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A Stock Option Agreement gives employees the right to buy company shares at a fixed price within a specific timeframe. Under Philippine corporate law, these agreements help startups and growing companies attract and keep talented staff by offering them a chance to become partial owners of the business.

The agreement spells out important details like the strike price (how much you'll pay per share), when you can exercise your options, and what happens if you leave the company. It must comply with Philippine Securities and Exchange Commission rules and typically includes vesting schedules that encourage long-term commitment - often spreading the options over 3-5 years of continued employment.

Stock Option Agreements become essential when your Philippine company needs to attract top talent without spending excessive cash. They're particularly valuable for startups and high-growth companies competing against larger firms for skilled employees, especially in tech, finance, and professional services sectors.

Use these agreements during key recruitment phases or when creating employee retention programs. The timing often aligns with funding rounds, expansion plans, or when preparing for an IPO. Many Philippine companies implement option plans after their Series A funding or when shifting from family-owned to professional management structures to align employee interests with company growth.

• Option Grant Agreement: Basic form used for initial stock option grants to employees, featuring standard vesting schedules and exercise terms.
• Employee Share Option Agreement: More comprehensive version with detailed performance conditions and protections for both employer and employee.
• Option To Purchase Shares Agreement: Specialized agreement for non-employee stakeholders like consultants or strategic partners, with flexible exercise periods and transfer restrictions.

• Company Board and Officers: Approve and implement the Stock Option Agreement program, set terms, and ensure SEC compliance.
• HR Managers: Administer the program, explain terms to employees, and track vesting schedules.
• Employees/Recipients: Review, accept, and exercise options according to vesting schedules and company policies.
• Corporate Lawyers: Draft agreements, ensure compliance with Philippine securities laws, and handle regulatory filings.
• Company Secretary: Maintains option records, updates share registers, and processes option exercises.

• Company Details: Gather articles of incorporation, latest financial statements, and current share capitalization structure.
• Option Terms: Define exercise price, vesting schedule, and total shares allocated to the option pool.
• Board Approval: Secure board resolution authorizing the stock option program and its key terms.
• SEC Compliance: Check current Philippine Securities regulations for required disclosures and filing requirements.
• Recipient Information: Collect employment details, tax identification, and banking information for option holders.
• Documentation Platform: Use our automated system to generate a compliant Stock Option Agreement that includes all required elements.

• Grant Details: Number of shares, exercise price, and option term clearly stated.
• Vesting Schedule: Detailed timeline of when options become exercisable, including cliff period if any.
• Exercise Terms: Process and conditions for converting options into shares, payment methods.
• Termination Provisions: Rights and obligations upon employment end or company sale.
• Securities Compliance: Required SEC disclosures and Philippine regulatory statements.
• Rights and Restrictions: Voting rights, transfer limitations, and shareholder agreements.
• Tax Implications: Clear statement of tax obligations under Philippine law.

A Stock Option Agreement differs significantly from a Stock Purchase Agreement in several key aspects under Philippine law. While both deal with company shares, they serve distinct purposes and operate under different timeframes.

• Timing of Transfer: Stock Option Agreements grant future rights to purchase shares at a preset price, while Stock Purchase Agreements facilitate immediate share transfers.
• Price Structure: Options typically offer below-market prices fixed at grant date, whereas Purchase Agreements reflect current market value or negotiated prices.
• Vesting Requirements: Option agreements usually include vesting periods and performance conditions; Purchase Agreements execute immediate, unconditional transfers.
• Target Users: Options primarily serve as employee incentives, while Purchase Agreements commonly facilitate investor transactions or business acquisitions.
• SEC Compliance: Different regulatory requirements apply - options need ongoing compliance with Philippine securities laws, Purchase Agreements require one-time transaction approval.