ETASSUM34040 - Schedule 3 SAYE option schemes: Linkage to Savings (Arrangement): Savings contracts and grant of options

The share option granted within a Schedule 3 SAYE option scheme is no different from one granted within a Schedule 4 CSOP (see ETASSUM40130) so the same principles apply with respect to the grant. Scheme organisers should note that a scheme will not meet the requirements of providing participants with legally enforceable 鈥渞ights to acquire shares鈥� unless it provides for the key terms of the option to be clearly stated at the time it is granted.

The key terms of an option are:

  • the asset under option which the option-holder has a right to acquire (in the case of a share option this will be reflected by a specified number of shares of a specified class),
  • If the shares which may be acquired under the option are subject to any restrictions, details of those restrictions must be stated (paragraph 28(5)),
  • the price at which the option can be exercised, and
  • the time when the option is exercisable.

Whether the terms of options are sufficiently clearly stated must be considered in the light of the decision in CIR v Burton Group plc (63 TC 191). Further guidance on this case is at ETASSUM47250.