Determining your 2017 stock plan tax requirements a step-by-step guide

Determining your 2017 stock plan tax requirements a step-by-step guide Alert: The tax-reform legislation adopted in December 2017 does not affect the 2017 tax year or the federal tax return for 2017 that you file in 2018. INSIDE How to use the Supplemental Form to avoid overpaying taxes Incentive Stock Option (ISO) plans can provide you with the benefit of favorable capital gains, but can be complicated with respect to tax. To determine your tax-reporting requirements, follow the steps outlined in this document. If you are unsure if your plan is an ISO, you can easily determine this by looking up your grant type on NetBenefits, under your Plan Summary page. 1

MASKED NAME Account Account No. XXX-XXXXXX No. X27-9579 Customer Customer Service: Service: XXX-XXX-XXXX 800-5-6666 Recipient Recipient ID No. XXX-XX-XXXX ID No. ***-**-86 Payer s Payer's Fed Fed ID Number: ID Number: XX-XXXXXXX 0-3523567 0 0 0 FORM 1099-B* Copy B for Recipient OMB No. XXXX-XXXX 2017 Proceeds from Broker and Barter Exchange Transactions Short-term transactions for which basis is reported to the IRS --report on Form 899 with Box A checked and/or Schedule D, Part I Proceeds are reported as gross proceeds unless otherwise indicated (a).(this Label is a Substitute for Boxes 2, 3, 5 & 6) (IRS Form 1099-B box numbers are shown below in bold type) 1a Description of property, Stock or Other Symbol, CUSIP Action Quantity 1b Date 1c Date Sold 1d Proceeds 1e Cost or 1f Accrued 1g Wash Sale Gain/Loss (-) Federal 1 State Acquired or Disposed Other Basis (b) Market Loss Income Tax 16 State Tax Discount Disallowed Withheld Withheld THETA CORP, TTT Sale 160.000 01/2/17 01/2/17 25,581.35 19,09.60(e) 6,171.75 Sale 103.000 01/27/17 01/27/17 16,919.38 12,9.93(e),2.5 Subtotals 2,500.73 31,90.53 MASKED NAME Account Account No. XXX-XXXXXX No. X27-9579Customer Service: Service: XXX-XXX-XXXX 800-5-6666 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TOTALS 2,500.73 31,90.53 0.00 0.00 0.00 Recipient Recipient ID No. XXX-XX-XXXX ID No. ***-**-86Payer s Payer's Fed Fed ID ID Number: Number: XX-XXXXXXX 0-3523567 Box A Short-Term Realized Gain 10,596.20 Note: This information is not reported to the IRS. It may assist you in tax return preparation. Box A Short-Term Realized Loss 0.00 0 For any transaction listed on Form 1099-B in a section indicating that "basis is reported to the IRS", we are reporting to the IRS: 1a Des long-term), 3 basis reported to IRS, 6 Gross or Net Proceeds, and Detail columns Information 1b, 1c, 1d, 1e, 1f, 1g,, 7, 1, 15 and 16. We are not totals. Based on the disposal method you have selected, the lots that appear on your 1099 Supplemental may differ from the lots on the 1099-B. For any section 1256 option contracts we are reporting to the IRS: Short-Term 1a Description Transactions of Property and totals for y transaction listed on Form 1099-B in a section indicating Description that "basis of is not Property, reporte Stock or Other Symbol, Cusip umns 1c, 1d,, 1, 15 and 16. We are not reporting to the IRS: Grant Quantity Date of Date Sold Proceeds Ordinary Income Adjusted Cost or Wash Sale Loss Adjusted Gain/Loss Type (w) Acquisition (x) or Disposed Reported (y) Other Basis (z) Disallowed THETA CORP, TTT QSOP 160.000 01/2/17 01/2/17 25,581.35 6,192.26 25,601.86 0.00-20.51 QSOP 103.000 01/27/17 01/27/17 16,919.38,.77 16,939.70 0.00-20.32 Totals 2,500.73 2,51.56 Short-Term Adjusted Realized Gain 0.00 Short-Term Adjusted Realized Loss -0.83 Wash Sale Loss Disallowed (w) Grant Type describes the equity award source of the lot you sold this tax year. Please see the Grant Type table for additional descriptio xxxxxx Grant Type Equity Award Type Acquisition date represents: DO Deposit Only Shares Deposit Date NQSOP Non Qualified Stock Option Shares Exercise Date Non Qualified ESPP Shares Purchase Date R) Exercise Department of the Treasury Internal Revenue Service Name(s) shown on return OMB No. 155-007 File with your Schedule D to list your transactions for lines 1b, 2, 3, 8b, 9, and 10 of Schedule D. Sequence No. 12A Social security number or taxpayer identification number Before you check Box A, B, or C below, see whether you received any Form(s) 1099-B or substitute statement(s) from your broker. A substitute statement will have the same information as Form 1099-B. Either will show whether your basis (usually your cost) was reported to the IRS by your broker and may even tell you which box to check. Part I Short-Term. Transactions involving capital assets you held 1 year or less are short term. For long-term transactions, see page 2. Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 899 (see instructions). You must check Box A, B, or C below. Check only one box. If more than one box applies for your short-term transactions, complete a separate Form 899, page 1, for each applicable box. If you have more short-term transactions than will fit on this page for one or more of the boxes, complete as many forms with the same box checked as you need. (A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS (see Note above) (B) Short-term transactions reported on Form(s) 1099-B showing basis wasn't reported to the IRS (C) Short-term transactions not reported to you on Form 1099-B Adjustment, if any, to gain or loss. 1 (e) If you enter an amount in column (g), (h) (c) (d) Cost or other basis. enter a code in column (f). Gain or (loss). (a) (b) Date sold or Proceeds See the Note below See the separate instructions. Subtract column (e) Description of property Date acquired disposed of (sales price) and see Column (e) from column (d) and (Example: 100 sh. XYZ Co.) (Mo., day, yr.) (Mo., day, yr.) (see instructions) in the separate (f) (g) combine the result instructions Code(s) from Amount of with column (g) instructions adjustment 2 Totals. Add the amounts in columns (d), (e), (g), and (h) (subtract negative amounts). Enter each total here and include on your Schedule D, line 1b (if Box A above is checked), line 2 (if Box B above is checked), or line 3 (if Box C above is checked) Note: If you checked Box A above but the basis reported to the IRS was incorrec adjustment in column (g) to correct the basis. See Column (g) in the separa ork Reduction Act Notice, see your tax retur SCHEDULE D OMB No. 155-007 (Form 100) Capital Gains and Losses Attach to Form 100 or Form 100NR. Department of the Treasury Go to www.irs.gov/scheduled for instructions and the latest information. Internal Revenue Service (99) Use Form 899 to list your transactions for lines 1b, 2, 3, 8b, 9, and 10. Sequence No. 12 Name(s) shown on return Your social security number Part I Short-Term Capital Gains and Losses Assets Held One Year or Less See instructions for how to figure the amounts to enter on the (g) (h) Gain or (loss) lines below. (d) (e) Adjustments Subtract column (e) Proceeds Cost to gain or loss from from column (d) and This form may be easier to complete if you round off cents to (sales price) (or other basis) Form(s) 899, Part I, combine the result with whole dollars. line 2, column (g) column (g) 1a Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 899, leave this line blank and go to line 1b. 1b Totals for all transactions reported on Form(s) 899 with Box A checked............. 2 Totals for all transactions reported on Form(s) 899 with Box B checked............. 3 Totals for all transactions reported on Form(s) 899 with Box C checked............. Short-term gain from Form 6252 and short-term gain or (loss) from Forms 68, 6781, and 882. 