An Introduction to Share Options By Gary Watson September 2015

Investigo Do they work? YES... and NO Share Option Schemes

Investigo Why Would You Implement A Share Scheme? To aid recruitment To improve retention To motivate key employees Is cost effective Is tax efficient

Investigo What Are The Benefits To Your Employees? They acquire a stake in the business Opportunity to accumulate wealth Relatively risk free

Investigo 3 Categories Of Share Scheme Purchase and award of shares Award of options Phantom share awards

Investigo What Is An Approved Share Scheme? EMI CSOP SAYE SIP A scheme for which certain tax benefits are available to employees and employers

Investigo What Is An Unapproved Share Scheme? Everything else!

Investigo Enterprise Management Incentive Aimed at smaller qualifying trading companies Option exercise price can be discounted to the market value of the shared at date of grant There is no income tax or NIC on the grant Less than 250 employees Gross assets of £30m or less At sale employees qualify for entrepreneur’s relief at 10%

Investigo Company Share Option Plans Used where EMI options cannot be granted Gives you an option to buy up to £30,000 worth of shares at a fixed price Options cannot be exercisable within 3 years of grant date There is no income tax or NIC on the grant Grants are subject to CGT

Investigo Save As You Earn Must be available to all employees who’ve been with the company for a certain time The price is fixed at the start You can save up to £500 a month out of your take home pay At the end of the savings contract (3 or 5 years) you can use the savings to buy the shares The interest and any bonus you receive at the end is tax free Gains are subject to CGT unless you put the shares into an ISA or pension as soon as you buy them

Investigo Share Incentive Plan 4 different ways you can receive shares under SIP: Free shares Partnership shares Matching shares Dividend shares After 5 years there is no income tax or NIC on their value when you acquire them Gains are subject to CGT

Investigo When Do Share Schemes Not Work? If share schemes are used to attract, retain and motivate, then there are 4 things that you have to be right about: Qualifying criteria Timeline Transparency The quantum

Timeline Of Investigo 2003 – 2015 Change Management Guildford Property and Facilities Management SAP The Birth of Investigo London 3 RD August 2003 Accounting & Finance St AlbansStrategyReading Milton Keynes Procurement & Supply Chain HR Launch of Sydney office

GDP

Investigo Investigo Turnover 2003–2015 £83 Million forecasted for 2015/2016

Investigo Darren Burns Director – Banking & Financial Services “Investigo is a genuine half way house between a large scale recruitment business and starting on your own. Unlike other ‘Equity’ schemes and empty promises around the market, the EMI scheme at Investigo is very real and very transparent. The scheme is aligned from Day 1. The financial incentive is very attractive and was a huge factor when joining Investigo. This is a huge reward for circa 5 years of hard work. It’s not for everyone, so you should be confident in building a brand and a profitable business. If you back yourself then Investigo have proven to share wealth amongst the group. I interviewed at 9 companies and Investigo came up trumps!”

Investigo Stuart Bonner Director – Property “Being a qualified accountant before getting into recruitment, understanding company valuations was something I’d trained in. I guess this made me more cynical than most when it came to offers of share schemes worth nothing. The absolute total transparency of the deal at Investigo has been key for me to believe and trust in it’s potential outcome”

Investigo Ben Cowan Director - Change Solutions “Apart from the culture and people, a major attraction for me to join Investigo was the transparent and straight forward LTIP. The scheme relates directly to the performance of the business I run, not on elements outside of my control, which I found particularly appealing. The EMI scheme demonstrates Investigo’s commitment to me, and creates loyalty in return, enabling us to focus 100% on delivering on Investigo’s vision. The EMI scheme, structured as it is, puts my “pay out” destiny in my own hands – something I find extremely motivating.”

Investigo Terry Dawson Associate Director – SAP “Leaving my last company and choosing to join Investigo was the biggest decision of my life, one of the reasons I chose to join was the LTIP/ EMI scheme that was presented to me. Unlike other share option schemes that seemed confusing and less than straight forward, the Investigo scheme was simple. It will reward me based on the results of my own performance and that of my division, so in simple terms I know exactly how much profit I need to generate for the company in a set period of time in order to achieve my financial goals. This clarity and straight forward approach helps me to focus on my goals and is hugely motivating for me. Investigo has literally given me the opportunity to change my life within a period of 3-4 years!”

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