Company with imminent AIM flotation
A previously private software company is scheduled to float on AIM in the next two weeks but wishes to grant EMI options to employees beforehand.
The price that investors are invited to subscribe for shares, which will also constitute the opening price on AIM, will be £2.50 per ordinary share.
The employees will be granted EMI options over the same ordinary class of share as will be floated on AIM but there will be individual performance targets in their option agreements that will determine when they can exercise their options.
A small discount may be appropriate, depending on the facts, to reflect any risk that the float may not go ahead in the scheduled time frame.
It may therefore be reasonable to use the price of £2.50 per share or – subject to the above factor – very close to this, as both AMV and UMV for the purpose of granting the EMI options.
No adjustment/discount is required (for a valuation for option purposes) to reflect the performance conditions restricting the employees’ freedom to exercise their options, as these conditions are personal to the employee only.