| Financial Benefits to Encourage Employee Participation |
37 |
in each case, at least 5 years’ service,145
but must not include outsiders nor those with a material interest in the
company if it is a close company. |
16A.7.1.3 Shares |
The shares must be ordinary share capital and must be quoted, or shares in a company not controlled by another company, or shares under the control of a non-close quoted company.147 It follows from this that if a company is taken over, the existing scheme must be wound up (since approval will be withdrawn) and a new scheme, with its own 5 or 7 year period, started in relation to the new head company. The shares must be fully paid up and not redeemable. The only restrictions permitted are those imposed by the company’s articles requiring employees to dispose of their shares at the end of their employment.148 The price at which the shares may be acquired must not be manifestly less than 80% of the market value at the time the option is acquired149 (oddly the 80% figure was not changed in 1996). |
The company conditions with regard to ownership and change of control are the same as for §16A.5.150 Schemes may now contain provisions allowing for the transfer of rights following a takeover so as to give rights to acquire shares in the new company.151 This must be agreed by the new company, and the value of the new option must be the same as that of the old option. |