스톡 옵션 행사 메릴린치

정확한 신호 바이너리 옵션 온라인.
진보 된 betfair 거래 전략.
스톡 옵션 행사 실시. 메릴 린치.
장기 인센티브 보상 플랜을 계획하십시오. 주식 옵션을 행사하는 법. 퇴직 서비스 그룹을 통해 스톡 옵션을 행사할 수 있습니다. 귀하는 제한된 개인 투자자 계정 주식을 열어야합니다. [전화 옵션]에서 Exercising Voice Response Service IVR (전화 응답 옵션 IVR)을 통해 일주일에 7 가지 옵션으로 하루 24 시간 동안 운동 요청을 제출할 수 있습니다. 또는 운동 요크 증권 거래소가 개설 된 날, 동부 표준시 (Eastern Timeon) 중 적어도 8 일 동안 참가자 서비스 담당자가 도움을받을 수 있습니다. 미국 이외의 지역에서는 [전화 번호]로 전화하여 8 a에서 참가자 서비스 담당자와 통화 할 수 있습니다. 또한 [URL]의 Benefits On Line 웹 사이트를 방문하여 스톡 옵션을 행사할 수도 있습니다. 정책 지침서에 따르면, 메릴린치 지분 증권의 매각을 요구할 것이며, 블랙 린 기간 동안 린치 행사를 금지 할 것입니다. 이것은 만료일 직전에 스톡 옵션을 행사할 수있는 능력에 영향을 줄 수 있습니다. 제한된 사람으로서의 지위 및 적용 가능한 블랙 아웃 기간과 관련하여 질문이있는 경우, 본부 사무처에 연락하십시오. lawinsider의 모든 내용. 사용 약관보기 Merrill Lynch는 주식 옵션 행사 방법에 대해 사용합니다. 홈 주식 옵션 스톡 옵션 메릴린치 스톡 옵션 행사 방법. Merrill Lynch의 관련 용도. 등록하시면 메릴 링 약관에 동의하게됩니다.
2 가지 생각 & 스톡 옵션 행사 행사 메릴린치 & rdquo;
그녀의 특권과 숨겨 지은 양육으로 인해 Ashley는 전투 경험이 없으며 레온을 통해 무거운 물건을 거의 다 사용합니다.
요약하면 야생 동물을 보호하고 자연 서식지를 보호하기 위해 돈을 쓰는 것은 시간과 자원을 낭비하지 않습니다.

메릴 린치 스톡 옵션 행사
Warner, Susan (해밀턴, 뉴저지)
Howard, Deborah (Jackson, NJ)
Berkley, Karen (Franklin Park, NJ)
래드클리프, 에릭 (켄들 파크, 뉴저지)
국제 통화 옵션 거래를위한 전문가 전문가 시스템, Quah, T. S. et al. Nat. Univ. 싱가포르, 1993 년 11 월
인공 신경 네트워크 및 부트 스트랩 및 메이트를 사용하여 향상된 가격 책정, Labjcygier, P. R. 외. Neyral Systems 국제 학술지, vol. 8 호 : 4 pp. 457-71, 1997 년 8 월.
대략적인 옵션 가격 책정, Chalasani, P. 외., 제 37 회 연례 심포지엄 컴퓨터 과학 재단, 244-253, 1996 년 1 월.
전자 송수신기, 작은 녀석을위한 빅 에지, 3 가지 패키지는 개인 옵션 거래자들에게 전문가들이 사용하는 툴들 중 일부를 제공합니다, 1995 년 12 월 *
S & P ComStock / optionomics 시스템 : 사운드 옵션 위험 분석으로 미래를 내다, Future, v22, n7, p28, 1993. *
데이터베이스와 인터넷 - 기업들이 살아있는 기업인 Martin Marshall, Communication Week, 1996 년 2 월에 모여 들었습니다. *
"1990 년 7 월 1 일자로 PepsiCo, Inc. 와 Merrill Lynch, Pierce, Fenner & Smith Incorporated 사이의 서비스 계약은 1990 년 10 월 31 일자로 작성되었습니다.
"1994 년 10 월 7 일 메릴린치 일반 스톡 옵션 계획 행정 시스템, 제 1 권, 1994 년 10 월 7 일"에 대한 펩시코의 주식 계획 변경 제안.
이 출원은 출원 일련 번호의 일부이다. 1995 년 6 월 7 일 출원 된 미국 특허 제 08 / 487,902 호, 현재 미국 특허 제 5,671,363 호, 현재 포기 된 1992 년 9 월 1 일 출원 된 미국 특허 제 938,939 호 (이의 개시 내용은 본 명세서에 참고로 포함됨)에 기재되어있다.
(i) 각 참가자에 대한 인구 통계 및 고용 관련 정보를 포함하는 정보 및 각 참가자에 의해 부여되고 부여되고 행사되는 옵션에 관한 정보, 및 (ii) 공리 룰 시스템 (autonomatic rule system) 상기 옵션의 행사를위한 상기 계획 기준을 적어도 부분적으로 정의하고;
옵션 거래 요청의 입력 및 저장된 정보의 확인을위한 통신 수단;
상기 저장 수단을 액세스하고, 상기 트랜잭션 요청을 수신하고, 상기 옵션 운동 요청을 처리할지 여부 및 방법을 검증하는 처리 수단;
상기 옵션의 기초가되는 증권에 대한 시장 가격 데이터에 액세스하고, 상기 거래 요구가 유효화 될 때 상기 옵션 보유 정보 및 상기 공리적 규칙 시스템에 따라 상기 옵션 거래를 구현하는 중개 수단; 과.
다음으로부터 선택된 적어도 하나의 프로세서 시스템을 더 포함한다 : for.
(a) 상기 옵션 거래의 이행으로부터 수령 한 통화를 다른 통화로 전환 및 지급하는 것,
(b) 상기 중개 수단을 실시간으로 조작하는 것 및 / 또는.
(c) 하나 이상의 옵션 거래에 대한 참여자 및 / 또는 중개인이 접근 가능한 시뮬레이션 및 요청 된 옵션 거래의 실제 구현에 앞서 거래에서 기대되는 결과를 제공하는 단계를 포함한다.
(i) 각 참가자에 대한 인구 통계 학적 및 고용 관련 정보를 포함하는 정보 및 각 참가자에 의해 부여되고, 부여되고, 행사되는 옵션에 관한 정보, (ii) 다음과 같은 공리적 규칙 시스템에 관한 옵션의 행사에 따라 상기 계획에 대한 상기 기준을 정의하는 것;
상기 참여자 옵션 거래 요청들로부터 수신하는 단계;
상기 거래 요청을 처리하고, 상기 옵션 운동 요청을 처리할지 여부 및 옵션을 처리하는 방법을 검증하는 단계;
상기 옵션 홀딩 정보, 상기 공리적 규칙 시스템 및 상기 요청이 유효화 될 때 상기 참가자의 요청에 따라 상기 옵션 거래 요청을 중재하는 단계; 과.
다음 중에서 선택된 하나 이상의 시스템을 제공합니다 : for.
(a) 상기 옵션 거래의 이행으로부터 수령 한 통화를 다른 통화로 전환 및 지급하는 것,
(b) 거래를 실시간으로 중개하는 행위, 그리고 / 또는.
(c) 하나 이상의 옵션 트랜잭션을 시뮬레이트하고 요청 된 옵션 트랜잭션의 실제 구현에 앞서 트랜잭션으로부터 예상 결과를 출력하는 단계를 포함한다.
각 클라이언트의 신원을 저장하는 단계;
상기 각각의 클라이언트에 대한 각 참가자의 신원을 저장하는 단계;
하나 이상의 계정을 생성하는 단계 - 각각의 상기 계정은 참가자와 관련됨 -;
상기 스톡 옵션 플랜에 따라 상기 참가자에 의해 보유 된 스톡 옵션에 관한 상기 각각의 계좌에 정보를 저장하는 단계; 상기 정보는,
해당 스톡 옵션에 대해 실행될 수있는 주식 잔여 주식의 수
각 스톡 옵션의 행사 가격; 과.
상기 각각의 스톡 옵션이 실행될 목표 가격으로서, 상기 목표 가격은 공리 룰 시스템에 의해 설정 됨 -;
상기 모든 회사들에 대한 현재 시장 가격을 모니터링하는 단계;
현재 시장 가격을 상기 저장된 목표 가격과 비교하는 단계;
시장 가격이 상기 목표 가격과 동일하거나 초과 할 때 각각의 상기 스톡 옵션에 대한 거래를 실행하는 단계; 과.
거래는 상기 J 고객의 각각의 I 번째 참가자로부터의 주문을 축적하고 상기 주문을 블록으로 행사함으로써 실행된다.
다음 단계들로부터 선택된 적어도 하나의 단계를 수행하는 단계 :
(a) 상기 옵션 거래의 이행에서 수령 한 통화를 다른 통화로 전환 및 지급하는 것.
(b) 실시간으로 거래를 중개하는 행위; 및 / 또는.
(c) 하나 이상의 옵션 트랜잭션을 시뮬레이트하고 요청 된 옵션 트랜잭션의 실제 구현에 앞서 트랜잭션으로부터 예상 결과를 출력하는 단계를 포함한다.
발명의 배경.
본 발명은 일반적으로 주식 옵션 관리를위한 컴퓨터 제어 계정 관리 시스템에 관한 것으로, 더욱 상세하게는 회사 후원 주식 소유권의 개별 참가자들에 대응하는 복수의 세그먼트 화 된 주식 옵션 계좌들을 추적 및 처리하기위한 관리 제어 시스템을 구현하기위한 데이터 프로세서에 관한 것이다 계획.
수년 동안 공영 기업은 상장 임원에게 회사의 주식을 주식 시장에서 할인 된 가격으로 구매할 수있는 옵션 형태로 지급했습니다. 스톡 옵션은 여러 가지 이유로 매력적입니다. 하나의 옵션은 특정 세금 혜택을 제공하고 개인이 소득이 발생한 기간을 통제 할 수 있도록하는 연기 지급 방식입니다. 또한 회사에서 주식을 살 기회는 옵션 수령자가 회사의 가치를 높이고 스톡 옵션의 가치를 높이기위한 추가 인센티브입니다.
초기 형태의 옵션 계획은 범위가 제한되어 있었고 소수의 핵심 임원 만 이용할 수있었습니다. 실제로 보상 형태로 옵션을 사용하는 것은 기업 임원에게만 국한되어 있었고 나머지 직원은 연금 계획에 따라 주식을 수령했거나 종종 기업 후원 소유권에 참여할 수 없었습니다. 대안의 보상 형태가 인기를 얻음에 따라 회사는 비 전통적 형태의 직원을 선발하는 데 점점 더 많은 관심을 보였습니다. 플렉스 타임, 위치 공유, 이익 맞춤 등의 개념은 비용 효율적인 방법으로 인력 수요를 해결하기위한 메커니즘에 대한 인사 부서의 전문 용어가되었습니다.
최근에는 많은 직원들이 직원 수당을 늘리고 많은 직원이 특히 원하는 형태로 직원에게 보상을 제공하기 위해 더 많은 수의 직원을 포괄 할 수있는 스톡 옵션 기반 보상의 광범위한 사용 가능성을 검토하고 있습니다. 상당한 열정으로 환영 받았지만, 회사가 후원하는 스톡 옵션 계획을 구현할 때의 문제점은 매우 어렵습니다. 참가자 수가 증가함에 따라 중요한 데이터를 추적하는 일은 점점 더 복잡해지고 있습니다. 대부분의 경우, 회사는 스톡 옵션 처리의 거래 특성을 소수의 참가자보다 큰 규모로 처리 할 준비가되어 있지 않습니다. 계획에 참여하는 각 보조금에 대한 각 옵션 (또는 각 옵션 블록)은 부여, 가득, 행사 및 만료 날짜와 같은 매개 변수의 적절한 묘사를 위해 개별적으로 추적해야하며, 옵션 권한이 부여되었습니다. 또한 옵션의 실용적인 실행에는 중개 집의 사용과 계획 속성에 따라 옵션과 기본 보안을 거래하고 완수하기위한 확립 된 교환이 필요합니다.
하나 이상의 회사가 개입 될 때 옵션 계좌 처리의 복잡성이 과도하게 증가합니다. 이는 다국적 기업의 국경 내에서 일하는 다국적 기업들에게 특히 해당됩니다. 각 기업은 주식 소유에 대한 법적 요구 사항과 상주 직원에 대한 세금 결과를 갖고 있습니다. 지금까지 복수의 개별 계좌에 대한 다국적, 복수 회사 스톡 옵션 계좌 보상 플랜의 관리를 처리 할 수있는 처리 능력이 없다. 또한 다국적 기업 또는 다국적 직원 (2 개 이상의 국가에서 1 개 이상의 회사에서 근무하는 직원)을위한 스톡 옵션 계획에는 기본 보안 및 기금이 다른 옵션을 행사하는 실질적인 문제가 추가로 있습니다 통화.
