bf015 espp plan ver3

AIM for Business Flows

BF.015 FUTURE PROCESS MODEL

SAMBA Financial Group

Employee Share Participation Plan (ESPP)

Author: Mohd Elbaw

Creation Date: June 4, 2009

Last Updated: July 29,2009

Document Ref: MEO/SS/SAMBA/HRMS/BF015/Ver 3

Version: 3

Approvals:

<Approver 1>

<Approver 2>

Copy Number _____

BF.015 Future Process Model

Employee Share Participation Plan (ESPP) File Ref: BF015_ESPP_PLAN_VER 3 Amended Corr Acptd (Ver 3)

Doc Ref: MEO/SS/SAMBA/HRMS/BF015/

Document Control ii

Document Control

Change Record 5

Date Author Version Change Reference 22-Jun-09 Mohd Elbaw Draft 1a No Previous Document 28-Jun-09 Mohd Elbaw 1.2 3-Jul-2009 Mohd Elbaw 1.3 28-jul-09 Mohd Elbaw 1.4

Reviewers

Name Position Moh’d Elbaw Oracle Project Manager Sohiyb Sakaji SAMBA Project Manager Negusse Salem Ahmed Balagi

Distribution

Copy No. Name Location 1 Library Master Project Library 2 Project Manager 3 4

Note To Holders:

If you receive an electronic copy of this document and print it out, please write your name on the equivalent of the cover page, for document control purposes.

If you receive a hard copy of this document, please write your name on the front cover, for document control purposes.




Document Control iii

SAMBA reserves the right to amend or change the contents of this document if any contents not in line with Samba’s policies and procedures which has already been delivered to Oracle.




Document Control iv

Contents

Document Control .......................................................................................... ii

Event Catalog ................................................................................................. 1

Employee Share Participation Plan (ESPP) ......................................... 1

Process Listing and Process Descriptions ........................................................ 4

ESPP Plan Creation................................................................................ 4 Process Relationships for ESPP Plan Creation ........................................ 4

Function Hierarchy ......................................................................................... 5

ESPP Plan Creation................................................................................ 5

Process Step Catalogs..................................................................................... 6

ESPP Plan Creation................................................................................ 6

Process Flow Diagrams .................................................................................. 8

Process Listing and Process Descriptions ...................................................... 12

ESPP Event ........................................................................................... 12 Process Relationships for ESPP Event ................................................... 12

Function Hierarchy ....................................................................................... 13

ESPP Event ........................................................................................... 13

Process Step Catalogs................................................................................... 15

Bonus Share / Bonus Split [Corporate Events] ................................. 15

Process Flow Diagrams ................................................................................ 16


Withdraw [Employee events] ............................................................. 17


Resignation / Termination With/Without Cause [Employee Events ] - End of Employment ............................................................................ 18


Retirement / Death [Employee event] – End of Service .................. 19





Document Control v

Leave of Absence ................................................................................. 20

Process Flow Diagrams .................................................................................. 1

Process Listing and Process Descriptions ........................................................ 6

ESPP Maturity ........................................................................................ 6 Process Relationships for ESPP Maturity ................................................ 6

Function Hierarchy ......................................................................................... 7

ESPP Maturity Extension (at Samba discretion) ................................. 7

Process Step Catalogs..................................................................................... 8

ESPP Maturity ........................................................................................ 8

Process Flow Diagrams ................................................................................ 10

List of Alerts .................................................................................................. 1

List of Reports................................................................................................ 2

Open and Closed Issues ................................................................................ 14

Open Issues ............................................................................................ 14 Closed Issues .......................................................................................... 14




Event Catalog 1 of 47.6

Event Catalog

Employee Share Participation Plan (ESPP)

Event ID Name Type Description Frequency

ESPP Plan Definition

Plan Creation SAMBA encourages retention and motivation of employees by providing opportunities to enroll in ESPP plan which is a singular way to save. i.e To buy SAMBA Shares at the price set at the beginning of the program, and to participate in the growth of SAMBA. This Process involves the definition of ESPP with the eligibility rules, Rate of Return and ESPP Announcement including the active dates. These detailed activities are described in sections below.

