There are several statutory requirements for a company to qualify to introduce an EMI share option plan, some of which will be satisfied at the time of the grant of the relevant EMI share option plan.
The requirements include:
Qualifying company
- It must be independent of other companies and have only qualifying subsidiaries.
- The company's gross assets must not exceed £30 million at the time of grant.
- It must have less than 250 full-time employees.
- The company must be a trading company or the parent company of a trading group. Certain trading activities will not qualify.
- The company must have a permanent UK establishment.
Qualifying Shares and Employees
Generally, EMI share options can be satisfied by newly issued shares or by the transfer of existing shares from a shareholder.
The shares subject to the EMI share options must also be fully paid up.
In addition to the above, to be eligible to be granted an EMI share option, an employee must work for the company (or group) for at least 25 hours per week, or if less, 75% of their working time.
It is also important to note that EMI share options can only be granted to employees and cannot be granted to non-executive directors or consultants.
When can the EMI share options be exercised?
The EMI share option plan (and any relevant EMI share option agreement) can determine when and under what conditions EMI share options can be exercised.
The EMI share options must be capable of being exercised within ten years of the date of the grant.
In the event that the options are exercisable upon death, they can only be exercised within 12 months after the option holder's death.
Blogs
