ESOP Grant Letter

Date: [DD-MM-YYYY]

To: [Employee Name] [Address] PAN: [ABCDE1234F]

Dear [First Name],

We are pleased to grant you an option to purchase equity shares of [Company Name] Private Limited ("Company") under the [Company Name] Employee Stock Option Plan, [Year] ("ESOP").

This Grant Letter, together with the ESOP and the Grant Acknowledgement at Annexure A, constitutes the terms of your stock options.

1. Grant details

| Item | Detail | |---|---| | Number of options granted | [X] options | | Exercise price per share | ₹[X] (face value: ₹10) | | Grant date | [DD-MM-YYYY] | | Vesting commencement date | [DD-MM-YYYY] | | Total vesting period | 48 months | | Cliff | 12 months (25% vests on first anniversary) | | Post-cliff vesting | 36 equal monthly instalments | | Exercise window after vesting | Up to 10 years from Grant Date | | Exercise window on resignation | 90 days post last working day (subject to clause 5) |

2. Vesting

Subject to your continued employment, options shall vest as follows:

• Months 1–12 — no vesting.
• Month 12 (cliff) — 25% (i.e. [X] options) vest in one tranche.
• Months 13–48 — the remaining 75% vests in 36 equal monthly tranches of [X] options each.

3. Exercise

You may exercise vested options by serving an Exercise Notice on the Company together with:

• the exercise price (₹[X] × number of options exercised); and
• applicable perquisite tax under section 17(2) of the Income-tax Act, 1961.

Shares allotted on exercise shall rank pari passu with existing equity shares.

4. Tax treatment

• At exercise — the difference between the fair market value (FMV) on exercise date and the exercise price is taxed as a perquisite in your hands. The Company shall withhold tax at source and adjust it against your salary.
• At sale — the difference between sale consideration and FMV at exercise is taxed as capital gains. Holding period is computed from the allotment date.

5. Termination

| Reason for exit | What happens to vested options | What happens to unvested options | |---|---|---| | Resignation in good standing | Exercise within 90 days, else lapse | Lapse | | Termination for cause | All options (vested and unvested) lapse | Lapse | | Death or permanent disability | Fully vested; exercisable by legal heir within 12 months | Vested in full immediately |

6. Confidentiality

You agree to treat the existence and details of this Grant as confidential, save for disclosure to immediate family, tax advisors, or as required by law.

7. Acceptance

Please sign and return the Grant Acknowledgement at Annexure A within 30 days, failing which the grant lapses.

Welcome to the cap table.

For and on behalf of [Company Name] Private Limited,

_________________ [Authorised Signatory] Designation: [CEO / Director]

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Annexure A — Grant Acknowledgement

I, [Employee Name], confirm that I have read, understood, and accept the terms of this Grant Letter and the [Company Name] Employee Stock Option Plan, [Year].

Signature: ____________

Date: ____________