As and when occurring






ESPP Events ESPP Events Corporate Event: Corporate event covers Bonus Shares and Share Splits happening during the life cycle of ESPP. Employee Event: Employee event covers the withdrawal from the participation prior to plan maturity, for any reason that include retirement, death or other justifiable reason acceptable to SAMBA Senior Management. The reasons could be one of the following: - Resignation - Termination With/Without Cause In above cases the employee participation plus accumulated returns will be refunded to the sundry account till final settlement is processed. In normal withdrawals executed by employees, the employee participation plus accumulated returns will be refunded to the employee’s account. In cases of Retirement from service in Samba: In case Employee chooses to exercise monies instead of Shares: Employee’s Participation with accumulated return will be processed and credited to Payroll sundry account. HR will process this amount along with the normal settlement process (End of service). In case Employee chooses to exercise shares instead of monies: Employees will be allotted equivalent SAMBA shares based on the prevailing market price (settlement price). In case of Death: SAMBA will pay any remaining unpaid amount or balance due under the plan enrollment, by crediting respective plan account and notifying the beneficiaries the employee has named of their rights under the Plan and disburse the requisite amounts.

As and when occured






ESPP Maturity ESPP Maturity (A) If Settlement price is greater than or equals the offering price plus accumulated returns SAMBA will arrange to settle the employee with shares (equity option). (B) If Settlement price is lower than the Offering Price plus accumulated returns, employees would receive their savings plus accumulated returns.

At maturity

ESPP Accounting ESPP Accounting Please refer to Appendix A for Costing Details




Process Listing and Process Descriptions 4 of 47.6

Process Listing and Process Descriptions

ESPP Plan Creation

Process ID Event Process Title Description of Process Output ESPP01 ESPP Plan Creation PLAN Definition Prior to ESPP Plan announcement, SAMBA will initiate

required communication with SAMA regulators to gain proper approval for ESPP Plan. By having the required SAMA Approval, the Offering Share Price, Enrollment Amount limits, Offering Period and Fix Rate of Return are defined. In addition to that, Eligibility criteria (all staff with confirmed status as of scheme start) are also defined.

Process Relationships for ESPP Plan Creation




Function Hierarchy 5 of 47.6

Function Hierarchy

SAMBA Bank

Function: ESPP Plan Creation Function Owner:

HR Date:

28-6-2009 Description:

ESPP Plan Creation

Function ID #

Function Description

Function Owner

Type

Notes

ESPP01.01

SAMA Approval SAMBA Offline Prior to ESPP Plan announcement, SAMBA will initiate required communication with SAMA regulators to gain proper approval for ESPP Plan. This activity is performed offline.

ESPP01/02

ESPP Plan Definition Designated HR Officer Automatic Having the required SAMA Approval (for quantum of shares involved), the Offering Share Price, Enrollment Amount limits, Offering Period and Fix Rate of Return are defined as per Samba management decisions. In addition to that, Eligibility criteria is also defined. Detailed process steps are described below.




Process Step Catalogs 6 of 47.6

Process Step Catalogs

ESPP Plan Creation

ID Description Frequency Notes Agent Automation ESPP01.03.01

Plan Creation As And When Occur

This process covers the step of ESPP definition: - ESPP program Period (Start, End) - The Finalized Offering Price (If HR does not have the final offering price at plan creation time, a tentative value is required to be inputted). - The Approved Number Of Shares - The Finalized Rate of Return. - The Number of Extensions Allowed to the ESPP maturity Date and Period of Extension - The Max. and Min. Enrollment Amounts - ESPP Eligibility Criteria: Employee type and status, Minimum Period Of Service. - ESPP Enrollment End Date

Designated HR Officer Automatic

ESPP01.03.02

Send Notification Plan Creation This Process fires an email notification to all eligible employees to enroll before the ESPP enrollment deadline. Option to send another reminder (one week (parameter) prior to deadline) to those eligible employees who have not yet enrolled will also be available.

