Schedule 2 share incentive plan (SIP): General requirements: Purpose of the plan
The purpose of a Schedule 2 SIP must be “to provide benefits to employees in the form of shares in a company which give them a continuing stake in that company” (paragraph 7(1)). The Schedule 2 SIP must not provide benefits to employees that are not in accordance with Schedule 2. Participants are not prevented from receiving benefits that all other shareholders receive, such as dividends and discounts on products or privilege cards.
The Trust Deed, Plan Rules and Share Agreements must not contain any reference to bonus arrangements but it is acceptable to do so in employee communications such as booklets and online information provided it is made clear that the bonus arrangement is not part of the Schedule 2 SIP.