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A Stock Option Plan lets Danish companies give their employees the right to buy company shares at a set price in the future. These plans follow Denmark's strict securities laws and tax regulations, making them a valuable tool for attracting and keeping talented staff while aligning with Danish corporate governance rules.

Under Danish law, these plans must clearly outline the exercise price, vesting periods, and any performance conditions. Companies typically structure their plans to take advantage of favorable tax treatment under Section 7P of the Danish Tax Assessment Act, which can benefit both the employer and employees through lower tax rates on gains from exercised options.

A Stock Option Plan works best when your Danish company needs to attract top talent without spending immediate cash. It's particularly valuable for startups and growth companies that want to compete with larger firms for skilled employees while preserving capital for business development.

These plans prove especially effective during expansion phases or when preparing for future funding rounds. Danish tech companies often use them to attract international talent, while established firms implement them to retain key executives. The tax advantages under Danish law make them most beneficial when structured as qualified options under Section 7P, offering significant savings for both the company and employees.

• Stock Option Agreement Private Company: Core template for privately-held Danish companies, featuring customizable vesting schedules and exercise periods. Common variations include qualified plans under Section 7P tax rules (with favorable tax treatment), non-qualified plans (offering more flexibility), time-based vesting plans (tied to employment duration), and performance-based plans (linked to specific company or individual targets).

• Board of Directors: Approves and oversees the Stock Option Plan structure, ensuring compliance with Danish corporate law and shareholder interests
• HR Department: Manages day-to-day administration, tracks vesting schedules, and handles employee communications
• Legal Counsel: Drafts plan documents, ensures compliance with Danish securities laws and tax regulations
• Employees: Receive and exercise options according to vesting schedules and performance conditions
• Tax Advisors: Guide structuring of plans to optimize benefits under Section 7P and other Danish tax provisions

• Company Details: Gather current share structure, valuation data, and authorized share pool information
• Plan Parameters: Define total options available, exercise price, vesting schedule, and exercise periods
• Tax Structure: Determine if the plan qualifies under Section 7P for optimal Danish tax treatment
• Employee Criteria: List eligible participants, performance conditions, and termination rules
• Board Approval: Prepare board resolution documents authorizing the Stock Option Plan
• Documentation: Our platform generates compliant option agreements, ensuring all mandatory elements meet Danish legal requirements

• Plan Overview: Clear statement of purpose, total shares reserved, and option types offered
• Eligibility Terms: Detailed criteria for participation and allocation rules under Danish law
• Exercise Terms: Precise pricing formula, exercise periods, and payment methods
• Vesting Schedule: Specific timeframes and conditions for option vesting
• Tax Provisions: Section 7P compliance requirements and tax reporting obligations
• Termination Rules: Clear procedures for handling options upon employment end
• Administration Details: Board powers and plan management procedures
• Legal Framework: References to relevant Danish corporate and securities laws

A Stock Option Plan differs significantly from an Equity Incentive Plan in several key aspects under Danish law. While both documents deal with employee compensation through company ownership, they serve distinct purposes and have different structures.

• Scope and Flexibility: Stock Option Plans focus specifically on share purchase rights at preset prices, while Equity Incentive Plans can include various forms of equity compensation like restricted stock units (RSUs), phantom shares, and performance shares
• Tax Treatment: Stock Option Plans often align with Section 7P requirements for favorable tax treatment, whereas Equity Incentive Plans may involve different tax implications depending on the type of equity awards
• Administrative Complexity: Stock Option Plans typically have simpler administration requirements, focusing on vesting and exercise periods. Equity Incentive Plans require more complex tracking of multiple award types and performance metrics
• Implementation Timeline: Stock Option Plans usually follow standardized vesting schedules, while Equity Incentive Plans often involve varied timing based on different award types