the gateway to your stock options

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Kerry Chambers
8 years ago
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1 WELCOME GUIDE FIDELITY STOCK PLAN SERVICES the gateway to your stock options TAKE PART IN YOUR COMPANY S GROWTH

2 TAKE ADVANTAGE OF all your plan offers Your employer has provided you with a potentially valuable benefit through your stock option plan. The plan gives you the right to buy company stock at a fixed price for a specified period of time. Your stock options can be an important part of your financial portfolio and may help you reach important goals such as: Purchasing a home Funding a college education Saving for a sound retirement UNDERSTANDING YOUR stock option plan To understand how your stock option plan works, review the following illustration. It walks you through the timeline of your grant from the date of your initial grant to the eventual exercise of your options. It also defines some important terms and explains how you can use your Fidelity Account to monitor and manage your stock plan.

Your stock options can be an important part of your financial portfolio and may help you reach important goals such as: Purchasing a home Funding a college education Saving for a sound retirement

3 GRANT THE LIFE OF A GRANT from initial grant date to the exercise of your options Your company grants you stock options, which give you rights to buy a predetermined number of shares of your company s stock at a pre-set price (called the grant price or exercise price). MONITOR AND MANAGE your stock option plan online through netbenefits.fidelity.com or a Fidelity Stock Plan Services Representative Activate your Fidelity Account Review the details of your grant VESTING Typically, you must wait a predetermined period of time before you can exercise your options to buy company stock (vesting period). An option becomes vested after this time has passed; you can then exercise your options to buy company stock. See which options are vested and when non-vested options will vest EXERCISE Use your options to buy company stock (called exercising your options). In-the-money options: The market price of the stock is greater than the grant price. Out-of-the-money options: The market price of the stock is less than the grant price. Exercise options online Exercise your options with a Fidelity Stock Plan Services Representative (Check your plan highlights for details) EXPIRATION Options usually have a pre-determined period in which you can exercise them. If you choose to exercise, make sure you exercise your in-the-money options before their expiration date, or you will forfeit their value forever. Check the expiration date of your options and your grant price PROCEEDS When you exercise your options, you can: keep the purchased company stock, sell the stock and buy other investments, or receive cash. These actions will result in either cash or shares being deposited into your Fidelity Account. To request a check, simply call a Fidelity Stock Plan Services Representative. If you choose to keep you proceeds in your Fidelity Account, you can: Invest your proceeds in a broad array of mutual funds, stocks, bonds, and CDs Access cash through checkwriting, bankwire, debit cards, and more

com or a Fidelity Stock Plan Services Representative Activate your Fidelity Account Review the details of your grant VESTING Typically, you must wait a predetermined period of time before you can

4 MORE options TO MANAGE YOUR PLAN As a stock option plan participant, when you decide to exercise your options you have a few choices. You can hold your shares, sell them and reinvest the proceeds, or sell them and use the proceeds to meet more immediate needs. Whatever you decide to do, you can benefit from the wide range of services, products, and research Fidelity Investments offers as your plan s administrator. To help you manage your account quickly and easily, you are able to: Activate your account online Use one consolidated screen to view your stock option balance and other account balances that may be held at Fidelity Take advantage of accurate, dependable online trading technology Access in-depth research on stocks, bonds, and mutual funds GET TIMELY INFORMATION Provide your address at Fidelity.com/goto/ to get timely information related to your plan, such as stock price alerts, important stock updates, and educational information, sent to you.

Whatever you decide to do, you can benefit from the wide range of services, products, and research Fidelity Investments offers as your plan s administrator.

5 ACCESS YOUR stock option plan online You can access your stock option plan information online at any time. When you log in to netbenefits.fidelity.com, you can access your plan information to: PORTFOLIO SUMMARY Review your vested and unvested grants Exercise your options (check your Plan Highlights for details) Check a pending exercise View your exercise history Screen shot for illustrative purposes only. Stock Option Calculator STOCK OPTION CALCULATOR A stock option calculator is available to help you model hypothetical transactions and estimate the resulting tax obligation before you exercise. You can model your options in a couple different ways: Enter a number of shares to exercise and sell, to calculate your potential sale proceeds Select a desired cash amount, to see how many options you would need to exercise and sell to receive that amount in proceeds Screen shot for illustrative purposes only. You can access the calculator from the Stock Option Summary page. Simply click on the Estimate Gain link located on the left-hand side of the screen. create your PIN TO ACCESS YOUR STOCK OPTION PLAN Go online to netbenefits.fidelity.com and follow the prompts to set up your PIN (if you haven t already done so). After you establish your PIN, you can gain access to your stock option plan information.

your exercise history Screen shot for illustrative purposes only.

