Stand-alone unapproved share option agreement (for a private company)

 

This is a precedent for the grant of an unapproved share option by a private company to an employee by way of a single agreement, rather than under a set of option scheme rules.

There is also an alternative version under development, which users may prefer: Standard document, Revised stand-alone unapproved option agreement (grant by company to employee). This alternative version will replace this document at some point.

Finance Act 2011 contains anti-avoidance legislation, enacted as Part 7A of the Income Tax (Earnings and Pensions) Act 2003, which taxes disguised remuneration provided to employees through third parties such as employee benefit trusts (EBTs), including, potentially, benefits provided under employee share plans.  The legislation contains certain exemptions for employee share options, but the provisions are complicated and restrictive.  Companies and their advisers should consider the impact of Part 7A when considering granting stand alone options through an EBT.  For more information, see Practice note, Disguised remuneration: Part 7A of the Income Tax (Earnings and Pensions) Act 2003.

PLC Share Schemes & Incentives

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