This article will help to explain how to register and issue phantom shares on Capdesk.
Before you can issue phantom shares on Capdesk, you will need to enable the phantom shares addon (if you have not already done so).
To enable the add-on, go on your company's profile, go to "Settings and add-ons" and ensure that "Phantom Shares Addon" is selected. If it isn't, please click the box by "Phantom Shares Addon" and select save to enable phantom shares.
To issue phantom shares on Capdesk, you will need to add a plan. To do this, go to the Phantom Shares tab (under Equity Awards) -> Plans -> 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 and this is to follow the value of the share class. You can find out more about how to create an Share Class on Capdesk here.
"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 on “Save” in order for it to show up in the “Phantom Share Plan” page.
To edit an existing plan, click on the corresponding action button and then edit. This will allow you to change the name of the plan or add any notes, documents etc.
Now that a plan has been created, phantom shares can be recorded on Capdesk.
Manually issuing Phantom Shares
Remaining on the Phantom Shares tab (under Equity Awards). Go to Grants -> Issue Grant -> Register Offline Issuance.
'Register Offline Issuance' is to simply record a grant to a stakeholder on Capdesk, typically historical data. The 'Issue Online' allows to execute the grant on Capdesk and allow for grantholder to sign the agreement.
You can then click (or search) for an existing stakeholder that is already registered on Capdesk or add a new phantom share holder instead. You can do this by clicking the green button at the bottom of the page. You will have to input whether the shareholder is a person or a company, followed by the corresponding details (name, country, email etc.)
Next you will need to provide information for the phantom share grant.
All the starred (*) fields are mandatory so the currency and the number of phantom shares have to be stated.
You will need to select a phantom share plan, input the date of grant (you can only enter past or today's date, we do not support future dates), select currency for the hurdle price (enter hurdle price if applicable) and enter the amount of phantom shares granted.
In the Calculation Method field there will be 2 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.
You will need to input the vesting schedule. For more details on Capdesk's vesting schedules, click here.
Finally, you can add additional information - funding rounds, notes and documents.
Once you've entered the relevant details and if you aren't live yet, click the "Save Draft" button. If you are already live, you can select either "Save Draft" or "Publish and Notify" button.
To view detailed information for any grant click the "View" button on the "Grants" page.
If you want to change the details of the grant, click on the action button (...) on the far right of the grant and then edit. Dates, vesting schedules, documents etc can all be edited and uploaded here. Take note that this action can only be followed if the transaction is saved as a draft, not published.
Cancelling Phantom Shares
To cancel any phantom share grants, go to Phantom Shares (under Equity Awards) -> Grants -> Action Button (the 3 dots on the line of the shareholders whose phantom shares you would like to cancel) -> Register Offline Cancellation.
You can then select the cancellation reason, enter the date of cancellation and how many phantom shares are going to be cancelled.
If you need further assistance, you can reach out to us by submitting a support ticket here.