ERSM301500 - Company Share Option Plans: Schedule 4 ITEPA 2003

This Schedule makes provision for the approval of CSOP schemes by an officer of Revenue and Customs. The schedule consists of eight parts which contain the requirements that have to be met in order for schemes to be approved. The approval process is administered by Employee Shares & Securities Unit (ESSU), Room G52, 100 Parliament Street, London SW1A 2BQ. In addition, a manual (ESSUM) is published that sets out in great detail the way in which HMRC interprets the Schedule for the purposes of providing scheme approval. A new updated version of this manual is due to be published in stages from March 2009. A brief summary of the requirements for approval follow:

• Part 1 - A brief introduction and definitions of fundamental concepts.
• Part 2 - The general requirements for approval including scheme monetary limits.
• Part 3 - The eligibility requirements for individuals to participate in the scheme.
• Part 4 - The requirements relating to the shares that can be used in the scheme.
• Part 5 - The requirements relating to the share options including good leaver provisions.
• Part 6 - The requirements relating to an exchange of options in the circumstances of a company re-organisation.
• Part 7 - The formal approval of schemes and in certain circumstances the withdrawal of approval.
• Part 8 - The supplementary provisions including the power to require information in relation to the administration of the scheme and an index of defined expressions.