Option Cancellation Agreement: Definition, Terms, Example
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What is an Option Cancellation Agreement?
An option cancellation agreement is a document that details the terms of an agreement between two parties in which one party can cancel their rights under an existing contract. A typical example of this type of agreement is when a tenant and landlord agree to extend their rental period by another year or term and give either party the right to cancel any time with written notice.
When entering into such agreements, both sides need to understand all aspects to know what obligations each other will have if they choose not to renew the lease. An option cancellation agreement should be reviewed by an attorney familiar with state laws as they can often have different state-to-state requirements.
Common Sections in Option Cancellation Agreements
Below is a list of common sections included in Option Cancellation Agreements. These sections are linked to the below sample agreement for you to explore.
Option Cancellation Agreement Sample
Exhibit 99.1
STOCK OPTION CANCELLATION AGREEMENT
This STOCK OPTION CANCELLATION AGREEMENT (the “Agreement”) is made and entered into as of January 7, 2011 (the “Effective Date”), by and between (the “Optionee”) and ICAGEN, INC., a Delaware corporation (the “Corporation”).
WHEREAS, the Corporation has previously granted to the Optionee stock options (the “Options”) to purchase shares of the Corporation’s common stock, $0.001 par value per share, under the Corporation’s 2004 Stock Incentive Plan (as amended to date, the “Plan”);
WHEREAS, the Optionee believes it to be in the Optionee’s best interest as an employee of the Corporation and in the best interest of the Corporation and its stockholders for the Optionee to voluntarily surrender and cancel certain outstanding Options that the Optionee presently holds, as identified on Exhibit A hereto (the “Cancelled Options”), so that additional shares become available under the Plan which the Corporation may use for future grants of stock options and other equity awards;
WHEREAS, the Optionee desires to surrender the Cancelled Options for cancellation without receiving any cash, equity awards or other consideration and without any expectation to receive, and without imposing any obligation on the Corporation to pay or grant, any cash, equity awards or other consideration presently or in the future in connection with the cancellation of such Cancelled Options; and
WHEREAS, the Corporation is relying on the Optionee’s surrender and cancellation of the Cancelled Options in making administrative determinations regarding the Plan;
NOW, THEREFORE, the parties hereby agree as follows:
| 1. | Surrender and Cancellation of Options. The Optionee hereby surrenders the Cancelled Options for cancellation, and the Corporation hereby accepts such surrender and cancellation, effective as of the Effective Date. By execution of this Agreement, the parties have taken all steps necessary to cancel the Cancelled Options. |
| 2. | No Expectation or Obligation. The Optionee and the Corporation acknowledge and agree that the surrender and cancellation of the Cancelled Options described herein shall be without any expectation of the Optionee to receive, and without imposing any obligation on the Corporation to pay or grant, any cash, equity awards or other consideration presently or in the future in connection with the surrender and cancellation of such Cancelled Options. |
| 3. | Miscellaneous. |
| 3.1 | Reliance. The Optionee acknowledges and agrees that the Corporation is relying on the provisions of Sections 1 and 2 herein in connection with the administration of the Plan including, without limitation, determinations regarding the nature of future grants thereunder. |
| 3.2 | Successor and Assigns. This Agreement shall be binding upon, and inure to the benefit of, both parties and their respective successors and assigns. |
| 3.3 | Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Delaware, without regard to any choice of law principle that would dictate the application of the law of another jurisdiction. |
| 3.4 | Counterparts. This Agreement may be executed in several counterparts and all documents so executed shall constitute one agreement, binding on each of the parties hereto, notwithstanding that both of the parties did not sign the original or the same counterparts. |
| 3.5 | Headings. The headings of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. |
| 3.6 | Severability. In the event that any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. |
| 3.7 | Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement. The Company and the Optionee have made no promises, agreements, conditions, or understandings relating to this subject matter, either orally or in writing, that are not included in this Agreement. |
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
| ICAGEN, INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| OPTIONEE | ||
|
| ||
| [Name] | ||
EXHIBIT A
Cancelled Options
Reference:
Security Exchange Commission - Edgar Database, EX-99.1 2 dex991.htm FORM OF OPTION CANCELLATION AGREEMENT, Viewed January 27, 2022, View Source on SEC.
