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PART II |
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GENERAL REQUIREMENTS |
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Introduction |
| | 6. The plan must meet the requirements of-
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paragraph 7 (the purpose of plan); |
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paragraph 8 (all-employee nature of plan); |
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paragraph 9 (participation on same terms); |
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paragraph 10 (no preferential treatment for directors, etc.); |
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paragraph 11 (no further conditions); |
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paragraph 12 (no loan arrangements). |
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The purpose of the plan |
| | 7. - (1) The purpose of the plan must be to provide benefits to employees in the nature of shares in a company which give them a continuing stake in that company.
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(2) The plan must not contain, and the operation of the plan must not involve, features which are neither essential nor reasonably incidental to that purpose.
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All-employee nature of plan |
| | 8. - (1) The plan must provide that every employee who-
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(a) meets the requirements mentioned in Part III (eligibility of individuals) in relation to an award of shares under the plan, and |
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(b) is chargeable to tax under Case I of Schedule E in respect of the employment by reference to which he satisfies the condition in paragraph 14 (the employment requirement), |
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is eligible to participate in the award, and invited to do so.
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(2) The plan must not contain any feature which has or would have the effect of discouraging any description of employees within sub-paragraph (1) from participating in an award of shares under the plan.
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This does not apply to any provision required or authorised by this Schedule.
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(3) The plan may provide that an employee who-
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(a) meets the requirements mentioned in Part III (eligibility of individuals) in relation to an award of shares under the plan, but |
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(b) is not chargeable to tax as mentioned in sub-paragraph (1)(b), |
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is eligible to participate in the award, and may be invited to do so.
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(4) For the purposes of this Schedule an individual is a "qualifying employee", in relation to an award of shares, if-
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(a) he is eligible to participate in the award, and |
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(i) he must be invited to participate in the award (see sub-paragraph (1)), or
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(ii) under the plan he may be invited to participate in the award (see sub-paragraph (3)) and has been so invited.
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Participation on same terms |
| | 9. - (1) The requirement of this paragraph is-
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(a) that every employee who is invited to participate in an award must be invited to participate on the same terms, and |
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(b) that those who do participate must actually do so on the same terms. |
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(2) The requirement of this paragraph is infringed by the awarding of free shares by reference to factors other than those mentioned in sub-paragraph (3).
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(3) The requirement of this paragraph is not infringed by the awarding of free shares by reference to an employee's-
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(b) length of service, or |
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This is subject to sub-paragraph (4).
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(4) Where the awarding of free shares is by reference to more than one of the factors mentioned in sub-paragraph (3) the requirement of this paragraph is infringed unless-
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(a) each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and |
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(b) the total entitlement is the sum of those separate entitlements. |
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(5) In the case of an award of free shares which provides for performance allowances, this paragraph has effect as provided in paragraph 29 (performance allowances: method one) or, as the case may be, paragraph 30 (performance allowances: method two).
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For this purpose "performance allowance" has the meaning given in paragraph 25(1).
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No preferential treatment for directors etc. |
| | 10. - (1) The first requirement of this paragraph is that no feature of the plan must have or be likely to have the effect of conferring benefits wholly or mainly-
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(b) on employees receiving higher levels of remuneration. |
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(2) The second requirement of this paragraph is that in the case of a plan established by a company that is a member of a group, the identity of the company (or, if it is a group plan, the participating companies) must not be such that the plan has or is likely to have the effect of conferring benefits wholly or mainly-
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(a) on employees of companies that are members of the group who receive higher levels of remuneration, or |
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(b) on directors of such companies. |
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(3) This paragraph is subject to paragraph 9(3) (award of shares by reference to remuneration etc.).
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No further conditions |
| | 11. No conditions, other than those required or permitted by this Schedule, may be imposed on an employee's participation in an award of shares under the plan.
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No loan arrangements |
| | 12. - (1) The arrangements for the plan must not make any provision, or be in any way associated with any provision made, for loans to some or all of the employees of-
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(b) in the case of a group plan, any participating company, |
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and the operation of the plan must not be in any way associated with such loans.
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(2) For the purposes of sub-paragraph (1) "arrangements" includes any scheme, agreement, undertaking or understanding, whether or not legally enforceable.
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