Option pools overview

Option pools

The purpose of an option pool is to provide a reserve of shares that can be granted as stock options to attract and retain talent, incentivize employees, align their interests with the company's success, and facilitate future equity-based compensation.

To create an Option Pool on Nimity, simply:

  1. Click on +Add new event from your Cap table screen

  2. Select Option Pool

  3. Fill in the required fields

POOL TYPES

There are multiple types of pools that can be created on Nimity, each with their own specific grant types.

Types of pools:

  • Stock Option Pool

    • A stock option pool is a portion of shares set aside by a company to provide to employees, advisors, and consultants as part of their compensation package. It's designed to incentivize those who contribute to the company's growth and success. The pool represents a percentage of the company's equity, and options from the pool are granted over time, typically with a vesting schedule that requires the recipient to remain with the company for a certain period before fully owning the options.

  • Phantom Pool

    • A phantom pool, also known as phantom stock or shadow stock, is a type of employee benefit plan that gives employees many of the benefits of stock ownership without actually giving them any company stock. Instead, the company provides a phantom stock plan, which is essentially a promise to pay a bonus equivalent to the value of a certain number of shares. Payment from a phantom pool is usually made in cash or equivalent, based on the performance or value of the company's stock.

  • SAR Pool

    • SAR stands for Stock Appreciation Rights. A SAR pool is a form of employee incentive plan where employees or executives receive a right, but not the obligation, to receive a bonus equal to the appreciation (increase in value) of the company's stock over a set period. Unlike actual stock or stock options, SARs do not involve issuing shares but offer the monetary equivalent of the increase in stock value over time, typically paid in cash.

POOL DETAILS:

  • Pool name - Name of the option pool (how would you like it to be displayed on your cap table)

  • Pool creation date - Date when it was created / approved by the board of directors

  • Pool size - Amount (how big the pool of equity is)

  • Share class options - Share class of promised shares

SOURCE OF SHARES

When creating an option pool, it is important to understand from where the shares that will be ultimately granted to your employees will come. Currently there are 2 different source of shares that can be selected.

  • Issue new shares - if this option is selected once the options granted will be exercised and converted to real shares, there will be new shares issued growing the fully-diluted number of shares and diluting every stakeholder

  • From Stakeholder(s) - if this option is selected the shares that make up the pool will come from one or more already existing stakeholders and will not grow the fully-diluted number of shares of the company, but will keep it constant without diluting any stakeholder as the shares that have been committed to the pool have already been issued.

POOL SETTINGS:

  • Recycle terminated options (what happens to the options that have been terminated due to employees leaving, etc. should they get recycled back in the pool, or not)

  • Recycle expired options (what happens to the options that have expired (have not been exercised in time) should they get recycled back in the pool, or not)

NOTE:

  • after creating your Option Pool you will be able to create a Grant for your employees from the "Option Pool" page, by clicking on the "Create grant" button

  • after creating an Option Pool, there will be an Option Pool transaction generated in the transaction history that can be edited if there's any change you want to do to the Option Pool

Now, your Option Pools screen will display the following table:

‍ Option Pools table

  • Size - The total amount of shares that have been set aside to be given as Options

  • Grantable - How much of the total size of the Pool can still be granted.

Different alternatives to calculated the Grantable number based on option pool properties (recycle expired & recycle terminated)

  • If recycle expired = true, and recycle terminated = true → GRANTABLE = size - granted + terminated + expired

  • if recycle expired = false, and recycle terminated = false → GRANTABLE = size - granted

  • if recycle expired = true and recycle terminated = false → GRANTABLE = size - granted + expired

  • if recycle expired = false, and recycle terminated = true → GRANTABLE = size- granted + terminated

  • Granted = sum of all grants created and awarded to beneficiaries

  • Outstanding (auto-calculated
) - Gives you the number of Options that are still held as Grants (Outstanding = granted - exercised - terminated - expired - settled)

  • Vested (auto calculated) - Gives you the total number of Options that have been vested to the grant owners

  • Exercisable - number of Options that are still left to be exercised (auto calculated: Exercisable = vested - exercised - settled - terminated - expired)

  • Exercised - sum of grants exercised
 by all beneficiaries

  • Settled - sum of grants settled in cash


  • Terminated - sum of terminated grants

  • Expired (auto calculated) based on expiration period of grant (defined when creating the grant)

Help me with my Option Plan

Before creating you Option Pool on Nimity it's best to have an Employee Stock Ownership Plan (ESOP) created and signed by your board of directors or administrators. If you don't currently have an ESOP Nimity can help you create a basic one, from scratch, that should enable you to give out Options to your employees. To create your own ESOP please look at the below videos:

Part 1:

Part 2:

The ESOP plan feature is only available for a limited number of countries currently

Please mind that we still encourage you to talk to your own lawyers/legal advisors

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