From employee incentivisation schemes to sophisticated succession planning, our expert team navigates the complexities of various share option structures to deliver optimal outcomes.
Whether you’re considering EMI schemes to align employee interests with shareholder goals, implementing put and call options for future transactions, or establishing cross-option agreements for business continuity, we provide comprehensive guidance that combines legal expertise with practical business acumen. Working seamlessly with your tax advisers and accountants, we ensure your share option strategy not only meets regulatory requirements but also serves as a powerful tool for achieving your business objectives.
Share options can be an effective way of incentivising employees and can have the effect of aligning the employees interests with those of the company’s shareholders. Conditions can be attached to an option to encourage various outcomes, for example, continued employment, the company achieving certain financial targets or the sale of the company or its business. Provided that the relevant eligibility criteria are met, the option may take the form of an “approved scheme” with beneficial tax treatment, the most common of which tends to be EMI Share Options. We frequently work with clients’ existing accountants or tax advisers to establish the best type of option and to produce the relevant legal documentation.
The right of a shareholder to require another person to buy their shares in the future (a put option) and the right granted by a shareholder to another person to allow that other person to acquire the shareholder’s shares (a call option). Put and call options can be used in a variety of circumstances, either alone or in combination. An example of their use in combination are cross option agreements exercisable on the death of a shareholder.
A cross-option agreement between shareholders combined with a life assurance policy over the life of each party. The cross option consists of each shareholder granting to the other shareholders put and call options over their shares, which are exercisable on death. On the death of a shareholder, the policy provides funds to allow the purchase of the deceased shares by the surviving shareholders.
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