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Date Posted: 03:38:02 02/21/03 Fri
Author: agree1
Subject: agree1


Option for director to subscribe for shares intended to be quoted on The Stock Exchange, the number of shares and the subscription price being subject to adjustment1
THIS AGREEMENT is made the …… day of ………

BETWEEN:

(1) (company) plc (Company Registration No ……) whose registered office is at (address) (‘the Company’) and
(2) (director) of (address)
[1154]
WHEREAS
(1) The Director is a [non-] executive director of the Company and it is proposed that the Company will grant an option to the Director in respect of the Option Shares (as defined in clause 1.4 below) on the terms and conditions set out in this agreement
NOW IT IS AGREED as follows:
1 Definitions and interpretation
In this agreement the following expressions have the meanings set out below (unless the context otherwise requires):
1.1 ‘the Auditors’ mean the auditors of the Company from time to time
1.2 ‘Control’ has the meaning given by the Income and Corporation Taxes Act 1988 Section 8402
1.3 ‘the Option’ means the right granted to the Director by clause 2
1.4 ‘the Option Shares’ means (number) Shares subject to variation pursuant to clause 6
1.5 ‘the Shares’ mean ordinary shares of (insert the nominal value of the Company’s shares) each in the capital of the Company
1.6 ‘the Subscription Price’ means (insert price) per Share subject to variation pursuant to clause 6
1.7-1.11 (continue as in Form 273 clauses 1.6-1.10 [1150] ante substituting ‘agreement’ for ‘deed’ in clause 1.6)
1.12 a reference to any enactment shall be construed as a reference to that enactment as from time to time amended extended or re-enacted
[1155]
2 Grant of Option
In consideration of the sum of [£1] (the receipt of which is acknowledged by the Company) the Company grants the Director the right to subscribe for the Option Shares [or any of them] at the Subscription Price3
3 Right to exercise Option
3.1 Except where exercise is pursuant to clause 5 the Option may not be exercised before (insert first exercise date)
3.2 The Option may not in any circumstances be exercised after (insert final exercise date)4
3.3 The right to exercise the Option shall terminate forthwith upon the Director ceasing to be a director of the Company
3.4 The Option is personal to the Director and he may not transfer assign or charge it
3.5 The right to exercise the Option shall terminate forthwith upon the director being adjudicated bankrupt
3.6 The Option shall lapse on the earliest of the following dates:
3.6:1 (insert final exercise date);
3.6:2 the expiry date of any period during which the Option may be exercised;
3.6:3 the date on which the Director ceases to be a director of the Company;
3.6:4 the date on which a resolution is passed or an order is made by the court for the compulsory winding up of the Company; or
3.6:5 the date on which the Director does or omits to do anything as a result of which he ceases to be the legal and beneficial owner of the Option
[1156]
4 Exercise of Option5
4.1 The Option shall be exercisable in whole or in part [(but if in part then in respect of not less than (insert minimum percentage) of the Option Shares or the balance of the Shares comprised in the Option)] by notice in writing given by the Director to the Company
4.2 The notice of exercise of the Option under clause 4.1 shall be accompanied by a remittance for the aggregate of the Subscription Prices payable
4.3 Within [30] days of receipt of a notice of exercise under clause 4.1 and the appropriate remittance under clause 4.2 the Company shall allot the Shares in respect of which the Option has been validly exercised and shall issue a definitive certificate in respect of the Shares allotted
4.4 Save for any rights determined by reference to a date on or before the date of allotment such Shares allotted under clause 4.3 shall rank pari passu and as one class with the other issued Shares of the Company
4.5 In respect of all Shares issued under this agreement at a time when the Shares are dealt in on the Unlisted Securities Market the Company shall make application to the Council of The Stock Exchange for the grant of permission to deal in such Shares on the said Unlisted Securities Market and in respect of all Shares issued under this agreement at a time when the Shares are listed on The Stock Exchange the Company shall make application to the Council of The Stock Exchange for such Shares to be admitted to the Official List
[1157]
5 Takeovers mergers and windings-up
5.1 If any person obtains Control of the Company as a result of making:
5.1:1 a general offer to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or
5.1:2 a general offer to acquire all the Shares
then the Option may be exercised within [one month] of the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied and to the extent that the Option has not been exercised by the end of such period shall lapse forthwith
5.2 If under the Companies Act 1985 Section 4256 the court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies the Option may be exercised within [one month] of the court sanctioning the compromise or arrangement and to the extent that the Option has not been exercised by the end of such period it shall lapse forthwith
5.3 If any person becomes bound or entitled to acquire shares in the Company under the Companies Act 1985 Sections 428-430F7 the Option may be exercised at any time when that person remains so bound or entitled and to the extent that the Option has not been exercised by the end of such period it shall lapse forthwith
5.4 If the Company passes a resolution for voluntary winding up the Option may be exercised within [one month] of the passing of the resolution and to the extent that the Option has not been exercised by the end of such period it shall lapse forthwith
5.5 For the purposes of clause 5.1 a person shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it
[1158]
6 Variation of share capital
6.1 In the event of any capitalisation consolidation sub-division or reduction of the share capital of the Company or any rights issue or other variation of capital taking place after the date of this agreement the number of Shares comprised in the Option [and] [or] the Subscription Price may be varied in such manner as the directors of the Company shall determine and as (save in the event of a capitalisation) the Auditors shall confirm in writing to be in their opinion fair and reasonable provided that no variation shall be made which would result in the Subscription Price for a Share being less than its nominal value
6.2 The Company shall notify the Director of any such variation under clause 6.1
[7 Alterations
In the event that:
7.1 an alteration is made to the rules of the Company’s executive share option scheme (‘the Scheme’) which benefits participants in the Scheme; or
7.2 the Scheme is replaced by another share option scheme the terms of which are more beneficial or advantageous for the participants than the terms of the Scheme
the terms of the Option shall so far as applicable be deemed to be altered to give the same benefits mutatis mutandis to the Director provided however that no alteration shall be made which would permit the Option to be exercised after (insert final exercise date)]8
[1159]
8 General
8.1 The Company will at all times keep available sufficient authorised and unissued Shares to satisfy the exercise to the full extent still possible of the Option taking account of any other obligations of the Company to issue shares
8.2 This agreement shall not form part of any contract of employment between the Company and the Director and the rights and obligations of the Director under the terms of his office or employment with the Company shall not be affected by this agreement or any right which he may have under it and this agreement shall afford the Director no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever9
8.3 [Subject to clause 7]10 no variation to the terms of this agreement shall be effective unless agreed in writing by the parties
8.4 Any notice or communication to be given by the Company to the Director may be personally delivered or sent by ordinary post to his last known address and where a notice or communication is sent by post it shall be deemed to have been received 72 hours after having been put into the post properly addressed and stamped
8.5 Any notice to be given by the Director to the Company shall be delivered or sent to the Company at its registered office and shall be effective upon receipt
AS WITNESS etc

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