Stock option plan

Description

• The stock option plan is an essential document for a corporation wishing to grant or offer a worker options to purchase shares in the corporation that employs them or in one of the of the corporation's subsidiaries or of a legal person controlled by the corporation or by any subsidiary of this corporation.
• The purpose of the plan for a corporation is to attract, retain and motivate its employees and workers and thus promote its interests by giving them the opportunity to acquire shares through the granting of stock options.
• Options may also be offered to directors and officers of the corporation.
• The stock option plan enables to fix in advance the acquisition price of the shares, the class and number of shares that may be purchased by the employee or worker, as well as define the exercise period of an option.
• Thus, options granted under such a plan provide a financial benefit to any employee of the corporation who becomes a beneficiary of the plan since the purchase price of the shares is fixed in advance and the value of the shares would likely have increased considerably by the time the beneficiary exercises the options granted to purchase the corporation's shares. It should be noted, however, that the acquisition of the shares may have tax consequences for the beneficiary.
• Since the beneficiary of options will become a shareholder of the corporation when he or she exercises his or her options, it would be relevant and beneficial for the corporation to sign a shareholders agreement which will govern certain situations and events experienced by shareholders, such as death, for example.

• For a plan with more complex conditions, contact  .

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