ShareData Offers the First Windows-Based Solution for Complying with FAS 123; ShareData’s Equity Edge for Valuation Allows Public and Private Companies to Automate and Comply with the New FASB Ruling on Stock Option Accounting
SUNNYVALE, Calif.–(BUSINESS WIRE)–May 28, 1996–ShareData, Inc., the leader in equity compensation management software, announced today the availability of the industry’s first Windows-based PC software to assist both public and private companies in the automation and compliance with a significant new FASB (Financial Accounting Standards Board) statement, FAS 123 (Financial Accounting Statement 123) — which requires that companies now report the “fair value” of all stock options.
The combination of ShareData’s new Equity Edge for Valuation software package, along with a wide range of training, support and access to private consulting services, offers companies a complete solution in the face of this new ruling. With ShareData as their equity compensation partner, public and private companies can better ensure that their stock option accounting is accurate, easily auditable and complies with accounting regulations.
About FAS 123
FAS 123 dictates that as of fiscal 1996, companies will need to report the equity compensation they distribute to employees in a new way, which includes the requirement that companies estimate the “fair value” of their stock option grants using sophisticated option pricing models. According to financial consultants and partners in some of the “Big Six” accounting firms, complying with FAS 123 will be no small task.
That is why ShareData is partnering with leading accounting firms such as Deloitte & Touche LLP, Coopers & Lybrand and Arthur Andersen, as well as professional organizations such as the American Electronics Association (AEA) and the Financial Executives Institute, to provide educational seminars and consulting services for financial professionals across the nation.
According to Cheryl Breetwor, founder and president of ShareData, “Although we helped lead the fight against FAS 123, as the leader in equity compensation solutions, we’re proud to be the first to offer companies both the software and support they’ll need to optimize their compliance with this ruling. For example, the number of decisions and scenarios that companies must explore in order to develop optimum reporting parameters can prove to be highly expensive and time-consuming. Therefore, we believe that most companies will want to obtain expert counsel and advice from their existing financial advisors or from those we can recommend. That is why we have focused as much on providing general education about FAS 123 and access to experienced advisors from top accounting firms to assist our customers with their implementation of FAS 123, as we have on developing the best software.”
“It is great to have the technology and guidance from ShareData that will help us and other companies to comply with today’s increasingly complex accounting regulations. Their timely addition of Equity Edge for Valuation to their existing suite of equity compensation management software is a welcome development for companies, such as ours, which distribute stock options broadly among all employees,” said Howard S. Mendelsohn, corporate controller, ICOS Corporation.
Equity Compensation in America
According to a survey undertaken by ShareData and the AEA in 1994 of 600 companies in over 30 industries, more than 50% reported that they grant stock options to all employees and that non-management made up 97% of the stock-option pool. In addition, 83.3% of companies with fewer than 100 employees, and 78.8% of companies with less than $50 million in revenue, grant options to all employees.
“In fact,” noted Cheryl Breetwor, “the truth about equity compensation is that it levels the playing field for small companies who can’t pay large salaries but need to attract — and keep — top talent. Our surveys show that stock options are not just for executives or high-tech companies, but are broadly distributed throughout companies in all kinds of industries nationwide.”
ShareData estimates that over 10,000 companies in the U.S. offer equity compensation to their employees, yet only about 30% automate the administration of these programs. ShareData expects this percentage to rise to 50%-60% by 1997, in part because of the difficulty companies will face in complying with FAS 123.
Equity Edge for Valuation
Equity Edge for Valuation is the company’s newest addition to its Equity Edge series of Windows-based modules for equity compensation planning, management and reporting. The program will use option pricing information, vesting schedules for each option and fair market values from the company’s Equity Edge database to automate the option valuation process.
Equity Edge for Valuation supports the “multiple option approach” to enable companies to minimize their value estimates. It also produces all the additional disclosure reports required by FAS 123. The program will provide “fair value” estimates for all equity instruments tracked by the following ShareData Equity Edge modules: Options, Stock Purchase, Restricted Shares and Performance Awards. ShareData’s DOS customers can take advantage of the new Windows-based modules with an easy-to-use conversion program.
In addition to its PC software, ShareData offers extensive support services including an 800-number (800-783-3388), educational seminars, product training, an annual user conference, an informative newsletter (“Issues and Options”), and an online reference system, ShareData Equity Expert.
Price and Availability
Equity Edge for Valuation is available now, starting at $3,000 for one copy, plus a yearly maintenance fee. The program requires Microsoft Windows 3.1 or higher and a minimum of 8 MB RAM. For ordering or product information, please contact ShareData at 1-800-783-3388.
ShareData, Inc., a privately-held company, was founded in May 1983 by Cheryl Breetwor and Patrick Ontko. With over 1,500 customers, ShareData is the leading supplier of DOS and Windows-based equity compensation software for public and private companies in the U.S. ShareData’s Windows-based Equity Edge flagship product line allows companies to cost-effectively and easily automate the management of, and reporting associated with, employee stock options and purchase plans.
For more information, contact Kristine Cornwall, director of marketing, ShareData, Inc., 190 Sobrante Way – 100, Sunnyvale, CA 94086. Phone: (408) 746-3666. Fax: (408) 746-0701. -0-
Note to Editors: All products and companies mentioned are trademarks or registered trademarks of their respective companies.
CONTACT: ShareData, Inc.
Kristine Cornwall, 408/746-3666
Agora Marketing International, Inc.
Maxine Bingham, 408/777-8436
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