Understanding Stock Option Plan Setup

This section discusses the steps for setting up stock option plans. Depending on how your organization administers its stock option plans, the majority of this setup phase is a one-time event that requires periodic maintenance on your part.

To set up stock option plans:

1. Create vesting schedules for stock options.

2. Define fiscal year calendars for stocks, if applicable.

3. Define basic stock option plan rules.

   Basic rules include the option types allowed, payment and income methods, share rules, FMV rules, and other parameters.

4. Define the tax rules.

5. Define the various reasons that you grant stock options.

6. Define stock action rules.

   These rules specify how certain changes in an optionee's human resources status can affect how the optionee participates in your stock plan.