Termination Rules
A termination rule defines the outcome for both the vested and unvested portions of a stakeholder's equity grant when the grant is terminated. The platform allows you to establish multiple rules to accommodate various scenarios.
You can view and add new termination rules on the 'Termination Rules' screen in the 'Company' section .
To add a termination rule to apply to grants, input the following parameters:
Termination Rule Name: Enter a name for the Termination Rule. This will be used to select which rule applies to an award on the 'Equity Grants' Screen.
Leaver Type: Choose ‘Good’ or ‘Bad’ to specify whether this rule should apply to leavers categorized as ‘Good Leavers’ or ‘Bad Leavers’.
Unvested: Select a parameter in the 'Unvested' section to determine the fate of the unvested portion of a stakeholder's grant on the termination date.
Cancel immediately: Unvested tranches will be canceled immediately and will no longer vest.
Continue to vest: Unvested tranches will continue to vest after the termination date.
Accelerate vesting and apply vesting rule: All unvested units will become vested on the termination date, and the option selected below for the 'Vested Units' will be applied.
Vested: Select a parameter in the 'Vested' section to determine the fate of the vested portion of an employee’s grant that has not yet been exercised or released on the termination date.
Expire immediately: Shares that were previously vested will expire and will no longer be available for release or exercise.
Expire after a period: Vested shares will remain available for release or exercise for a specified period. Enter a number in the first field and a time period in the second field to specify the time before these vested shares expire.
Expire on original Grant Expiry Date: Vested units will be available for release or exercise until the grant's expiry date.
Description: This is an optional field where you can add a description of the rule.