Stock Option Plan for Employees & Advisors

Talented employees and advisors will expect options in a technology venture. An "incentive stock option plan" can deliver options to employees with very favorable tax treatment for the employees. Likewise, advisors that help launch the venture at a time when cash flow is critical will be properly incented to help the company succeed with options. Using a written option plan for advisors can increase the available exemptions for a company to the requirement that the sale of all securities be registered. In some instances, a "phantom stock option plan" is more appropriate. In some scenarios, a phantom plan delivers similar economic benefits to an "incentive stock option plan" without creating additional owners of the company.