NEWSLETTER-2017

43 COMMERCIAL LAW Stages of a Standard SOP A standard SOP has three stages. The first stage is granting. The date of granting a right to a determined employee group by a company with respect to having the company shares for a strike price, or for free of charge, in the event of fulfillment of the determined terms and conditions. The second stage is vesting. At this stage, vesting occurs upon the right of a stock option as a result of fulfillment of the terms and conditions determined in the agreement (i.e., continuation of the em- ployment in the company for a determined period of time, fulfillment of the determined performance criteria). The third stage is exercising. Upon the achievement of the terms and conditions determined in the option plan, acquiring company shares through exercising the rights vested by the employees who are included to the share option plan. SOPs in Turkey SOPs are relatively new to the Turkish employment market and are, therefore, uncommon. However, with the increasing level of for- eign investments and market entries into Turkey, SOPs are likely to become more common in the near future. Due to the disadvantages explained, above, and other legal restrictions, such options are more likely to be preferred by foreign companies that are conducting their business in Turkey. As per Art. 15(c) of Decree No. 32 on the Protection of the Value of Turkish Currency (“Currency Law”), a foreign parent company can offer foreign securities and capital market instruments to the employ- ees of a subsidiary in Turkey. This type of share sale is subject to Turk- ish capital markets legislation, and requires application to the Capital Markets Board of Turkey (“CMB”), unless all of the following apply (Communiqué on Foreign Capital Market Instruments, Depository Receipts and Foreign Investment Funds (VII-128.4)) (Foreign Capital Markets Law): • The sale does not take place in Turkey;