This Agreement is made on [insert date of execution of the share option agreement] Parties 1 [insert name of Company whose shares are being granted under option] (registered number [insert registered number of company]) whose registered office is at [insert address of registered office of company](Company) 2 [insert name of Option Holder] of [insert address of option holder] (Option Holder) 3 [[insert name of Grantor (if different from Company) (registered number [insert registered number of company]) whose registered office is at [insert address of registered office of company]] (Grantor)] BACKGROUND (A) [The Company has agreed to grant to the Option Holder an Option to acquire Shares on the terms set out in this Agreement and in accordance with the rules of the [insert name of EMI option plan] (Rules). OR The Company and the Grantor intend that the Option Holder be granted an Option to acquire Shares on the terms set out in this Agreement and in accordance with the rules of the [insert name of EMI option plan] (Rules)]. (B) [The Company will satisfy the exercise of the Option by transferring or procuring the transfer of Shares

Share Incentives analysis: Fast growing entrepreneurial businesses that implement enterprise management incentives (EMI) share options are very frequently the same businesses looking for external funding from venture capitalists (VC), or seeking investment from individuals under the tax-advantaged Enterprise Investment Scheme (EIS).

Not realising a disqualifying event has occurred is one of the most common reasons why unintended income tax, National Insurance contributions (NICs) (employer’s and employee’s) and apprenticeship levy (AL) may become payable on the exercise of enterprise management incentives (EMI) options. Therefore, EMI eligibility is not just based on a snapshot of the company at the time the scheme is launched but requires ongoing monitoring. This Practice Note examines the following: • what are the consequences of a disqualifying event: ◦ on a market value EMI option, and ◦ on a discounted EMI option? • what are the disqualifying events: ◦ relating to the company ◦ relating to the employees ◦ relating to varying the terms of the option ◦ relating to the alteration of share capital ◦ relating to share conversions, and ◦ relating to granting options pursuant to company share option plans (CSOPs) • circumstances not giving rise to a disqualifying event (but which will prevent the company from being able to grant any new EMI options) • common

This Checklist examines some of the due diligence questions which should be asked to help ascertain whether the target company’s options should be treated as qualifying enterprise management incentives (EMI) options prior to the completion of any transaction to purchase the target company. It should be noted that this Checklist focuses only on EMI qualification. It does not examine wider issues associated with the particular terms of the EMI documentation nor addresses any considerations in processing the relevant option exercises as a result of the transaction. For this, see Practice Note: Private company transactions—share incentive considerations. EMI options are tax-advantaged share options intended for use primarily by small and growing companies which a qualifying company can grant on a discretionary basis, provided that all statutory requirements are met. They can be granted over shares worth up to £250,000 per individual and £6m in aggregate (with effect from 6 April 2026, except in respect of certain Northern Ireland companies for which the aggregate limit is £3m even after 6 April 2026). In both cases the shares are valued as

What is the [insert name of EMI scheme]? [insert name of company establishing EMI scheme] (the Company) has established the [insert name of EMI scheme] scheme (EMI Scheme). Pursuant to the EMI Scheme, the Company can grant enterprise management incentives (EMI) qualifying share options and also unapproved share options. Unless otherwise stated in this paper, you have been granted EMI qualifying share options. These FAQs outline the key provisions of the EMI Scheme and explain some of the tax benefits. The full details of the EMI Scheme are set out in the option grant documentation. If there is any contradiction or discrepancy between the EMI Scheme rules and/or option agreement and these FAQs, the plan rules take priority. What are EMI options? The EMI Scheme pursuant to which your option has been granted is a highly flexible and tax-efficient scheme designed specifically for small/medium-sized companies and it is subject to specific legislation. You have been selected to participate in the EMI Scheme and have been granted an option to buy the set number of shares (as specified under your option

Enterprise management incentives (EMI) options are tax-advantaged share options which, with effect from 6 April 2026, a qualifying company with fewer than 500 full-time equivalent employees can grant on a discretionary basis over shares worth up to £250,000 per individual and £6m in aggregate (in both cases valued as of the date of grant) and are intended for use primarily by small and growing companies. (In respect of certain Northern Ireland companies, the limit on the number of full-time equivalent employees is fewer than 250 rather than 500, and the aggregate limit is £3m rather than £6m.) The legislation relating to EMI options sets out numerous requirements that must be met, including in relation to: • the company granting the options • the individuals being granted the options, and • the terms of the options themselves For further information on the above requirements, see Practice Notes: EMI—qualifying companies, EMI—trading activities, EMI—what makes an employee eligible? and EMI—requirements for options. See also: EMI scheme—flowchart to determine company's eligibility, EMI scheme—flowchart to determine employee's eligibility,

