EMI share options and redundancy

johnnyboyc

I am about to be made redundant from my place of work, but I have some EMI share options from a number of years ago.

The paperwork for these share options is horrendously complex and unintelligible, and it's hard to figure out what can be done about them.

My company has told me that there is normally a 90-day period in which to exercise my options, but they're extending that period to 5 years. Is this a good thing?

The taxation of these things confuses me somewhat as well. Can anybody here explain to me, in plain English, what that's all about?

Thanks for your time.

ratechaser

In my relatively limited experience, stock options gained as an employment benefit tend to have a pretty long expiry date (I've seen up to 10 years but I'm sure there are longer ones). But when you are terminated involuntarily and without 'cause' (e.g. Redundancy as opposed to dismissal for gross misconduct), you generally only have a short period to exercise them (or not).

My view is if they are giving you 5 years rather than the normal 90 days, then that's a good thing in principle. That said, how does the current market price compare to the strike price of your options?

Ultimately they are worthless until and unless market price > strike price... So if that's not currently the case, you at least have another 5 years for it to happen.

ratechaser

Just to add that I'm no expert on the tax treatment of options, but unless there is something very unusual about yours, you would only have potential tax liability at the point you exercised them. So just holding them, whether it be for 90 days or 5 more years, should not land you with a tax bill...