In the case of option-based plans, there are multiple types of transactions to choose from within Shareworks. The most common ones are outlined below.
Exercise available options and sell all shares on the exchange ‒ an optionee can take the options, convert them to stock, and sell all the stock immediately. Shareworks facilitates a cashless exercise where optionees convert their options to stock without having to provide personal funds. Payment to the company is made from the proceeds received from the settlement of the sale.
Exercise available options, sell just enough shares to pay for the options, and hold the remaining shares in the account ‒ an optionee can convert their options to stock, sell a portion of the stock, and hold the remainder of the shares in the account to sell at a later date. Shareworks facilitates a cashless exercise, where optionees sell the necessary number of shares without having to provide personal funds. The optionee will then be provided with the remaining shares. This exercise type may also allow optionees to sell additional shares above the necessary amount, so that both cash and share proceeds are received (if permitted by the plan).
Exercise available options and hold the stock ‒ an optionee can convert the options to stock and then hold the stock in their account. This is known as a cash exercise, where optionees must provide payment for the stock. Shareworks (or the Company) must receive a payment from the optionee within the number of business days stated in the exercise direction letter to cover the cost of the exercise. When the funds are received, Shareworks (or the company) will remove the hold, proceed with the exercise, and deliver the shares to the optionee.
Exercise of cash-settled SARs (stock appreciation rights) for cash ‒ participants can exercise some or all of their vested rights, but unlike a stock option plan, participants do not have to pay the company to acquire the underlying securities. Upon exercise, participants will receive a cash payment through the company's payroll system for the appreciation in the value of the underlying securities (i.e., the plan’s prescribed market value for the stock less the grant price).
Exercise of stock-settled SARs (stock appreciation rights) and hold the remaining shares ‒ participants can exercise some or all of their vested rights, but unlike a stock option plan, participants do not have to pay the company to acquire the underlying securities. Upon exercise, sufficient shares will be withheld to cover the cost of the options and the necessary number of shares will be sold to cover the transaction fees and any applicable taxes. Once finalized, the optionee will receive the net shares.
Employee share purchase plan
When you participate in an employee share purchase plan or other form of share purchase plan, you can complete the following types of transactions.
Sell shares ‒ participants can sell the shares that they are entitled to in accordance with the rules outlined in their company's plan. Sales can be completed using Shareworks' 5-step transaction process.
Withdraw or transfer shares ‒ a participant can withdraw or transfer the shares that they are entitled to in accordance with the rules outlined in their company's plan. Withdrawals and transfers can be completed using Shareworks' 5-step transaction process.
NOTE: Specific plan rules and Shareworks functionality varies. The terminology used to describe the different transaction methods may vary slightly within each plan. Please review your plan terms and conditions to determine if these types of requests are allowed.