Employee Stock Options Programs (ESOPs)

PRLog (Press Release) – Feb 05, 2008 – An employee stock option is a call option on the common stock of a company, issued as a form of non-cash compensation. Restrictions on the option (such as vesting and limited transferability) attempt to align the holder's interest with those of the business' shareholders. If the company's stock rises, holders of options experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company's stock price.

Employee stock options are mostly offered to management as part of their executive compensation package. They are also offered to lower staff, especially by businesses that are not yet profitable. They can also be offered to non-employees: suppliers, consultants, lawyers and promoters, and to members of the company's board of directors for services rendered.


An employee stock options programs can be used to help employees take advantage of their stock option program by advancing the amount needed to convert their options into stock and then sending them the proceeds of the ensuing employee stock option.

By rolling their options into employee stock option loans immediately, there’s no advance exercise cost (no out-of-pocket expense) and the participant maximizes his leverage in the equity. As always, exercising the option also gives the issuer a cash infusion which, if managed correctly, can enhance the value of the underlying collateral - the stock.


Behind the Numbers:

Example:

* John Shareholder owns 100,000 stock options exercisable @ $1 per share. The stock trades at $3/share. John wants to exercise but doesn't have $100,000 readily available.

* A DFS Worldwide, LLC. funder facilitates an advance to cover the $100,000, and a
loan against the $300,000 portfolio that results - all at once.

* At a 90% advance rate, the loan would be $270,000, minus the $100,000 we
advanced.

Therefore, John receives $170,000 (the cash difference) and the loan now leverages the
full 100,000 share position for him (he participates in upside growth) – all without writing a check.


What are the eligibility requirements?
Price times average volume should equal at least $100,000