System Automatic

ESPP01.03.03

Book ESPP enrollment ESPP Plan Notification

As a response to the received notification, thru a self service request, the Employee will book his ESPP enrollment request mentioning the Enrollment amount. System will determine the number of shares that could be allocated for this employee on the entered amount. Employee is not shown the number of shares which will be allotted. The product of number of shares that could be allocated (on the entered amount) and declared share price will be the basis of calculating the actual enrollment amount . System will validate if this derived enrollment amount is within the prescribed limits (>= 5% of ABS and <= 40% of ABS and greater than SAR 2,000). All these values and thresholds are parameterized in ESPP plan definition step. The employee also identifies the names and Percentage Claim for each Designated Beneficiary as per the ESPP Form mentioned in Appendix A. This form will be uploaded as an attachment to the ESPP enrollment. Enrollment into ESPP plan is allowed for employees only upto the enrollment end date. However, HR at its discretion can enroll employees into ESPP plan through professional interface even after the enrollment end date.

Employee Automatic






ESPP Enrollment Approval ESPP Enrollment The approvals involved are : Employee->HR officer If the employee seeking enrollment is marked as ‘watch’, the approval flow is as follows : Employee->HR officer->HR head


ESPP01.03.05

Review Initial Share Allocation (Trial run prior to actual share allocation)

Approved ESPP Enrollment

The Designated HR Officer , Generate a report to view the total number of shares versus the approved/declared shares .


ESPP01.03.06

- Input of ESPP plan final approved offering price - Align requested number of shares with approved/declared. This is the Share allocation process.

ESPP Enrollment end date

Upon crossing the enrollment end date and request from the Designated HR Officer, HR officer will enter the final no. of shares enrolled. System will validate the total number of shares required versus the approved/declared shares. If the requested shares are more than approved shares, system automatically reduces requested shares proportionally by integer value without disturbing those who have enrolled with the minimum required amount.

System Automatic

ESPP01.03.07

Employee Enrollment Processing At the time of Payroll run.

Upon final shares allocation, system will automatically create monthly deductions and will continue till the end of ESPP Plan. System will also calculate the returns on accumulated contributions as product of previous month Accumulated Balance and the fixed rate of return. Returns = (Previous accumulated balance + this month deduction ) X Fixed rate of return

System Automatic




Process Flow Diagrams 8 of 47.6

Process Flow Diagrams NOTE: THE DIAGRAMS ARE HIGH LEVEL AND DO NOT REFLECT THE ENTIRE PROCESSESM AS MENTIONED IN THE REST OF THE bf DOCUMENT.

ESPP SAMAApproval

Start

Designated HROfficer

Plan Creation (1)ESPP program Period(Start, End) (2)Finalized Offering Price(If HR does not havefinal offering price atplan creation time, atentative value isrequired to be inputted(3)Approved Number OfShares (4)Finalized Rate ofReturn (5)Number of ExtensionsAllowed to ESPPmaturity Date & Periodof Extension (6)Max. & Min. EnrollmentAmounts (7)ESPP Eligibility Criteria:Employee type &status, Minimum PeriodOf Service (8)


ESPP Enrollment EndDate (9)

SystemSend Notification ofESPP EnrollmentDeadline Date (10)

EmployeeLogs on ESPPEnrollment request ,specifying EnrollmentAmount . (11)

SystemCheck EmploymentType Eligibility . (12)

Eligible?

SystemCheck Probation Periodcompletion before OROn ESPP Offering StartDate (13)

Completed?

SystemContinue (14)

A

A

B

Y

N

Y

N





EnrollmentAmount => 5% & <=

40% Of ABS &enrollment Amount

=> 2000 SAR?

SystemContinue (15)


Approve ESPPParticipation Request(16)

Approved?

SystemCheck if Employee IsMarked as “Watched”(17)

Watch Flag = Yes?

HR HeadApprove ESPPParticipation Request(18)

Approved?

Designated HRofficer

Generate Initial ShareAllocation Report (19)

SystemValidate total Numberof shares requiredversus approved/declared number ofshares (20)

A

A

A

A

C

B

AY

N

Y

N

Y

N

Y

N





Exceed?

