Stock options
1 Understanding stock options
Not everyone at 1st Money gets stock options. See the second tab of this doc for details: 1st Money's 10% employee stock options pool doc
More useful references:
- youtube.com/watch?v=_B2Er0SZvn4
- businessinsider.com/twitter-ipo-created-1600-millionaires-2013-11
- techcrunch.com/2007/11/12/counting-the-google-millionaires/
- thedailybeast.com/articles/2012/02/03/david-choe-facebook-s-millionaire-graffiti-artist.html
2 Stock options template
Stock options offer in writing
Here's the stock options offer in writing:
Definitions:
- Date Stock Options Started: the date you reply "Agreed", or the date you start working your first day, which ever is later.
- Agreed Minimum Hours: 40 hours each week.
Proposed offer:
1. You work the Agreed Minimum Hours, from the Date Stock Options Started. From this date, you agree to commit your time and attention to the tasks assigned.
2. Your working hours are flexible, but ideally, where possible, should overlap with similar hours that the rest of the team work.
3. It's agreed that ____% non-transferable incentive stock options (employee stock options) will be vested (uniform graded vesting) in 1/208th blocks at the end of each week for 4 years from the Date Stock Options Started, with a 52-week cliff (no vesting for the first 52 weeks, with 52/208th vested at the start of the 53rd week), provided that you continue to work the Agreed Minimum Hours employed at 1st Money UK Holdings Ltd, and continue to act in good faith towards 1st Money.
4. The exercise (buy) price of the options will be set when 1st Money get its first serious funding round. It'll be set as the value of the stock at that time, as assessed by the outside investor(s).
5. The maximum maturity of these options is 10 years.
6. Your options will dilute normally along with all other stock as further investment rounds come on board.
7. Further options may be agreed at the end of the 4 years for further years of service.
8. You'll continue to be paid hourly as previously agreed. This agreement doesn't exclude you from future pay raises or conversion to monthly pay.
9. 1st Money provides all your equipment, laptop, keys, etc, where agreed.
10. 1st Money will cover your reasonable moving costs should we need to relocate you and your family.
11. Any works you create during the agreed work hours are "works for hire", and you give full perpetual exclusive ownership of those works to 1st Money UK Holdings Ltd.
12. You agree to not disclose trade secrets and other confidential information of 1st Money UK Holdings Ltd.
13. Approved time off hours are recognised as follows:
- Employees: Paid regular holidays count towards your Agreed Minimum Hours. Approved paid time off also counts towards your Agreed Minimum Hours. Unpaid time off doesn't count, even if approved.
- Contractors: Approved unpaid time off counts towards your Agreed Minimum Hours (by law, we can't do holidays or paid time off for contractors). Unpaid time off is usually two weeks each year (see your agreement).
14. Weeks that don't reach the Agreed Minimum Hours DON'T count as vested. This has the effect of delaying the date that you reach your 52-week cliff. This also delays the date that you reach the 208 weeks to fully vest. See your week's hours at the bottom of: Person > Attendance > Week
15. You agree that your timesheets submitted and approved time off requests in 1st Money will be the sole source for determining if hours have been correctly worked.
If you don't agree to ANY of the above, please discuss, and have a redrafted copy resent to you.
If you agree to ALL the above, please send a reply email with the word: "Agreed"
This offer is open for 10 calendar days after the "send date". Failing to reply inside 10 days will void this offer.
P.S. You can view the current cap. table at: https://docs.google.com/spreadsheets/d/1yYRyY3RVlN1KDg_FRsvfxESAeTTI9BH_HOLVLcqT-ks/edit#gid=03 Getting more stock options
1st Money's minimum expectation is 40 hours a week, but some HEs have the lifestyle or motivation to work even longer hours.
Here's the additional stock options template:
Additional stock options offer in writing
Here's the additional stock options offer in writing:
Definitions:
- Date Additional Hours Started: the date you reply: "Agreed"
- Additional Hours Duration: 52 weeks.
