Fees Reduced for the Cashless Hold Option Exercise Method

BNY Mellon has agreed to reduce the fees charged for exercising options using the cashless hold method. BNY Mellon is no longer charging the broker fee of $0.05 per share for the shares sold to the Company to cover the option exercise cost and fees.

Please note: The transaction fee for each option exercise still remains at $20 per option transaction submitted online or via Interactive Voice Response, and $40 per option transaction assisted by a customer service representative.

The cashless hold method is where shares are sold to cover the option exercise cost, the transaction fee and the broker fees. With the elimination of the $0.05 per share broker fee, the cashless hold method now has additional advantages over the stock swap method. The cashless hold method can be used by optionees who do not have enough shares to utilize the stock swap method to exercise their options.

Now that the broker fee is waived, the cashless hold exercise method nets virtually the same number of shares as the stock swap method without your having to send a check for fees or submit any forms, such as the attestation form. Although you do not have to send any funds or forms, you must still submit your option exercise request to BNY Mellon online or by telephone. Once you complete your submission, the option exercise is processed automatically the following business day.

Cashless Hold Option Exercise Time Constraints

There are critical time constraints that optionees must be aware of if they choose the cashless hold option exercise method.

• An option exercise using the cashless hold method can be submitted between the hours of 12:01 a.m. and 4 p.m. ET, Monday through Friday, and anytime Saturday or Sunday. In the case of an early closing of the New York Stock Exchange, this window will be reduced from 12:01 a.m. until that day's market closing time.
• Once submitted, the cashless hold exercise is processed the following business day after submission. Therefore, you must use the following deadlines when submitting an exercise close to the date your option expires:
  • If your option expires on a business day, you must submit your exercise online or by telephone no later than 4 p.m. ET on the prior business day.
  • If your option expires on a weekend, you must submit your exercise online or by telephone no later than 4 p.m. ET on the Thursday prior to that weekend.
• Since the cashless hold exercise is not processed until the following business day after submission, an option cannot be exercised timely on its expiration date using the cashless hold method.

For questions, please call SAIC Stock Programs or BNY Mellon.

Related Information

• Option Exercise Methods
• How to Exercise an Option