Stock option contract

Description

• A stock option contract is a form of share-based compensation that gives an employee or director of the company, or one of its subsidiaries, the right to purchase, at a predetermined price (the option exercise price), a specific number of shares in the company during a predetermined period of time, and up to a specified date, which is the option expiry date. These shares may be common or preferred.
• Why not offer your employees the chance to become shareholders in your company? In a competitive job market, a stock option plan is a form of employee benefit and a way of winning the loyalty of your key employees.
• By retaining your key employees and aligning their interests with those of the company, you not only foster their commitment, but also the sustainable growth and long-term profitability of your business.
• This is a form of share-based compensation arrangement designed to remunerate, retain and attract employees, or to compensate directors and other service providers.
• An approach designed to create a strong link between company performance and employee remuneration, encouraging them to contribute actively to overall success.
• Through the acquisition of shares in the company, beneficiaries will have a genuine stake in the growth of the company or its subsidiaries, which will further motivate them in the performance of their duties and functions, and contribute to the profitability of the company or its subsidiaries.
• Since a beneficiary will become a shareholder of the company if he or she exercises his or her options, it would be advantageous for the company to adopt a shareholders' agreement to govern certain situations experienced by shareholders, such as death, for example. This ensures that all shareholders are protected and that the company's interests are safeguarded in all circumstances.

• This document meets the needs of SMEs for a relatively simple stock option agreement, and requires that the company has already adopted astock option plan.
• For further legal information on stock corporations, please consult ourlegal FAQ.

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