Meeting with a Lawyer: Employee Stock Option Plans
Created by FindLaw's team of legal writers and editors | Last reviewed May 23, 2024
Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.
This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.
The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area.
Also available in PDF | MS Word
This document is designed to help you collect a variety of information about your company in order to assist your attorney in assessing your company's situation and advise you about creating an employee stock option plan (ESOP). You should also collect the following documents (if they exist) to include in the file you'll take to your attorney:
- Annual report (if there is one)
- Recent prospectus or private placement memorandum
- Recent financial statement
- Summary plan descriptions of current employee benefit plans
Today's Date: __________________ General Information Name of Company: ________________________________________ Company Address: ________________________________________ ________________________________________ ________________________________________ City State Zip Contact Person: ________________________________________ Telephone Number: ________________________________________ Area Code Extension E-mail Address: ________________________________________ Name of Accountant: ________________________________________ Telephone Number: ________________________________________ Area Code Extension BUSINESS INFORMATION What business is the company in?______________________________ _________________________________________________________ Business form: _____ Corporation _____ Partnership _____ Sole-proprietorship If your company is a corporation, in what state is the company incorporated? _______________ what kind of tax treatment does it have? ______ "C" corporation ______ "S" corporation Affiliated companies, parent or subsidiaries: Name of Company Relationship to Your Company _________________________ ____________________________ _________________________ ____________________________ _________________________ ____________________________ Stock Information Is your company's stock publicly traded? ______ Yes ______ No If "yes," which stock exchange? ______________________ How many shareholders are there? ______________________ (Provide an estimate if your company is publicly traded.) How many stockholders hold 5% or more of the company's stock? ______________________ What percentages of stock do your major shareholders own? (List from most to least (5%).) ___________________________________ ______________% ___________________________________ _____________% ___________________________________ _____________% ___________________________________ _____________% ___________________________________ _____________% Are major shareholders active in the business? _____ Yes _____ No Are family members of major shareholders active in the business ______ Yes ______ No If you answered "Yes," what are the relationships? Stockholder Family Member Relationship _________________ ___________________ ________________ _________________ ___________________ ________________ _________________ ___________________ ________________ _________________ ___________________ ________________ _________________ ___________________ ________________ What classes of stock are outstanding? _____ Common shares _____ Preferred shares ______ Other Please provide more detail about the classes of stock if appropriate. __________________________________________________________ __________________________________________________________ __________________________________________________________ Is any sale of stock pending? ______ Yes ______ No Are any options or warrants outstanding? ______ Yes ______ No Tax Information What tax bracket is the company in this year? Federal _______________ State _______________ What bracket do you expect the company to be in next year? Federal _______________ State _______________ How is your company taxed? ______ "C" corporation ______ "S" corporation Other: ________________________________________ Past taxable income and federal taxes: Net taxable income Federal taxes paid 1997 $______________________ $______________________ 1998 $______________________ $______________________ 1999 $______________________ $______________________ 2000 $______________________ $______________________ 2001 $______________________ $______________________ Projected taxable income and federal taxes: Net taxable income Federal taxes paid 2000 $______________________ $______________________ 2001 $______________________ $______________________ 2002 $______________________ $_______________________ 2003 $______________________ $_______________________ Employee Information How many employees does your company have? ____________ How may of your employees are unionized? ____________ What is the total payroll? $___________ What portion of the payroll is for unionized employees? $___________ Do you plan to include unionized employees? ______ Yes______ No As a percentage, how long have your employees been with the company? 0-6 months _________% 6 mos. to 1 year _________% 1-3 years _________% 4-5 years _________% > 5 years _________% Current Key Employees And Officers Name: ________________________________________ Position: __________________________________ Age: __________ Compensation:________________ Stock ownership: _______________ % Name: ________________________________________ Position: __________________________________ Age: __________ Compensation:__________________ Stock ownership: _______________ % Name: __________________________________________ Position: ____________________________________ Age: __________ Compensation:__________________ Stock ownership: _______________ % Name: __________________________________________ Position: ____________________________________ Age: __________ Compensation:__________________ Stock ownership: _______________ % Possible Future Key Employees Name: ___________________________________________ Current Position: _______________________________ Potential Position: _______________________________ Compensation: _______________________________ Name: ___________________________________________ Current Position: _______________________________ Potential Position: _______________________________ Compensation: _______________________________ Name: ___________________________________________ Current Position: _______________________________ Potential Position: _______________________________ Compensation: _______________________________ Employee Benefits Does your company currently have any qualified benefit plans? ______ Yes ______ No Please provide the following information about your company's employee benefit plans. Retirement Plans 1. Kind of plan: ________________________________________ Current assets: ________________________________________ Current contribution: __________________________________ Current contribution expressed as a percentage of pay: ______% Type of Investments: __________________________________ 2. Kind of plan: ________________________________________ Current assets: ________________________________________ Current contribution: __________________________________ Current contribution expressed as a percentage of pay: ______% Type of Investments: __________________________________ 3. Kind of plan: ________________________________________ Current assets: ________________________________________ Current contribution: __________________________________ Current contribution expressed as a percentage of pay: ______% Type of Investments: __________________________________ Welfare Plans 1. Kind of plan: ________________________________________ Benefits offered: __________________________________ ____________________________________________________ Cost to company: __________________________________ 2. Kind of plan: ________________________________________ Benefits offered: __________________________________ ____________________________________________________ Cost to company: __________________________________ 3. Kind of plan: ________________________________________ Benefits offered: __________________________________ ____________________________________________________ Cost to company: __________________________________ Does your company have any unqualified plans? ______ Yes ______ No If yes, what kind of plans are they and how many employees participate? 1. Kind of plan: ___________________________________ Number of participants: _______________________ Cost to company: _____________________________ 2. Kind of plan: ___________________________________ Number of participants: _______________________ Cost to company: _____________________________ 3. Kind of plan: ___________________________________ Number of participants: _______________________ Cost to company: _____________________________ Are any of the company's qualified plans "top heavy?" ______ Yes ______ No Financial Information Current valuation, as of _______________: $________________ Who provided the valuation of your company? __________________ ____________________________________________________________ Retained earnings, as of ______________: $_________________ Why Do You Want To Create An ESOP? ______ To motivate employees ______ To convert current profit-sharing plan, accounted for as an expense ______ To obtain working capital ______ To refinance existing debt ______ To increase cash flow by creating tax deductions ______ To pass control of the business ______ To aid in estate planning ______ To guard against corporate takeovers ______ Other Please describe: ______________________________ |
Find the Right Attorney for Your Stock Option Plan
Offering stock options is a great way to attract top talent to a startup that has yet to make a profit, as it directly rewards their effort in building the company. Find the right business and commercial law attorney near you for professional assistance.
See Basic Terms for Shareholders and Investors for more information.
FindLaw will earn a commission if you purchase business formation products through these affiliate links.
Meet FindLaw's trusted partner LegalZoom, an industry leader in online business formations
Kickstart your LLC in minutes!
Join the millions who launched their businesses with LegalZoom.
LLC plans start at $0 + state fees.
Prefer to work with a lawyer?
Stay up-to-date with how the law affects your life

Learn more about FindLaw’s newsletters, including our terms of use and privacy policy.