SystemReduces requestedshares proportionallyby integer valuewithout disturbingthose enrolled for min.shares. (21)

SystemCreate monthlydeductions & willcontinue till end ofESPP Plan. (22)

PayrollOn Monthly Basispayroll Deduction willbe deducted for BaseSalary (23)Calculate returns onaccumulatedcontributions (24)

SystemEnd of Process. (25)

End

C

A

Y

N

Other Requirements 1. Employee can only enroll in one ESPP plan at any point in time. In other words, only one ESPP plan can be active at any point in time. 2. However, Samba would like the option to activate or rollout more than 1 ESPP scheme concurrently. System should have this ability and to be

designed accordingly.






ESPP Event

Process ID Event Process Title Description of Process Output ESPP02.01 ESPP Event Corporate Event Corporate event covers Bonus Shares and Share Splits

happening during the life cycle of ESPP.

ESPP02.02 ESPP Event Employee Event This Covers: - Withdrawal - Resignation - Termination with/Without Cause - Retirement - Death - Transfer - Leave of Absence

Process Relationships for ESPP Event





Function Hierarchy

SAMBA Bank

Function: ESPP Event Function Owner:

HR Date:


ESPP Event

Function ID #


Function Owner

Type

Notes

ESPP02.01.01

Bonus Share / Bonus Split SAMBA Manual The SAMBA management decides to initiate Bonus Share/Share split to all outstanding share programs. The percentage of Bonus Share / Share split will be decided by the management.

ESPP02.01.02

Withdraw Resignation / Termination with/Without a cause

Employee / Line Manager / Designated HR Officer

Automatic Employee event covers the withdrawal from the participation prior to plan maturity, for any reason that include retirement, death or other justifiable reason acceptable to SAMBA Senior Management. The reasons could be one of the following: - Resignation - Termination With/Without Cause - Voluntary withdrawal by employee In above cases the employee participation plus accumulated returns will be refunded to the sundry account till final settlement is processed. In normal withdrawals executed by employees, the employee participation plus accumulated returns will be refunded to the employee’s account. In cases of Retirement from service in Samba: If the current prevailing share price (settlement price) is less than the initial ESPP scheme price, the employee will be refunded with monies only (employee contribution plus accumulated returns). If the current prevailing share price (settlement price) is greater than the initial ESPP scheme price, the employee will be credited with equivalent number of shares. In case of Death:





Function ID #


Function Owner

Type

Notes

SAMBA will pay any remaining unpaid amount or balance due under the plan enrollment, by crediting respective plan account and notifying the beneficiaries the employee has named of their rights under the Plan and disburse the requisite amounts.






Bonus Share / Bonus Split [Corporate Events]

ID Description Frequency Notes Agent Automation ESPP02.01.01.01

Bonus Share / Bonus Split As and When Occur

SAMBA management decides to initiate Bonus Share/Share split to all outstanding share programs. The percentage of Bonus Share / Share split will be decided by the management.

SAMBA Manual

ESPP02.01.01.02

Enter Bonus Share / Bonus Split Percentage

As and When Occur

Designated HR Officer enters the applied bonus share / bonus split ratio along with the effective date.

Designated HR officer Automatic

ESPP02.01.01.03

Bonus Share/Share Split What if scenario

As and When Occur

Designated HR Officer may create what-if scenario report that shows the result of applying the bonus share/bonus split ratio and submit to HR Head for review. A report will be developed by Oracle for this purpose.

Designated HR officer Automatic

ESPP02.01.01.04

Execution of Bonus Split / Bonus Split [Adjustment of holdings]

As and When Occur

This process involves running a script that applies the Bonus share /Share Split to all the outstanding ESPP programs. The ESPP Offering price, cost price and number of shares allotted to each employee will be adjusted as per the Bonus share / Share split ratio. Any fractional value in the allotted shares will be retained till scheme maturity. At the time of scheme maturity, the fractional values are converted to equivalent amounts and refunded to employee account. For example : Employee is allotted 3.75 shares. At scheme maturity, employee is allotted 3 shares. The fraction of 0.75 is converted to equivalent amount and credited to the employee account as 0.75 X settlement price.

System Automatic






ESPP

Start

ManagementInitiate Cooperate ESPPevent (Bonus Share/Share Split) (1)


Enters applied bonusshare / bonus splitpercentage along witheffective date. (2)Generate What ifScenario Report. (IfNeeded) (3)

SystemRunning a script thatapply Bonus share/Share Split to alloutstanding ESSPprograms. (4)

SystemAdjust ESPP Offeringprice, cost price & no.of shares as Per toBonus share / Sharesplit ratio (5)

End

Other Requirements 1.






