Legal Problems Of The Stock Option System

The Stock Option System is the researching object of this dissertation. It refers to the salary system that the manager or other senior managerial staff enjoys the right to purchase the stock of the company in specified proportion at the fixed price in the specified future period. The right should be authorized according to the Stock Option Plan by the general meeting of stockholder.In the 50s of 20th century, the Stock Option System emerged in the U.S.A. where the Marketing Economy was relatively flourishing. With the passage of time it has been universally adopted as a long-term incentive mechanism of the companies to their managerial staff. With an acknowledging attitude, many countries regulate the Stock Option System in its developing process in the related legislation. In recent years, some positive explorations of the Stock Option System's implementation and popularization have also been made in the business field of China. However, in the pilot experiment of the Stock Option System in China some accommodation a well as dissimilation to a certain extent have been made owing to the limitation of the special legal environment. So, the object of the dissertation is to research the Stock Option System overall and advance some legislation proposals related to the Stock Option System thus the real Stock Option could be popularized in China.After the systematical analysis of the Sock Option System the dissertation gives its own viewpoints on building up the Stock Option System in China. The feature of the researching paper is embodied by the comparison and contrast of the history and reality, the positivism and norm as well as the supposition and test.Besides the introduction and conclusion, the dissertation is divided into five chapters.The first chapter gives a brief account of the Stock Option. To popularize the genuine Stock Option System in China, the definitude of its connotation and denotation has the first importance. Therefore, after the analysis of the connotation the dissertation compares the Stock Option with the related legal concepts such as the Standard Stock Option, the ESOP and the Warrants tomake a more strict definition of the connotation. Then, the dissertation classify the Stock Option briefly based on the situation in the U.S.A. with the most advanced Stock Option System in the world in order to define the denotation of the Stock Option.The second chapter is about the historical development of the Stock Option System and the practice of the system in China. According to the "Way Dependence Theory", a system's future can be predicted by the comparison and contrast of its history and current situation. This chapter reviews the history of the Stock Option including its emergence and development and introduces five pilot experiment modes of the Stock Option System in China. Additionally, the chapter analyzes the practice of the pilot experiment on the Stock Option in China and points out the differences between China's Stock Option System in the pilot experiment practice and the real Stock Option.The third chapter analyzes the legal principle of the Stock Option System. The considerable achievements of the Stock Option System in such a short period as 50 years attribute to the profound theory basis. The HR Capital Theory and the Agreement Agency Theory are the basic theory origins of the Stock Option System. After the brief analysis of them, the chapter expounds the legal nature of the Stock Option as well as the agreement authorized by the Stock Option to clarify the position of the Stock Option System in the whole legal system. In addition to this, the legal characteristics of the Stock Option are analyzed in this Chapter.The obstacles during the course of building up the Stock Option System and perfecting the related legal system in China are discussed in the fourth chapter. The chapter is the researching emphasis of this dissertation. Started with the problems about the source of the stock and the sales of the stock after option performing, the difficulties and obstacles that will be faced in the process of introducing the Stock Option System into China are analyzed and the relevant legislative solutions are recommended.The fifth chapter that is also the researching emphasis focuses on building up the related legislations so as to perfect the Stock Option System in China. The legislations solutions are recommended on the essential factors and applicable fields in the Stock Option Plan as there are no maneuverablelegislations. Finally, a supplementary section introduces the Civil Legal Responsibility System in the implementation of the Stock Option System in China to balance the rights and the obligations, about which some legislation proposals are advanced in this chapter.