Share option agreement

Non-employee
2 Reviews
Select support levelCompare
Recommended

Document overview

This agreement covers a situation where the optioner is not an employee. The agreement is for the option to crystalise when the company share valuation reaches a certain level. The optioner may be associated in any capacity. Suitable for any business. Example: a third party Internet marketer working for an Internet business or a contracted operator of a hotel or adventure park or leisure facility.
Compliant
Compliant with the latest law
Document propertied
Document properties
  • Length:6 pages (1200 words)
  • Available in:
    MsWordMicrosoft Word DOCXApple pagesApple PagesRTFRTF
watertight guarantee
Backed by our watertight guarantee

If the document isn’t right for your circumstances for any reason, just tell us and we’ll refund you in full immediately.

writing in plain english
Written in plain English

We avoid legal terminology unless necessary. Plain English makes our documents easy to understand, easy to edit and more likely to be accepted.

Notes
Guidance notes included

You don’t need legal knowledge to use our documents. We explain what to edit and how in the guidance notes included at the end of the document.

email
Support from our legal team

Email us with questions about editing your document. Use our Lawyer Assist service if you’d like our legal team to check your document will do as you intend.

Update
Up to date with the latest law

Our documents comply with the latest relevant law. Our lawyers regularly review how new law affects each document in our library.

About this share option agreement

This document may be bought and provided by either the company management or the person who will be the optioner. The optioner may be associated in any capacity and in any business. He may be a corporate body. Example: a third party Internet marketer working for an Internet business or a contracted operator of a hotel or adventure park or leisure facility. Conditions to trigger option to be entered by you. The optioner is not an employee.

It is assumed that the optioner will be instrumental in increasing the value of the shares in the company. This could be measured by an initial public offering, a purchase of shares by some other person, or an accountant’s valuation on the terms on which you instruct him.

We have provided an example deal, but it is for you to enter details of your exact deal. That may be any arrangement you like.

We have provided for the optioner to pay for the option and also to pay for the shares on exercise of the option. Either or both provisions may be deleted or the sums increased or reduced.

We leave the defintion of the event that triggers the possibility for the exercise of the option to your commercial judgement. It could be many things, from an increase in net current assets or net profit, to an increase in shareholders' equity. If it might not be clear to the holder when the event happens that qualifies the option to be exercised, you may need suggestions from your accountant.

Alternatives to this agreement

Net Lawman sells variations on this agreement for:

  • the trigger being the optioner’s performance criteria;
  • options for employees;

You can see these at Share option agreements.

This would also be a good time to put into place a new shareholders’ agreement whilst you are in charge of the shares. If you wait until the optioner is a new shareholder, you will have to take greater account of what he wants. Look at Shareholders’ agreements.

The law in this agreement

This document is drawn under basic contract law: no special rules, no tax arrangements, no complications. The law which is followed is of Companies Act, 2008.

Contents of this agreement

  • Definitions and interpretation
  • Optional reference to main contract for work
  • Option data
  • Grant of option
  • Conditions for exercise of option
  • What happens if main contract is terminated before option is exercised
  • Warranties by the company
  • Draft notice by optioner to exercise the option
  • Draft list of matters which may affect optioner’s decision
Sample share option agreementFront cover

Recent reviews

Yes
07 June 2023
Yes
Joe Considine
Review of the Ireland version
Methodical Construction
17 March 2017
Methodically and carefully constructed. Was easy to tweek for our purposes.
Dai Leon
Review of the New Zealand version

Choose the level of support you need

Document Only

Complete the document template yourself using our guidance notes
R299.00
  • ok This document
  • okDetailed guidance notes explaining how to edit each paragraph
Most Popular

Lawyer Assist

Support from our legal team during and after editing
212 Reviews
R2,798.00
  • ok This document
  • okDocument with guidance notes explaining how to edit each paragraph
  • okUnlimited email support - ask our legal team any question related to completing the document
  • ok
    Review of your edited document by our legal team including:
    • reporting on whether your changes comply with the law
    • answering your questions about how to word a new clause or achieve an outcome
    • checking that your use of defined terms is correct and consistent
    • correcting spelling mistakes
    • reformatting the document ready to sign
© 1999 - 2024 Net Lawman Limited.
All rights reserved