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    Our framework

    A plan your people understand, and that keeps working

    Every Sharesquare plan follows the same philosophy. Four principles keep the incentive fair to both sides, simple to explain and ready for the company you will be in five years.

    Why it matters

    Most plans fail quietly, not on paper

    A participation plan rarely fails because a document is wrong. It fails because it ends up in a drawer: signed once, explained once, then forgotten. People stop feeling it, and the board stops using it. The framework is built to avoid the three ways that happens.

    Four principles

    What every plan is built on

    01

    Balanced incentives

    A plan only works when both sides want it to succeed. The company needs room to keep growing, and participants need to trust that the reward is real and within reach.

    Continuity first

    A plan that weakens the company eventually pays out nothing to anyone. So the rules protect the company's future, without turning against the people in it.

    Room to decide, within limits

    The board keeps room to decide, for example on who receives a grant. That room has clear limits, so participants know the rules will not be bent against them.

    Carrot over stick

    The plan rewards the behaviour you want rather than punishing what you do not. Leaver rules exist, but they are the exception, not the tone of the plan.

    What this means for you

    Participants get a reward that motivates them, and the company keeps the protection it needs.

    02

    Simple to explain

    A plan exists to link effort to a financial reward. If that link is hard to follow, the motivation disappears. Simplicity is not a shortcut, it is what makes the plan work.

    A menu, not a blank page

    You choose from a focused set of tested options instead of answering questions you have never thought about. Fewer choices, fewer ways to get it wrong.

    Best practice built in

    Every option reflects what works in practice, so your time goes to the few choices that really matter for your company.

    Easy to run

    A plan that is hard to manage gets neglected. Running it year after year should take little effort.

    What this means for you

    You make a handful of meaningful choices, and your team understands what they have.

    03

    Built to evolve

    Nobody has a crystal ball. No plan can capture every scenario upfront, so you decide what matters today and adjust as the company grows.

    Postpone what you can

    Many decisions are better taken later, when you know more. That works because the plan sets out how decisions are made, so people can trust the process.

    Grows with the company

    New people, a bigger pool, a new valuation: the plan can be updated as the company changes, instead of being replaced.

    What this means for you

    You can launch without having every answer, and your plan does not freeze on the day it starts.

    04

    One source of truth

    A plan has three sides: the rules, the numbers and what participants see. When they drift apart, trust goes with them. In Sharesquare they come from the same choices.

    Rules and numbers in sync

    The calculations follow the rules you chose. Change a setting, and the numbers follow.

    Custom where it is safe

    Your own wishes are possible as long as they do not break the logic behind the calculations.

    Always visible to participants

    Participants do not depend on a document in a drawer. They see their grant, vesting and value in their own dashboard.

    What this means for you

    What the plan says, what the calculator shows and what participants see always match.

    Flexible in practice

    Not every decision belongs on day one

    Move through the life of a plan and see what you decide at each stage. Decisions you settled earlier stay in place, so you only decide what you need to, when you need to.

    Day one · Decide at this stage
    • Pool size and starting valuation
    • Incentive type: value growth, dividend right or both
    • Payout triggers and leaver rules
    • The first grants, each with their own vesting
    Already settled

    Nothing yet, this is where the plan starts.

    Not every decision belongs on day one

    • Launch (Day one): Pool size and starting valuation; Incentive type: value growth, dividend right or both; Payout triggers and leaver rules; The first grants, each with their own vesting
    • Every year (While the plan runs): Update the company valuation; New grants for new or high-performing people; Calculate the virtual dividend, when your plan includes one
    • Growth (When the company changes): Expand the pool when it runs out; Choose how the extra dilution is shared; Update the rules where needed
    • Payout (Exit or repurchase): Calculate each participant's payout; Apply each grant's own vesting, plus the leaver, hurdle and cap rules agreed earlier
    Clear boundaries

    What the framework is, and what it is not

    It is

    • The philosophy behind every Sharesquare plan
    • A focused set of tested choices, applied to your company
    • Rules, calculations and participant dashboard built from the same choices
    • Available for plans in the Netherlands, Germany and Bulgaria

    It is not

    • A blank template you fill in yourself
    • A one-off document that ends up in a drawer
    • A change in legal ownership: virtual shares leave your shareholder structure as it is
    • Legal, tax or financial advice

    FAQ

    Frequently asked questions

    About the framework behind every plan

    Can we change the plan after launch?+

    Yes. The plan is built to be updated as your company changes. Changes follow the decision-making process set out in the plan, so participants know how and when rules can change.

    Can we add our own wishes?+

    Where it is feasible, yes. Customisation is possible as long as it does not break the logic behind the calculations, because the rules, the calculators and the participant dashboard need to stay in sync.

    Why only a limited set of choices?+

    Because more options rarely lead to a better plan. A focused set built on best practice keeps the plan understandable for participants and saves you from weighing scenarios that may never happen.

    Which decisions do you need to make before launching a virtual share plan?+

    Only four: the size of the pool and the starting valuation, the incentive type (value growth as with share appreciation rights, a virtual dividend as a form of profit sharing, or both), the payout triggers and leaver rules, and the first grants, each with their own vesting. Everything else, such as new grants or a bigger pool, can wait until it becomes relevant.

    Why are leaver rules agreed at launch, not when someone leaves?+

    Because a departure is the worst moment to start negotiating. When the rules are clear from day one, for example the difference between a good leaver and a bad leaver, everyone knows what happens to the vested and unvested part of a grant. That keeps the plan fair for the person leaving and predictable for the company.

    What are hurdle and cap rules in a virtual share plan?+

    A hurdle is a threshold value above which the payout starts, so participants share in the growth beyond that point. A cap sets a maximum on what a grant can pay out. Both are agreed upfront and applied automatically when payouts are calculated, together with each grant's own vesting.

    What happens to the plan when the company grows or raises funding?+

    The plan grows with it. You update the company valuation, expand the pool when it runs out and choose how the extra dilution is shared. Decisions you made earlier stay in place, so participants keep a clear view of what their grant is worth.

    What happens to virtual shares if only part of the company is sold?+

    That depends on the plan rules. In a partial sale, participants can for example share pro rata in the sale proceeds, while their remaining rights stay in place. Another option is to let the rights continue in full or in part. Which arrangement applies is set by the exit conditions of the plan.

    How long do virtual shares remain valid?+

    You decide that in the plan rules. Many plans set a maximum term, also called a longstop date. This prevents rights from running on indefinitely when no sale takes place. On top of that, the vesting and leaver rules decide what happens to the rights when an employee leaves.

    Can our own adviser review the setup?+

    Yes. You can give your adviser a read-only or co-admin account to review the setup with you. Sharesquare provides software and does not give legal, tax or financial advice, so for questions about your own situation your adviser is the right person to ask.

    Sharesquare framework

    • Balanced incentives: Good for the company, worth it for people
    • Simple to explain: A reward, not rocket science
    • Built to evolve: Decide today, adjust as you grow
    • One source of truth: Rules, numbers and dashboard always match

    Want to see the framework in action?

    In a short call we show you how the four principles come together in the platform.

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