Introduction
This article will guide you through the workflow to record a stock split. If you are unsure about whether your company has undergone a stock split, consult with your lawyer. Please note that this workflow will require that you upload evidence of the stock split, such as the Board Consent approving the split, and will not generate any documentation to effectuate the change.
See our blog for more information about stock splits (or reverse stock splits).
Stock Splits Workflow
Click on the link below for more information about what to expect during the workflow:
- Getting Started
- Provide Split Data
- Approvals
- Stock Incentive Plan
- Review Equity Promises
- Review Stock Certificates
- Checkpoint
Getting Started
To begin, select the Stock Split (Upload Only) workflow, located in the Equity section of the Start New Workflow page.
Provide Split Data
Make sure to have the date of the stock split, the Split From shares number (1 is pre-populated but can be changed), and the Split To shares number handy as you will be asked to input this information. The Price Per Share will be calculated automatically based on the split to and from numbers that are entered in:
Once the data is entered, the next page in the workflow will require you to submit information about the preferred stock in your company, if applicable. Click on the Edit icon to see how you may edit the preferred share conversion ratio:
Approvals
Next, the workflow will require you to upload or defer a Board Approval as well as Stockholder Approval for the stock split.
Stock Incentive Plan
On the next screen of the workflow, you'll be asked to upload your company's Amended Stock Incentive Plan (SIP) if there is one in place. Please note that at the end of this workflow, the system will adjust the size of your Stock Incentive Plan by the split ratio.
Review Equity Promises
After providing the SIP documentation, you can review any outstanding equity promises your company might have. The grant amounts shown in the Grant Shares workflow for these equity promises will be updated to reflect the new post-split amount once the split becomes effective.
Review Stock Certificates
You'll be able to view all of your company's stock certificates (as they will be affected by the split). First, the original stock certificates will be displayed as they appeared before the stock split. If you would like to generate the post-split certificates for these stockholders, check the box and then click Continue.
On the next page, you will be able to view the updated electronic certificates, or you will be asked to upload the new certificates (depending on whether or not you checked the box on the first page of the workflow asking you whether or not you wanted to upload the certificates affected by this split).
Checkpoint
You will have the option to review all of the documents that you have uploaded (and the certificates you have generated, if applicable) at this point in time. You will also be able to send documents out to your legal team for review. Once you move past this screen, you will have recorded the stock split for your company and can no longer go back and make changes. Additionally, the new certificates will go out for signature to the company's President and Secretary if you chose to generate them.
Once all certificates have been signed (or, if uploaded, once you move past the Checkpoint step), the stock split has been recorded in your account, and your cap table and stock ledger have been updated. If a change in authorized shares is required, please perform the Change Authorized Shares workflow now.
Fidelity Private Shares LLC provides cap table management and other administrative services to private companies and their equity compensation plans.
Screenshots are for illustrative purposes only.
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