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Meet some of our Option Cancellation Agreement Lawyers
Eric H.
I help startups, growth-stage companies, and middle market businesses navigate their most important legal moments, from early fundraising rounds to complex M&A transactions. I work with founders, investors, executives and their ecosystem partners who want exceptional client service without the overhead of a large firm. Whether you are raising capital, planning an acquisition, negotiating complex commercial agreements, or need an experienced general counsel in your corner on a fractional basis, I bring big law and Fortune 500 expertise, at a fraction of their rates. I'm based in Minneapolis and work with clients across Minnesota and nationally.
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As a former corporate attorney at one of the world's premier global law firms and former in-house counsel at Texas Instruments, a Fortune 500 technology leader, I bring big-firm expertise and corporate-level sophistication to entrepreneurs, startups, and small business owners who deserve the same quality legal support as the largest companies in the world. As a lawyer and startup founder with products currently being sold in national retail chains, I've spent my career at the intersection of complex business transactions, corporate law, and policy. I know how deals get done, where contracts go wrong, and how to protect businesses before problems arise. Now, I put that experience to work for founders and business owners who need practical, straightforward legal guidance without the intimidating price tag of a major law firm. Whether you're signing your first vendor contract, structuring a partnership, protecting your intellectual property, or navigating a business dispute, I translate the law into plain language so you can make confident decisions and focus on growing your business. What I bring to the table: - Complex commercial transactions experience at an AmLaw 100 firm - 7+ years as in-house counsel at a Fortune 500 company - Deep understanding of how businesses actually operate day-to-day - Flat-fee, transparent pricing with no billing surprises - Fast turnaround and direct communication If you're building something, I want to help you protect it.
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Caroline N.
Caroline N.
Caroline is a solo attorney who provides legal counsel with a management-first mindset, combining legal expertise with proactive policy development. Prior to starting her own practice, Caroline gained extensive legal experience as a litigator defending and advising employers of all sizes, ranging from a single business owner, to a small family-owned winery, and major, nationwide corporations. Caroline also has experience on the plaintiffs' side representing survivors of sexual abuse against school districts and churches. With her unique litigation background and expertise representing both plaintiffs and defendants, Caroline understands that legal compliance is only a piece of the puzzle for business success. She is committed to leading with compassion to provide a personalized, approachable service for each client. Having safeguarded companies against a variety of business and employment disputes, Caroline is focused on preventative risk management, helping owners reduce potential employment litigation that she has defended firsthand in court. Caroline is dedicated to helping entrepreneurs spend less time worried about liability and more time focusing on business growth. Based in Los Angeles County, she provides accessible, actionable legal solutions throughout Southern California. During her free time, Caroline enjoys yoga and serving her Los Angeles community. In 2025, she partnered with NLSLA to provide pro bono legal services to individuals impacted by the Eaton Fire. Currently, she serves on the board of directors of a nonprofit organization based in Los Angeles.
"Caroline was fantastic to work with! She was thorough, responsive, and took the time to understand my business and what I actually needed. She explained her recommendations clearly, caught California-specific requirements I wasn’t aware of, and was very helpful with all of my follow-up questions. I feel much more confident using the final agreement with my clients and would absolutely work with her again. Highly recommend!"
Adam J.
I'm a California-licensed attorney with 18+ years of experience helping everyone from Fortune 500 companies and venture-backed startups to individuals navigating real-life legal situations. I bring an high degree of emotional intelligence to every matter, and am also certified as both a coach and as a counselor. My career started at Fenwick & West, one of Silicon Valley's top law firms, where I worked alongside names like Google, Airbnb, Kleiner Perkins, and Sequoia Capital. From there I moved in - house at companies like Cloudflare, Autodesk, and Enphase - which gave me a practical, business-minded perspective that I bring to every client, no matter the size of the matter. Today I work with businesses and individuals alike. On the business side, that means commercial contracts, leases, startup corporate work, and serving as a fractional general counsel for companies that need a trusted legal partner without the overhead. On the personal side, I help individuals with employment matters, disputes, demand letters, contract review, and the kind of everyday legal situations where you just need someone knowledgeable in your corner. I'm direct, responsive, and I speak plain English — not legalese. Whether you're a founder closing your first deal or an individual facing a situation you've never navigated before, I'll give you the same level of attention and care.
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