The following Corporate practice note Produced in partnership with Dilpa Raval of CMS and Graham Muir of CMS provides comprehensive and up to date legal information covering:
This Practice Note focuses on some key corporate issues that arise in the context of share incentives including:
the company law requirements that do not apply (or apply differently) in relation to employee share schemes falling within the Companies Act 2006 (CA 2006) definition
the requirement for listed companies to gain shareholder approval before establishing an employees' share scheme
how the prospectus requirements may be relevant to share incentives
how financial regulation applies in connection with share incentives, and
the relevance of the Market Abuse Regulation, (EU) 596/2014 (as amended) (the Market Abuse Regulation) and share dealing codes to share incentives
This Practice Note is intended to be a summary of the issues relevant to corporate lawyers. If further details are required, the advice of a share incentives specialist should be sought.
When establishing a share incentive scheme for employees it is usual for the scheme to be drafted so as to constitute an 'employees' share scheme' falling within the CA 2006 definition. This is because a number of company law requirements do not apply to an employees' share scheme, including certain CA 2006 restrictions:
on the allotment of shares and grant of share options
in relation to pre-emption rights
regarding financial assistance (subject to specified conditions), and
in relation to share buybacks
CA 2006, s 1166
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Express and implied contractual terms distinguishedContractual terms may be either express or implied:•express terms—are terms which are actually recorded in a written contract or openly expressed in an oral contract at the time the contract is made (or there may be a combination of written and oral
Coronavirus (COVID-19): The guidance detailing normal practice set out in this Practice Note may be affected by measures concerning process and procedure in the civil courts that have been introduced as a result of the coronavirus (COVID-19) pandemic. For guidance, see Practice Note: Coronavirus
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Disposal and devolutionThe equity of redemption arises as soon as the mortgage is made. It is an interest in the land which the mortgagor can:•transfer, lease or mortgage inter vivos, or•by will (it passes on intestacy)No cloggingIt is a fundamental principle of a mortgage that there must be no clog
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