Employee shareholding

Implementing a BSPCE Allocation Plan in 4 Steps

BSPCE plan in 4 steps: shareholders' meeting, drafting the plan rules, signing warrants and updating the register. Full checklist.

Ambre Devis
Jun 29, 2026

💡 Warning

This article is the result of automatic translation, the accuracy and fidelity of the translation are therefore not guaranteed. To consult the original version of this article, in French, click here.

 

As equity incentive tools, founder stock option plans (BSPCE) are widely used by growing companies to retain and motivate their teams.

In practice, how do you issue and grant BSPCEs? What formalities must be completed? Here are the four essential steps to follow to implement your BSPCE grant plan.

 

💡 Key takeaways

  • The grant decision must be prepared with approval of the grant by the shareholders, followed by an extraordinary general meeting. (BOFIP of 27 March 2024)

  • The documentation — plan, grant letter, mini-shareholders’ agreement — is key: it sets out the practical rules, such as vesting, departure, exercise, etc.

  • A sensitive point to secure is the setting of the exercise price and its justification, particularly in the case of a discount. (BOFIP of 27 March 2024)

  • In case of doubt on any tax point — price, discount, beneficiary eligibility, treatment of an interim transaction — it is essential to seek support from a lawyer.

 

1. Consult with your shareholders

Remember that BSPCEs are subscription options that grant the beneficiary the right to subscribe for shares in the issuing company. Thus, upon subscribing for the shares to which the BSPCE entitle the holder, the beneficiary may become a shareholder and acquire the rights attached to that status (such as voting rights or the right to dividends).

The decision to grant such options falls within the exclusive authority of the company’s extraordinary general meeting. Indeed, as stated in Article L228-92 of the Commercial Code, the decision to issue securities granting access to the capital must first be authorized by the shareholders at an extraordinary general meeting.

 

Consequently, the allocation process must begin with a consultation of your shareholders through an extraordinary general meeting or a written consultation (if your articles of incorporation permit it), in order to obtain their approval.

Shareholder authorization must cover several distinct points:

  1. The issuance of BSPCE warrants;
  2. The issuance of shares resulting from the exercise of the BSPCE and the resulting capital increase;
  3. The waiver by current shareholders of their preemptive subscription rights with respect to the BSPCE (Article L225-138 I of the Commercial Code).

To allow your shareholders to vote on these various items, you must prepare two reports:

1️⃣ A report from the governing body (Article R225-113 of the Commercial Code) detailing:

  • The reasons for the proposed capital increase and its maximum amount;
  • The company’s business performance during the relevant fiscal year;
  • The terms and conditions for the allocation of BSPCE warrants;
  • The exercise period for the warrants.

2️⃣ A special report by the statutory auditor (Article R225-115 of the Commercial Code ) setting forth the auditor’s opinion on:

  • The proposal to waive preemptive rights;
  • The criteria used to calculate the exercise price;
  • The impact of the issuance on the position of the company’s current shareholders.

The shareholder consultation also provides an opportunity to vote on delegating authority to the management body to implement the allocation plan.

This delegation (also known as a “pool”) may cover:

  1. The characteristics of the BSPCE warrants (subscription terms, etc.);
  2. The exercise price of the allocated warrants;
  3. The list of beneficiaries;
  4. The shares allocated to each beneficiary.

Pursuant toArticle L225-138 III of the Commercial Code, the issuance must take place within 18 months of the allocation decision made at the Extraordinary General Meeting.

 

2. Draft your model documents

Once the delegation has been approved, you must focus on drafting the legal documentation related to the allocation of BSPCEs.

To prepare for the allocation, three types of documents are required:

1️⃣ An allocation plan 

Also known as the “Plan Rules” or “Terms and Conditions,” this plan must detail the terms of the grant, including:

  • The characteristics of the BSPCE (type and number of underlying shares to which it entitles the holder, validity period, etc.);
  • The exercise schedule;
  • The plan in the event of an employee’s departure (e.g., resignation, termination, or retirement).

2️⃣ A grant letter 

While the grant plan applies to all plan beneficiaries, the grant letter details the provisions specific to each beneficiary.

In particular, the letter specifies the beneficiary’s allocated share as part of their grant, the vesting start date, and the exercise price of the BSPCE.

3️⃣ A contractual commitment (or mini-agreement) 

Upon exercising their BSPCE options, the beneficiary becomes a shareholder of the company. It is therefore important that, at the time of grant, the beneficiary agree to the terms of the shareholders’ agreement entered into between the company’s founders and investors.

This ensures that the beneficiary accepts the terms negotiated with your investors (tag-along, drag-along, or preferential liquidation rights).

It is also common to include in the mini-agreement a commitment by the beneficiary to sell their shares in the event of their departure from the company. This allows the company to avoid, in the event of a contentious departure, ending up with a hostile shareholder on its capital structure.

Given the importance of these provisions and the implications they may have for your company’s shareholder structure, it is strongly recommended that you seek legal counsel when drafting this documentation.

 

3. Compile a list of your BSPCE beneficiaries

The next step in the allocation process is to draw up a list of share recipients and determine the number of warrants to be distributed to each.