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1............................ 5 6 Short-term capital loss carryover. Enter the amount, if any, from line 8 of your Capital Loss Carryover Worksheet in the instructions....................... 6 ( ) 7 Net short-term capital gain or (loss). Combine lines 1a through 6 in column (h). If you have any longterm capital gains or losses, go to Part II below. Otherwise, go to Part III on the back..... 7 Part II Long-Term Capital Gains and Losses Assets Held More Than One Year See instructions for how to figure the amounts to enter on the (g) (h) Gain or (loss) lines below. (d) (e) Adjustments Subtract column (e) Proceeds Cost to gain or loss from from column (d) and This form may be easier to complete if you round off cents to (sales price) (or other basis) Form(s) 899, Part II, combine the result with whole dollars. line 2, column (g) 8a Totals for all long-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 899, leave this line blank and go to line 8b. 8b Totals for all transactions reported on Form(s) 899 with Box D checked............. 9 Totals for all transactions reported on Form(s) 899 with Box E checked............. 10 Totals for all transactions reported on Form(s) 899 with Box F checked.............. 11 Gain from Form 797, Part I; long-term gain from Forms 239 and 6252; and long-term gain or (loss) from Forms 68, 6781, and 882...................... 11 12 Net long-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 12 13 Capital gain distributions. See the instructions.................. 13 1 Long-term capital loss carryover. Enter the amount, if any, from line 13 of your Capital Loss Car Worksheet in the instructions.................. 15 Net long-term capital gain or (loss). Combine lines 8a through 1 in colum the back.................... For Paperwork Reduction Act Notice, see your tax return instruction column (g) Department of the Treasury Internal Revenue Service (99) U.S. Individual Income Tax Return 2016 OMB No. 155-007 IRS Use Only Do not write or staple in this space. For the year Jan. 1 Dec. 31, 2016, or other tax year beginning, 2016, ending, 20 See separate instructions. Your first name and initial Last name Your social security number If a joint return, spouse s first name and initial Last name Spouse s social security number Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Make sure the SSN(s) above and on line 6c are correct. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking Foreign country name Foreign province/state/county Foreign postal code a box below will not change your tax or refund. You Spouse 1 Single Head of household (with qualifying person). (See instructions.) If Filing Status 2 Married filing jointly (even if only one had income) the qualifying person is a child but not your dependent, enter this Check only one 3 Married filing separately. Enter spouse s SSN above child s name here. box. and full name here. 5 Qualifying widow(er) with dependent child 6a Yourself. If someone can claim you as a dependent, do not check box 6a..... Boxes checked Exemptions on 6a and 6b No. of children c Dependents: (2) Dependent s (3) Dependent s () if child under age 17 on 6c who: (1) First name Last name social security number relationship to you qualifying for child tax credit lived with you (see instructions) did not live with you due to divorce or separation If more than four (see instructions) dependents, see Dependents on 6c instructions and not entered above check here Add numbers on d Total number of exemptions claimed................. lines above 7 Wages, salaries, tips, etc. Attach Form(s) W-2............ 7 Income 8a Taxable interest. Attach Schedule B if required............ 8a b Tax-exempt interest. Do not include on line 8a... 8b Attach Form(s) 9 a Ordinary dividends. Attach Schedule B if required........... 9a W-2 here. Also attach Forms b Qualified dividends........... 9b W-2G and 10 Taxable refunds, credits, or offsets of state and local income taxes...... 10 1099-R if tax 11 Alimony received..................... 11 was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ.......... 12 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 13 If you did not 1 Other gains or (losses). Attach Form 797.............. 1 get a W-2, see instructions. 15 a IRA distributions. 15a b Taxable amount... 15b 16 a Pensions and annuities 16a b Taxable amount... 16b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 18 Farm income or (loss). Attach Schedule F.............. 18 19 Unemployment compensation................. 19 20 a Social security benefits 20a b Taxable amount... 20b 21 Other income. List type and amount 21 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income 22 23 Educator expenses........... 23 2 Certain business expenses of reservists, performing artists, and Form Adjusted Gross Income fee-basis government officials. Attach Form 2106 or 2106-EZ 2 25 Health savings account deduction. Attach Form 8889. 25 26 Moving expenses. Attach Form 3903...... 26 27 Deductible part of self-employment tax. Attach Schedule SE. 27 28 Self-employed SEP, SIMPLE, and qualified plans.. 28 29 Self-employed health insurance deduction.... 29 30 Penalty on early withdrawal of savings...... 30 31 a Alimony paid b Recipient s SSN 31a 32 IRA deduction............. 32 33 Student loan interest deduction........ 33 3 Tuition and fees. Attach Form 8917....... 3 35 Domestic production activities deduction. Attach Form 8903 35 36 Add lines 23 through 35................... 36 37 Subtract line 36 from line 22. This is your adjusted gross income..... 37 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 100 (2016) Incentive Stock Option Plan 1 Gather the following documents. FORM/DATA WHERE TO FIND IT WHO TO CALL Form W-2 This form will be provided by your company. Your company s payroll department IRS Form 100 (the full 100, not the 100EZ or the 100A), including Schedule D Capital Gains and Losses Forms are available online at www.irs.gov,* by calling 800.TAX.FORM (800.829.3676), or by visiting your local IRS office. Your local IRS office or your tax advisor IRS Form 899 This form is available online at www.irs.gov,* by calling 800.TAX.FORM (800.829.3676), or by visiting your local IRS office. Your local IRS office or your tax advisor Form 1099-B You can access the form online at Fidelity.com/taxforms at the end of January. In addition, a form will be mailed to you no later than mid-february, if applicable. A Fidelity Stock Plan Services Representative at the number provided on the statement 2017 Supplemental Information (Fidelity is providing you with additional information to supplement your 1099-B due to cost basis regulations that no longer permit brokers to include ordinary income.) You can access the form online at Fidelity.com/taxforms at the end of January. In addition, a form will be mailed to you no later than mid-february, if applicable. A Fidelity Stock Plan Services Representative at the number provided on the statement Participant uses these Fidelity forms Form 1099-B Form 899 Schedule D Form 100 2017 TAX REPORTING STATEMENT Form 899 Sales and Other Dispositions of Capital Assets Go to www.irs.gov/form899 for instructions and the latest information. 2017 Attachment 2017 Attachment 100 17 Supplemental Stock Plan Lot Detail 2017 SUPPLEMENTAL INFORMATION Form 1099-Supplemental to complete Rolls up into Rolls up into b Spouse........................ } * Fidelity is not involved in the preparation of the content supplied at the third-party unaffiliated website and does not guarantee or assume any responsibility for its content. 2

