Deciding when to exercise your vested stock options is your choice. You are not required to exercise your options as soon as they vest.
Some issues to consider before exercising:
Vesting and Expiration Date. You never want stock options that are "in the money" to expire unexercised — it's like throwing money away.
Taxes. We strongly advise that you consult your tax advisor before exercising your stock options to understand the tax implications.
Stock Price. Although we would all like to exercise when the stock price is at its highest, no one can predict when that will be. Still, it's a good idea to keep an eye on the stock price, particularly as your options get closer to their expiration date.
Life Needs. Your financial and life goals will help you decide when to begin planning to exercise your stock options. Remember, these options are long-term instruments and as long as you remain an active Wells Fargo team member, you may exercise your option until it expires. On the other hand, exercising grants earlier on with the reload feature may give you the opportunity of future appreciation.
How to Exercise Only you can decide how to exercise your stock options. Before deciding, please read your grant materials, including the Prospectus, carefully. If you are an active team member and you do not exercise before the expiration date, you forfeit your option. Your option may terminate before the expiration date if your employment with Wells Fargo ends. We recommend that you consult with your tax advisor before deciding to exercise stock options. The following ways to exercise your LTICP stock options are available on Stock Options Management by signing on with your LAN username and password.
Same-Day Sale (Cashless). Buy and sell shares on the same day; end up with money net of exercise price, tax withholding, and fees.
Buy and Hold (Cash). Buy shares by delivering the exercise price and any tax withholding in cash; end up with Wells Fargo stock.
Sell-to-Cover. Buy and sell enough shares to cover the exercise price and any tax withholding in cash; end up with Wells Fargo stock.
Stock Swap. Buy shares by swapping in Wells Fargo stock to cover the exercise price, deliver any tax withholding in cash or by share withholding; end up with Wells Fargo stock and reload, if applicable.
