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Sharing Ownership Packages
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Whereas our Products are stand-alone items that can be prepared and purchased
separately, our Packages consist of a group of Products that we have packaged
together to meet specific needs. The following Sharing Ownership Packages have
been developed in response to commonly arising needs of companies in the area of
Sharing Ownership.
Brash Solutions is not an ‘off-the-shelf’ product provider,
and always ensures clients’ particular commercial needs are properly taken into
account. Invariably, a client would first obtain Brash Solutions’ Sharing
Ownership Services to identify the right solution, and then a suitable Sharing
Ownership Package may be provided. |
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Contents
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The phases covered by the Option Plan Package are:
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Option Design - includes design advice to tailor an option strategy to your business needs – in particular, we have developed features that where appropriate: |
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maximise transparency, |
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minimise shareholder dilution, |
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minimise the perception of discrimination among different classes of employee, |
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minimise valuation and accounting complexity, |
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make the options water-proof (they cannot go ‘under water’), and |
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link equity rewards with employees’ performance assessment and remuneration packages.
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- Option Plan Establishment - consists of full legal documents including
Plan Rules, Board Minutes Approving the
Plan, and if appropriate, a Shareholder Approval
Pack. An Implementation Timetable can also be included to guide you through the process.
- Option Offer - includes template offer documents you can use over and over again, consisting of a
Letter of Offer, a Plan Information
Booklet, Offer Acceptance, and can include a
Tax Booklet and its companion, the ESOP Tax
Simulator.
- Option Grant - consists of
Board Minutes Approving Issue, Option Grant Advice, and an
Issue Forms Pack including a Notice of Exercise, Tax Election and Option Certificate.
- Option Administration - including an
ESOP Plan Register, Procedures Manual and
Forms, and proprietary ESOP Administrator
Database.
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Under this Package, capital growth is taxed under CGT with access to the
standard 50% concession, and there can be option plan-type flexibility to impose
performance targets and vesting conditions.
For unlisted companies, we have successfully addressed the two most poignant hurdles: share valuation and how to repurchase shares from employees on cessation of employment.
The three methods of participation are:
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- Cash Offer - employees are invited to purchase ‘cash’ shares in the company using private funds.
- Internal Loan - to the extent permitted by tax rules, the employer
provides loans to employees, either interest-free or at commercial interest.
- External Loan - in this case, a third party financier is used,
whether it be a bank, or say another shareholder, and commercial interest is
usually charged.
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| Contact Us
if you wish to discuss any of the above. |
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| This Package has been designed for the following outcomes: |
- to allow the $1,000 annual tax exemption to be funded by the employee rather than the employer by way of salary sacrifice-funded on-market purchases, also with the option of awarding selective share bonuses, discount shares, employer-employee matching contributions (all taxed on a deferred basis), and/or employee-funded investment shares,
- to enable employees to fully utilise the $1,000 tax exemption regardless of share price changes throughout the year, and facilitating constant payroll reductions to ease administration, with no messy refunds of unused amounts at year end,
- to allow employees to utilise the $1,000 tax exemption and leverage their gains by using pre-tax dollars, while minimising the risk of loss due to the tax exemption providing an effective 31.5% to 46.5% loss buffer depending on the employee’s marginal tax rate, and
- for the company to be seen as a good employer by allowing employees to take
full advantage of one of the few legitimate employment-tax planning
opportunities still available under Australian tax law.
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| The 10 steps involved in establishing the Trust-Tax Concession Package are as follows: |
- Project Planning
- Trustee Company Formation
- Plan Design
- Plan Administration Design
- Tax Advice
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- Legal Documents
- Award Advice
- Board/Shareholder Approval
- Prospectus Advice
- Employee Communications
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| Once the Trust-Tax
Concession Package is installed, we can hand over the baton to a specialist
administration provider to administer the Plan, using an administration system
that has been tailored over many years of research and development especially
for this style of ESOP – thereby further extending the one-stop service. |
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| Contact Us
if you wish to discuss any of the above, or for more information on Sharing
Ownership, go to:
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