How to grant EMI share options

Once you have determined that your company and employees are eligible for an EMI scheme, you will need to create the actual EMI scheme so you can grant share options.

You will first need to make a few decisions about your EMI scheme, including:

• People: Which of your employees do you include within the scheme? Senior leaders, key roles or all team members?
• Number of shares: How many shares are granted to each employee? This guide may help you decide.
• Exercise price: Do you allow employees to exercise the EMI options at the nominal value? This means that when they exercise their fully vested shares, they will have an income tax charge for the difference between the agreed actual market value (AMV) and the nominal value. Or will they exercise at the AMV? In this case, there will be no tax owed. Or will the exercise price be somewhere in between these two values? Learn more about taxation and exercising EMI shares here.
• Exercisable or exit only: Will employees be able to exercise their shares upon completion of a vesting schedule, or on exit only (e.g. if the company is sold)?
• Vesting schedule: If the shares are not exit only, at what point in the future are employees able to exercise them? Understand your options for EMI vesting schedules by reading this guide.
• Special conditions: What other conditions might be attached to the grant of the options that employees need to satisfy before they can exercise their fully vested shares? These might be performance-related conditions, such as meeting sales goals.