Internet-based employee stock option planner

An Internet-based Comparison Modeling Tool for providing an individual who is an employee or consultant of a company and has been awarded stock options the ability to analyze whether to exercise a vested stock option quickly or at another “as of” date at or before the end of the term, with the proceeds being used to find an alternative investment vehicle, or whether to wait until at or close to the end of the term of an option grant to exercise that option, comprising the steps of:

• storing in a server coupled to the Internet information about the individual's stock option plan relative to a company stock, including for each grant the exercise price, the present stock price, vesting schedule, and term of the option grant;
• inputting at the server a projected annual percentage increase in the company stock price based on the company's past performance, estimated future performance, or other number the individual enters in as the projected company stock price and a projected annual percentage increase in an alternative investment value;
• inputting tax information relative to the individual at the server;
• calculating at the server overall gain based on the stored and inputted information including taking into account the selected “as of” exercise dates, the projected annual percentage increase for the company stock price and the inputted projected annual increase in value for the alternative investment for the two cases of (1) exercising a vested stock option within the stock option term, setting a first “as of” date at or close to the present date and (2) waiting to exercise the vested stock option at a second “as of” date at or closer to the end of the term of the stock option, the calculating step including:
• (a) calculating the gain for the alternative investment based on a stock option exercise at the first “as of” date and using the proceeds from the exercised grant to fund the alternative investment, the gain being calculated by taking the after-tax gain from exercising the stock option at the first “as of” date, calculating the growth in net proceeds for the alternative investment using the projected increase in the alternative investment, and then calculating the net gain in the alternative investment by subtracting the tax basis in that investment and the capital gains tax on the proceeds from the sale, thus to determine the net gain for the alternative investment from the first “as of” date to the second “as of” date, and
• (b) calculating the gain that results from waiting to exercise the stock option grant at the second “as of” date, including calculating the value of the stock option based on the projected annual increase in the company stock price at the second “as of” date, subtracting from this value the exercise cost of the stock option and then the taxes to determine the net gain from exercising at the second “as of” date;
• comparing the two gains by grant to arrive at the greater of the gains;
• and,
• displaying the result of the comparison step, thus to permit maximizing of the individual's gain, whereby the individual is given information as to whether to immediately exercise an option grant or to exercise the option grant closer to the end of the term of the stock option.