5.1 As paid. At the time of the exercise, you must consider Merrill Lynch in terms of the proceeds of the exercise price and the number of option shares purchased. The authorized payment methods are: (i) cash (by bank transfer to Merrill Lynch); (ii) a personal cheque or a certified or banked cashier`s cheque153s payable to Merrill Lynch; (iii) allow Merrill Lynch to sell only enough underlying shares to cover the exercise price, control and fees (cash holding); (iv) allow Merrill Lynch to sell all the underlying shares and deliver the proceeds, net of taxes and fees, or to your Merrill Lynch account (scriptural sale); or (v) the auction of common shares that you own for at least six months, with a value on the year date corresponding to the exercise price, taxes and deners (share exchange exercise). Companies must produce two documents relating to employees` options for action. The first is the stock options plan approved by the company`s board of directors that provides information on the rights of employees covered by the plan. The second is the option agreement, which is normally prepared individually. This document defines the price per share that the employee must pay, the number of shares the company grants and how the employee is associated with the plan. Both documents should alienate the details of the exercise when the employment ends. The plan may require, for example. B of laid-off employees, whether they exercise their stock options within 24 hours of the end of the day or give them 30 days. Plans and agreements may also include provisions that do not allow certain employees to exercise their ESO, for example. B employees who leave the company to work for a competitor. Employees dismissed for reasons such as misappropriation or unjustified absences may also lose their options under the terms of a plan.
Most legal ESOs require workers to be required before they can exercise the options. Vesting simply means that employees must work for the company for a certain period of time in order to obtain the right to exercise their stock options. Most plans allocate the total number of options over a period of several years and grant purchase rights as a percentage. For example, an employee has the option to purchase 1,000 shares. Assuming that the compensation rate is 25 per cent per annum, the employee can buy 250 shares after working for the company for one year. If he does not stop his option, he can buy 500 shares, 750 shares after three years or 1,000 shares after four years. When an employee leaves the company, his exercise rights are usually limited to the amount he has transferred. Employers sometimes use employee stock options or EOS as a financial incentive for employees. ESOs give employees the option to purchase shares of companies at a fixed price at the time of the option. Employees do not pay for their stock until they exercise their options.
ESOs are coming to an end and employees are leaving the company usually with only a little time to exercise their stock options. If a company other than your employer has granted you stock option rights, it is advisable that this (third) company also sign the termination contract. If you have employee stock option rights, you can acquire shares in a company yourself as an employee. In this scenario, your employer gives you the right to purchase a certain amount of company shares at a pre-agreed price for a pre-agreed period.