The past few years have seen an acceleration in the number of companies, in particular Hi-Tech companies, allotting options or shares as a method of recompensing their employees. The Trust Co., in co-operation with Bank Leumi, is ready and capable of accompanying the issuing company the whole way, from the inception of the idea until the crediting of each employee with the proceeds of sale of his shares.
The allotment of options and/or shares is made by way of an allotment plan presented by a company, in accordance with the guidelines set out in Sec. 102 of the Income Tax Ordinance - i.e. deduction of tax in accordance with the employee's standard rate of tax, deduction at a fixed rate of 25% or as per a Tax Authority permit (rolling) - all of which will be decided by the allotting company.
Dealing with such allotments includes, inter alia, the process of exercising the options and the sale of the resulting shares. This requires both knowledge and the investment of considerable time.
The Trust Co. is ready and capable of accompanying the issuing company the whole way, from the inception of the idea until the crediting of each employee with the proceeds of sale of his shares.
The Trust Co. acts as trustee for both the allotment of options and shares to employees and to controlling shareholders in companies whose shares are traded both in Israel and abroad and also to those private companies whose shares are not traded.
For such allotments the Trust Co. has obtained two permits from the Income Tax Authorities, dated 14 January 1990 and updated on 13 March 2003, to act as trustee.
The activities of the Trust Co. include:
- The preparation and presentation to the tax authorities of the required documents - the Trust Deed, the request to act as trustee and the notice of the allotment.
- Preparation of the Trust Deed dealing with all aspects arising from the allotment programme and the obligation documents to be signed by the employees.
- Holding the option/securities documents in trust and depositing them with an authorized dealer.
- Dealing with the exercise of the options and the sale of the resulting shares by the employees.
- In cases where employees require a loan to finance the exercise of their options, to co-ordinate with Bank Leumi the possibility of them being granted such a loan.
