About this document
This is a comprehensive Enterprise Management Incentive (EMI) share scheme agreement between any company and any eligible employee.
This EMI Share scheme document is suitable if you want to set up a tax advantaged share options for employees. It will help small, higher risk companies recruit and retain employees who have the skills to help them grow and succeed. An EMI Share scheme can also be a useful tool to reward employees.
In order to qualify in law the company must:
- be independent (company must not be controlled by another company);
- be trading in the UK (more than 50%);
- not have gross assets in excess of £30 million (this is measured at the time the option is granted and applies to the consolidated assets of the group where there is more than 1 company);
- have fewer than 250 employees (at the date of grant); and
- not undertake certain excluded activities (e.g. dealing in shares, property development.
provision of legal or accountancy services, shipbuilding, coal and steel production, etc.)
For an employee to be eligible to receive qualifying EMI options, they must:
- work for the company, or one of its group companies for at least 25 hours per week, or, if less, for 75% of their working time per week; and
- not own more than 30% of the ordinary share capital of the company.
Net Lawman have a second EMI share scheme document which provides for the employee to be able to exercise the option only following a sale of a controlling interest in the company. You can find this document linked right.
- Grant of options
- Limits on number of shares under option
- Alteration of share capital
- Schedule: the option agreement as follows:
- Grant of option
- Limits on Number of Shares under
- Rights not Assignable
- Lapse of Option
- Death of option holder
- Variation of share capital
- Replacement Options
- Winding up and Statutory Reconstruction
- Tax and National Insurance Contributions
- No claims if option not tax effective
- Employment Issues
- Restrictions on shares
- Extensive explanatory notes and guidance.
- Schedule 1: Restrictions on Shares
- Schedule 2: Vesting of Option Shares
- Comprehensive agreement with practical and sensible provisions
- Includes option agreement
- Aids retention of employees and acts as an incentive for joining the company
- Plain English notes to guide you, including ‘How to set up an EMI Share Scheme’
This document has been drawn by James Hunt, unconnected with Net Lawman. James Hunt will welcome your contact for further legal help. There may be a charge for James Hunt services.
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