SHARES IN SUCCESS Everything you need to know about our scheme

Transcription

1 SHARES IN SUCCESS Everything you need to know about our scheme

2 ALL YOU NEED TO KNOW ABOUT SHARES IN SUCCESS HOW DOES SHARES IN SUCCESS WORK? The award you get is a percentage of your eligible earnings, paid in shares. Any awards made in shares will be held in a trust on your behalf. As soon as your shares have been awarded you ll be eligible to receive dividend payments on them, which are normally paid twice a year if Tesco PLC decide to make the payments. You can sell your shares after three years, or you can wait for five years when they ll be free from Income Tax and National Insurance. YOUR 2015 SHARES IN SUCCESS? Who will receive the award? All UK Tesco colleagues who were employed on or before 28 February 2014, are still employed on the award date of 22 May 2015 and are registered for the scheme. What is the Shares In Success Award for 2015? Eligible colleagues will receive a Shares In Success Award of 1% of their 2014/15 tax year earnings. What is the maximum award? The maximum award under the 2015 Shares In Success will be 2,000. What is the award date? The 2015 Shares In Success award date is 22 May This is the date on which we make the award of shares and is used to calculate the award share price. It is used as the anniversary date of the shares determining when they are available to sell. Colleagues who leave before this date may not be eligible for the award. What is the award share price and how is this worked out? We will work out the award share price using the average of the closing share price of a Tesco PLC share over the 5 dealing days before 22 May How do I know if I m registered? If you started with Tesco after 1 August 2008 you will have registered for the scheme when you signed your contract. So, unless you returned the opt-out form included with your contract, you do not need to do anything further. If you have opted-out before you will have recently received a letter explaining that unless you tell us before 8 May 2015 that you do not want to be part of the scheme you will be registered automatically. How do you work out how many shares I ll receive? The number of shares you will receive is based on a percentage of your eligible earnings over the 2014/15 tax year and the award share price. So, for 2015 with an award percentage of 1% this means that you would receive 1 of shares for every 100 of your eligible earnings up to a maximum of 2,000 When will I know how many shares I ve been awarded? All eligible colleagues will receive a personalised letter in June with details of their award amount and the award share price. SHARES IN SUCCESS 2

3 WHAT HAPPENS TO MY SHARES OVER TIME Your commitment is highly valued as we work together to rebuild this great business so if you choose to leave Tesco within three years, you may forfeit these shares. 1 We look at how we perform each year. 3 In three year s time you can choose to sell your shares but you ll have to pay Income Tax and National Insurance. 2 We ll tell you if an award is being made, the value, share price and what you ll receive. 4 In five year s time you can sell your shares free of Income Tax and National Insurance, or just keep them and sell them whenever you choose. THE SHARES IN SUCCESS JOURNEY Once your award is three years old you have the choice whether to sell your shares or leave them in trust...it s up to you. Here s an example of how awards made in previous years add up over time Dividends payable if Tesco PLC decide to make a payment you ll be eligible to receive dividend payments on every share you hold, from when they are awarded until they are sold Shares in trust when awarded in May you can t sell these shares and if you leave you may forfeit them Shares in trust available to sell, will be liable for Income Tax and National Insurance Shares in trust available to sell, will be free from Income Tax and National Insurance HELD IN TRUST CAN SELL OR KEEP SHARES SELL OR KEEP 2014 HELD IN TRUST CAN SELL OR KEEP SHARES CAN SELL OR KEEP SHARES 2013 HELD IN TRUST CAN SELL OR KEEP SHARES CAN SELL OR KEEP SHARES For illustration purposes only. The above example is based on a colleague who has been eligible in previous years and remains in employment for the entire period. Please note shares can go down in value as well as up. SHARES IN SUCCESS 3 SHARES IN SUCCESS 3

