document must comply with Indian corporate law, particularly the Companies Act, 2013, SEBI regulations, and relevant tax laws. It typically includes detailed provisions about the option grant, vesting schedule, exercise conditions, and post-exercise rights, while also addressing confidentiality and intellectual property concerns. The agreement is structured to protect the company's interests while providing clear and enforceable rights to the advisor, taking into account specific Indian regulatory requirements for equity-based compensation.
Suggested Sections

1. Parties: Identification of the Company and the Advisor, including their respective addresses and registration details

2. Background: Context of the advisor's engagement and the company's stock option program

3. Definitions: Key terms used throughout the agreement including 'Options', 'Exercise Price', 'Vesting Schedule', etc.

4. Grant of Options: Details of the stock options being granted, including number of shares and exercise price

5. Vesting Schedule: Timeline and conditions for option vesting, including any cliff period

6. Exercise of Options: Process and conditions for exercising vested options

7. Term and Termination: Duration of the agreement and circumstances for early termination

8. Advisor Services: Scope of advisory services to be provided

9. Confidentiality: Protection of company's confidential information

10. Intellectual Property: Ownership and assignment of IP created during advisory relationship

11. Representations and Warranties: Standard declarations by both parties

12. Compliance with Laws: Obligation to comply with relevant securities and corporate laws

13. Governing Law and Jurisdiction: Application of Indian law and jurisdiction for disputes

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, etc.

Optional Sections

1. Lock-in Period: Restrictions on sale of shares post-exercise, used when company wants to ensure advisor retention

2. Tax Provisions: Detailed tax implications and responsibilities, needed for complex tax situations or international advisors

3. Right of First Refusal: Company's right to purchase shares before sale to third parties, used for closely-held companies

4. Tag-Along Rights: Advisor's right to join in sale of shares by other shareholders, used for protection in exit scenarios

5. Drag-Along Rights: Company's right to force advisor to join in sale of shares, used for future M&A scenarios

6. Foreign Exchange Compliance: Required when advisor is non-resident, addressing FEMA compliance

7. Non-Competition: Restrictions on advisor's involvement with competing businesses, if appropriate for relationship

8. Dispute Resolution: Detailed arbitration or mediation procedures, if preferred over court jurisdiction

Suggested Schedules

1. Schedule A - Option Grant Details: Detailed terms of option grant including number of shares, exercise price, and vesting schedule

2. Schedule B - Vesting Milestones: Specific performance or time-based milestones triggering vesting

3. Schedule C - Exercise Notice: Template form for exercising vested options

4. Schedule D - Advisor Services: Detailed scope of advisory services and any specific deliverables

5. Schedule E - Shareholders' Agreement Deed of Adherence: Form to be signed upon exercise of options to join existing shareholders' agreement

6. Appendix 1 - Company's Stock Option Plan: Copy or summary of the company's stock option plan rules

7. Appendix 2 - Regulatory Compliance Checklist: List of regulatory requirements and necessary compliance steps

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

Healthcare

E-commerce

Manufacturing

Professional Services

Education Technology

Biotechnology

Renewable Energy

Consumer Products

Software Development

Consulting Services

Relevant Teams

Legal

Human Resources

Finance

Company Secretarial

Board of Directors

Executive Leadership

Compliance

Corporate Development

Relevant Roles

CEO

Chief Legal Officer

General Counsel

Company Secretary

HR Director

Chief Financial Officer

Board Member

Technical Advisor

Strategic Advisor

Industry Expert

Corporate Lawyer

Equity Compensation Specialist

Startup Founder

Managing Director

Chief Strategy Officer

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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