Withdraw [Employee events]

ID Description Frequency Notes Agent Automation ESPP02.01.02.01.01

WITHDRAW As and When Occur

Thru Self Service, employees may request to withdraw from ESPP program.

Employee Automatic

ESPP02.01.02.01.02

Approving the ESPP Withdraw As and When Occur Approval flow is as follows :

Employee->HR officer.

If the employee seeking enrollment is marked as ‘watch’, the approval flow is as follows : Employee->HR officer->HR head

Approvers Automatic

ESPP02.01.02.01.03

Release Participation Amount plus the accumulated Plan

Withdraw Request approved

Once the withdraw request is approved, the system will credit the employee participation amount plus the accumulated returns to the Employee account. The required GL entries are passed to adjust the requisite GL balances accordingly. Dr ESPP GL Cr employee Current A/c. A notification would be sent to Treasury informing the quantum of shares to be adjusted in their managed share pool

System Automatic

ESPP02.01.02.01.04

Reset ESPP Balance Housekeeping activity.

The system will reset the Employee ESPP Enrollment Balance. System Automatic






Resignation / Termination With/Without Cause [Employee Events ] - End of Employment


Resignation / Termination As and When Occur

Resignation / Termination Request would be raised by employee Line Manager and have it approved according to resignation/Termination Business flow as part of Hire to Retire flow.

Employee / Line Manager / Designated HR Officer

Automatic

ESPP02.01.02.02.02

Release Participation Amount along with accumulated Return

As and When Occur

In Case of Resignation: Employee’s Participation with accumulated return will be processed and credited to Payroll sundry account. HR will process this amount along with the normal settlement process (End of service). A notification would be sent to Treasury informing the quantum of shares to be adjusted in their managed share pool. In case of Contract Termination at the request of Samba: Same as above In Case of Termination with cause: Same as above

System Automatic

ESPP02.01.02.02.03

Reset ESPP Balance As and When Occur The system will reset the Employee ESPP Enrollment Balance.

System Automatic






Retirement / Death [Employee event] – End of Service


Retirement/Death As and When Occur

Designated HR officer records the Termination event. Designated HR Officer Automatic

ESPP02.01.02.03.02

Release Employee Participation amount plus accumulated return

As and When Occur The Designated HR Officer enters the redemption price.

In case of Death : SAMBA will pay any remaining unpaid amount or balance due under the plan enrollment, by crediting respective plan account and notifying the beneficiaries the employee has named of their rights under the Plan and disburse the requisite amounts In Case of Retirement : In case Employee chooses to exercise monies instead of Shares: Employee’s Participation with accumulated return will be processed and credited to Payroll sundry account. HR will process this amount along with the normal settlement process (End of service). . In case Employee chooses to exercise shares instead of monies: Employees will be allotted equivalent SAMBA shares based on the prevailing market price (settlement price) only when the settlement price is greater than the initial ESPP share price. In all above cases, the ESPP Balance will be adjusted accordingly and a notification would be sent to Treasury informing the quantum of shares to be adjusted in their managed share pool

SAMBA Manual

ESPP02.01.02.03.03

Reset ESPP Balance As and when occurs The system will reset the Employee ESPP Enrollment Balance after the

above activities.

System Automatic






Leave of Absence


Approval of Unpaid leave request As and When Occur

This process involves the steps of requesting for long leave (for various reasons like sickness etc.,). The process of Leave requests (covering such scenarios also) is described in detail in the Leave management paragraph as part of Hire to Retire document.

Employee Automatic

ESPP02.01.02.04.01

Payroll deductions (pertinent to ESSP)

As and When Occur

Pertaining to ESSP : System continues to process the ESSP enrollment deductions from his Payroll and. The system will perform this as long as the employee is still in service and his enrollment is active. Note : Payroll actions for leave of absence (for other than ESSP) are described in Admin to Pay document.

