Exercising on Ledgy allows you to manage the entire option exercise process in one streamlined workflow. You can open exercise windows, receive and process exercise requests, automatically generate documents, send them for signature, and update your cap table—all within Ledgy.

What is fully automated exercising?

Fully automated exercising is an end-to-end workflow that connects admins and employee stakeholders in one collaborative process. This eliminates the need for Excel sheets or email chains to manage exercises. The system guides you through each step, from opening an exercise window to publishing the final transaction on your cap table.

Fully automated exercising is available on Scale and Enterprise plans.

Video tutorial

Step-by-Step Guide

1. Set up payment details & exercising templates

A. Setting up payment details

Before opening an exercise window, you need to set up payment details so stakeholders know where to send their exercise payments:

Navigate to Equity Events → Windows
Open Payment settings and add your company's banking details
If needed, add multiple sets of payment details for different subsidiaries (e.g., separate accounts for UK and Swiss employees)

Note: Payment details will only appear on the employee dashboard after their exercise request is approved and all required documents are signed.

B. Setting up exercising templates

To automate document generation for exercises:

Go to Equity Plans → Pools & Plans
Ensure your plan has the required Exercise template configured
You can add multiple document templates to each plan
Templates will auto-populate with exercise details and create signature requests based on the signatories set on the template
Remember to publish any plan changes on the Transactions page

2. Open an exercise window

There are 2 types of exercise windows in Ledgy:

Standard windows: Typically used for company-wide, cyclical exercise windows.
Post-termination offboarding windows: Typically used for individual, one-off cases where employees leave the company and are allowed to exercise within a defined timeframe.

A. Standard Windows

Go to the Equity Plans → Exercising page
Click on "+ Add Exercise Window" on the top right.
1. Mandatory fields: Choose the
  1. Plan
  2. Stakeholder(s), and
  3. Opening date
  4. Payment settings: select the options available for a stakeholder to pay their exercising costs. Options are:
    Exercise and hold all (Bank transfer): The stakeholder is responsible for paying exercising costs via bank transfer as part of the exercise request process.
    Exercise and hold all (Cover via payroll): The stakeholder will pay exercising costs via a payroll deduction. Ledgy will create a payroll deduction in the payroll page when the exercise request is finished.
    Withhold-to-cover: The cost of exercise will be paid by withholding shares. If the cost is not evenly divisible by the share price, the number of shares will be rounded up and Ledgy will create a payroll addition in the payroll page when the exercise request is finished.
    Sell to cover [Public companies] : The cost of exercise will be paid by selling shares on the market, after approving the exercise request and signing relevant documents, a market order will be created for the cost of exercise.
    Sell all: The cost of exercise will be paid by selling all the shares on the market, after approving the exercise request and signing all relevant documents, one market order is generated. When the order is completed, two payments are generated one to the company (for exercising costs and taxes) and the other to the employee.
2. Optional Fields:
  1. Close Date: until when will the exercise window be open?
  2. Decide the date of the vesting cut-off with "Effective vesting date": Stakeholders can request to exercise up to their vested amount at this date
3. Communication to Stakeholders:
  1. Toggle ‘Notify affected stakeholders’ to make sure your stakeholders know what is happening
  2. You can add extra context in the "Note to stakeholders" box. This note will be included in the notification email.

B. Post-termination offboarding windows

Go the Stakeholders page
Click on "Offboarding" at the top of the page:
Select the stakeholders you need to offboard, the effective vesting date and the termination date.
Open an exercise window for individual off-boarding employee stakeholders. Choose the dates to open & close the exercise window
1. You can choose to ‘terminate unexercised vested grants’ for off-boarding windows with a closing date set. This automates the creation of termination transactions for the unexercised grants, once the window has closed.
2. Toggle ‘Notify affected stakeholders’ and add a note for stakeholders. The note will be included in the email sent.

3. Wait for your stakeholders to request an exercise

The stakeholder will see the cost of the exercise in the currency of the grant, as well as see an estimation of that cost in the currency of their dashboard, if different.

If you are curious about how it looks like from their perspective, or you want to share information with your stakeholders ahead of time, check out this article.

You will get an email notification whenever a stakeholder sends an exercise request. On your company page, you'll also see a notification on the menu:

4. Respond to exercise requests & send documents for signature

To respond to exercise requests, go to the Equity Plans → Exercising page. The ‘Exercise requests’ table will show any employee requests that require a response.

You have different options:

Accept an exercise request without edits

Click on the purple tick mark to accept the request
Decide what should happen with the documents:
1. Tick the first checkmark if you want them to be created
2. Tick the second checkmark if you also want to send them out for signature
Click on "Accept Request" at the end of the modal

Accept an exercise but edit some information

Click on the purple tick mark to accept the request
You can choose to:
1. add a tax input to be paid as part of the total exercise cost, and/or
2. if the exercised grant has a different currency, edit the exchange rate.
Note: if the request is edited, the employee needs to confirm they want to proceed with the exercise.
Decide what should happen with the documents:
1. Tick the first checkmark if you want them to be created
2. Tick the second checkmark if you also want to send them out for signature
Note: the signature requests will be automatically created only after the employee confirms they want to proceed with the exercise.
Click on "Accept Request" at the end of the modal

If the employee rejects the edits, the exercising process will end and the request will move to the table ‘Historic’ requests.

Reject an exercise request

To reject an exercise request:

Click on the red "x"
Optionally add a note to explain the reasons why to the relevant stakeholder
Click on "Reject request"

Declining an exercise request will put an end to the exercise process and the request will move to the table ‘Historic’ requests.

5. Confirm payment: (Bank transfers)

Once all documents are fully signed, employees who chose to pay via bank transfer can pay the exercise price using the payment details that will now appear on the employee dashboard — and mark the request as paid.

Example of the employee dashboard payment details

Once the employee has marked the request as paid, check to confirm the payment has arrived in the bank account. To mark the exercise request as paid:

Go to the Equity Plans → Exercising page
Click the ‘mark as paid’ button: This generates the draft exercise transaction.

6. Review and publish the exercise transaction

Go to Ownership → Transactions page
Review the exercise transaction & create any needed documents: click the three dots next to the relevant transaction.
1. Any signed, completed signatures will be attached as documents to the transaction
2. Optional: Use the ‘documents and signatures’ workflow to create a share certificate for the new share issuance.
If you are happy with the transaction, save and click the "Publish" button at the top right corner of the page.

7. Handle Payroll updates (Payroll & withhold-to-cover)

Any payroll deductions or additions stemming from an exercise request will be automatically tracked upon finalizing an exercise request. You can view payroll updates and and mark them "Done" in the Payroll updates page, which can be accessed by the "Payroll updates" button at the top of the Exercising page.