Although EMI share options can be enormously tax efficient, they also pose potentially large pitfalls. If not drafted and implemented correctly, the tax repercussions for both employees and companies can be significant. This Practice Note sets out the most common misunderstandings and mistakes made when: • assessing whether a company qualifies to grant EMI options • implementing an EMI scheme, and • operating an EMI scheme In particular, this Practice Note details: • what an EMI option is • the consequences of an EMI option being drafted/implemented incorrectly • the consequences of an EMI qualifying option being operated incorrectly • common misunderstandings and mistakes made when assessing whether a company qualifies to grant EMI options • common misunderstandings and mistakes made when implementing an EMI scheme • common misunderstandings and mistakes made when operating an EMI scheme, and • how to avoid misunderstandings and mistakes when dealing with EMI options This Practice Note only deals with the common misunderstandings and mistakes relating to EMI options. It is not intended to be a

This Agreement is made on [insert date of execution of the agreement] Parties 1 [insert name of acquiring company whose shares are being granted under the replacement option] (registered number [insert registered number of company]) whose registered office is at [insert address of registered office of company] (Company) 2 [insert name of Option Holder] of [insert address of option holder] (Option Holder) BACKGROUND (A) On [insert date of grant of original EMI option], the Option Holder was granted an option by [insert name of EMI scheme company that granted the original EMI option] (Original Grantor) over shares in the Original Grantor (Original Option). (B) The Company has obtained Control of the Original Grantor as part of a company reorganisation as defined under paragraph 39 of Schedule 5, and wishes to grant to the Option Holder a new EMI Option over shares in the Company (New Option) in consideration of the release by the Option Holder of the Original Option in accordance with the terms of this Agreement. (C) The Option Holder wishes to release the Original Option in consideration of the grant of the New Option in accordance with the terms set out in this Agreement.

Enterprise management incentives (EMI) schemes and company share option plans (CSOPs) are both tax advantageous discretionary share option schemes used widely in the UK. While EMI schemes have the potential to provide more generous tax treatment and allow for greater individual awards, the EMI eligibility requirements are far stricter than those for CSOPs and, as such, many companies who do not qualify to grant EMI options instead decide to adopt a CSOP for the benefit of their employees. This Practice Note seeks to examine the differences between the two schemes in order to highlight those circumstances in which one scheme would be adopted by a company in favour of another, and the different benefits that each scheme offers. This Practice Note only provides a summary of each point and therefore should be read in conjunction with Practice Notes: How EMI schemes work and key features and How CSOPs work and key features as well as the other more detailed Practice Notes. Issue EMI schemes CSOPs Does the scheme have to be offered to all eligible employees? No No Reason

The enterprise management incentives (EMI) scheme is a highly flexible and tax-efficient scheme designed specifically for small and medium-sized companies. The EMI regime is prescriptive and sets out numerous requirements that must be met at the time the options are granted, including in relation to: • the company granting the options • the employees being granted the options • the shares being placed under option, and • the options themselves This Flowchart focuses on the conditions that must be met in

The enterprise management incentives (EMI) scheme is a highly flexible and tax-efficient scheme designed specifically for small/medium-sized companies. The EMI regime is prescriptive and sets out numerous requirements that must be met at the time the options are granted, including in relation to: • the company granting the options • the employees being granted the options • the shares being placed under option, and • the options themselves This flowchart focuses on the conditions that

Rules of the [insert name of company granting EMI options] enterprise management incentives Scheme 1 Definitions and interpretation 1.1 Definitions In this Scheme, except where the context otherwise requires, the words and expressions set out below will bear the following meanings, namely: [Acquiring Company • has the meaning ascribed to it in paragraph 39 of Schedule 5; Agreement • means the agreement entered into by an Eligible Employee, the Company and, where different, the person which grants an Option, in such form as the Directors will from time to time determine; Closed Period • means a period when the Directors are prohibited from dealing in shares under the Market Abuse Regulation (Assimilated Regulation (EU) 596/2014) or any other regulation, act, guidance or code on transactions in securities which applies to the Company, including any share dealing code of the Company; Company • [name of company granting options] (Company No [insert registered number]); Control • has the meaning ascribed to it in Schedule 5 and derivative terms shall be construed accordingly; Date of Grant • in respect of the Option, means the date on which the Agreement is entered into by all the relevant parties; Directors • means the board of directors of the Company from time to time or a duly authorised