Section 537 | Alterations of share capital for purposes of section 536

(1)This section has effect for the purposes of section 536(1)(b) and (c) (other disqualifying events: alterations of share capital of relevant company).

(2)This subsection applies to an alteration of the share capital of the relevant company if—

(a)the alteration affects (or but for the occurrence of some other event would affect) the value of the shares to which the option relates; and

(b)it consists of or includes—

(i)the creation, variation or removal of a right relating to any shares in the relevant company,

(ii)the imposition of a restriction relating to any such shares, or

(iii)the variation or removal of a restriction to which any such shares are subject.

(3)This subsection applies to an alteration of the share capital of the relevant company if the effect of the alteration is to increase the market value of the shares to which the option relates and either—

(a)it is not made by the relevant company for commercial reasons, or

(b)the main purpose (or one of the main purposes) for making it is to increase the market value of those shares.

(4)In this section any reference to—

(a)a restriction relating to shares or to which shares are subject, or

(b)a right relating to shares,

is a reference to such a restriction imposed or right conferred by any contract or arrangement or in any other way.