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What is a stock purchase plan within the framework of the 1995 circular?
The 1995 circular allows a company to offer to its employees the possibility to acquire shares at a purchase price which is, at a minimum, 100/120e of the share market price, (or a discount of 16.67%). The acquired shares are then unavailable for two years. The value of the granted benefit is not subject to taxes or to social security contributions.
What is the target group within a company?
The offer must be made to the employees or directors of the company. The company is allowed to choose the beneficiaries of the offer and the benefits granted. Contrary to an employee share plan created by virtue of article 609 of the Company Code, the offer does not have to be made to all employees; this is at the company’s discretion.
Why offer this type of plan to employees?
In Belgium, the stock purchase plan can be used as:
- a remuneration and motivational tool (officers)
- an alternative to a stock option plan (managers)
- an employee stock plan (for all or selected employees).
Why use a leverage scheme in this type plan?
Not all employees have the same means to purchase company shares. As a result, the stock purchase plan may appear to be primarily attractive for senior management and high earners. To resolve this financial problem, Dexia Employee Benefits has created a leveraged scheme that enables to be associated to the company’s profits via a limited contribution.
Which companies can create an employee stock purchase plan with leverage and under what conditions?
The company must be listed on the stock market or be the subsidiary of a listed company. |
