Schedule 2 share incentive plan (SIP): Types of award: Partnership shares: Compulsory purchase of partnership shares
Partnership shares may be subject to provisions requiring partnership shares acquired on behalf of an employee to be offered for sale in certain circumstances. This includes employee pre-emption provisions, general pre-emption provisions and ‘drag along’ provisions whereby once one shareholder holds a specified proportion of the share capital, that shareholder can compulsorily acquire the remaining shares (paragraph 43(2B)), although this list is not exhaustive.
Partnership shares may be subject to such provisions only where the participant receives in return for the shares an amount equal to the price paid for the shares or, if lower, the unrestricted market value of those shares at the date they are offered for sale (paragraph 43(2C)). This is subject to the general requirement in paragraph 9 that the provisions apply to all Schedule 2 SIP participants on the same terms.