Stock Option Agreements Single Dialog Workspace
Use this workspace to set up stock option agreements with your employees and others.
You assign stock option agreements to contact persons so that you can create stock option agreements for employees as well board members and partners. To create agreements for your employees, you must assign each employee to a contact person. Here, the term "contact person" includes employees and other company-related persons.
A stock option agreement is an agreement that the company will grant the employee or company-related person (for instance, a board member) a given number of stock options of a given type within a certain period. For example, a stock option agreement could say that the company grants the employee Hugo Rune 2,000 options for B-shares at a given price over the next two years.
When you create a stock option agreement, enter the contact person who represents the employee or company-related person for whom the agreement is intended, and enter a stock option agreement type. The stock option agreement type determines the stock type and contains template information that Maconomy transfers to the new agreement. The agreement type also functions as a framework of defined rules with which the agreements classified under that type must comply. For instance, the agreement type defines the total number of shares to be allocated to the agreements classified under it, and Maconomy ensures that the number of shares granted to a specific agreement does not exceed the remaining number of shares that are available for that agreement type. For more information, see the description of the fields in the Stock Option Agreement Types workspace.
You can set up a detailed vesting plan for the options granted in the agreement. For example, you can set up a plan wherein the first 1,000 options vest after one year, the next 500 vest after 18 months, and the remaining options vest after two years. Set up the vesting plan in the Stock Option Agreement Lines sub-tab, where you enter a line for each vesting period, including the number of options to vest in that period. You also use this sub-tab to enter the exercisings that the contact person for the agreement must perform. When a contact person wants to exercise an option, you select the line that contains the shares to be exercised, enter the relevant number of shares and the market price per share on the current day, and select Exercise in the Transaction Type field. Maconomy ensures that the options for the selected line have vested and that the number of shares exercised does not exceed the number of shares granted on that line. When you use the Register Transaction action, the exercising is stored in the database and appears in the Stock Option Exercisings workspace, where you can see all exercisings performed by the specific contact person.
You can also cancel stock options. For example, if an employee leaves the company, thereby forfeiting shares not yet exercised, cancel the employee's remaining shares by entering a Cancellation transaction type for the employee's remaining number of shares. The method for entering cancellations is similar to that for entering exercises in that you must provide values for the same fields. However, leave the Share Price field blank for cancellations. Just like exercises, cancellations are stored in the database and appear in the Stock Option Exercisings workspace.