This chapter lists prerequisites and discusses how to:
Administer participant information (record stock issuance instructions and identify insiders).
Specify daily stock prices.
Calculate stock balances.
Manage stock splits.
Manage dispositions.
Before you begin to actively manage your stock administration system, you should define your stock administration business rules and set up the common setup tables.
See Also
Defining Stock Administration Business Rules
This section provides an overview of participant information and discusses how to:
Specify a participant's default issuance instructions.
Enter issuance instructions for brokers.
Enter registration instructions for stock certificates.
Enter and update issuance instructions for multiple participants.
Identify insiders.
With Stock Administration you can quickly access the human resources information that you need to administer your stock plans. In addition to viewing participants' job, employment, and payroll data, you can enter issuance instructions for individual participants and run the Mass Issuance Update Application Engine process (ST_RUNCTL_ISUUPD) to add issuance instructions for multiple participants. Finally, you can specify the insiders who are subject to SEC Section 16 reporting requirements and Regulation S-K proxy requirements.
Page Name |
Definition Name |
Navigation |
Usage |
ST_ISSUANCE |
Stock, Issuance/Profiles, Maintain Issuance Instructions, Maintain Issuance Instructions |
Specify a participant's default issuance instructions. |
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ST_EMPL_SEC |
Click the employee ID number on one of numerous pages in the Stock Administration application. |
View participant information. The information is current as of today's date. |
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ST_ISSUANCE_SEC1 |
Select Broker on the Maintain Issuance Instructions page, then click Edit Issuance Type Information. |
Enter issuance instructions for brokers. |
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ST_ISSUANCE_SEC2 |
Select Certificate on the Maintain Issuance Instructions page, then click Edit Issuance Type Information. |
Enter registration instructions for stock certificates. |
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ST_INSIDER_TBL |
Stock, Issuance/Profiles, Maintain Insiders |
Identify insiders. |
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ST_PERS_PROFILE |
Stock, Issuance/Profiles, Review Personal Profile |
View HR information for a participant, including employment, job, and payroll data. |
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ST_RUNCTL_ISUUPD |
Stock, Issuance/Profiles, Update Mass Issuance |
Enter and update issuance instructions for multiple participants. |
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ST_ISSU_MESSAGE |
Stock, Issuance/Profiles, Review Mass Issuance Messages |
View messages that are generated by the Mass Issuance Update process. |
Access the Maintain Issuance Instructions page (Stock, Issuance/Profiles, Maintain Issuance Instructions, Maintain Issuance Instructions).
Plan Type |
Select Option Plan or Purchase Plan. If the participant is enrolled in both plan types, you can toggle back and forth to view the information for each plan type. |
Mass Issuance Update |
This check box is selected if the issuance instructions were created by a mass issuance update. |
Issuance Type |
Select Broker to have the shares held through a brokerage firm. Select Certificate to have the shares issued in the form of a certificate. |
Edit Issuance Type Information |
Click to display a page where you can enter additional issuance instructions. If the issuance type is broker, the Maintain Issuance Instructions - Broker Details page appears. If the issuance type is certificate, the Maintain Issuance Instructions - Certificate Details page appears. |
Access the Maintain Issuance Instructions - Broker Details page (select Broker on the Maintain Issuance Instructions page, then click Edit Issuance Type Information).
Account Number |
Enter the participant's brokerage account number. The field holds up to 17 alphanumeric characters. |
Quick Sales |
If Stock Purchase Plan is selected in the Plan Type field, this check box is available. Select if the participant volunteers to participate in the Quick Sale program. This field informational only. |
Access the Maintain Issuance Instructions - Certificate Details page (select Certificate on the Maintain Issuance Instructions page, then click Edit Issuance Type Information).
Account Number |
Enter the participant's transfer agent account number. The field holds up to 17 alphanumeric characters. |
Legend ID |
If Stock Purchase Plan is selected as the plan type on the Maintain Issuance Instructions page, this field is available. Legend IDs are set up on the Stock Legend Table page. |
Address Type |
Options are Home or Mailing. The system displays the address information entered in HR. |
Access the Update Mass Issuance page (Stock, Issuance/Profiles, Update Mass Issuance ).
