Before issuing equity awards you will need to have an equity plan created to issue equity.
For the purpose of this article, we will use the creation of an option grant plan as an example. Please, bear in mind that the same process is valid for Share Grants, Warrants, RSUs and Phantom Shares. If you can't see the tab for the desired equity type, you will need to enable the relevant equity module.
Creating an Equity Plan
1. Navigate to Equity awards > Options > Plans.
2. Click Add plan.
3. Select the Granting method.
This setting defines whether grants are signed or approved by the issuer. You can read more about signatureless granting.
4. Add the Plan details:
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Use Shares determines where the equity awards are drawn from:
- Directly from Incentive Pool;
- Authorised specifically for this plan: when using this option, you will also need to create a specific authorisation for this specific plan. Read more about creating a plan specific authorisation.
- Outside the pool (non-incentive shares outside the pool);
- Issued: if the shares are already issued to a shareholder who will be satisfying the awards on exercise e.g. an EBT. If this option is selected, you will be able to select which shareholder is associated with the awards.
- Name: the name of the plan e.g. EMI.
- Share Class: the share class in which the equity will be issued as.
- Jurisdiction: if the jurisdiction is UK, you will be able to select a type (EMI, CSOP or Other).
5. Add non-mandatory information.
- Termination Rules: Used when terminating online grants (only applicable to options and warrants). When starting the termination process a rule can be used to define the exercise period of the termination. Those rules can be seen as templates, as the exercise period of the termination can be customised before starting the process.
- Note: This is where you can write comments about specific conditions of the grant for the stakeholders and administrators to view.
- Documents - You can upload any documents relating to the plan. For example, an option plan, board resolution, shareholder resolution. Once you have successfully uploaded the document you need to press 'Add document' for it to be added.
6. Click Save.
Once the plan has been created, you might need to add an authorisation. You can find detailed guidance here.