2 Report your ordinary income. Generally, you will owe ordinary income tax on shares sold that were acquired from the exercise of an ISO when your stock sale is considered a disqualifying disposition. Note that alternative minimum tax (AMT) may apply when you hold the ISO shares through the calendar year of exercise. You should consult a tax advisor regarding your personal tax situation. The income earned from the sale of shares acquired from your stock option plan may be taxable in full or in part as ordinary income and reported on your W-2 provided by your company. However, with ISOs, you have no tax withholding and no Social Security or Medicare tax. In addition, you may owe tax on any capital gains resulting from the sale of your stock from the exercise, which is explained in later steps. Example: IRS W-2 for ISO and Form 100 b Employer identification number (EIN) a Employee s social security number OMB No. 155-0008 Safe, accurate, FAST! Use Visit the IRS website at www.irs.gov/efile * 1 Wages, tips, other compensation 2 Federal income tax withheld c Employer s name, address, and ZIP code 3 Social security wages Social security tax withheld 5 Medicare wages and tips 6 Medicare tax withheld 7 Social security tips 8 Allocated tips d Control number 9 10 Dependent care benefits e Employee s first name and initial Last name Suff. 11 Nonqualified plans 12a See instructions for box 12 C 13 Statutory employee 1 Other f Employee s address and ZIP code 15 State Employer s state ID number 16 State wages, tips, etc. 17 State income tax 18 Local wages, tips, etc. 19 Local income tax 20 Locality name Retirement plan Third-party sick pay o d e 12b C o d e 12c C o d e 12d C o d e Your company may voluntarily report the ISO income in box 1. Wage and Tax Form W-2 Copy B To Be Filed With Employee s FEDERAL Tax Return. This information is being furnished to the Internal Revenue Service. 2017 Statement 2015 Department of the Treasury Internal Revenue Service The amount of ISO income is included in box 1. ISO income is included in boxes 16 and 18 if state and local tax withholding applies. * Fidelity is not involved in the preparation of the content supplied at the third-party unaffiliated website and does not guarantee or assume any responsibility for its content. ISOs have no tax withholding and no Social Security or Medicare tax. W-2 income is reported on line 7 of Form 100. 3

