Emperor Energy Grants 10 Million Unlisted Options at $0.1095 Exercise Price Under Employee Incentive Plan

Details of Emperor Energy’s Employee Incentive Plan and Recent Option Issuance

Following shareholder approval on 10 June 2026, Emperor Energy Limited proceeded with issuing 10 million unlisted options under its Employee Incentive Plan on 23 July 2026. These options were granted for nil cash consideration, aligning with common equity-based compensation practices among ASX-listed companies. This approach incentivizes employees by linking remuneration to shareholder value without immediate cash expenditure.

The options have an exercise price of $0.1095 per share and a three-year term, expiring on 21 July 2029. This price sets the cost for option holders to convert options into ordinary fully paid shares. Employee incentive plans like this are widely used in the energy sector to retain talent and motivate performance while spreading equity participation.

Option Terms and Exercise Conditions

The newly issued unlisted options are denominated in Australian dollars with a fixed exercise price of AUD 0.1095 per share. Each option converts into one ordinary fully paid share upon exercise, increasing Emperor Energy’s issued capital. These options are unquoted and not intended for trading on the ASX, meaning they remain privately held. The terms comply with ASX Listing Rule 6.1, ensuring regulatory approval and fairness.

Option holders have until 21 July 2029 to exercise. Should Emperor Energy’s share price exceed $0.1095 during this period, exercising options becomes financially attractive. The company has not disclosed any vesting conditions, performance hurdles, or individual recipients.

Current Capital Structure and Unquoted Options Portfolio

Post-issuance, Emperor Energy has 976.27 million ordinary fully paid shares on the ASX. Alongside these, the company holds approximately 66.5 million unquoted options across four classes. Prior to this issuance, about 56.5 million unquoted options existed, including:

• 15 million options expiring 11 November 2027 at $0.015 exercise price
• 34.5 million options expiring 1 December 2028 at $0.1095 exercise price
• 7 million options expiring 1 December 2028 at $0.20 exercise price

The new 10 million options at $0.1095 exercise price expiring in 2029 extend the company’s employee incentive offerings with a longer expiry than some existing classes.

Nil Cash Consideration and Financial Implications

The 10 million options were issued for nil cash consideration, meaning Emperor Energy did not receive immediate funds from this grant. Unlike capital raises, this issuance does not enhance liquidity but expands potential future share capital. Investors may view this as a non-cash employee compensation method that preserves cash reserves.

If all options are exercised, Emperor Energy would receive $1.095 million in proceeds, representing a future capital inflow dependent on share price performance and option holder decisions.

Multiple Option Classes and Dilution Risks

Emperor Energy’s four classes of unquoted options, totaling approximately 66.5 million, pose potential dilution risks if exercised. Exercising all options would issue an equivalent number of new shares, diluting existing shareholders’ ownership.

Exercise prices vary, reflecting issuance at different times and market conditions. The lowest price of $0.015 suggests earlier issuance during lower valuations, while the highest price of $0.20 indicates issuance under stronger market sentiment. Shareholders should monitor share price movements relative to these exercise prices as they influence exercise likelihood.

Regulatory Compliance and ASX Confirmation

The ASX confirmed the new options comply with Listing Rule 6.1, validating their terms and structure. Documentation detailing the securities’ conditions is publicly available via ASX disclosures.

The issuance was formally notified on 23 July 2026 through an Appendix 3G, following a prior Appendix 3B announcement on 22 July 2026. Emperor Energy confirmed no further securities remain to be issued under this placement, marking completion of this tranche.

Strategic Role of Employee Incentive Plans in the Energy Sector

Emperor Energy’s Employee Incentive Plan aligns with industry practices to attract and retain specialized talent in exploration, engineering, and management roles. Equity participation through options enables the company to compensate employees without immediate cash outflows, supporting long-term value creation aligned with shareholder interests.

The nil-consideration option grant serves as direct employee remuneration rather than a purchase plan, reinforcing alignment between employee incentives and company performance over extended project timelines common in the energy industry.

Placement Timeline and Completion

The proposed securities issuance was announced on 22 July 2026 via Appendix 3B, with the actual issue and completion notification following on 23 July 2026. This swift process reflects the pre-approved nature of the Employee Incentive Plan secured on 10 June 2026.

No further securities are pending issuance under this placement, though shareholder approval allows for future grants under the plan without additional shareholder votes, subject to original resolution limits.

Investor Guidance on Option Exercises and Share Price Impact

Shareholders should track option exercise activity, especially if Emperor Energy’s share price surpasses exercise prices of outstanding options. Exercising options increases issued capital and dilutes ownership but also generates cash inflows that can fund growth initiatives.

Effective deployment of exercise proceeds into value-generating projects may offset dilution effects, benefiting shareholders. Conversely, ineffective use could result in pure dilution. Investors should consider these factors when evaluating the company’s capital management and employee incentive impacts.

Unquoted Options and Trading Considerations

The issued options are unquoted and not tradable on the ASX, typical for employee incentive securities held privately. This means holders cannot readily sell options on the open market and must exercise to realize value or arrange private transactions.

The unquoted status limits direct impact on ASX trading but eventual option exercises will increase the pool of quoted shares. No details were provided on restrictions or holding periods post-exercise; investors should consult company disclosures for further information.