UK Employee Options (EMI)

searcher profile

July 03, 2025

by a searcher from Imperial College London in London, UK

I'm looking into a deal where the management team owns options worth 10% of the business. These options are vested but not yet exercised and would likely be exercised if a deal happens. The two year date for the EMI tax advantage is due to happen in October of this year. The management team would be staying and the owner is looking for a full exit (he's not involved in the day to day operations). How could you deal with these options in a potential offer? Is there a way to roll these options over but attach a vesting period to keep the management team incentivised for the future? If the options get exercised, would you essentially be paying for the same equity twice if you buy 100% of the shares (once on deal close and once for future equity awards)? Or is it best to buy 100% of the shares and stick with cash bonuses? Has anyone dealt with something similar?
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commentor profile
Reply by a searcher
in Canterbury, UK
As mentioned earlier, check the shareholder agreement for drag and tag. Speak to the management team as well and see what their vision is and if its aligned with yours. Legal DD will provide clarity
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Reply by a searcher
in Northampton, UK
"The two year date for the EMI tax advantage" doesn't sound right - I think you are talking about the BADR holding rules which are 2 years from grant date? But regardless the devil is in the detail - you need to read the share option agreement for all of the detail.
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