EMI scheme - part option

EMI scheme - part option

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I'm putting an EMI agreement together and I had two questions which somebody may be able to help with if they've been there already:

1. Can the employee exercise part of the option in the future? I'm just wondering what happens if exercise time comes and the employee doesn't have the cash to pay for the shares, but wants to get them in order to re-sell.

2. Does there have to be a consideraion for the grant of the option. I've seen a specimen agreement which has this in, but think it's optional.

If anybody could help on this I would be extremely grateful.

Thanks
JohnG

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By Jon Stow
04th Dec 2008 10:57

You might not welcome my comment, John
but if you are asking these questions might it be better to engage a specialist person or firm to draw up the EMI agreement and draft the paperwork.

Over six years ago I used to prepare EMI Schemes when with a larger professional firm but with a lot of peer review to make sure we were bombproof. Now I am a small firm owner I consider the risk too great to do it myself even though i think I know what I am talking about. They are easy things to get wrong.

Jon Stow Consulting

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By johngill
04th Dec 2008 09:25

Thanks Hamish that's very helpful.

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By User deleted
03rd Dec 2008 17:03

EMI
1. Yes, the option agreement could enable the option holder to exercise the options in tranches after one specified service period, or you could award smaller sets of options for staggered service periods.

2. No, the award of the grant can be for nil consideration. The option price would have to be at least the nominal value of the share, that is the only practical parameter.

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