Approved Savings-Related Share Option Scheme

A share option scheme linked to a savings contract taken out usually with our building society governed by the Income and Corporation Taxes Act 1988. The limits to the amount that may be saved and the number of shares over which an option may be granted is severely restricted. The option is only exercisable on the maturity of the savings contract after three, five or seven years following the grant of the option. The employee does not have to exercise the option and may take the cash from the savings contract. However, he would normally exercise the option if the share price has risen from the date of the grant of the option (when the subscription price is fixed). The subscription price for the shares is set at the date of the grant of the option and may be as low as 80% of the market value at that time. These schemes are generally non-selective - all employees must participate on a similar basis. The number of shares over which options may be granted can be weighted by reference to the length of service or salary so long as this is not discretionary.