Q&As

We want to make new share option grants but our employees are all working from home. Can our share option agreements be executed electronically?

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Published by a ÑÇÖÞÉ«ÇéÍø Share Incentives expert
Published on: 23 April 2020
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The position on this will largely depend upon whether the relevant share option agreements are drafted to be deeds or to be bilateral contracts with consideration.

In practice, share options are most often granted by deed in order to make sure that a validly binding contract is made. However, if a deed isn’t used then all the other requirements must be met in order for a binding contract to be made. This includes a need for consideration to paid by the prospective option holder to the grantor of the option in order for the share option to be granted to them. Therefore, typically, if a share option is not being granted by means of a deed then the share option terms will require the employee to make a nominal payment (such as £1) to the company in order for the company to grant the option to them.

Bilateral contracts with consideration can be executed electronically. Where this

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United Kingdom
Key definition:
Share option definition
What does Share option mean?

A share option is an agreement between the holder of shares and a third party. An option gives one party the right (but not an obligation) to purchase shares at a specified price at a specified point of time (or on the occurrence of a specified event).

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