3 Assemble information on the purchase and sale of your stock. You will need to refer to two documents this year. Your Fidelity Brokerage 1099-B Tax-Reporting Statement and your 2017 Supplemental Information Form. The Supplemental Form may contain information that is not reported on your 1099-B due to cost basis regulations. If the amounts on these two forms differ, you ll need to use information from both to complete your tax forms to ensure that you don t overpay in taxes. Example: Fidelity Brokerage 1099-B Tax-Reporting Statement 1 2 3 5 6 7 FORM 1099-B* 2017 Proceeds from Broker and Barter Exchange Transactions Short-term transactions for which basis is reported to the IRS --report on Form 899 with Box A checked and/or Schedule D, Part I Proceeds are reported as gross proceeds unless otherwise indicated (a).(this Label is a Substitute for Boxes 2, 3, 5 & 6) 1a Description of property, Stock or Other Symbol, CUSIP Action Quantity 1b Date Acquired 1c Date Sold or Disposed (IRS Form 1099-B box numbers are shown below in bold type) 1d Proceeds 1e Cost or Other Basis (b) 1f Accrued Market Discount 1g Wash Sale Loss Disallowed Copy B for Recipient OMB No. XXXX-XXXX Gain/Loss (-) Federal Income Tax Withheld 1 State 16 State Tax Withheld THETA CORP, TTT Sale 160.000 01/2/17 01/2/17 25,581.35 19,09.60(e) 6,171.75 Sale 103.000 01/27/17 01/27/17 16,919.38 12,9.93(e),2.5 Subtotals 2,500.73 31,90.53 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TOTALS 2,500.73 31,90.53 0.00 0.00 0.00 Box A Short-Term Realized Gain 10,596.20 Box A Short-Term Realized Loss 0.00 For any transaction listed on Form 1099-B in a section indicating that "basis is reported to the IRS", we are reporting to the IRS: 1a Description of Property, 2 type of gain or loss (i.e. short-term or long-term), * This is important 3 basis reported tax information to IRS, 6 Gross and is or being Net Proceeds, furnished and to the columns Internal 1b, Revenue 1c, 1d, 1e, Service. 1f, 1g, If, you 7, 1, are 15 required and 16. to We file are a return, not reporting a negligence to the IRS: penalty the Action, or other the sanction Gain/Loss, may and be all imposed subtotals on and you totals. if this income is taxable and the IRS determines that it has not been reported. 1 2 3 CUSIP (your company s ticker/ trading symbol) Quantity (number of shares sold) Date Acquired (date you exercised the grant) Date Sold or Disposed 5 Proceeds (gross proceeds from stock sale) 6 7 Cost or Other Basis (this is provided to the IRS, as directed, and may need to be adjusted see the Supplemental Form) Gain/Loss (from the proceeds of the sale and may also need to be adjusted see the Supplemental Form) Continues

