PeopleSoft Stock Administration 9.1 PeopleBook

Administering Releases

This chapter provides an overview of administering releases and discusses how to:

View release information for restricted shares.
Enter release information for restricted shares.

Understanding the Release of Restricted Shares

This section lists prerequisites and common elements and provides an overview release administration.

Prerequisites

Before you begin releasing restricted shares:

Grant options or awards that allow exercise before vesting, such as restricted stock awards.
Exercise unvested shares.

Common Elements in This Chapter

83b Election	Selected if the optionee filed an IRC 83(b) tax election.
Employee Information	This group box displays employee information as of the release date.
EmplID	Click to access the Employee Information page to view employee information.
Release Number	Displays NEW when you enter a release. When you save, the system generates a sequential release number from the last release number stored in the Stock Table.

Release Administration

Stock options that are exercised before they are vested are commonly called restricted shares and are typically held in escrow until they vest. As the shares vest, they are released to the optionee. You must record the number of shares released and the taxes due from the optionee, release the shares from escrow, and deliver them according to the optionee's instructions. Ordinary income and taxes are generally calculated and collected at the time of release unless the optionee filed an 83(b) election at the time of exercise.

If your stock plans include restricted stock awards, or the plans allow exercise before vesting, you periodically release restricted shares.

The process of releasing restricted shares is similar to that of exercising options. You identify the releasable shares, the release method, and the issuance instructions. Depending on the optionee's 83(b) election, you calculate ordinary income and collect taxes.

Viewing Release Information

This section discusses how to:

Select the exercise associated with the release you want to view.
View release transactions.

Pages Used to View Release Information

Page Name	Definition Name	Navigation	Usage
Release Options	ST_REL_SRCH1	Stock, Grant Transactions, Release Options	Select the exercise for which you want to view releases.
Release Transactions	ST_REL_SRCH2	Stock, Grant Transactions, Release Options Click an exercise number.	View release transactions and access the Releases component.

Page Name

Definition Name

Navigation

Usage

Release Options

ST_REL_SRCH1

Stock, Grant Transactions, Release Options

Select the exercise for which you want to view releases.

Release Transactions

ST_REL_SRCH2

Stock, Grant Transactions, Release Options

Click an exercise number.

View release transactions and access the Releases component.

Selecting the Exercise for the Release

Access the Release Options page (Stock, Grant Transactions, Release Options).

Exercise Number

Click to access the Release Transactions page, where you view the existing release transactions for the grant and access the Releases component.

Viewing Release Transactions

Access the Release Transactions page (click an exercise number on the Release Options page).

Shares Releasable	Displays the number of shares that can be released.
Release Number	Click to access the Releases - General page, where you can view the details of the release.

Entering Release Information

This section discusses how to:

Enter general release information.
Calculate taxes for released shares.
Calculate costs for a release.
Enter issuance instructions for a release.
Enter certificate information for a release.
Add escrow information for a release.
Add brokerage instructions for a release.
Select legends to display on issuance instructions.
Record payment information for shares.

Pages Used to Enter or Modify Release Information

Page Name	Definition Name	Navigation	Usage
Releases - General	ST_EXER_RELEASE	Stock, Grant Transactions, Release Options Click an exercise number on the Release Options page, or click the Add a Release button.	Enter general information for the release of restricted shares.
Release Comments	ST_EXER_REL_SEC	Click Comments on the Releases - General page.	Enter comments for the release.
Releases - Taxes	ST_REL_TAXES	Access the Releases - General page and select the Taxes tab.	Calculate taxes for released shares.
Release Payroll Data	ST_EXER_PR3_SBP	Click Sent to Payroll Date on the Releases - Taxes page.	View payroll details.
Releases - Cost	ST_REL_COST	Access the Releases - General page and click the Cost tab.	Determine the tax amount due to the company if the optionee did not pay taxes at the time of exercise. Enter trade information.
Releases - Issuance	ST_REL_ISSUE	Access the Releases - General page and select the Issuance tab.	Enter issuance instructions advising the escrow agent to release restricted shares from the escrow account and return them to the transfer agent for reissuance. Instruct the transfer agent to reissue the shares released from escrow.
Escrow Information	ST_REL_CERT_SEC	Click Escrow on the Releases - Issuance page.	Enter escrow and address information.
Certificate Information	ST_REL_CERT_SEC	Click Certificate on the Releases - Issuance page.	Enter registration and address information for certificates.
Broker/Branch Information	ST_REL_BROKER_SEC	Click Broker on the Releases - Issuance page.	Add brokerage information.
Legend	ST_REL_LEGEND_SEC	Click Legend on the Releases - Issuance page.	Select the legends to display on the issuance instructions.
Releases - Payment	ST_REL_PAYMENT	Access the Releases - General page and select the Payment tab.	Record payments made to the company on releases and view outstanding balances.

