Esop Scheme Drafter

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name: esop-scheme-drafter
description: Drafts an employee stock option scheme document and individual grant letter template — eligibility, vesting, exercise mechanics, and leaver treatment — using only the parameters actually instructed and flagging tax-advantaged scheme qualification and regulatory approval requirements for verification rather than asserting them. Use this whenever a user wants an ESOP scheme or grant letters drafted — including phrasings like "draft our ESOP scheme document", "prepare a grant letter for this new hire's options", "draft the vesting and leaver terms for our option pool", or "set up our stock option plan documentation". Fires for any employee stock option scheme or individual grant, in any jurisdiction.
---

# ESOP Scheme Drafter

## What this does

Drafts the scheme document that governs an employee stock option plan and the individual grant letter template used for each grantee — eligibility, pool size, vesting and exercise mechanics, and treatment on leaving the company. It drafts only the parameters actually instructed; it does not assume a standard vesting schedule, leaver treatment, or tax-advantaged status, all of which vary by company decision and by jurisdiction.

## Before you start

**The scheme parameters.** Pool size, vesting schedule and cliff, and the exercise price methodology. Blocking — flag any of these left unspecified rather than filling it in with a standard assumption.

**Governing law and jurisdiction.** ESOP schemes carry jurisdiction-specific regulatory and tax treatment — approval requirements, and in some jurisdictions a distinct tax-advantaged scheme structure with its own qualifying conditions. Ask; do not assume a jurisdiction, and flag jurisdiction-specific tax and regulatory content as a verification point throughout.

Not blocking, ask once and proceed on what is confirmed: **whether this is a fresh scheme or an amendment to an existing one.**

## Method

**1. Confirm the scheme's basic parameters — pool size, vesting schedule, cliff period, and exercise price methodology — using only what is specified.** Flag any gap rather than defaulting to a common structure such as a four-year vest with a one-year cliff, since the client may intend something different.

**2. Draft the scheme document structure**: eligibility, grant authority (board or committee), vesting mechanics, exercise mechanics and window, treatment on termination, change of control treatment, and administration provisions.

**3. Do not assume the scheme qualifies for any specific tax-advantaged structure without the user confirming both eligibility and intent.** Qualifying conditions for tax-favourable option schemes are technical and jurisdiction-specific; flag this as a verification point rather than drafting as though qualification is settled.

**4. Draft the individual grant letter template** — grantee details, number of options, vesting commencement date, the vesting schedule applicable to that grantee, exercise price, and expiry.

**5. Flag leaver provisions carefully.** What happens to vested and unvested options on resignation, termination for cause, and death or disability should be drafted only as instructed. If the client has not specified a good-leaver/bad-leaver distinction, flag this as an open decision rather than inventing a default treatment — it is one of the most consequential terms in the scheme.

**6. Flag any company law or securities law approval or filing requirement the scheme is likely to trigger** — shareholder approval, a regulatory filing — as jurisdiction-specific and requiring verification, not as something already satisfied.

**7. Check internal consistency between the grant letter template and the scheme document.** The grant letter's terms should never contradict the scheme it is issued under.

## Output

**1. Header.** Company, jurisdiction, scheme name, date.

**2. Scheme document.** Eligibility, pool, vesting, exercise, leaver provisions, change of control, administration.

**3. Grant letter template.** With individualised fields clearly marked.

**4. Points requiring verification.** Tax-advantaged scheme qualification, and company or securities law approval and filing requirements.

## Do not

Do not assume the scheme qualifies for a specific tax-favourable regime without confirmation.

Do not invent leaver provisions that were not instructed. Flag the gap as a decision the client needs to make.

Do not assume a standard vesting schedule without confirming that is what is wanted.

Do not assert that a specific regulatory approval or filing requirement is satisfied. Flag it.

Do not let the grant letter template contradict the scheme document.