System Automatic


ESPP Plan File Ref: BF015_ESPP_PLAN_VER 3 Amended Corr Acptd (v. 1.4 )

Doc Ref: MEO/SS/SAMBA/HRMS/BF015/1.4



Withdraw

Withdraw Request

Start

EmployeeSubmit WithdrawRequest (1)

Approved?

SystemEmployee ParticipationAmount along withaccumulated Return isrefunded to employeecurrent account (2)

SystemReset ESPP Balance(3)

End

A

A

Y

N





Resignation/Termination

Resignation /Termination Request

Start

Employee/LineManager/


Resignation /Termination Requestwas raised byemployee & have beenapproved accordingresignation/TerminationBusiness flow. (1)

SystemCheck TerminationReasons. (2)

Reason =Resignation?

SystemEmployee’sParticipation withaccumulated return willbe processed alongwith End of ServiceBenefits & ESPPBalance will beadjusted accordingly &notifies employee /treasury dept (3)

HR HeadDecide to releaseEmployee Participationamount with or withoutaccumulated return (4)

SystemProcess ESSPParticipation with Endof Service Benefitssettlement. (5)

SystemReset ESPP Balance.(6)

End

A

AY

N





Retirement

Termination/Retirement Request

Start


Enter TerminationRequest, Specifyingreason of Terminationas Retirement or Death.(1)

SystemCheck TerminationReasons. (2)

Reason = Death?

SystemSAMBA will completeor pay any remainingunpaid amount orbalance due under plansigned up atenrollment, by creditingrespective planaccount at time ofemployee’s death &notifying beneficiariesemployee have namedof their rights underPlan. (3)Reset ESPP Balance(4)

End

EmployeeChoose to ExerciseMonies Instead ofShares (5)

Exercise Monies?

SystemEmployee’sParticipation withaccumulated return willbe processed &credited to Payrollsundry account. (6)Reset ESPP Balance(7)

End

SystemCheck Settlement Price(8)

A

B

N

Y

Y

N





SettlementPrice > Offer Price?

SystemEmployees will beallotted equivalentSAMBA shares basedon prevailing marketprice (9)Reset ESPP Balance(10)

End

B

A

Y

N

In case of termination for cause, Samba may choose to only give the employee his contribution. In such cases, the required additional accounting entries for the P&L should be auto generated by the system and propagated to the STAR system. Oracle will endeavor to achieve this. Leave Of Absence





Leave of Absence

Start

EmployeeSubmit Leave ofAbsence (1)Approval Process ofLeave of Absence asdescribed in Hire-to-Retire Business flowdocument (2)

SystemSystem continues toprocess ESSPenrollment deductionsfrom his Payroll .system will performthis as long asemployee is still inservice (3)

End






ESPP Maturity

Process ID Event Process Title Description of Process Output ESPP03.01 ESPP Maturity Extension ESPP Maturity Extension To extend the ESPP maturity date for any justifiable

reason acceptable to SAMBA Senior Management. ESPP Extension

ESPP03.02 ESPP Maturity Exercise ESPP Maturity

Process Relationships for ESPP Maturity





Function Hierarchy

SAMBA Bank

Function: ESPP Maturity Function Owner:

HR Date:


ESPP Maturity Extension (at Samba discretion)

Function ID #


Function Owner

Type

Notes

ESPP03.01.01

Maturity Notification Alert System Automatic The System will fire notification alert to HR. notifying the ESPP Maturity date. This notification will be sent before the Maturity date by number of days that could be set as a parameter.

ESPP03.01.02

Apply for Extension SAMBA Manual In response to the email notification, HR validates to raise ESPP extension request or not. In case an extension is required, request would be raised to Senior Management for approval.

ESPP03.01.03

Enter The extension Period Designated HR officer Automatic The designated HR officer, enters the extension details in ESPP Program Definition as defined in step ESPP01.03






ESPP Maturity


Maturity Notification Alert Maturity Date System will fire notification alert to HR notifying the ESPP Maturity date. This notification will be sent before the Maturity date by number of days that could be set as a parameter.

System Automatic

ESPP03.02.02

Enter The Settlement Share Price Maturity Date The Designated HR Officer enters the Settlement Share Price on the ESPP Program definition (Defined in step ESPP01.03) after the Maturity Date.


