Finance Act 1987

2 (1) In Schedule 10 of the [1984 c. 43.] Finance Act 1984 (approved share option schemes) after paragraph 4 there shall be inserted the following paragraph—

“4A (1) The scheme may provide that if any company (in this paragraph referred to as "the acquiring company")—

(a) obtains control of a company whose shares are scheme shares as a result of making—

(i) a general offer to acquire the whole of the issued share capital of the company which is made on a condition such that if it is satisfied the person making the offer will have control of the company, or

(ii) a general offer to acquire all the shares in the company which are of the same class as the scheme shares, or

(b) obtains control of a company whose shares are scheme shares in pursuance of a compromise or arrangement sanctioned by the court under section 425 of the [1985 c. 6.] Companies Act 1985 or Article 418 of the [S.I. 1986/1032 (N.I. 6).] Companies (Northern Ireland) Order 1986, or

(c) becomes bound or entitled to acquire shares in a company whose shares are scheme shares under sections 428 to 430 of the said Act of 1985 or Articles 421 to 423 of the said Order of 1986,

any participant in the scheme may at any time within the appropriate period, by agreement with the acquiring company, transfer to the acquiring company his rights under the scheme (in this paragraph referred to as "the old rights") in consideration of the grant to him of rights (in this paragraph referred to as "the new rights") which are equivalent to the old rights but relate to shares in a different company (whether the acquiring company itself or some other company falling within paragraph (b) or paragraph (c) of paragraph 7 below).

(2) In sub-paragraph (1) above "the appropriate period" means—

(a) in a case falling within paragraph (a), the period of six months beginning with the time when the person making the offer has obtained control of the company and any condition subject to which the offer is made is satisfied,

(b) in a case falling within paragraph (b), the period of six months beginning with the time when the court sanctions the compromise or arrangement, and

(c) in a case falling within paragraph (c), the period during which the acquiring company remains bound or entitled as mentioned in that paragraph.

(3) The new rights shall not be regarded for the purposes of this paragraph as equivalent to the old rights unless—

(a) the shares to which they relate satisfy the conditions specified, in relation to scheme shares, in paragraphs 7 to 11 below; and

(b) the new rights will be exercisable in the same manner as the old rights and subject to the provisions of the scheme as it had effect immediately before the exchange; and

(c) the total market value, immediately before the exchange, of the shares which were subject to the participant's old rights is equal to the total market value, immediately after the exchange, of the shares in respect of which the new rights are granted to the participant; and

(d) the total amount payable by the participant for the acquisition of shares in pursuance of the new rights is equal to the total amount that would have been payable for the acquisition of shares in pursuance of the old rights.

(4) Where any new rights are granted pursuant to a provision included in a scheme by virtue of this paragraph they shall be regarded—

(a) for the purposes of section 38 of this Act and this Schedule, and

(b) for the purposes of the subsequent application (by virtue of a condition complying with sub-paragraph (3)(b) above) of the provisions of the scheme,

as having been granted at the time when the corresponding old rights were granted.”

(2) In paragraph 12 of the said Schedule 10 (transfer of rights) after the words "any of them" there shall be inserted "(except pursuant to a provision included in the scheme by virtue of paragraph 4A above)".