LTI AT THERMO FISHER

STOCK OPTIONS

Stock options give you an opportunity, or option, to purchase or exercise a specific number of shares in the future at a fixed price, for up to eight years. At Thermo Fisher, options have historically been a differentiator due to our long-term track record of solid stock performance.

Build wealth based on
stock price appreciation.

HOW IT WORKS

1

You receive an LTI award that includes options and you accept the grant. The number of shares granted is based on Thermo Fisher’s methodology to convert awarded value into full value shares and options. There are a number of calculation and valuation inputs applicable uniquely to each specific grant and date, which include the colleagues’ award value, the mix of LTI types, the average stock price applied to determine shares, etc. Additionally for stock options, the calculation of the number of options includes valuation of the grant applying a Black-Scholes value, which is a widely-accepted stock option valuation model used to estimate the value of options upon the grant date.

2

Options are granted to you on the grant date at the exercise price. Exercise price is the current stock price on the grant date.

3

Your shares vest evenly over a four-year period. As your options vest, you gain full control over them. Typically, you are only able to exercise options that have vested.

4

Once vested, you can purchase the stock, or exercise those options until they expire. You can exercise, or sell, your vested options at any point within 8 years of the grant date. Typically, taxes occur when options are exercised. meaning that you purchase the shares.

5

Stock appreciation will determine the amount you receive when you exercise. You can exercise, or sell, your vested options at any point within 8 years of the grant date. Typically, taxes occur when options are exercised, meaning that you purchase the shares.

Note: Tax laws vary by country.

6

You can exercise options as soon as they’re vested, but waiting longer could mean a larger award if the stock price increases (or a smaller award if the stock price decreases).

HOW LTI VESTS

You deserve frequent opportunities to share in the company’s success.

You earn the right to buy a specific number of Company shares at a predetermined price for a set number of years. Stock options vest 25% each year over four years.

The grant date is the date on which you are granted the options.
Grant date 25% 50% 75% 100% 1 year 2 years 3 years 4 years 8 years Expiration +25% +25% +25% 75% 100% 25% 50% +25% +25% +25% +25% 1 year 2 years 3 years 4 years 8 years Grant date Expiration

  • FOR
    EXAMPLE

    Example for education purposes only. Fictional past performance is no guarantee of future results.

    You received a grant of 1,000 options with an exercise price of $100 per share.

  • After 6 years, the company stock price increased to $200 per share and you decided to exercise all your options.

  • The difference between the exercise price and market price was $100 ($200-$100).

  • In this example, 1,000 options became $100,000 in value when exercised.

    Multiply the difference ($100) by the number of options exercised (1,000) for a total value of $100,000, minus taxes.

KEY FEATURES

  • Significant Potential Upside

    Because options are based on company stock price appreciation, they provide more leverage — and therefore are worth more when exercised — in a rising market

  • Value Based on Stock Price Appreciation

    You earn money on the growth in stock price (current stock price compared to exercise price). The stock prices themselves are not relevant when calculating the value you receive — only the change between the two

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