Use end-to-end Exercising to streamline the process: open exercise windows for stakeholders, respond to requests, manage the payment status, and complete all signature steps — then draft exercise transactions to issue shares to stakeholders.
What is fully automated exercising?
Fully automated exercising streamlines the option exercise process into one collaborative workflow between admins & employee stakeholders, so you’ll never need to use Excel or emails to manage exercises again. Manage any required signatures, payment, tax inputs, partial acceptances of requests and more in a status-driven, step-by-step workflow that ends with updating your employee’s dashboard and cap table as soon as the prerequisites are met.
Available to Scale and Enterprise plans.
Video tutorial
Step-by-Step Guide
0. Lay the groundwork: payment details & exercising templates
A. Add payment details
Your stakeholders might need to pay an exercise price. Add the payment details so they know where to wire the money.
Go to Equity Plans → Exercising
Open Payment settings and add the company banking details.
Note that the payment details will only be shown on the employee dashboard once the employee’s exercise request is approved, and any relevant documents have been signed.
Do you have multiple accounts for different subsidiaries? No problem. Add multiple sets of payment details for employees that pay into different accounts: for example, UK employees may pay a UK account, whereas Swiss employees may pay a Swiss account.
B. Exercising Templates
Use Ledgy to generate all the annoying paperwork for you, by adding your document templates to the relevant Equity Plans:
Go to Equity Plans → Pools & Plans page
Check your plan has the required Exercise template set up. Note that:
You can add multiple document templates to the plan.
Templates will be auto-populated with details of the exercise and signature requests created will be sent for signing based on signatories set on the template. For more information on how to set up templates & signatories, check this article.
Remember to publish any plan changes you make — on the Transactions page.
1. 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.
Mandatory fields: Choose the
Plan
Stakeholder(s), and
Opening date
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.
Optional Fields:
Close Date: until when will the exercise window be open?
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
Communication to Stakeholders:
Toggle ‘Notify affected stakeholders’ to make sure your stakeholders know what is happening
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
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.
Toggle ‘Notify affected stakeholders’ and add a note for stakeholders. The note will be included in the email sent.
2. Wait for your stakeholders to request an exercise
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:
3. 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:
Tick the first checkmark if you want them to be created
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:
add a tax input to be paid as part of the total exercise cost, and/or
unselect a grant to reject the exercise request for one or more grants if there are multiple grants in the exercise request.
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:
Tick the first checkmark if you want them to be created
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.
4. 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
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.
5. 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.
Any signed, completed signatures will be attached as documents to the transaction
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.
6. 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.
