This article explains how you can cancel a share grant or cancel and convert to a different share class (i.e. deferred).
On Carta, you can cancel share grants in multiple ways, depending on how it should be reflected: either keeping record of a transaction, revoking its issuance.
- Register offline cancellation - you can use this feature for both offline and online issuances if you need to register a partial or full cancellation of a grant (eg. the employee has left and you wish to cancel their grant).
- Cancel execution - you can use this feature only for online issuances to cancel a grant in signing status (eg. the grant has been sent for signing but you some details need to be amended).
Register offline cancellation
1. Go to Equity Awards > Share grants > Grants.
2. Click the Actions Button located on the right-hand side of the award > Register Offline Cancellation.
3. Select one of the three different methods of cancellation:
- Cancel grant by cancelling the shares
- Cancel grant by converting share grants to another share class i.e. deferred
- Cancel grant by transferring shares to another stakeholder
Cancel Grant by Cancelling the Shares
This will cancel the shares so the grantholder no longer holds them and, if applicable, the shares will return to the incentive pool.
1. Select a Cancellation reason.
If Buyback is selected as the cancellation reason, the cancelled portion will be deducted from the vested amount. If any other reason is selected, the platform will prioritize cancelling the unvested amount.
2. Add the Cancellation Date and select one of the three options for the cancellation.
- Cancel shares vested (Buyback only) - cancels only the vested portion.
- Cancel shares yet to vest - cancels any unvested shares in the grant.
- Cancel all outstanding shares including any vested options - cancels the entire grant.
- Specify a number of shares to cancel - this option allows you to input the number of shares to be cancelled (could include vested and unvested). By selecting this option you can also choose to accelerate the unvested portion:
3. Add a Cancellation Note.
4. If applicable, add a funding round in the Advanced section.
5. Click Save Draft or Publish Cancellation.
Cancel Grant by Converting Shares to Another Share Class
1. Select a Cancellation reason.
If Buyback is selected as the cancellation reason, the cancelled portion will be deducted from the vested amount. If any other reason is selected, the platform will prioritize cancelling the unvested amount.
2. From the Convert to Share Class dropdown, select the share class the shares will be converted to.
3. Add the Cancellation Date and select one of the three options for the cancellation.
- Cancel shares vested (Buyback only) - cancels only the vested portion.
- Cancel shares yet to vest - cancels any unvested shares in the grant.
- Cancel all outstanding shares including any vested options - cancels the entire grant.
- Specify a number of shares to cancel - this option allows you to input the number of shares to be cancelled (could include vested and unvested). By selecting this option you can also choose to accelerate the unvested portion:
4. Add a Cancellation Note.
5. If applicable, add a funding round in the Advanced section.
5. Click Save Draft or Publish Cancellation.
Once the shares have been converted, navigate to Ownership > Shares to see the cancelled shares allocated in that class.
Cancel Grant by Transferring Shares to Another Stakeholder
1. Select a Cancellation reason.
If Buyback is selected as the cancellation reason, the cancelled portion will be deducted from the vested amount. If any other reason is selected, the platform will prioritize cancelling the unvested amount.
2. Select a buyer. The stakeholder types we currently support are individuals, trusts and companies.
3. Add the Cancellation Date and select one of the three options for the cancellation.
- Cancel shares vested (Buyback only) - cancels only the vested portion.
- Cancel shares yet to vest - cancels any unvested shares in the grant.
- Cancel all outstanding shares including any vested options - cancels the entire grant.
- Specify a number of shares to cancel - this option allows you to input the number of shares to be cancelled (could include vested and unvested). By selecting this option you can also choose to accelerate the unvested portion:
3. Add a Cancellation Note.
4. If applicable, add a funding round in the Advanced section.
5. Click Save Draft or Publish Cancellation.
Cancel Execution
1. Go to Equity Awards > Share grants > Online Issuances.
2. Click the Actions Button located on the right-hand side of the award > Cancel execution.
3. Provide a Cancellation reason and click Confirm.