ESOP Trust Deed

What is ESOP Trust Deed ?
An ESOP (Employee Stock Ownership Plan) Trust Deed is a legal document that establishes the rules and guidelines for managing shares allocated to employees under an ESOP. This document outlines the responsibilities and powers of the trustees, the criteria for employee eligibility, the vesting schedules, and the methods for share allocation. It also defines the voting rights associated with the shares and the procedures for distributing shares or their value to employees upon specific events like retirement or resignation.
Features of ESOP Trust Deed
📜 Legal Document: ESOP Trust Deed is a legally binding document outlining the rules for managing shares.
👥 Beneficiaries: Specifies eligible employees who will benefit from the ESOP.
🕰️ Vesting Schedules: Defines the timeline for employees to gain ownership of allocated shares.
🗳️ Voting Rights: Describes the voting privileges associated with ESOP shares during company decisions.
💰 Distribution Rules: Outlines procedures for distributing shares or their value to employees upon certain events.
🏦 Funding Mechanism: Details how the trust will be funded, either through company contributions or borrowings.
📊 Valuation Methods: Specifies the methods used to value company shares held in the trust.
📝 Administrative Procedures: Outlines the administrative processes and compliance standards for trust management.
🏢 Company Contributions: Addresses how and when the company contributes shares to the trust.
🔄 Amendments and Termination: Defines conditions for amending the trust deed and circumstances under which the trust can be terminated.