The Enterprise Management Incentive Option Agreement

Article author
Charles Brecque
  • Updated

An Enterprise Management Incentive (EMI) Option Agreement is a contract between a company and an employee, which grants the employee a right to buy a certain number of shares in the company at an identified price. It establishes the terms for the grant, lapse, and exercise of the option. 

Core elements

  • Grant date 
  • Option shares + exercise option
  • Share option plan
  • Tax and national insurance liabilities

Features of option

  • Generally not exercisable before exercise conditions satisfied.
  • Cannot be transferred, assigned, or put under a security interest.
  • Will lapse if an exercise condition becomes incapable of being satisfied.

Option holder agrees to

  • Indemnify employer for tax and national insurance contributions payments.
  • Enter into a joint election of shares if required by employer.
  • Grant employer or a substitute power of attorney in respect of tax and national insurance obligations.

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