ACoconut - ESOP Contract

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

Use Case Description

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

Actors

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

• Buyer, 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 information.

Precondition

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

Process Flow

Main Process Flow

• Seller creates new issuance of ESOP instrument;

• Seller deposits the issued token to the ESOP issuance;

• Buyers engages the ESOP issuance;

• Seller vests issued tokens according to the vesting schedule;

• Buyer can withdraw the issued token that is already vested.

Alternative Process Flow

• If seller 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 seller deposits the issued token;

• Active: The buyer engages the ESOP issuance;

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

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

• Complete not Engaged: No buyer engages in time;