Paragraph 15

(1)

M1Except in the case of a profit sharing scheme, the scheme may provide that if any company (“the acquiring company”)—

(a)

obtains control of a company whose shares are scheme shares as a result of making a general offer—

(i)

to acquire the whole of the issued ordinary 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)

to acquire all the shares in the company which are of the same class as the scheme shares;

(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 M2Companies Act 1985 or Article 418 of the M3Companies (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 that Act or Articles 421 to 423 of that Order,

any participant in the scheme may at any time within the appropriate period, by agreement with the acquiring company, release 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 10(b) or (c) above).

(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 10 to 14 above; 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 release of the old rights; and

(c)

the total market value, immediately before the release, of the shares which were subject to the participant’s old rights is equal to the total market value, immediately after the grant, 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 185 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.

(5)

M4Where a scheme which was approved before 1st August 1987 is altered before 1st August 1989 so as to include such a provision as is mentioned above (“an exchange provision”), the scheme as altered may by virtue of this and the following sub-paragraphs apply that provision to rights obtained under the scheme before the date on which the alteration takes effect.

(6)

If an exchange provision is applied as mentioned in sub-paragraph (5) above in a case where, on or after 17th March 1987 but before the date on which the alteration takes effect, an event has occurred by reason of which a person holding rights under the scheme would be able to take advantage of the exchange provision—

(a)

the scheme may permit a person who held rights under the scheme immediately before that event to take advantage of the exchange provision; and

(b)

in a case where rights then held would otherwise, by reason of the event, have ceased to be exercisable, the scheme may provide that the exchange provision shall apply as if the rights were still exercisable.

(7)

The application of an exchange provision as mentioned in sub-paragraph (5) or (6) above shall not itself be regarded for the purposes of this Schedule as the acquisition of a right.

(8)

Sub-paragraphs (5) and (6) above have effect subject to paragraph 4 above.

Annotations

Marginal citations

M1: Source—1980 Sch.10, 10A; 1984 Sch.10 4A; 1987 Sch.4 1, 2; 1987 (No.2) s.59
M2: 1985 c. 6.
M3: S.I. 1986/1032 (N.I. 6).
M4: Source—1987 Sch.4 3

Notes on Schedule 9

Modifications

C1: Sch. 9 excluded (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 238(2)(c)(4), 289 (with ss. 60, 101(1), 171, 201(3))
C2: Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 115
C3: Sch. 9 modified (29.4.1996) by Finance Act 1996 (c. 8), s. 116(3)
C4: Sch. 9 modified (28.7.2000) by Finance Act 2000 (c. 17), s. 49(1)(2)
C5: Sch. 9 continued for specified purposes (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 418(3) (with Sch. 7)

Notes on Part II

Textual amendments

F1: Sch. 9 Pts. 1, 2, 6 repealed (except for specified purposes) (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 112(1), Sch 8 Pt. 1 (with Sch. 7)