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A Stock Option Plan lets Irish companies give their employees the right to buy company shares at a set price within a specific timeframe. These plans follow Revenue guidelines and the Companies Act 2014, offering a tax-efficient way to reward and retain key staff members.

Once approved by shareholders, the plan sets out clear rules about who can receive options, when they can exercise them, and what happens if someone leaves the company. Many Irish tech startups and growing businesses use these plans to compete for talent, especially when they can't match the salaries of larger corporations.

Consider implementing a Stock Option Plan when your Irish company needs to attract and retain top talent without increasing immediate cash costs. This works especially well for startups and scale-ups competing against larger employers, or when preparing for significant growth phases or potential IPOs.

The timing is right to create a plan when raising new investment rounds, launching major expansion projects, or facing key employee retention challenges. Many Irish tech companies introduce option plans early in their growth journey, as they help align employee interests with long-term company success while complying with Revenue's tax-efficient share scheme rules.

• Stock Option Agreement Private Company: The standard Irish private company Stock Option Plan, designed for unlisted businesses. It includes vesting schedules, exercise conditions, and tax-efficient structures under Revenue guidelines. Companies can customize key terms like vesting periods (typically 3-4 years), exercise price, and good/bad leaver provisions to match their needs.

• Company Directors & Board: Approve and oversee the Stock Option Plan, set key terms, and ensure compliance with Irish company law and Revenue requirements.
• HR Teams: Manage day-to-day administration, track vesting schedules, and communicate plan details to employees.
• Legal Counsel: Draft and review plan documents, ensuring alignment with Irish employment law and tax regulations.
• Eligible Employees: Receive and exercise options according to plan terms, often including executives, key staff, and new hires.
• Company Secretary: Maintains option registers, handles shareholder notifications, and ensures proper documentation.

• Company Details: Gather current share capital structure, existing shareholders' rights, and any pre-emptive rights provisions.
• Plan Parameters: Define option pool size, eligible employees, vesting schedules, and exercise price methodology.
• Board Approval: Secure board resolution authorizing the plan and its key terms.
• Revenue Compliance: Confirm alignment with Irish tax requirements for employee share schemes.
• Documentation: Use our platform to generate a legally sound Stock Option Plan, ensuring all mandatory elements are included and compliant with Irish law.

• Plan Administration: Clear rules on who manages the plan and their decision-making powers.
• Eligibility Criteria: Detailed terms defining who can receive options and under what conditions.
• Option Terms: Exercise price, vesting schedule, expiration dates, and exercise procedures.
• Good/Bad Leaver Provisions: What happens to options when employees leave voluntarily or are terminated.
• Tax Provisions: Compliance with Revenue requirements for qualifying share option schemes.
• Change Control: Rules governing option treatment during company sale, merger, or IPO.
• Shareholder Rights: Voting rights, dividend entitlements, and transfer restrictions on exercised shares.

A Stock Option Plan differs significantly from an Equity Incentive Plan in several key aspects, though both are used for employee compensation in Irish companies. Understanding these differences helps ensure you choose the right tool for your needs.

• Scope and Flexibility: Stock Option Plans focus specifically on share options, while Equity Incentive Plans can include multiple types of awards like restricted stock units, performance shares, and stock appreciation rights.
• Tax Treatment: Stock Option Plans typically align with specific Revenue guidelines for tax-qualified options, whereas Equity Incentive Plans may involve different tax considerations based on the various award types.
• Administration Complexity: Stock Option Plans generally have simpler administration requirements, focusing on option grants and exercises. Equity Incentive Plans require more complex tracking and management of diverse award types.
• Implementation Timeline: Stock Option Plans can be implemented more quickly, while Equity Incentive Plans often need more extensive setup due to their broader scope.