Questions On Employee Stock Options Essay

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TO: Harris Enterprise Employees FROM: Natalie Harris, Human Resource Director DATE: July 2, 2015 SUBJECT: Employee Stock Options Offered Harris Enterprise is announcing that employee stock purchases will be extended to current full time employees starting July 2, 2015. You may purchase these exclusive benefits at competitive market value which will includes a specialized employee discount. Employee stock options have been created as a compensation plans benefitting companies, stockholders, and employees. There are a few important pieces of information all employees should know: 1. What are employee stock options? 2. Who qualifies to purchase stock options? 3. How do you utilize payroll deductions to purchase employee stock options? 4. What happens if you leave the Harris Enterprise? What Is a Stock Option? All employees have the right to know what a stock option entails. Employee stock options are contracts giving employees the right to buy the company’s common stock at a specified exercise price after a specified vesting period. The price at which the option is provided is usually the market price at the time the options are purchased. Employees who have purchased stock options predict that the share price will go up and that they will be to turn a profit by purchasing the stock at the lower grant price and then selling the stock at the current market price. There are two principal kinds of stock option programs, each has specific rules and tax consequences: qualified

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