Background

Work 2k hours as a freelance specialist with Happily and get stock options awarded immediately!

Happily Path to Equity

# Equity in The Shared Economy
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## We crunched the numbers and found that freelancers contribute to 20% of the time spent building Happily. We believe this significant contribution in our lifetime value deserves equitable recognition, so we've dedicated 20% of our employee equity pool exclusively for our freelancers.

Why are we doing this? 

Happily Events ReplitEventApril2024 photoAirykaRockefeller-172

Team Happily Group Shot

## __*You* get equity! And *you* get equity!__
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# Okay, what’s equity?

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### What are stock options?
Stock options are contracts that give you the right, but not the obligation, to buy a certain number of shares of Happily’s stock at a predetermined price. Happily will be offering an Non-Qualified Stock Option, or NSO. This type of option is more flexible and allows Happily to offer equity to contractors, freelancers, advisors, etc. 

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### Why is Happily offering equity to freelancers?
We aim to challenge the status quo and inspire other creative agencies and marketplaces to provide a pathway to equity for freelancers. Why? Because freelancers are the heartbeat of the industry. Freelancers impact the growth and success of our business and as such, should benefit from that growth. As Happily becomes more valuable, so should the freelancers driving that growth. 

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### How can stock options help me?
Stock options provide an opportunity to profit from the Happily’s growth. If the company's stock price increases above the exercise price, you can purchase shares at a lower price and potentially sell them at a higher market price.

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### How do stock options work?
If you are granted stock options, you can “exercise” those options after meeting eligibility requirements and the vesting period. The exercise price of the options is fixed at the grant date, and you can buy shares at this price, even if the market price is higher.

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### What does it mean to exercise a Happily stock option? 
Exercising a Happily stock option means to buy Happily’s stock at the exercise price specified in the option contract.

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### How do I exercise Happily Stock options?
To exercise your options, [follow these steps](https://support.carta.com/s/article/exercising-options-on-carta) provided by Carta, Happily's equity management platform.

please notify Happily’s Finance at finance@teamhappily.com and coordinate an ACH payment to Happily for the total exercise price of the options package.

Follow these steps provided by Carta, Happily's equity management platform

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### How is the exercise price determined?
The exercise price is the market price of the stock option on the grant date. The market price is determined by an independent third party 409a valuation of Happily.

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### What are the tax implications of exercising an NSO stock options?
NSO stock options are taxed at 2 different triggering moments. 

First when an option is exercised. When you exercise an NSO, you will pay ordinary income tax on the "bargain element," which is the difference between the exercise price and the fair market value (FMV) of the stock at the time of exercise. For Example: If options are granted on January 1, 2020 and then are exercised on January 1, 2024 at an exercise price of $10 per share. If the Fair Market Value (FMV) on the exercise date is $30 per share then the difference ($30 - $10 = $20) per share is considered ordinary income.

Second when a stock is sold. After exercising the options and acquiring the stock, any further gain or loss realized upon the sale of the stock is subject to capital gains tax. The holding period of the stock (short-term vs. long-term) determines the applicable capital gains rate. For example: using the same data above, if the stocks are sold on January 1, 2025 and the new FMV is $50 per share. The capital gain would be calculated as follows, FMV on Date of Sale - FMV at Exercise Date = Capital Gain ($50 - $30 = $20). In this example, there would be a taxable capital gain of $20 per share.

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### When am I eligible to participate in the equity plan?
All Freelancers have the opportunity to earn equity at Happily. As a freelancer, you will become eligible for stock options once you have completed 2,000 billable hours working on Happily projects. 

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### How long will it take to reach the 2,000 hours requirement?
This really depends on the type of roles you take and how long the duration of those projects are, as well as the frequency of requests in your location. 

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### What is a vesting period? And what is the vesting period for Happily’s stock options as a freelancer?
A vesting period is the time you must wait before you can exercise a stock option after it has been awarded. It is common for a vesting period to span several years with a portion of the options vesting each month/year. 

Happily has set an immediate vesting period, meaning that if you meet the eligibility criteria of 2,000 hours and are offered stock options, these options will be fully vested immediately.

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### Do I have to exercise the stock options?
No you are not required to exercise the stock options.

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### Do my stock options expire?
Yes, if you don’t exercise the options by the set expiration date than they will expire. Your Happily’s options will expire within 3 years after vesting. 

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### What happens to my stock options if I leave the company?
This depends on the company's stock option plan. Typically, there is a limited period post-departure to exercise vested options, while unvested options may be forfeited.

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### What is the value of my equity?
Legally we are not able to speculate on that. 

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### If I exercise my options, is there an option for the company to buy back my company shares? 
When there is a buyback option Happily will let you know. 


You get equity! You get equity! Ok. What’s equity?

Happily Fractional GIF

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