One Team, One Plan Together we are HomeServe
Welcome Welcome to One Plan, our Global Share Incentive Plan, which enables everyone at HomeServe to become an owner of our company. It s an opportunity for you to buy shares in HomeServe and get extra shares for free. By becoming a shareholder you re investing in yourself and your colleagues, planning for the future and helping build the HomeServe of tomorrow. One Team, One Plan Together we are HomeServe
What is it? For every two HomeServe shares you buy through One Plan, we ll award you the right to receive one share completely free provided you keep the shares you buy for three years. There are no complicated application forms and no fees or charges to buy shares. It s just a simple way to invest for your future. You can invest from $15 to $215 each month. You re not locked into paying the same amount for any length of time either. If you want to change your investment one month or not contribute anything at all, you can. You re in control. Key points Buy shares every month from after-tax pay Invest $15 to $215 a month The right to receive one share free for every two you buy Adjust your monthly payments when you want Seeds Seeds Seeds
How does it work? Invest 1. You choose how much to invest in One Plan. You can invest from $15 to $215 each month. This amount is taken from your net pay. The investment limits will be reviewed in May each year and are likely to vary if there is a significant change to the exchange rate from dollars ($), into British pounds ( ). If you are investing more than any new maximum, your pay deductions will be reduced. If you are saving less than the new limit, you can increase your monthly investment. Seeds 2. Computershare, the administrator of One Plan, uses the money you invest to buy HomeServe shares for you. These are called Partnership Shares. Partnership Shares are bought once a month. There are no transaction fees or commissions to pay when your money is invested. Your entire contribution will be used to purchase shares for you. It is therefore possible to receive fractions of shares 3. You can change the monthly amount you invest in One Plan at any time. Just log into your account online and tell us the changed monthly amount. If things are a bit tight you can stop or reduce your contributions. If you re flush one month you can invest more, up to the $215 monthly limit. Any changes will be applied in the next available payroll.
How does it work? Own Your One Plan shares are held by Computershare. You don t need to do anything your shares will be held securely. You can see how many shares you have and what they re currently worth by logging into your account online. There are no annual charges.
How does it work? Grow 1. Your investment can benefit you in three ways: Through your shares growing in value (but remember that share prices can go down as well as up). Through receiving additional free shares. Through receiving dividends. 2. For every two Partnership Shares bought, you get the right to receive one share free. These free shares are called Matching Shares. You can receive fractions of Matching Shares. 3. As you re a shareholder in HomeServe, you ll receive any dividends that we pay. Dividends depend on the performance of our company. If we do well during our financial year, we may decide to pay a dividend to reward our shareholders for backing us. We usually decide whether to pay a dividend twice a year, in May and November. The amount you would receive depends on the number of shares you hold. Dividends on Partnership Shares are automatically re-invested in additional HomeServe shares, called Dividend Shares. Dividend Shares can be sold at any time. Until you have ownership of your Matching Shares, you are not entitled to dividends on them. However, you will then receive some additional free shares equal to the dividends on those shares.
How does it work? Grow Contd. 4. The earliest that you can normally sell or withdraw your shares depends on the type of shares: Partnership Shares at any time (but within a period of up to three years of the purchase date, your right to receive the related Matching Shares is normally forfeited). Matching shares ownership will be transferred to you in September each year provided you have held the related Partnership Shares for at least two years. For example, in September 2019 ownership of Matching Shares relating to Partnership Shares bought from September 2016 to August 2017 will be transferred to participants. Dividend Shares at any time. 5. When you receive your Matching Shares you will be liable to tax but this can normally be funded by selling some of the shares. If you sell any One Plan shares, you may have to pay tax on any gain not already taxed as income. More information on tax is provided in the Tax Guide. 6. There are no charges other than stockbrokers commission if you sell shares the transaction costs can be found in the Terms & Conditions you sign up to when you join. 7. To sell your shares just log into your account online and tell Computershare, who will sell them as soon as possible providing the London Stock Exchange is open. Computershare will do all the work and pay the sale proceeds to your bank account. 8. You can also give online instructions to withdraw your shares from One Plan and receive a share certificate or transfer them to another investment or share trading account. However, until you want to sell your shares you may find it more convenient to leave your shares in One Plan.
