SIMULTANEOUS EXERCISE AND SELL OPTIONS PROGRAM - PDF document

1 SIMULTANEOUS EXERCISE AND SELL OPTIONS P
SIMULTANEOUS EXERCISE AND SELL OPTIONS PROGRAM Help your employees take advantage of your plan Self-administering your corporate equity plans can save your company money, but it can put an undue burden on your employees. Without the ability to exercise stock options while simultaneously selling the underlying shares, they would have to fund the entire exercise cost and applicable taxes. Our simultaneous exercise and sell options (SESO) program provides an easy method for selling shares received from the exercise of stock options, while hands. With our SESO program, employees can: � Exercise their stock options with no upfront investment � Sell all or a portion of their shares without the need to open a brokerage account � Receive proceeds to the nancial institution of their choice When a sale is executed, we deduct transaction fees and commissions from the sales proceeds paid to the employee, eliminating the hassle and expense of ongoing bills. We can assist with restricted stock too. For restricted stock, where tax withholding is required on the vesting date, we can help your employees sell all or a portion of those vested shares to cover the taxes. Our executive services group offers experience and knowledge to easily support this effort. You simply submit your employee sale requests to Computershare and instruct your transfer agent to deliver the are executed, we’ll forward the option cost and withholding taxes to you. As with the SESO program for stock options, we deduct all transaction fees from the sale proceeds. Learn More Go to cpm.computershare.com for more on our how we can help you better manage your equity plans. Or contact us at busdev@computershare.com or 888 404 6333 to schedule a complimentary demo of our online tools for both the plan sponsor and the plan participant. Convenience for your employees. Administrative control for you. Product Overview Convenience for them. Control for you. Take advantage of our SESO program to make it easy for your employees to participate in their equity plan while you retain administrative control. SIMULTANEOUS EXERCISE AND SELL OPTIONS PROGRAM Frequently Asked Questions Product Overview How can employees sell shares received from the exercise of their employee stock options? For com

2 panies that choose to retain control of
panies that choose to retain control of their stock plan administration, we offer the simultaneous exercise and sell options (SESO) program to provide you and your employees with an easy-to- use solution for selling shares received from the exercise of stock options. Once employees inform the designated company contact of their desire to perform a cashless exercise, the company contact simply noties us of the number of shares that are to be sold. We then execute the sale order. On the settlement date (usually three business days after the trade date), we will remit the option cost and any applicable withholding taxes to the company, and will issue the remaining proceeds, less applicable fees, to the employees as per the company’s instructions. Which exercise methods are available with the seso program? Employees can choose either a cashless-for-cash exercise or a cashless-for-stock exercise. With these methods, no outlay of cash by the employee is required, and distributions to the employee can be made in either cash or stock. While not included in the SESO program, cash exercises and stock swaps that do not require the sale of stock can continue to be processed in the normal manner by your company. Are employees required to open individual brokerage accounts? We do not require your employees to have a brokerage relationship with us to participate in the SESO program. What types of fees are associated with this program? When a sale is executed, transaction fees and commissions are deducted from the sales proceeds paid to the employee. A nominal annual fee covers the ongoing administration of this program. Are employees able to place a limit order? Yes. When requesting the sale of shares, the designated company contact simply species the number of shares to be sold and the limit price. The limit price may be set above or below the current market price and can be placed as a “day” or a “good-till-cancelled” order. We will call the designated company contact the same day that all or part of the limit order is lled. What information does computershare require for timely distribution? We provide a standard template for clients to complete. The template requires the optionee’s name and address, number of shares sold, sale pr

3 ice, option cost, applicable fees, any a
ice, option cost, applicable fees, any applicable withholding taxes, and net proceeds to be distributed to the optionee. Can funds be wired? As a standard business practice, we wire the option cost and any applicable withholding taxes to your company at no charge. Employees can request a wire of the net proceeds for a fee of $25 per wire transaction. Does computershare provide tax reporting for the seso service? Typically, our SESO program clients sign an exemption letter under IRS Revenue Procedure 2002-50, which exempts us from the mailing of Forms 1099-B to employees who have sold shares under the SESO program. The company is responsible for reporting the compensation income resulting from stock option exercises. Will computershare maintain records for the stock option plan under this arrangement? Our program services are utilized by clients who administer their stock plans in-house and, therefore, do not include recordkeeping for stock option plans. If a client needs more support, we offer full administration services including individual web- accessible accounts for your employees. Can other types of equity compensation plans be administered under a similar arrangement? In addition to providing SESO services for employee stock option plans, we offer a similar arrangement for shares vesting under restricted stock plans. Employees may nd it benecial to have the option of selling shares to cover any withholding taxes that may be due when restricted stock vests. We can also facilitate the sale of stock-settled SARs to allow employees to receive cash rather than stock. Will i have a dedicated contact if questions or issues arise? Your current relationship manager and/or a member of the executive services group will be able to answer your questions and resolve service issues. Can computershare support executive trades? Our dedicated executive services group provides specialized services to assist executive ofcers in satisfying their trading-related compliance obligations. Services include assistance with the preparation and ling of Form 144 and the administration of Rule 10b5-1 sales plans. The executive services group will also quickly provide sale details to clients to assist them with the timely ling of SEC Form 4. Frequently Asked Question