Share Options
Before downloading and using one of these option agreement templates, we suggest that you read these helpful guidance notes:
- What is share capital?
- Authorised share capital and the Companies Act 2006
- Company structure: using different classes of shares
- Shareholders' rights
- Why you should use a shareholders' agreement
- Shareholders' agreements: important points to consider
- Preventing conflicts between shareholders and directors using a shareholders' agreement
- Avoiding conflict between your shareholders' agreement and your articles of association
- Controlling the entry of new shareholders: right of first refusal within a shareholders' agreement
- Planning for termination and exit in your shareholders' agreement
- Share issues, dilution and pre-emption rights in a shareholders' agreement
- Drag along clauses within shareholders' agreements
- Tag along provision in a shareholders' agreement
- Cross options
- Ways of resolving deadlock between shareholders
- Alternative dispute resolution: better than going to court
These agreements supplied by Net Lawman.co.uk allow employees, including directors, or a third party, such as a sales agent or distributor, to be rewarded in line with the increased performance of the company.
The agreements cover options triggered by either an increase in the value of the company or share price, or the attainment of some specified targets.
Template: Employee Share Option Agreement
"This document is likely to be used by an employer to motivate an employee working in any capacity. The business of the company and the role of the employee are not important to the effect of the agreement.
The same document could be used for many employees (such as each director or senior manager), with terms varied for each.
It is assumed that the employee will achieve a personal goal, or contribute to a corporate one, that increases the value of the company significantly. When a target is met, the option can be exercised.
We have provided for the employee to pay the company for the option and also to pay for the shares on exercise. Either or both provisions may be deleted or the sums increased or reduced.
The actual result or event that will trigger the exercise of the option is for your commercial judgement. If there is no decisive event that proves the increase in value, you may need to ask your accountant for a suggestion, with reference to balance sheet value or profit as shown in the annual accounts." Netlawman.co.uk
Template: Employee Share Option Agreement: performance based
"This agreement grants an option to buy shares in a company to a contractor or business advisor. The third party could be involved with the company in any way.
To be eligible to trigger the option, the holder have to achieve a target (such as a sales goal). You can decide what criteria can be met and set them down as a schedule to this agreement.
We have provided for the holder to pay for the option and also to pay for the shares on exercise. Either or both provisions may be deleted or the sums increased or reduced." Netlawman.co.uk
Template: Share Option Agreement: non-employee
"This agreement grants the right to buy shares in a company subject to conditions being met.
The person who is granted the option may be associated in any capacity and in any business. Most likely, he or she will be an adviser or contracted worker whose actions will directly increase the share price. For example, he or she may work to secure an initial public offering or sell the business above a certain price. But the holder could also be a corporate body, such as another company.
The exact conditions on which the option is triggered are specified by you. They could include the achievement of a public share price, or an accountant’s valuation on the terms on which you instruct him or her.
We have provided for the holder to buy the rights and also to pay for the shares on the exercise. Either or both provisions may be deleted or the amounts increased or reduced.
This agreement may be bought and provided by either the company management or the person who will hold the option.
We leave the definition of the event that triggers the possibility for the exercise of the option to your commercial judgement. It could be many things, from an increase in net current assets or net profit, to an increase in shareholders' equity. If it might not be clear to the holder when the event happens that qualifies the option to be exercised, you may need suggestions from your accountant." Netlawman.co.uk
Template: Share Option Agreement: non-employee; performance based
"This agreement grants an option to buy shares in a company to a contractor or business advisor. The third party could be involved with the company in any way.
To be eligible to trigger the option, the holder have to achieve a target (such as a sales goal). You can decide what criteria can be met and set them down as a schedule to this agreement.
We have provided for the holder to pay for the option and also to pay for the shares on exercise. Either or both provisions may be deleted or the sums increased or reduced." Netlawman.co.uk
Notice:co
The documents menus are designed to describe the documents, but please be sure that you check them over carefully to ensure that they do meet your needs. All documents are subject to NetLawman's Terms and Conditions, which we ask you to read before you purchase any documents.
We are pleased to be supported by Net Lawman.co.uk as a leading independent online provider of ready-to-use legal documents for business users.
Net Lawman is a founding member of the Association of Publishers of Online Legal Documents (APOD).
APOD exists to:
- promote the sale of online legal and business document templates;
- educate the public about the need for legal documents to protect their interests, and in the online availability of professionally written and affordable template contracts;
- promote and represent the interests of the Association and its members;
- ensure professional standards for customers and the public in accordance with the APOD Code of Practice.
We always welcome your feedback so please do let us know what else you would like to know about using this Form.