deferred share scheme

[anotherdub]

Hi,

Has anyone come across an employee share "option" scheme where employees are granted "deferred shares" which are held in trust by their employer until the company floats or is sold, and can then be transferred to ordinary shares?

My employer has such a scheme, with a few special conditions.
1) If I leave before the company is sold, whenever that is, I lose all the rights to these shares.
2) The "deferred shares" are vested at 25% per year for 4 years.

My question - I've been with this employer for 5+ years. Is it normal to vest "deferred shares" like this when I still lose everything, vested or not, if I leave or get made redundant?

Anything similar operating out there?

Thanks,
AD

 

[BRICKTOP]

I think what you are referring to is a "restricted stock scheme" and not a share option scheme. You are "given" the shares. I have seen two of these schemes run at my current employer (unfortunately never including me!!).

These are quite common in the US and becoming more popular here to "lock in" key staff to a certain point in time e.g. you get €150k of shares in four years time if you are still employed at that date, they held in trust until that date. They are normally subject to income tax at the date of grant (even though you haven't actually got them yet), subject to what is termed a "clog", which is % reduction in the liable amount for each year a restriction is applied.

There is some info on the KPMG website. If the amount is significant, you or your employer should approach the Revenue directly as they seem to be treated differently from company to company for some reason and you may be able to strike a deal with the Revenue to delay your payment until you have the shares\money in your hands.