Understanding Grant Administration

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

Once you establish your stock option plans and allocate funds to them, you're ready to grant stock options to your optionees.

You can grant stock options to your participants in three ways:

  • Process grants awarded through your variable compensation plan.

  • Award grants from an individual stock option plan through an online transaction.

  • Replace an existing grant with a new grant during a reprice.

By using variable compensation, much of the process is automated. But you can still make adjustments and grant individual grants as necessary.

Before you begin granting stock options, you should:

  • Create the vesting schedules.

  • Set up your stock option plans.

  • Create your grant reasons.

  • Set up agreements.

  • Set up the default tax tables.

  • Add insider data.

  • Add issuance instructions.

  • Enter daily prices.

  • Allocate shares to the stock option plan and variable compensation plan.

  • Receive variable compensation awards.

Field or Control

Description

Agreement ID

Select a grant agreement to use for this grant. If you selected a Parameter ID its agreement ID is the default. You can select another from the available options.

Employee Information

This group box displays employee information as of the grant date.

Exercise Before Vest

If the option plan allows exercise before vesting, you can select this check box. If the option type is RSA this check box is selected.

Expire Basis

Displays the value that is associated with the option parameter ID. You can select Grant Date, Grant Date - 1, Vest Date, or Vest Date - 1 to indicate the date used to calculate the start of the option life months.

Grant Date

Defaults to the payout period's end date associated with the payout period ID or the VC plan ID. You can change it, but the date must be between the payout period's begin date and the end date.

Grant FMV

Displays the Grant FMV calculated based on the Daily Prices table and defined using the Stock Option Plan Rules - FMV Rules page.

Grant Number

Displays NEW when you enter a grant. When you save, the system generates a sequential grant number from the last grant number stored on the Stock table.

Grant Price

The system default is the Grant FMV (fair market value) calculated based on the Daily Prices table and defined in the Stock Option Plan Rules - FMV Rules page. You can change this amount.

If the option type is ISO, the grant price cannot be less than the FMV on the grant date.

If the optionee is a 10% shareholder, the grant price of an ISO/ISAR grant has to be at least the Grant FMV multiplied by the 10% shareholder FMV rule on the governing body rules table.

Grant Status

Valid values are Active, Void, and Pending.

Life - Months

Displays the value associated with the option parameter ID, which you can change. Enter the number of months that the option remains outstanding.

If the option type is ISO or ISO/SAR, the maximum life months is defined on the Governing Body Rules table. The value in this field cannot exceed the number in the Governing Body Rules table.

Shares Granted

Number of shares to grant to an individual.

Stock Plan

Plan from which you want to grant the options. Once you save the grant and it is active, the unallocated plan shares balance on the Option Plan component (STOCK_PLAN_BAL) changes to reflect the grant.

Transfer Option

If the option plan allows options to be transferred, this field is available. Select to allow the options to be transferred. This field is not available if the option type is ISO or ISO/SAR. This field is for information only.

Vesting Begin Code

Displays the value that is associated with the vesting schedule ID.

Vesting Schedule ID

Displays the value associated with the option parameter ID, which you can change.