1. (1) For the purposes of this Schedule—
‘approved’ in relation to a scheme, means approved under paragraph 2;
‘associated company’ has the same meaning as in section 432, except that, for the purposes of paragraph 24, subsection (1) of that section shall have effect with the omission of the words ‘or at any time within one year previously’;
‘bonus date’ has the meaning assigned to it by paragraph 18;
‘control’ has the same meaning as in section 432;
‘full-time director’ has the same meaning as in section 250;
‘grantor’, in relation to a scheme, means the company which has established the scheme;
‘group scheme’ and, in relation to such a scheme, ‘participating company’ have the meanings given by subparagraphs (3) and (4), respectively, of paragraph 2;
‘market value’ shall be construed in accordance with section 548;
‘savings-related share option scheme’ means a scheme approved by the Revenue Commissioners in accordance with this Schedule and which approval has not been withdrawn;
‘scheme shares’ has the meaning assigned to it by paragraph 10;
‘shares’ includes stock.
(2) Section 10 shall apply for the purposes of this Schedule.
(3) For the purposes of this Schedule, a company is a member of a consortium that owns another company if it is one of not more than 5 companies which between them beneficially own not less than 75 per cent of the other company's ordinary share capital and each of which beneficially owns not less than 5 per cent of that capital.
(4) For the purposes of this Schedule, the question whether one company is controlled by another shall be determined in accordance with section 432.
Approval of schemes
2. (1) On the application of a body corporate (in this Schedule referred to as ‘the grantor’) which has established a savings-related share option scheme, the Revenue Commissioners shall approve the scheme if they are satisfied that it fulfils the requirements of this Schedule.
(2) An application under subparagraph (1) shall be made in writing and contain such particulars and be supported by such evidence as the Revenue Commissioners may require
(3) Where the grantor has control of another company or companies, the scheme may be expressed to extend to all or any of the companies of which it has control and in this Schedule a scheme which is expressed so to extend is referred to as a ‘group scheme’.
(4) In relation to a group scheme, ‘participating company’ means the grantor or any other company to which for the time being the scheme is expressed to extend.
3. (1) The Revenue Commissioners shall not approve a scheme under this Schedule if it appears to them that it contains features which are neither essential nor reasonably incidental to the purpose of providing for employees and directors benefits in the nature of rights to acquire shares.
(2) The Revenue Commissioners shall be satisfied—
(a) that there are no features of the scheme other than any which are included to satisfy requirements of this Schedule which have or would have the effect of discouraging any description of employees who fulfil the conditions in paragraph 9(1) from actually participating in the scheme, and
(b) where the grantor is a member of a group of companies, that the scheme does not and would not have the effect of conferring benefits wholly or mainly on directors of companies in the group or on those employees of companies in the group who are in receipt of the higher or highest levels of remuneration.
(3) For the purposes of subparagraph (2), ‘a group of companies’ means a company and any other companies of which it has control.
4. (1) If, at any time after the Revenue Commissioners have approved a scheme, any of the requirements of this Schedule cease to be satisfied or the grantor fails to provide information requested by the Revenue Commissioners under paragraph 6, the Revenue Commissioners may withdraw the approval with effect from that time or such later time as the Revenue Commissioners may specify but where rights obtained under a savings-related share option scheme before the withdrawal of approval from the scheme under this paragraph are exercised after the withdrawal, section 519A(3) shall apply in respect of the exercise as if the scheme were still approved.
(2) If an alteration is made in the scheme at any time after the Revenue Commissioners have approved the scheme, the approval shall not have effect after the date of the alteration unless the Revenue Commissioners have approved the alteration.
5. If the grantor is aggrieved by—
(a) the failure of the Revenue Commissioners to approve the scheme or to approve an alteration in the scheme,
(b) the withdrawal of approval, or
(c) the failure of the Revenue Commissioners to decide that a condition subject to which the approval has been given is satisfied,
it may, by notice in writing given to the Revenue Commissioners within 30 days from the date on which it is notified of the Revenue Commissioners' decision, require the matter to be determined by the Appeal Commissioners, and the Appeal Commissioners shall hear and determine the matter in like manner as an appeal made to them against an assessment and all the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.
