ESOP Agreement

Employee Stock Options Plans are used by various companies to attract, retain, and compensate their employees. Under Employee Stock Options Plans, there is an ESOP agreement between a company and its employees that entitled the latter with a right to buy a certain number of company’s shares at a fixed price within a certain period of time. The fixed price is often called the grant or exercise price.  Employees who are granted stock options hope to profit by exercising their options to buy shares at the exercise price when the shares are trading at a price that is higher than the exercise price.

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