October 28, 2014
Volume 7, No. 5

In this issue:

Vegas Conference Confessions...SOS Recaps the 2014 NASPP Conference

Aspirations Fever

SOS Online Demos

Free SOS Educational Webcast: Getting the Last Word: Mastering Mail Merge (and other Word functions)

Consultant Corner: Conversions Gone Bad! And How to Avoid Them...


SOS Xposé

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From the SOS Library:

Section 6039 Electronic Participant Statements

From the SOS Webcast Archive-

Voyage to the End of the Year: How to Comply with Year-end Regulations

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Equity Compensation Projects/Consulting

SOS-TEAM Outsourcing

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Vegas Conference Confessions...SOS Recaps the 2014 NASPP Conference

We recap one of our industry's biggest stock plan conferences in this month's Xtra:

The NASPP National Conference returned to Las Vegas this year to mark and celebrate the 22nd anniversary of the largest conference in our industry.  This year the conference was packed with 50 exhibitors and more than 1800 attendees! (Our favorite booth tchotchkes this year, excepting our own, were the stuffed animal camels from Linklaters!) With 11 sponsors and close to 200 speakers, the NASPP conference was chock-full of content and late-breaking information.  See the pictures from the NASPP.

A conference app was available for the first time this year and got rave reviews for providing a detailed schedule of sessions and events, a networking game, an attendee list, and note taking capabilities. You even had the choice to forgo taking a copy of the massive materials books home since all the materials were available online (one less thing to cram into your homebound suitcase).  The Ask the Expert booth was a popular place to hang out this year and the evening events included good drinks, great food, mingling, and an array of activities (including the Cirque du Soleil Show at Mandalay Bay, Michael Jackson ONE!).

As usual, the SOS booth had phenomenal giveaways. This year you needed a lucky roll of the super-sized, inflated dice. We also had our much-anticipated cash giveaway at the final break. We recorded over 250 booth visitors, making it one of our busiest years ever!

As previously noted, SOS spoke on a record five panels this year! Elizabeth Dodge, Christine Zwerling, Steve Gaylord, Andrea Best, and Sorrell Johnson brought their A game to Vegas while squeezing in client work on the side.  

NASPP 2015 was announced for October 27-30 in sunny San Diego, California. We hope to see you there!

Shawna Casey
Associate Director, Marketing
Stock & Option Solutions

Aspirations Fever 

Our fourth annual Aspirations on November 4, 2014, is fast approaching. The conference, a unique event which focuses on the issues facing those managing stock plans at private/IPO companies, will be held again this year at Villa Ragusa in the heart of the Silicon Valley. We have announced the speakers, the schedule, the credits offered (CEP, CLE, and CPE) and now a look at the overflowing vendor hall:

We are pleased to partner with the following Aspirations sponsors: 

With the incredible, content-rich agenda, unparalleled speakers, lively vendor hall, and the comfortable and convenient venue, Aspirations will be your favorite conference this fall. Don't miss this event.

Shawna Casey
Associate Director, Marketing
Stock & Option Solutions

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Suggestions for articles and webcasts are welcome. Please email us at xtra@sos-team.com.

SOS Online Demos

Julie Kenia works through Transpose, a helpful tool for Stock Plan Professionals

Steve Gaylord demonstrates how Access is the perfect tool for data validation


Free SOS Educational Webcast:

Getting the Last Word: Mastering Mail Merge
(and other Word functions)


Please join us for our next educational webcast on November 18, at 11am Pacific Time, 2pm Eastern Time.


Whether we like it or not, much of stock plan management involves documents of one form or another. From one-page employee communication emails to massive process and procedure documents to award agreements and memos documenting modifications, we use MS Word nearly as much as we do Excel. At SOS we review and update hundreds of these documents every year and see many of the same inefficiencies and issues over and over again.

Further we recently learned that some stock plan professionals were unaware that you can use MS Word to blast personalized emails to your participants for quick and effective (and inexpensive!) custom communications such as grant notifications, grant expiration notices, transaction confirmations and more!