6. The Revenue Commissioners may by notice in writing require any person to furnish them, within such time as the Revenue Commissioners may direct (not being less than 30 days), with such information as the Revenue Commissioners think necessary for the performance of their functions under this Schedule, and which the person to whom the notice is addressed has or can reasonably obtain, including in particular information—
(a) to enable the Revenue Commissioners to determine—
(i) whether to approve a scheme or withdraw an approval already given, or
(ii) the liability to tax, including capital gains tax, of any person who has participated in a scheme, and
(b) in relation to the administration of a scheme and any alteration of the terms of a scheme.
7. The Revenue Commissioners may nominate any of their officers, including an inspector, to perform any acts and discharge any functions authorised by this Schedule to be performed or discharged by them.
8. (1) The scheme shall not provide for any person to be eligible to participate in it, that is to say, to obtain and exercise rights under it at any time if at that time that person has, or has within the preceding 12 months had, a material interest in a close company which is—
(i) a company the shares of which may be acquired pursuant to the exercise of rights obtained under the scheme, or
(ii) a company which has control of such a company or is a member of a consortium which owns such a company.
(2) Subparagraph (1) shall apply in relation to a company which would be a close company but for section 430(1)(a) or 431.
(3) (a) In this paragraph, ‘close company’ has the meaning assigned to it by section 430.
(b) For the purpose of this paragraph—
(i) subsection (3) of section 433 shall apply—
(I) in a case where the scheme in question is a group scheme, with the substitution of a reference to all participating companies for the first reference to the company in paragraph (c)(ii) of that subsection, and
(II) with the substitution of a reference to 15 per cent for the reference in that paragraph to 5 per cent, and
(ii) section 437(2) shall apply, with the substitution of a reference to 15 per cent for the reference in that section to 5 per cent, for the purpose of determining whether a person has or had a material interest in a company.
9. (1) Subject to paragraph 8, every person who—
(a) is an employee or a full-time director of the grantor or, in the case of a group scheme, a participating company,
(b) has been such an employee or director at all times during a qualifying period not exceeding three years, and
(c) is chargeable to tax in respect of that person's office or employment under Schedule E,
shall be eligible to participate in the scheme, that is to say, to obtain and exercise rights under it, on similar terms.
(2) For the purposes of subparagraph (1), the fact that the rights to be obtained by the persons participating in a scheme vary according to the levels of their remuneration, the length of their service or similar factors shall not be regarded as meaning that they are not eligible to participate in the scheme on similar terms.
(3) Except as provided by paragraph 20 or pursuant to such a provision as is referred to in paragraph 22(1)(e) or (f), a person shall not be eligible to participate in the scheme at any time unless he or she is at that time a director or employee of the grantor or, in the case of a group scheme, of a participating company.
Conditions as to the shares
10. The scheme shall provide for directors and employees to obtain rights to acquire shares (in this Schedule referred to as ‘scheme shares’) which satisfy the requirements of paragraphs 11 to 15.
11. Scheme shares shall from part of the ordinary share capital of—
(a) the grantor,
(b) a company which has control of the grantor, or
(c) a company which either is, or has control of, a company which—
(i) is a member of a consortium which owns either the grantor or a company having control of the grantor, and
(ii) beneficially owns not less than 15 per cent of the ordinary share capital of the company so owned.
12. Scheme shares shall be—
(a) shares of a class quoted on a recognised stock exchange,
(b) shares in a company not under the control of another company, or
(c) shares in a company which is under the control of a company (other than a company which is, or if resident in the State would be, a close company within the meaning of section 430) whose shares are quoted on a recognised stock exchange.
13. (1) Scheme shares shall be—
(a) fully paid up,
(b) not redeemable, and
(c) not subject to any restrictions other than restrictions which attach to all shares of the same class or a restriction authorised by subparagraph (2).
(2) Subject to subparagraph (3), the shares may be subject to a restriction imposed by the company's articles of association—
(a) requiring all shares held by directors or employees of the company or of any other company of which it has control to be disposed of on ceasing to be so held, and
(b) requiring all shares acquired, in pursuance of rights or interests obtained by such directors or employees, by persons who are not, or have ceased to be, such directors or employees to be disposed of when they are acquired.
(3) A restriction is not authorised by subparagraph (2) unless—
(a) any disposal required by the restriction will be by way of sale for a consideration in money on terms specified in the articles of association, and
(b) the articles also contain general provisions by virtue of which any person disposing of shares of the same class (whether or not held or acquired as mentioned in subparagraph (2)) may be required to sell them on terms which are the same as those mentioned in paragraph (a).
14. (1) In determining for the purposes of paragraph 13(1)(c) whether scheme shares which are or are to be acquired by any person are subject to any restrictions, there shall be regarded as a restriction attaching to the shares any contract, agreement, arrangement or condition by which such person's freedom to dispose of the shares or of any interest in them or of the proceeds of their sale or to exercise any right conferred by them is restricted or by which such a disposal or exercise may result in any disadvantage to that person or to a person connected with that person.
(2) Subparagraph (1) does not apply to so much of any contract, agreement, arrangement or condition as contains provisions similar in purpose and effect to any of the provisions of the Model Code set out in the Listing Rules of the Irish Stock Exchange.
15. Except where scheme shares are in a company whose ordinary share capital consists of shares of one class only, the majority of the issued shares of the same class shall be held by persons other than—
(a) persons who acquired their shares—
(i) in pursuance of a right conferred on them or an opportunity afforded to them as a director or employee of the grantor or any other company, and
(ii) not in pursuance of an offer to the public,
(b) trustees holding shares on behalf of persons who acquired their beneficial interests in the shares as mentioned in subparagraph (a), and
(c) in a case where the shares fall within paragraph 12(c) and do not fall within paragraph 12(a), companies which have control of the company whose shares are in question or of which that company is an associated company within the meaning of section 432.
16. (1) The scheme may provide that if any company (‘the acquiring company’)—
(a) obtains control of a company whose shares are scheme shares as a result of making a general offer—
(i) to acquire the whole of the issued ordinary share capital of the company which is made on a condition such that if it is satisfied the person making the offer will have control of the company, or
(ii) to acquire all the shares in the company which are of the same class as the scheme shares,
(b) obtains control of a company whose shares are scheme shares in pursuance of a compromise or arrangement sanctioned by the court under
section 201 of the Companies Act, 1963
(c) becomes bound or entitled to acquire shares in a company, under
section 204 of the Companies Act, 1963
, whose shares are scheme shares,
any participant in the scheme may at any time within the appropriate period, by agreement with the acquiring company, release his or her rights under the scheme (in this paragraph referred to as ‘the old rights’) in consideration of the grant to him or her of rights (in this paragraph referred to as ‘the new rights’) which are equivalent to the old rights but relate to shares in a different company (whether the acquiring company itself or some other company falling within subparagraph (b) or (c) of paragraph 11).
(2) In subparagraph (1) ‘the appropriate period’ means—
(a) in a case falling within clause (a) of that subparagraph, the period of six months beginning with the time when the person making the offer has obtained control of the company and any condition subject to which the offer is made is satisfied,
(b) in a case falling within clause (b) of that subparagraph, the period of six months beginning with the time when the court sanctions the compromise or arrangement, and
(c) in a case falling within clause (c) of that subparagraph, the period during which the acquiring company remains bound or entitled as mentioned in that clause.
(3) The new rights shall not be regarded for the purposes of this paragraph as equivalent to the old rights unless—
(a) the shares to which they relate satisfy the conditions specified, in relation to scheme shares, in paragraphs 11 to 15,
(b) the new rights will be exercisable in the same manner as the old rights and subject to the provisions of the scheme as it had effect immediately before the release of the old rights,
(c) the total market value, immediately before the release, of the shares which were subject to the participant's old rights is equal to the total market value, immediately after the grant, of the shares in respect of which the new rights are granted to the participant, and
(d) the total amount payable by the participant for the acquisition of shares in pursuance of the new rights is equal to the total amount that would have been payable for the acquisition of shares in pursuance of the old rights.
(4) Where any new rights are granted pursuant to a provision included in a scheme by virtue of this paragraph they shall be regarded—
(a) for the purposes of section 519A and this Schedule, and
(b) for the purposes of the subsequent application (by virtue of a condition complying with subparagraph (3)(b)) of the provisions of the scheme,
as having been granted at the time when the corresponding old rights were granted.
Exercise of rights
17. The scheme shall provide for the scheme shares to be paid for with moneys not exceeding the amount of repayments made and any interest paid to them under a certified contractual savings scheme within the meaning of subsection (4) of section 519C.
18. Subject to paragraphs 19 to 22, the rights obtained under the scheme must not be capable of being exercised before the bonus date, that is to say, the date on which repayments under the certified contractual savings scheme are due and for the purposes of this paragraph and paragraph 17—
(a) repayments under a certified contractual savings scheme may be taken as including or as not including a bonus,
(b) the time when repayments are due shall be, where repayments are taken as including the maximum bonus, the earliest date on which the maximum bonus is payable and, in any other case, the earliest date on which a bonus is payable under the scheme, and
(c) the question of what is to be taken as so included must be required to be determined at the time when rights under the scheme are obtained.
19. The scheme shall provide that if a person who has obtained rights under the scheme dies before the bonus date the rights must be exercised, if at all, within 12 months after the date of that person's death and if that person dies within 6 months after the bonus date the rights may be exercised within 12 months after the bonus date.
20. The scheme shall provide that if a person who has obtained rights under it ceases to hold the office or employment by virtue of which that person is eligible to participate in the scheme by reason of—
(a) injury or disability or on account of his or her being dismissed by reason of redundancy (within the meaning of the Redundancy Payments Acts, 1967 to 1991), or
(b) reaching pensionable age (within the meaning of
section 2 of the Social Welfare (Consolidation) Act, 1993
then the rights shall be exercised, if at all, within 6 months of that person so ceasing and, if that person so ceases for any other reason within 3 years of obtaining the rights, they may not be exercised at all except pursuant to such a provision of the scheme as is mentioned in paragraph 22(1)(e); in relation to the case where that person so ceases, for any other reason, more than 3 years after obtaining the rights, the scheme shall either provide that the rights may not be exercised or that they must be exercised, if at all, within 6 months of that person so ceasing.
21. The scheme shall provide that where a person who has obtained rights under it continues to hold the office or employment by virtue of which that person is eligible to participate in the scheme after the date on which that person reaches pensionable age, that person may exercise the rights within 6 months of that date.
22. (1) The scheme may provide that—
(a) if any person obtains control of a company whose shares are scheme shares as a result of making a general offer falling within clause (a)(i) or (a)(ii) of paragraph 16(1), rights obtained under the scheme to acquire shares in the company may be exercised within 6 months of the time when the person making the offer has obtained control of the company and any condition subject to which the offer is made has been satisfied,
(b) if under
section 201 of the Companies Act, 1963
, (compromise between company and its members or creditors) the court sanctions a compromise or arrangement proposed for the purposes of or in connection with a scheme for the reconstruction of a company whose shares are scheme shares or its amalgamation with any other company or companies, rights obtained under the share option scheme to acquire shares in the company may be exercised within 6 months of the court sanctioning the compromise or arrangement,
(c) if any person becomes bound or entitled, under
section 204 of the Companies Act, 1963
, (power to acquire shares of shareholders dissenting from schemes or contract which has been approved by majority), to acquire shares in a company shares in which are scheme shares, rights obtained under the scheme to acquire shares in the company may be exercised at any time when that person remains so bound or entitled,
(d) if a company whose shares are scheme shares passes a resolution for voluntary winding up, rights obtained under a scheme to acquire shares in the company may be exercised within 6 months of the passing of the resolution,
(e) if a person ceases to hold an office or employment by virtue of which that person is eligible to participate in the scheme by reason only that—
(i) that office or employment is in a company of which the grantor ceases to have control, or
(ii) that office or employment relates to a business or part of a business which is transferred to a person who is neither an associated company of the grantor nor a company of which the grantor has control,
rights under the scheme held by that person may be exercised within 6 months of that person so ceasing, and
(f) if, at the bonus date, a person who has obtained rights under the scheme holds an office or employment in a company which is not a participating company but which is—
(i) an associated company of the grantor, or
(ii) a company of which the grantor has control,
those rights may be exercised within 6 months of that date.
(2) For the purposes of this paragraph a person shall be deemed to have obtained control of a company if that person and others acting in concert with that person have together obtained control of it.
23. Except as provided in paragraph 19, rights obtained by a person under the scheme shall not be capable—
(a) of being transferred by that person, or
(b) of being exercised later than 6 months after the bonus date.
24. No person shall be treated for the purposes of paragraph 20 or 22(1)(e) as ceasing to hold an office or employment by virtue of which that person is eligible to participate in the scheme until that person ceases to hold an office or employment in the grantor or in any associated company or company of which the grantor has control.
Acquisition of shares
25. (1) The scheme shall provide for a person's contributions under the certified contractual savings scheme to be of such amount as to secure as nearly as may be repayment of an amount equal to that for which shares may be acquired in pursuance of rights obtained under the scheme, and for this purpose the amount of repayment under the certified contractual savings scheme shall be determined as mentioned in paragraph 18.
(2) The scheme shall not—
(a) permit the aggregate amount of a person's contributions under certified contractual savings schemes linked to savings-related share option schemes approved under this Schedule to exceed £250 monthly, nor
(b) impose a minimum on the amount of a person's contributions which exceeds £10 monthly.
(3) The Minister for Finance may by order amend subparagraph (2) by substituting for any amount for the time being specified in that subparagraph such amount as may be specified in the order.
26. The price at which scheme shares may be acquired by the exercise of a right obtained under the scheme—
(a) shall be stated at the time the right is obtained, and
(b) shall not be manifestly less than 75 per cent of the market value of shares of the same class at that time or, if the Revenue Commissioners and the grantor agree in writing, at such earlier time or times as may be provided in the agreement,
but the scheme may provide for such variation of the price as may be necessary to take account of any variation in the share capital of which the scheme shares form part.
27. (1) For the purposes of section 437(2), as applied by paragraph 8(3)(b)(ii) of this Schedule, a right to acquire shares (however arising) shall be taken to be a right to control them.
(2) Any reference in subparagraph (3) to the shares attributed to an individual is a reference to the shares which, in accordance with section 437(2) as applied by paragraph 8(3)(b)(ii) of this Schedule, fall to be brought into account in that individual's case to determine whether their number exceeds a particular percentage of the company's ordinary share capital.
(3) In any case where—
(a) the shares attributed to an individual consist of or include shares which that individual or any other person has a right to acquire, and
(b) the circumstances are such that, if that right were to be exercised, the shares acquired would be shares which were previously unissued and which the company is contractually bound to issue in the event of the exercise of the right;
then, in determining at any time prior to the exercise of that right whether the number of shares attributed to the individual exceeds a particular percentage of the ordinary share capital of the company, that ordinary share capital shall be taken to be increased by the number of unissued shares referred to in clause (b).