ESPP03.02.03.A

Check if the Settlement Share Price is less than or equal to Offering Price

Maturity Date If the Settlement Share Price is less than or equal to Offering Price : Refund Employee contribution plus the accumulated returns up to the maturity date to the employee account.

System Automatic

ESPP03.02.03.B

Check if the Settlement Share Price is greater than Offering Price

Maturity Date If the Settlement Share Price is greater than Offering Price: Generate ESPP Settlement report that shows number of shares to be credited into employee investment account. This report will be developed by Oracle. This report should contain both the As-is with fractions and with the adjustment for fractions. This Report will be used by HR for review.

System Automatic

ESPP03.02.03.B.1

Check if Fraction Exists Maturity Date Check if fractions exist on number of Shares as per the applied Bonus Share / Bonus Split event. Check if fractions exist on number of Shares At the time of scheme maturity, the fractional values are round up to nearest number For example : Employee is allotted 3.75 shares. At scheme maturity, employee is allotted 4 shares. The fraction of 0.75 is converted to equivalent amount and debited to the employee account as 0.75 X settlement price.

System Automatic

ESPP03.02.03.B.2

Round Up the Number of Shares Maturity Date Round Up the Number of Shares. System Automatic

ESPP03.02.03.B.3

Multiple the difference of round up by the adjusted offering share price

Maturity Date Multiply the fractional portions by the offering share price (revised offering share price in case Bonus Split was carried out).

System Automatic

ESPP03.02.03.B.4

Debit the Employee account with calculated round up difference amount

Maturity Date Debit the Employee’s account with calculated round up difference amount.

System Automatic

ESPP03.02.03.C

Intimation for Credit of shares to Employee Investment Account

Maturity Date The ESPP settlement report mentioned in ESPP03.02.03.B can be generated again at this stage and after review will be forwarded to the concerned depts. for actual share crediting process. Employee’s investment account will be credited with no. of shares enrolled for.

System Manual

ESPP03.02.04

Reset ESPP Balance Maturity Date System will reset the ESPP enrollment Balance. System Automatic






ESPP Maturity

Start

SystemMaturity NotificationAlert. (1)


Enter Settlement SharePrice (2)

SettlementPrice is >= Offer

Price?

SystemCheck if Fraction Exists(3)

Fraction Exists?

SystemRound Up Number ofShares (4)Multiple difference ofround up by adjustedoffering share price (5)Debit Employeeaccount withcalculated round updifference amount (6)


Intimation for Credit ofshares to EmployeeInvestment Account (7)


Refund Employeecontribution plusaccumulated returnsup to maturity date toemployee account (8)

SystemReset ESPP Balance(9)

End

A

A

Y

N

Y

N

Other Requirements 2.




List of Alerts 1 of 47.6

List of Alerts

Sr. No.

Alert Details Type Frequency / Event

1. ESPP Program Creation System will fire alert based on creation of new ESPP Program

Event

2. ESPP maturity Notification Email

The system Will fire alert on ESPP maturity Date

Periodic

3. ESPP SAMBA Share The system will fire alert to treasury Dept. to credit Employee investment account with the equivalent number of Shares.

Periodic

4. Alerts to employees System will fire alters to employees during Withdrawal and other required events.




List of Reports 2 of 47.6

List of Reports

Sr. No.

Report Name Details Frequency

1. 2.




Appendix A 3 of 47.6

Appendix A A

mor

tizat

ion

of

Opt

ion

Cos

t Account Debit Credit

P&L – ESPP Employee costs Option cost calculated at the grant date

Equity Account Option cost calculated at the grant date

Con

tribu

tion Account Debit Credit

Salary Monthly Contribution

Contribution Reserve (01260100) Monthly Contribution

Acc

rual

Account Debit Credit

Interest Paid Monthly Interest

Interest Reserve (01260100) Monthly Interest

With

draw

/Res

ign

atio

n or

Te

rmin

ated

for

Cau

se


Contribution Reserve (01260100) Accumulated Contribution Balance

Staff C/A / Sundry Accumulated Contribution Balance





Interest Reserve (01260100) Accumulated Interest Balance till Last Payroll Run

Staff C/A / Sundry Accumulated Interest Balance till Last Payroll Run

Interest Paid Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the withdraw Date)

Staff C/A / Sundry Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the withdraw Date)

Res

igna

tion

or T

erm

inat

ed fo

r Cau

se

with

Rev

ersa

l



Staff C/A / Sundry Accumulated Contribution Balance


Staff C/A / Sundry Accumulated Interest till resignation/termination effective date





Interest Reserve (01260100) Accrued interest between resignation/termination effective date & Last Payroll Date

Interest Paid Reversal (P&L) Accrued interest between resignation/termination effective date & Last Payroll Date

End

Empl

oym

ent (

illne

ss, d

isab

ility

/term

inat

ion

)

Sett

lem

ent P

rice

is <

= O

ffer

Pri

ce



Sundry Account Accumulated Contribution Balance


Sundry Account Accumulated Interest Balance till Last Payroll Run






Sundry Account Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the withdraw Date)

End

Empl

oym

ent (

illne

ss, d

isab

ility

/term

inat

ion

)

Sett

lem

ent P

rice

is >

Con

trib

utio

n +

Acc

rued

inte

rest




Interest Reserve Accumulated Interest Balance till Last Payroll Run


Retirement / Redundancy Cost Difference between (market value of the share entitlement) and (Accumulated contributions with interest earned at the termination date





Sundry Account Difference between (market value of the share entitlement) and (Accumulated contributions with interest earned at the termination date

Ret

irem

ent a

nd S

ettle

men

t Pric

e <

Con

tribu

tion

+ A

ccru

ed

Inte

rest











R

etire

men

t and

Set

tlem

ent P

rice

>= C

ontri

butio

n +

Acc

rued

Inte

rest












Retirement / Redundancy Cost Difference between (market value of the share entitlement) and (Accumulated contributions with interest earned at the termination date

Sundry Account Difference between (market value of the share entitlement) and (Accumulated contributions with interest earned at the termination date

Upo

n D

eath


Other Costs Goal Amount – Actual Contribution till last payroll

Contribution Reserve Goal Amount – Actual Contribution till last payroll

Other Costs Interest till Scheme Maturity

Interest Reserve Interest till Scheme Maturity





Settl

emen

t of D

eath

&

shar

e pr

ice

< C

ontri

butio

n +

Acc

rued

In

tere

st



Interest Reserve Accumulated Interest

Sundry A/C Share Entitlement equivalent

Settl

emen

t of D

eath

& sh

are

pric

e >=

C

ontri

butio

n +

Acc

rued

Inte

rest



Interest Reserve Accumulated Interest

ESPP Exercise Costs / Reserve for Expenses Cost to the bank of the transfer of the shares to the beneficiary (carrying value of the share entitlement minus the Goal Amount).

Sundry A/C Share Entitlement equivalent

Sche

me

Mat

urity

Settl

emen Account Debit Credit






Staff A/C Accumulated Contribution Balance


Staff A/C Accumulated Interest Balance till Last Payroll Run

Interest Paid Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the Maturity Date)

Staff A/C Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the withdraw Date)

Sche

me

Mat

urity

Settl

emen

t Pric

e >

Con

tribu

tion

+



TOSD Sundry A/C Accumulated Contribution Balance






TOSD Sundry A/C Accumulated Interest Balance till Last Payroll Run

Interest Paid Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the Maturity Date)

TOSD Sundry A/C Difference Between (Accumulated Interest Balance till Last Payroll Run) and ( Interest Balance till the withdraw Date)

Reserve for Expenses Difference between Share Entitlement (Share Price * No. of shares allocated) and Goal Amount + Accrued Interest

TOSD Sundry A/C Share Entitlement (Share Price * No. of shares allocated)




Open and Closed Issues 14 of 47.6

Open and Closed Issues

Open Issues

ID Issue Resolution Responsibility Target Date Impact Date

1 Accounting entries 2 Verify & update all process flow

diagrams

3 Transfer to GL Process 4 Review and Validate List of

Reports

5 Review and Validate List of Alerts

Closed Issues

ID Issue Resolution Responsibility Target Date Impact Date

bf015 espp plan ver3

Documents

espp plan creation

document ref

espp event

contents document control

document control purposes

process relationships

process listing

process descriptions