3 Assemble information on the purchase and sale of your stock. Example: 2017 Supplemental Information Form 2017 SUPPLEMENTAL INFORMATION MASKED NAME Account Account No. XXX-XXXXXX No. X27-9579Customer Service: Service: XXX-XXX-XXXX 800-5-6666 Recipient Recipient ID No. XXX-XX-XXXX ID No. ***-**-86Payer s Payer's Fed Fed ID ID Number: Number: XX-XXXXXXX 0-3523567 Note: This information is not reported to the IRS. It may assist you in tax return preparation. 8 Detail Information Supplemental Stock Plan Lot Detail Based on the disposal method you have selected, the lots that appear on your 1099 Supplemental may differ from the lots on the 1099-B. Short-Term Transactions Description of Property, Stock or Other Symbol, Cusip Grant Type (w) Quantity Date of Acquisition (x) Date Sold or Disposed Proceeds Ordinary Income Reported (y) 0 9 10 Adjusted Cost or Other Basis (z) Wash Sale Loss Disallowed Adjusted Gain/Loss THETA CORP, TTT QSOP 160.000 01/2/17 01/2/17 25,581.35 6,192.26 25,601.86 0.00-20.51 QSOP 103.000 01/27/17 01/27/17 16,919.38,.77 16,939.70 0.00-20.32 Totals 2,500.73 2,51.56 Short-Term Adjusted Realized Gain 0.00 Short-Term Adjusted Realized Loss -0.83 Wash Sale Loss Disallowed 0.00 8 Ordinary Income Reported (cross-reference this with your company W-2 and input in column (g) of Form 899) 9 10 Adjusted Cost Basis (this amount is used to recalculate your gain/loss, and is equal to the ordinary income plus the cost basis on your 1099-B) Adjusted Gain/Loss (recalculated per your new basis; proceeds minus your adjusted cost basis this amount goes in column (h) of Form 899) 5

