Why you need to take a small payment from the recipient to confirm digital acceptance for option agreements.
When you issue EMI and unapproved options on Vestd, the recipient digitally accepts the option agreement.
To make the option agreement a legally binding contract, there needs to be a consideration (typically £1) to ensure formal authorisation from both parties. This consideration should be taken from the recipient’s next payroll.
This is explicitly stated under clause 2.1 in Vestd’s standard option agreement but also applies to bespoke option agreements. You can use this clause in your bespoke option agreements.
The Company hereby grants to the Employee an option to acquire Option Shares, up to the number set out in the Schedule, at the Exercise Price during the Option Period in accordance with the terms of this Agreement (the “Option”). In consideration thereof the Employee agrees to pay the Company £1 and authorises the Company to take this amount from the next payroll.
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