This list must be drawn up in accordance with the company’s allocation policy. While some companies choose to allocate BSPCE warrants to all employees, others prefer to reserve the allocation for a specific category of employees (top management, key personnel, etc.).

It is therefore important to keep in mind the reasons that led you to implement your allocation plan when making such a decision and to involve all decision-makers within the company in this process.

You must also determine the allocation amounts: will they be based on salary, job type, or seniority?

Again, the answer will depend on your grant policy and the objectives you have set for yourself.

 

4. Execute Your Allocations 

Once you have finalized the list of beneficiaries and the quantities to be granted, all that remains is to have each beneficiary sign the legal documentation to formalize the grant. The stock options are then distributed in accordance with the terms of the plan.

When you reach this stage, keep in mind that many employees have very little knowledge of the subject and may not fully realize the scope of the opportunity being offered to them. It is therefore important that you communicate with them to explain their rights as well as the terms of the grant.

You can then formalize this moment by bringing your employees together to send a positive message and get them on board with your vision to ensure the company’s growth.

It is also possible to prioritize one-on-one meetings with each beneficiary.

To organize such a communication effort, don’t hesitate to involve your human resources manager, who, thanks to their close relationship with employees and their experience, can be a great help!

 

What’s next?

Once your BSPCE grants have been issued, you must monitor the vesting period, manage exercise requests, and handle employee departures when they occur.

At Equify, we offer to support you throughout the BSPCE grant process. Specifically, we assist you with:

  • Organizing your grant plan (setting up the terms for issuing BSPCE options, drafting customized legal documentation, and facilitating electronic signatures);
  • Managing events following the grant of BSPCE options (exercise and subscription of underlying shares, employee departures, etc.).

 

Sources

1. Article L225-138 I of the French Commercial Code

2. Article L225-138 III of the Commercial Code

3. Article R225-113 of the Commercial Code

4.Article R225-115 of the Commercial Code

5. BOFIP of March 27, 2024

6. Article 163 bis G of the Tax Code

7. Article L228-92 of the Commercial Code

 

What documents should be prepared for a BSPCE grant, and when?

In practice, the following documents are typically involved: 

  • The report of the management body: essential to explain the reasons for the issuance to the extraordinary general meeting.
  • The minutes of the extraordinary general meeting: authorisation of the issuance, waiver of preferential subscription rights — Droit Préférentiel de Souscription / DPS — and delegation of authority to the Board.
  • The Plan Rules: the framework document defining the vesting conditions, leaver provisions and exercise terms.
  • The Grant Letter: the individual contractual document specifying the number of warrants, the exercise price and the specific vesting schedule.
  • The subscription form and accession to the shareholders’ agreement: to anticipate the beneficiary’s entry into the share capital.

The key objective is to avoid inconsistencies between these documents.

What is the right level of information to provide in communications to beneficiaries?

Structured communication should cover:
 
  • Vesting and cliff mechanics: specify whether vesting is purely time-based or linked to performance KPIs.
  • Exit taxation: distinguish between the subscription gain and the capital gain, and flag the impact of length of service — the 3-year threshold — on the tax rate.
  • Exercise windows: clarify liquidity events — exits — versus early exercise.

How can the exercise price — or strike price — be secured?

This is the main point of attention in the event of a tax audit. The exercise price must reflect the real value of the shares on the grant date.
 
  • In the event of a recent fundraising round: the price should be aligned with the price paid by investors, unless an illiquidity discount can be justified — generally accepted between 20% and 50% — due to the absence of preferential rights attached to the ordinary shares resulting from the BSPCE.
  • In the event of a valuation report: it is essential to keep an internal valuation note or an expert report justifying the method used — DCF, market multiples or transaction multiples.

What are the subtleties of Good Leaver / Bad Leaver clauses?

These clauses are designed to ensure that only active contributors — or those who have loyally fulfilled their role — retain an interest in the share capital.

 

1. Good Leaver: preserving vested rights

  • Good Leaver status applies by default to all departure situations that are not characterised as “misconduct”. It recognises that the contributor has “earned” their shares.
  • Scope: it generally covers resignation after a minimum service period, dismissal for genuine and serious grounds without misconduct, incapacity, death or retirement.
  • Treatment of securities: the Good Leaver retains all warrants that have already vested as of the departure date. However, any remaining unvested warrants lapse.
  • Exercise nuance: being a Good Leaver gives the beneficiary the right to keep their gains, but often imposes a liquidity constraint: the beneficiary must decide whether to purchase the shares immediately — exercise — or wait for a future event, depending on what the plan rules provide.
 

2. Bad Leaver: the “sanction” and “clawback” mechanism

The Bad Leaver mechanism is designed to deter conduct that is detrimental to the company.
  • Scope: gross or wilful misconduct, breach of a non-compete clause, or premature resignation before a certain period, often referred to as the “cliff”.
  • Treatment of securities: it results in the immediate lapse of all warrants, whether vested or unvested. If the beneficiary already holds shares resulting from exercised BSPCE, the rules often provide for a forced sale undertaking in favour of the company or the founders, generally at nominal value — i.e. a price significantly below market value.

 

 
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