ETASSUM42110 - Schedule 4 Company Share Option Plan (CSOP): Eligibility of individuals to participate: The employment requirement: Overview

Paragraph 8 establishes the employment requirement for individuals to participate in a Schedule 4 CSOP scheme. Scheme rules must make it clear that only full-time directors (see ETASSUM42130) and qualifying employees (with no working hours requirement or a commitment to work a set number of hours) of the company establishing the scheme (the scheme organiser), or in the case of a group scheme a constituent company (formerly participating company), can be granted options.

It is not possible to extend the eligibility requirement to include part-time directors, however it is acceptable to provide for more stringent eligibility requirements such as only full-time employees. In practice however this would limit flexibility, so stricter eligibility would be achieved more easily by the application of discretion when making grants rather than setting stricter eligibility requirements. There is no employment requirement at the time of exercise and, although companies may include such as a condition of exercise, the legislation itself does not provide for such a requirement.