Call Option Agreement | Practical Law

Call Option Agreement | Practical Law

A call option agreement to be used in connection with a stockholder's investment in a company. This agreement sets out the terms and conditions under which the stockholder grants the company the right to purchase (or call) the shares of the company held by that stockholder under certain circumstances. It is drafted in favor of the company, but aims to be reasonable and includes provisions commonly included in many call option agreements. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

Call Option Agreement

Practical Law Standard Document 1-535-8786 (Approx. 16 pages)

Call Option Agreement

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A call option agreement to be used in connection with a stockholder's investment in a company. This agreement sets out the terms and conditions under which the stockholder grants the company the right to purchase (or call) the shares of the company held by that stockholder under certain circumstances. It is drafted in favor of the company, but aims to be reasonable and includes provisions commonly included in many call option agreements. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.
On August 23, 2023, the SEC adopted new rules under the Investment Advisers Act of 1940 for private fund advisers (see Legal Update, SEC Adopts New Rules for Private Fund Advisers) (the "New Rules"). The New Rules are generally effective 12 to 18 months after publication in the Federal Register and will have a material impact on limited partnership agreements for private equity funds and may require revisions to this resource. Updates are planned in the near future. For more information on the final rule, see Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, Fed. Reg. 88 FR 63206 (Sept. 14, 2023).