환율의 차이 외에도 참여자의 관점에서 볼 때 자격이 부여 된 (즉, 우대 세제 대상) 자격 또는 비 자격있는 플랜에서 옵션을 부여 할 수 있기 때문에 옵션을 행사하는 방법에 큰 불확실성이있을 수 있으며 옵션은 참여자는 기초 유가 증권의 현행 시장 가격과 파업 가격의 차이를 본질적으로 (더 적은 세금, 수수료 및 수수료) 나타내는 현금 지출 또는 이들의 일부 조합을받습니다. 참여자가 다양한 재무 결과 (예 : 예상 세금, 수수료 또는 현금 지출 또는 이들의 조합 포함)를 시뮬레이션하여 참가자의 재정적 필요가 옵션 행사를 촉진시키는 데 도움이되는 경우 참가자에게 도움이됩니다.
발명의 목적 및 요약.
본 발명의 목적은 사전 설정된 플랜 기준에 따라 유가 증권을 매입하기위한 옵션의 보유 및 거래에 관한 복수의 개별 계좌를 관리하기위한 데이터 처리 시스템을 제공하는 것이다.
본 발명의 다른 목적은 연속적으로 하나 이상의 회사 주식 옵션 플랜의 이행을 관리하기위한 데이터 처리 장치를 제공하는 것이다.
본 발명의 또 다른 목적은 계획 지시에 따라 반응하는 트랜잭션을 제공하고 계획 참여자로부터 입력을 선택하는 방식으로 계획 제약을 처리하는 시스템을 제공하는 것이다.
본 발명의 또 다른 목적은 플랜 참가자들에 대한 링크 된 중개 계좌의 사용을 통해 플랜 조건에 따라 기득권 된 옵션을 행사하기위한 현금없는 거래를 제공하는 것이다.
본 발명의 또 다른 목적은 통화 차이를 가로 질러 기능 할 수있는 장치 및 시스템을 제공하는 것을 포함하며, 실시간으로 옵션 실행을 제공하고, 참가자가 옵션의 실행을 위해 원하는 파라미터를 정의하기 위해 상이한 운동 시나리오를 시뮬레이션하게하거나, .
본 발명의 상기 및 다른 목적은 복수의 개별 계좌, 현재 주식 가격 결정, 개별 자필 데이터, 회사 옵션 계획 및 현재 원천 징수 및 기타 세금의 관리 및 추적을 지시하는 저장된 프로그래밍을 제어하는 ​​단계를 포함하는 데이터 처리 시스템에서 실현된다 요구 사항. 주어진 플랜의 각 참여자에 대해 시스템은 부여 된 주식 매수 선택권 수, 부여 일, 기명 된 가득액 및 최후의 기한, 만료 된 기한 및 만료일을 추적합니다. 참가자가 결정한 날짜에, 시스템은 참여자가 옵션 요금, 원천 징수율 등과 같은 관리 계획에 따라 선택 옵션에 대한 요청을 구현합니다.
본 발명의 다양한 속성에 따라, 시스템은 참여자의 이름으로 보유 된 상응하는 중개 계좌를 사용하여 옵션 행사에 필요한 실제 주식 거래를 실시하고, 교환기의 시장 판매 가격은 플랜 스폰서에게 지불하는데 사용된다 (회사) 옵션 가격 및 참가자에게 보상으로 남은 수익금.
본 발명의 전술 한 특징들은 다음의 도면들과 관련하여 제시된 특정 실시 예에 대한 다음의 상세한 설명으로부터 더 잘 이해 될 수있다.
도면의 설명.
무화과. 도 1은 본 발명에 포함되는 동작 활동의 기능적 블록도를 제공한다.
무화과. 도 2는 본 발명의 참여자 속성 모듈의 논리 흐름도를 제공한다.
또한, 도 3a 및도 3b는 본 발명에 의해 구현 된 일일 트랜잭션 처리의 논리 흐름도를 제공한다.
무화과. 도 4는 본 발명의 옵션 실습 모듈의 논리 흐름도. 과.
무화과. 5는 계획 또는 클라이언트 기준으로 참가자의 지시에 따라 주식의 누적 거래에 대한 순서도를 제공합니다.
무화과. 도 6은 참가자가 실시간으로 옵션을 행사할 수있는 단계의 시퀀스 및 본 시스템에 의해 취해진 다른 액션을 나타내는 흐름도이다.
특정 실시 예의 상세한 설명.
첫째로 간략하게 개요로서, 본 발명은 상이한 회사들에 대한 개별 스톡 옵션 어카운트의 광범위한 구현과 관련된 동작들을 별개의 계획들에 따라 관리하는 것에 관한 것이다. 구현은 프로그램 로직 및 현재 환경 입력에 대한 응답으로 명령을 구현하는 통합 제어 프로그램에 의해 관리됩니다. 이 시스템은 현재 또는 미래에 선택 주식 옵션을 행사할 수있는 참여 개인의 기록뿐만 아니라 참여자에게 부여 된 옵션을 행사할 때 계획 참가자의 권리 실행을 지시하는 여러 가지 별개의 옵션 계획을 메모리에 유지합니다. 프로세싱은 시간 중심적이고 이벤트 중심적입니다. 예를 들어, 참가자의 기록에 대한주기적인 업데이트는 규칙적인 (적어도 매일) 간격으로 발생합니다. 또한, 선택 입력은 시스템 처리, 예를 들어, 옵션 운동 요청 또는 목표 가격 획득을 트리거하는 것이 바람직하다.
정교한 데이터 처리 시스템은이 구현을 위해 사용되며, 바람직하게는 다수의 I / O (입력 / 출력) 제어기, 반도체 및 자기 디스크 형태의 세그먼트 메모리 (즉, 입출력) 제어기와 상호 연결된 하나 이상의 마이크로 프로세서 기반 중앙 처리 장치 (CPU) , 즉시 메모리 및 영구 저장 장치), 분산 처리를위한 통신 포트 및 예를 들어 들어오는 주식 시세 (즉, 옵션의 기본 보안 가격의 실시간 견적)에 대한 실시간 입력 통신이 포함됩니다. 제어 프로그램은 생성 된 실행 가능 버전이 중앙 프로세서를 위해 선택된 하드웨어와 호환 가능한 방식으로 컴파일 가능하고, 프로그램이 실행될 때까지 컴파일 가능한 다양한 상업적으로 잘 알려진 프로그래밍 언어 (예 : Cobol, "C", Pascal 등)로 작성 될 수 있습니다. 모든 주변 워크 스테이션. 예를 들어 IBM 3090 (Sierra) 시스템 플랫폼에서 프로그래밍되고 실행되는 Cobol II를 사용하여 본 발명을 구현하면 탁월한 결과를 기대할 수 있습니다.
전술 한 개관을 염두에두고, 주목하자. 도 1은 본 발명의 동작에 관련된 여러 기관들 사이의 처리 관계의 블록도를 제공한다. 특히, 시스템 소유자는 중앙 처리 하드웨어가 유지되는 블록 (10)의 중앙 위치에서 시스템을 동작시킨다. 전술 한 바와 같이, 본 발명은 참가자 및 중개인 계좌상의 최소 분리 파일을 수반하는 복수의 개별 계좌에 관한 것이다. 물론 과거 및 업데이트 된 계정 파일의 유지 관리를 위해 데이터베이스 20이 필요합니다.
계속해서 FIG. 도 1에서, 개별 블록들은 통신 채널을 나타내는 라인들과 상호 연결된다. 예를 들어, 각 참가자 (30)는 시스템 관리를 통해 상응하는 계좌 기록에 대한 액세스 권한을 가지며, 옵션 연습 명령을 입력하거나, 실행을 위해 현금을 제출하거나, 세금 목적으로 기록을 요구할 때이 채널을 사용할 수있다. 시스템 소유자는 각각의 직원 그룹에 대해 다양한 처리 요구 사항을 가진 하나 이상의 개별 고객 회사 (블록 40)의 이익을 위해 시스템을 운영합니다. 이와 관련하여, 시스템은 클라이언트 (40), 참가자 (30) 및 시스템 관리자 (10)에 대한 통신 채널을 통합한다.
본 발명의 지시에 따라 이루어진 실제 거래는 실제로 관련된 거래를 위해 형성된 은행 또는 다른 수탁자 인 하나 이상의 이동 에이전트 (50)를 통해 실질적으로 처리된다. 이전 에이전트는 고객 회사의 새로 발행 된 주식 또는 자사주를 해제하고 시스템 관리자 (또는 관련 브로커)에게 직접 또는 보관소 신탁 회사 (DTC)를 통해 전달합니다 (블록 55). 그 자체로서 계획 지시, 클라이언트 제약, 참가자 요청 및 중개 계좌 제한에 따라 주식 거래를 실행하기위한 하나 이상의 교환기 (블록 60)에 대한 잘 알려진 통신 시스템.
본 발명 시스템의 구현을 지배하는 논리 명령을 이해하기 위해, 현저한 용어에 대한 간략한 설명이 도움이 될 수 있으며, 따라서 아래의 표 1에 제공된다 :
1. 옵션. 옵션은 거대한 날짜에 설정된 행사 가격으로 1 명 이상의 자격을 갖춘 직원에게 부여됩니다. 옵션의 유효 기간은 제한적이며 행사하지 않을 경우 임기 만료됩니다. 옵션은 기본 유가 증권의 일련 번호를 파업 가격으로 구매할 수있는 권리입니다.
2. 가득 기간. 종업원에게 부여 된 옵션은 가득 기간 종료 후 (보통 부여 일로부터 최소 1 년)까지 행사할 수 없다. 후원자는 자신의 가득 시간표를 지정할 수 있습니다. 따라서 각 참가자는 자신의 계정에 기득권과 비 보유권 옵션을 둘 다 가질 수 있습니다.
3. 운동. 옵션은 일반적으로 행사 가격으로 옵션에서 부여한 주식 수까지의 구매 가격을 지불함으로써 행사되므로 옵션을 행사하는 사람은 기본 보안을 소유합니다. 종업원 스톡 옵션 계획을위한 옵션 행사 방법에는 일반적으로 주식 교환, 사적 자원으로부터의 전통적인 참가자 현금 지불, 그리고 보조금을 지불하기위한 운동 후 실질적인 즉각적인 매각이 포함됩니다 ( "무 현금"운동 방법으로도 알려져 있기 때문에 참가자는 실제로 주식을 매매하지 않아도되며, 참가자는 그러한 거래에 대한 지출을 효과적으로 받게됩니다. 글로벌 운영의 경우, 시스템은 법으로 현금 또는 현금없는 거래를 금지 할 수있는 국가 별 제한을 구현해야합니다.
4. 수입. 운동시 참가자는 옵션 보조금 가격과 행사 가격 (행사 일의 공정 시장 가격) ​​사이의 스프레드가 과세 대상 소득과 같은 현금 지출을 실현합니다. 기획 스폰서는 전형적으로 보상 비용으로이 스프레드를 공제합니다. 실현 된 소득 및 비용은 국세청, 증권 거래위원회 및 / 또는 특정 계획 규정에 의해 다르게 적용될 수 있습니다. 참가자는 옵션을 행사하고 주식을 수령함으로써 소득을 연기 할 수 있습니다.
5. 원천 징수 세. 각 참가자의 운동 소득에 대한 세금은 플랜 스폰서가 지정한 요율에 보류됩니다. 원천 징수 세액은 연습, 주식 보 유금, 예금 입금 또는 이미 소유 된 주식의 교환을 통해 얻은 주식의 수를 매각하여 세액 납부를 위해 플랜 스폰서에게 전달 된 결과 자금으로 발생합니다 당국.
6. 중개 서비스. 각 참가자는 연습을 용이하게하기 위해 중개 계좌를 개설해야합니다. 행사를 통해 얻은 주식의 순자산은 계정에 입금됩니다. 참가자는 자신의 편의를 위해 주식을 보유하거나 판매 할 수 있습니다.
7. 운동 비용. 각 운동은 운동으로 얻은 주식의 일부 비율을 매각 할 수있는 다양한 가능한 운동 비용을 수반합니다.
이러한 비용에는 다음이 포함될 수 있습니다.
옵션 가격. 참가자는 운동시받는 주식을 발행하는 고용주에게 옵션 가격에 행사되는 옵션의 수를 곱한 금액을 빚진 다. (예 : 보조 옵션 인 $ 37.50의 옵션 100 개와 옵션 가격 $ 3,750.00의 옵션).
원천 징수 세. 위에서 설명한 바와 같이, 옵션의 스프레드는 경상 소득으로 과세됩니다. 그러나 일부 옵션 보너스 및 국제 참가자는이 수입에 대해 과세 대상이되지 않을 수 있습니다.
수수료 및 수수료. 스톡 옵션 행사 및 행사 비용을 충당하기위한 주식 매각은 거래 수수료를 수반합니다. 기획안 스폰서는 스톡 옵션 플랜 참가자를 대신하여 이러한 수수료 및 수수료를 지불하거나 현금 또는 주식 예금을 통해 또는 참가자가 운동에서 얻은 주식 매각을 통해이를 지불하도록 지정할 수 있습니다.
