but also enabling the local company to allocate
some stock to the manager of the
business. This is essential to attract, motivate,
and retain talented people and create
a sense of ownership. Reserving between 5
and 10% ofthe outstanding stock for this
purpose is fairly common. As tax regimes
vary widely around the world, it is important
to consult with a local tax expert to
set up the new business in a legal format
that is most attractive for the parent company.
Failure to do so may turn out to be
very expensive in the future. <
Jan Melles is president of Photonics Investments
and was the co-founder and later
chairman of Melles Griot. He is currently on
the board of numerous
public and private photonics
companies, and
invests in and brokers the
mergers and acquisitions
of photonics companies.
E-maii: jmeiies@photonics
investments.com; www.
photonicsinvestments.com.