Are there any risks? As with any investment in shares, there are risks with One Plan. The value of HomeServe shares can go down as well as up. When you invest in One Plan, you re buying shares in HomeServe. These shares are traded on the London Stock Exchange and, like any publicly traded shares, their value can go down as well as up. 1. What your money will buy Even if you invest the same amount of money in One Plan every month, the number of shares it buys will change. If the share price goes up (increasing in value), your monthly investment may buy fewer shares. If it goes down, it may buy more shares. 2. What shares in One Plan are worth The shares you buy one month could be worth more or less in the future. It s important to understand that the value of shares ultimately depends on the balance of those wanting to buy and sell shares. This can be affected not just by how well the company has done, but also by how well investors think it will do in the future and external factors (e.g. interest rates, competitors, regulation). 3. Effect of exchange rate movements The market price of HomeServe shares is decided in British pounds ( ) by trading on the London Stock Exchange. The number of shares you can buy, and the amount you receive in dollars ($) when you sell shares, will also depend on the exchange rate at the relevant time between British pounds ( ) and dollars ($). < Grow < Grow An advantage that you have as an investor in One Plan is that you get the right to receive one free share for every two you buy (not something ordinary investors get). This means that, depending on the circumstances, your investment effectively has some protection from any fall in HomeServe s share price. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Selling your shares You can sell (or withdraw) your Partnership Shares whenever you want. But the longer you hold onto them, the bigger the potential benefit: If you sell them within a period of up to three years, you will normally forfeit the Matching Shares you could receive with them. If you hold your Partnership Shares for at least that period (of up to three years), ownership of your Matching Shares is transferred to you and they are yours to do whatever you want with. Joining 2016/17 Monthly pay deductions start August 2016 to July 2017 (purchases start September 2016 to August 2017) Joining 2017/18 Monthly pay deductions start August 2017 to July 2018 (purchases start September 2017 to August 2018) Dividends From purchase Dividends From purchase September 2019 Matching Shares become yours and tax paid September 2020 Matching Shares become yours and tax paid Joining 2018/19 Monthly pay deductions start August 2018 to July 2019 (purchases start September 2018 to August 2019) Dividends From purchase September 2021 Matching Shares become yours and tax paid Can my shares be sold without me giving permission? When the ownership of Matching Shares is transferred to you (even if Computershare continues to hold them on your behalf) there may be an obligation for your employer to withhold tax. If there is, some of your One Plan shares may be sold to fund this obligation.
Joining One Plan < Gr You can join One Plan, check your shares and sell them at www.computershare.com/homeserve Joining 1. Sign in with your User ID and PIN 2. Select Portfolio and then Apply 3. Enter the amount you d like to invest every month 4. Confirm and you re done 5. Your application will be processed for the next available payroll Changing your monthly investment 1. Sign in with your User ID and PIN 2. Select Contributions and then Change 3. Enter the new amount you d like to invest every month 4. Changes will take effect in the next available payroll Selling shares 1. Sign in with your User ID and PIN 2. Select Portfolio and then Transact 3. Select Sell and follow the instructions 4. Enter your PIN again to confirm your sale 5. The proceeds (less selling costs) will be included in your next pay 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 When can I join? Join One Plan by visiting www.computershare.com/ HomeServe You can join One Plan at any time, just as long as you ve completed three months continuous service. You ll be sent your User ID automatically and your PIN will be sent separately soon afterwards.
What happens if I leave HomeServe? If you leave HomeServe: You won t be able to carry on investing in One Plan. The treatment of your Matching Shares will depend on your reason for leaving (see table to the right). Some Matching Shares may need to be sold to fund any tax your employer is required to withhold. Computershare will contact you regarding the shares you have in One Plan. You will have the following choices: Sell shares Sell some or all of them the proceeds after normal brokerage charges will be paid to you. Keep shares Leave them in One Plan free of charge until you want to sell them (when normal brokerage charges will apply). Have them transferred into your name (you will be sent a share certificate) or to your personal brokerage account if that can accept UK shares. Please note, selling UK certificated shares in the US may be difficult. Reason for leaving Resignation or dismissal Death, injury, disability, redundancy, retirement, employer leaving the HomeServe Group (or certain business transfers out of the HomeServe Group) Are rights to Matching Share forfeited? Yes, if it s less than the 2-3 year holding period since you bought the related Partnership Shares (see How does it work, point 4, for further details). Otherwise, no. No, but some shares may need to be sold to fund any tax your employer is required to withhold.
