THE EMPLOYEE INVESTMENT TRUST - OPERATION

Steps

1. Employer makes loans or contributions to the EIT.
2. The EIT makes an offer to selected Employees nominated by Employer of units in the EIT and an interest-free loan to acquire those units.
3. The EIT invests in assets approved by the Employer and selected by the Employees. The EIT issues units in the EIT to the Participating Employees, funded by way of interest-free loans from the EIT.
4. The loans from the EIT are effectively non-recourse, which protects the downside risk exposure of Participating Employees.
5. The issue of Bonus Units enables the Participating Employees, where appropriate, to receive the full benefit of the allocated investments (that is, rather than providing growth-only benefits).