PeopleSoft Stock Administration 9.1 PeopleBook

Administering Reprice

This chapter provides an overview of reprice administration and discusses how to:

Set up parameters for repricing stock.
Select participants for the Reprice Grants process.
Run the Reprice Grants process.
View messages generated by the reprice processes.

Understanding Reprice Administration

This section lists prerequisites and provides an overview of repricing and the repricing procedure.

Prerequisites

Before you begin to reprice stock or run the Reprice Grants process, back up all of your data.

Repricing Overview

If the value of a company's stock declines such that the current fair market value of the stock is less than the option price of outstanding stock options, the option is considered to be underwater. The company may decide to reprice some or all of the options. Optionee's can choose not to participate in the repricing, and you might want to exclude individuals and groups, such as insiders or foreign offices.

When a stock is repriced, optionees surrender their higher-priced stock options in exchange for lower-priced options. Repricing affects stock options with option prices that exceed a specified break price. A repricing cancels the shares that remain outstanding on the original grant and creates a new grant for the outstanding shares at a new, lower option price on a specific date. The new stock option, granted as a result of the repricing, usually retains many of the characteristics of the old stock option.

The number of shares in the new stock option grant is equal to the number of outstanding shares in the old stock option grant as of the cancel date of the option. All transactions that occurred before the repricing remain with the repriced option.

Repricing Procedure

When a stock is repriced, optionees surrender their higher-priced stock options in exchange for lower-priced options.

To reprice your stock:

Set up the reprice parameters including stock ID, eligibility, and vesting, through the Stock Reprice component.
Run the Reprice Eligibility process to determine who can participate in the reprice using the Reprice Eligibility Process page.
Print Reprice Election forms and send to plan participants for their acceptance (optional).
Enter individuals' elections to participate in the stock repricing using the Reprice Participation page.
Run the Reprice Grants process using the Reprice Grants Process page.
If necessary, run the Reverse Reprice process using the Reverse Reprice Grants Process page.

Note. Check the Reprice Messages page after you run any of the reprice processes.

Setting Up Stock Reprice Parameters

This section discusses how to:

Enter eligibility rules for repricing stock.
Enter conversion rules for repricing stock.
Define the vesting parameters for repriced stock.

Generate the Stock Reprice report (STSU009) to view stock reprice information.

Pages Used to Set Up Stock Reprice Parameters

Page Name	Definition Name	Navigation	Usage
Define Stock Repricing - Eligibility	ST_REPRC1	Stock, Option Reprices, Define Stock Repricing, Eligibility	Enter the eligibility rules for the stock reprice, including the record date and break price, and exclude any groups of individuals or stock plans that should not be repriced.
Define Stock Repricing - Option Rules	ST_REPRC2	Stock, Option Reprices, Define Stock Repricing, Option Rules	Enter the new grant date, specify the features of the new grant, and specify how the option types are converted.
Define Stock Repricing - Vesting	ST_REPRC3	Stock, Option Reprices, Define Stock Repricing, Vesting	Define the vesting features of the new grant.

Entering Eligibility Rules for Repricing Stock

Access the Define Stock Repricing - Eligibility page (Stock, Option Reprices, Define Stock Repricing, Eligibility).

Record Date

Enter the cut-off date for determining eligible options. Each grant date must be less than or equal to this date.

Break Price

Enter the price for determining the eligible options. Each stock option selected during the Reprice Eligibility process is greater than or equal to this price.

Eligibility Status

Displays the status of the reprice process: Unprocessed, or Processed.

Status Date

Displays the date on which the reprice eligibility status was updated.

Exclude

Select the types of optionees that you want to exclude from the repricing.

Stock Reprice ID button

To exclude specific stock plans, companies, or countries, select the appropriate check box and click this button to search for the items to exclude.

Additionally Include

You can include individuals excluded from the reprice by the Exclude rules you selected.

Stock Reprice ID button

To include specific individuals, select the Optionee check box and click this button to search for the individuals to include.

Entering Conversion Rules for Repricing Stock

Access the Define Stock Repricing - Option Rules page (Stock, Option Reprices, Define Stock Repricing, Option Rules).

Grant Date

Enter the new option's grant date.

Cancellation Date

Displays the grant date, which is used to cancel the original options.

Stock Plan Rule

Select Keep Original Stock Plan or Apply New Stock Plan.

Stock Plan

If you selected a stock plan rule of Apply New Stock Plan, this field becomes available for entry. Select a new stock plan ID used to generate the new grants.

Exercise Before Vest Rule

Select Keep Original to keep the original rule or Override to change it.

Exercise Before Vest

If you selected the exercise before vest rule of Override, this field becomes available for entry. Select this check box to allow exercise before vest for the new grants.

Transferable Options Rule

Select Keep Original to keep the original rule or Override to change it.

Transferable Options

If you selected the transferable options rule of Override, this field becomes available for entry. Select this check box to allow transferable options for the new grants.

Agreement ID

Select an agreement ID.

Option Type Conversation

Select a conversion method for the different option types. For example, to convert grants to NQ grants during the Reprice Grants process, select NQ.

Defining the Vesting Parameters for Repricing Stock

Access the Define Stock Repricing - Vesting page (Stock, Option Reprices, Define Stock Repricing, Vesting).

Vesting Schedule Rule

Select Keep Original Vesting, Defer Original Vesting, or New Vesting.

Vesting Schedule ID

If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Select a vesting schedule ID for the new grants.

Option Expiration Basis

If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Select Grant Date, Grant Dt + 1, Vest Date, or Vest Dt + 1.