As Of Date |
Enter the date that you want the mass issuance to be effective. The system displays an error message on the Review Mass Issuance Messages page if the date entered already exists in the issuance instructions for a participant or the participant has an effective-dated row greater than the as of date. |
Initial Issuance |
Select during implementation to generate the initial issuance instructions. The system only generates instructions for participants who don't have specific issuance instructions for the identified stock. |
From
If this is an initial issuance, these fields are not available and None is selected as an issuance type.
Issuance Type |
Select the issuance type that you want to change from. Select Broker, Certificate, or None. |
Brokerage ID |
If you selected the Broker issuance type, this field becomes available. Select a brokerage ID from the available options. |
Branch ID |
If you selected the Broker issuance type, this field becomes available. Select a branch ID from the available options. |
To
Issuance Type |
Select the issuance type that you want to change to. Select Broker, Certificate, or None. If you select Certificate, the system uses the home address. |
Brokerage ID |
If you selected the Broker issuance type, this field becomes available. Select a brokerage ID from the available options. |
Branch ID |
If you selected the Broker issuance type, this field becomes available. Select a branch ID from the available options. |
Keep Account Number |
Select to have the account number from the last broker moved over to the new broker. |
Access the Maintain Insiders page (Stock, Issuance/Profiles, Maintain Insiders).
EmplID |
Click this number to view employee information. |
Insider Information
Title |
The system defaults the business title stored in the HR Job table. If there is more than one job for an individual, the primary job defaults. The system uses the lowest active record number if there is no primary job flagged. You can enter a different title if you like. |
Ownership Percentage |
If you selected an insider type of Beneficial Owner, this field becomes available. Enter the percentage of beneficial ownership by the individual. The percentage serves to check the stock purchase participation requirements (eliminating individuals with greater than 5% beneficial ownership), and check for the ISO 10% Shareholder FMV Rule and the ISO 10% Shareholder Option Life Rule. You must enter a number, as it is not derived from the system. |
Report with Proxy |
Select this check box if the individual is the chief executive officer (CEO), one of the five most highly paid executive officers of the company, or meets other proxy criteria. This field is used to sort and filter different reports. |
Insider Status
Select all insider status types that apply to the individual. At least one type must be selected. If you select reporting person, director, or officer, the system also selects company insider. If an individual is no longer an insider, add a new effective-dated row and leave all check boxes unselected.
This section lists prerequisites and discusses how to:
Enter daily stock prices.
View FMV prices for a plan.
All companies, either public or private, must establish a fair market value (FMV) for their common stock. The various prices reported daily by the stock exchanges are indications of that value. Each company decides the price, or combination of prices, to use in calculating the FMV for the various stock transactions.
Generate the Daily Prices report to view the daily prices that you have entered for a given stock.
Before you can enter daily prices, you must define:
Stock ID on the Stock Table page.
FMV methods on the FMV Method Table page.
FMV method on the Stock Details - Common Rules page.
If the stock plan FMV differs from the defaults defined on the Stock Details - Common Rules page, you must further define the stock plan FMV on the Stock Option Plan Rules component for option plans and Stock Purchase Plan Rules component for stock purchase plans.
Page Name |
Definition Name |
Navigation |
Usage |
ST_DAILY_PRICES |
Stock, Daily Prices, Maintain Daily Prices |
Enter daily stock prices for a particular stock. |
|
ST_DAILY_PLNPRC |
Click the Fair Market Value button on the Daily Prices page. |
View FMV prices for a plan. |
Access the Maintain Daily Prices page (Stock, Daily Prices, Maintain Daily Prices).
Common Page Information
Add One Price |
Click Next to enter a daily price for the next trading day. Click Previous to enter a daily price for the day prior to the first day you entered a daily price. If the next or prior trading day spans a weekend or holiday, the system automatically enters those rows. |
Add Multiple Prices |
Click Next to skip to add new daily price rows based on the end date that you enter. Click Previous to add daily price rows before the first daily price row that has already been entered. |
Page Control |
Use the arrows to scroll through the daily price rows. |
FMV Date |
Displays the date of the FMVs in the row. |
Trading Day |
Displays the day of the week. If the day is a non-trading day such as a holiday, Saturday, or Sunday, there is no data for that day. The system uses the holiday schedule defined on the Stock Exchange Table component to determine which days are holidays. |
Daily Prices Tab
Enter the opening, high, low, and closing stock price for the day. Also enter the volume of shares traded on the exchange for this trading day. (The volume is for informational purposes only.)
