Introduction
Hurdle shares are a special share type that only become valuable once a specified share price (the "hurdle") is exceeded. This article will guide you through the complete process of setting up and granting hurdle shares in Ledgy, from creating the appropriate share class to issuing grants to your stakeholders.
Creating a hurdle share class
To set up hurdle shares, you first need to create a dedicated share class with the hurdle feature activated:
Go to the Ownership > Share classes section in Ledgy
Select Add share class in the top right corner
In the "Create a new share class" window that appears, define the share class parameters
Specifically for Hurdle Shares, activate the "Hurdle" toggle (turn it green)
Insert the Hurdle share price in the field that appears below
Note: If you've had any stock splits in the past, these will be taken into consideration when adding the Hurdle Price. For example, if you've had a stock split with a factor of 100, and you want to define a Hurdle Share Price of GBP 10, you'll need to insert 1,000 GBP in this field so that, taking into account the stock split, your effective hurdle share price will be GBP 10.
Setting up a hurdle shares pool and plan
After creating the share class, you need to establish a pool and plan for your hurdle shares:
Go to Equity Plans > Pools & Plans
Add a new Pool for the hurdle shares (each pool requires a unique share class)
Ensure that the underlying Share Class is assigned to the Hurdle Shares (as created in the previous step)
Once the Pool has been created, add a new Plan by clicking on the "Add plan" button
Fill in the required fields:
Plan name
Date
Grant type (select "Hurdle Shares (UK)" if applicable)
Allocate the plan to the Hurdle Shares Pool you just created
Note: When generating a new plan, if 'Hurdle Shares (UK)' is selected as the Grant Type but the underlying share class doesn't have hurdle shares toggled, you will receive a warning message from Ledgy.
Issuing hurdle shares to stakeholders
Once your hurdle share class, pool, and plan are set up, you can grant hurdle shares to stakeholders:
Go to Equity Plans > Grants
Select Add grant in the top right corner
In the grant creation form:
Choose the Hurdle Shares plan created in the previous steps
Enter the number of shares to grant
Specify the grant date
Select which stakeholder you want to issue the shares to
You can further customise any Optional fields as necessary by expanding the toggle arrows below
Complete the process by clicking on "Create" or "Save"
By following these steps, you'll successfully set up and grant hurdle shares to your stakeholders in Ledgy.