Report Stock/Stock Options

• If the purchase price is less than the stock/stock option’s valuation on the day of receipt, the difference between the purchase price and the value of the stock/stock options is due the Plan.  
• Faculty in departments/ORUs with the alternative option for outside income, permitting them to retain income from for-profit organizations, must count this difference in their earnings threshold. 
• Faculty who neglect to disclose the stock/stock options at the time of receipt will owe the Plan the difference between the initial purchase price and the market value at the time it is disclosed.

Please note: Stock that is purchased, at fair market value, as a personal investment is not considered compensation and does not need to be reported in UC OATS because it is not considered outside compensation. However, there may be conflict of issues related to a faculty’s stock ownership and any research in which they may be involved. Questions regarding these concerns should be addressed with your local campus office that manages conflict of interest compliance

Publicly Traded Companies:

The following information must be provided at the time that the options are granted (within 30 days of receipt of options).

1. A copy of all agreements between the faculty member and the company related to the consulting work and compensation;
2. A copy of the offer letter or other documentation that describes the numbers of shares of stock or options that have been offered.  This document should include the date(s) on which the faculty member signed the stock or stock option offer(s).

Non-Publicly Traded Companies:

The following information must be provided at the time that the options are granted (within 30 days of receipt of options).

1. A copy of all fully executed agreements between the faculty member and the company related to the consulting work and compensation;
2. A copy of the offer letter or other documentation that describes the numbers of shares of stock or options that have been offered.  This document should include the date(s) on which the faculty member signed  the stock or stock option offer(s);
3. A copy of the articles of incorporation of the company;
   It is required that a value can be placed on the options.  Accordingly, a copy of any records the faculty member received from the company that will document the company’s stock value at the time that the faculty member originally received the stock options must be provided. This information is often found in meeting minutes of the Board of Directors or in SEC filing papers. Or, a company’s stock or stock options can also be valued by an outside attorney or accounting firm (e.g. 409a valuation report). An 83b election form can also be used, if available.
4. A copy of the offer letter or other documentation that describes the numbers of stocks or options that have been offered.  This document should include the date(s) on which the faculty member signed the stock or stock option offer(s).