Entering General Release Information

Access the Releases - General page (Stock, Grant Transactions, Release Options, then click an exercise number on the Release Options page or click the Add a Release button).

Remaining Shares

Releasable

Displays the number of shares that are releasable as of the release date entered.

Release Information

Release Status	Valid values are Pending, Void, and Active, which is the default.
Status Date	Displays the date that the status was last changed and saved.
Replace Release Number	If this is a replacement release, select a replacement release number. You must void the original release before you can create a replacement release. You associate the two releases with the replace release number for audit purposes.
Shares Released	This value cannot exceed the Remaining Shares Releasable field amount. Only vested shares are releasable.
Release FMV	The default is the release FMV calculated from the Daily Prices table as of the release date that you entered, according to your release FMV rule. You can change this number.
Release Method	Select a method to pay for associated taxes. If you select a value that is not defined in the Stock Option Plan Rules component, you receive an error. Cash is the default.
Shares Sold	If the release method is Sell to Cover, this field is available for entry. Enter the number of shares sold. If the release method is Same Day Sale, this field is not available for entry, and the system displays the total shares released.
Sale Price	If the release method is Sell to Cover or Same Day Sale, this field is available for entry. The Release FMV field is the default, but you can enter another value.
Receipt Date	Displays the date that the release receipt was run.

Calculating Taxes for Released Shares

Access the Releases - Taxes page (access the Releases - General page and select the Taxes tab).

This page is available if the optionee did not file an 83(b) election at the time of exercise. Use it to calculate the taxes for the release. Like the exercise process, you can do this by integration with PeopleSoft Payroll for North America by using the stock tax tables or by entering taxes manually. If you use Payroll for North America, send the tax information to payroll from this page.

Tax Detail

The system populates these fields when you click any of the Load Default Taxes, Copy Previous Taxes, or Calculate Taxes buttons. You can change these values. If the optionee filed an 83(b) election and paid taxes at the time of exercise, you cannot calculate taxes at the time of the release.

Tax Type	Select the type of tax to calculate.
Default Percentage	The system enters the default tax percentage based on the tax type. You can change the default percentage to modify the current tax amount.
Tax YTD	Enter the year-to-date tax amounts to have the system use these values when calculating taxes with limits.
Current Tax	The system calculates the current tax based on the ordinary income amount displayed on the page and the default percentage. You can change the current tax amount and the default percentage changes accordingly.
Tax Override	If you overrode the default taxes or inserted the tax amounts, the system displays Manual. The default is None, which means no tax override.
Maximum Tax	Displays the maximum tax limit if the Tax Type field has a maximum tax limit.

Default Tax Calculation

You can load the default tax information or copy the tax information from the previous release. Use these methods if you don't use Payroll for North America.

Load Default Taxes	Click to load the default tax rates based on the country and state associated with their tax location and the tax rates that you entered on the tax setup pages. The taxes are calculated based on the ordinary income from the release.
Copy Previous Taxes	Click to copy the tax percentages used in the last release within the last calendar year. If there are no releases for the current year, the system copies the percentages from the previous year and provides a warning message.

North American Payroll

If you use Payroll for North America, you can calculate the taxes owed and send them directly to payroll.

Calculate Taxes	Click to have Payroll for North America calculate the taxes due on the ordinary income from the exercise. The system determines the YTD taxes paid and monitors any limit that might be met.
Update Payroll	Click to send the tax and ordinary income data to payroll. After the transaction is saved, you receive confirmation that the transaction was sent. If you don't save the exercise, payroll is not updated.
Sent to Payroll Date	Displays the date on which the payroll taxes were sent to payroll, either through Update Payroll or when the payroll report is run. Click the date to access the Release Payroll Data page, where you view payroll details.
Reversal Date	Displays the date on which the Option Income/Tax Reversals report was run.

Calculated Values

The system displays the following information:

Tax Preference Income	Alternative minimum tax value if the option type is ISO. Otherwise, it is ordinary income which is the difference between the option price and the fair market value of the company's stock on the exercise date.
Total Taxes	The sum of all the taxes displayed. This is the taxes due on the release.

Reversing Taxes Sent to Payroll

To reverse taxes that you've already sent to payroll, change the release status to Void on the Releases - General page, and save. If payroll hasn't processed the transaction, the system deletes the transaction.

If payroll has already processed the transaction, you receive a message that the transaction wasn't found. Print the Option Income/Tax Reversals report to notify your payroll administrator that the transaction should be reversed.