4 SHARES IN SUCCESS QUESTION & ANSWERS WHAT HAPPENS TO MY SHARES IF I LEAVE TESCO? What happens if I leave Tesco due to: Redundancy Retirement TUPE Death In Service If you are eligible and leave after 28 February 2015 but before the award date of 22 May 2015 you will receive cash compensation rather than shares, this is a taxable payment which is paid after the award date. If you are eligible and leave after the award date of 22 May 2015, you will be awarded shares as normal. These will be released from trust after you leave and you ll be given the choice of either having a share certificate in your name or selling the shares immediately. What happens if I leave Tesco due to resignation or for any other reason? Your commitment is highly valued as we work together to rebuild this great business so please note that if you choose to leave Tesco before 22 May 2018 you will forfeit your shares. This will also apply if you leave Tesco for any other reason other than Redundancy, retirement, TUPE or Death In Service. SO WHAT ELSE SHOULD I KNOW? When will my Shares In Success shares become available to sell? After five years, you can sell your shares and you won t have to pay Income Tax and National Insurance. You can sell your shares after three years, but you will have to pay Income Tax and National Insurance on either the market value on the release date or the market value on the award date, whichever is lower. How can I find out how many shares I own? You can check how many shares you own at any time by setting up a free personal portfolio at If you have a question about your own shareholding please give the Tesco shares helpline a call on (open 8.30am 5.30pm Monday to Friday calls are charged at 8p per minute plus network extras) Where can I find the current share price? The share price is constantly changing. You can get an indication of the current share price in the financial pages of a newspaper, and on the internet it s updated regularly on Why are my shares held in trust? Your Shares In Success shares are held in trust on your behalf by the Trustees as this is tax efficient for you under the HM Revenue & Customs rules of the scheme. If you keep your shares in trust for five years or more and then sell them directly from the trust, you won t need to pay Income Tax, National Insurance or Capital Gains Tax. 4 SHARES IN SUCCESS What are dividends and what are my choices? Dividends are payments made to all shareholders that are normally paid twice a year if Tesco PLC decide to make dividend payments. You can choose whether you want to receive any dividends in cash or more shares called Re-Invested Dividend shares, the Trustees will hold these on your behalf. The default position will be cash, unless you have already selected to reinvest your dividends. Please note you can change your dividend choice i.e. shares or cash, at any time by logging into your Employee Share Plan (ESP) portal account and giving an online instruction, or by contacting the Tesco shares helpline on Your dividend choice will apply to all shares you hold within the plan. How do I find out more? If you have any other questions about the scheme or about your own shareholdings please call the Tesco shares helpline on (calls are charged at 8p per minute plus network extras). SHARES IN SUCCESS 4

5 GLOSSARY DATE This is the date on which we make the award of shares under Shares In Success and it is used to calculate the award share price. The award date has to be within six weeks of the announcement of our annual results. It is used as the anniversary date of the shares, determining when they are available to sell. SHARE PRICE The award share price is the average of the closing price over the five days prior to the award date, and this is used to calculate the number of shares a colleague is awarded. DIVIDEND Companies who issue shares have the right to pay shareholders a dividend. A dividend is a payment made to shareholders as their portion of the profits. The dividend amount is communicated when we announce our results. You get one dividend per share which means the more shares you own, the higher your dividend payment. They are normally paid twice a year if Tesco PLC decide to make a payment and can be paid in cash or more shares (which are called Re-invested Dividends). ELIGIBLE EARNINGS This is what we use to calculate your award, along with the award percentage and award share price. Your eligible earnings include your base pay and some other payments e.g. overtime. Other elements are excluded e.g. location pay. Everyone s pay is different so if you have any questions on what this means for you, your Personnel Manager will be able to help you. EQUINITI A company that Tesco has appointed to look after the administration of shares for all Tesco shareholders including colleagues. EQUINITI ESP PORTAL The Equiniti online service, which gives you a personalised page showing all of your Tesco shares. FORFEIT The need to give up your shares. IN TRUST A trust is a legal arrangement where one or more Trustees are made legally responsible for looking after your shares for your benefit. RE-INVESTED DIVIDENDS Additional shares purchased with dividend payments. SHARES A share is a small piece of Tesco that you own. When you own a share you become a shareholder, which means you will also be eligible for dividends if Tesco PLC decide to make payments. The price of the share is based on the value of Tesco. Shares can go up and down in value as the total value of the company changes. SHAREHOLDER Someone who owns a share in Tesco. SHARE PRICE This is the current price at any given time when you buy or sell your shares. The share price changes constantly and can be checked on the internet or in the financial pages of a newspaper. The figure you ll see is the price of one share. TRUSTEE The person in charge of the trust is known as the Trustee. The Trustee needs to make sure everything in the trust stays in working order under the trust rules. Please visit to find out more on Shares In Success and all your benefits. SHARES IN SUCCESS 5