이제 FIG. 도 2에서, 셋업 모듈은 신규 또는 업데이트 된 클라이언트 / 참가자 계정 파일 및 관련 동작에 대한 셋업 데이터의 엔트리를 기술하는 흐름도로 제공된다. 특히, 논리는 블록 (100)에서 시작하여 데이터베이스 관리자 모듈로 분기한다. 이 관리자 시스템은 검색 및 업데이트 목적으로 기존 계정, 클라이언트 및 참가자 레코드의 데이터베이스에 대한 액세스를 허용합니다. 클라이언트 / 참여자의 증가에 따라 데이터베이스 관리 프로그램이 갱신 처리를 위해 시스템 관리 링크를 통해 자동으로 호출됩니다.
본 논의의 목적을 위해, 데이터베이스 관리자는 새로운 클라이언트 및 / 또는 참가자에 대한 새로운 레코드 및 파일을 추가하고 테스트 (120)를 통해 기존 파일을 업데이트하는데 사용된다. 테스트 (120)에 대한 긍정적 인 응답 (새로운 클라이언트 엔트리, 즉 a 진행중인 관리 기준에 따라 스톡 옵션의 부여 및 거래를 허용하는 참여 직원을위한 계획을 스타링하는 데 관심이있는 신규 회사)은 지정된 어드레싱 가능한 파일 위치가 클라이언트 프로파일 파라미터에 대해 데이터베이스에 할당되는 블록 (130)으로 로직을 분기하고; 시스템 관리자에 의해 확인 된 이들 파라미터는 블록 140에서 입력된다.
여기에 설명 된 예시 시스템은 옵션 처리와 관련하여 참가자의 클라이언트에 대한 권리와 의무를 기술하기위한 미리 포장 된 여러 계획을 포함합니다. 이 플랜은 테스트 150에 설명 된 바와 같이 새로운 클라이언트가 사용할 수 있으며, 여기서 부정적인 응답은 수신 된 클라이언트 기준에서 선택 프로세스를 호출합니다. 이에 기초하여, 선택된 플랜은 새로운 클라이언트에 대한 장래의 트랜잭션을 관리하기 위해 데이터베이스에 입력된다. 또는 고객은 고객의 특정 요구와 관심 사항에 따라 스톡 옵션 계획을 사용자 정의 할 수 있습니다. 이것은 블록 (170)에서 테스트 (150)에 대한 긍정 응답 및 커스텀 플랜 파라미터의 입력을 통해 행해진 다. 그 후 프로세싱은 다음 클라이언트 (신규) 테스트 (180)로 계속되거나 블록 (190)을 계속 진행한다.
계속해서 FIG. 도 2에 도시 된 바와 같이, 테스트 (120)에 대한 부정 응답을 가정하면, 로직은 테스트 참가자 (200)로 분기하여 참가자가 그 클라이언트에 대한 데이터베이스 내에 신규인지 기존인지를 식별한다. 테스트 200 (신규 참가자)에 대한 긍정적 인 응답은 해당 참가자에 해당하는 새 레코드를 열거 나 입력하는 것을 계속 차단합니다 (210). 그 다음에, 참가자는 적절한 클라이언트에 논리적으로 연결되고, 블록 (220)은 그 클라이언트에 대해 이전에 입력 된 모든 클라이언트 윤곽선 옵션 계획 피쳐들을 계승한다. 그 후, 시스템은 어드레스 가능한 데이터베이스 레코드 내의 저장을 위해 그 참가자에 대한 나머지 정의 파라미터를 탐색한다 (블록 230). 이것은 큐 (280)의 다음 참가자 입력에 대해 계속된다.
참여자가 시스템에 이미있는 경우 (200을 테스트하는 "아니오"), 논리는 테스트 240으로 분기하여 참여자의 파일에 상태가 변경되었는지를 판별합니다. 상태 변경은 해당 참가자를 위해 저장된 매개 변수로 전달되며 승진, 선택 옵션의 확정, 종료, 옵션 만료, 옵션 실행 또는 기타 변경 사항과 같은 전기, 인구 통계 또는 지불 정보를 포함 할 수 있습니다. 긍정 응답이 수신되면, 주요 레코드가 액세스되고 (블록 250), 적절한 변경이 레코드에 입력된다 (블록 260).
전술 한 논리 구조에서, 클라이언트 및 참가자는 지정된 옵션 플랜을 통해 시스템 정의되며, 실제로이 플랜은 클라이언트에 따라 변조되고 증분되어, 다수의 다른 플랜이 시스템에 의해 구현된다 (예를 들어, 플랜 (I), 여기서 I는 옵션 관리 시스템을 사용하는 서로 다른 클라이언트의 색인 변수입니다. 이러한 맥락에서, 계획은 다양한 참여자를위한 옵션 계좌의 처리에 표 II에 나타난 정보 프로파일을 통합 할 수있다. 시스템에 의해 관리되는 각각의 계획은 바람직하게는 (i) 각 참가자 및 그들의 옵션 (들)에 대한 필요한 세부 사항을 식별 및 / 또는 분류하는 것과 같은 목적을위한 파라미터 세트, (ii) 이들 파라미터 각각을 포함하는 데이터베이스 및 iii) 계획 참여자가 옵션을 행사하기위한 계획 기준을 적어도 부분적으로 정의하는 공리 체계. 표 II 설명 Resp. 크기 계획 레벨 규칙 계획 이름 묵시적 50 차일 계획 소스 코드 오페라 9 챕터 계획 재고 ​​오페라 8 챕터 계획 재고 ​​딕셔너리 20 챕터 VRS 묵음 예 또는 아니오 VRS 전화 번호 연산자 999-999-9999 연간 또는 분기 별 명세서 Mrking Annl 또는 Qtrly 고객 문자 짧은 이름 1 Systems 20 Chars 고객 문자 짧은 이름 2 Systems 20 Chars 고객 문자 전화 번호 Systems 999-999-9999 계정 할당 Oper Yes 또는 No 계획 실행 날짜 시스템 CC / YY / MM / DD 인센티브 보상 Mrking Yes or No 분수 보조금 기부 예 또는 아니오 제로 허용 기부 예 또는 아니오 운동에 필요한 급여 데이터 기부 예 또는 아니오 최대 연중 실습 기부자 999 최소 운동 기부자 9,999,999.9999 최대 운동가 기부자 9,999,999.9999 목표 가격 운동 기간 (d) 999 운동 일시 중지 시작일 MM / DD / DD / DD / DD / DD / DD / DD / DD / DD / DD / DD / DD / YY / MM / 999.99 1 차 판매 수수료 % 2 차 판매 인플레이션 % 2 차 판매 인플레이션 % 99999 2 차 판매 최저 수수료 수수료 999.99 2 차 판매 수수료 % 99999 999.99 계획에 대한 각 유효한 운동 유형에 대해 다음을 반복하십시오. 30 가지) 운동 유형 여학생 6 명 력 운동 코드 시스템 1 문자 운동 설명 팅크 30 곰 국가 규칙 국가 번호 연산자 999 국가 이름 Mktg 30 챠 이스 VRS 연습을 허용합니까? 예 또는 아니오 새 계정 양식이 필요합니까? Mktg / Legal 예 또는 아니오 강제 분배 제공 운영 / 법률 예 또는 필요 없음 특수 사용자 권한 필요 Oper 예 또는 아니오 특별 사용자 ID Oper 8 자 유효한 각 운동 (최대 30 개 유형)에 대해 다음을 반복하십시오. 유효한 운동 유형 Mrking 6 자 유효 운동 코드 시스템 1 문자 유효한 운동 설명 Mrking 30 Charars GRANT RULES 부여 날짜 CC / YY / MM / DD 부여 가격 Mrking 99,999.99999 보조금 만료 날짜 CC / YY / MM / DD 최대 연습 연중 내내 999 최저 가득 금액 Mrking 9,999,999.9999 기득권 cusip Oper 8 Chars 기득권 계좌 Oper 9 Chars 기한 경과 된 계정 Oper 8 Chars 기각 된 계정 Oper 9 Chars Unvested 뛰어난 cusip Oper 8 Chars 미확인 걸출한 계정 Oper 9 Chars Unvested 경과 된 cusip Oper 8 Chars Unvested 경과 된 계정 Oper 9 Chars 연습 cusip Oper 8 Chars 연습 계정 Oper 9 Chars 직원 상태 규칙 상태 코드 Mrking 1 Char 상태 설명 Mrking 30 Chars 운동 컷오프 금액 Mrking 9999 Exerci 컷오프 유형 묵음 연도 / 월 / 일 수식 규칙 지급 날짜 기부금 CC / YY / MM / DD 상태 코드 부호 1 Char 조취 율 Mrking 9.9999 기각 계산 유형 기내 절단 또는 라운드 특별 기장 수표 시스템 예 또는 아니오 100 % 가득 날짜 시스템 CC / YY / MM / DD 각 이벤트 날짜 (최대 25 개 이벤트 날짜)에 대해 다음을 반복하십시오. 이벤트 가득 조건 날짜 누락 CC / YY / MM / DD 이벤트 가득 조건 날짜 9.9999.
위 플랜 프로필에서 열 "Resp" 가변 데이터에 책임이있는 시스템 소유자의 지정 부문, 예를 들어 "마케팅"을 나타냅니다. VRS는 여러 언어로 터치 톤 입력을 통해 참가자의 시스템 옵션에 직접 전화 연결을 허용하는 음성 응답 시스템을 나타냅니다. 열 "크기"는 데이터베이스 관리를위한 레코드 형식 크기 및 / 또는 형식의 실시 예를 나타냅니다.
추가 계획 수준 규칙 (또는 다른 규칙)은 특정 시스템에서 요구하거나 관리자가 요구하거나 원하는대로 구현할 수 있습니다. 예를 들어, 다른 선호 된 계획 수준은 옵션 교부금의 종류, 옵션 교부금 접미사, 참여자를위한 계획에 의해 실시간 거래 (아래에 설명 됨)가 허용되는지, 특정 통화 유형 (예 : 외환 거래, as described below), the language in which the VRS responds as a default when the participant phones, termination letters, and option expiration letters. The option grant suffix is useful when, such as preferred herein, the system recognizes options by their grant date because different types of options, or options having different conditions for exercise, may be granted to the participant on the same date; hence, the suffix can permit the system to distinguish between different types of options granted to the same participant on the same date. The parameters for termination letters and option expiration letters are equivalent to toggles prompting whether the system should issue letters to the participant as notification, respectively, that participation in the plan has been terminated (and, for example, how the options can be exercised in the future) and that particular option(s) granted are due to and/or have expired. Similarly, the grant rules can include parameters for the option grant type and the option grant suffix.
With the above Plan structure for illustration, attention is now directed to FIG. 3 depicting the logic path for the inventive system associated with periodic (daily) account processing. Beginning at block 400, logic uploads the system module at block 410. The system module governs the processing of accounts on the periodic or input driven basis. In this context, input driven processing is exemplified by a transaction request received by telephone from a participant. Periodic processing is time based (e. g., daily) and functions to control time based processing of accounts--for example the removal of vested options after the expiration of a Plan delineated termination period for the option. Other time based processing will include the comparison of current stock price on an exchange with a specified target price in a participant's file with a contingent transaction automatically executed if the price-quote comparison is satisfied. In this context, the current stock price corresponds to some recently completed and fixed transaction, such as "end of day" pricing. Other market pricing techniques may be employed.
Continuing in FIG. 3, at blocks 420 and 430 the system accesses the participant files in sequence for processing in accordance with the Plan dictates for the entered Date. Test 440 determines whether the participant/plan files delineate a grant date for the option account. If so ("yes"), logic proceeds to blocks 450-490 wherein the Plan is accessed and used to quantify and confirm the option grant, calculate vest and optionally option price for the newly granted options and update the participant files in accordance therewith.
At test 500, the system determines if the date of processing is a vesting date for that Ith participant; if so, logic proceeds to blocks 510-540 for processing the participant records in accordance with the Plan and specifically updating the options (vested) available for transacting by the participant. The records for the Ith participant are updated with the new information replacing the existing files in the database.
Plan constraints often include time periods for exercising vested options. Therefore, after the passage of time, unexercised vested options will expire. The system module determines this at test 550 for each participant (unless the Plan for that participant has no time based option expiration function). A positive response to test 550 branches to blocks 560-590 wherein the Plan is accessed and the associated expired options removed from the participant's account.
As discussed above, exercise of options by the participant may be accomplished by both direct request or by a time function; this latter course involves the setting of a target price for the shares that is above the current market price, and the setting of transaction time period in terms of start time (or date) and span (duration of requested price delineated transactions). Once evoked, the system must continuously (implemented in incremental updates) receive market data for direct comparison to the target price, and automatically execute the requested transaction upon satisfaction of the target-market price comparison.
The foregoing is accomplished as follows. At test 600, the system determines if a target price exercise older has been entered for the user and if so the target price, TP(I) and the duration DD(I) for the Ith participant, block 610. The system then accesses the current quote for the specified security, defined as MAR_P(D), at block 620 and compares this price data at test 630. If the comparison criteria is met, logic proceeds to block 640 where the system links to an exchange for automatic execution of the options exercised. The participant's account is then updated at block 650. If test 630 is not satisfied, no transaction is authorized for this period and the participant's file is updated accordingly at block 660. The system then increments to the next participant (I+1) for further processing at block 670.