Plan FMVs |
Click this button to access the Plan FMVs page where you can specify a stock plan and view the various FMV methods for the stock plan. |
Bid/Ask Tab
Enter the bid and ask price for the day.
Access the Plan FMVs page (click the Fair Market Value button on the Maintain Daily Prices page).
Option Plan, Purchase Plan |
Select whether to view FMVs for the Option Plan or Purchase Plan. |
FMV Date |
FMV date selected from the primary page. |
Stock Plan |
Select from the available options. |
|
Click the Calculate button to display the price indicators and plan FMVs for the FMV day. |
Plan FMVs
The system displays only the FMVs that relate to the stock plan and the date selected.
Company FMV |
FMV based on the FMV date and the rules defined on the Stock Details - Common Rules page. |
Grant FMV |
FMV based on the FMV date and the rules defined on the Stock Option Plan Rules - FMV Rules page or the Stock Purchase Plan Rules - FMV Rules page. |
Exercise FMV, Swap/Trade FMV, Release FMV, and Repurchase FMV |
FMV based on the FMV date and the rules defined on the Stock Option Plan Rules - FMV Rules page. |
Offer FMV, Purchase FMV |
The system displays the FMV based on the FMV date and the rules defined on the Stock Purchase Plan Rules - FMV Rules page. |
This section provides an overview of high-level, comprehensive share balance and allocation processing, lists common elements, and discusses how to:
Calculate stock treasury balances.
Calculate stock class balances.
Calculate stock options outstanding.
Calculate stock purchase plan balances.
As a stock administrator, you must have accurate records of the number of shares that are allocated to your treasury, stock classes, and stock plans. The intricate balance tracking and share allocation functionality of Stock Administration captures online transactions and batch processes and provides reports that you can use for financial disclosure, auditing, and regulatory reporting. When you enter an "As of Date" on the share balance inquiry pages and click the calculator button, you can see the share balances as of the date that you entered.
Once you set up your balance tables, the share accounting is derived in real time off the stock options and stock purchase transaction tables. This enables you to define effective-dated rules for the return of shares to the treasury or stock plans for transactions such as cancellations, expirations, repurchases, swaps, trades, and SAR exercises.
Treasury pool and stock plan funding follow a typical allocation process with each action altering pool and plan balances. A typical allocation flow is:
Fund Treasury: A company files an initial registration statement with a regulatory agency, such as the SEC, that lists the number and type of shares allocated to the treasury. Later on, a company may increase the number of shares allocated by filing appropriate documents with the SEC to create a new treasury pool or increase the allocation levels of the current pool.
Create Class Pools: Different pools can be created for different types of shares. For example, you may create one class pool for common shares outstanding prior to implementation and another class pool for preferred shares outstanding. The common share pool for a stock ID increases and decreases depending upon stock transactions such as exercises, purchases, swaps, trades, and repurchases.
Fund Stock Plans: The Board of Directors or the shareholders approves allocating shares to a stock plan from a designated treasury pool. If you use variable compensation, you can allocate shares from your stock option plan to be used by your variable compensation plan. The variable compensation allocation doesn't affect the plan balance.
Process Stock Plan Transactions: After the stock plan allocation, daily transactions affect plan balances. Stock option plan transactions include grants, exercises, cancellations, expirations, repurchases, sales, and releases. Stock purchase plan transactions include purchases and sales.
Monitor Treasury and Stock Plan Balances: All these stock plan transactions may affect the treasury pool and stock plan balances, and may affect common shares outstanding. The system needs to accurately record the effects of these transactions and to update share balances.
