Carta open forum

We have an engineer who was originally hired as an employee and received an ISO grant. They're moving over to a contractor role, but we'd like to keep their vesting going without disrupting the schedule. Since ISOs require employee status, what's the cleanest way to handle this so the equity doesn't get messed up? Do we amend the original grant to convert to NSOs, or issue a new grant? And how do we reflect the change in Carta?

We have an engineer who was originally hired as an employee and received an ISO grant. They're moving over to a contractor role, but we'd like to keep their vesting going without disrupting the schedule. Since ISOs require employee status, what's the cleanest way to handle this so the equity doesn't get messed up? Do we amend the original grant to convert to NSOs, or issue a new grant? And how do we reflect the change in Carta?

Hi Rose -

You might need to get acknowledgement of the change to contractor your grant is converted to NSO. I am assuming this person in continuing to be service provider to your company.   Within Carta, you are able to "modify the grant" and under the compliance section add the date of the ISO to NSO conversion (effective date of moving to contractor role).  You would want to make sure this change is noted in your deferred tax asset report and I usually tag with administrative note to grant.  I also suggest working with Carta Admin support can help you and answer any questions.

We have an engineer who was originally hired as an employee and received an ISO grant. They're moving over to a contractor role, but we'd like to keep their vesting going without disrupting the schedule. Since ISOs require employee status, what's the cleanest way to handle this so the equity doesn't get messed up? Do we amend the original grant to convert to NSOs, or issue a new grant? And how do we reflect the change in Carta?

Thank you for the insights, @Chad Stamper and @Christie Johnson. Do you know if it's preferable to modify the existing grant or to cancel and reissue? Or is that just preference? 

Hi Rose -

You might need to get acknowledgement of the change to contractor your grant is converted to NSO. I am assuming this person in continuing to be service provider to your company.   Within Carta, you are able to "modify the grant" and under the compliance section add the date of the ISO to NSO conversion (effective date of moving to contractor role).  You would want to make sure this change is noted in your deferred tax asset report and I usually tag with administrative note to grant.  I also suggest working with Carta Admin support can help you and answer any questions.

We have an engineer who was originally hired as an employee and received an ISO grant. They're moving over to a contractor role, but we'd like to keep their vesting going without disrupting the schedule. Since ISOs require employee status, what's the cleanest way to handle this so the equity doesn't get messed up? Do we amend the original grant to convert to NSOs, or issue a new grant? And how do we reflect the change in Carta?