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Technology Stocks : Dell Technologies Inc.
DELL 128.43+0.6%Dec 24 12:59 PM EST
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To: jbn3 who wrote (21509)11/13/1997 10:20:00 PM
From: Meathead  Read Replies (1) of 176387
 
Dell has an employee stock purchase plan (ESPP) where employees
can use up to 15% of their salary to purchase shares at a 15% discount. It works like this:

There are two periods a year. The first period is January 1st
thru June 30th and July 1st thru Dec 31st.

Say an employee makes 50k/yr and signs up for the first period. He/she will have $3750 (25k(6mos salary) x 15%) deducted
from their paycheck spread out over the 6mo period.

Here's the beauty of the plan. The employee gets to purchase
the stock at 85% of the lower of: it's price on Jan 1 or
June 30. The number of shares the employee is entitled
to is limited to $3750/(85% of the stock price on Jan1).
Therefore if the stock is lower on June 30th the employee
will get x number of shares plus a cash refund for the
difference.

Example:

Jan1 share price: $80
85% purchase price: $68
Employee contribution: $3750
Share entitlement: 55 shares

Jun30 share price: $50
85% purchase price: $42.50
Diff between prices: $25.50
Employee recieves: 55 shares plus...
...a refund of $25.50 x 55shares equaling $1402.

If the share price is higher at the end (which it usually is),
the benifits are obvious. Everyone I know who works there max's
out to %15 percent of their salary each period because you can't loose! Hope this wasn't too confusing.

MEATHEAD
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