Recording options, share grants and warrants that are issued out of an Employee Benefit Trust (EBT).
Some companies issue equity awards out of an EBT rather than an Incentive Pool. If your company uses this resource to issue equity, this support article will cover the necessary steps to do so.
This article will be divided into sections:
- Recording and issuing shares to an EBT
- Creating an equity plan
- Issuing equity from an EBT
- Viewing the EBT in the cap table
Recording and Issuing Shares to an EBT
1. The EBT must be set up as a stakeholder in your cap table. You will also need to issue shares to it as these shares will be the authorised pool for your EBT from which you can issue grants from. Go to Ownership > Shares.
2. Click Shares > Register offline share issuance.
3 - Select the trust from the list of stakeholders or create the trust entry in your cap table by clicking Or add a new buyer.
4. Set the Stakeholder type as Trust and input all the necessary information and click Next.
5 - Input all the necessary share issuance details and click Publish and notify the shareholder:
- Share Class - The underlying share class of the equity you intend to issue out of the EBT.
- Date - The date of issuance of these shares. It will be the date that these shares were allotted to the EBT.
- Quantity - Quantity of shares allotted to the EBT that can be used to be issued as equity grants.
- Currency of transaction - The currency in which the equity will be issued under.
- Price per share - The price per share of the shares being allotted. You may input the nominal value as these shares were not sold.
6. The EBT will appear in the Cap table.
Creating an Equity Plan
7. Create an equity plan with the following settings:
- Use Shares... - Select Issued.
- Shareholder - Select the trust you have just created.
Issuing equity from an EBT
8. You will be able to grant equity awards from the plan you just created connected to your EBT.
Viewing the EBT in the Cap Table
9. The number of equity awards held by the EBT on the cap table will decrease by the amount granted. In the screenshot below you can see a deduction of 50 options.