Clause 19

by deleting subsection (1) and substituting the following subsection:“(1) Where a qualifying employee derives any gains or profits in any year of assessment, after the expiry of the minimum holding period, from any stock option granted on or after 1st April 2001, or any right or benefit under any share acquisition scheme (other than a stock option scheme) granted on or after 1st January 2002, to acquire shares in any qualifying company or in its holding company under a company employee equity-based remuneration scheme, there shall, subject to this section and section 13J(7) to (10), be exempt from tax —

the first $2,000 of such gains or profits in that year of assessment as determined under subsection (2); and

25% of any amount of such gains or profits in that year of assessment exceeding $2,000 as determined under subsection (2).”;

by deleting the words “on the exercise, assignment or release of the right or benefit (referred to in this section as the exercise price)” in the 1st, 2nd and 3rd lines of subsection (2)(a) and substituting the words “under the right or benefit”;

by deleting the words “exercise price of the shares are” in the 1st line of subsection (2)(b) and substituting the words “price to be paid for the shares under the right or benefit is”;

by deleting the words “deemed to be income of a person under section 10(5)” in the 2nd and 3rd lines of subsection (3) and substituting the words “to which section 10(5) applies”;

by deleting the words “deemed income” in subsection (3)(a) and (b) and substituting in each case the words “gains or profits”;

by deleting the definition of “company stock option scheme” in subsection (5) and substituting the following definitions:“ “company employee equity-based remuneration scheme”, in relation to a qualifying company or its holding company, means any share acquisition scheme which satisfies the 50% requirement;“50% requirement”, in relation to a company employee equity-based remuneration scheme, means in the aggregate at least 50% of the employees of the qualifying company are offered during any calendar year any rights or benefits to acquire shares in the qualifying company or in its holding company under any share acquisition scheme, as ascertained in accordance with the following formula:where Ais the aggregate number of employees of the qualifying company who are offered during a calendar year any right or benefit to acquire shares in the qualifying company or in its holding company under any share acquisition scheme in respect of which the qualifying company has opted under section 13J(7) for tax exemption under this section and not section 13J to apply, and who are employees of that qualifying company at the time of such offer;Bis the number of employees of the qualifying company on the last day of that calendar year;Cis the number of part-time employees (other than non-executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year;Dis the number of full-time employees with less than one-year’s service (other than non-executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year; andEis the number of employees engaged on contracts not exceeding 2 years (other than non-executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year;”;

by deleting the definition of “minimum vesting period” in subsection (5) and substituting the following definition:“ “minimum holding period” has the same meaning as in section 13J;”.(h)by inserting, immediately after the definition of “qualifying employee” in subsection (5), the following definition:“ “share acquisition scheme” has the same meaning as in section 13J;”; and

by deleting the words “stock option scheme” in the section heading and substituting the words “employee equity-based remuneration scheme”.