What activities can I perform in Option Navigator™?

Option Navigator™ provides your organization with the capabilities to:

• Derive the Assumptions for you valuation inputs
• Value your new option and restricted stock awards
• Generate your financial reporting requirements per FAS 123R such as Expense, Deferred Tax, and EPS Dilution reports

What software do I need in order to use Option Navigator™?

Option Navigator™ is a web-based application. You do not need to install any additional software in order to use Option Navigator™. You have access to new functionality and enhancements instantaneously as new releases are performed on a monthly and
quarterly basis.

Who do I contact with questions?

As a client of Option Navigator™, you have a dedicated Customer Relationship Manager who will assist you with any questions you have, as well as access to Consultants and the PhD staff if needed to ensure a smooth audit process.

Will my organization be able to generate reports by cost center?

Absolutely. Option Navigator™ enables your organization to not only group by one variable (such as cost center) but different user defined variables in addition to award type and plan name. As a result, you will have the flexibility to produce reports based upon any specific criteria that is relevant to your organization (business unit, geography, etc.).

How do I get my data into Option Navigator™?

As part of the initial implementation process, you will work with a dedicated Customer Relationship Manager who will help you format and validate your data and upload it into Option Navigator™ - this will cover your entire historical data. Going forward you are then able to easily prepare the required data files from your administration system and upload the information into Option Navigator™, a friendly user-interface guides you through any validation errors that are generated with your dedicated Customer Relationship Manager readily available to help you along the way. If your stock plan administrator is one of your partners, your Customer Relationship Manager will work with them to set up the automatic transmittal of your data and for the resolution of any data issues.

What are the security measures surrounding Option Navigator™?

Option Navigator™ pages are always accessed using SSL technology to guarantee secure data exchanges between your browser and our servers. Our servers are hosted in a secure facility that supports a fully redundant infrastructure in case of any hardware failovers. A SAS-70 Type II report is available upon your request.

Can I apply different tax rates for my employees in foreign countries?

Tax rates can be applied at a grant-level and would allow you to define a different tax rate schedule for different grants. The grant-specific tax rate schedules are not applied at the country level, but rather an the individual grant level and can be maintained over time, so that a different tax rate can be applied as employees move between different tax jurisdictions.

Can I use Option Navigator™ to calculate my implied volatility?

Yes, Option Navigator™ has a direct feed of the daily call option trades of various maturities and strike prices, and allows you to derive your current and historical implied volatilities easily. The implied volatility can then be averaged with a historical volatility to derive a blended rate if optimal.

When can I access Option Navigator™?

Option Navigator™ is available online all the time outside a weekly maintenance window to perform basic server maintenance (downtime is approximately 2-3 hours every week during non-business hours) and we perform new version releases on a monthly-quarterly basis. You can log in to Option Navigator™ and generate your reports any time of the day or night.

Does Option Navigator™ provide the required disclosures for my financial statements?

The A240 Disclosure reports provide the majority of the disclosure requirements as mandated by paragraph A240 of FAS 123R with additional information provided in the Expense, Deferred Tax, and EPS Dilution reports from which all disclosure requirements are met directly or through minor calculation. The summary A240 Disclosure report can be inserted directly into the footnotes without reformatting. Additional reports provide detail at the vesting tranche level.

I use an outside consultant to create my fair values, can I still use Option Navigator™ for financial reporting?

Absolutely, you can provide your fair values for each grant record as part of the initial implementation process and on an ongoing basis as you value your new option and restricted stock grants. The financial reporting module of Option Navigator™ only requires that a fair value is available for each grant record (or multiple fair values at the vesting record level) regardless of where that option value was derived.

Does it matter what stock administration system I use?

It does not. As a matter of fact, your use of Option Navigator™ is relatively independent of your administration system outside the data requirements for your historical option plan information and the ongoing activity information (exercises, cancels, etc.) as required for your monthly, quarterly, or annual reporting. For maximum ease, our strategic partners have built automated data feeds between their stock administration systems and Option Navigator™. Please see our Partner page for more information on our strategic partners.

I require a sophisticated lattice model to value my options, does Option Navigator™ support a valuation model other than Black-Scholes-Merton?

In addition to Black-Scholes-Merton, Option Navigator™ provides two lattice models: the Lattice Barrier Model and the Hull-White II Lattice Model (HW II). The HW II model is the most robust of the two, and was developed by Drs. John Hull and Alan White specifically for valuing employee stock options