Document background
The Share Option Agreement is a critical document used by Canadian companies to grant stock options to employees, directors, consultants, or other eligible individuals. It serves as a formal contract that outlines the rights and obligations of both the company and the option holder, detailing specific terms such as the number of shares, exercise price, vesting schedule, and exercise conditions. This agreement must comply with Canadian federal and provincial securities laws, corporate regulations, and tax requirements, particularly the Income Tax Act provisions regarding stock option benefits. Companies typically use this agreement as part of their compensation and retention strategy, enabling them to align stakeholder interests with company performance while maintaining compliance with Canadian regulatory frameworks. The document includes necessary provisions for different scenarios such as termination of employment, change of control, and share capital adjustments.
