NEW YORK -- When Jessica Gleeson began work a decade ago making lattes and cappuccinos at a Starbucks cafe, her goal was to save enough money to buy a house when she was 30. She beat that, signing the papers for a Victorian home in Seattle on her 28th birthday.
Last New Year's Eve, to celebrate the millennium, she and friends flew to Paris to watch fireworks light up the Eiffel Tower.
All this was possible because Gleeson, like all other employees of Starbucks Corp., gets stock options that have grown in value as the company has prospered.
''It's not so much about the things I can get with them, but that they provide me with choices,'' said Gleeson, 33, who now works as a leader for international learning and development at the Seattle coffee company. ''I have additional resources I can invest in things that are important to me.''
Stock options, once associated mainly with corporate chieftains, are going to a growing number of rank-and-file workers. They can prove to be valuable bonuses or, if mismanaged or caught in faltering markets, not worth the paper they're printed on.
The National Center for Employee Ownership estimates that up to 10 million workers are offered options -- 10 times more than a decade ago.
''The perception is that people who are getting options are those going to work for MyStartUp dot-com,'' said Corey Rosen, executive director of the Oakland, Calif., center. ''But companies like Bank of America, Pepsi and Bristol-Myers -- to name just a few -- give options to all their employees. There are a lot of options out there that are potentially worth a lot of money.''
A stock option gives an employee the right to buy a set amount of a company's shares during a specified time period and at a fixed price, usually the market price on the day the option is granted. In a rising market, a worker like Starbucks' Gleeson who exercises her options to buy the stock and then sells her shares, can pocket the ''spread'' between the grant price and the higher market price. She does have to pay taxes on the profits.
In a declining market, however, a company's shares can fall below the grant price, making the options worthless, at least in the short run. If a company fails, the options die with it.
''Managing options can be tricky because there are market risks and tax implications,'' said Trisha Stewart, a vice president at J.P. Morgan Advisory Services in New York.
As a result, she said, many employees seek help from investment advisers who can help determine what employee spending and savings goals are, how much stock should be held in the companies they work for and the tax consequences of selling the stock.
''Some people think that if the market is headed down, you should exercise (your options) and sell,'' Stewart said. ''OK. But then what are you going to do with the money? If you don't need the cash, are the prospects for other investments any better? If not, maybe it would be better to hold on (to the options) and wait it out.''
Financial planner Rick Schultz set up OptionWealth.com in Rockville, Md., late last year to help companies, financial advisers and workers better understand the value of stock options. The site offers lots of free information -- including what to look for in an options package when applying for a job -- as well as fee-only forecasting and management sections.
''If you're just joining a company and the market is down, you're in a good position,'' Schultz said. ''Your (grant) price will be low, and there's a good probability the shares will go up.''
The problem, of course, is ''with the guy who was hired six months ago who got options at $100 and the share price is now $20,'' Schultz said. Companies can't easily change the grant price, Schultz noted, ''but some of them are giving their valued employees another grant, generally smaller, at a lower price.''
Alan Ungar, a certified financial planner based in Calabasas, Calif., said people with stock options always face a dilemma: ''They worry, if I exercise and sell too soon, I'll miss a fortune if the stock goes up; if I exercise too late, I could lose what I've got.''
But he argued that most don't clearly define their financial goals and don't consider risk -- factors that can influence when to exercise options and sell shares.
Ungar said his site, mycriticalcapital.com, ''lays out strategies that help focus on what you want your options to accomplish -- beyond saving taxes and maximizing gains.''
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