A step by step guide to terminating an Option Grant on SeedLegals

In some circumstances, you and an option holder may wish to terminate an existing option grant. This may be due to an alternate agreement with the option holder or perhaps an error. The following offers step by step instructions on how to terminate an existing option grant:

1. Go to the Share Options dashboard, select Option Holders and then 'Active Grants'. 

2. Then, click on the option holder for whom the grant is being terminated

3. Click Stop Vesting

4. Select ‘Cancel the Option’ and input the date you're looking to terminate the grant (note that the cancellation will only affect the part of the option that hasn't been exercised).

5. Create the Deed Of Termination

6. You should then be transported to the Deed of Termination. Please hit the 'Sign' button and then send it out to your Option Holder's email for them to sign. 

As this document is a Deed - it'll need to also be witnessed. The platform will generate you a link to send out to your witness. You’ll want to wait for the Option holder and their witness to do the same.

7. When the deed is fully signed and witnessed, click the ‘Terminate Grant’ button

8. If this was an EMI Option grant, be sure to notify HMRC of this cancellation in your annual return (you will only need to do this for an unapproved option holder if they are a UK tax resident who is also an employee of the company)!