Section 471: Share options to which this Chapter applies
1955.This section sets out which share options come within the scope of the Chapter. It introduces the term “share option” in place of the cumbersome “right to acquire shares”. In fact, although the title of section 135 of ICTA includes the words “share options”, that term is not used at all in the source legislation.
1956.Subsection (1) makes it clear at the outset that the options concerned are those granted by reason of a person’s office or employment. It derives from parts of section 135(1) and (6) and section 140(1) of ICTA.
1957.Subsection (2) makes it clear that the shares over which the option is granted can be shares in any body corporate. The normal case, of course, will be the grant of options over shares in the employing company, but the legislation can apply even if the body corporate is totally unconnected with the employment.
1958.Subsection (3) makes it clear that the option may be granted to someone other than the director or employee. It derives from section 140(1) of ICTA.
1959.Subsection (4) sets out two definitions which help to make the legislation easier to read. For example, the term “the employee” is used instead of “the director or employee of the company”. Also, the fact that this Chapter applies to prospective and former employees is made clear by the reference to the extended definition in section 487(1).
