Introducing… The Friedman Billings Ramsey Group Inc Employee Stock Purchase Plan For First NLC 2005 Employee Stock Purchase Plan by brz27029

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									            Introducing…
The Friedman, Billings, Ramsey Group, Inc.

  Employee Stock Purchase Plan
             For First NLC



              2005
         Employee Stock Purchase Plan
                                            Agenda

       1.   Purpose of the ESPP                   8. Gains on ESPP
       2.   How the Plan Works                    9. Pricing Information
       3.   Definition of Terms                   10. Example of Purchase
       4.   General Information                   11. Taxation
       5.   Direct Deposit Program                12. Comparison of
       6.   Contributions                             ESPP & 401k
       7.   Insider Trading Policy                13. Important Dates
                                                  14. How to Enroll



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                             Purposes of the ESPP

       • Provides you with the opportunity to acquire
         Friedman, Billings, Ramsey Group, Inc. stock
         through payroll deductions.

       • Provides opportunity to share in the future of
         the Company.




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                              How the Plan Works

       • Accumulated deductions from your pay are
         used to buy stock at a 15% discount every 6
         months.

       • You elect the rate of contribution:
                  Any whole percentage from 1% to 15%.
                  Applies to base salary, commissions, and
                  bonuses.


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                               Definition of Terms

       • Eligible Employee: Must be…
                  Regularly scheduled to work at least 20 hours
                  per week and at least 5 months per calendar
                  year.

       • Employee Stock Purchase Plan: A stock benefit
         plan qualified under Section 423 of the IRS Code.
            Participation in the Plan is voluntary.


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                                    More Definitions

       • Fair Market Value (“FMV”): The closing price
           of Friedman, Billings, Ramsey Group, Inc. stock
           on the New York Stock Exchange on the trading
           day immediately preceding the date of
           determination.
       • Offer Date: The first date of the Offering Period.
                  Determines the highest possible price at which
                  you will buy your shares during an Offering
                  Period.

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                                    More Definitions

       • Offering Period: Six month period.
                  Offering Periods will start on January 1 and
                  July 1 of each year.

       • Purchase Date: Last date of the six-month period
           at end of which stock is purchased. Purchases
           occur on the last business day of June and
           December of every year.


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                              General Information

       • Only whole shares can be purchased. Any
         funds insufficient to buy a whole share will be
         credited to your account for the next Offering
         Period.

       • If your employment is terminated during an
         Offering Period, all deductions will be refunded
         to you.


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                              General Information

       • IRS Mandatory $25,000 limitation on the value
         of shares purchased per calendar year, based
         on FMV at Grant Date.

       • All Friedman, Billings, Ramsey Group, Inc.
         employees are subject to the Insider Trading
         Policy and must receive clearance from the
         Compliance Group before trading FBR stock.
         Procedures to follow.

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                           Direct Deposit Program

       • You must establish a brokerage account
         with Fidelity Investments before the end
         of the offering period.

       • Your ESPP shares will be directly
         deposited in your account after each
         purchase.

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                                      Contributions

       • Enroll once.
                  Enrollment form will remain effective from
                  Offering Period to Offering Period, until you
                  stop deductions, you are no longer eligible, or
                  the Plan is discontinued.

       • You may change your contribution rate by
         submitting an enrollment card no later than the
         15th day of the month.

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                                      Contributions

       • No more than two increases and two decreases
         may be made during an Offering Period.

       • You may discontinue payroll deductions and
         withdraw from the Plan at any point during the
         Purchase Period until 15 days prior to the
         Purchase Date.



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                                      Contributions

       • If you discontinue deductions, the money
         previously contributed as of that date will
         be used to purchase stock at the end of the
         Purchase Period.

       • If money is withdrawn, you can re-enroll
         only at the beginning of the next Offering
         Period.

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                                     Gains on ESPP



       • 15% gain on contributions

       • Possible gain of more than 15%




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                              Example of Purchase

       *For illustration purposes only. Actual prices may vary.

