Schedule 3 SAYE share option schemes: Exchange of options: Scheme rules
The provisions of paragraph 38 are not a requirement for a Schedule 3 SAYE option scheme. But if companies wish to include such a “rollover” facility in the rules of a Schedule 3 SAYE option scheme, they must do so precisely in accordance with the statutory provisions.
Although the term “rollover” of options is in common use, the legislation refers to a “release” of old options in consideration of the grant of new options.
Rollover of options can only be:
- effected if the scheme rules provide for it, and
- applied to those options which were granted on terms which included such provisions .
The statutory requirements which must be reflected in the scheme rules if rollover provisions are to be acceptable centre on:
- when a rollover of options can take place (paragraph 38(2) and (3)), (see ETASSUM36030),
- the new options being “equivalent” to the old options (paragraph 39(4)), (see ).
Whether the new options are equivalent is based on the:
- nature of the shares that can be the subject of the new options,
- exercise provisions of the new options,
- number of shares that will be the subject of the new options, and
- price at which the new options may be exercised.