Share Option Staff Agreement Review — Guide

Share option staff agreement review for Irish employers

Share options for Irish staff sit at the intersection of employment law, company law, and Revenue tax treatment — and most off-the-shelf templates get at least one of those three wrong. This review takes your draft (or a market template you have downloaded) and aligns it to current Irish practice: KEEP-eligible vs unapproved options, vesting and cliff structures, leaver provisions, change-of-control treatment, and the Revenue documentation that goes with each route.

What is included

• solicitor-handled review of your share option agreement against current Irish employment and company-law practice.
• Mark-up identifying terms that are unenforceable, ambiguous, or out of step with Irish staff expectations.
• KEEP vs unapproved options decision support, with the Revenue tax position called out for each route.
• Vesting, cliff, leaver, and change-of-control commentary tailored to your fact pattern.
• Plain-English notes you can hand to your finance lead, HR lead, or shareholders before issuing the option grants.
• One round of follow-up questions by email after delivery.

Who this is for

Irish startups and SMEs preparing to issue share options to their first three to twenty senior hires. Also for HR managers and finance leads inheriting an option scheme from a previous adviser and wanting an independent review before the next grant cycle.

Process

1. Pay the online. You will receive a short intake form by email immediately.
2. Return the form together with your draft agreement and any prior board approvals or Revenue correspondence.
3. We deliver the marked-up review and notes once we receive the materials.
4. Use the email follow-up to clarify any open questions before you issue the grants.

Related services

• Employee share option scheme setup (full bespoke build)
• Cap table legal health check (review your full equity stack)
• Founder shareholders agreement (Ireland)
• How to set up a KEEP scheme in Ireland (long-form guide)

Frequently asked questions

What is the difference between KEEP options and unapproved options in Ireland?

KEEP (Key Employee Engagement Programme) options are an Irish Revenue-approved scheme with significant tax advantages — gains are taxed at CGT rates rather than as employment income, provided the strict KEEP eligibility criteria are met (qualifying company, qualifying employee, exercise window, holding requirements). Unapproved options are simpler to grant but the gain on exercise is taxed as employment income at marginal rates plus PRSI and USC. The choice depends on whether the company qualifies for KEEP and whether the staff value the deferred-tax benefit enough to accept the additional restrictions.

What is a typical vesting schedule for Irish staff?

The most common pattern is four-year monthly vesting with a one-year cliff. The cliff means the option-holder vests nothing in the first year and twenty-five per cent on the first anniversary; the remaining seventy-five per cent then vests monthly over years two to four. Some early-stage Irish startups use three-year vesting with a six-month cliff to align better with staff expectations in a smaller company. Avoid sub-twelve-month cliffs unless you are willing to accept higher attrition.

What happens to options when an employee leaves?

A well-drafted Irish option agreement distinguishes between good leavers (death, disability, redundancy, mutual termination) and bad leavers (resignation in early period, dismissal for cause). Good leavers typically retain vested options to be exercised within 90 days. Bad leavers typically forfeit unvested options and have a shorter window (often 30 days) to exercise vested options. The default position in many off-the-shelf templates favours the option-holder, which can be expensive when staff turn over.

Do I need shareholder approval to issue share options?

In most Irish private companies, share option issuances require board approval and, depending on the constitution, shareholder approval. The constitution and any existing shareholders agreement should be checked before any option grant — issuing options outside the authorised pool, or in a way that conflicts with pre-emption rights, can invalidate the grant.

Can I issue options to non-employee contractors?

Yes, but the Revenue tax treatment is different. Contractor option grants do not qualify for KEEP and are taxed as miscellaneous income on exercise. There may also be VAT implications. We recommend a separate review for contractor option packages.

What is change-of-control treatment and why does it matter?

Change-of-control provisions determine what happens to options on a sale, IPO, or majority change of ownership. Common patterns include accelerated vesting (all unvested options vest immediately), single-trigger acceleration (vesting accelerates only on termination after the change), or no acceleration. The right pattern depends on whether you want to retain the team through the transaction or whether the team has earned an immediate exit.

How long does it take to issue options once the agreement is approved?

After the option agreement is reviewed and signed, the actual grants typically take one to two weeks: board resolution, individual option grant letters, exercise of any required pre-emption waivers, update to the cap table and company register. The bottleneck is usually scheduling the board meeting rather than the legal work.

Need ongoing legal support?

If your situation is more complex than this scope — multiple investors, multiple share classes, contested commercial terms — we can scope a tailored engagement. Email hello@onlinelegalservices.ie with a short summary and we will respond with options.

If you would like to be told when solicitor services are available again on this site, you can join our no-fee waiting list. To instruct a solicitor now, use the Law Society of Ireland’s Find a Solicitor directory.