For subsection (1)(b) substitute—

“(b)

Condition A or B is met.”.

For subsections (2) and (3) substitute—

“(2)

Condition A is that the option is exercised—

(a)

on or after the third anniversary of the date on which it was granted, but

(b)

not later than the tenth anniversary of that date.

(2A)

Condition B is that the option—

(a)

is exercised before the third anniversary of the date on which it was granted, and

(b)

is so exercised by virtue of a provision included in the scheme under paragraph 24 of Schedule 4 (exercise of options after ceasing to be director or employee) in circumstances in which subsection (2B) applies.

(2B)

This subsection applies if the individual exercising the option—

(a)

has ceased to be a full-time director or qualifying employee of the scheme organiser (or, in the case of a group scheme, a constituent company) because of injury, disability, redundancy or retirement, and

(b)

exercises the option within 6 months of the day on which he ceases to be such a director or employee.

(2C)

In subsection (2B)—

“redundancy” means redundancy within the meaning of ERA 1996 or ER(NI)O 1996, and

“retirement” means retirement on or after reaching a retirement age specified in the scheme.”.

For section 525(1)(b) (no charge in respect of post-acquisition benefits) substitute—

“(b)

Condition A or B (as set out in section 524(2) or (2A)) is met.”.