Granting Shares Above Fair Market Value

Introduction

This article covers how to grant shares above Fair Market Value (FMV). There are two steps; first you will update your company's Administration settings, and then you will run the Grant Shares workflow and stipulate the price-per-share. Please see this article if you are looking to issue grants below FMV. 

Changing Administration Settings

Please note that full company access users will be able to change these settings. If you believe that your permissions should be expanded, consult with the appropriate individual at your company and direct them to these instructions.

1. Navigate to the Administration Workspace by either clicking the Gear icon on the bottom left corner, or clicking on Company Workspace and selecting Administration Workspace. 
2. Under General Settings, click on Workflow Administration. 
3. Click on Grant Shares or Options Under Stock Incentive Plan.
   
4. Select Yes to allow grants to be priced above or below FMV.
   
5. Scroll to the bottom of the page and click Save. 

Changes in the Grant Shares workflow

Once the workflow settings have been changed, there will be some differences in the Grant Shares workflow. The workflow will function similarly but there are some changes at described below. 

Getting Started 

When you run the Grant Shares workflow, you will have an option to select if the grants will be issued at or above FMV, below FMV, or a mix. 

NOTE: if you select the mixed option where some grants are at or above FMV and others below, there will be two steps in the workflow to first list the grants at or above FMV, and then to list the RSAs below FMV. 

List Grant Recipients

Click Add Grant on the List Grant Recipients page. There will be an option to select that the grant strike price is above FMV. Select Yes, and enter the price per share. Continue the workflow as usual from this point. 

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Screenshots are for illustrative purposes only.

Fidelity provides cap table management and other administrative services to private companies and their equity compensation plans.

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