Vesting schedule types for grants

When registering a grant on Capdesk, it's important to make sure the way the grant vests, as is dictated in the grant agreement, this article will help you pick the correct vesting type for Capdesk.

On Capdesk you can have a grant vest in effectively 3 ways: Immediate (all shares vest immediately on the vesting start date), Custom (in a bespoke manner) and Automatic (shares vest on dates (tranches) distributed across regular intervals; monthly, yearly, quarterly

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There are currently 4 different "Automatic" schedule types. They each have a different method of distributing shares to vest across the vesting schedule, this is relevant if there is a fractional share vesting in a month, e.g.  3.5 or 4.7 shares vesting rather than 4 or 5.

In a grant agreement, it should be explained how the options shall vest and if in doubt you should seek expert advice.

You can then relate this to the relevant automatic schedules described below. 

They are listed and explained below:

  1. Automatic (Distribute Evenly, Round-Up)
  2. Automatic (Distribute Evenly, Round-Down)
  3. Automatic (Round-Up)
  4. Automatic (Round-Down)

 

1) Automatic (Distribute Evenly, Round-Up): Rounds up the first tranche then distributes evenly.

This will take all the fractional shares across the first group of tranches that adds up to a whole share and have it vest at the beginning of that group, it then repeats this until the end of the schedule.

If you are preparing an import file and want to use this vesting schedule fill in the field "vesting_type" as "automatic_equal_round_up".




2) Automatic (Distribute Evenly, Round-Down):  Rounds down the first tranche and then distributes evenly.
This will take all the fractional shares across the first group of tranches that adds up to a whole share and have it vest at the end of that group, it then repeats this until the end of the schedule.

If you are preparing an import file and want to use this vesting schedule fill in the field "vesting_type" as "automatic_equal_round_down".




3) Automatic (Round Up):  Rounds up any fractional vesting at each tranche, for example, 2.1 will round up to 3. This can result in a shorter than anticipated vesting schedule as seen below in the case that there is a small number of options granted of shares granted to the option holder.

If you are preparing an import file and want to use this vesting schedule fill in the field "vesting_type" as "automatic_round_up".





4) Automatic (Round Down):  Rounds down any fractional vesting at each tranche and last tranche vests the rest.

If you are preparing an import file and want to use this vesting schedule fill in the field "vesting_type" as "automatic_round_down".

 

If you need further assistance, you can reach out to us by submitting a support ticket here.


Thank you for reading this support article, if you are interested to read other articles that relate to managing your options, please see this page of articles:
https://support.capdesk.com/administrators#options