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Option To Purchase Shares Agreement
"I need an Option to Purchase Shares Agreement for our senior software developer, granting them the option to purchase up to 5% of our company's shares at a fixed price of $2.50 per share, exercisable between January 2025 and December 2025, as part of their employment package."
1. Parties: Identifies and defines the parties to the agreement - typically the option grantor (company or existing shareholder) and the option holder
2. Background: Sets out the context of the agreement, including the company's current share structure and the purpose of granting the option
3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles
4. Grant of Option: Specifies the formal grant of the option, including the number of shares subject to the option and the type of shares
5. Option Period: Defines the duration of the option, including commencement and expiry dates
6. Exercise Price: Specifies the price at which shares can be purchased when the option is exercised
7. Exercise of Option: Details the process and requirements for exercising the option, including notice requirements
8. Completion: Sets out the process for completing the share transfer after option exercise
9. Company's Obligations: Specifies the company's obligations regarding share maintenance and corporate actions during the option period
10. Representations and Warranties: Contains standard representations and warranties from all parties
11. Confidentiality: Establishes confidentiality obligations regarding the agreement and company information
12. General Provisions: Standard boilerplate clauses including notices, governing law, and dispute resolution
1. Tag-Along Rights: Include when other shareholders should have the right to participate in any sale resulting from the option exercise
2. Drag-Along Rights: Include when the option holder should have the right to force other shareholders to join in a sale
3. Anti-Dilution Provisions: Include when the option holder needs protection against dilution from new share issues
4. Employee-Specific Provisions: Include when the option is part of an employee share scheme
5. Foreign Investment Conditions: Include when the option holder is a foreign entity requiring FIRB approval
6. Security Interests: Include when the option is subject to any security interests or used as collateral
7. Pre-emptive Rights: Include when existing shareholders should have first right to purchase shares post-exercise
8. Change of Control Provisions: Include when specific provisions are needed for company sale or change of control
1. Company Details: Schedule containing full company details, share capital structure, and existing shareholders
2. Option Terms Schedule: Detailed terms of the option including precise number of shares, class, and exercise price calculations
3. Exercise Notice: Pro forma notice for exercising the option
4. Share Transfer Form: Pro forma share transfer form for use upon exercise
5. Deed of Accession: If applicable, form of deed to bind the option holder to existing shareholders' agreement
6. Calculation Methods: If applicable, detailed methods for calculating adjustments to option terms
7. Consent Documents: Forms of any required regulatory or third-party consents
Authors
ASIC
Board
Business Day
Company
Completion
Completion Date
Corporations Act
Encumbrance
Exercise Notice
Exercise Period
Exercise Price
Existing Shareholders
Expiry Date
Fair Market Value
FIRB
FIRB Approval
Government Agency
Grant Date
GST
Insolvency Event
Material Adverse Change
Option
Option Holder
Option Shares
Parties
Related Body Corporate
Related Party
Representative
Security Interest
Share
Shareholders Agreement
Share Capital
Subsidiary
Tax
Transfer Form
Valuation
Warranties
Grant of Option
Exercise Period
Exercise Price
Option Exercise Mechanics
Completion Requirements
Share Rights and Restrictions
Anti-dilution Protection
Transfer Restrictions
Regulatory Compliance
Representations and Warranties
Confidentiality
Pre-emptive Rights
Tag-Along Rights
Drag-Along Rights
Share Capital Reorganization
Corporate Actions
Notices
Assignment
Amendment
Termination
Governing Law
Dispute Resolution
Force Majeure
Costs and Stamp Duty
GST
Further Assurance
Severability
Entire Agreement
Counterparts
Technology
Financial Services
Professional Services
Manufacturing
Retail
Healthcare
Real Estate
Mining & Resources
Telecommunications
Media & Entertainment
Startups & Scale-ups
Education
Construction
Agriculture
Legal
Finance
Human Resources
Corporate Development
Compliance
Risk Management
Board Secretariat
Investment
Mergers & Acquisitions
Executive Leadership
Chief Executive Officer
Chief Financial Officer
Company Secretary
Legal Counsel
Corporate Lawyer
Investment Manager
Human Resources Director
Board Director
Compliance Officer
Finance Manager
Business Development Manager
Startup Founder
Venture Capital Manager
Private Equity Manager
Corporate Advisory Manager
Risk Manager
Employee Share Scheme Administrator
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