Stock Plan Services FAQs: ESPP

ESPP stands for employee stock purchase plan, which is a type of plan that provides you with a convenient way to buy your company's shares. If you decide to enroll, you choose a recurring amount to be deducted from your paycheck. Your accumulated deductions will be used to purchase shares on a predetermined schedule.

An ESPP lets you choose the amount you want to contribute from each paycheck. Depending on your plan, this can be a percentage of your paycheck or a dollar amount. Each pay period, your company deducts this amount (after taxes) and holds on to it until it's time to purchase your shares. On the designated purchase date, your company uses that money to purchase company shares for you.

Before you enroll, consider how much you can afford to have deducted from your paycheck.

• An ESPP can be a convenient way to save for the future and potentially create extra cash.
• An ESPP can make saving easy and painless, since there are regular contributions coming from your paycheck. This helps remove the temptation to spend the money.
• An ESPP offers more than the ease of routine savings—it can give you another way to participate in your company's potential success.

Your company may offer a lookback provision, which calculates the price you pay for each share based on the share price on the first or last business day of the offering period, whichever is lower. Being able to buy shares at the lower price makes the lookback an attractive incentive.

Example 1—Share price increase: Your company's shares are trading at $10 per share at the beginning of the offering period, but at $15 per share on the purchase date. With the lookback provision, you get to buy shares at the lower of these two prices, which in this example is $10 per share.

Example 2—Share price decrease: Your company's shares were trading at $20 per share at the beginning of the offering period but fell to $15 per share on the purchase date. In this instance, the lookback feature does not apply, and you buy shares at the purchase date price, which in this example is $15 per share.

If you're eligible to enroll and the enrollment window is open, you'll see Enroll next to your ESPP when you log in to Fidelity NetBenefitsLog In Required. You'll be prompted to open an account if you don't already have one. This account is where your purchased shares will be deposited. To finish enrolling, simply choose an amount to contribute and then review and agree to the terms.

For help enrolling in your ESPP, please review the ESPP quick-start guide (PDF).

It's your chance to participate in the ESPP or make changes. During this period, which is predetermined by your company, you will be able to enroll and select how much you want to contribute from your paycheck.

During the offering period, your company collects after-tax payroll deductions and holds the money until it's time to purchase shares. The number of offering periods during the year depends on your company plan, but it's most commonly on a quarterly or semiannual basis.

This is a company-determined date after the offering period when your company uses the money you have contributed to buy your company' shares.

Your shares will be deposited as soon as administratively feasible following the purchase date. You will receive a notification from Fidelity once your shares are in your account.

Once the purchase is completed, shares will be deposited into your account. Log in to Fidelity NetBenefitsLog In Required to view your shares.

If your plan has a holding requirement, this is the minimum amount of time that you must hold your ESPP shares before they can be sold. The details of the holding period, if applicable, will be described in the plan documents.

If you need assistance, please call Fidelity. Visit Fidelity.com/globalcall for phone numbers and dialing instructions.