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32 Int'l Bus. Law. 155 (2004)
Stock Option Plans in France

handle is hein.journals/ibl32 and id is 157 raw text is: Stock Option Plans in France Philippe Desprbs and Foniques de Rostolan* Gide Loyyette Noue, Paris 5tcOk option plans were introduced into French law in 1970 in listed companies. The scope of stock option plans was subsequently broadened in 1987 to include unlisted companies and foreign plans. Stock option plans have become a very popular compensation tool since the mid-I 990s. In the aftermath of the bursting of the speculative bubble linked to the rise of the new technology sector, stock options proved to be an unprofitable investment vehicle for many holders. However, stock option plans remain a preferred motivational and retention tool for top executives and employees. 'This compensation tool, which gives a misleading impression of being easy to administer, conceals several major pitfalls from an employment, social security and tax law standpoint. First, this article will give an overview of the treatment of stock option plans under French law and, secondly, it will proceed to study the rules applying to stock options granted by a foreign parent company. Finally, it will discuss -the potentially problematic issues arising from the termination of an employment contract, where the employee has been granted stock options. Overview of the treatment of stock option plans under French law Under French law, two principal kinds of stock options may be granted, each with varying rules and social security and tax treatment: (1) stock options entitling the holder to subscribe for shares to be issued; and (2) stock options entitling the holder to purchase existing shares previously purchased by the company. The life cycle of stock options is marked by three main events: the grant of the options, the exercise of the options and the sale of the underlying shares. International Business Lawyer August 2004 di'm-111,;Se i I Ito enipjoN n1l111, - ovial s(-cljril and tax 1 m is' ues' a rkin 1rotn e lendi ng, 0 W ;tl Ild W.1 t i013 (11' ;1 I'01-0i I'll 104 -1, Old i0li pi af [it ('111pio N oes in a 1'ren11 su b6fia r

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