A step by step guide to designing your option scheme on Vestd
This article covers how to design either an Unapproved, or an EMI Option Scheme on Vestd.
Once you have your EMI Valuation (only in the case of EMI options), and have authorised an Option Pool, you are ready to design your Option Scheme.
First, log onto our platform, and click Dashboard on the top left:
Here, under EMI & Options, click View and distribute.
At the top of this page you will see three boxes:
If you already have a scheme designed and want to distribute options through it, click the first box.
Depending on whether you want to design an Unapproved, or an EMI scheme, click the relevant box.
Whether you choose EMI or Unapproved, you will be taken to a page that looks the same:
First, give your scheme a name for reference.
If you are a Pro Customer, and have had us digitise your own agreement template, you will have the option to select which document you would like to use here:
From here, scroll down and you will have to fill in the following:
- Exercise Price, which will affect how much tax the recipient will pay upon exercise.
- Exercise conditions, i.e. are the Options Exercisable: In the Exercise Period (which you also select below); or on Exit Event.
- Criteria (to qualify for this option). Although most used is only time based vesting, you can also add certain performance criteria.
- File, although this is optional and rarely used, to either add to or replace the Criteria
Almost there! Now you need to set the Vesting Schedule (if you want to set one).
If you choose not to use one and not to have the shares vest automatically, vesting of the options will be entirely manual, and in your control.
If you choose not to use a vesting schedule, but turn on Automatic Vesting, everything will vest all at once once the Vesting Duration period has passed.
You will still need to set a vesting duration, this is the date by which all of the options will have to vest.
If you do choose to use a vesting schedule, the page will look slightly different:
The Cliff Date and Cliff Shares part might sound confusing. All it means is this: the Cliff Date is the date on which the recipient will have their first set of Options vest. The Cliff Shares percentage defines what percentage of their total shares becomes available on the Cliff Date. The Vesting Frequency is how often the Options vest after that: Monthly, Quarterly, Half-Yearly, or Yearly.
If you leave all of these blank, the recipient's options will start vesting immediately, at the frequency you choose.
If you choose for the shares to not vest automatically, you will need to do so manually as they become due.
Once this is done, just click Save at the bottom of the screen, and:
Congratulations! You are now ready to start adding recipients.
For each new recipient, just fill in their details and how many shares you want to give them.
Then click Save and add another, much faster now that the scheme is in place.
If you would now like to upload your own signed agreements against each distribution, follow these steps.