You can issue different types of equity awards to specific grantholders in Carta.
There are a few required steps that have to be observed prior to issuing equity awards:
Enabling the specific award add-on - The link to that specific award type (e.g. Options, Warrants, Restricted Stock Units, etc) will appear under the Equity Awards dropdown.
Creating an incentive pool / adding an authorisation.
Adding an equity plan the awards will be issued from.
Equity Awards can be issued in two ways:
Online equity awards issuance - an online issuance can be used when the entire signing process will be done through Carta (i.e. the agreements will be uploaded on the account and the signatures will be completed via Carta).
Offline equity awards issuance - an offline issuance can be used when the signing process will take place outside Carta (i.e. the agreements have already been signed).
For the purpose of this article, we will use the issuance of option grants individually as an example. Please, bear in mind that the same process is valid for the other types of awards (e.g. Share grants, Warrants, RSUs, etc.)
Online Equity Awards Issuance
There are a few required steps that have to be observed prior to issuing equity awards online:
Adding the agreement templates on Carta.
Selecting the default signatory.
1. Go to Equity Grants > Options > Grants.
2. Click on Issue Grants > Issue online.
3. Select an existing holder or click on Or add a new optionholder. If a new optionholder is created, it will be necessary to add holder details, such as name, email, stakeholder type, stakeholder category, etc. Click Next.
4. Enter the details related to the option grant. The required details (marked with a red asterisk on the platform) will vary according to the equity type. The details can include:
Plan - select the equity awards plan you have just added.
Document set - it will become available after the plan is selected.
Grant date - it is the expected date of signature. If the expectation is not met, Carta will automatically adjust the grant date to reflect the date the signature process was completed.
Exercise price - exercise price per share.
Hurdle price - In case you are issuing share grants or phantom (virtual) shares.
Options - number of options granted (this field will be named differently if other types of equity awards are being issued).
Expires - expiration date of the grant (if applicable).
Vesting schedule - Dictates how the award will vest.
5. Scroll the page down and click on Save draft or Send for signing.
6. The grantholder will receive an email with an invitation to sign the grant. If the grants needs to be witnessed, the witnesses will also be invited to sign the grant. The signature process will then become available to company signatories and the grant will have its status updated to "Issuer signing".
7. The details on the published grant can be viewed by clicking on View.
Offline Equity Awards Issuance
1. Go to Equity Grants > Options > Grants.
2. Click on Issue Grants > Register offline issuance.
3. Select an existing holder or click on Or add a new optionholder. If a new optionholder is created, it will be necessary to add holder details, such as name, email, stakeholder type, stakeholder category, etc. Click Next.
4. Enter the details related to the option grant. The required details (marked with a red asterisk on the platform) will vary according to the equity type. The details can include:
Plan - select the option grant plan you have just added
Grant date - date of when the options were granted (this is not the vesting start date)
Exercise price - exercise price per share
Hurdle price - In case you are issuing share grants or phantom (virtual) shares.
Options - number of options granted (this field will be named differently if other types of equity awards are being issued).
Expires - expiration date of the grant (if applicable)
Vesting schedule - Dictates how the award will vest.
5. Scroll the page down and click on Save draft or Publish and notify grantholder.
6. Draft grants can be edited by clicking on the three-dotted button located on the right-hand side of the award and Edit.
7. Draft option grants can be published by clicking on the three-dotted button located on the right-hand side of the award and Publish and notify. That will trigger a notification to the grantholder.
8. The details on the published option grant can be viewed by clicking on View.
