Plan design
Choice of beneficiary, quantum, exercise price, exercise period, continued-service or performance conditions. Coordination with the financing strategy and the cap table.
→ Corporate · Sub-expertise
Share subscription warrants (bons de souscription d'actions, BSA) are the go-to instrument for giving third parties to the company — advisers, partners, service providers, investors — an equity interest, without resorting to schemes reserved for employees. We design BSA plans tailored to the beneficiary's profile, the target valuation and the cap-table strategy.
→ What we cover
Choice of beneficiary, quantum, exercise price, exercise period, continued-service or performance conditions. Coordination with the financing strategy and the cap table.
Corporate resolutions (extraordinary general meeting authorization, issuance decision), drafting of the issuance agreement and the exercise terms, keeping of the warrant register.
Vesting (gradual acquisition), cliff, continued-service conditions, individual or collective performance conditions, triggers linked to an event (sale, IPO).
Determination of the exercise price at fair value (Black-Scholes or other method), taking into account future dilution and the beneficiary's tax thresholds.
Management of early-exercise conditions upon a sale or IPO, coordination with the drag-along and tag-along clauses of the agreement.
Monitoring of the register, management of exercises, updating of the cap table, capital-increase formalities upon each exercise.
→ Our approach
01
Identification of the beneficiary and the objective (incentivizing an adviser, remunerating a strategic partner, sweet equity for an investor), definition of the quantum and the key parameters.
02
Plan design: exercise price, vesting, performance conditions, coordination with the shareholders' agreement and the other instruments in place.
03
Drafting of the issuance agreement, holding of the authorizing extraordinary general meeting, issuance decision, registry formalities and entry in the warrant register.
04
Administrative management of the plan, monitoring of the vesting conditions, handling of exercises and the corresponding capital-increase formalities.
→ Who we help
Award of warrants to a strategic adviser with two-year vesting in return for operational support, to align their interests with those of the company without cash remuneration.
Warrants awarded to an investor in addition to their capital subscription, conditional on achieving financial objectives or on outperformance, to boost their IRR.
Warrants in place of part of a service provider's fees (agency, consulting firm) to secure a long-term collaboration and preserve cash.
Warrants reserved for a founder selling part of their shares, allowing them to re-enter the capital in the event of future outperformance.
→ Q&A
BSA are open to everyone (employees, executives, third parties) with an exercise price and ordinary tax treatment. BSPCE are reserved for employees and executives of eligible companies (young businesses) with a specific advantageous tax regime. The choice depends on the beneficiary and on the company's eligibility.
The exercise price must reflect the fair value of the shares at the issuance date, failing which it may be reclassified (benefit in kind, abuse of law). Generally, the most recent known valuation (a recent funding round) or a valuation method (DCF, multiples) is used.
In principle yes, but the issuance agreement may provide for a temporary or permanent restriction on transfer, or prior approval. In practice, BSA are often non-transferable to preserve the intuitu personae nature of the award.
The issuance agreement may provide for automatic early exercise upon a full sale or an IPO, to allow the beneficiary to participate in the liquidity. Failing that, they may lose their warrants if these are unvested or are not exercised in time.
→ Go further
Let's talk. We respond within one business day to qualify your transaction and direct you to the firm's most suitable lawyer.
Get in touch→