How to Configure Option Exercises to Include Custom Documents

Introduction

This article explains how to set up exercises to include custom exercise agreements.  This might be useful if you need your exercise to include extra documents, for example, a joinder to a voting rights agreement.

Please click on the links below to be directed to the portion of the article you are interested in viewing:

• Setting Up the Additional Option Exercise Document
• How The Document Will Appear During Exercise

Setting Up the Additional Option Exercise Document

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. Click on Company Workspace and select Administration Workspace.
2. Under General Settings click Workflow Administration.
3. Scroll down to the Equity heading and click on Exercise Options.
4. In the Additional Restriction Agreement for Plan Shares section click Add. 
   
5. You will be asked to input the following information:

• Additional Restriction Agreement for Plan Shares document. This document must have no blanks. For example, if your document contains, "As of [insert today's date]," you may consider working with your lawyer to eliminate these blanks and inserting language that needs no filling in, such as, "As of the date stated below." Work with your lawyer to change any legal documents they've given you.
• Signing Statement. The default signing statement reads, "IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year below." This statement can be customized based on your needs. This will appear on the signature page above the recipient's signature block.
• Context Documents for Restriction Agreement. This is optional. If the additional document makes reference to another document, you can select or upload that document here. For example, if the custom document is a joinder to a voting rights agreement, you can select the original voting rights agreement here so the signer will be granted access to it. This may also be used for an explanation or instructional document to be distributed along with the Additional Restriction Agreement. 

How The Document Will Appear During Exercise

Once these documents have been set up in the Administration Workspace and saved, an employee exercising options will be presented with an additional document for signature when exercising their options, as shown in the example below. 

A signature page containing the signing statement and a signature block will be added to any additional restriction document that has been uploaded. The date will appear in the signature block after the signing process has been completed. No blanks in the restriction document will be filled in, which is why eliminating the blanks before you set the document up is essential.

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Screenshots are for illustrative purposes only. Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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

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