Use the forms to calculate your capital gains and/or losses on IRS Form 899 and Schedule D. Even though the ordinary income may be reported on your W-2, you still need to report the sale of the stock on Form 899 and carry over the amounts to Schedule D.* In preparation for completing these forms, consider the following: 1. How long did you hold the shares before you sold them? This determines which section of Form 899 to complete. Your holding period begins on the day after you exercised your option. Form 899 is divided into two parts. Determine which section you will need to complete: Part I is for short-term capital gains or losses. Short term is defined as selling the stock less than one year from the date you acquired it. Part II is for long-term capital gains and losses. Long term is defined as holding the stock for more than one year from the date you acquired it. 2. Does the cost basis on your 1099-B match the amount on your Supplemental Form? If it doesn t, you may need to make an adjustment on Form 899. This is because you may have already paid tax on your ordinary income (as reported on your W-2) and you don t want to pay taxes twice. *State and local taxes may also apply and the rules governing such taxes may vary from federal income tax rules. Please consult your tax advisor. 6 Continues

Use the forms to calculate your capital gains and/or losses on IRS Form 899. Example: ISO exercise and subsequent sale within one year as a disqualifying disposition (short term) To complete Form 899 and Schedule D, you need to know: Which shares you sold from which grant When you acquired those shares (i.e., the exercise date) The fair market value of the stock at exercise The date of sale The sale price and whether it is net of commission Your cost basis Amount of ordinary income (from the Supplemental Form) 7 Continues

Use the forms to calculate your capital gains and/or losses on IRS Form 899. Example: ISO exercise and subsequent sale after one year as a disqualifying disposition (long term) To complete Form 899 and Schedule D, you need to know: Which shares you sold from which grant When you acquired those shares (i.e., the exercise date) The fair market value of the stock at exercise The date of sale The sale price and whether it is net of commission Your cost basis Amount of ordinary income (from the Supplemental Form) 8 Continues

Use the forms to calculate your capital gains and/or losses on IRS Form 899. Example: ISO exercise and subsequent sale after one year as a qualifying disposition (long term) To complete Form 899 and Schedule D, you need to know: Which shares you sold from which grant When you acquired those shares (i.e., the exercise date) The fair market value of the stock at exercise The date of sale The sale price and whether it is net of commission Your cost basis Amount of ordinary income (from the Supplemental Form) 9

5 Use IRS Form 899 to calculate your capital gains and/or losses on Schedule D. Gain or loss from the sale of the stock should be reflected on Form 899 and Schedule D. How this is reflected depends on whether the sale is short term (less than one year from the date the stock was acquired to the date it was sold) or long term (more than one year from the date acquired to the date it was sold). Example: Short-Term Gains or Losses Example: Long-Term Gains or Losses 10

