Senior's share scheme

07 September 2006

Issue: 4074 / Categories: Forum & Feedback

I have been asked to advise a new client, an unquoted trading company, in connection with a share scheme, which it has put in place for certain senior employees. The client was a professional services partnership which incorporated some years ago, and the senior employees are individuals who previously would have become partners. Every year, they are each entitled to acquire a small percentage of shares (not new shares), from the existing shareholders.

I have been asked to advise a new client an unquoted trading company in connection with a share scheme which it has put in place for certain senior employees. The client was a professional services partnership which incorporated some years ago and the senior employees are individuals who previously would have become partners. Every year they are each entitled to acquire a small percentage of shares (not new shares) from the existing shareholders. The price payable is based on net assets so the existing shareholders effectively receive the value they would have received had the business remained a partnership. There are restrictions on the shares in that they will have to be sold back if the employee leaves — under good/bad leaver provisions.
The understanding is that the price they will pay on acquisition will probably exceed unrestricted market value as the...

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