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Employee Stock Option Agreement Template for New Zealand

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Key Requirements PROMPT example:

Employee Stock Option Agreement

"I need an Employee Stock Option Agreement for our New Zealand-based startup, offering 4-year vesting options to senior developers with a one-year cliff period and accelerated vesting provisions in case of acquisition."

Document background
The Employee Stock Option Agreement serves as a fundamental instrument for companies in New Zealand seeking to offer equity incentives to their employees as part of their compensation package. This document is typically used when a company wants to align employee interests with company growth and retention goals, while complying with New Zealand's regulatory requirements including the Companies Act 1993 and Financial Markets Conduct Act 2013. The agreement specifies critical details such as the number of options granted, exercise price, vesting schedule, and conditions for exercise or termination. It's particularly relevant for startups and growing companies in New Zealand's business landscape, where equity compensation is increasingly important for attracting and retaining talent. The document must carefully balance the company's need for flexibility with employee rights and regulatory compliance.
Suggested Sections

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

2. Background: Context of the agreement, including reference to employment status and option plan

3. Definitions: Key terms used throughout the agreement including Option, Exercise Price, Shares, Vesting Date, etc.

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

5. Vesting Schedule: Timing and conditions under which options become exercisable

6. Exercise of Options: Process and requirements for exercising options, including payment methods and notice requirements

7. Term and Expiration: Duration of the option grant and circumstances of expiration

8. Restrictions on Transfer: Limitations on transferring or assigning the options

9. Termination of Employment: Impact of employment termination on vesting and exercise rights

10. Compliance with Laws: Requirements for compliance with securities laws and other regulations

11. Tax Obligations: Tax implications and responsibilities of the option holder

12. General Provisions: Standard contractual terms including notices, amendments, and governing law

Optional Sections

1. Change in Control Provisions: Special terms applying in case of company merger, acquisition, or other change in control

2. Lock-up Period: Restrictions on selling shares for a specified period after exercise, typically included for pre-IPO companies

3. Shareholder Rights: Details of rights as a shareholder after exercise, needed if different from standard shareholder rights

4. Clawback Provisions: Terms allowing company to recoup benefits in specific circumstances, often included for senior executives

5. International Supplement: Additional terms for employees in different jurisdictions, needed for multinational implementations

6. Non-Competition Clause: Restrictions on working for competitors, typically included for senior roles

7. Market Standoff Agreement: Restrictions on share sales during IPO or other public offerings, needed for pre-IPO companies

Suggested Schedules

1. Schedule 1: Option Details: Specific details of the option grant including number of shares, exercise price, grant date, and vesting schedule

2. Schedule 2: Exercise Notice: Form to be completed when exercising options

3. Schedule 3: Tax Summary: Summary of tax implications and obligations under New Zealand law

4. Appendix A: Company's Stock Option Plan: Full text or summary of the company's stock option plan under which the grant is made

5. Appendix B: Shareholders' Agreement: Key terms from the shareholders' agreement that will apply post-exercise

6. Appendix C: Regulatory Compliance: Summary of relevant Financial Markets Conduct Act requirements and exemptions

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

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Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Biotechnology

Software Development

E-commerce

Telecommunications

Consulting

Real Estate

Energy

Education Technology

Media and Entertainment

Consumer Goods

Relevant Teams

Human Resources

Legal

Finance

Executive Leadership

Information Technology

Product Development

Sales

Marketing

Operations

Research and Development

Business Development

Customer Success

Engineering

Design

Analytics

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Software Engineer

Product Manager

Sales Director

Marketing Manager

Operations Manager

Human Resources Director

Research Scientist

Business Development Manager

Account Executive

Technical Lead

Design Director

Financial Analyst

Legal Counsel

Department Head

Project Manager

Senior Developer

Data Scientist

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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