From the Hypotheticals page you can create and value hypothetical grants –
providing you with the basic ability to run different scenario analyses with respect
to their stock option awards. You have the ability to manipulate the following:
· Grant
date
· Stock
price
· Exercise
price on grant date
· Contractual
term of the grant
· Vesting
schedule for the particular instrument.
1. Enter the Grant Date. Enter a date in the date field or click on the calendar
icon to select a date using the calendar.
2. Enter the Contractual Term. The number is measured in years.
3. Enter a Grant Date FMV. The number is measured in dollars.
4. Enter an Exercise Price. The number is measured in dollars.
Notes: The grant date FMV and the exercise price are used to show the impact
that different model inputs have on option values when the exercise price is held
constant. Note that you may create a premium- or discount-priced option by
entering different values for the FMV and grant price.
4. Create a Vesting Schedule:
Define an expanded vesting schedule for the life of a hypothetical grant. All
fields must be entered and the total percent vesting must equal 100%.
a. Enter the Percent Vesting. The Percent Vesting defines the total
percentage of the options grant that vest according to the vesting defined
on a particular row inputted by you. The Percent Vesting is closely related to
the Number of Periods because each row could generate multiple vesting
dates. The overall Percent Vesting must total 100%.
b. Enter a Period Type. The Period Type defines the type of period of time
to create vesting date increments. Users can create period increments
annually, monthly, weekly or daily.
c. Enter Period Increments. The Period Increments is a positive integer
that defines how much of the period type does the option vest at each
vesting date (i.e. 2 years, 6 months).
d. Enter the Number of Periods: The Number of Periods in each row define
how many vest dates that particular row creates. For example, number of
periods is 2 on first row, which means it will generate vest date 1 and vest
date 2).
e. Click the Add button.
f. To reset any period increments and start over:
- Click the Reset button.
5. Select an Assumptions Scenario:
Any saved assumptions scenarios are listed in the drop down list in the Hypothetical Valuations using Assumptions Scenario section at the
bottom of the page. At least one scenario must be selected. If no Assumptions
Scenarios are defined, click the Assumptions Scenarios button to add one.
6. Click the Calculate button.