- Date Additional Hours Ended: exactly Additional Hours Duration weeks after the Date Additional Hours Started.
- Previous Stock Options Percent: 0.____%.
- Previous Hours Per Week: 40 hours.
- Previous Hourly Pay Rate: $____ each hour.
- Previous Monthly Pay Estimate: $____ each month.
- Previous Unpaid Time Off Hours: 80 hours each year (or 2 weeks each year at 40 hours each week).
- Additional Stock Options Percent: equal to Previous Stock Options Percent (above).
- New Hours Per Week: 60 hours.
- New Hourly Pay Rate: $____ each hour.
- New Monthly Pay Estimate: equal to Previous Monthly Pay Estimate (above).
- New Unpaid Time Off Hours: 120 hours each year (or 2 weeks each year at 60 hours each week).
Proposed offer:
1. 1st Money is offering double stock options (Previous Stock Options Percent + Additional Stock Options Percent) in exchange for working New Hours Per Week, whilst still paying Previous Monthly Pay Estimate for the Additional Hours Duration.
2. Upon acceptance, 1st Money will change:
- Previous Hourly Pay Rate to New Hourly Pay Rate (for the Additional Hours Duration).
- Previous Unpaid Time Off Hours to New Unpaid Time Off Hours (for the Additional Hours Duration).
3. Previous Stock Options Percent will still vest normally with 1/208th blocks at the end of each week for 4 years (with a 52-week cliff, no vesting for the first 52 weeks, with 52/208th vested at the start of the 53rd week) for every week over 40 hours work done.
4. Additional Stock Options Percent will vest on the same basis as the Previous Stock Options Percent (i.e. with 1/208th blocks at the end of each week for 4 years, with a 52-week cliff. No vesting for the first 52 weeks, with 52/208th vested at the start of the 53rd week) but with the different date started of Date Additional Hours Started.
5. You only become qualified to receive the Additional Stock Options Percent once you've completed the Additional Hours Duration weeks of New Hours Per Week.
6. New Hours Per Week aren't averaged. E.g., if you work 60 hours, 58 hours, and 62 hours, this counts as 2 weeks completed, not 3 weeks.
7. Once you've qualified yourself for the Additional Stock Options Percent, the date started for vesting will be backdated to Date Additional Hours Started.
8. Failing to qualify for Additional Stock Options Percent means you won't get your Additional Stock Options Percent. You'll still get your Previous Stock Options Percent, plus pay for all the hours you've worked.
9. Careful management of your New Unpaid Time Off Hours should make qualifying for Additional Stock Options Percent very achievable. It's possible to negotiate an extension on the Date Additional Hours Ended, but it must be done in writing, with a valid reason, e.g., medical, act of God, etc.
10. All pay rate increases during the Additional Hours Duration will first be calculated on the basis of Previous Hours Per Week. They'll then scaled back to the New Hours Per Week. This makes the Monthly Pay Estimate possible to compute and reset after the Date Additional Hours Ended.
11. Your timesheets submitted and approved time off requests in 1st Money will be the sole source for determining if hours have been correctly worked.
12. At the end of the Additional Hours Duration, 1st Money will change:
- New Hourly Pay Rate to Previous Hourly Pay Rate.
- New Unpaid Time Off Hours to Previous Unpaid Time Off Hours.
Conclusion:
All other terms (e.g., exercise, maturity, dilution, etc) on the Additional Stock Options Percent will be the same as agreed with your Previous Stock Options Percent.
If you don't agree to ANY of the above, please discuss, and have a redrafted copy resent to you.
If you agree to ALL the above, please send a reply email with the word: "Agreed"
This offer is open for 10 calendar days from the "send date". Failing to reply inside 10 days will void this offer.
P.S. You can view the current cap. table at: https://docs.google.com/spreadsheets/d/1yYRyY3RVlN1KDg_FRsvfxESAeTTI9BH_HOLVLcqT-ks/edit#gid=0Was this page helpful?
