Directors’ Resolution to Adopt Share Option Plan

A Directors’ Resolution to Adopt Share Option Plan is a resolution by the directors of a company to approve the adoption of an Employee Share Option Plan (ESOP).

What is a Directors’ Resolution to Adopt Share Option Plan?

This is a resolution by the directors of a company to approve the adoption of an Employee Share Option Plan (ESOP).

When do you use a Directors’ Resolution to Adopt Share Option Plan?

When a company decides to incentivize its employees by allowing their participation in stock options or share options, it creates an Employee Share Option Plan (ESOP).

Essentially, this is to lay out the terms and conditions under which an employee can get such share options. Also, what such share options will constitute.

The Board of Directors of the company plan (ESOP) first approves and then presents to the shareholders for their approval. The Shareholders of the company then give the final approval to the Plan to be adopted by the company. This approval and adoption by the directors are made effective through a Directors’ Resolution, which is when this document is used.

How to use a Directors’ Resolution to Adopt Share Option Plan?

There are two options:

• • if a meeting of the board of directors is convened to adopt the share option plan, use a Board Minutes to adopt share option plan; or
  • if the board resolution will be passed by way of a written resolution, use a Board Resolution to adopt share option plan.

What to include in the resolution?

• Details of the meeting (if using Minutes);
• Date of passing the resolution;
• Purpose of the share option plan;
• Class of shares to be issued under the plan;
• Eligible grantees;
• Maximum number of shares issuable upon exercise of all options; and
• Validity of the share option plan.

Can ESOPs be issued to consultants?

No. Employee stock options (ESOPs) are employee incentives that are aimed at incentivizing employees. It cannot be granted to consultants.

Notes on signing

• The Minutes of a General Meeting to Adopt Share Option Plan should be signed by the chairperson of the meeting.
• The Written Resolution to Adopt Share Option Plan should be signed by all the directors.

Create Now

About Author

Daniel Walker

Daniel Walker is the Founder and Chief Executive Officer of Zegal, the trusted legaltech firm. Prior to founding Zegal, Daniel practised at DLA Piper, Stephenson Harwood and Clyde & Co, in Hong Kong, Singapore, and the UK.

Stay compliant with the Zegal template library

Zegal legal template are meticulously crafted with the precision of AI and the expertise of seasoned human lawyers, providing a unique blend of speed and reliability.

You can trust that Zegal agreements are legally sound and fully compliant with current regulations.

Whether you're a startup, SME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.

Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.

Don’t compromise on speed or compliance. Stay secure, compliant, and efficient with Zegal.