In addition to the entry of time-driven exercise orders, the system preferably can processes exercise orders on an order receipt basis, i. e., older-driven processing as opposed to event-driven processing. In this mode of operation, for example, the system provides two forms of execution to the participant with vested options, funded and cashless. The funded transaction is the traditional mechanism described above for processing options and involves the receipt from the option holder of the share price defined in the option account which is then coupled with additional funds from the option grantor for purchasing the security on the exchange at the strike price of the option. The security is then provided to the plan participant for disposition.
An alternate approach, the cashless approach, does not require any contribution by the participant and is based on the normally common occurrence of an option price that is significantly below the current market price of the security. A cashless transaction involves the disposal of shares at the market price (either treasury shares or previously purchased shares) with the proceeds divided between the client (option grantor, receiving the option price for the sold shares) and the participant (who receives the market price minus option price (i. e., MAR_P-OPT_P) multiplied by the number of shares). This transaction is considered "cashless" because no initial contribution is required by the plan participant option holder.
A third form of option exercise involves the use of stock as directly contributed by the participant to fund the exercise of the options. This stock can be sold at open market with the proceeds used to fund the execution of the option. However, more usually, the participant "swaps" an amount of stock sufficient to exercise the options, and receives the shares represented by the options minus the shares she used for the exercise. For example, if the participant has 1000 options (i. e., to purchase 1000 shares) for which the funds required for exercise are equal to the present market value of 100 shares of the same stock presently owned by the participant, the participant will receive 900 shares in a "stock swap" exercise of the options.
The foregoing transactions are accomplished by the present system in accordance with FIG. 4. Beginning with start block 700, logic proceeds to block 710 and input of the current queued request for the Ith participant. At test 720, the system first confirms that the participant order is proper, i. e., the current records reflect possession of vested options to support the exercise request for that participant; other confirmation data may be accessed for foreign security laws on ownership, etc. as may be needed.
Assuming a negative response to test 720, logic continues to test 740 wherein the system determines the form of the transaction, i. e., cashless or funded. If the 45 funded request is selected by the participant, logic branches to test 750 to confirm receipt of the necessary funds to support the purchase. As stated earlier, all transactions are based on the use of a concurrent brokerage account and the requisite funds may be established by one of several mechanisms such as margin on existing shares etc. If the transaction as requested is unfunded, ("no" to test 750) the system stops execution of the older and prepares a report, block 760.
If the transaction is fully funded, the system enters the participant selected target price for the transaction, TP(I) and recalls the current market price, MAR_P(D) at blocks 780 and 790 respectively. Test 800 compares the prices for the security with automatic execution of the transaction instituted upon satisfaction of the test via blocks 810-830. The target price may be and often is set at the current market price by the participant to insure execution of the option (i. e., test 800 always satisfied).
Continuing with FIG. 4 and assuming selection of the cashless exercise, processing proceeds to block 840 for the entry of the target price by the participant. Again the system accesses the current market price for that security and compares this value to the selected target price and additionally the stored option price for that participant. This latter test condition is required as the TP(I) must also support the payment of the option price and the accrued transaction fees pursuant to the designated cashless transaction. Satisfaction of this bifurcated conditional permits automated order execution via the brokerage account for that participant, blocks 870 and 880. Logic then proceeds to the next order in the queue.
Although the entry of option exercise instructions are made on an individual participant basis, the actual implementation of these transactions is done on a client/security basis, i. e., transactions for a given security are accumulated so that the actual trade order that reaches the exchange comprises many individual orders combined. The method of accumulation is not critical and may proceed by either a set time period or by volume of transactions in given securities.
This accumulation process is delineated in FIG. 5. At select intervals, the system begins the transaction procedure via start block 1000, confirming the transaction period at test 1010. A "yes" to test 1010 starts the transaction entry process; each plan is accessed and each participant incremented by indexing variables "J" and "I" respectively, blocks 1020-1040. At block 1050, the system accesses the transaction request REQ(I) for the Ith participant. If this REQ is confirmed at test 1060 (meets plan constraints and target price considerations), the system accumulates the optioned shares into the total for that security, block 1070, wherein TSO(J) represents the total stock options for the Jth security and ISO represents the individual stock options REQ by the Ith participant. Logic continues for each Ith participant and Jth Plan with the retention of TSO(J) for all J's in the system, blocks 1080-1100. These collected and confirmed orders are then sent to the exchange for execution, block 1110.
Continuing with FIG. 5, test 1120 confirms that the order as entered on the exchange was executed per instructions. A positive response to test 1120 is followed by system file update with the new information, block 1130. If the order cannot be confirmed, the system determines whether the a price limit failure occurred, test 1160. A price limit prevents a rapidly shifting market from causing a negative cash transaction by assuring that the market price received for the security is sufficient to cover the option price plus whatever incidentals may accrue. If a price limit triggered an aborted trade, a report is generated, block 1180; if the trade failed for some other reason (e. g., trading stopped for that security on the exchange) the system contacts the broker to complete the report, block 1170. This ends the processing until the next period or volume limit is reached, block 1150.
With the proliferation of multinational corporations and employees who may likely be working in various countries during their tenure with one or more international companies, the invention also allows for the management of stock option plans where the money used for the exercise transaction, and/or for the disbursement of proceeds (e. g., "cashless" execution of the option), are in different currencies. In such a system, the participant requests (i) the form of option exercise desired (e. g., cashless, regular sale, or cash balance disbursement), (ii) that the proceeds are to be distributed in a particular currency eligible for the plan, and (iii) the desired method of disbursement (e. g., cash or wire transfer). The exercise of the option proceeds as described above with the additional input that the broker (or participant, as described below) enters to indicate that a "foreign" currency transaction is requested, and how the funds are to be disbursed. Preferably, wire transfer instructions and information must be provided by the plan participant prior to execution of this foreign currency transaction; otherwise, measures can be implemented to allow the participant to submit wire transfer authorization and for the broker (or customer service representative) to enter and confirm that information during the participant's online modem or telephone session. The option exercise then proceeds as described above with a disbursement monetary value generated that is due to the participant as well as the type of currency with which the option was exercised and the type of currency that the participant desires to be disbursed. If the two currency types are different, the system queries a database (present in the system or remote accessible online via a service provider) for the exchange rate between the two currencies, and generates a value of the disbursement in the currency type requested by the customer. Preferably, the system also generates a transaction fee for the currency exchange based on a standard rate or such other terms as the plan manager may require or may have agreed with the company whose options are being managed. The system also preferably generates output reports for the manager and/or the participant and/or the company regarding wire transfers and/or currency rate reports (including any applicable exchange transaction fee(s)).
In another embodiment of this invention, it is preferably contemplated that a participant engages the system and exercises vested options without directly contacting a broker. As such, the participant can access the system on a bulletin board directly via modem, a hypertext page (preferably via secure server protocol) on the web portion of the internet, or a menu system via touch-tone telephone as mentioned above. The participant would be required to enter account information and one or more passwords (e. g., a PIN, a personal identification number). Thereafter, the participant enters, for example, information indicative of the particular options to be exercised and, optionally, trading, currency, and/or proceed distribution instructions. For example, the participant can direct the system to exercise specified options only if the price of the underlying security were not less than a given price. Likewise, the participant could direct that the proceeds be distributed in a particular currency, as described above; and that they be wired, mailed, or directly deposited with a specified institution. Further, the VRS preferably responds in a default language (e. g., English, or a language as determined by the plan level rules) particular to the participant, and/or the participant can be presented with a menu prompting for entry of the language in which the participant would like to continue the session. Languages presently preferred for implementing in this system include English, Spanish, German, French, Italian, Portuguese, Dutch, Mandarin (Chinese), Japanese, Tagalog (Phillipines), and Malay (Malaysia); other languages can be used or implemented as a particular plan or administrator requires. Similarly, a web site can allow the participant to continue their session on web pages with their particularly preferred language.
As mentioned in various places above, the present system can generate any number of reports in respect of the transactions, options granted, and the like. It is preferred that, via the plan level rules, all reports for a particular client are generated in a designated language. It is particularly preferred that reports, in addition to those mentioned already, also include (i) monthly, quarterly, and/or annual statement reporting on the participants option holdings and activity, (ii) confirmations of the exercise, and (iii) confirmation of the participant's PIN and any other passwords required to access the system.
In yet another embodiment, the invention contemplates the real time execution of option exercise, as described in U. S. Pat. No. 4,674,044, entitled "Automated Securities Trading System" (the disclosure of which is incorporated herein by reference). In that system, trades to be executed are collected at the end of the day and processed for a single block trade the following trading day. In the present invention, such a system could have undesirable consequences because one or more such large trades could provide sufficient market pressure to change the price of the underlying security, most likely decreasing its price. When options are executed by insiders, the required disclosure of such exercises, coupled with changes in the underlying security price, could have a number of detriments. Accordingly, it is desirable to allow the plan participant to exercise her options in real time under the present system. With reference to FIG. 6, assuming, for example, that the participant calls in by telephone, the participant ("user" in the Figure) starts 601 by calling a predefined telephone number and navigates through various menu options using the touch tone phone keys using known technology (the Voice Response System, "VRS", mentioned above). The user enters her account number 603 which is verified 605 by the system. The user then enters her PIN at 607. The system verifies the users PIN 609 and decides whether real time trading is an election within the plan 611 by reference to the plan level rules. If real time processing is permitted, the user enters her desired order for the options to be exercised 613 (e. g., number of options to be exercised and type of exercise for all or groups thereof) and the order is processed 615. If real time trading is not permitted, the system branches 617 to process the order in a batch mode (e. g., the order will pend on the system until it can be processed in the normal course of trading). Continuing with the processing, the older is executed 619 in real time such as in the aforementioned U. S. Pat. No. 4,674,044. Afterwards, the trade is confirmed 621 and the relevant databases are updated 623 to reflect the option exercise, after which this portion of the process terminates 625.
In still another embodiment, the present invention contemplates simulations of the tax consequences of an option exercise, especially in combination with the present invention. Income to a plan participant from the exercise of options is likely taxable at the federal, state, and even local levels. To facilitate the participant's decision on how many options should be exercise, and how various options should be exercised (e. g., cashless, exchange, etc.), the invention provides a simulation of the tax consequences of a particular manner of exercising the options. The simulation can be performed at a workstation at which a broker can view/run the simulation and communicate with the participant, or, more preferably, the participant can access the simulation via telephone and use of a menuing system or via modem (e. g., a page on the web poison of the internet, or on a bulletin board by direct modem connection). By performing one or more simulations with different parameters, the participant can better decide how the options should be exercised. In an embodiment of such a simulation, the participant first specifies the number of options to be exercised. The Net Shares of stock required for the exercise of the options is determined by: (Number of Options)-(Required Shares for Stock Swap)-(Share Withholding)-(Shares Sold)=Net Shares of Stock.
The total taxes are assigned a variable: Total Taxes=A Gross SAR Proceeds=(number of options)×(Stock Price-Grant Price)=B.
The fees/commissions due to the plan administrator and the SEC can be calculated as follows: Fees/Commissions and Residual Proceeds Step 1 A - B = C If C > 0 Then [(Stock Sale Proceeds - Option Reimbursement) - C] = Net Gain If C < 0 Than Negative (C) = Residual SAR Proceeds Step 2 Commissions Calculation Net Gain/Stock Prices × (Plan Commission Schedule = X if X ≥ 0.005 then round up to the next penny, if X < 0.005 then round down. SEC Fee Calculation (Net Gain / 300) × 0.1 = SEC Fee if SEC Fee goes to thousandths place, then round up to next full hundredth. Transaction Fees (set by the plan administrator) $3.85 for only CLF for all option types except for "K" and "F". Step 3 Total Fees and Commissions Commissions + SEC Fee + Transaction Fees = Total Fees/ Commissions.
The FICA HI Taxes are calculated according to the following formula:
(Gross Gain)×FICA Hi % from payroll file)=FICA Hi Taxes Due.
FICA OAS Taxes are calculated as follows: FICA OAS Taxes Step 1 (Gross Gain) × (FICA OAS % from payroll file) = Estimated FICA Tax Step 2 (Estimated FICA Tax) + (Participant YTD FICA OAS Amount) = Subtotal FICA Step 3 (the dollar amount shown can change depending upon IRS regulations) If subtotal FICA ≤ $4054.80 Estimated FICA Tax = FICA OAS Transaction TAX If subtotal FICA > $4058.80 (Subtotal FICA) - (FICA Work 1) = FICA OAS Transaction Tax.
The SUTA and Disability Taxes are calculated according to the following formula: (Gross Gain)×(SUTA or Disability Tax Rate from Payroll File)=SUTA Taxed Due or Disability Taxes Due.
From the forgoing, the Total Taxes Due are calculated by the following formula: (Federal Taxes Due)+(Total State Taxes)+(Total Local Taxes)+(FICA Hi Taxes Due)+(FICA OAS Transaction Taxes)+(SUTA Taxes Due)+(Disability Taxes Due)=Total Taxes Due.
