Option To Purchase Shares Agreement Template for Australia

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Key Requirements PROMPT example:

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."

Document background
The Option To Purchase Shares Agreement is a strategic instrument commonly used in Australian corporate transactions to provide parties with the right to acquire company shares under specific conditions. It is particularly relevant in contexts such as employee incentive schemes, strategic investments, corporate restructuring, and startup funding arrangements. The agreement typically includes essential elements such as the option price, exercise period, share details, and completion mechanisms, all structured to comply with Australian corporate law and securities regulations. This document is crucial for companies seeking to align interests with key stakeholders, attract investment, or create future ownership opportunities while maintaining current control structures. The agreement must be carefully drafted to address tax implications, corporations law requirements, and any specific industry regulations applicable under Australian law.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Retail

Healthcare

Real Estate

Mining & Resources

Telecommunications

Media & Entertainment

Startups & Scale-ups

Education

Construction

Agriculture

Relevant Teams

Legal

Finance

Human Resources

Corporate Development

Compliance

Risk Management

Board Secretariat

Investment

Mergers & Acquisitions

Executive Leadership

Relevant Roles

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

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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