Introduction

This article explains the process of adding an established Stock Incentive Plan (SIP) and how to prepare the related documents for upload. Adding an existing plan can be captured during onboarding or through the Upload Stock Incentive Plan workflow. Once the plan and forms are set up, you will be able to issue grants under the plan.

If you need to create a new plan, see this article for instructions on setting up a new stock incentive plan. To make changes to an existing SIP, see this article on how to amend a stock incentive plan.

We recommend paying particular attention to the instructions on how to adjust the language and format of your forms so that they coincide with the generated cover page and signature page.

Click the links below for instructions on uploading your SIP and preparing your documents.

Adding your plan during Onboarding
Using the Upload Stock Incentive Plan workflow
Preparing and viewing grant documents

Onboarding

One way to record your Stock Incentive Plan is during company onboarding. The SIP can be added once the Company Charter step has been completed.

Click Start on the Stock Incentive Plan step to begin.
Select Yes to Do you have a stock incentive plan?
Check if you plan includes RSAs, RSUs, and/or allows for Early Exercise. Note that the documents that you will be required to upload can change based on the sections made in this step.
Enter the number of shares in the plan, and the effective date of the plan. Upload the Stock Incentive Plan document and the associated Board and Stockholder Approvals.
Check the box if your company has a default vesting schedule. This vesting schedule set here will populate by default when running the Grant Shares workflow.
Upload the applicable Form Agreements (see below to make sure your agreements are properly formatted.) Click Continue to save the plan.

Upload Stock Incentive Plan Workflow

If your plan was not added during onboarding, you can run the Upload Stock Incentive Plan workflow to add an existing plan approved and executed outside of Fidelity Private Shares. Follow these steps to upload your existing plan:

From the Company Workspace click Start a New Workflow > Upload Stock Incentive Plan.
Enter the number of shares in the plan, and check if your plan includes RSAs, RSUs, or allows for early exercise. Note that you will be asked to upload additional forms if these options are checked.
Click Document Options and upload a copy of the Stock Incentive Plan document.
Enter in the additional details of your plan and click Continue.
Set the grant defaults to be used when granting new shares.

Vesting Period: the number of years over which vesting stock is distributed.
Vesting Frequency: the frequency with which vesting stock is granted.
Include Vesting Cliff: a typical option vesting schedule spans four total years with a one-year initial cliff. A one-year cliff means no shares vest until the first anniversary of your start date. An employee’s shares do not vest until the cliff ends, at which point all of the shares that should have been vested during this time become vested at once. After that, vesting typically occurs monthly or quarterly over the remaining period.
Cliff Duration: length of time for the vesting cliff. One year is typical for option grants.
Acceleration Clause: an acceleration clause establishes the circumstances under which the vesting of some or all the equity in question accelerates, typically in connection with a change of control of the company (e.g. sale). If the criteria set forth in the acceleration clause are met, an employee will immediately vest some portion or all of their unvested equity. For example, a single-trigger acceleration clause provides that upon a sale of the company, any then-unvested options automatically and immediately vest.
Termination Clause: how time vested RSUs will be handled during termination.

Upload all applicable Form Agreements. Make sure your documents are properly prepared to not include any variable information.
Upload the appropriate Board approval and Stockholder approval.
Review the documents before continuing. You can also share the documents or send for legal review. When ready, click Continue.
A confirmation will display indicating that your plan was fully set up in the platform.

Preparing and Viewing your Plan Documents

How should I prepare my Form of Agreements for upload?

The forms you upload will be used as part of future grants from the platform. To avoid any conflicting language between what Fidelity Private Shares will generate and your Form Agreements, you will want to remove any of the following provisions from your forms:

Number of shares/options.
Price per share/exercise price/strike price.
Any dates including the grant date, expiration date, and vesting commencement date.
Vesting schedule, including vesting intervals.
Any reference to a cliff and its duration.
Any reference to acceleration and the terms thereof.

In place of those terms, we suggest adding language along the lines of, "This option shall vest in the manner described in the vesting schedule on the cover page attached hereto."

What does a grant look like with uploaded Form of Agreements?

When issuing new grants with an uploaded plan, the platform will utilize your uploaded Form Agreements. A cover page will be generated containing the details of the grant as entered during the grant shares workflow, followed by a signature page and the appropriate Form Agreement. Below is an example of a generated cover sheet:

The final page of the cover sheet will include the signature blocks for the company and for the grantee, as shown in this example:

All plan related documents are stored in the Data Room. The Stock Incentive Plan, as well as the other grant documents, are available to the grantee in the My Equity page and will be provided during the grant acceptance workflow.

What happens for exercised grants?

Similar to the cover page that is included when a new grant is issued, a cover page is included when a holder exercises their option grants. This cover page will include the date, number of shares, price per share, amount paid, and form of payment. This cover page also includes the holder's signature. The uploaded Form of Exercise will be included after the cover page.

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.

Fidelity Private Shares LLC

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