Thereafter, the Net Proceeds can be calculated according to the following summation: [(Credit Balance+Check Amount)+Gross Proceeds+(Shares Required×Stock Price)+Gross SAR Proceeds]=[Reimbursement+(Total Tax-Taxes from Share Withholding-Taxes Deferred)+Fees+Commissions+Residual SAR Proceeds]=Net Proceeds.
Depending upon the type of stock option granted to the participant, which type may have to be entered by the participant or broker, but preferably is in the database, the simulation determines which tax calculations are necessary according, for example, to the following criteria:
For NQO (non-qualified option): Calculate all tax calculations.
For ISO (individual stock option)
2. Only for Wilmington and Pennsylvania (exceptions, e. g.)
3. If tax deferment is NOT selected.
Then Calculate State and Local.
For DISO (deferred ISO):
Calculate State and Local regardless of whether tax deferment was selected; and then.
Calculate Federal if tax deferment is NOT selected.
Calculate all tax calculations.
Federal Taxes are calculated as Tax (Fed/Int'l)%×Gross Gain=Federal Taxes Due With the qualification that if Share Withholding is selected for tax payment, the tax rate can not be greater that 28%. International taxes can be assumed to be the same as those for the U. S. as an estimation, or specific tax calculations can be provided depending upon the participant s residence, where the proceeds are to be deposited, the location of the underlying security, and so forth.
State Taxes are calculated starting with: for states i=1 to n, Σ(R Si ×A Si ×GG i ) where R Si is the tax rate for the ith state, A Si is the state tax allocatable to the ith state, and GG i is the gross gain, to arrive at Estimated State Taxes. Thereafter, the simulation calculates the Resident State Comparison Rate for each work state individually that has a reciprocity agreement with the resident state (i. e., the state in which the participant has a legal residence for tax purposes) as follows: Resident State Comparison Rate=Work State allocation rate×resident state tax rate.
The resident state comparison rate is then compared with the work state tax rate:
(i) If comparison rate>work state tax rate, then offset rate=work state rate.
(ii) If comparison rate<work state tax rate, then offset rate=comparison rate.
The offset state taxes are calculated as equal to (Offset Rate×Gross Gain).
This procedure is repeated for each work state that has a reciprocity agreement with the resident state. After all applicable offset state taxes have been tabulated by each state, all offset state taxes are summed to arrive at a Total Offset Tax Dollars. The final resident state taxes are computed as the Estimated States Taxes for the Resident state only (i. e., the state in which the participant is a resident) minus the offset rate. The total state taxes are finally computed as the sum of the final resident state taxes plus the Estimated Taxes for all of the work states.
The Local Taxes are calculated simply for localities i=1 to n, Σ(R Li ×A Li ×GG i ) where R Li is the tax rate for the ith locality, A Li is the local tax allocatable to the ith locality, and GG i is the gross gain, to arrive at Estimated Local Taxes.
A screen accessible to the broker or to the participant (e. g., on the web portion of the internet) would preferably include the following fields:
Total Exercise Costs--This shows the sum of the option reimbursement cost, Total Tax, and Fees/Commission.
Share/Cash Withholding--Designated by the tax payment field as an indicator of whether a stock or cash disbursement is requested. If share withholding, this field will reflect the number of shares withheld. All other tax payments will reflect dollar amount of the option exercise without attached SAR taxes if applicable.
Residual SAR Proceeds--SAR proceeds not used to/from a exercise.
Pending Transaction--shows current pending transaction.
Other fields on the screen, along with some associated variables and commands (it being understood that "screen" may run to multiple screens, and that multiple screens may be used to group common or related parameters and results) are shown, along with a preferred arrangement, in the following table: Top of Screen Acct No. States client's account number Grant Date Indicated option grant date from database Grant Price Indicated grant price (strike price) for this option. Status Date Date of an employee status change. (e. g., if all 0's, the status is active and unchanged). Status Indicates type of status change; e. g., voluntary or involuntary termination, death, or retired. Available The number of options available to exercise. Options Available Available attached SAR's SAR Grant Type One letter code indicating the grant type Column One Exercise The exercise method chosen; e. g., C = \CASH, Type CLP = CASHLESS PARTIAL, CLP = CASHLESS FULL, SS = STOCK FOR STOCK Reload CASHLESS FULL, SS=STOCK Indicate a "Y"or a "N" to reload the stock option No. of The number of options to use in the transaction Options Disquali - Systematic default will be N unless a disqualifying exer - fying ISO cise is placed. An ISO will become disqualified if shares are sold and or taxes are paid with share withholding. The participant can also elect to disqualify an option. Number Total SAR's to use. of SAR's Tax The tax field will read the demographic screen fed tax field (Fed/Int'l) for domestic and aggregate tax rate for Int'l. Can adjust upward in increments of 0.1% up to 39.6% for domestic. International taxes cannot be adjusted. The Federal tax will be added to all other taxes provided in a demographic feed for calculations. Stock Price Current stock price for model Tax Payment Method for paying taxes. C = Credit Balance/Check amount, S = Share Withholding, D = Tax Deferral , and P = Stock Sale Credit Amount of cash to be used for exercise from cash balance. Balance Check Amt Total check partcipant will use to complete a cash exercise (Use in the case of wired funds as well.) Share The amount of shares used from the account to complete a Amount stock for stock exercise. Shares The amount of shares used from outside accounts to Attested complete a stock for stock exercise. Use price Indicate a "Y"or "N"if the stock price entered in the model as limit will be used as the limit price for a real time trade. Indicate "N" for market order. Column Two Exercise The type of exercise will be spelled out fully. C = Cash, Type CLP = CASHLESS PARTIAL, CLF = CASHLESS FULL, SS = STOCK FOR STOCK Net Shares The shares that will be received by the participant. The following is tlie calculation: Options - Required Shares for Stock Swap - Share Withholding - Shares Sold = Net Shares Net Proceeds Any cash that will be received by the participant from a option exercise. The following is a calculation: [(Credit Balance + Check Amount) + Gross Proceeds + (Shares Required × Stock Price) + Gross SAR Proceeds] - [Reimbursement + (Total Tax - Taxes form Share Withholding - Taxes Deferred) + fees + Commissions + Residual SAR Proceeds] = Net Proceeds SAR Information displayed whenever a SAR or a Unit Option is Proceeds exercised with the net proceeds generated from a SAR exercise or Unit surrender. The following is a calculation: (Stock Price - Grant Price) × # of SAR's - SAR taxes = SAR Proceeds Required The minimum cash needed to complete a cash exercise. Cash Amount Required Calculation of the total shares required to do a stock for Shares stock exercise. The following is a calculation: [(number for SS of options × grant price)]/stock price = required shares Stock Sale Total proceeds generated by a stock sale on a exercise Proceeds.
The above-described arrangement is merely illustrative of the principles of the present invention. Modifications and adaptations thereto will be apparent to those skilled in the art upon perusing this specification, and such are intended to be within the scope and spirit of the present invention.

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Exercising stock options merrill lynch.
Long-Term Incentive Compensation Plan the Plan. How to Exercise Stock Options. You may exercise Stock Options through the Retirement Services Group. You must open a Limited Individual Investor Account Stock to exercise. You may submit exercise requests virtually 24 hours a day, seven options a week through the Exercising Voice Response Service IVR at [phone options. Alternatively, participant service representatives are available to help you from at least 8: Eastern Timeon any day the Exercising York Stock Exchange is open. Outside of the United Statesyou can call [phone number] collect to speak to a participant service representative from 8 a. You may also exercise your Stock Options by visiting the Benefits On Line Web-site at [URL]. Policy Manual, you will be required to merrill any sale of Merrill Lynch equity securities and lynch will be prohibited from exercising your Stock Lynch during blackout periods. This may affect your ability to exercise stock options just prior to the expiration date. If you have questions regarding your status as a restricted person and the applicable blackout period, please contact the Corporate Secretarys office. All contents of the lawinsider. View our Terms Of Use. Merrill Lynch Uses in How to Exercise Stock Options Clause Home How to Stock Stock Options Merrill Lynch How to Exercise Stock Options. Related uses of Merrill Lynch. By registering you agree to our terms merrill service.
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Exercising stock options merrill lynch

Warner, Susan (Hamilton, NJ)
Howard, Deborah (Jackson, NJ)
Berkley, Karen (Franklin Park, NJ)
Radcliffe, Eric (Kendall Park, NJ)
A connectinist expert system for international currency option trading, Quah, T. S. et al. Nat. Univ. of Singapore, Nov. 1993.
Improved ption pricing using artificial neural networks and bootstrap and mehtods, Labjcygier, P. R. et al. International journal of Neyral Systems, vol. 8 issue:4 pp. 457-71, Aug. 1997.
Approximate option pricing, Chalasani, P. et al., 37th annual symposium Foundations of Computer Science, pp. 244-253, Jan. 1996.
The Electronic Invetor, A Big Edge for little Guys, Three packages give individual options traders some of the tools pros use, Dec. 1995.*
S&P ComStock/optionomics Systems: looking to the future with sound options risk analysis, Future, v22, n7, p28, 1993.*
Database and the Internet--Businesses flock to put live corporate, Martin Marshall, Communication Week, Feb. 1996.*
"Agreement for Services Between PepsiCo, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated dated as of Jul. 1,1990" dated Oct. 31,1990.
"Proposal to Convert Pepsico's Sharepower Plan to Merrill Lynch's Generic Stock Option Plan Administrative System, vol. One, Oct. 7, 1994" of Oct. 7, 1994.
This application is a continuation-in-part of application Ser. No. 08/487,902, filed Jun. 7, 1995, now U. S. Pat No. 5,671,363, and application Ser. No. 938,939, filed Sep. 1, 1992, now abandoned (the disclosures of which are incorporated herein by reference).
addressable data storage means for storing in relation to said accounts (i) options holding information including demographic and employment-related information on each participant and information on the options granted, vested, and exercised by each participant, and (ii) an axiomatic rule system at least in part defining said plan criteria for the exercise of said options;
communication means for entry of option transaction requests and confirmation of stored information;
processing means for accessing said storage means, receiving said transaction requests, and validating whether and how to process the options exercise requests;
brokerage means for accessing market price data on the security underlying said option and implementing said option transaction in accordance with said option holdings information and said axiomatic rule system when said transaction request is validated; 과.
further comprising at least one processor system selected from the following: for.
(a) converting and disbursing currency received from implementing said option transaction into a different currency,
(b) operating said brokerage means in real time, and/or.
(c) providing a participant and/or broker accessible simulation of one or more options transactions and the expected results from the transactions prior to the actual implementation of the option transaction requested.
accessing a device for storing in relation to said accounts (i) options holding information including demographic and employment-related information on each participant and information on the options granted, vested, and exercised by each participant, and (ii) an axiomatic rule system at least in part defining said criteria for said plan in accordance with which options are exercised;
receiving from said participant option transaction requests;
processing said transaction requests, and validating whether and how to process the options exercise requests;
brokering said option transaction request in accordance with said option holdings information, said axiomatic rule system, and the participant's request when the request is validated; 과.
providing at least one system selected from the following: for.
(a) converting and disbursing currency received from implementing said option transaction into a different currency,
(b) brokering the transaction in real time, and/or.
(c) simulating one or more options transactions and outputting the expected results from the transactions prior to the actual implementation of the option transaction requested.
storing the identity of each client;
storing the identity of each participant for each said client;
creating one or more accounts, each said account associated with a participant;
storing information in each said account regarding stock options held by said participant under the stock option plan; said information comprising:
the number of shares of stock remaining for each said stock option that may be executed;
the strike price of each said stock option; 과.
a target price at which each said stock option is to be executed, said target price set by an axiomatic rule system;
monitoring current market prices for all said companies;
comparing the current market prices with said stored target prices;
executing a trade on each said stock option when the market price equals or exceeds said target price; 과.
wherein trades are executed by accumulating orders from each Ith participant of said J clients and exercising said orders in blocks.
performing at least one step selected from the following:
(a) converting and disbursing currency received from implementing said option transaction into a different currency;
(b) brokering the transaction in real time; 및 / 또는.
(c) simulating one or more options transactions and outputting the expected results from the transactions prior to the actual implementation of the option transaction requested.
BACKGROUND OF THE INVENTION.
The present invention generally relates to computer controlled account management systems for stock option management, and more particularly to a data processor for implementing a management control system for tracking and processing a plurality of segmented stock option accounts corresponding to individual participants in a company sponsored stock ownership plan.
For many years, publicly owned companies have provided payment to upper level executives in the form of options to purchase shares of stock in the company for whom they were employed at discounts from the prevailing market price. These stock options are attractive for many reasons. For one, the option is a form of deferred payment that provides certain tax benefits and allows the individual to control the times during which the income is derived. In addition, the opportunity to buy stock in the company is an additional incentive to the option recipient to work to increase the value of the company, and so also the value of the stock options.
Early forms of option plans were limited in scope and available only to a handful of key executives. Indeed, the use of options as a form of compensation was routinely limited to the officers of a corporation, while the remaining employees were either granted stock pursuant to pension plans or, more often than not, unable to participate in company sponsored ownership. As alternative forms of compensation grew in popularity, companies were increasingly interested in providing payment to select employees in untraditional forms. Concepts such as flex time, position sharing, benefit tailoring, and others became the terminology of personnel departments for mechanisms to address staffing needs in a cost efficient manner.
