Staff can be granted options at a price not less than their market value at the date of the grant. The option to purchase shares exists for ten years, but cannot be exercised for the first three.
The company has the power to select the employees and directors it wishes to offer the shares, but participation in the scheme is not open to people who own more than 10% of the company.
Once selected the company grants the individual an option to purchase the company's shares at a set time in the future at today's price.
When an option is granted by the company, income tax is not chargeable.