Who should use an employee share option plan
An option plan is an effective way of involving key employees, particularly in technology companies, in start-ups and in companies at a growth stage. Instead of raising salaries, options give employees a share in the future profits of the company. This works where the team believes in the direction of development and wants to take part in it.
What the plan governs
The plan sets out how many shares or stocks may be awarded to employees, at what price they may acquire them (the exercise price) and on what schedule they acquire the right to do so (vesting). The plan also governs what happens to the options if an employee leaves the company or if the company is sold. For small teams the plan can remain simple; for companies preparing for an IPO it becomes more advanced, with additional protection for investors.
Documentation and registration side
Putting the plan in place usually touches the articles of association and the capital structure, so the documentation goes hand in hand with shareholder resolutions and filings with the National Court Register (Krajowy Rejestr Sądowy, KRS). The tax position of the employee is a separate matter and we flag it at the structuring stage, so that the design of the plan is discussed together with its tax consequences rather than after signature.