To grant EMI options, a company must be an independent trading company with:
There are certain trading activities which will not qualify, such as banking, farming, property development, provision of legal services and ship building.
You should also be aware there are rules relating to the independence requirement, the trading requirement and the shares that can be used for EMI options. Ask a lawyer if you want to find out if your company qualifies.
EMI shares can only be granted to employees. They cannot be granted to non-executive directors or consultants. The employee must work for the company for at least 25 hours per week, or if less, 75% of their working time.
Employees cannot be granted EMI options if they (or their ‘associates’) have a ‘material interest’ in the company whose shares are used for the scheme, or in certain related companies.
EMI options may be granted under a set of plan rules, or by way of stand-alone EMI option agreements. The EMI option terms should form a written agreement between the option holder (the employee) and the grantor (the company) which states the main terms of the option, including how and when it may be exercised.