Creating a phantom shares plan and manually recording and cancelling individual grants
Before you can issue phantom shares on Capdesk, you will need to enable the phantom shares add-on which can be found in the 'Settings and add-ons' area of the platform.
Firstly, in order to issue phantom shares on Capdesk, you will need to add a plan. To do this, navigate to the 'Phantom Shares' area (within Equity Awards), select the 'Plans' tab and choose 'Add Plan'.
Creating a Phantom Share Plan:
“NAME” (mandatory) - the name of the plan (e.g. Phantom Share Plan).
“SHARE CLASS” (mandatory) - you will need to select a share class for the phantom share plan.
"TERMINATION RULES" (non-mandatory) - Used when terminating online grants. 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” (non-mandatory) - this is where you can write any comments or notes relating to the plan.
“DOCUMENTS” (non-mandatory) - you can upload any relevant documents relating to the plan here. Once you’ve successfully uploaded the document you need to press 'Add document' for it to be added.
Once you’ve created your plan, click 'Save'.
An overview of the plan can be seen by simply clicking on the plan name and you can make any changes using the 'Edit' function by clicking on the '...' action button.
Please ensure you have recorded a share price valuation before attempting to issue a grant.
To issue your phantom shares, navigate to the 'Grants' tab, select the green 'Issue Grant' option and choose 'Register Offline Issuance'.
'Register Offline Issuance' is to simply record a grant to a stakeholder on Capdesk, typically historical data. The 'Issue Online' option enables the grant to be executed on Capdesk, allowing the grantholder and issuer to sign the agreement online.
You then have the option to choose from an existing stakeholder or add a new one instead by clicking the green button at the bottom of the page. If adding a new stakeholder you will have to select whether the shareholder is a person or a company, followed by inputting their corresponding details (name, country, email etc.)
Next you will need to provide information for the phantom share grant.
All mandatory fields are noted with a starred asterisk (*) to help you with completing the data.
First select a phantom share plan and then input the date of grant, select the currency for the hurdle price (entering the hurdle price if applicable) and enter the total amount of phantom shares granted.
Scroll down to the 'Payment Schedule' section. In the Calculation Method field you will see two options, 'Full Value' or 'Appreciation Only':
Full Value: When calculating the principal amount, the quantity of shares granted will be multiplied by the hurdle price.
Appreciation Only: Similar to Full Value however the difference between the hurdle price and the share price at the time of the grant date is taken into consideration.
The Payment Factor is whether the principal amount calculated is multiplied by a certain factor. If this is not the case, the field can be left empty.
Next you will need to input the vesting schedule, choosing from one of the available types.
Finally, you can add any additional information such as funding rounds, notes and documents.
Once you've completed the above steps, choose 'Save Draft' or 'Publish and Notify Grant Holder' to save the phantom share grant.
Please note the publish and notify option is only available once your account is live.
Once the grant has been registered it will appear on the 'Grants' tab and you can view detailed information for any grant by clicking on the 'View' button.
To change the details of the grant, click on the '...' action button and choose 'Edit'. Dates, vesting schedules, documents etc can all be edited and uploaded here as long as the transaction was saved in draft format.
Cancelling Phantom Shares
You can cancel any phantom share grants by selecting the '...' action button within the grants area and choosing the 'Register Offline Cancellation' option.
You will then need to select the cancellation reason, enter the date of cancellation and state how many phantom shares are going to be cancelled.
When selecting the number of phantom shares to cancel you can choose from only those left to vest, cancel all or specify the number.
It is mandatory that a note is left to explain the details of the cancellation to the stakeholder.
Once completed, press 'Save Draft' or 'Publish Cancellation' and the status of the phantom share grant will be updated.
The publish option will only be available if the phantom share grant was already a published transaction.
The status of the cancelled phantom share will then be updated within the grants area.
If you need further assistance, you can reach out to us by submitting a support ticket.