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  • 1.  Canceled Options Instead of Terminating

    Posted 12-06-2022 14:21
    We canceled units for a holder instead of terminating them. Will the cancellation be handled differently when putting those units back in the pool? If yes, is there a way to reverse the cancellation and then terminate the same units?

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    Carta Admin
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  • 2.  RE: Canceled Options Instead of Terminating

    Posted 01-19-2023 08:24
    With regard to this query, cancelation is not different from termination with regard to returning units to the pool.

    The difference comes up, instead, in case the interest has a vesting schedule and any portion of the grant's vesting had been vested at the time of cancelation/termination. That is so due to the fact that cancelation cancels the full award, regardless of vesting, while termination forfeits the unvested amount only.

    That is, even if the award was fully unvested or did not have a vesting schedule, the best procedure is always to record the transaction as a termination instead of a cancelation, considering that the reporting of that security will be incorrect.

    Please let me know if you have any questions on the above. In case you prefer to redo the process since this grant is already canceled, we can rectify this by re-issuing it and deleting the incorrectly canceled grant.

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    Carta Support
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    Original Message


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