This template Call Option Agreement is made between a Grantor and a
Grantee. The Grantee is granted the right (but not the obligation) to
exercise an option to purchase (or “call”) for the Grantor’s shares (which
are the subject of the option) 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.
This document has been updated to refresh and modernise it and to align it
with the drafting of our Put Option Agreement template.
The template includes a notice of exercise attached as a schedule to the
agreement. In order to exercise the option, the Grantee must deliver this
to the Grantor.
The template assumes that both parties are individuals; however this may be
changed if one or both parties are corporate entities. The template also
assumes that the consideration for the purchase of the shares by the
Grantee will be made in cash and that the granting of the option itself
will be made for nominal consideration, e.g £1. No conditions are attached
to the exercise of the option; these should be added if required.
The 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 call 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, as
the document that actually transfers the shares, is the document liable for
stamp duty. Note that the Grantee 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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