Income Tax (Earnings and Pensions) Act 2003

Only certain kinds of restriction allowed

30 (1) Eligible shares must not be subject to any restrictions other than—

(a) those affecting all ordinary shares in the company,

(b) those permitted by—

(i) paragraph 31 (voting rights),

(ii) paragraph 32 (provision for forfeiture), or

(iii) paragraph 33 (pre-emption conditions), or

(c) those involved in there being a holding period (see paragraphs 36, 61 and 67).

(2) For the purposes of this paragraph shares are subject to a restriction if there is any contract, agreement, arrangement or condition—

(a) by which a 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

(b) by which such a disposal or exercise may result in any disadvantage to the person or to a person connected with the person.

This is subject to sub-paragraphs (3) and (4).

(3) Sub-paragraph (2) does not extend 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 as (for the time being) set out in the listing rules issued by the competent authority for listing in the United Kingdom under section 74(4) of the Financial Services and Markets Act 2000 (c. 8).

(4) Any discretion of the directors under the articles of association of the company to refuse to accept the transfer of shares is to be disregarded for the purposes of this paragraph if the directors—

(a) have undertaken to the Inland Revenue not to exercise it in such a way as to discriminate against participants, and

(b) have notified all qualifying employees of the existence of the undertaking.