Johnson & Johnson and Fidelity Stock Plan Services. Providing Support for Your Long-Term Incentive Plan

Transcription

1 Johnson & Johnson and Fidelity Stock Plan Services Providing Support for Your Long-Term Incentive Plan

2 Agenda KEY DATES REVIEW YOUR PLAN BASICS Stock Options Restricted Share Units (RSUs) REVIEW YOUR CHECKLIST NETBENEFITS DEMONSTRATION RESOURCES HOW TO WORK WITH FIDELITY STOCK PLAN SERVICES

3 Key Dates Activity Last Date to Exercise Your 2008 Stock Options Time Frame February 9, 2018 at 4 p.m. ET Vesting of Your Restricted Share Units February 9, 2018 Distribution of Shares as a Result of Your Restricted Share Units Vesting Week of February 12, 2018 New LTI Award Grant February 12, 2018 New LTI Grant Viewable on Fidelity NetBenefits Week of March 5, 2018 Dividend Reinvestment Election Action needs to be taken prior to February 26, 2018 The dates show n in the chart above are based on the timing and accuracy of a variety of factors, including the transfer of data, receipt of instructions, and receipt of assets. Changes in any of these factors may result in changes to the dates and timing show n above, including the dates on w hich, and thus the prices at w hich, assets in your account are sold and/or reinvested.

4 Stock Options A stock option is the opportunity to purchase shares of your company s common stock at a set price (grant price) after a given period of time (vesting period) but before the expiration date. Vesting Period 10 Stock Options $100/Share Exercised at $142/Share Fair market value (FMV) at Sale Initial Cost = Profit $1,420 $1,000 = $420 This example excludes any applicable taxes, commissions, and fees. As with any type of equity compensation, be sure to consult your tax advisor regarding the income tax consequences to you.

5 Stock Option Tax Requirements Taxes Due When you exercise or sell shares, you may have taxable ordinary compensation income to report when you file your tax return, in addition to any capital gains or losses. Taxes Withheld Ordinary income taxes can be withheld when you exercise. Included are federal, state, local, and FICA taxes. Fidelity.com/JNJ-ResourceCenter

6 Restricted Share Units (RSUs) A RSU is a grant valued in terms of company stock, but company stock is not issued at the time of the grant. After the recipient of a RSU satisfies the vesting requirement, the company distributes shares equivalent to the number of shares used to value the RSU. 400 RSUs 3-Year Cliff Appreciation 5 years $93/RSUs $93 x 400 = $37,200 $142/Share $142 x 400 = $56,800 $150/Share $150 x 400 = $60,000 This example excludes any applicable taxes, commissions, and fees. As with any type of equity compensation, be sure to consult your tax advisor regarding the income tax consequences to you.

7 Restricted Share Unit Tax Requirements Taxes Due The fair market value of the shares will be taxed as ordinary income based on the average of the high/low price of the stock on the distribution date. Taxes Withheld Equivalent shares will be withheld to cover your taxes and the remaining net shares will be deposited in your Fidelity Account. Fidelity.com/JNJ-ResourceCenter

8 Net Shares Upon distribution, net shares will be used to cover your taxes* 400 shares distributed at $142 / Share Employee owes $22,720 in total taxes $22,720 / $142 = 160 shares Remaining 240 shares ( ) are deposited into the brokerage account As with any type of equity compensation, be sure to consult your tax advisor regarding the income tax consequences to you. *only applicable to U.S., Canada and Global Mobility populations.

9 Your Checklist Step One Set Up Your Fidelity Account Create a Fidelity username and password Activate your account Accept grant Set up dividend reinvestment

10 Your Checklist Step Two Make Getting and Managing Your Money Easier Set up Electronic Funds Transfer (EFT) Make your Fidelity account more convenient Download the Fidelity Mobile app Add account beneficiaries

11 NETBENEFITS DEMONSTRATION

12 Resource Center 1 Educational guides for your award(s) 2 Frequently asked questions Easy access to key terms, as well as how to contact Fidelity 3 Fidelity.com/JNJ-ResourceCenter Screenshot is for illustrative purposes only.

13 Other Resources Links to videos and step-by-step instructions VIDEOS AND STEP-BY-STEP INSTRUCTIONS How to activate your account How to accept your grant How to sell shares How to sell shares video How to withdraw proceeds How to exercise a stock option How to estimate and exercise a stock option video How to reinvest dividends Long-Term Incentive Plan education webinar recording

14 Fidelity Stock Plan Services Is Here to Help Download the Fidelity Mobile app Visit Fidelity on the Web Fidelity.com NetBenefits.com Fidelity.com/JNJ-ResourceCenter Review your account with a Fidelity Representative at (800) App Store is a service mark of Apple Inc. Google Play is a trademark of Google Inc.

15 Important Additional Information Investing involves risk, including risk of loss. Please note that tax information is general in nature and should not be considered tax or legal advice. Fidelity does not provide legal or tax advice. Consult an attorney or tax professional regarding any specific legal or tax situation. Recordkeeping and administrative services for your company s equity compensation plans are provided by your company and its service providers. Johnson & Johnson and Fidelity Stock Plan Services are not affiliated. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved