Reinstating a Cancelled Option or Warrant
Overview: You need to reverse an option or warrant cancellation for any reason.
Scenario: Typically, this happens when you find exercise paperwork languishing on someone’s desk after the Post-Termination Exercise period date passes, and the system has already canceled the vested shares. Another common scenario is when you’ve terminated someone on the wrong date and need to undo the termination and re-terminate them on the correct date. (*See “How to un-terminate a Participant” below)
Solution: (1) correct the Record History Transaction Dates in the audit trail and (2) edit the affected record to remove the cancellation and restore the record to its pre-cancellation state.
This procedure can be used to restore any option or warrant to a previous status so that a transaction can be processed.
Important Note: You must process your exercise or other transaction on the same day that you reinstate the grant–overnight, the system will look at the scheduled expiration date and, if the date is past, will cancel the grant again–in which case you’ll have to repeat these steps.
Steps to Take:
- Look at the Record History and examine the Transaction Dates. Look at the Transaction date where the cancellation occurred. There will be an entry next to the Transaction Date that indicates shares were cancelled on that date. There may be more than one Transaction Date on and after the cancellation; you will edit each of those dates in the next step.
- Select each Audit Date that occurs on or after the cancellation. One at a time, using the Edit button just below the Record History list (not the pencil icon at the bottom of the screen–that edits the grant itself) edit the Transaction Dates to match the last previous date that the option was outstanding or displayed the pre-cancellation status of the grant. (In the example below, the unvested portion of the option was cancelled due to the employee’s termination. The vested portion of the option was thereafter canceled because the post-termination exercise period had passed. We want to reverse the second cancellation only, because an exercise request was received but not processed before the system canceled the vested shares.)
- After editing the affected Transaction Dates, you will edit the option record to restore certain data fields to the pre-cancellation state. Open the option record in Edit mode by clicking the Edit pencil icon at the bottom of the screen (shortcut: type E on the keyboard).
- Using the Quick Links panel on the left, navigate to the Exercise/Cancellation section. Locate and select the Cancellation Record that you want to reverse by clicking the radio button. Below that line item, you’ll see the details for that item in the fields below. Below those fields are three action buttons for editing that section.
- At the bottom of that section, select the button for Delete Row.
- A dialog will pop-up asking you to confirm deletion of the cancellation record.
- Review the dialog to make sure that you are deleting the correct row.
- Click OK.
- If you want to completely reinstate the option to outstanding status, delete all of the cancellation records if there is more than one.
- Scroll up to the Vesting Schedule Section and clear any date information in the “Vesting Stop Date” field.
- Scroll up to the Details Section and, if necessary, clear the date in the “Exercise Period Ends” field.
- Also in the Details Section, remove any info in the “Date of Disposition” and “Basis of Disposition” fields.
- Save the option record. The Transaction Date for this record save should be the same as the date you fixed in step 2. In the Save dialog box, in the Notes field enter Cancellation reversed and then click OK.
- View the Record History again using the Quick Links. You should now see a list of transactions all having the same Transaction Date–the erroneous cancellation and your reversal of the cancellation will both have the same date. When CF sees a list of Transaction Dates that are all the same date, it will ignore all but the most recently-saved record with that date, and that record becomes the “true” record for that Transaction Date.
The option’s history has now been reset to its previous state (prior to the cancellation).
* How to un-terminate a Participant:
- Locate the Participant record on the People > Participants tab.
- Edit the Participant record .
- Uncheck the box next to the Terminated caption.
- Save the Participant record.