Frequently Asked Questions Q: Does the tax-reform legislation adopted in December 2017 affect my 2017 taxes? A: No. The tax-reform legislation adopted in December 2017 does not affect the 2017 tax year or the federal tax return for 2017 that you file in 2018. Q: How do the tax implications of an ISO differ from those of a nonqualified stock option (NSO)? A: An ISO can potentially receive beneficial tax treatment. You will not be subject to tax at the time of exercise of an ISO (although the difference between the fair market value of the stock at exercise and the amount you paid for the stock will be treated as taxable income for alternative minimum tax purposes when you hold the shares through the calendar year of the exercise). When you sell shares acquired by exercise of an ISO, your gain (or loss) will be treated as a capital gain (or loss), provided the shares are held for more than one year from the exercise date and two years from the grant date. When shares are not held long enough, the amount of ordinary income depends on the sale price relative to the market price on the exercise date. If ISO shares exercised are held for the entire holding period, then the entire amount of any gain (or loss) over the exercise price will be treated as a capital gain upon the subsequent sale of those shares (generally, a long-term capital gain, given the holding period requirement for ISOs), and taxed at the favorable rates applicable to capital gains, rather than as ordinary income.* In contrast, when you exercise an NSO, the difference between the fair market value of the stock at the time of exercise and your exercise cost will be treated as ordinary compensation income, and your employer will generally be required to withhold taxes at the time of your exercise. Upon your sale of the stock (whether at the time of exercise or some later date), your gain or loss (the sale proceeds minus your adjusted basis in the stock) will be subject to tax as a capital gain (or loss). Q: What is alternative minimum tax or AMT? A: Congress created the AMT as an alternative form of federal income taxation to ensure that wealthy individuals and corporate taxpayers pay a fair share of federal income taxes. Its reach, however, now sometimes extends beyond the wealthy. The AMT is a tax system that works in parallel with the regular federal income tax system while some taxpayers use the regular system, others must use the AMT system. The AMT has its own set of forms, rates, rules, and brackets. It requires taxpayers to calculate their federal income tax using both systems and then pay the higher amount. *Please see a tax advisor as to your specific tax amounts due. 11 Continues

Frequently Asked Questions Exercising ISOs that are deep in the money (on which gain at exercise is usually deferrable and taxed as capital gain income at the time of sale) can potentially subject an individual to AMT. Once you have triggered the AMT for your ISO exercise, you will have an AMT credit and will also need to follow special reporting rules when you sell the ISO stock. You will want to discuss this with a qualified tax advisor to see if this applies to you. Q: What is a qualified disposition and disqualified disposition, with respect to an ISO? A: Your ISO plan qualifies for special tax treatment if you hold your shares for a certain period of time. Qualified Disposition: Favorable tax treatment is received when two time periods are met. First, shares you acquired must be sold more than two years from the grant date. Second, the sale should occur more than one year after the exercise date of the option. Disqualified Disposition: This occurs when you sell the shares acquired within the first two years of the grant date or less than one year from the exercise date. When did you exercise your options and when did you sell those shares? Disqualified Disposition Qualified Disposition Grant Date Year 1 Year 2 Year 3 Purchase Date Sold 1/1/2015 2/3/2016 1/2/2017 For Example: Grant date: 1/1/2015 Date you exercised your options: 2/3/2016 Date you sold these shares: 1/2/2017 You have a disqualified disposition because even though you sold two years after the grant date, it {was not yet a year after the exercise date. If you are unsure of the grant date, check the NetBenefits website for your grant details. 12 Continues

Frequently Asked Questions Q: Why do my tax forms show a capital loss from my exercise? A: Generally speaking, a loss on a 1099-B and 899 is usually a result of any market-related loss on the stock sale and/or any commissions and fees charged. Q: What is a wash sale? A: A wash sale occurs when you sell shares at a loss and buy additional shares of the same security within a 61-day period, beginning 30 days before the sale and ending 30 days after the sale, including the date of the sale. If the sale results in a wash sale, generally, you will not be able to deduct the resulting loss. Instead, the loss and the holding period will be carried over to increase the basis of the new shares. Sales of stock received in an ISO exercise raise additional issues under the wash sale rules when the sale price is above the exercise price but below the market price at exercise. For assistance with completing your tax return, please consult your tax advisor. Q: Will I owe other taxes beyond federal tax when I sell my stock? A: State and local taxes may also apply, and the rules governing such taxes may vary from federal income tax rules. Please consult your tax advisor for more information. Go back to the Fidelity SPS Resource Center If you have any questions, a Fidelity Stock Plan Services Representative can help. Call 800.5.935. Tax laws are complex and subject to change. State and local taxes may also apply, and the rules governing such taxes may vary from federal income tax rules. Your actual income tax consequences depend on your individual circumstances. Therefore, you should always consult a qualified tax advisor regarding your particular tax situation. Fidelity Brokerage Services LLC, Member NYSE, SIPC Fidelity Stock Plan Services, LLC 2018 FMR LLC. All rights reserved. 71099.5.0 03/3129 SOP-ISO-TAX-PDF-0118