Once you have determined that your company and employees are eligible for EMI, you need to craft the actual award of the EMI scheme, which is incredibly simple to do on Vestd. The key ingredients of this are:
- People - who do you include within the scheme?
- Number of shares - how many does each individual get granted?
- Exercise price - do you allow the employees to exercise the options at nominal value, which means that when they exercise the options will have an income tax charge for the difference between the agreed AMV and the nominal value, or do they exercise at the AMV, or somewhere in between?
- Vesting period - at what point in the future are they able to exercise the shares?
- Performance conditions - what other conditions might be attached to the grant of the options that they need to satisfy before they can exercise?
When you issue EMI options on Vestd, this will be using the standard EMI template that has been reviewed by our legal advisers, CMS.
It is important that you read through this carefully when you set up the reward scheme, so that you are fully aware of the content.
The great majority of the template is a standard industry approach to the issuance of options to employees.
One particular issue that you should be aware of is that the agreement states that if the individual ceases to be an employee of the company (for any reason other than death) than the options lapses. However, the Board does retain the explicit right (with the approval of the majority off shareholders) to determine within 16 weeks of cessation of employment that the lapse provision does not apply to this option (and this may be subject to Board determined conditions).
Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal or financial advice'.