STOCKCROSS. Employee Stock Plans. What employee stock plans are... When to exercise your grants... CORPORATE SERVICES

Transcription

1 Employee Stock Plans What employee stock plans are... An employee stock plan is a great benefit and could potentially generate extra income for an employee. An employee stock option, commonly referred to as a grant, is essentially the common stock of a company that is issued in the form of non-cash compensation to their employees. The grant price is fixed at the price of the company s stock on the day of issue and can be compared against the company s current stock price as it fluctuates in the market. The grants will remain in non-cash form until exercised. When to exercise your grants... Knowing when to exercise grants requires some monitoring and strategy. Exercising grants is like purchasing stock for the grant value. The goal is to exercise when the grant value is lower than the current stock price. This way, you can sell the stock for higher than what you exercised ( purchased ) it for and earn the difference in cash. Exercised stock can be held onto and sold whenever the employee wants. STOCKCROSS CORPORATE SERVICES

2 Employee Stock Plans Fact Sheet Employee Options vs. Standard Options Price: The exercise price of employee stock options (ESOs) do not equal the exercise price of standard options. The ESO s price is usually the price of the company stock at the time of issue and generally does not fluctuate with the market. Also, if an employee purchases company stock through ESPP, the price is usually discounted. Quantity: Standardized stock options typically have 100 shares per contract, while ESOs usually have some non-standardized amount. Expiration Length: ESOs often have a maximum maturity that far exceeds the maturity of standardized options. Tax issues: There are a variety of differences in the tax treatment of ESOs having to do with their use as compensation. These vary by country of issue but in general, ESOs are tax-advantaged with respect to standardized options. Definitions Exercise: The process of purchasing a stock that has been issued to the employee by the company. Exercise/Grant Price: The price at which an option may be exercised, stated in the option agreement. Also called the "strike price". Expiration Date: The date by which the owner of the option must decide whether to exercise the option and actually purchase the stock. Vesting Period: The period of time(s) an employee has the ability to exercise their options. Employee Stock Purchase Plan (ESPP): Allows employees to purchase additional stock in the company at a discounted price. Investing your Earnings 9464 Wilshire Blvd. Beverly Hills, CA Once you have exercised your options and generated some extra income, the next step can be to continue to invest that money and watch it grow. StockCross Corporate Services makes it easy with the option to automatically transfer that money into an account and begin investing immediately. Find out how on pages 5 & 6. STOCKCROSS FINANCIAL SERVICES, INC. MEMBER FINRA SIPC EST. 1971

3 Frequently Asked Questions 1. My stock options have been sold. When will I receive the funds? 2. I have some shares held at the transfer agent, such as ComputerShare or American Stock Transfer. How can those be transferred into my StockCross account? 3. I m trying to submit a new account application online, but I don t have a Social Security Number. What do I do? 4. Can I use my StockCross account for regular stock and options trading? 5. I submitted an order to exercise my options. Why hasn t it happen yet? 6. I just received and that said edocs notification for statements/trade confirmations. What is this for? 7. I want to know how many options I have to exercise. Where do I find this information? STOCKCROSS CORPORATE SERVICES

4 Frequently Asked Questions 1. My stock options have been sold. When will I receive the funds? It takes 3 business days for all trades to settle. The funds will be distributed per the instructions on your Stock Option Authorization form on the settlement date. If the funds are being wired, it may take up to 1 week for them to arrive in your bank account. If your StockCross account shows that the wire request has been transferred, please contact your bank to see if they re holding the funds for any reason. 2. I have some shares held at the transfer agent, such as ComputerShare or American Stock Transfer. How can those be transferred into my StockCross account? You ll need to scan and a copy of your recent statement, or a screen shot, to esop@stockcross.com. With the statement, please include a note requesting X amount of shares be deposited into your StockCross account number XXX-XXXXX. 3. I m trying to submit a new account application online, but I don t have a Social Security Number. What do I do? If you are not a U.S. taxpayer, in the SSN/Tax ID box you need to put your Employee ID number with enough zeros in front to make it 9 digits long. 4. Can I use my StockCross account for regular stock and options trading? Normally yes. Please contact us at: esopinbox@stockcross.com to verify that you are not in a restricted country. 5. I submitted an order to exercise my options. Why hasn t it happen yet? Once an order to exercise is submitted, the information must be verified with your company s Stock Option Department. The order will be input per verification by your company. You ll receive an automatic notification at the address listed on your account once the trade has executed. 6. I just received and that said edocs notification for statements/trade confirmations. What is this for? This is to let you know that a document detailing your recent exercise is now available. You may want to keep a copy of this document for tax reporting purposes Wilshire Blvd. Beverly Hills, CA I want to know how many options I have to exercise. Where do I find this information? For information about stock options that you haven t exercised, you ll need to contact your company s Stock Option Department or check your stock option account. STOCKCROSS FINANCIAL SERVICES, INC. MEMBER FINRA SIPC EST. 1971

5 Investing with StockCross Where StockCross comes in... After you have begun to exercise your employee stock options you might find yourself asking, now what? That s where StockCross comes in. The additional income you can earn from exercising your options is a great starting point to begin building your portfolio in the stock market. StockCross makes it easy by allowing you to automatically transfer that money into a StockCross account where you can continue to invest and trade your earnings. How we can help... StockCross can offer several ways for you to begin building your portfolio. We have knowledgeable and experienced investment specialists who would be happy to get you started through a FREE portfolio analysis, offer invaluable advice at any time, or execute trades right over the phone. Additionally, you can utilize our advantage online trading platform if you prefer to manage your own portfolio. STOCKCROSS CORPORATE SERVICES

6 Investing with StockCross Offerings Investment Center The StockCross Investment Center offers a wide range of investments available for any type of account. We provide guidance and tools to help you reach your investment goals. StockCross has many investments to choose from including: U.S. and Foreign Bonds, Bills & Notes Certificates of Deposit (CDs) Annuities & Life Insurance Reverse Convertibles Municipal Bonds Tax-Advantaged Municipal Bonds Corporate Bonds CMOs Unit Investment Trusts (UITs) Exchange Traded Funds (ETFs) U.S. and Foreign Government Agency Issues 16,000+ Mutual Funds Syndicate Issues Preferred Stocks Structured CDs Not all investments are suitable for all investors. Please contact an Investment Specialist to explore which investments may best suit your goals. Contact us at or chat with us online at stockcross.com. Growing your Money Easy as 1, 2, 3... How Compounding Interest Works: 1. Open an account with StockCross worth $10, Contribute $50 to the account monthly 3. Earn 5% compound interest per year After 10 years you ll have $24,267* $25,000 $20,000 $15,000 $10,000 $5,000 $0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year Wilshire Blvd. Beverly Hills, CA *It is important to remember that this scenario is hypothetical and future rates of return can't be predicted with certainty and investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees STOCKCROSS FINANCIAL SERVICES, INC. MEMBER FINRA SIPC EST. 1971