Company Share Option Plan meaning

A company share option plan (CSOP) A company share option plan (CSOP) enables tax-favoured options over shares with a value up to £60,000 per person, assessed as at the grant date, to be awarded at the discretion of companies that satisfy the CSOP qualifying criteria, and is commonly adopted by companies that are too large to be eligible to issue enterprise management incentive (EMI) options...

This flow diagram outlines the steps for submitting a compensation event claim seeking extra time to finish the works and/or extra payment under the NEC3 Engineering and Construction Contract...

In this issue: Employment issues New content Company law and regulatory Trackers Dates for your diary Weekly highlights from other practice areas Employment issues Option holder denied chance to exercise options entitled to relief based on proprietary estoppel The High Court has ruled on a claim by Mr Andrew Dixon against GlobalData plc concerning share options under the company’s unapproved employee share option plan (the Plan). Between January 2006 and 31 December 2014, Mr Dixon worked for Canadean Limited, which became a subsidiary of GlobalData after its purchase in September 2010. He received 400,000 options in January 2011 under the Plan. In September 2014, he was notified that his employment would end. After talks with senior management, his termination date was moved to the end of December 2014 on amended terms. The Court found that the then CEO, Mr Simon Pyper, had assured him that his options would “vest in line with current conditions”. Mr Dixon subsequently...

In this issue: Tax treatment Corporate Governance Useful information Weekly highlights from other practice areas Tax treatment HMRC publishes employee share schemes statistics for the tax year ending 2022 HMRC has released figures for the tax year to 2022 covering the tax-advantaged employee share schemes—company share option plans (CSOPs), enterprise management incentives (EMI), save as you earn (SAYE) and share incentive plans (SIPs). Drawn from share scheme returns, the data sets out how many companies run schemes, how many employees receive or are granted awards, the value of those awards, how many options are exercised, and estimates of the income tax and National Insurance contributions (NICs) relief obtained. Employees are estimated to have benefited from £840m of income tax relief and £560m of NICs relief in that year across the four schemes EMI accounted for the largest share of total relief at £680m Relief on CSOP options stayed far below other schemes at £50m...

In this issue: Company law and regulatory Corporate Governance Useful information Dates for your diary Weekly highlights from other practice areas Company law and regulatory PISCES: legislation will allow for amendments to existing EMI and CSOP options The government has published the Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025, SI 2025/583. These create the legal framework for PISCES and, for a PISCES company, allow trustees of the company’s EBT or SIP and the company’s employees and directors, or those of any group member, to participate in a PISCES arrangement. In addition, the government has signalled that the next Finance Bill will permit employers, with the employee’s consent, to amend existing enterprise management incentives (EMI) and company share option plan (CSOP) contracts to add a PISCES trading event as an exercisable event, while preserving the schemes’ tax advantages. This means employees whose contracts are updated in line with the legislation...

Why do companies have reorganisations? Groups of companies carry out reorganisations for numerous and varied reasons. These steps will frequently have implications for existing share plans and other employee equity arrangements. In some instances, the consequences are commercial in nature. Examples include: the reorganisation prompting early vesting, exercise and/or lapse of awards because the relevant provisions in the share plan rules on a change in control of the parent company, or on the participant’s employment ending, have been engaged; and a requirement for awards over shares in the current parent to be swapped for awards over shares in a newly formed parent company. In certain situations, if the right steps are not taken within a defined period, valuable tax advantages may ultimately be lost entirely. Common types of reorganisation The most frequent forms of reorganisation include the following: placing a new group holding or parent entity above an existing company or group, often to enable an initial...

ARCHIVED : This archived Practice Note offers context on the key distinctions between the SIP guidance in ESSUM and the places it can now be located within ETASSUM. It also sets out any material differences in the guidance. This Practice Note reflects the position as at December 2015 and is intended solely for background reference. Background On 28 October 2015, HMRC announced a new Employee Tax Advantaged Share Scheme User Manual (ETASSUM), which is available on its Gov.uk website. At the time of writing, the earlier guidance in ESSUM remains live and can still be accessed. As its name suggests, ETASSUM covers enterprise management incentives (EMI) schemes, company share option plans (CSOPs), save as you earn (SAYE) schemes and share incentive plans (SIPs). ETASSUM is not yet in its final form and, at the time of preparing this Practice Note, certain links are still missing. Each page contains a feedback link that can be used to alert HMRC to any problems. The table below presents a summary...

At any one time, an individual can be employed by more than one employer, commonly working on a part-time basis for each business. Those businesses might belong to the same group or be entirely unconnected to one another. Participation in numerous Share incentives glossary A–Z—Unapproved share option arrangements is generally not problematic; accordingly, this note concentrates on examining the effect of such simultaneous employments on an employee’s capacity to participate in HMRC statutory tax-advantaged plans, namely: enterprise management incentives (EMI) schemes company share option plan (CSOPs) share incentive plans (SIPs), and save as you earn (SAYE) schemes For more general information on each of these schemes, see Practice Notes: How EMI schemes work and key features How CSOPs work and key features How SAYE schemes work and key features What is a SIP? This Practice Note examines the definitions of connected, group, qualifying subsidiaries, associated and constituent companies for each tax-advantaged share...

[ insert name of company who granted the option pursuant to the long term incentive plan (LTIP) ] ( Company ) [ insert name of LTIP ] ( Plan ) Name Number of Shares under Option Option Price per Share Date of Grant Normal Vesting date [ , subject to satisfaction of Performance Targets ] End of Holding Period We hereby confirm that you hold an Option permitting you to acquire up to the maximum number of Shares in [ insert name of Company whose shares are being granted under option ] as shown in the table above. The Option was issued on the Date of Grant set out above under a global deed of grant entered into by the Company [ and is conditional upon the Performance Target(s) attached to this certificate ]. The Option Price due per Share when the Option is exercised is likewise specified in the table above...

This Agreement is entered into on [ insert date of execution of the share option agreement ] Parties [ insert name of Company whose shares are being granted under option ] (Company) [ insert name of Option Holder ] (Option Holder) [ [ insert name of Grantor (if different from Company) ] (Grantor) ] BACKGROUND [ As at the date of this Agreement, the Company has agreed to grant the Option Holder an Option to acquire Shares on the terms set out in this Agreement and in line with the rules of the [ insert name of unapproved option plan ] (Rules). OR The Company and the Grantor intend that, as at the date of this Agreement, the Option Holder is to be granted an Option to acquire Shares on the terms stated in this Agreement and in accordance with the rules of the [ insert name of unapproved option plan ] (Rules). ] [ The Company...

This declaration of trust is entered into on [ insert date on which this declaration of trust is executed ] by [ insert name of nominee ] of [ insert address of nominee ] [ , a company registered in England and Wales (registered number [ insert company number ]) ] (the Nominee). BACKGROUND (A) On [ insert date on which LTIP Contingent / Matched Award / Option was granted ] (the Date of Grant), [ insert name of Participant ] (the Participant) received a [ Contingent Award OR Matched Award OR Option ] (the Award) over [ insert number and class of shares under award or option ] in the capital of [ insert name of company whose shares are subject to LTIP awards ] (the Company) pursuant to the terms of the [ insert name of LTIP ] (the Plan)...