The following Share Incentives practice note Produced in partnership with Will Cookson of Spiral Sky Limited provides comprehensive and up to date legal information covering:
Share options are an enforceable right for an employee to acquire shares at a given price, subject to meeting pre-determined conditions. The share option contract between the grantor and the employee will also stipulate who is to source those shares and satisfy the subsisting share option at the point the share option is exercised. The shares will typically come from either the company or a third party such as an individual shareholder, corporate shareholder or a trustee of an employee benefit trust (EBT).
This Practice Note considers the situation where an individual is the one who satisfies the share option and specifically examines:
why an individual might want to offer their shares
process and documentation
considerations around the individual shareholder’s shares
accounting and reporting implications
multiple individual shareholders, and
gifting shares through a will
The individual shareholder will normally be selling their shares for the exercise price set in the share option contract. More often than not the exercise price is equal to the market value at the date of grant, so the shareholder is effectively losing their right to any future growth on those shares.
In most cases the reason an individual agrees to settle the share options is due to dilution (see below). There can be other reasons, for example family members passing on shares
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
This Practice Note considers the different categories of contractual damages that may be available for financial loss (pecuniary loss), ie expectation-based damages, reliance-based damages and gains-based damages.For guidance on contractual damages generally, see Practice Note: Contractual
This Practice Note examines why parties involved in a construction project may enter into an escrow agreement (or escrow deed) to set up an escrow account. It looks at the benefits of paying funds into escrow, how an escrow account operates and the provisions typically found in an escrow
STOP PRESS: The Corporate Insolvency and Governance Act 2020 contains provisions which, on a temporary basis (presently until 31 December 2020) impose significant limitations on the ability for a creditor to seek a winding-up order against a company. For further reading, see Practice Note: Corporate
This practice note provides an introduction to tort law by addressing three questions:•what does the concept of being liable in tort mean? And how does tort relate to contract and criminal law•how has the law of tort developed?•what is the scope of tort, ie what interests does it protect? What
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.