2. (I) Where any scheme is esJablished by or on behalf of an employer under which some or all of the employ�, (including Directors) or such employer become entitled to acquire shares or an interest iD shares in the issued or authorised equity capital of such employer or of some other entity specified in sub paragraph (2) (b) (i), an application may be made for that scheme Io be approved by the Commissioner-general. (2) The Com.missioner-General shaJl approve any share option scheme if satisfied that the constitution (whether by trust deed or otherwise) and rules relating to the scheme have as their main objective the entitlcrµent to acquire shares or an interest in shares as described in sub.paragraph (1), and that the entit�ement is, for a set number of shares, at a fixed price, for a specific type of share and during a set period of times: • Provided that- ( a) the scheme is esJablished in the Republic by or on behalf of an employer carrying on business wholly or partly within the Republic and employees who are citizens or permanent residents of the Republic regardless of the place where the duties of that employment are ·performed; and /b) the constitution and rules- 0 &) �) ;, ·, · ' (i) provide for the panicipation by all employees of the employer meeting clearly defined criteria or all employees of designated holding or subsidiary companies of the employer or other business enterprises which the Co'!I'-�:io::::.&.-G::.::.c..� z..::.::cpts as befog closely affiliated_ with the emP_l.oyer in accord:ince with th.is Act; (ii) restricts the criteria for p:?rticipation so as to• exclude cmpioyces wfio are nor mdfvidu:lls or have not worked -for the empl�ycr or entities specified in ire'rn '(i) fot a minimum of lWenty hours per week during the period of two years to ciigibiHty, 'or for at least five months as seas'ar.a.l foll-_llmc personuel' duciog such period: (iii) restrict th� cri;er_�a for participation so·as ro limit the totaJ numbc:r of shares ,or interests in shares to be �cquired under the··sche:::e by :.ny one; cmployCe io one-fifth of all of the shureS and imi:rests in shares issued or required . to be issued in ·tenns of the scheme; (iv) ·rcgllirt that. ou:·becom'ing �tig·i�!�}or· Particip�tion,'. :ifl �mploY.ees are. adyised by .the .employe; in-\\--rlting, of their eligi.biHty, of the co'nsdtution and rules of the __ ... -·�· .scheme. 'of the: rcsuJts 'of"'c.he SChCIDC 0VCI' the· last•tcn ,rm·.incial yeafS of operati�n or sinCc lnce.Ption if U!C _-,� sch,crne.�as b.-in esfeblished.for l�s Iha.a icn ye"? and.,' ·' · · : :�_>}:i;/ . < ': ... ... �\1k\::;t: � . . �:. / . � _ -:_ : �- >,;,• 1:.:c,, .. ii . .'' �-��-���"-�<.\!1· i'-��'/1f!: ... �:.. . ·.:1 I- 7'.�f}-���'l,1,fir.t,%J.;'( . < ,l l :.,'<>'f1·�;�;{J;'l�"'J't�.�i�� ._<tt .., ,:'Si�'Nif:r� , !j,:�-'.,�-i,f!J • •-ey;. ":'1r " �..-,..� ...... �......,., • .._�;-._&,..,..,.i.,_\�1�,)!",(.� "·.k�"t:- �:.,,1,:,:s il k,�� 1:, ·� ··:11��-1}��I��;Jt.f,m1:��Ji ,_,zi}?::>?r:r•?\?:�t�(.�ft�Et�1�1.\;�:-'itkrt�� -�#(,���.iiffo:f�¾:1.:v-r-'--·.-:��-t�J:�1:::,-,?.,.�f;,,;'l.11;i,'1.i�:,,\��:�-:.��:�n}'i1;'\r����-.�,x,�>) ,' . ( . t.: ·,.Jr*.it:"t�� ; . ,_.•• . : · .. ' �:t ;: . • ,_••�· • , .:.,;��'--�::�� -��-- .. ,, ·. ,, ••. , •• �- ��--\-.. :� .-'r· , , •• ,l I • ·•,; . _ ,, • •j:g · • c.. c .,�•· '. . · . ,, ,:,-, ).I . • Ii . JI • �:i . . . . , . . 'C: ,. . , · . . · ': . ;.-. • :-t.- . - � ' . " ,· ,y,: J/� �.:.�• ·r ,; ,. • I ���::'.����t@:����r: :V·xfq��,��-��'.�Y�d.:�;��t:!.t�?ffi��·�!����::'ff¥�(�1;:�'�f{��J�"f:�! � � I :;;:\i � ;;;�;;.;=;; 2002 65 < �- ',,_ .; .' '>--�· � - i_; ; ., ,. '.·•,;,:_1:·:\·':::,:::.:,.:,:_:_:.:,:,�.:,:_l':,;_jl:, -_ I ••' " . ' . :,,. :.