Execution-only service for your equity awards

United States > Business > Employee Equity Plans > Execution-only service for your equity awards

​Self-administering your corporate equity plans can save your company money, but it can put an undue burden on your employees. Without the ability to exercise stock options while simultaneously selling the underlying shares, employees have to fund the entire exercise cost and applicable taxes.

Our simultaneous exercise and sell options (SESO) prog​​​​ram is the solution.

SESO is an execution-only service for your equity awards that provides an easy method for selling shares received from the exercise of stock options, while leaving administrative control of the plans in your hands.

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 Types of plans our SESO service supports
  • Stock Options
    Participants can exercise their options without funding the initial purchase upfront by selling all or a portion of available shares.
  • Restricted Stock
    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?
  • Step 1
    Participant sends request for a cashless exercise to you
  • Step 2
    You notify us of the number of shares to be sold
  • Step 3
    We execute the sale order
  • Step 4
    We remit the option cost and any applicable withholding taxes to you
  • Step 5
    We remit net proceeds, less applicable fees, to the participant
  • Hidden

 Frequently Asked Questions

​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.

​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.

​We do not require your employees to have a brokerage relationship with us to participate in the SESO program.

​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.

​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.

​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.

​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.

​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.​

​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.

​Your current relationship manager and/or a member of the executive services group will be able to answer your questions and resolve service issues.

​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.

 

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