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Share Option Schemes

December 2014
Any company considering setting up an employment management incentive (EMI) share option scheme must set out the terms of the option in writing at the time of the grant. Our EMI Share Option Agreement may be used for this purpose. However in order to assist you further in this process, we have this month added several new ancillary documents.

EMI options are granted to employees as part of a tax efficient share option plan to incentivise employees. EMI schemes are ideal for small companies and flexible in how the options operate. There are however strict rules governing qualifying companies, employees and the terms and circumstances in which the option(s) are granted.

Our new material to complement our existing popular EMI Share Option Agreement includes:

• A notice of exercise of option – a form of notice required under the share option agreement to be sent to the company by the relevant employee before the option can be exercised;

Board Minutes – to record and approve the granting of EMI share options to eligible employees; and

• A shareholders’ ordinary resolution – which may be required in order to approve the implementation of the EMI Scheme.

In addition to this new EMI material, we have also added two new notices of exercise of option to complement our non-EMI share option agreements. One is a general notice of exercise of option and the other is for share options which can only be exercised following the occurrence of a specified event.

This new material may be useful for company directors, secretaries and administrators whose company has already adopted an EMI Share Option Scheme or is considering adopting one as well as for professional advisors to companies who run such schemes.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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