Template Description

The Board Resolution for Approval of ESOP Plan + Employee Agreement Template is a professionally drafted, regulatory-compliant legal document set designed to support startups and private companies in formally adopting and implementing an Employee Stock Option Plan (ESOP). Structured across two parts, a 5-page board resolution and employee-specific ESOP grant agreement, this Microsoft Word-based template aligns with Indian corporate laws under the Companies Act, 2013, SEBI (where applicable), and global startup best practices. It enables companies to attract and retain top talent by offering equity-linked compensation in a compliant, transparent, and board-approved framework.

Understanding the ESOP Plan Board Resolution + Employee Agreement Template

This dual-document template ensures that a company first receives internal board authorisation and shareholder consent (if required), and then contractually binds eligible employees to vesting, tax, and exercise terms through a signed agreement.

Key Features of the Template

1. Board Resolution for ESOP Adoption

• Plan Approval: Clearly articulates the board’s approval of the ESOP plan with mention of plan name, year, and document reference.
• Plan Mechanics: Outlines critical terms, number of options, exercise price, vesting structure, and lock-in periods.
• Shareholder Approval Provision: Declares the plan subject to special resolution by shareholders.
• Committee Constitution: Authorises formation of an ESOP/Nomination & Remuneration Committee for plan governance.
• Regulatory Filings: Empowers legal/compliance officers to submit MGT-14, SH-7, or PAS-3 forms with the Registrar of Companies.

2. Employee Stock Option Agreement

• Option Grant & Vesting: Specifies the number of stock options granted, vesting schedule (e.g., 25% cliff + monthly vesting over 3 years), and effective grant date.
• Exercise Terms: Defines exercise price, time window for exercising options, and procedural conditions.
• Termination Scenarios: Covers resignation, termination for cause, retirement, death/disability, with option treatment for each.
• Non-Transferability Clause: States options are personal and non-assignable without Board/ESOP Committee approval.
• Tax Responsibility: Clarifies that all tax liabilities are borne by the employee.
• Governing Law & Jurisdiction: Confirms Indian legal jurisdiction or other applicable territory.

3. Execution and Signature Blocks

• Includes separate signature spaces for Board signatory and Employee acknowledgement.
• Provides for use of electronic or physical copies with a record retention clause.

Conclusion

The Board Resolution for ESOP Plan Approval + Employee Agreement Template is an essential compliance and HR asset for modern startups offering employee ownership. It secures regulatory approval, defines roles of ESOP Committees, and empowers employees with a clear, enforceable equity framework. By proactively addressing vesting, tax, and exit terms, this template minimises disputes and builds long-term retention and alignment between founders, investors, and talent. It is a critical tool in any company’s equity and employee governance strategy.