· :• '• , , , , , ', o· - , ··:': •, · ••'·'. with panicipation in such schemes in general and the �player's scheme in particular, eXcept that the price of the shares shall be fixed at the time the option is given and the price shall not be·Jess.than the market value of the shares at that time, and only ordinary shares of th1 company may participate jn the scheme; (v) require that 1111 shares and interests in shares acquired through the scheme are registered, with the derails of the prices at which sbaI'CS and interCSts in shares are issue� exercised, sold or relinquished whether by effluxion of time or otherwise; (vi) require that all administrative and other expenses of the scheme are borne by the employer, and that the scheme shall be independently audited by the auditors or independent accountants who examine or report on the financial statements of the employer; (vii) require that eligibility for participation in the scheme and • the eXtcnt of that participation shall be on the basis of ·the period of service with the employer or other entities specified in item (i), basic emoluments over a defined period, termination of service benefits from employer or other entities specified in item (i) or a combination of some or all of these criteria which shall apply equally to all employees who are in the service of the employer and arc not on notice by either party for termination of service at the date eligibility arises except to the extent that the rules of the scheme permit accrued or othCr terminal benefits to be applied for participation in the scheme; (viii) require that in the case of a scheme which provides for acquisition of shares or interests in shares in a private company notice of intent tO sen or relinquish such·shares ar interests in shm-es ·shall be deemed to be given by an cinpioyee pan.icipatirig in. tbe schcine on termination of service or on death, and that. any amount unpa.id in �t of the acquisition price of sllch shares or interests ill shares, shall be recoverable by the tru.<tees from the sale proceeds, but not .exceeding that amount. in the event o_f dcatli: . . · (ix) require the trust�s and the Cmpioyer to act as tAX.pay�r agent for an employee panicipating, in the scheme for all matters connected with the scheme including the · taxation of proceeds of shares or interests in shares sOld or otherwise disposed of by employees participating in . the scheme; (x) provide that the _;,,heme may be tcnninated et the instigation -_ of an en_1ployer wh� shares and interests in shares held. by employees participating in_[!ie �h_em� are !l)e su�je<;f. "ofuncoiJditional arrangements.for. sale by participants ·at fnir market vaIUe as certified bi the audiior of the_ .. . �· .. . - - - - - : . _ . . . , : .: .· - 0 . cschemc and the cmpl yer;·; � . --- - ·: .___, _ ·._;· ' . _ :--·· • • :· ' • , , ::--�:;:l·�-='•l .,t ·. -_�::-__ : , : i . _ . . : · -� •1· ' ,, . .1. · .) • I '.�§ . :j1''1 . . · . . •t I ,:,: " . • �1,-_, · � ·· • • · · . : -; .� :� ,- _ , :::.. -_ ,\_,. .-.·, '•'· :,; (i ., ·-, ·-- _, . � _ _ _· . _ _ , .• • i , - 66 No. 3 of 2002] Income Tax (Amendment) • . , _ (xi) do not pre�ent ·an employee participating in the scheme from selling the employees shares on the basis of the price formula detailed herein after five years from acq_uisition of such shares or interests in shares, except where the date of tennination of service with the. employer or of the death of the employee in the course of the realis.itioa of that employee's estate is earlier: (xii) do not provide for the issue to or acquisition by employees of shares as interests in shares conveying a preference as to dividends unless such shares participate in dividends declared on ordinary shares in the same entity in excess of the level of Such preference and confer rights of participation on dissolution or redemption no less favourable than the rights ottributablc to holders of such ordinary shares or interests therein; (xiii) do not ·require any participating employee re conniDute additional amounts beyond amounts determinable in tenns of the constitution and rules at the date of the� empIOyee agreeing to participate in the scheme; (xiv) do not permit the rules or constitution to be amended in a manner detrimental to employees panicipating in the scheme without the consent of the trustees, and without co�ation from the Commissioner-General; (xv) do not pcnnit the granciog of credit for any amount towards financing the exercise of an option to acquire shares.