See Also
Administering Variable Compensation Grants
Calculate Balance button |
Click the Calculate Balance button to generate balances based on the as of date. |
Clear Balance button |
Click the Clear Balance button to clear the share balance values for the page. |
Shares Cancelled |
Shares cancelled from an active stock option grant that are returned to the treasury or plan. The Cancel Shares Method must be set to Return to Treasury or Return to Plan on the Stock Option Plan Rules - Shares page for shares to be allocated back to the treasury or plan. |
Shares Expired |
Shares expired from an active stock option grant that are returned to the treasury or plan. The Expired Shares Method must be set to Return to Treasury or Return to Plan on the Stock Option Plan Rules - Shares page for shares to be allocated back into the treasury or plan. |
Shares Repurchased |
Shares repurchased that are returned to the treasury or plan where the repurchase is active. The Repurchase Shares Method must be set to Return to Treasury or Return to Plan on the Stock Option Plan Rules - Shares page for shares to be allocated back to the treasury or plan. |
Shares Swapped/Traded |
Shares swapped or traded for exercises that are returned to the treasury or plan. The amount of shares traded for release is also added to the shares swapped balance. The Shares Swapped Method must be set to Return to Treasury or Return to Plan on the Stock Option Plan Rules - Shares page for shares to be allocated back to the treasury or plan. |
Exercised SAR Shares |
Exercised SAR shares that are returned to the treasury or plan where the Share Payment Method is equal to SAR Exercise. The Exercise SAR Shares Method must be set to Return to Treasury or Return to Plan on the Stock Option Plan Rules − Shares page for shares to be allocated back to the treasury or plan. |
Shares Available to Issue |
The sum of the Plan Shares Allocated, Shares Cancelled, Shares Expired, Shares Repurchased, Shares Swapped, and Exercised SAR Shares, less the Shares Granted. |
Page Name |
Definition Name |
Navigation |
Usage |
ST_TREASURY_BAL |
Stock, Review Balances Info, Stock Treasury Balance |
Calculate stock treasury balances by running the ST_TRSR_BAL process. The system reports the shares available for issue based on a specific date, along with other balances. You must first allocate shares on the Stock Treasury Table - General page. |
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STOCK_CLASS_BAL |
Stock, Review Balances Info, Stock Class Balance |
Calculate stock class balances by running the ST_CLASS_BAL process. The system reports the class shares outstanding based on a specific date. You must first allocate shares on the Stock Class Table page. |
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STOCK_PLAN_BAL1 |
Stock, Review Balances Info, Option Plan, Shares Available |
Calculate stock option plan shares available as of a specific date by running the ST_OPTN_BAL process. You must first allocate shares to a stock option plan on the Stock Plan Table page. |
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STOCK_PLAN_BAL2 |
Stock, Review Balances Info, Option Plan, Options Outstanding |
Calculate the Stock Option plan shares available to issue, options outstanding, and shares authorized but unissued based on an as of date. |
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STOCK_ESPP_BAL |
Stock, Review Balances Info, Stock Purchase Plan Balance |
Calculate a stock purchase plan's balances, including shares available to issue as of a specific date, by running the ST_ESPP_BAL process. You must first allocate shares to a stock purchase plan on the Stock Plan Table page. |
Access the Stock Treasury Balance page (Stock, Review Balances Info, Stock Treasury Balance).
Plan Shares Allocated |
Plan shares allocated that decrease the treasury balance. |
Class Shares Allocated |
Class shares allocated that decrease the treasury balance. |
Access the Stock Class Balance page (Stock, Review Balances Info, Stock Class Balance).
Shares Exercised |
Shares from active option exercises. This does not include SAR exercises. |
Shares Outstanding |
The sum of Class Shares Allocated, Shares Exercised, and Shares Purchased, less the Shares Swapped and Shares Repurchased. |
Access the Option Plan - Options Outstanding page (Stock, Review Balances Info, Option Plan, Options Outstanding).
Shares Exercised |
Shares from active option exercises. This does not include SAR exercises. |
Options Outstanding |
Shares granted less the shares exercised, shares cancelled, and shares expired. |
Shares Authorized But Unissued |
The sum of Options Outstanding and Shares Available to Issue. |
Access the Stock Purchase Plan Balance page (Stock, Review Balances Info, Stock Purchase Plan Balance).
