Share Incentive Plan

Housework*Fairy

(please be gentle with me!)

In January 2012 I opted into my employer's share incentive plan. I purchase 20 shares per month at £1.40 (£28) so as of now have 100 shares and a share is apparently worth £1.97.

Rumours have been abounding that the company founder is looking to sell-up, and a letter came out with the wage slips this month saying the company was looking at options to raise finance and possibly involve new shareholders.

Apart from the letter nothing official has been released.

A colleague seemed to think that as of now we can't buy any more shares. Is this right or will I continue to buy 20 each month until the company sale goes through?

If the company does get a buyer will this share scheme automatically end. If so, and I have to 'sell' my shares, do I have to pay tax? (I know if I choose to stop the plan myself I have to pay tax on the whole value of the share, and I know if I get made redundant I wont have to pay tax but I'm not sure how it works if the company stop the scheme).

Communication about the share scheme hasn't been brilliant - if it wasn't for the fact it's on my wage slip I wouldn't even know I was in it, I haven't had any letters and the one that was in the wage slip was sent to everyone.

All the people who have mentioned it to me so far have worked there for years and have loads of shares and are all excited about a possible windfall later on in the year but I'm just a bit confused (not to mention the fact that my shares are only worth £197 before tax)

Thanks if anyone can answer me x

MoneySaverLog

You have to be very careful of "insider dealing" if you're privileged to information which is not available in the open stock market you may become restricted from dealing in shares in the company.

From what you're saying though things seem up in the air. You need to take advice from the company as to whether you can continue investing in the SIP. I would imagine that there is no guarantee that any new owner would continue the scheme either, they might wind it up.

Usually there is something in the T&C's with regards to a wind up, and I know in mine that if this were to happen I'd keep the shares tax and NI free if it was the company's decision to stop the scheme.

Housework*Fairy

MoneySaverLog wrote: »

You have to be very careful of "insider dealing" if you're privileged to information which is not available in the open stock market you may become restricted from dealing in shares in the company.

From what you're saying though things seem up in the air. You need to take advice from the company as to whether you can continue investing in the SIP. I would imagine that there is no guarantee that any new owner would continue the scheme either, they might wind it up.

Usually there is something in the T&C's with regards to a wind up, and I know in mine that if this were to happen I'd keep the shares tax and NI free if it was the company's decision to stop the scheme.

Thanks for the reply. I think tomorrow I will try and find some terms and conditions (or at least someone to talk to about them).

sabretoothtigger

I dont see that a large seller means the price is going to rise. You need an even larger buyer to come in and buy the shares to imply some kind of premium effect

It might be that he needs the money and has to sell below market price like how a rights issue is often done