2(1)Schedule 2 to ITEPA 2003 (share incentive plans) is amended as follows.U.K.
(2)In paragraph 1 (introduction), after sub-paragraph (4) insert—
“(5)Sub-paragraph (A1) is also subject to Part 10A of this Schedule (disqualifying events).”
(3)After Part 10 insert—
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.”
(4)The amendments made by this paragraph have effect in relation to disqualifying events occurring on or after the day on which this Act is passed.