More recently, companies are examining the possible broader use of stock option-based compensation to cover greater numbers of employees in order to stretch out staffing dollars and to provide remuneration to employees in a form particularly desired by many staff members. Although greeted with substantial enthusiasm, the problems in implementing a company sponsored stock option plan are daunting. As the number of participants grows, tracking salient data becomes increasingly complex. For the most part, companies are not equipped to handle the transactional attributes of stock option processing on a scale above a handful of participants. Each of the options (or each block of options) for each grant to each participate in the plan must be individually tracked for proper delineation of such parameters as the granting, vesting, exercise, and expiration dates, and the particular strike price for which the option right was granted. Also, the practical exercise of an option requires the use of a brokerage house and an established exchange for trading and consummating the options and the underlying security in accordance with the plan attributes.
The complexities of option account processing increase disproportionately when more than one company is involved; this is especially true for multinational companies working within the borders of multiple countries--each with its own set of legal requirements on stock ownership and tax consequences for resident employees. Heretofore, there has been an absence of processing capabilities available to address the management of a multi-country, multi-company stock option account compensation plan for a plurality of individual accounts. In addition, stock option plans for multinational corporations, or for multinational employees (i. e., employees who work for one or more companies in two or more countries), have the added practical problem of exercising options where the underlying security and the funds are in different currencies.
Besides currency differences, from the participant's point of view there can be significant uncertainties in how to exercise options because options may be granted in qualified (i. e., qualifying for preferential tax treatment) or non-qualified plans, and the option may be exercised so that the participant receives the underlying security, a cash disbursement representing essentially (less taxes, commissions, and fees) the difference between the strike price and the then present market price of the underlying security, or some combination thereof. It would be beneficial to the participant if she could simulate various financial outcomes (e. g. including estimated taxes, fees, or cash disbursements, or combinations thereof) to arrive at what is best for the participants financial needs precipitating exercise of the options.
OBJECTS AND SUMMARY OF THE INVENTION.
It is an object of the present invention to provide a data processing system for managing a plurality of individual accounts directed to the holding and transacting of options for the purchase of securities in accordance with pre-established plan criteria.
It is another object of the present invention to provide a data processing apparatus for managing the implementation of one or more company stock option plans on a continuous basis.
A further object of the present invention to provide a system for processing plan constraints in a manner to provide responsive transactions in accordance with plan dictates and select inputs from plan participants.
An additional object of the present invention to provide a cashless transaction for the exercise of vested options in accordance with plan terms, through the use of a linked brokerage account for the plan participants.
Still further objects of this invention include providing such apparatus and systems that can function across currency differences, provide option execution in real time, allow the participant to simulate different exercise scenarios to define the desired parameters for the execution of the options, or a combination thereof.
The above and other objects of the present invention are realized in a data processing system including controlling stored programming directed to the managing and tracking of a plurality of individual accounts, current stock pricing, individual biographic data, company option plans and current withholding and other tax requirements. For each participant in a given plan, the system tracks the number of options to purchase stock that have been granted, the grant date, the number vested and vest date, and the number expired and date of expiration. At participant determined dates, the system implements a participant requested exercise of select options in accordance with the governing plan, e. g., option price, withholding percent, etc.
In accordance with the varying attributes of the present invention, the system uses a corresponding brokerage account held in the participant's name to implement the actual trades of stock necessary for the option exercise, with the market sale price on the exchange used to pay the plan sponsor (company) the option price, and remaining proceeds as compensation to the participant.
The foregoing features of the present invention may better appreciated from the following detailed description of a specific illustrative embodiment thereof, presented in conjunction with the following drawings:
DESCRIPTION OF THE FIGURES.
무화과. 1 provides a functional block diagram of the operative activities encompassed by the present invention;
무화과. 2 provides a logic flowchart of the participant attribute module of the present invention;
또한, 3A and 3B provide logic flowcharts of the daily transaction processing implemented by the present invention;
무화과. 4 depicts a logic flowchart of the option exercise module of the present invention; 과.
무화과. 5 provides a flowchart for the cumulative trading of shares in accordance with the instructions from participants on a plan or client basis.
무화과. 6 depicts a flowchart showing a sequence of steps by which the participant can exercise options in real time and other actions taken by the present system.
DETAILED DESCRIPTION OF SPECIFIC EMBODIMENTS.
First briefly in overview, the present invention is directed to managing the operations associated with the broad scale implementation of individual stock option accounts for different companies and in accordance with distinct plans. The implementation is governed by an integrated control program implementing commands in response to program logic and current environmental inputs. The system maintains in memory records of participating individuals having present or future rights to exercise options of select stock, as well as a plurality of distinct option plans that dictate the implementation of the plan participants' rights in exercising the options granted to the participants. Processing is both time-driven and event-driven; for example, periodic updates to the participant's records occur at regular (preferably at least daily) intervals. In addition, select inputs preferably trigger system processing, e. g., option exercise request or target price acquisition.
A sophisticated data processing system is used for this implementation, which preferably includes one or more microprocessor-based central processor units (cpu) interconnected with multiple I/O (input/output) controllers, segmented memory in both semiconductor and magnetic disk form (i. e., immediate memory and permanent storage), communication ports for distributed processing and real time input communication for, e. g., incoming stock quotes (i. e., real time quotation of the option's underlying security price). The controlling program can be written in various commercially well-known programming languages (e. g., Cobol, "C", Pascal, etc.), as long as the resulting executable version is compilable in a manner compatible with hardware selected for the central processor and any peripheral work stations. For example, excellent results can be expected implementing this invention using Cobol II programmed and running on an IBM 3090 (Sierra) system platform.
With the foregoing overview in mind, attention is directed to FIG. 1 which provides a block diagram of the processing relationship between the various institutions involved in the operation of the present invention. More particularly, the system proprietor operates the system at a centralized location, block 10 where the central processing hardware is maintained. As stated above, the invention is directed to a plurality of separate accounts involving at a minimum segregated files on the participant and participant's brokerage account. This will of course require database 20 for maintenance of past and updated account files.
Continuing with FIG. 1, the individual blocks are interconnected with lines indicating channels of communication. For example, each participant 30 has access to a corresponding account record via system management and may use this channel for entering option exercise orders, submit cash for execution, or request records for tax purposes. The system proprietor is operating the system for the benefit of one or more separate client companies, block 40, each with a diverse set of processing requirements for their respective group of employees. In this regard, the system incorporates communication channels for the client 40, the participants 30, and the system manager 10.
Actual transactions made in accordance with the dictates of the present invention are processed practically through one or more transfer agents 50, typically a bank or other trustee formed for the transactions involved. The transfer agent releases newly issued or treasury shares of stock in the client company, which are passed to the system manager (or associated broker) either directly or through a depository trust company (DTC), block 55. Finally, the system is linked via per se well-known communications systems to one or more exchanges, block 60, for execution of the transactions of shares in accordance with plan dictates, client constraints, participant requests, and brokerage account limitations.
To understand the logic commands governing the implementation of the present inventive system, a brief description of the salient terms may be helpful and thus provided in Table 1 below:
1. Option(s). Options are granted to one or more eligible employees at a strike price set on the giant date. The options have a limited lifetime, and expire at the end of their term if not exercised. An option is a right to a purchase a set number of shares of the underlying security at the strike price.
2. Vesting Period. Options granted to an employee are not exercisable until the completion of a vesting period, typically at least one year after grant date. Sponsors may specify their own vesting schedule. Accordingly, each participant may have both vested and non-vested options in her account.
3. Exercise. An option is typically exercised by paying the purchase price for up to the number of shares granted in the option at the strike price, so the person exercising the option then owns the underlying security. Option exercise methods for employee stock option plans typically include stock swap, traditional participant cash payments from private resources, as well as the effectively immediate sale of underlying security after exercise to pay for the grant price (also known as the "cashless" exercise method because the participant need not actually buy and then sell the stock; the participant effectively receives what would have been the disbursement for such a transaction). For global operations, the system must implement country specific restrictions that may inhibit cash or cashless transactions by law.
4. Income. Upon exercise, participants realize cash disbursements, such as the spread between the option grant price and the exercise price (fair market value on exercise date), as taxable income. Plan sponsors typically deduct this spread as a compensation expense. The income and expense realized may be governed otherwise by IRS, SEC, and/or the particular plan regulations. Participants can also defer income by exercising the option and receiving the stock.
5. Withholding Taxes. Taxes on each participant's exercise income are withheld at rates specified by the plan sponsor. Funds to pay withholding taxes are raised through the sale of a number of the shares obtained through the exercise, share withholding, cash on deposit, or swapping of shares of stock already owned, with the resulting funds forwarded to the plan sponsor for payment to taxing authorities.
6. Brokerage Services. Each participant is required to open a brokerage account to facilitate exercises. The net number of shares obtained through the exercise is deposited into the account. Participants may hold the shares or sell them at their convenience.
7. Exercise Costs. Each exercise entails a variety of possible exercise costs, against which some percentage of the shares obtained on exercise are sold.
These costs can include:
Option price. Participants owe their employer, which issues the stock they receive on exercise, the option price times the number of options being exercised. (e. g., 100 options with a grant price of $37.50 equal an option price of $3,750.00.)
Withholding Taxes. As described above, the spread on an option is taxable as ordinary income. Some option awards and international participants, however, may not be subject to taxation on this income.
수수료 및 수수료. The exercise of stock option and sale of shares to cover exercise costs entail transaction fees. Plan sponsors may choose to pay these commissions and fees on behalf of their stock option plan participants, or specify that participants pay for these through a cash or stock deposit or through the sale of shares obtained from the exercise.
Now turning to FIG. 2, the set up module is presented in flowchart delineating the entry of set up data for a new or updated client/participant account file and associated operations. More particularly, logic begins at block 100 and branches to the database manager module. This manager system permits access to the database of existing accounts, clients and participant records for retrieval and update purposes. As the population of clients/participants grow, the database manager will be automatically invoked via the link to system management for update processing.
For the purposes of the present discussion, the database manager is used to add new records and files for new client and/or participants and update existing files via test 120. A positive response to test 120 (indicating a new client entry, i. e., a new company interested in starling a plan for its participating employees that permit the granting and transacting of stock options on an ongoing managed basis) branches logic to block 130 wherein a designated addressable file location is allocated in the database for client profile parameters; these parameters as ascertained by the system manager are then entered at block 140.
The exemplified system described herein includes several prepackaged Plans for delineating the rights and obligations of the client to the participants regarding option processing. These Plans will be available to the new client as set forth in test 150, where a negative response invokes the selection process from the received client criteria. Based thereon, the selected Plan is entered into the database for governing future transactions for the new client. Alternatively, the client may customize a stock option Plan in accordance with the client's particular needs and interests. This is done via a positive response to test 150 and the entry of custom Plan parameters at block 170. Processing then continues to the next client (new) test 180 or to continue block 190.
Continuing with FIG. 2, assuming a negative response to test 120, logic branches to test 200 which identifies whether the participant is new or existing within the database for that client. A positive response to test 200 (new participant) continues to block 210 for open/entry of a new record corresponding to that participant. The participant is then logically concatenated to the proper client, block 220 thus inheriting all the client delineated option Plan features previously entered for that client. Thereafter, the system seeks the remaining defining parameters for that participant for storage within the addressable database record, block 230. This continues for the next participant entry in que, test 280.
If the participant is already in the system ("no" to test 200), logic branches to test 240 to determine if a status change has been made to the participant's file. A status change is directed to the parameters stored for that participant and can include biographic, demographic or payment information such as a promotion, vesting of select options, termination, expiration of options, exercising options, or other changes. If a positive response is received, the salient records are accessed, block 250, and the appropriate changes entered into the records, block 260.
