Types of plans our SESO service supports
Participants can exercise their options without funding the initial purchase upfront by selling all or a portion of available shares.
Participants can cover the taxes from a grant vesting by selling all or a portion of vested shares.
Stock Appreciation Rights (SARs)
Participants can sell stock-settled SARs and receive cash rather than stock.
How does SESO work?
Participant sends request for a cashless exercise to you
You notify us of the number of shares to be sold
We execute the sale order
We remit the option cost and any applicable withholding taxes to you
We remit net proceeds, less applicable fees, to the participant
Frequently Asked Questions
How can employees sell shares received from the exercise of their employee stock options?
For companies that choose to retain control of their stock plan administration, we offer the simultaneous exercise and sell options (SESO) program to provide you and your employees with an easy-to-use solution for selling shares received from the exercise of stock options. Once employees inform the designated company contact of their desire to perform a cashless exercise, the company contact simply notifies us of the number of shares that are to be sold. We then execute the sale order. On the settlement date (usually three business days after the trade date), we will remit the option cost and any applicable withholding taxes to the company, and will issue the remaining proceeds, less applicable fees, to the employees as per the company's instructions.
Which exercise methods are available with the SESO program?
Employees can choose either a cashless-for-cash exercise or a cashless-for-stock exercise. With these methods, no outlay of cash by the employee is required, and distributions to the employee can be made in either cash or stock. While not included in the SESO program, cash exercises and stock swaps that do not require the sale of stock can continue to be processed in the normal manner by your company.
Are employees required to open individual brokerage accounts?
We do not require your employees to have a brokerage relationship with us to participate in the SESO program.
Are employees able to place a limit order?
Yes. When requesting the sale of shares, the designated company contact simply specifies the number of shares to be sold and the limit price. The limit price may be set above or below the current market price and can be placed as a "day" or a "good-till-cancelled" order. We will call the designated company contact the same day that all or part of the limit order is filled.
What information does Computershare require for timely distribution?
We provide a standard template for clients to complete. The template requires the optionee's name and address, number of shares sold, sale price, option cost, applicable fees, any applicable withholding taxes, and net proceeds to be distributed to the optionee.
Can funds be wired?
As a standard business practice, we wire the option cost and any applicable withholding taxes to your company at no charge. Employees can request a wire of the net proceeds for a fee of $25 per wire transaction.
Does Computershare provide tax reporting for the SESO service?
Typically, our SESO program clients sign an exemption letter under IRS Revenue Procedure 2002-50, which exempts us from the mailing of Forms 1099-B to employees who have sold shares under the SESO program. The company is responsible for reporting the compensation income resulting from stock option exercises.
Will Computershare maintain records for the stock option plan under this arrangement?
Yes. Our OPTRACK software system can accommodate your needs and works with SESO. If a client needs more support, we offer full administration services including individual web-accessible accounts for your employees.
Can other types of equity compensation plans be administered under a similar arrangement?
In addition to providing SESO services for employee stock option plans, we offer a similar arrangement for shares vesting under restricted stock plans. Employees may find it beneficial to have the option of selling shares to cover any withholding taxes that may be due when restricted stock vests. We can also facilitate the sale of stock-settled SARs to allow employees to receive cash rather than stock.
Will I have a dedicated contact if questions or issues arise?
Your current relationship manager and/or a member of the executive services group will be able to answer your questions and resolve service issues.
Can Computershare support executive trades?
Our dedicated executive services group provides specialized services to assist executive officers in satisfying their trading-related compliance obligations. Services include assistance with the preparation and filing of Form 144 and the administration of Rule 10b5-1 sales plans. The executive services group will also quickly provide sale details to clients to assist them with the timely filing of SEC Form 4.