This session is designed to help you learn a few of the tips and tricks in MS Word that the SOS team has come to know (and love) over their many years in equity compensation. Using tools like Mail Merge or Compare in Word can make your job easier and your documents more professional.  Have you ever wondered if there was any way to keep your paragraphs from splitting apart with only the first line of the paragraph at the bottom of one page while the other lines are on a second page?  How about creating an easily updated Table of Contents?   Need to create a table and keep the headings at the top of each new page? 

Join our expert panel for an overview of using mail merge and other helpful functions in Word to assist you with these challenges. 

Functions covered will include:

  • Paper and email mail merging
  • Watermarks
  • Word Counts
  • Styles
  • Keeping lines together
  • Keeping paragraphs together, etc.
  • Header rows with Tables
  • Table of Contents
  • Compare


(One hour of Certified Equity Professional continuing education credit is available for attending. See the CEPI website for more information on CEP continuing education requirements.)?


 Take your career to new places with SOS. We're hiring.

SOS Consultant Corner - Conversions Gone Bad! And How to Avoid Them...

In a previous newsletter, we featured an article entitled "Having the Right Ingredients for a Successful Data Conversion". Our goal was to help you prepare for a conversion so that it could be done efficiently and accurately.

But what if you have already finished your conversion? You might think that because the number of shares granted, exercised, and canceled before and after match as of the conversion date, that all is well-- and hopefully you are right. It is also possible that the converted data has differences and discrepancies and these differences may not be discovered until much later. Some of these differences may be relatively minor, while others may require a great deal of manual work to fix. In some cases, companies have simply had to start over and convert again. We don't want you to be that company. 

The following items are things to check when your conversion is "completed" that will help verify that your conversion did not go BAD, or to keep in mind if you have a conversion on the horizon.

#1) Vesting! 
Everything can look peachy keen when you compare your grant-level summary data such as granted, exercised, released outstanding, cancelled, releasable and exercisable shares on your conversion date. But to be certain your vesting was converted correctly, you need to look at the status of the grants at several points in time. We recommend reconciling exercisable and vested shares using multiple dates. We suggest that you choose at least one date prior to your conversion cutoff date, the date as of your conversion cutoff, and one or two more dates out into the future. This is one of the best and fastest ways to tell if vesting has been converted properly.

When we are assisting our clients with a conversion, we will typically select our dates based upon the vesting schedules so that we can try to look at the data at points near where vesting may have occurred. For example, if our client has an annual vesting and their conversion is done as of October 13, 2014 we might look at the data as of the following dates, separating our choices by at least a year:

July 23, 2013
September 9, 2013
October 13, 2014 (always select the conversion as of date as one of your reconciling points)
December 16, 2015
February 20, 2016
March 8, 2017
If they were to have monthly vesting, we might select the following dates, with some spread one month apart:

July 23, 2013
September 8, 2014
October 13, 2014 (always select the conversion as of date as one of your reconciling points)
November 22, 2014
December 16, 2015
January 25, 2016
Another approach for vesting reconciliation is to reconcile the shares granted at the vesting tranche-level. This could require massive amounts of data (depending on your vest schedule and amount of data history), so this approach may not be feasible unless you are using MS Access to perform your reconciliation, but it is a foolproof way to prove out your conversion at all points in time with one step.
#2) Termination Provisions
Stock plan systems handle termination provisions differently. In some systems you set the termination provisions at the plan level so that, when you load grants, the defaults are set according to the provisions in your plan. In some systems, you have the ability to set termination provisions at the grant level. In both cases, the initial termination provisions may be modified after the terminations have been processed.

When converting, the possibility that provisions may have been modified, or may be different at the grant level, is often overlooked. The grants and terminations may simply be loaded using the plan-level defaults. This is why it's important to reconcile data comparing at the actual cancel dates for both the unvested and vested shares as well as the vesting stop dates. 

