Share Options
Free share option scheme?
SUMMARY
In due course, Homesitters' existing shareholders plan to arrange a public offering of shares, in which event they feel it would be appropriate to offer free shares to those who have helped make the shares marketable.
Homesitters - the future
Our company is well-established (1980) and has been quietly successful for many years. It is well evidenced that we continue to impress our clients and employees - and the insurance companies who support us.
At present, the directors are the shareholders. Because at some point they have to consider retirement, over the next few years they will be introducing the next generation of management, and working towards an initial public offering ('IPO').
To that end we want to continue the development of the company without spoiling the quality of our service. This would be considerably helped by increasing the marketing contribution from our clients, employees, and intermediaries.
With your help, what we do and how we do it can stay relatively unchanged, but at the same time we can also grow steadily and energetically.
The company will develop, and it will be largely due to the efforts of the staff, the Homesitters, the clients, and others who have recommended us.
Clearly, the more they have put into the company - either by arranging assignments, or by carrying them out, or by using our services - the more they deserve to benefit when we widen the share-ownership.
So eventually we plan to share the value of the company with those people who have added to that value.
Our proposal
We have established a scheme in which participants can accumulate "credits". Our intention is that in due course the accumulated credits may be converted into share options. We can give no guarantee that this will happen; were we to do so, the credits could attract an immediate liability to tax.
- Credits will accrue from:
- ...using our services
- ...recommending our services
- ...undertaking homesits
- ...introducing new employees
- ...administering assignments
- ...providing clerical input
Practicalities
If you use our services,
- we will allocate credits to your account as a percentage of our standard net charges to you during the year. We will be making special provision for clients of long standing.
If you recommend our services,
- we will allocate to your account a fixed number of credits per new client. This will be in addition to any other "recommendation discount scheme" which we may operate from time to time.
If you undertake an assignment for us,
- we will allocate to your account a fixed number of credits for each sit-day undertaken. Credits will not accrue until you have completed your 10th "sit" for us, when they will be backdated to include all your "sits".
If you introduce new employees,
- we will allocate to your account a fixed number of credits per new employee.
If you are a member of our office staff,
- we will allocate credits to your account as a percentage of your annual gross salary, starting with the year after the second anniversary of your joining.
Credits
- - will be allocated to qualifying recipients and held to their account strictly at the discretion of the shareholders. The shareholders reserve the right at any time to alter the criteria against which the allocation is decided.
- - will be allocated without cost or liability to the recipient and without any commitment or liability on the part of Homesitters Ltd, its directors, its employees or its shareholders.
- - will have no financial value whatsoever until and if they are converted into share options.
- - will be non-transferable and non-negotiable.
Questions
It all sounds rather complicated; why should I be interested?
Well, the credits will cost you nothing, and if they metamorphose into share options they might attract some value.
If I want these credits, won't I have to use Homesitters more often, or work harder, or something?
No; you don't have to do anything different - you continue as though the credits had never been mentioned. But if whatever you do benefits Homesitters, you will be allocated credits and there may be some tangible appreciation.
Will the credits which I have received be allocated to me in perpetuity?
Yes, other than in the unlikely event where the existing shareholders decide that the allocation is no longer appropriate.
Will the credits incur a tax liability?
No. HM Revenue & Customs have assured us that no tax liability will arise, not least because the credits will be non-transferable and non-negotiable. They don't have to be mentioned on a tax return. However, should the credits be converted into share options which you decide to take up, there could be a liability to tax on your gain.
Do I have to do anything now?
No. From time to time we will write to you to tell you how many credits you have accrued.
Should you have further questions, please contact us.
