Section 423 | “Restricted securities” and “restricted interest in securities” ^F1

(1)For the purposes of this Chapter employment-related securities are restricted securities or a restricted interest in securities if—^F1

(a)there is any contract, agreement, arrangement or condition which makes provision to which any of subsections (2) to (4) applies, and^F1

(b)the market value of the employment-related securities is less than it would be but for that provision.^F1

(2)This subsection applies to provision under which—^F1

(a)there will be a transfer, reversion or forfeiture of the employment-related securities, or (if the employment-related securities are an interest in securities) of the interest or the securities, if certain circumstances arise or do not arise,^F1

(b)as a result of the transfer, reversion or forfeiture the person by whom the employment-related securities are held will cease to be beneficially entitled to the employment-related securities, and^F1

(c)that person will not be entitled on the transfer, reversion or forfeiture to receive in respect of the employment-related securities an amount of at least their market value (determined as if there were no provision for transfer, reversion or forfeiture) at the time of the transfer, reversion or forfeiture.^F1

(3)This subsection applies to provision under which there is a restriction on—^F1

(a)the freedom of the person by whom the employment-related securities are held to dispose of the employment-related securities or proceeds of their sale,^F1

(b)the right of that person to retain the employment-related securities or proceeds of their sale, or^F1

(c)any other right conferred by the employment-related securities,^F1

(not being provision to which subsection (2) applies).

(4)This subsection applies to provision under which the disposal or retention of the employment-related securities, or the exercise of a right conferred by the employment-related securities, may result in a disadvantage to—^F1

(a)the person by whom the employment-related securities are held,^F1

(b)the employee (if not the person by whom they are held), or^F1

(c)any person connected with the person by whom they are held or with the employee,^F1

(not being provision to which subsection (2) or (3) applies).