Consider a termination on a grant that is fully vested at the time of the conversion for 1,000 shares. Assume that the conversion date is July 1 2014, and that for some valid reason the last date to exercise vested shares has been modified from a customary 3 month period to 12 months (July 1, 2015).

When reconciling shares, the 1,000 shares shows as vested and exercisable as of the conversion date of July 1, 2014, and that vesting reconciled for any points in time that you picked prior to the conversion date. Suppose you picked your future data points to be December 31, 2014, March 30, 2015, and July 1, 2016.
On December 31, 2014, the 1,000 shares will show as vested, as they will also on March 30, 2015. By July 1, 2016 they will show as cancelled.

But--short of reconciling your grant summary data for every day into the future--there is no way to know for sure that you have caught the exact cancellation date during the conversion, since the vested shares are cancelling on July 1, 2015 which is in between the March 30, 2015 and July 1 2016 data points we checked.

In this example, the shares will cancel on July 1, 2015, and we only know that as of March 30, 2015 the grant was fine and that as of July 1, 2016 the grant was fine. But suppose during the conversion the last date to exercise was mistakenly entered as April 15, 2015.  Even reconciling at these multiple points you would not identify this discrepancy. It is only by comparing the exact projected cancellation dates - comparing those dates from the source system to the dates in the target system - that the problem would be discovered.    

Sometimes these projected cancellation dates are easy to extract from your system to perform a comparison, and sometimes you have to customize reporting to compile the data to compare. It is extra work, but it is an important step in ensuring that your conversion is correct and complete..

#3) Reconcile at the participant level
Again, it is possible for everything to reconcile well when you are comparing data at the grant level. But don't forget to also compare at the participant level. For example, if you accidentally change participant identifiers during the conversion process, you may wind up loading the right amount of shares granted, but to the wrong participants.  Only an audit at the participant ID level will help you identify this type of problem.

#4) Reconcile at the grant type level
As with #4 above, it is possible to make a mistake in the type of grant and not affect your numbers. Thus, this is another possible issue that you will not catch unless you reconcile by grant type.
If you have recently completed a conversion, these are a few of the areas that require extra scrutiny to avoid downstream issues.  

The SOS Conversion Team 
Stock & Option Solutions, Inc.

SOS Xposé

...tender tidbits about people and players in our industry...

Handing out new business cards...Ingrid Freire is now working for Yahoo! As the Director of Finance, Stock Plan Services. Sinead Kelly is now Senior Counsel, Securities at Wells Fargo & Company.  Shelley Cole is now the VP of Total Rewards for Take-Two Interactive Software, Inc. Kimberly Canigiula is the new Senior Manager of Global Equity at MobileIron. Loann Nguyen is with Brocade as the Stock Administration Manager. Dayana Abreu is now the Senior Implementation Manager at E*TRADE Financial Corporate Services Inc.

Answered prayers...Dan Walter and Melanie Jameson from Performensation bailed on the NASPP conference for kind of a good reason. They brought their new son, Greyden Jameson Walter, into their lives on September 16, 2014. Greyden's story involves the help of many from the equity compensation industry and Dan and Mel want to thank all of you (but you will have to contact one of them directly for more details.) Dan: dwalter@performensation.com, Mel: mjameson@performensation.com.

Pitching in...With a combination of recycled SOS bottles and cans, and collected donations, Leah Lane & Gary Cogger, both of SOS, raised $946.00 to contribute to the total of $264K raised at the Walk N Wag fundraiser for the Humane Society of Silicon Valley.

SOS is hiring and here are our recent additions:
Jennifer Lim (People Solutions)
Athena Snider (People Solutions)
Sorrell Johnson (Strategic Team)
John Flanigan (Sales)

SOS has a suite of 6039 Services and Solutions, have you seen it?

Did you miss an issue of Xtra? View our complete newsletter archive from our website here.
Miss a webcast? You can find links to recordings, as well as the materials, on our webcast page.

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.

Stock & Option Solutions | (888)SOS-0199
SOS Xtra Editor: Shawna Casey