October 18, 2011
In this Issue:
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SOS Xtranormal Participant 6039 Education Videos:
SOS Employment Opportunities
From the SOS Xtra Archive:
Product Spotlight: Customized Year-end Tax Statements
A recorded demo of "Email Xpress", the SOS automated solution for emailing participant stock plan confirmations and statements, is now available:
From the SOS Webcast Archive -
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Do you have ideas for our next newsletter or webcast? Topics you're dying to see addressed but haven't yet? Please send us an e-mail with your ideas to: email@example.com.
It was crunch time, the IPO was imminent, financials flying, excitement abounded, and no one knew how the outsourced stock department was going to open up an employee call center within a few days. The service provider could not roll out a call center to manage the expected flood of employee questions in time to deal with the IPO. The Company knew it was the first time the employees could see the actual value from their years of service and the Company didn't want to miss the chance to reinforce how thankful they were to the employees for the success.
The Company faced issues such as making sure the call center personnel were trained on the intricacies of the plan, company culture, and the details of the corporate transaction all in a matter of days. It was imperative to assure a quality employee experience for each and every participant. Everywhere the Company looked there were no industry solutions that could meet these demands in the time period required.
Luckily, they found Stock & Option Solutions. Leveraging the depth of our consulting group, and relying on our expertise in both the IPO/equity compensation arena, as well as in employee communications, SOS implemented a Call Center in two days with trained experts that came up to speed on the IPO transaction details and company culture in hours. The SOS consultants staffing the Call Center engaged with Client management and provided real time feedback on the status of the Call Center and Company employees. Company Management now had direct information regarding trends and employee feelings regarding the success of their IPO and equity plans. This feedback allowed company management to be responsive to employee needs at this critical time and showed that participants were thrilled with the IPO and plans. Management communicated this information to inspire employees to keep their energy focused on the Company success.
In an industry based around standard service solutions, SOS is proud to be able to immediately respond to its customers needs and create customized solutions for the impossible. With team members like Tim McCleskey, Susan Garvin and Sarah Roberts (a few of SOS's Certified Equity Professionals with over 50 years of equity experience between the three of them) on the front line every day solving customer issues, SOS can help you, our Clients, quickly climb the ladder of success.
Barrett Scott, Principal
SOS Out and About
Where we've been...
SOS Solutions Webcast: Diluted EPS - Let SOS Dilute Your EPS Problems
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Special Dividends for Option HoldersThe Special Dividend
Over the course of the last year, SOS assisted several clients with processing a special dividend on their company stock which also impacted for their stock plan participants. While the shareholders receive the dividend payout, these dividends impact equity instruments. While the impact to optionees varies between companies, the one constant is that those who hold options or awards see a change to their grants that is equivalent to the dividend payout.
This process begins when a company decides to reward their shareholders for investing in the company, often when a company has cash on hand but the share price has not delivered the desired value. The board of directors determines the payout (on a per share basis) to provide and give that amount in either cash or stock to shareholders of the company. This payment is known as a special dividend. The clients with whom we have worked most recently provided cash dividends to their shareholders and adjusted the outstanding stock grants accordingly.
How do they work?
With most of our clients the adjustment to the stock option or restricted stock unit was as follows:
Employees who hold an unexercised stock option have the exercise price reduced by the amount of the special dividend. In cases where there is a $0.00 share price, as in the case of an unvested restricted stock unit award, or the exercise price is under a particular threshold (as determined by the dividend), then an increase to the underlying shares of the option or award is applied to provide an equivalent ratio for those holders.
In doing so, the total value (including fair value) of the grants is not changed and in the cases with which SOS has assisted, the original expiration date, vesting and all other terms under the agreement remain the same. Likewise, the expense that has been recognized is not impacted nor requires adjustment.
How do you update the database?
While on the surface it may appear to be a fairly straight-forward concept, the closer you look you find that the devil is in the details. And few, if any systems, can automatically process such a transaction. The following pointers will help you to prepare and make the necessary changes resulting from a special dividend:
Julie Kenia, CEP
Julie is a Senior Equity Consultant for Stock & Option Solutions, Inc. (SOS). Julie has helped countless clients with projects ranging from special dividends to stock splits and option exchanges as well as data conversions related to software vendor changes. Julie has also provided clients with interim stock plan support during leaves. Prior to joining SOS Julie was Manager of Long Term Equity Plans at AT&T Corp.
Free SOS Educational Webcast
Data Do's and Don'ts: How to Keep Your Employee Data Safe
November 10th, 2011
Please join us for our next educational webcast on November 10th at 11am Pacific Time, 2pm Eastern Time.Description:
One of the many responsibilities of a stock plan professional involves the maintenance of Personal Identifying Information ("PII"), such as social security numbers, home addresses, wage information, and tax withholdings. This data is passed across multiple systems, departments, internal and external parties, resulting in numerous opportunities for sensitive information to be lost or mishandled.
Who's responsible for keeping this information private? Guess what: YOU ARE. You and everyone who comes in contact with this data have an obligation to protect your company from a costly data breach and your fellow employees from destructive identity theft. Whether or not you are directly touching employee PII on a daily basis, it is everyone's responsibility to understand the importance of shielding this data and knowing how to safeguard it.
In this webcast, we'll discuss what constitutes PII, US regulations governing the handling of such data, and the consequences of a loss or breach. We'll look closely at the most common areas of risk in equity plans and best practices for addressing these concerns. Finally, we'll arm you with questions to ask and things to think about as you evaluate the level of data security within your own stock plan group.
We will save you time, reduce your company's risk and make compliance with Section 6039 as easy as answering these questions:
SOS Can Also:
SOS Across Our Desk: Equity Compensation in the News...
Employee Stock Options
Insider Trading Policy
SOS Xposé...tender tidbits about people and players in our industry...
New Beginnings...Jim Sullivan is in a new job as Stock Plan Administrator at Apple...Blue Coat has added Kenn Lara to their team as Senior Compensation Manager...Samantha Lagocki began her new role as Sr. Stock Services Specialist at Equinix this week...Jean Wong recently joined Gilead Sciences as Director, Stock Plan Services...Global Shares appointed David Limb as VP Business Development Europe that will be based in London...Congratulations to everyone!
New Arrival...John McCann and his wife Shelley have welcomed a baby boy. John McCann V was born on on October 5th, and weighed in at 10 lbs. Congratulations, John and Shelley!
What Comes in 3's...Robyn Shutak of NASPP just completed her first triathlon in September. Anyone want to arm wrestle?
Baby Bump...Jessica Carbullido of Con-Way is expecting her 3rd child on tax day, 2012. Congrats!
Industry News...NASPP Conference: SOS is presenting four sessions at this year's NASPP Conference! The Conference is in San Francisco from Nov 1-4; we hope you'll come to our sessions and stop by our booth to say hello...We've heard that NASPP Conference hotel is about to run out of rooms--register for the Conference today and book your room today so you don't miss out...8th Annual CEP Symposium - March 27, 2012. Register Now...Help Set NCEO's Equity Compensation Webinar Schedule--NCEO is running an online survey on which equity compensation Webinar topics you'd like to see...Last month, Solium Transcentive released a new version. Learn more here.
|Information provided in this newsletter is designed for educational and entertainment purposes only and is not provided as professional service or advice. Moreover, this newsletter should not be relied on as legal, accounting, auditing, or tax advice. Anyone reading this newsletter should not act upon this information without seeking professional counsel and/or input from their advisors. The preceding information does not necessarily represent the official views of Stock & Option Solutions, Inc. with respect to any of the issues addressed.|
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