ACoconut - ESOP Contract

A financial instrument that incentivizes employees and aligns employees' interests with company share performance.

Use Case Description

The system will allow makers to create new Employee Stock Option Plan (ESOP) issuances, and allow takers to engage existing ESOP issuance.

Actors

  • Maker, who is the asset seller of the ESOP issuance. Usually the Foundation who wants to incentivize employees;

  • Taker, who is the asset purchaser of the ESOP issuance. Usually the Foundation employee;

  • Timer Oracle, who is an external timer service provider that provides timing triggers to the NUTS Technology Platform.

Precondition

  • Financial Service Providers have created the ESOP instruments using the NUTS protocol;

Process Flow

Main Process Flow

  • Maker creates new issuance of ESOP instrument;

  • Maker deposits the issued token to the ESOP issuance;

  • Taker engages the ESOP issuance;

  • Maker vests issued tokens according to the vesting schedule. Taker can withdraw the issued token that is already vested;

  • When the vesting schedule ends, the issuance becomes complete engaged;

  • When the employee service ends before the vesting schedule due, the issuance becomes complete engaged.

Alternative Process Flow

  • If maker does not deposit the issued token in time, the issuance becomes unfunded;

  • If there is no engagement in time, the issuance completes with no engagement.

Issuance States

Below are the possible states of an ESOP contract:

  • Initiated: The ESOP issuance is created;

  • Engageable: The maker deposits the issued token;

  • Active: The taker engages the ESOP issuance;

  • Complete Engaged: The vesting schedule completes or the employee service ends;

  • Unfunded: The maker fails to deposit the issued token in time;

  • Complete not Engaged: No taker engages in time;