3424.This is another introductory paragraph, based on paragraph 1(1) of Schedule 9 to ICTA. It lists the requirements relating to share options. The “etc.” refers to the voluntary provisions, which are authorised by paragraphs 24 and 25 of this Schedule.
3425.This paragraph derives from paragraph 29 of Schedule 9 to ICTA and contains the rule that the exercise price must be not less than the market value of the shares at the time of the grant of the option. Sub-paragraph (2) allows this price to be fixed in advance of the grant if agreed between the Inland Revenue and the scheme organiser.
3426.The word “manifestly” is retained in sub-paragraph (1). The word is interpreted to mean variations of “evidently”, “clearly” and “obviously”.
3427.Sub-paragraph (3) extends the scope for changes, which are permitted to occur as a result of a variation in the share capital. Paragraph 25 of Schedule 9 to ICTA refers only to price, but in reality the number and description of the shares may be affected. This and the necessity of getting Inland Revenue approval in advance (sub-paragraph (4)) have been recognised in practice. See Change 169 in Annex 1.
3428.This paragraph provides that the participant may not transfer share options. It derives from part of paragraph 27(2) of Schedule 9 to ICTA.
3429.There is a new sub-paragraph (2) which provides a signpost to paragraph 25 of this Schedule which deals with the position after the death of a participant.
3430.This derives from part of paragraph 27(1) of Schedule 9 to ICTA and permits a scheme to allow an option holder to exercise options after ceasing to be a full-time director or qualifying employee.
3431.This derives from the other part of paragraph 27(2) of Schedule 9 to ICTA (part is reflected in paragraph 23 of this Schedule). It allows a scheme to provide for the exercise of an option after the option holder dies.