Understanding Administering Exercises
This section lists prerequisites and common elements and provides an overview of administering exercises.
Before you begin administering exercise transactions, you should:
Set up the various stock tax types and default tax rates.
Grant options to the optionees.
Establish issuance instructions for your optionees.
Make sure that the grants are active and not pending.
Make sure that daily prices are current.
Field or Control |
Description |
|---|---|
83b Election |
This field is only available for a restricted exercise. Use if the optionee files an IRC 83(b) tax election. |
Employee Information |
This group box displays employee information as of the exercise date. |
Exercise Before Vest |
Selected if exercising before vesting is allowed for the option. |
Exercise Number |
The system displays NEW when you enter an exercise. When you save, the system generates a sequential exercise number from the last exercise number stored on the Stock table. |
ID |
Click to access the Employee Information page to view employee information. |
Restricted Exercise |
Selected if the exercised shares are unvested. |
Optionees may exercise stock options on or after the vesting date; prior to the vesting date if exercise before vesting is allowed; or at any time during the life of the stock option, depending on the terms of your stock option plan.
When an optionee exercises a grant, you record the number of shares exercised, the funds and any applicable taxes due from the optionee, and issue the shares.
Depending on the type of option being exercised and the exercise method selected, you can issue the shares in a stock certificate, electronically deposit them with a stock broker, or hold the shares in escrow until the optionee meets restrictions, such as vesting.