share incentive plan

share incentive plan
Formerly known as the all-employee share ownership plan (AESOP). Introduced by the Finance Act 2000, a plan under which shares are held by a trustee on behalf of an employee under the terms of a HM Revenue & Customs (HMRC) approved trust and all employees and executive directors must be eligible to participate in the plan provided that certain criteria are met.
The plan enables companies to make four different types of share award: "free" shares, "partnership" shares (paid for by employees out of pre-tax salary), "matching" shares (which companies can give to employees who purchase partnership shares) and "dividend" shares (purchased with dividends from other plan shares). There are a number of tax advantages for the employer and employee available.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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