       Offering Period:           7/1/2005 – 12/31/2005
       Price on Offer Date:       FMV:          $13.00
       Price on Purchase Date:    FMV:          $16.00
       Purchase Price:      85% of $13.00       $11.05

       Contributions:                             $500.00
       Shares Purchased:                          45 ($500/$11.05) (+ $2.75)
       Values of Shares:                          $720.00 = (45 x $16)
       Gain on Purchase:                          $220.00 (44%)
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                              Example of Purchase

       *For illustration purposes only. Actual prices may vary.

       Offering Period:           7/1/2005 – 12/31/2005
       Price on Offer Date:       FMV:          $13.00
       Price on Purchase Date:    FMV:          $10.00
       Purchase Price:      85% of $10.00       $8.50

       Contributions:                             $500.00
       Shares Purchased:                          58 ($500/$8.50) (+ $7.00)
       Values of Shares:                          $580.00 = (58 x $10)
       Gain on Purchase:                          $80.00 (16%)
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                                      Taxation - DD

       • Disqualifying Disposition (“DD”)
       • If you sell within two years from your offer date or
         one year from your Purchase Date, you must
         report your sale to the Company.
                  • The difference between the fair market value of the
                    stock on the day it was purchased and what you paid
                    for it will be Ordinary Income (“OI”) reported on
                    your W-2.
                  • Any additional gain/loss is reported as either Short-
                    Term Capital Gain/Loss (less than 12 months) or
                    Long-Term Capital Gain/Loss on Schedule D. Short-
                    term gains/losses are taxed at your normal tax rate.
                    Long-term gains/losses are taxed at 15%.
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                               More Taxation - QD

       • Qualifying Disposition (“QD”)
       • If you sell after two years from your Purchase
         Date:
                  Ordinary income is the lesser of:
                   • 1) 15% of FMV at Purchase Date, or
                   • 2) the total gain
                  Additional gain/loss is reported on Schedule D.
       • Under these conditions, substantially all of the
         profit is Long-Term Capital Gain.
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                    Comparison of ESPP and 401k

       • ESPP                                     • 401k
           No company match,                          Company matches a
           but you get a 15%                          portion of your
           discount                                   contributions
           Withdrawal is                              Early withdrawal is
           permissible with no                        taxed and restricted
           penalty




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                    Comparison of ESPP and 401k

       • ESPP                                     • 401k
           Short-term after-tax                       Long-term pre-tax
           investment                                 investment
           If you withdraw,                           You may change
                                                      contribution levels
           you must wait until
                                                      on a monthly basis.
           the next Offering                          You may also stop
           Period to rejoin the                       and restart
           Plan                                       contributions at any
                                                      time.


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                    Comparison of ESPP and 401k

       • ESPP                                     • 401k
           One type of                                Select from several
           investment:                                different investment
            • Your Company                            portfolios with
              stock                                   varying risks and
                                                      rates of return:
                                                       • Guaranteed
                                                         Investment
                                                         Contracts
                                                       • Mutual Funds
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                                    Important Dates

       Enrollment Deadline – June 27, 2005
       Offering Period Start Dates:
           First period:                          July 1, 2005
           Subsequent period:                     January 1, 2006

       Purchase Dates:
       Last day of each Offering Period.


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                                      How to Enroll

                                    To join the ESPP:

            • Complete the Friedman, Billings, Ramsey
                Group, Inc. ESPP Enrollment Form


          Friedman, Billings, Ramsey Group, Inc. recommends
            that you read a copy of the Company’s Prospectus,
           which is available upon request, prior to making any
           investment decisions regarding Your Company stock.

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                                      Don’t Forget!

                                                  • Be sure to complete your
                                                    paperwork no later than
                                                    June 27, 2005

                                                  • Completed paperwork
                                                    should be delivered to
                                                    Human Resources.



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                        Thank you for your time!


                             Congratulations!


F R I E D M A N   B I L L I N G S   R A M S E Y

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