Introduction

This article outlines the process for terminating a participant from an Employee Stock Ownership Plan (ESOP) within the platform. Termination involves handling all assets in accordance with the specific scenario selected for the participant.

When to use the Termination Process

• Employee Termination: Initiate when a participant leaves the company.
• Change in Entity: Applicable if a participant's type changes (e.g., transitioning from employee to freelancer).

What termination actually does

Termination stops the participant's time-based vesting for all awards, ensuring no further vesting after the termination date. Any assets that were not vested by the termination date - such as unvested options or shares - are automatically returned to the plan's pool. To ensure participants can still manage any assets they retain, their access is switched to their personal email address, giving them continued access to the platform even after they leave the company.

Process steps

Selecting a participant

Choose the participant to be terminated using the selection box with search functionality. Participants involved in ongoing processes cannot be terminated until those processes are completed, deleted, or resolved, as allocated or reserved assets may not process accurately during termination.

Participants without any assets or awards can also be terminated. This action won't affect any assets or processes but can be useful for generating termination documentation when needed.

Setting the termination date

The termination date serves as the cut-off for asset processing. Assets vested before this date are retained; unvested assets are forfeited under the "Good Leaver" schema. The termination date can be set retroactively or for a future date, with no restrictions.

Setting the termination scenario

For each plan in which a participant is enrolled, a specific schema must be chosen within the termination scenario field.

Two default termination schemas exist:

• Good Leaver: Participant retains vested assets and forfeits unvested ones. This is the typical scenario for most terminations.
• Bad Leaver: Participant loses rights to all assets. This scenario applies in specific situations defined in the plan terms, usually involving significant breaches or contract violations
• Note that your plan may have different schemas if they were specifically defined in the plan terms.

Adding a personal email

Participants will likely lose access to their work email upon leaving the company. If they retain any assets, they will need access to the Eldison platform post-termination. Therefore, login credentials and all notifications will be updated to their personal email address.

Important: The switch to personal email login is triggered when the termination process is published, not automatically on the termination date. Until published, participants must continue to use their work email - and SSO if applicable - to access the platform.