Life Limit Months

If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Enter the number of months from the option expire basis to set the expiration date for the vesting schedule.

Vesting Deferral Months/Days

If you select a vesting schedule rule of Defer Original Vesting, this field becomes available for entry. Enter the months and days by which to defer the vesting schedule for new grants.

Exercise Hold Date

Enter the date before which no shares can be exercised from the new grant.

Selecting Participants for a Reprice

This section discusses how to:

Run the Reprice Eligibility process.
Enter participant elections for a reprice.

Pages Used to Select Participants for a Reprice

Page Name	Definition Name	Navigation	Usage
Determine Eligibility	ST_RUNCTL_REPRC1	Stock, Option Reprices, Determine Eligibility	Run the reprice eligibility process using the reprice ID parameters set up using the Stock Reprice component.
Participation	ST_REPRC_PARTIC	Stock, Option Reprices, Participation	Enter a participant's elections to be included or excluded in the stock repricing. You must first run the Reprice Eligibility process.

Running the Reprice Eligibility Process

Access the Determine Eligibility page (Stock, Option Reprices, Determine Eligibility).

Stock ID	Enter the stock ID for the stock that you want to reprice.
Reverse Eligibility Process	To reverse a previously run eligibility process, select this check box.
Default Reprice Election	Select to make "yes" the default for the reprice election for all participants.

Exclude

The system displays the choices you selected on the Define Stock Repricing - Eligibility page.

Reprice Status

Eligibility Status	Displays the status of the reprice process: Unprocessed or Processed.
Status Date	Displays the date on which the reprice status was updated.

Entering Participant Elections for a Reprice

Access the Participation page (Stock, Option Reprices, Participation).

Reprice Election

If the participant elects to participate in the reprice, select this check box.

Reprice Participation Status

Displays the status of the optionee's eligible grant for the stock reprice process: Eligible, Notified, or Finalized.

Running the Reprice Grants Process

This section discusses how to:

Run the Reprice Grants process.
Reverse a reprice process.

You can run the Reprice Grants process as soon as you receive participants' elections and update participants' records. You can run this process repeatedly as you update the participants' records.

If you must correct errors, you can reverse the results of the repricing process.

Pages Used to Run the Reprice Process

Page Name	Definition Name	Navigation	Usage
Process Repricing	ST_RUNCTL_REPRC3	Stock, Option Reprices, Process Repricing	Run the Reprice Grants process.
Reverse Repricing	ST_RUNCTL_REPRC4	Stock, Option Reprices, Reverse Repricing	Undo the results of previous reprice processing to correct errors.

Running the Reprice Grants Process

Access the Process Repricing page (Stock, Option Reprices, Process Repricing).

Eligibility Status	Displays the status of the reprice process: Unprocessed or Processed.
Status Date	Displays the date on which the reprice status was updated.

Reversing a Reprice Process

Access the Reverse Repricing process page (Stock, Option Reprices, Reverse Repricing).

Process Method

Select Process All or Process by Individual.

Viewing Reprice Processing Messages

This section discusses how to view messages after you run a repricing process.

Page Used to View Reprice Messages

Page Name	Definition Name	Navigation	Usage
Review Reprice Messages	ST_REPRC_MESSAGE	Stock, Option Reprices, Review Reprice Messages	View messages produced by the Reprice Eligibility, Reprice Grants, and Reverse Reprice Grants processes. To access this page, enter the process name. Valid values are REPRC ELIG, REPRC GRANT, and REV REPRC.

Record Date	Enter the cut-off date for determining eligible options. Each grant date must be less than or equal to this date.
Break Price	Enter the price for determining the eligible options. Each stock option selected during the Reprice Eligibility process is greater than or equal to this price.
Eligibility Status	Displays the status of the reprice process: Unprocessed, or Processed.
Status Date	Displays the date on which the reprice eligibility status was updated.

Grant Date	Enter the new option's grant date.
Cancellation Date	Displays the grant date, which is used to cancel the original options.
Stock Plan Rule	Select Keep Original Stock Plan or Apply New Stock Plan.
Stock Plan	If you selected a stock plan rule of Apply New Stock Plan, this field becomes available for entry. Select a new stock plan ID used to generate the new grants.
Exercise Before Vest Rule	Select Keep Original to keep the original rule or Override to change it.
Exercise Before Vest	If you selected the exercise before vest rule of Override, this field becomes available for entry. Select this check box to allow exercise before vest for the new grants.
Transferable Options Rule	Select Keep Original to keep the original rule or Override to change it.
Transferable Options	If you selected the transferable options rule of Override, this field becomes available for entry. Select this check box to allow transferable options for the new grants.
Agreement ID	Select an agreement ID.

Vesting Schedule Rule	Select Keep Original Vesting, Defer Original Vesting, or New Vesting.
Vesting Schedule ID	If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Select a vesting schedule ID for the new grants.
Option Expiration Basis	If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Select Grant Date, Grant Dt + 1, Vest Date, or Vest Dt + 1.
Life Limit Months	If you select a vesting schedule rule of New Vesting, this field becomes available for entry. Enter the number of months from the option expire basis to set the expiration date for the vesting schedule.
Vesting Deferral Months/Days	If you select a vesting schedule rule of Defer Original Vesting, this field becomes available for entry. Enter the months and days by which to defer the vesting schedule for new grants.
Exercise Hold Date	Enter the date before which no shares can be exercised from the new grant.

Reprice Election	If the participant elects to participate in the reprice, select this check box.
Reprice Participation Status	Displays the status of the optionee's eligible grant for the stock reprice process: Eligible, Notified, or Finalized.