Employee Share Option Plans

The ultimate drafting of the plan requires consideration of commercial, human resource, accounting, legal and taxation issues.

The design of the plan can have material taxation implications for employees which can ultimately impact on the success of the underlying strategy.

We have set out below a high level overview of an employee option plan.

The grant of an option provides the employee with an opportunity to acquire a share at specified times by paying the exercise price.

There is a time limit by which this exercise price must be paid as set out in the Employee Share Option Plan Rules.

The Government has announced proposed changes to the taxation legislation regarding Employee Share Option Plans.

These changes will apply from 1 July 2009.

Our website will be updated when the legislation is given royal assent.