Attracting and retaining talent is a fundamental step in the development of a company.
To do this, there are various profit-sharing solutions: BSPCE, stock-option, AGA or BSA. These employee shareholding devices indeed allow to involve more the actors of the company in its evolution.
Warrants (BSA) offer its holder the possibility of acquiring one or more shares at a fixed price, during a fixed period, and thus increase his participation in the company or enter the share capital.
What do BSA consist of? Who are the beneficiaries? What is their interest? We take stock of the warrants!
A share warrant is a financial instrument as defined in the Article L211-1 of the Monetary and Financial Code, and more specifically a security (Article L211-2 of the Monetary and Financial Code), issued by a corporation.
The legal regime for issuing BSA is thus governed by the rules applicable to securities (Article L228-91 and following of the Commercial Code).
This warrant gives its holder the right to purchase one or more shares at a determined exercise price and until a maturity date. Therefore, it is an optional title on existing or to be issued shares. Indeed, the holder of a BSA is not obligated to buy these shares. He is only allocated the shares in case of subscription and payment of the exercise price.
BSAs, BSPCEs and free share allocations (AGA) are all mechanisms designed to interest beneficiaries in the company's equity capital. Despite their common vocation, these employee shareholding mechanisms have major differences.
Introduced by the Finance Act for 2005, the allocation of free shares allows its beneficiary to become a shareholder of the company for free. In the context of a BSA, the holder only becomes a shareholder if he decides to acquire the shares at a preferential price.
As for the warrants to subscribe for business creator shares (BSPCE), they can only be allocated to the employees and corporate officers of the company. BSA beneficiaries can be both actors in the company and third parties to it.
The issuance of share subscription warrants is reserved for corporations: SA, SAS, SCA, whether listed or not. This is indeed what Article L228-91 paragraph 1 of the Commercial Code states: "corporations can issue securities giving access to capital or giving the right to the allocation of debt securities."
Furthermore, and in application of Article L228-92 paragraph 1 of the aforementioned Code, the extraordinary general meeting of shareholders is the only competent authority to authorize the issuance of BSAs.
The particularity of BSAs is that they are not exclusively reserved for employees and managers of the company. Indeed, third parties to the company can also benefit from these subscription warrants.
BSAs can thus be allocated to the following beneficiaries:
The BSA are accompanied by an exercise period during which the beneficiary can acquire the shares at a predetermined price. The exercise of warrants may also be subject to performance or presence requirements.
BSA holders benefit from a more or less long exercise period (a few months or several years) to subscribe to shares. There is no legal constraint in this regard.
In principle, the duration of the exercise period is determined according to the objectives pursued by the company: raising funds, rewarding employees... Generally, when the warrants are awarded to retain and motivate shareholders, the exercise period is spread over several years to offer more flexibility to the beneficiaries.
Like the deadline, the exercise price is freely determined.
When the BSA is intended to reward the actors of the company, the price can be set on the basis of a valuation of the company. Indeed, the BSA holder will only exercise his warrant if he believes that the valuation of the company has become higher than the exercise price.
In any case, the exercise price must be consistent with the real value of the awarding company, under penalty of tax reclassification as disguised salary.
As with the BSPCE, it is possible to condition the exercise of the BSA to certain requirements:
The mechanism of Warrants presents certain advantages both for the granting company and for the beneficiary.
Warrants allow the company to reward, motivate and retain the employees, managers and financial partners of the company. The goal is to encourage these individuals to perform and thus participate in the company's growth.
Warrants allow the holder to become a shareholder of the company without having to make a contribution. He thus benefits from a leverage effect when the exercise price is lower than the real value of the share.