How to manage vesting schedule templates in Carta LLC | support.carta.com
How to manage vesting schedule templates in Carta LLC
The Vesting library supports two kinds of vesting criteria that can be created as a template to easily use when issuing new interests:
Time (or Service): Vests after an amount of time has elapsed. For example, 10,000 units vest 1/48 each month for 48 months.
Performance: Vests after an event has taken place. For example, 5,000 units vest when the enterprise value has been increased by 2x.
How do I create a new performance condition?
Navigate to Cap Table > Vesting.
Click Define condition +.
Define condition type.
Condition type: Representation of the restrictive conditions and used when selecting the additional vesting condition.
Event-based performance condition: A firm-wide condition that is satisfied after an event that affects the company as a whole such as an IPO or an acquisition.
Market-based performance condition: A condition that becomes satisfied upon a market event such as the company reaching a valuation of $500 million or the stock price reaching a value of $50 per share.
Non-market based performance condition: An individual-focused event. For example, Ted Baker, the company's Director of Sales, achieved a sales goal of 1,000 subscription licenses sold in his first 100 days of employment.
Add condition details.
Condition name
Condition details: Enter the company/legal language specifying the conditions to be achieved.
Variable payouts (Minimum and Maximum): Performance awards can be configured to allow for payouts at greater than or less than 100% of target. Carta will initially reserve shares from the plan’s share pool at the maximum payout amount.
Vesting post-termination: Indicate whether awards that have time vested will pay out upon performance achievement if the stakeholder is terminated between time vest and performance achievement.
No: Participants forfeit the award if they have not met both the time vesting and performance condition upon termination.
Yes: Allow stakeholders that have met the time vesting criteria to keep the award if they are terminated before the performance condition has been met.
Click Save to create the new performance condition.
How do I create a vesting plan template?
Navigate to Cap Table > Vesting.
Click Add template +.
Creating a new Standard vesting schedule template
Input the vesting schedule details, such as the length of the schedule (in number of months) and when the vesting occurs.
Creating a new Custom vesting schedule template
Click into the Custom Template tab.
To add a new Tranche, click the + to the right of the row.
To modify the Vesting Conditions of a tranche, click the row tools button to the right of the vesting condition and select Edit conditions.
In the modal, Time-based vesting can be toggled off and on, and one or more Performance Conditions can be applied. Click Save to apply the modifications.
When the details have been completed, click Save to make the vesting plan template available for use when issuing new interests.