See Also

Stock Administration Integrations

Setting Up Tax Rules

Calculating Costs for a Release

Access the Releases - Cost page (access the Releases - General page and select the Cost tab).

Trade Information

If a release method is Trade for Taxes, these fields become available for entry.

Trade FMV	Displays the swap or trade FMV, as defined on the Stock Option Plan Rules - FMV Rules setup page.
Traded	Displays the number of shares required for the trade by dividing the Total Tax Due field value by the Swap/Trade FMV field value. You can change this number.

Trade Detail

If a payment method is Trade for Taxes, these fields become available for entry. You can make multiple entries to record the various shares used for the trade and whether the shares are being surrendered or are to be netted from the release.

Source	Select Constructive Delivery if the shares surrendered for the trade are to be netted from the release and a physical certificate is not delivered. Select Physical Delivery if a physical certificate is surrendered for cancellation.
Number of Shares	Enter the number of shares surrendered. Constructive delivery reduces the number of shares to be issued by the number of shares traded.
Certificate Number	Enter the certificate number of the shares surrendered for the trade.
Date Acquired	Enter the date on which the traded shares were acquired.

Calculated Values

Total Tax Due	Displays the total taxes due calculated on the Releases - Taxes page.
Trade Value	If the share payment method is Trade, the system displays the trade value (number of shares traded multiplied by the swap or trade FMV).
Due to Company	This value equals the total taxes due less the trade value.

Entering Issuance Instructions for Released Shares

Access the Releases - Issuance page (access the Releases - General page and select the Issuance tab).

Shares Swapped/Traded

If shares are traded as part of the release, the system displays these amounts.

Constructive	The total number of constructively traded shares.
Physical	The total number of physically traded shares.
Shares Issued	The total number of shares issued from the release. This equals the number of shares released less the total number of constructive shares traded.
Shares Returned	The total number of shares returned from the trade when a certificate is physically delivered for more shares than required for the trade.

Agent Notification

Transfer Control Number	Displays the transfer control number assigned by the Issuance Instructions report.
Escrow Control Number	Displays the control number assigned by the Issuance Instructions report.
Transfer Issue Date	Displays the date that the Issuance Instructions report was run. This field is populated after you run the Agent Issuance Instructions report.

Issuance Detail

To enter multiple issuance instructions, enter the number of shares for each issuance requirement, select the issuance type, and select the brokerage information or the address where you want the certificate sent. After you save the release, you can generate the required transfer agent instructions, broker deposit instructions, and broker invoices.

Issuance Number	Displays 1 when you first add a release. For each subsequent issuance you create, the system generates a sequential number.
Issuance Type	If the release is an SDS or STC, the default is Broker. If the release is any other type, the default is the information on the Issuance Instruction page for the optionee. If issuance instructions are not set up for an optionee, Certificate is the default. You can change the default value.
Shares Issued	Enter the number of shares equal to the total number of shares being issued less any traded shares. The default is the number of shares released.
Broker, Escrow, and Certificate	Click to access the Broker page, Escrow Information page, or Certificate page, respectively.
Legend	Click to access the Legend page.

Entering Certificate Information

Access the Certificate Information page (click Certificate on the Releases - Issuance page).

This page is identical to the Certificate page in the Exercises component.

See Also

Entering Certificate Information

Adding Escrow Information

Access the Escrow page (click Escrow on the Releases - Issuance page).

This page is identical to the Escrow Information page in the Exercises component.

See Also

Entering Escrow Information

Entering Brokerage Instructions

Access the Broker/Branch Information page (click Broker on the Releases - Issuance page).

This page is identical to the Broker/Branch Information page in the Exercises component.

See Also

Entering Broker Instructions

Selecting Legends to Display on Issuance Instructions

Access the Legend page (click Legend on the Releases - Issuance page).

This page is identical to the Legend page in the Exercises component.

Recording Payments for Shares

Access the Releases - Payment page (access the Releases - General page and select the Payment tab).

Payment Information

Record each payment on a separate line.

Payment Date	Enter the date on which you received the payment. The payment date must be greater than or equal to the release date.
Sequence	If more than one payment is made in a single day, the system enters a sequence number.
Payment Type	Select Adjustment, Cash, Check, Loan, Pay Ded, or Wire.
Payment Amount	You can enter a negative amount to reflect an overpayment.

Calculated Values

Due to Company	Displays the amount due to the company calculated on the Releases - Cost page.
Total Payments	Displays the sum of the payment amounts.
Remaining Due	This field is calculated by subtracting the Total Payments field from the Due to Company field.