In the foregoing logic structure, the client and participant are system-defined through a specified option Plan and in fact this Plan may be modulated and incremented in accordance with the client so that a plurality of differing Plans are implemented by the system (e. g., Plan(I), wherein I is an indexing variable for the differing clients using the option management system). In this context, the Plan can incorporate the profile of information shown in Table II in the processing of option accounts for the various participants. Each plan managed by the system preferably includes (i) a set of parameters for such purposes as identifying and/or categorizing the necessary particulars for each participant and their option(s), (ii) a database containing each of these parameters, and (iii) an axiomatic system at least in part defining the plan criteria for the exercise of the options by a plan participant. TABLE II Description Resp. Size PLAN LEVEL RULES Plan name Mrking 50 Chars Plan source code Oper 9 Chars Plan stock cusip Oper 8 Chars Plan stock desciiptioil Oper 20 Chars VRS Mrking Yes or No VRS phone number Oper 999-999-9999 Annual or quarterly statements Mrking Annl or Qtrly Customer letter short name 1 Systems 20 Chars Customer letter short name 2 Systems 20 Chars Customer letter phone number Systems 999-999-9999 Account Assignment Oper Yes or No Plan active date Systems CC/YY/MM/DD Incentive Compensation Mrking Yes or No Fractional grants Mrking Yes or No Allow zero grants Mrking Yes or No Payroll data required for exercise Mrking Yes or No Maximum year to date exercises Mrking 999 Minimum exercise amount Mrking 9,999,999.9999 Maximum exercise amount Mrking 9,999,999.9999 Target price exercise duration (d) Mrking 999 Exercise blackout start date Mrking CC/YY/MM/DD Exercise blackout end date Mrking CC/YY/MM/DD Limit price % Mrking 9.9999 1st sale inflation % Mrking 9.9999 1st sale minimum commission Mrking 999.99 1st sale commission % Mrking 9.9999 2nd sale inflation % Mrking 9.9999 2nd sale minimum commission Mrking 999.99 2nd sale commission % Mrking 9.9999 Repeat following for each valid exercise type for the plan (max. 30 types) Exercise type Mrking 6 Chars Exercise code Systems 1 Char Exercise description Mrking 30 Chars COUNTRY RULES Country number Oper 999 Country Name Mktg 30 Chars Allow VRS exercises? Mktg Yes or No New account form required? Mktg/Legal Yes or No Force share delivery Oper/Legal Yes or No Special user authority needed Oper Yes or No Special userid's Oper 8 Chars Repeat following for each valid exercise allowed (max. 30 types) Valid exercise type Mrking 6 Chars Valid exercise code Systems 1 Char Valid exercise description Mrking 30 Chars GRANT RULES Grant date Mrking CC/YY/MM/DD Grant price Mrking 99,999.99999 Grant expiration date Mrking CC/YY/MM/DD Maximum year to date exercises Mrking 999 Minimum vesting amount Mrking 9,999,999.9999 Vested outstanding cusip Oper 8 Chars Vested outstanding account Oper 9 Chars Vested lapsed cusip Oper 8 Chars Vested lapsed account Oper 9 Chars Unvested outstanding cusip Oper 8 Chars Unvested outstanding account Oper 9 Chars Unvested lapsed cusip Oper 8 Chars Unvested lapsed account Oper 9 Chars Exercise cusip Oper 8 Chars Exercise account Oper 9 Chars EMPLOYEE STATUS RULES Status code Mrking 1 Char Status description Mrking 30 Chars Exercise cutoff amount Mrking 9999 Exercise cutoff type Mrking Years/Months/Days VESTING RULES Grant date Mrking CC/YY/MM/DD Status code Mrking 1 Char Vesting rate Mrking 9.9999 Vesting calculation type Mrking Truncate or Round Special vesting check Systems Yes or No 100% vesting date Systems CC/YY/MM/DD Repeat following for each event date (up to 25 event dates) Event vesting date Mrking CC/YY/MM/DD Event vesting date Mrking 9.9999.
In the above Plan profile, the column "Resp." indicates the specifying division of the system proprietor responsible for the variable data, e. g., "marketing". VRS represents a Voice Response System that allows direct phone link to the system options for the participant via touch-tone entry, preferably in multiple languages. The column "Size" indicates an embodiment of the record format size and/or format for database management.
Additional plan level rules (or other rules) can be implemented as required by a particular system or which the administrator requires or desires. For example, other preferred plan level riles include the type of option grant, an option grant suffix, whether real-time trading (described below) is allowed by the plan for the participant, and the particular currency type (e. g., foreign currency transactions, as described below), the language in which the VRS responds as a default when the participant phones, termination letters, and option expiration letters. The option grant suffix is useful when, such as preferred herein, the system recognizes options by their grant date because different types of options, or options having different conditions for exercise, may be granted to the participant on the same date; hence, the suffix can permit the system to distinguish between different types of options granted to the same participant on the same date. The parameters for termination letters and option expiration letters are equivalent to toggles prompting whether the system should issue letters to the participant as notification, respectively, that participation in the plan has been terminated (and, for example, how the options can be exercised in the future) and that particular option(s) granted are due to and/or have expired. Similarly, the grant rules can include parameters for the option grant type and the option grant suffix.
With the above Plan structure for illustration, attention is now directed to FIG. 3 depicting the logic path for the inventive system associated with periodic (daily) account processing. Beginning at block 400, logic uploads the system module at block 410. The system module governs the processing of accounts on the periodic or input driven basis. In this context, input driven processing is exemplified by a transaction request received by telephone from a participant. Periodic processing is time based (e. g., daily) and functions to control time based processing of accounts--for example the removal of vested options after the expiration of a Plan delineated termination period for the option. Other time based processing will include the comparison of current stock price on an exchange with a specified target price in a participant's file with a contingent transaction automatically executed if the price-quote comparison is satisfied. In this context, the current stock price corresponds to some recently completed and fixed transaction, such as "end of day" pricing. Other market pricing techniques may be employed.
Continuing in FIG. 3, at blocks 420 and 430 the system accesses the participant files in sequence for processing in accordance with the Plan dictates for the entered Date. Test 440 determines whether the participant/plan files delineate a grant date for the option account. If so ("yes"), logic proceeds to blocks 450-490 wherein the Plan is accessed and used to quantify and confirm the option grant, calculate vest and optionally option price for the newly granted options and update the participant files in accordance therewith.
At test 500, the system determines if the date of processing is a vesting date for that Ith participant; if so, logic proceeds to blocks 510-540 for processing the participant records in accordance with the Plan and specifically updating the options (vested) available for transacting by the participant. The records for the Ith participant are updated with the new information replacing the existing files in the database.
Plan constraints often include time periods for exercising vested options. Therefore, after the passage of time, unexercised vested options will expire. The system module determines this at test 550 for each participant (unless the Plan for that participant has no time based option expiration function). A positive response to test 550 branches to blocks 560-590 wherein the Plan is accessed and the associated expired options removed from the participant's account.
As discussed above, exercise of options by the participant may be accomplished by both direct request or by a time function; this latter course involves the setting of a target price for the shares that is above the current market price, and the setting of transaction time period in terms of start time (or date) and span (duration of requested price delineated transactions). Once evoked, the system must continuously (implemented in incremental updates) receive market data for direct comparison to the target price, and automatically execute the requested transaction upon satisfaction of the target-market price comparison.
The foregoing is accomplished as follows. At test 600, the system determines if a target price exercise older has been entered for the user and if so the target price, TP(I) and the duration DD(I) for the Ith participant, block 610. The system then accesses the current quote for the specified security, defined as MAR_P(D), at block 620 and compares this price data at test 630. If the comparison criteria is met, logic proceeds to block 640 where the system links to an exchange for automatic execution of the options exercised. The participant's account is then updated at block 650. If test 630 is not satisfied, no transaction is authorized for this period and the participant's file is updated accordingly at block 660. The system then increments to the next participant (I+1) for further processing at block 670.
In addition to the entry of time-driven exercise orders, the system preferably can processes exercise orders on an order receipt basis, i. e., older-driven processing as opposed to event-driven processing. In this mode of operation, for example, the system provides two forms of execution to the participant with vested options, funded and cashless. The funded transaction is the traditional mechanism described above for processing options and involves the receipt from the option holder of the share price defined in the option account which is then coupled with additional funds from the option grantor for purchasing the security on the exchange at the strike price of the option. The security is then provided to the plan participant for disposition.
An alternate approach, the cashless approach, does not require any contribution by the participant and is based on the normally common occurrence of an option price that is significantly below the current market price of the security. A cashless transaction involves the disposal of shares at the market price (either treasury shares or previously purchased shares) with the proceeds divided between the client (option grantor, receiving the option price for the sold shares) and the participant (who receives the market price minus option price (i. e., MAR_P-OPT_P) multiplied by the number of shares). This transaction is considered "cashless" because no initial contribution is required by the plan participant option holder.
A third form of option exercise involves the use of stock as directly contributed by the participant to fund the exercise of the options. This stock can be sold at open market with the proceeds used to fund the execution of the option. However, more usually, the participant "swaps" an amount of stock sufficient to exercise the options, and receives the shares represented by the options minus the shares she used for the exercise. For example, if the participant has 1000 options (i. e., to purchase 1000 shares) for which the funds required for exercise are equal to the present market value of 100 shares of the same stock presently owned by the participant, the participant will receive 900 shares in a "stock swap" exercise of the options.
The foregoing transactions are accomplished by the present system in accordance with FIG. 4. Beginning with start block 700, logic proceeds to block 710 and input of the current queued request for the Ith participant. At test 720, the system first confirms that the participant order is proper, i. e., the current records reflect possession of vested options to support the exercise request for that participant; other confirmation data may be accessed for foreign security laws on ownership, etc. as may be needed.
Assuming a negative response to test 720, logic continues to test 740 wherein the system determines the form of the transaction, i. e., cashless or funded. If the 45 funded request is selected by the participant, logic branches to test 750 to confirm receipt of the necessary funds to support the purchase. As stated earlier, all transactions are based on the use of a concurrent brokerage account and the requisite funds may be established by one of several mechanisms such as margin on existing shares etc. If the transaction as requested is unfunded, ("no" to test 750) the system stops execution of the older and prepares a report, block 760.
If the transaction is fully funded, the system enters the participant selected target price for the transaction, TP(I) and recalls the current market price, MAR_P(D) at blocks 780 and 790 respectively. Test 800 compares the prices for the security with automatic execution of the transaction instituted upon satisfaction of the test via blocks 810-830. The target price may be and often is set at the current market price by the participant to insure execution of the option (i. e., test 800 always satisfied).
Continuing with FIG. 4 and assuming selection of the cashless exercise, processing proceeds to block 840 for the entry of the target price by the participant. Again the system accesses the current market price for that security and compares this value to the selected target price and additionally the stored option price for that participant. This latter test condition is required as the TP(I) must also support the payment of the option price and the accrued transaction fees pursuant to the designated cashless transaction. Satisfaction of this bifurcated conditional permits automated order execution via the brokerage account for that participant, blocks 870 and 880. Logic then proceeds to the next order in the queue.
Although the entry of option exercise instructions are made on an individual participant basis, the actual implementation of these transactions is done on a client/security basis, i. e., transactions for a given security are accumulated so that the actual trade order that reaches the exchange comprises many individual orders combined. The method of accumulation is not critical and may proceed by either a set time period or by volume of transactions in given securities.
This accumulation process is delineated in FIG. 5. At select intervals, the system begins the transaction procedure via start block 1000, confirming the transaction period at test 1010. A "yes" to test 1010 starts the transaction entry process; each plan is accessed and each participant incremented by indexing variables "J" and "I" respectively, blocks 1020-1040. At block 1050, the system accesses the transaction request REQ(I) for the Ith participant. If this REQ is confirmed at test 1060 (meets plan constraints and target price considerations), the system accumulates the optioned shares into the total for that security, block 1070, wherein TSO(J) represents the total stock options for the Jth security and ISO represents the individual stock options REQ by the Ith participant. Logic continues for each Ith participant and Jth Plan with the retention of TSO(J) for all J's in the system, blocks 1080-1100. These collected and confirmed orders are then sent to the exchange for execution, block 1110.
Continuing with FIG. 5, test 1120 confirms that the order as entered on the exchange was executed per instructions. A positive response to test 1120 is followed by system file update with the new information, block 1130. If the order cannot be confirmed, the system determines whether the a price limit failure occurred, test 1160. A price limit prevents a rapidly shifting market from causing a negative cash transaction by assuring that the market price received for the security is sufficient to cover the option price plus whatever incidentals may accrue. If a price limit triggered an aborted trade, a report is generated, block 1180; if the trade failed for some other reason (e. g., trading stopped for that security on the exchange) the system contacts the broker to complete the report, block 1170. This ends the processing until the next period or volume limit is reached, block 1150.
With the proliferation of multinational corporations and employees who may likely be working in various countries during their tenure with one or more international companies, the invention also allows for the management of stock option plans where the money used for the exercise transaction, and/or for the disbursement of proceeds (e. g., "cashless" execution of the option), are in different currencies. In such a system, the participant requests (i) the form of option exercise desired (e. g., cashless, regular sale, or cash balance disbursement), (ii) that the proceeds are to be distributed in a particular currency eligible for the plan, and (iii) the desired method of disbursement (e. g., cash or wire transfer). The exercise of the option proceeds as described above with the additional input that the broker (or participant, as described below) enters to indicate that a "foreign" currency transaction is requested, and how the funds are to be disbursed. Preferably, wire transfer instructions and information must be provided by the plan participant prior to execution of this foreign currency transaction; otherwise, measures can be implemented to allow the participant to submit wire transfer authorization and for the broker (or customer service representative) to enter and confirm that information during the participant's online modem or telephone session. The option exercise then proceeds as described above with a disbursement monetary value generated that is due to the participant as well as the type of currency with which the option was exercised and the type of currency that the participant desires to be disbursed. If the two currency types are different, the system queries a database (present in the system or remote accessible online via a service provider) for the exchange rate between the two currencies, and generates a value of the disbursement in the currency type requested by the customer. Preferably, the system also generates a transaction fee for the currency exchange based on a standard rate or such other terms as the plan manager may require or may have agreed with the company whose options are being managed. The system also preferably generates output reports for the manager and/or the participant and/or the company regarding wire transfers and/or currency rate reports (including any applicable exchange transaction fee(s)).
