Cancellation of Share Option
There will be circumstances where a company has share options outstanding but wishes to cancel them. This may be because, the options have proved to be of little value, the company may want to start a new share incentives programme and clear out existing options or there is a sale, and the buyer will not want outstanding options over shares in the company after acquisition.
In these circumstances the company can enter into a relatively straight forward agreement with the option holder to cancel the options. This new Deed of Surrender - Share Option document is now available in the share option templates. It has been drafted as a deed with no consideration payable. It can be drafted for cash consideration (even nominal consideration) but there will be tax implications and specialist advice should be sought in this case.
The execution provisions for a deed will need to be followed.
This new template will be of interest to all company directors, secretaries, and administrators whose companies have share options schemes.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.