Employee Stock Option Plan (ESOP) is an employment scheme for the benefits of an enterprise's employee. Under the ESOP scheme, the employees are encouraged to acquire ownership of the company in form of shares for their commendable services. The shares are given to the employees at a lesser rate than the market price of those shares.
A business that wishes to implement the ESOP scheme for its employees needs to have an ESOP policy for the employees. The ESOP policy states the terms and conditions, eligibility, price of shares, etc. An ESOP policy acts as the legal documentary proof that the employees will be rewarded for their performance and creates trust in the employers. Having an ESOP policy encourages employees to focus on the company goals rather than their individual goals and creates a sense of ownership in the employees.
After receiving the requisite information, the lawyer will draft the ESOP Scheme for your company. The draft of the ESOP scheme will be shared with you for your approval or suggestions for any changes. Once the changes are made, if any, and the scheme is approved, the documentation lawyer will send the final draft of the employee stock ownership plan.