Glossary Administrator Computershare. They buy shares in HomeServe on your behalf and handle the day-to-day management of the plan. Computershare One of the UK s largest share plan administrators and transfer agents. They maintain HomeServe s register of shareholders. Dividend Shares Shares bought for you using dividends paid on your One Plan shares (other than Matching Shares where ownership has not been transferred to you), plus any additional shares you received instead of dividends on your Matching Shares. London Stock Exchange The stock market in London, England, that HomeServe shares are traded on. Matching Shares Free shares you are awarded when you buy Partnership Shares. You are granted a right to one Matching Share for every two Partnership Shares, but you must normally hold the Partnership Shares for a period in order for ownership of your Matching Shares to be transferred to you. Partnership Shares Shares bought with your monthly investment from your pay. PIN The number you will need to set up when logging into the One Plan website at www.computershare.com/homeserve. It will be sent to you separately from your User ID. User ID Your User ID will be sent to you once you re eligible to join One Plan. You ll need it to log into the One Plan website at www.computershare.com/homeserve
If you need more information If you ve got any questions about One Plan, get in touch with our specialist team at Computershare. Phone: 8558018347* Email: homeserve@computershare.co.uk Web: www.computershare.com/homeserve *The Computershare team is available from 8:00am to 6:00pm Central European Time (CET), Monday to Friday (excluding bank holidays). There are risks associated with any investment in shares. If you re not sure whether One Plan is right for you, you should talk to an independent financial adviser before investing in it. This brochure is intended as a guide to One Plan. The One Plan benefits are delivered using HomeServe s Global Share Incentive Plan. This is governed by formal rules which are available on request. In the event of any inconsistency between this guide, the Rules and any applicable legislation, the Rules and any applicable legislation will prevail. HomeServe reserves the right to amend the HomeServe Global Share Incentive Plan Rules and to suspend or terminate the HomeServe Global Share Incentive Plan at any time.
Tax Guide This is a summary of the United States income tax and social security implications assuming you are US resident for income tax purposes (and are not subject to tax in any other jurisdiction) at all relevant times. It describes the position at June 2016 and is subject to change. This summary is for guidance only and does not take account of your personal circumstances. If you require personal tax advice you should take appropriately qualified professional advice. Partnership Shares (shares purchased on behalf of employees through the London Stock Exchange) Matching Shares (a right to acquire shares on vesting, sometimes called a restricted stock unit or RSU) On purchase On sale At grant On vesting On sale Income tax and social taxes Capital gains tax Income tax and social taxes Capital gains tax Income tax and social taxes Capital gains tax Income tax and social taxes Capital gains tax Income tax and social taxes Capital gains tax û û û * ü * Except for some highly compensated employees (see below) û û ü û û * ü * Except for some highly compensated employees (see below) Purchase of Partnership Shares and grant of your award of Matching Shares There are no tax or similar liabilities. Vesting of your award of Matching Shares You will be liable to federal ordinary income tax at your marginal tax rate (up to 39.6%) on the fair market value of the shares when the award vests (normally up to three years after it was granted) or, if later, when it is settled. You may also be liable to pay Medicare and social security tax on the vesting value. Medicare is payable on wages up to $200,000 at 1.45%, and on wages exceeding $200,000 ($250,000 if you are married and file a joint tax return) at 2.35%. Social security tax is payable at 6.2% on the first $118,500 of your wages subject to social security. Your employer must withhold the amounts due.
Tax Guide Contd. On a sale of the shares You may have to pay capital gains tax if you sell shares. For sales more than 12 months after acquisition, the gain will be taxed as a long-term capital gain at a maximum rate of 20%. For earlier sales, the gain will be treated as a short-term capital gain that (absent capital losses that may be offset) will be taxed at the same rates as ordinary income tax rates. The base cost used to calculate the taxable gain is the amount paid for Partnership Shares or the fair market value of Matching Shares when they vest. There is also an additional 3.8% of Medicare tax payable on investment income (including on the sale of shares acquired under One Plan) if your annual income exceeds $200,000 ($250,000 if you are married and file a joint tax return). You must pay any tax due on share sales direct to the IRS. State taxes Most, but not all, states follow the federal tax principles described. Dividends Dividends will be liable to income tax at a maximum rate of 20%. An additional 3.8% net investment income tax will generally be due if you earn over $200,000 ($250,000 if you are married and file a joint tax return). You must declare and pay any tax due direct to the IRS as part of your annual tax return. You will receive the required information on your Dividend Statement, issued when the dividend is paid. Important: If you join One Plan you will be asked to complete Form W9 online. It is important that you do this since, otherwise, US backup withholding tax will be automatically deducted by Computershare when a dividend payment is made (before Dividend Shares are purchased). Further information More detailed information on the taxation of One Plan benefits is provided in the Tax Information Sheet online. 129WXL D14