Share Option Put Agreement

This template Put Option Agreement is made between a grantor and an option holder.

It gives the option holder the right (but not the obligation) to exercise an option requiring the grantor to purchase the option holder’s shares in the company within a specified time period and at a specified price.

If the option is not exercised within the agreed period, it will lapse.

Notice of exercise

The template includes a notice of exercise attached as a schedule to the agreement.

To exercise the option, the option holder must deliver that notice to the grantor.

Assumptions used in this template

• The parties are individuals, although this may be changed if one or both parties are corporate entities.
• The consideration for the purchase of the shares by the grantor will be paid in cash.
• The granting of the option itself is for nominal consideration (for example, £1).
• No conditions are attached to the exercise of the option. Conditions should be added if required.

Tax and stamp duty points

This template does not consider the tax and stamp duty implications of the option. HMRC’s website has relevant information and should be considered.

• Exercising a put option will not of itself attract stamp duty.
• Stamp duty is payable on stock transfer forms at 0.5% of the value of the consideration for the transfer of the shares.
• The stock transfer form is the document liable for stamp duty.
• The grantor will not be able to be registered as the legal owner of the shares until stamped stock transfer forms are presented to the company.

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