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Non Qualified Stock Option Agreement

Non Qualified Stock Option Agreement Template for Indonesia

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Key Requirements PROMPT example:

Non Qualified Stock Option Agreement

"I need a Non Qualified Stock Option Agreement under Indonesian law for our tech startup, granting options to our senior software developer for 10,000 shares with a 4-year vesting period and a cliff period of 1 year, with exercise price set at IDR 5,000 per share."

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Document background
The Non-Qualified Stock Option Agreement serves as a crucial instrument for companies operating in Indonesia to provide equity-based incentives to their employees and consultants. This document is typically used when a company wishes to offer stock options that don't qualify for preferential tax treatment under Indonesian tax regulations. The agreement details the grant of options, exercise terms, vesting conditions, and compliance requirements under Indonesian law, particularly adhering to OJK regulations, Company Law No. 40 of 2007, and relevant capital market regulations. It's commonly implemented as part of employee compensation packages, talent retention strategies, or consultant engagement arrangements, providing a framework for potential equity ownership while addressing specific Indonesian regulatory requirements, including foreign ownership restrictions and local corporate governance standards.
Suggested Sections

1. Parties: Identification of the Company granting the options and the Option Holder (employee/consultant)

2. Background: Context of the option grant, reference to any employee stock option plan, and corporate approvals obtained

3. Definitions: Key terms used throughout the agreement including Exercise Price, Option Shares, Grant Date, Expiration Date, etc.

4. Grant of Option: Specific details of the option grant including number of shares, exercise price, and type of shares

5. Vesting Schedule: Details of when and how the options become exercisable

6. Exercise of Option: Process and conditions for exercising the options, including payment methods and notice requirements

7. Term and Expiration: Duration of the option grant and circumstances of expiration

8. Taxation: Tax obligations and responsibilities of both parties under Indonesian tax laws

9. Compliance with Laws: Adherence to Indonesian corporate, securities, and employment laws

10. Transferability: Restrictions on transfer or assignment of the options

11. Adjustment Provisions: Adjustments for corporate actions like stock splits or reorganizations

12. Termination of Employment: Impact of employment termination on option rights

13. Governing Law and Jurisdiction: Application of Indonesian law and dispute resolution mechanisms

Optional Sections

1. Change in Control: Provisions for acceleration or special treatment of options in case of company sale or merger

2. Lock-up Period: Restrictions on sale of shares after exercise, typically included for public companies

3. Shareholders' Agreement Compliance: Required when option shares must comply with an existing shareholders' agreement

4. Foreign Investment Provisions: Required when the option holder is a foreign national, addressing Indonesian foreign ownership restrictions

5. Currency Provisions: Required when exercise price or related payments involve foreign currency

6. Clawback Provisions: Optional provisions for recovering shares or profits in case of misconduct

7. Market Standoff Agreement: Required for companies planning an IPO, restricting sale during the IPO period

Suggested Schedules

1. Notice of Exercise Form: Template form for the option holder to exercise their options

2. Vesting Schedule Details: Detailed breakdown of vesting dates and conditions

3. Calculation of Exercise Price: Method and examples of exercise price calculations, particularly if subject to adjustments

4. Required Regulatory Approvals: List of necessary approvals from Indonesian authorities

5. Tax Calculation Examples: Examples of tax implications under different exercise scenarios

6. Consent of Spouse: Required spousal consent form under Indonesian marital property laws

7. Board Resolution: Copy of board resolution approving the option grant

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Company
Option Holder
Board of Directors
Board of Commissioners
Option
Option Shares
Exercise Price
Grant Date
Vesting Date
Vesting Schedule
Exercise Period
Expiration Date
Exercise Notice
Fair Market Value
Cause
Good Reason
Change in Control
Trading Day
Business Day
Subsidiary
Parent Company
Articles of Association
Plan
Employee Stock Option Plan
Securities Laws
OJK
Capital Markets Law
Company Law
Exercise Form
Exercise Price Payment
Option Certificate
Shares
Common Stock
Employment Agreement
Confidential Information
Intellectual Property Rights
Tax Obligations
Regulatory Approvals
Foreign Investment Restrictions
IDX
Material Adverse Effect
Termination Date
Disability
Competing Business
Shareholders Agreement
Lock-up Period
Market Price
Transfer
Permitted Transferee
Clauses
Interpretation
Grant of Option
Exercise Price
Vesting Conditions
Exercise Rights
Exercise Procedure
Term and Expiration
Termination Provisions
Transfer Restrictions
Regulatory Compliance
Tax Obligations
Adjustment Provisions
Representations and Warranties
Confidentiality
Non-Competition
Change in Control
Share Rights
Corporate Actions
Notices
Amendment
Assignment
Severability
Waiver
Entire Agreement
Governing Law
Dispute Resolution
Foreign Investment Compliance
Currency Provisions
Shareholder Rights
Data Protection
Employee Acknowledgments
Company Covenants
Force Majeure
Termination
Indemnification
Relevant Industries

Technology

Manufacturing

Financial Services

E-commerce

Healthcare

Professional Services

Telecommunications

Consumer Goods

Real Estate

Energy

Education

Transportation and Logistics

Mining and Resources

Retail

Media and Entertainment

Relevant Teams

Human Resources

Legal

Finance

Compliance

Corporate Secretariat

Executive Leadership

Compensation and Benefits

Employee Relations

Risk Management

Corporate Governance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Human Resources Director

Legal Counsel

Compensation and Benefits Manager

Corporate Secretary

Finance Manager

HR Business Partner

Compliance Officer

Employee Relations Manager

Senior Executive

Department Head

Project Manager

Technical Lead

Senior Consultant

Key Employee

Board Member

Industries
Law No. 40 of 2007 on Limited Liability Companies (Company Law): Primary legislation governing corporate entities in Indonesia, including provisions on share capital, shareholder rights, and corporate governance requirements for stock issuance
Law No. 8 of 1995 on Capital Markets: Regulates securities, including provisions on stock options and other equity-based instruments in Indonesia
OJK Regulation No. 32/POJK.04/2015: Regulations on capital increases in public companies, including provisions related to employee stock option plans
Law No. 13 of 2003 on Employment: Labor law governing employment relationships and compensation, including equity-based compensation arrangements
Income Tax Law (Law No. 36 of 2008): Tax regulations governing the treatment of stock options, including timing of taxation and calculation of taxable income from stock options
Law No. 25 of 2007 on Investment: Regulations on foreign investment, including restrictions on foreign ownership and investment in Indonesian companies
Currency Law No. 7 of 2011: Regulations regarding the use of Indonesian Rupiah in transactions, which may affect the pricing and settlement of stock options
OJK Regulation No. 33/POJK.04/2014: Regulations concerning the board of directors and board of commissioners of public companies, including their authority to grant stock options
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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