In another embodiment of this invention, it is preferably contemplated that a participant engages the system and exercises vested options without directly contacting a broker. As such, the participant can access the system on a bulletin board directly via modem, a hypertext page (preferably via secure server protocol) on the web portion of the internet, or a menu system via touch-tone telephone as mentioned above. The participant would be required to enter account information and one or more passwords (e. g., a PIN, a personal identification number). Thereafter, the participant enters, for example, information indicative of the particular options to be exercised and, optionally, trading, currency, and/or proceed distribution instructions. For example, the participant can direct the system to exercise specified options only if the price of the underlying security were not less than a given price. Likewise, the participant could direct that the proceeds be distributed in a particular currency, as described above; and that they be wired, mailed, or directly deposited with a specified institution. Further, the VRS preferably responds in a default language (e. g., English, or a language as determined by the plan level rules) particular to the participant, and/or the participant can be presented with a menu prompting for entry of the language in which the participant would like to continue the session. Languages presently preferred for implementing in this system include English, Spanish, German, French, Italian, Portuguese, Dutch, Mandarin (Chinese), Japanese, Tagalog (Phillipines), and Malay (Malaysia); other languages can be used or implemented as a particular plan or administrator requires. Similarly, a web site can allow the participant to continue their session on web pages with their particularly preferred language.
As mentioned in various places above, the present system can generate any number of reports in respect of the transactions, options granted, and the like. It is preferred that, via the plan level rules, all reports for a particular client are generated in a designated language. It is particularly preferred that reports, in addition to those mentioned already, also include (i) monthly, quarterly, and/or annual statement reporting on the participants option holdings and activity, (ii) confirmations of the exercise, and (iii) confirmation of the participant's PIN and any other passwords required to access the system.
In yet another embodiment, the invention contemplates the real time execution of option exercise, as described in U. S. Pat. No. 4,674,044, entitled "Automated Securities Trading System" (the disclosure of which is incorporated herein by reference). In that system, trades to be executed are collected at the end of the day and processed for a single block trade the following trading day. In the present invention, such a system could have undesirable consequences because one or more such large trades could provide sufficient market pressure to change the price of the underlying security, most likely decreasing its price. When options are executed by insiders, the required disclosure of such exercises, coupled with changes in the underlying security price, could have a number of detriments. Accordingly, it is desirable to allow the plan participant to exercise her options in real time under the present system. With reference to FIG. 6, assuming, for example, that the participant calls in by telephone, the participant ("user" in the Figure) starts 601 by calling a predefined telephone number and navigates through various menu options using the touch tone phone keys using known technology (the Voice Response System, "VRS", mentioned above). The user enters her account number 603 which is verified 605 by the system. The user then enters her PIN at 607. The system verifies the users PIN 609 and decides whether real time trading is an election within the plan 611 by reference to the plan level rules. If real time processing is permitted, the user enters her desired order for the options to be exercised 613 (e. g., number of options to be exercised and type of exercise for all or groups thereof) and the order is processed 615. If real time trading is not permitted, the system branches 617 to process the order in a batch mode (e. g., the order will pend on the system until it can be processed in the normal course of trading). Continuing with the processing, the older is executed 619 in real time such as in the aforementioned U. S. Pat. No. 4,674,044. Afterwards, the trade is confirmed 621 and the relevant databases are updated 623 to reflect the option exercise, after which this portion of the process terminates 625.
In still another embodiment, the present invention contemplates simulations of the tax consequences of an option exercise, especially in combination with the present invention. Income to a plan participant from the exercise of options is likely taxable at the federal, state, and even local levels. To facilitate the participant's decision on how many options should be exercise, and how various options should be exercised (e. g., cashless, exchange, etc.), the invention provides a simulation of the tax consequences of a particular manner of exercising the options. The simulation can be performed at a workstation at which a broker can view/run the simulation and communicate with the participant, or, more preferably, the participant can access the simulation via telephone and use of a menuing system or via modem (e. g., a page on the web poison of the internet, or on a bulletin board by direct modem connection). By performing one or more simulations with different parameters, the participant can better decide how the options should be exercised. In an embodiment of such a simulation, the participant first specifies the number of options to be exercised. The Net Shares of stock required for the exercise of the options is determined by: (Number of Options)-(Required Shares for Stock Swap)-(Share Withholding)-(Shares Sold)=Net Shares of Stock.
The total taxes are assigned a variable: Total Taxes=A Gross SAR Proceeds=(number of options)×(Stock Price-Grant Price)=B.
The fees/commissions due to the plan administrator and the SEC can be calculated as follows: Fees/Commissions and Residual Proceeds Step 1 A - B = C If C > 0 Then [(Stock Sale Proceeds - Option Reimbursement) - C] = Net Gain If C < 0 Than Negative (C) = Residual SAR Proceeds Step 2 Commissions Calculation Net Gain/Stock Prices × (Plan Commission Schedule = X if X ≥ 0.005 then round up to the next penny, if X < 0.005 then round down. SEC Fee Calculation (Net Gain / 300) × 0.1 = SEC Fee if SEC Fee goes to thousandths place, then round up to next full hundredth. Transaction Fees (set by the plan administrator) $3.85 for only CLF for all option types except for "K" and "F". Step 3 Total Fees and Commissions Commissions + SEC Fee + Transaction Fees = Total Fees/ Commissions.
The FICA HI Taxes are calculated according to the following formula:
(Gross Gain)×FICA Hi % from payroll file)=FICA Hi Taxes Due.
FICA OAS Taxes are calculated as follows: FICA OAS Taxes Step 1 (Gross Gain) × (FICA OAS % from payroll file) = Estimated FICA Tax Step 2 (Estimated FICA Tax) + (Participant YTD FICA OAS Amount) = Subtotal FICA Step 3 (the dollar amount shown can change depending upon IRS regulations) If subtotal FICA ≤ $4054.80 Estimated FICA Tax = FICA OAS Transaction TAX If subtotal FICA > $4058.80 (Subtotal FICA) - (FICA Work 1) = FICA OAS Transaction Tax.
The SUTA and Disability Taxes are calculated according to the following formula: (Gross Gain)×(SUTA or Disability Tax Rate from Payroll File)=SUTA Taxed Due or Disability Taxes Due.
From the forgoing, the Total Taxes Due are calculated by the following formula: (Federal Taxes Due)+(Total State Taxes)+(Total Local Taxes)+(FICA Hi Taxes Due)+(FICA OAS Transaction Taxes)+(SUTA Taxes Due)+(Disability Taxes Due)=Total Taxes Due.
Thereafter, the Net Proceeds can be calculated according to the following summation: [(Credit Balance+Check Amount)+Gross Proceeds+(Shares Required×Stock Price)+Gross SAR Proceeds]=[Reimbursement+(Total Tax-Taxes from Share Withholding-Taxes Deferred)+Fees+Commissions+Residual SAR Proceeds]=Net Proceeds.
Depending upon the type of stock option granted to the participant, which type may have to be entered by the participant or broker, but preferably is in the database, the simulation determines which tax calculations are necessary according, for example, to the following criteria:
For NQO (non-qualified option): Calculate all tax calculations.
For ISO (individual stock option)
2. Only for Wilmington and Pennsylvania (exceptions, e. g.)
3. If tax deferment is NOT selected.
Then Calculate State and Local.
For DISO (deferred ISO):
Calculate State and Local regardless of whether tax deferment was selected; and then.
Calculate Federal if tax deferment is NOT selected.
Calculate all tax calculations.
Federal Taxes are calculated as Tax (Fed/Int'l)%×Gross Gain=Federal Taxes Due With the qualification that if Share Withholding is selected for tax payment, the tax rate can not be greater that 28%. International taxes can be assumed to be the same as those for the U. S. as an estimation, or specific tax calculations can be provided depending upon the participant s residence, where the proceeds are to be deposited, the location of the underlying security, and so forth.
State Taxes are calculated starting with: for states i=1 to n, Σ(R Si ×A Si ×GG i ) where R Si is the tax rate for the ith state, A Si is the state tax allocatable to the ith state, and GG i is the gross gain, to arrive at Estimated State Taxes. Thereafter, the simulation calculates the Resident State Comparison Rate for each work state individually that has a reciprocity agreement with the resident state (i. e., the state in which the participant has a legal residence for tax purposes) as follows: Resident State Comparison Rate=Work State allocation rate×resident state tax rate.
The resident state comparison rate is then compared with the work state tax rate:
(i) If comparison rate>work state tax rate, then offset rate=work state rate.
(ii) If comparison rate<work state tax rate, then offset rate=comparison rate.
The offset state taxes are calculated as equal to (Offset Rate×Gross Gain).
This procedure is repeated for each work state that has a reciprocity agreement with the resident state. After all applicable offset state taxes have been tabulated by each state, all offset state taxes are summed to arrive at a Total Offset Tax Dollars. The final resident state taxes are computed as the Estimated States Taxes for the Resident state only (i. e., the state in which the participant is a resident) minus the offset rate. The total state taxes are finally computed as the sum of the final resident state taxes plus the Estimated Taxes for all of the work states.
The Local Taxes are calculated simply for localities i=1 to n, Σ(R Li ×A Li ×GG i ) where R Li is the tax rate for the ith locality, A Li is the local tax allocatable to the ith locality, and GG i is the gross gain, to arrive at Estimated Local Taxes.
A screen accessible to the broker or to the participant (e. g., on the web portion of the internet) would preferably include the following fields:
Total Exercise Costs--This shows the sum of the option reimbursement cost, Total Tax, and Fees/Commission.
Share/Cash Withholding--Designated by the tax payment field as an indicator of whether a stock or cash disbursement is requested. If share withholding, this field will reflect the number of shares withheld. All other tax payments will reflect dollar amount of the option exercise without attached SAR taxes if applicable.
Residual SAR Proceeds--SAR proceeds not used to/from a exercise.
Pending Transaction--shows current pending transaction.
Other fields on the screen, along with some associated variables and commands (it being understood that "screen" may run to multiple screens, and that multiple screens may be used to group common or related parameters and results) are shown, along with a preferred arrangement, in the following table: Top of Screen Acct No. States client's account number Grant Date Indicated option grant date from database Grant Price Indicated grant price (strike price) for this option. Status Date Date of an employee status change. (e. g., if all 0's, the status is active and unchanged). Status Indicates type of status change; e. g., voluntary or involuntary termination, death, or retired. Available The number of options available to exercise. Options Available Available attached SAR's SAR Grant Type One letter code indicating the grant type Column One Exercise The exercise method chosen; e. g., C = \CASH, Type CLP = CASHLESS PARTIAL, CLP = CASHLESS FULL, SS = STOCK FOR STOCK Reload CASHLESS FULL, SS=STOCK Indicate a "Y"or a "N" to reload the stock option No. of The number of options to use in the transaction Options Disquali - Systematic default will be N unless a disqualifying exer - fying ISO cise is placed. An ISO will become disqualified if shares are sold and or taxes are paid with share withholding. The participant can also elect to disqualify an option. Number Total SAR's to use. of SAR's Tax The tax field will read the demographic screen fed tax field (Fed/Int'l) for domestic and aggregate tax rate for Int'l. Can adjust upward in increments of 0.1% up to 39.6% for domestic. International taxes cannot be adjusted. The Federal tax will be added to all other taxes provided in a demographic feed for calculations. Stock Price Current stock price for model Tax Payment Method for paying taxes. C = Credit Balance/Check amount, S = Share Withholding, D = Tax Deferral , and P = Stock Sale Credit Amount of cash to be used for exercise from cash balance. Balance Check Amt Total check partcipant will use to complete a cash exercise (Use in the case of wired funds as well.) Share The amount of shares used from the account to complete a Amount stock for stock exercise. Shares The amount of shares used from outside accounts to Attested complete a stock for stock exercise. Use price Indicate a "Y"or "N"if the stock price entered in the model as limit will be used as the limit price for a real time trade. Indicate "N" for market order. Column Two Exercise The type of exercise will be spelled out fully. C = Cash, Type CLP = CASHLESS PARTIAL, CLF = CASHLESS FULL, SS = STOCK FOR STOCK Net Shares The shares that will be received by the participant. The following is tlie calculation: Options - Required Shares for Stock Swap - Share Withholding - Shares Sold = Net Shares Net Proceeds Any cash that will be received by the participant from a option exercise. The following is a calculation: [(Credit Balance + Check Amount) + Gross Proceeds + (Shares Required × Stock Price) + Gross SAR Proceeds] - [Reimbursement + (Total Tax - Taxes form Share Withholding - Taxes Deferred) + fees + Commissions + Residual SAR Proceeds] = Net Proceeds SAR Information displayed whenever a SAR or a Unit Option is Proceeds exercised with the net proceeds generated from a SAR exercise or Unit surrender. The following is a calculation: (Stock Price - Grant Price) × # of SAR's - SAR taxes = SAR Proceeds Required The minimum cash needed to complete a cash exercise. Cash Amount Required Calculation of the total shares required to do a stock for Shares stock exercise. The following is a calculation: [(number for SS of options × grant price)]/stock price = required shares Stock Sale Total proceeds generated by a stock sale on a exercise Proceeds.
The above-described arrangement is merely illustrative of the principles of the present invention. Modifications and adaptations thereto will be apparent to those skilled in the art upon perusing this specification, and such are intended to be within the scope and spirit of the present invention.