FAQ 464: ESOP--Reverse stock split

Problem: How do I run a reverse stock split on ASC?

Solution: Below are the recommended steps for processing your reverse stock split using a 1-to-2 stock split as an example. You would simply use a different sell or buy price to handle your specific situation. You basically sell the existing shares at one price, and buy them back at a higher price, so that the quantity of the shares is decreased. Please review these and try it with your plan. If you run into problem, email us the plan. 1) Make a copy of the plan, just as a safeguard. 2) Set up an additional cash fund in the plan. (On the Fund Definition (FUNDDEF) screen in the fund specs, increase the "Maximum Number of Funds" field by one, and give the new fund a description like "Stock Split Clearing Fund" or something along those lines. It shouldn't show up on the statements, but just so that it is easier to distinguish from the other funds.) 3) Print a Total of Investment Accounts to get the total number of shares to be split. (ASC Main Menu -> Reports, Valuation, Unit 401(k) (print the Schedule of Investment Accounts (Total Version of Report))) 4) Sell the shares to the new fund at 1/2 the current amount per share (if it's a 1 for 2 split). (ASC Main Menu -> Calculations, Fund Calcs, Buy/Sell Shares (Choose the "Sell Shares" option; "Fund to Purchase Stock" will be the new fund; "Price per Share" and "Release Price" will be the same; "Status Codes to Convert" would be "ABC" if it only effects active employees or "ABCHMNTPF" if actives and terms are effected; input the total shares in the plan in the "Number of Shares to Sell" field; choose "Create Transaction" and input a date.)) 5) Process the type 3 and 23 transactions that were just created for the sell. 6) Purchase shares from the new fund at the new price per share. (ASC Main Menu -> Calculations, Fund Calcs, Buy/Sell Shares (Choose the "Purchase Shares" option; "Fund to Purchase Stock" will be the new fund; "Price per Share" and "Release Price" will both be the same; "Status Codes to Convert" would be "ABC" if it only effects active employees or "ABCHMNTPF" if actives and terms are effected; input the total shares in the plan times 2 in the "Number of Shares to Purchase" field; choose "Create Transaction" and input a date (you may want to use a different date than you did in #4 above so that you can distinguish between the two sets of transactions).)) 7) Process the new type 3 and 23 transactions that were created for the purchase. 8) Print a Total of Investment Accounts to check the results.