5

Sub-paragraph (A1) is also subject to Part 10A of this Schedule (disqualifying events).

PART 10ADisqualifying events

85A

1

A SIP ceases to be a Schedule 2 SIP if (and with effect from the time when) a disqualifying event occurs.

2

The following are disqualifying events—

a

an alteration being made in—

i

the share capital of a company any of whose shares are subject to the plan trust, or

ii

the rights attaching to any shares of such a company,

that materially affects the value of the shares that are subject to the plan trust;

b

shares of a class of shares that is subject to the plan trust receiving different treatment in any respect from the other shares of that class.

3

Sub-paragraph (2)(b) applies in particular to different treatment in respect of—

a

the dividend payable,

b

repayment, or

c

any offer of substituted or additional shares, securities or rights of any description in respect of the shares.

4

Sub-paragraph (2)(b) does not however apply where the difference in treatment arises from—

a

a key feature of the plan, or

b

any of the participants' shares being subject to any restriction.

5

Nor does sub-paragraph (2)(b) apply as a result only of the fact that shares which have been newly issued receive, in respect of dividends payable with respect to a period beginning before the date on which they were issued, treatment less favourable than that accorded to shares issued before that date.

6

For the purposes of this paragraph a “key feature” of a plan is a provision of it that is necessary to meet the requirements of this Schedule.

7

This paragraph does not affect the operation of the SIP code in relation to shares awarded to participants in the plan before the disqualifying event occurred.