Joint share ownership plan (JSOP) Definition

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GLOSSARY

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What does Joint share ownership plan (JSOP) mean?

Joint share ownership plans (JSOPs) also sometimes referred to as a ‘joint ownership agreement' (JOA). This is a type of employee share incentive plan under which the employee participant owns shares jointly with a third party, which is typically the trustee of an employee benefit trust (EBT).

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Why do companies use share schemes?

Why do companies use share schemes? Why not just reward staff with cash? It is often a simpler, less burdensome way to reward and incentivise employees. This Practice Note analyses the advantages and disadvantages of shares schemes as a general concept. For further details on the advantages and disadvantages of each individual type of scheme, see Practice Note: The advantages and disadvantages of each share incentive arrangement. This Practice Note details: • why do companies implement share schemes? • what are the types of share schemes? • the advantages of share schemes (from a company and employee perspective) • the disadvantages of share schemes (from a company and employee perspective), and • use of share schemes Why do companies implement share schemes for their employees? There are numerous reasons why companies choose to implement employee share schemes and many of these depend on the size of the company and its specific objectives. Some common reasons for companies utilising share schemes include, but are not limited to: • recruiting,...

JSOPs—funding the acquisition and terms of the plan

JSOPs—funding the acquisition and terms of the plan Basic structure of a JSOP The basic structure of joint ownership involves two owners, namely the employee participant who owns the growth interest, and the co-owner, holding the balance of the interest in the shares. Typically, the co-owner is the trustee of an employee benefit trust (EBT) established by the company, either specifically to facilitate the jointly owned share structure or established as a general employee share ownership trust. In this practice note, it is assumed that the co-owner will be the trustee of an EBT. For more general information on joint share ownership plans (JSOPs), see Practice Note: Introduction to JSOPs. Funding the acquisition of the jointly owned shares The EBT trustee will usually be funded by the company. There are various approaches to funding, each with different consequences and considerations. Contribution The first and in some ways simplest approach would be for the company to make a contribution by way of gift to the EBT. This is...

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Buy notice for joint share ownership plan (JSOP) agreement

Buy notice for joint share ownership plan (JSOP) agreement To: [insert name of participant] We refer to the agreement that we entered into on [date] with you and [insert name of the Company whose shares are under the JSOP award] (the Company), under which we jointly acquired shares in the Company with you (the Deed). We have received written confirmation from the Company that the Sell Right has lapsed in relation to [all OR [insert percentage]] of the Participant’s Interest under the Deed, and that the Buy Right may therefore be exercised in relation to it. In accordance with clause 9.5 of the Deed, we hereby confirm that we have therefore exercised the Buy Right on [date] in relation to [all of OR that part of] your Participant’s Interest, which we therefore acquired on that

Joint share ownership plan (JSOP) agreement

Joint share ownership plan (JSOP) agreement This Deed is made on the [insert] day of [insert month] 20 [insert year] Parties 1 [insert name] of [address] (the Participant) 2 [insert name of company] a company registered in England and Wales (with registered number [insert]), whose registered office is at [insert address] (the Company); and 3 [insert name of trustee], incorporated in [insert jurisdiction] with registered number [insert] and with a registered office situated at [insert address], as trustee (the Trustee) of the [insert name of trust]. Background (A) The Company wishes to incentivise certain executive directors and employees of the Group by allowing them to acquire interests in its shares and has made recommendations to the Trustee in relation to this. The Participant is an executive director or employee of the Group. (B) The Participant wishes to acquire a beneficial interest in [insert number] [ordinary] shares in the Company, to be held by the Participant and the Trustee as tenants in common in undivided shares...

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