Direct subscription of shares

Direct subscription for shares

In many cases a director or employee will simply subscribe directly for shares rather than participate in a share option scheme. These shares may be of an existing class in the company’s share capital, or a new class of shares created for the purposes of incentivising that director or employee, and any other subscribers. For an example subscription agreement for directors and/or employees, see Precedent: Subscription agreement—directors and employees.

A security (which includes shares) will be an employment-related security where the right or opportunity to acquire the securities (or interest in securities) is:

1. •

   available by reason of an employment of the person acquiring the securities (or interest) or any other person, or

2. •

   made available by a person's employer (or a person connected with a person's employer) (the deeming provision) unless such right or opportunity is made available:

   1. ◦

      by an individual, and

   2. ◦

      in the normal course of the domestic, family or personal relationships of that individual

For these purposes, employment includes a former, current and prospective employment.

The rules on employment-related securities apply very broadly