ΠΕΡΙΓΡΑΦΗ

This course offers a practical, Cyprus-focused introduction to designing and implementing employee share schemes for private companies. Participants will explore why share plans are effective tools for retention and growth, and how different structures—such as options, restricted shares, growth shares, and phantom plans—operate in practice. 

The course explains the corporate law foundations under Cap. 113, the interaction with employment law, and the treatment of leavers, control rights, and exits. It also covers valuation, tax, payroll, and filing requirements, equipping directors, HR professionals, and advisors with the knowledge to structure compliant, commercially sound, and dispute-resistant share schemes.

ΣΕ ΠΟΙΟΥΣ ΑΠΕΥΘΥΝΕΤΑΙ

• Lawyers
• Corporate administrators
• Accountants
• HR and finance managers
• Founders, Directors and Managers of Cyprus private companies
• Directors and Partners

ΠΕΡΙΣΣΟΤΕΡΕΣ ΠΛΗΡΟΦΟΡΙΕΣ

Course content

Module 1 – Why Share Schemes for Private Companies

• The strategic role of employee share schemes in Cyprus SMEs and growth companies.
• Retention and motivation compared with salary and bonus alternatives.
• Overview of scheme types suitable for private Ltds: Share option plans (fixed exercise price, time-based or performance-based vesting - Restricted shares with forfeiture on leaving - Growth shares with hurdle values - Phantom share arrangements (cash-settled).
• The Cyprus Reality

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Module 2 – Corporate Law Backbone under Cap. 113

• Articles of Association review: what must exist before granting options.
• Authority to allot shares: board versus shareholder approvals.
• Authorised share capital and steps to increase it.
• Capital maintenance rules in relation to these schemes
• Private company member limit how this interacts with these schemes
• Pre-emption in private companies: contractual rights in Articles or shareholders’ agreements, methods of waiver.
• Practical drafting of ordinary and special resolutions.
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Module 3 – Financial Assistance and Employee Trusts

• Section 53 Cap. 113- Lawful loans to employees for acquisition of fully paid shares.
• Using a trustee structure to hold shares on behalf of employees.
• Drafting board papers and resolutions to justify financial assistance within the exception.
• Risks if resolutions are incomplete or improperly minuted

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Module 4 - Employment Law Interaction and Leaver Design

• Are share options part of remuneration under Cyprus law.
• Effect of redundancy, resignation, dismissal, retirement on vested and unvested awards.
• Good leaver and bad leaver definitions in contracts and scheme rules.
• Proportionality and fairness to avoid challenges.
• Contractual enforceability: how Cap. 149 applies to option agreements.
• Case study: sample leaver dispute and how the outcome depends on drafting

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Module 5 – Structuring Vesting, Transfers, and Control Rights

• Vesting structures: time-based, milestone-based, performance-linked.
• Lock-ins, restrictions on transfers, and how to embed them in Articles.
• Treatment of employee shares in drag-along and tag-along scenarios.
• Ensuring minority employees cannot block exits.
• Exit provisions: treatment of shares on sale, merger, or liquidation in a private Ltd context

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Module 6 – Drafting the Documents and Filings

• Core plan rules: eligibility, grant process, vesting, exercise, termination, amendment.
• Individual grant or option agreements: award size, price, vesting, posttermination exercise.
• Aligning Articles with plan rules: mandatory transfer clauses, creation of new share classes if needed.
• Resolutions: increasing share capital, approving the scheme, granting options.
• Filings: HE12 Return of Allotment, updating registers, issuing share certificates.
• Maintaining auditready records

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Module 7 – Valuation and Pricing Mechanics

• Setting exercise prices: nominal value requirement, market value, independent expert valuation.
• Buy-back pricing on exit or leaving: formula versus fair value determination.
• Role of auditors or independent valuers.
• Avoiding penalty clauses and unconscionable discounts.
• Drafting valuation clauses that withstand challenge.
• Worked examples: good leaver vs bad leaver pricing

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Module 8 – Practical Tax and Payroll Touchpoints

• Income Tax Law framework: grant not taxed, exercise as the taxable event.
• Calculation of taxable benefit: market value minus exercise price.
• Employer obligations: PAYE withholding, social insurance, IR7 reporting.
• Cashless exercise and sell-to-cover arrangements.
• Post-exercise treatment: dividends (SDC vs Non-Dom exemption), no Cyprus capital gains tax except real-estate-linked companies.
• Brief note on IFRS 2 for awareness