Share Option Agreement - Exercise On Conversion Date
This Share Option Agreement - Exercise on Conversion Date is between a Company and a Grantee, giving the latter the right to exercise the option to subscribe for new shares when a specified event occurs. The document assumes that the Grantee is a director or full time employee of the Company (or both). However, it is possible to specify a different relationship such as that of a contractor.
The Option must be exercised in the 30 days following the Conversion Date otherwise it will lapse. The Company must give notice to the Grantee when the Conversion Date is to occur, which is the date when the Company’s shares are listed on a recognised stock exchange; the Company is sold; a resolution for the winding up of the Company is passed; or the statutory accounts of the Company for a specified financial year are approved by the Company’s board of directors. If the Grantee ceases to be a director / employee / other or dies, then the Option will also lapse. The Company may vary its share capital but the Grantee is protected if new shares are issued before the Option is exercised because he or she will be treated as a shareholder for these purposes. The Grantee is offered further protection because he or she will be given ample opportunity to exercise the Option if the Company's entire share capital is to be sold or the Company is to be wound up.
If the Option is exercised but the Grantee ceases to be a director / employee / other or dies, then his or her shares are offered to the other shareholders at a price specified by the auditors. If there are any remaining shares, then the Grantee can require them to be bought by the Company.
Details of the “Conversion Date”, “Option Shares”, “Ordinary Shares”, and the “Subscription Price” in the Interpretation section should be completed. If the Grantee is not an employee, then the words in square brackets in the final part of sub-clause 4.1, the entirety of sub-clause 4.2 and the wording in square brackets from lines four to eight of sub-clause 7.1 should be deleted. Other optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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