Shares Purchased |
Shares issued from active stock purchases. |
This section provides overviews of stock split considerations and stock split processing and discusses how to define the parameters of a stock split.
Stock splits affect all stock shares in your stock administration system. You must split not only the outstanding stock but the outstanding stock options as well. Historic records must be split and the split must be thoroughly documented on all records.
Consider the following before you start the stock split process:
What split ratio will you use? Companies commonly split stock in a 2 for 1 ratio. That is, for each share of stock shareholders own they receive two shares while the price for the individual shares is cut in half. Other popular ratios are 3 for 1, 3 for 2, and 5 for 4. Regardless of the ratio, the same principle holds. The stock price declines, the par value declines, and the amount of shares outstanding increases. This is not true for reverse splits.
How are you going to handle transactions that occur between the record date and the payable date, and the record date and the process date? All FMVs and grants that occur between these dates must be adjusted to account for the stock split before you enter information into the system.
Run the Stock Split report before and after you process a stock split. You can use these reports to reconcile your balances. You should run the Shares Granted SQR and select grants with a pending status. Then run all the SQRs for all your stock option plans and stock purchase plans. You should also run and print all balance inquiry pages just before you run the split process.
To split your stock:
Define the split parameters.
Define the stock split parameters, including the stock ID, the split conversion ratio for shares and stock prices, and the record date of the split, using the Define Split page.
Run the Stock Split Application Engine process (ST_SPLIT_PRC).
Run the Stock Split process using the Process Split page. You can run only stock splits with a split status of unprocessed.
Page Name |
Definition Name |
Navigation |
Usage |
ST_SPLIT |
Stock, Stock Splits, Define Split |
Define the parameters of a stock split and the stock split ID. |
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ST_RUNCTL_SPLIT |
Stock, Stock Splits, Process Split |
Process a stock split. You must first define a stock split ID on the Define Split page. |
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PRSCRUNCTL |
Stock, Stock Splits, Stock Split Report |
Generate the Stock Split report (STSU013). Use the report to view stock split information. |
Access the Define Split page (Stock, Stock Splits, Define Split).
Record Date |
Enter the date on which an individual must officially own the stock to derive an adjustment resulting from a stock split or a stock dividend. Options granted after the record date are not adjusted. |
Payable Date |
Enter the date that the split shares will be distributed to the stockholders. |
Stock Conversion
Enter the number of New Shares and Old Shares. These numbers define the conversion ratio for splitting stock shares and prices. All share fields will be multiplied by new/old. All field prices will be multiplied by old/new.
Fractional Share Rules
If fractional shares are allowed at the Stock Detail level, these fields become available and the fractional share rules defined on the Stock Details - Common Rules page are the default. You can make them more restrictive. If fractional shares are not allowed, the value in Decimal Places is 0.
Decimal Places |
Enter a number, between 0 and 6, to determine the number of decimal places to round. |
Stock Price Rules
The price rounding rules defined on the Stock Details - Common Rules page are the default. You can make them more restrictive.
Decimal Places |
Enter a number, between 0 and 6, to determine the number of decimal places to round. |
Rounding Rule |
Select a rounding rule to use for fractional shares. Valid values include Standard, Up, and Down. The default value is Down. |
Split Status |
The stock split status is either Unprocessed or Processed. |
Status Date |
Last date that the split status changed. |
See Also
Defining Common Rules for Stock Option and Stock Purchase Plans
To manage dispositions, use the Offering/Purchase Periods (ST_OFFERING_PD) component. This section lists the pages that you use to:
Confirm dispositions that are submitted through the self service application.
Batch confirmed dispositions and send them to Payroll for North America.
See Also
Administering Stock Option Dispositions
Administering Stock Purchase Dispositions
Page Name |
Definition Name |
Navigation |
Usage |
ST_RUNCTL_SSDISP |
Stock, Grant Transactions, Confirm Self-Service Dispostns |
Confirm stock dispositions that are reported through PeopleSoft eEquity. |
|
ST_RUNCTL_SENDDISP |
Stock, Grant Transactions, Process Dispositions-Batch Up |
Collect all confirmed disposition information and send to Payroll for North America for processing. |