Creating Vesting Schedules
To create vesting schedules, use the Vesting Schedule (ST_VEST_SCHED) component.
Vesting schedules govern when and in what proportions shares become available to optionees. Vesting schedules are used when you grant options.
You can generate the Vesting Schedule report (STUSU021) to view vesting schedule information.
|
Page Name |
Definition Name |
Usage |
|---|---|---|
|
ST_VEST_SCHED |
Create vesting schedules. This topic also provides Examples of Common Vesting Schedules |
Use the Vesting Schedule page (ST_VEST_SCHED) to create vesting schedules.
Navigation:
This example illustrates the Vesting Schedule page.
Field or Control |
Description |
|---|---|
Uneven Share Rule |
Indicate how the system is to handle fractional shares: Last Vest Period. Allocate to the last vesting period. This is the default value. First Vest Period. Allocate to the first vesting period. First Full Share. Accumulate over the vesting periods until the fractional shares add up to one full share, then add the share to the vesting period where that occurs. |
Vesting Begin Code |
Select Grant Date (the default) to have vesting start on the grant date. Select Start/Hire Date to have vesting to start on the effective date of the Action of Hire. Select Other Date to enter a random date at the time of the grant on the Maintain Grants - Vesting page, the Modify Grants - Modify page, or the Create VC Grants - Grant page. |
Sequence |
This field displays the row number in the vesting period sequence. Vesting schedules frequently have more than one sequence. For example, you can vest 25 percent of the grant after one year and then vest in quarterly increments over the next three years. |
Vesting Frequency |
You can select different vesting frequencies for different sequences within one vesting schedule. For each, the first vest date depends on the Vesting Begin Code selection. All other vest dates (excluding the first vest date) depend on the previous period vest date. The vesting frequency must logically match the vesting months. Values are Vest Date (all shares vest as of the Vesting Begin Code date), Monthly, Quarterly, SemiAnnual, and Annually. |
Vesting Months |
Enter the number of months in each vesting period. The vesting months must logically match the vesting frequency. |
Vesting Percent |
Enter the percentage of shares vested during each vesting period. The sum of the percentages must total 100%. |
Period Count |
This field displays the number of vest periods relative to the Vesting Frequency you selected and the number of Vesting Months you entered for the sequence. For example, if you select a Vest Frequency of Quarterly and enter 36 in the Vesting Months field, the system calculates a Period Count of 12 (the number of quarters in 36 months). |
Examples of common vesting schedules, and how you enter them in the Vesting Schedule page, follow.
Example 1: Shares Vest Equally Over Three Years Beginning One Year From Hire Date
You grant an option on 04/01/99 for 1,000 shares to vest equally over 3 years, starting one year from the optionee's hire date of 03/15/99. You can define a vesting schedule that looks like this:
Vesting Schedule ID: 3at33%-Service
Description: Shares vest in three equal increments beginning one year from the Service Date.
Uneven Share Rule: Last Vest Period
Vesting Begin Code: Start/Hire Date
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Annually |
12 |
33.00 |
1 |
|
2 |
Annually |
12 |
33.00 |
1 |
|
3 |
Annually |
12 |
34.00 |
1 |
Or you might create one entry:
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Annually |
36 |
100.00 |
3 |
Because you specified the uneven shares load at the end of the vesting schedule, the fractional one-percent share is included in the last period. The shares vest as follows:
03/15/00 - 333 shares.
03/15/01 - 333 shares.
03/15/02 - 334 shares.
Example 2: All Shares Vest at Grant
You grant an option on 04/01/99 for 1,000 shares to vest 100% on the date of grant. You can define a vesting schedule that looks like this:
Vesting Schedule ID: 100%atGrnt
Description: All shares vest on the date they are granted.
Uneven Share Rule: First Full Share
Vesting Begin Code: Grant Date
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Vest Date |
0 |
100.00 |
1 |
Example 3: Shares Vest Equally Over Four Years Starting One Year From a Random Date
You grant an option on 04/01/99 for 1,000 shares to vest at 25% per year over four years starting one year from a random date of 10/01/98. The vesting schedule might look like this:
Vesting Schedule ID: 4at25%-Random
Description: Shares vest in four equal increments beginning one year from a random date.
Uneven Share Rule: First Full Share
Vesting Begin Code: Other Date
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Annually |
12 |
25.00 |
1 |
|
2 |
Annually |
12 |
25.00 |
1 |
|
3 |
Annually |
12 |
25.00 |
1 |
|
4 |
Annually |
12 |
25.00 |
1 |
Or you can create one entry:
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Annually |
48 |
100.00 |
4 |
When you grant the shares, you specify the date the shares start vesting on the Maintain Grants - Vesting page, the Modify Grants - Modify page, or the Create VC Grants - Grant page. The shares vest as follows:
On 10/01/99 - 250 shares.
On 10/01/00 - 250 shares.
On 10/01/01 - 250 shares.
On 10/01/01 - 250 shares.
Example 4: Quarter of the Shares Vest After One Year Then Monthly for Three Years
You grant an option on 04/01/99 for 1,000 shares to vest at 25% after one year from the date of grant and then monthly thereafter for the next year. You want to accumulate fractional shares over the vesting periods until they equal one full share, then add them to the vesting period where that occurs. You might define a vesting schedule that looks like this:
Vesting Schedule ID: 4YrCombo
Description: Shares vest 25% after 1 year and monthly thereafter for 3 years (36 months).
Uneven Share Rule: First Full Share
Vesting Begin Code: Grant Date
|
Sequence |
Vesting Frequency |
Vesting Months |
Vesting Percent |
Period Count |
|---|---|---|---|---|
|
1 |
Annually |
12 |
25.00 |
1 |
|
2 |
Monthly |
36 |
75.00 |
36 |
The shares vest as follows:
On 04/01/00-250 shares.
On 05/01/00- 62 shares.
On 06/01/00- 63 shares.
On 07/01/00- 62 shares.
On 08/01/00- 63 shares.
On 09/01/00- 62 shares.
On 10/01/00- 63 shares.
On 11/01/00- 62 shares.
On 12/01/00- 63 shares.
On 01/01/01- 62 shares.
On 02/01/01- 63 shares.
On 03/01/01- 62 shares.
On 04/01/01- 63 shares.