How to Convert Stock Options to Upstock RSUs

Note: To be able to convert stock options to RSUs, you must have an active Standard account with Upstock. Demo accounts won’t be able to take advantage of this feature as they do not have access to agreement templates and pre-drafted legal documents.

It’s possible that before you joined Upstock, your company already had a stock option plan in place for your team members. However, if you want to fully avail of the benefits and advantages offered by Upstock, you will need to convert these stock options into Upstock RSUs. This can be done in just a few minutes.

Here’s how you do it. First, go to:

Capitalization > All Fixed Shares > Add new vesting plan

Next, input the name of the team member whose stock option plan you wish to convert into RSUs. Afterwards, fill in the details of the team member’s converted RSU plan. Here’s the information that you need to input in the appropriate field:

Start date: This is the date that will appear in the legal documents and will be used to determine the vesting schedule of the RSU plan.

Periodicity: You have 3 choices here: month, quarter, or semester. Choosing a periodicity of per month means that the vesting dates will generally take place every month (subject to the cliff). Quarter means every 3 months and semester is every 6 months.

Duration: This serves as a multiplier to the periodicity which will calculate the total duration of the RSU plan. For example, if you choose a periodicity of per semester and indicate a duration of 8, this means that the total duration of the RSU plan will be 48 months or 4 years. The vesting schedule in the RSU plan and the number of RSUs that will vest per period is dependent on the duration and cliff you will indicate.

Cliff: This is the minimum unit of time that a team member has to stay with the company in order for any RSUs to vest. If the team member leaves the company before the cliff, they will forfeit any equity earned. For example, if the periodicity is set as per month and the duration is set at 36 (which means the total duration of the RSU plan is 36 months or 3 years), you can indicate a cliff of 12 (which translates to 12 months or 1 year) so that the team member will be barred from receiving any RSUs if he/she leaves the company within a year. On the other hand, using the same parameters but with the cliff set at 0, this will mean that the team member will have his/her RSUs vest right away every month and will be able to keep it even if the team member leaves the company immediately after.

RSU count: This is the total number of RSUs that will be allocated to the team member which he/she will earn following the vesting schedule.

Generally, you would want to follow the conditions and vesting schedule of the team member’s old stock option plan unless the said team member would agree to surrendering the stock options under a new set of conditions and vesting schedule upon its conversion to RSUs.

Once you are done with the steps outlined above, click “Create and Sign.” You will then be taken to a page where additional information will be requested in order to complete the conversion process. In the field for “Shares surrendered,” indicate the number of shares covered by the team member’s old stock option plan. Make sure that the number of shares you indicate here corresponds to the number of converted RSUs if you desire a 1:1 conversion ratio. After that, proceed to sign the award agreement for the converted RSUs.

Congratulations! You have successfully converted your old stock options into Upstock RSUs!

Important: RSU conversion may be done so long as the stock option plan has not yet been fully exercised by the team member. If all the stock options under the plan have already been exercised and the corresponding shares already delivered, conversion is no longer possible as there would be nothing left to convert.