6 your Fidelity Account STOCK OPTIONS CAN HELP YOU MANAGE YOUR A Fidelity Account has been established for you to help you manage your stock options. You can also use this non-retirement brokerage account as your personal investing account. You simply need to activate your account online. If you do not activate your account, your online access will be limited to viewing your account balance, and you ll be restricted from making online transactions. How does my Fidelity Account work? Your Fidelity Account is centered around the core account. Transactions in your brokerage account are processed through your core account. This is where your cash is held until shares are purchased or you sell and decide what to do next. It s also the part of your account where your stock plan sale proceeds, dividends, and capital gains are automatically deposited. FIDELITY ACCOUNT Deposit to Core Account Stock Plan Sales Initial Investments Additional Deposits Trade Proceeds Cash Dividends CASH ( CORE ACCOUNT ) Cash Account or Municipal Money Market Fund INVESTMENTS With your cash proceeds, you can invest in: Fidelity Mutual Funds Stocks Bonds Non-Fidelity Mutual Funds Withdraw from Core Account Request a Check Security Purchase Mutual Fund Purchase Debit Card Withdrawals ATM Withdrawals Check Withdrawals Bill Payments Transfer of Funds

If you do not activate your account, your online access will be limited to viewing your account balance, and you ll be restricted from making online transactions. How does my Fidelity Account work?

7 Keep the big picture in focus As a recipient of stock options, it s important to view your company stock holdings as part of your investment portfolio and overall wealth. In particular, you should understand the impact the exercise of stock options may have on your overall asset allocation and the extent to which you are diversified. Fidelity s online planning and guidance tools Fidelity offers online planning tools to help keep your portfolio on track. Visit Fidelity.com to access: Fidelity Portfolio Analysis: Obtain an in-depth analysis of your portfolio s asset allocation and holdings. Fidelity PortfolioPlanner : Portfolio Review The Portfolio Review tool will help you review your portfolio and create investment strategies to meet your financial goals.

Fidelity s online planning and guidance tools Fidelity offers online planning tools to help keep your portfolio on track. Visit Fidelity.

8 glossary Commission. The fee paid to a broker for executing a trade based on the number of shares traded or the dollar amount traded. Exercise. To purchase stock made available through a granted stock option. Exercise Date. The date you exercise the rights on your stock option by buying the underlying company stock. Exercise Price. The price that must be paid to exercise the stock option. The exercise price is usually set at the fair market value of the company s stock on the date of the grant. Also called the grant price. Expiration Date. The last date that you are able to exercise your stock option. After this date your options have no value. Fair Market Value. The price at which shares would change hands in a transaction between a willing seller and a willing buyer. Fidelity Account. Non-retirement brokerage account, with trading and cash-management features, that helps you monitor and manage your stock plan. Gain/Loss. The total value of your asset minus its cost basis. Grant. The total number of options awarded under a stock option plan. In-the-Money. A stock option is in-the-money when the current market price is above the grant price. Issuer (of an option). The company (your employer) that grants stock options to an optionee (you). Net Value. The amount your options or shares are in-the-money. Option Agreement. A contract between you and the issuer that sets forth the terms of the option grant. Out-of-the-Money. A stock option is out-ofthe-money or under water when its grant price is above the current market price. Stock Option. Gives the optionee the right, but not the obligation, to purchase the stock of the issuer at a fixed price (the grant price) for a fixed period of time. Vesting. The process by which options become exercisable, usually through the passage of time. Your option is considered vested when you have the right of ownership and you can exercise. Grant Price. Established at the grant date, the price you pay to buy shares of your company when you exercise your options (also called the exercise price). System availability and response time may be subject to market conditions. Brokerage services provided by Fidelity Brokerage Services LLC, Member NYSE, SIPC SOP-EKT-WG

The price that must be paid to exercise the stock option. The exercise price is usually set at the fair market value of the company s stock on the date of the grant. Also called the grant price.

Expand your world of investment choices.

Fidelity BrokerageLink Expand your world of investment choices. The power is in your hands. Because it s your retirement money and your future, you should have the freedom to make your own decisions. Fidelity