THE FUNDED REPLICATOR SHARE PLAN - OPERATION

Steps

1. The Employer advances funds to the Plan Trustee.
2. The advances are not subject to FBT.
3. The advances are invested in Eligible Investments (for example, listed shares, listed unit trusts, bonds etc.) from an approved list of Investments.
4. The Participating Employee is the legal owner of the Investments, which are held by the Employer as security for repayment of the advance of the Employer, which occurs at the time of encashment of the investment.

Encashment

Providing the Participating Employee has fully vested rights ESP encashment can occur:

• Upon request of the Participating Employee; or
• If a condition of the Plan, compulsory upon termination of employment with the employer.

Encashment of the plan is outlined in the diagram below.

Steps

1. Provided the equity has vested, the Participating Employee lodges a Redemption Request Form.
2. The Plan Trustee encashes the Investment by selling the Investment on behalf of the Participating Employee.
3. The Plan Trustee repays the interest free advance/loan to the Employer; and
4. The Employer pays the Participating Employee an amount equal to the original advance/loan amount as salary or wages subject to PAYG.
5. The Plan Trustee pays the Employee the growth in value of the Investment.