5b analysis, page-68

buddy134

Employee Share Purchase Plans can operate as follows.

1 The company buys the shares on market.

2 The shares are held in trust in the form of an interest free loan to employees .

3 The employees do not contribute one cent.

4 Dividends progressively pay off the loan on the shares and when completely paid out, the trustee hands over the shares to the employees.

5. The company loan to the trustee has been fully refunded to the company.

There may be variations to this but this type of plan is the one I am familiar with and it worked very well for me.