Up to $1 million of gains from the exercise of Company Stock Options ("CSOPs") over ten years will be partially exempt from income tax. The exemption is as follows:

100% of the first $2,000 gains annually; and

25% of the remaining annual gains.

The 10-year period commences from the year the employee first exercises the CSOPs.

The CSOP Scheme is available to all stock options granted with effect from 1 April 2001 by a qualifying company under a Company Stock Option Plan to an employee to acquire ordinary shares of the qualifying company.

The Scheme will be subject to review after 5 years.

A CSOP Plan is one that satisfies the vesting period requirement as prescribed by the Singapore Exchange (SGX) for companies listed on the SGX, regardless whether the company is listed on the SGX or not.

To qualify for the scheme, the company must offer CSOPs to at least 50 percent of staff in the company.

An employee receiving CSOPs on shares of an overseas holding company will also be eligible for the tax exemption.

CSOPs can be granted to any employee of the company, including part-time employees and executive and non-executive directors.

Further details will be released by IRAS before 1 April 2001.